Q1 2026 Ventas Inc Earnings Call

April 28, 2026

Operator: Thank you for standing by. My name is Bailey, and I will be your conference operator today. At this time, I would like to welcome everyone to the Ventas Q1 2026 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by 1 on your telephone keypad. If you would like to withdraw your question, again, press star and 1. I will now like to turn the call over to BJ Grant, Senior Vice President of Investor Relations. You may begin.

Speaker #2: All lines have been placed on mute to If you would like to withdraw your question, again, press star and 1. I will now like to turn the call over to BJ Grant, Senior Vice President of Investor Relations, you may begin.

Speaker #2: prevent any background noise. After the speakers are marked, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad.

Speaker #2: Thank you, Bailey. Good morning, everyone, and welcome to the Ventas first quarter 2026 results conference call. Yesterday, we issued our first quarter 2026 earnings release, presentation materials, and supplemental information package, which are available on the Ventas website at ir.ventasreit.com.

Bill Grant: Thank you, Bailey. Good morning, everyone, and welcome to the Ventas First Quarter 2026 Results Conference Call. Yesterday, we issued our Q1 2026 earnings release, presentation materials, and supplemental information package, which are available on the Ventas website at ir.ventasreit.com. As a reminder, remarks today may include forward-looking statements in other matters. Forward-looking statements are subject to risks and uncertainties, and a variety of topics may cause actual results to differ materially from those contemplated in such statements. For a more detailed discussion of those factors, please refer to our earnings release for this quarter and to our most recent SEC filings, all of which are available on the Ventas website.

Bill Grant: Thank you, Bailey. Good morning, everyone, and welcome to the Ventas Q1 2026 Results Conference Call. Yesterday, we issued our Q1 2026 earnings release, presentation materials, and supplemental information package, which are available on the Ventas website at ir.ventasreit.com. As a reminder, remarks today may include forward-looking statements in other matters. Forward-looking statements are subject to risks and uncertainties, and a variety of topics may cause actual results to differ materially from those contemplated in such statements. For a more detailed discussion of those factors, please refer to our earnings release for this quarter and to our most recent SEC filings, all of which are available on the Ventas website.

Speaker #2: As a reminder, remarks today may include forward-looking statements and other matters. Forward-looking statements are subject to risks and uncertainties, and a variety of topics may cause actual results to differ materially from those contemplated in such statements.

Speaker #2: For a more detailed discussion of those factors, please refer to our earnings release for this quarter and to our most recent SEC filings, all of which are available on the Ventas website.

Speaker #2: Certain non-gap financial measures will also be discussed on this call, and for a reconciliation of these measures to the most closely comparable gap measures, please refer to our supplemental information package posted on the Investor Relations website.

Bill Grant: Certain non-GAAP financial measures will also be discussed on this call, for a reconciliation of these measures to the most closely comparable GAAP measures, please refer to our supplemental information package posted on the investor relations website. With that, I'll turn the call over to Debra A. Cafaro, Chairman and CEO of Ventas.

Speaker #2: And with that, I'll turn the call over to Debra A. Cafaro, Chairman and CEO of Ventas.

Speaker #3: Thank you, BJ, and good morning to all of our shareholders and other participants. I want to welcome you to the Ventas first quarter 2026 earnings call.

Debra A. Cafaro: Thank you, BJ, and good morning to all of our shareholders and other participants. I want to welcome you to the Ventas Q1 2026 Earnings Call. Ventas continues to drive growth and outperformance as a leading participant in the longevity economy. We are already into our 5th consecutive year of double-digit annual growth in our senior housing operating portfolio or SHOP. Even more exciting, this year represents a new and positive inflection point when demographic demand jumps and growth remains elevated for over a decade. Our business and team have been built to meet this moment and seize the unprecedented opportunity for multi-year growth and value creation. With SHOP as our engine, Ventas is now a $56 billion S&P 500 company with a portfolio of over 1,400 properties serving a large and growing aging population.

Speaker #3: Ventas continues to drive growth and outperformance as a leading participant in the longevity economy. We're already into our fifth consecutive year of double-digit annual growth in our senior housing operating portfolio, or SHOP.

Speaker #3: Even more exciting, this year represents a new and positive inflection point when demographic demand jumps and growth remains elevated for over a decade. Our business and team have been built to meet this moment, and seize the unprecedented opportunity for multi-year growth and value creation.

Debra A. Cafaro: Even more exciting, this year represents a new and positive inflection point when demographic demand jumps and growth remains elevated for over a decade. Our business and team have been built to meet this moment and seize the unprecedented opportunity for multi-year growth and value creation. With SHOP as our engine, Ventas is now a $56 billion S&P 500 company with a portfolio of over 1,400 properties serving a large and growing aging population.

Speaker #3: With SHOP as our engine, Ventas is now a 56 billion S&P 500 company with a portfolio of over 1,400 properties, serving a large and growing aging population we have developed a unique brand that stands for delivering for stakeholders and winning together.

Debra A. Cafaro: We have developed a unique brand that stands for delivering for stakeholders and winning together. Our excellent Q1 results and improved full-year outlook demonstrate our competitive advantages, the impact of our differentiated platform, strong execution of our 1, 2, 3 strategy, and our momentum. In the quarter, Ventas delivered 9% year-over-year growth in total same-store property NOI and normalized FFO per share. SHOP NOI grew over 15%, US occupancy increased 370 basis points, fueled by broad-based demand and our Ventas OI initiatives. Accretion from senior housing investment activity further contributed to our growth in the quarter, showing our strategy in action. Notably, our liquidity reached record levels, and our financial position continued to strengthen.

Speaker #3: Our excellent first quarter results and improved full-year outlook demonstrate our competitive advantages, the impact of our differentiated platform, strong execution of our One, Two, Three strategy, and our momentum.

Speaker #3: In the quarter, Ventas delivered 9% year-over-year growth in total same-store property NOI and normalized FFO per share. SHOP NOI grew over 15%, and U.S. occupancy increased 370 basis points, fueled by broad-based demand and our Ventas OI initiatives.

Debra A. Cafaro: SHOP NOI grew over 15%, US occupancy increased 370 basis points, fueled by broad-based demand and our Ventas OI initiatives. Accretion from senior housing investment activity further contributed to our growth in the quarter, showing our strategy in action. Notably, our liquidity reached record levels, and our financial position continued to strengthen.

Speaker #3: Accretion from senior housing investment activity further contributed to our growth in the quarter, showing our strategy in action. And notably, our liquidity reached record levels and our financial position continued to strengthen.

Speaker #3: Based on our first quarter results and our confidence, we have improved our outlook for the full year, increasing our midpoint guidance for FFO per share by 3 cents to $3.86 per share, led by SHOP same-store growth of 16%.

Debra A. Cafaro: Based on our Q1 results and our confidence, we have improved our outlook for the full year, increasing our midpoint guidance for FFO per share by $0.03 to $3.86 per share, led by SHOP same-store growth of 16%. As a result of our strategy and execution, we have already grown senior housing to over 60% of our business, and our communities now serve nearly 100,000 residents. In a large and highly fragmented sector where most operators run 10 or fewer communities, our platform gives us unique advantages to drive out performance at scale through data and experiential insights. With our collaborative approach, Ventas OI also attracts many experienced operators who want to manage our communities and benefit from Ventas's aligned approach, people, and platform. We're just getting started.

Speaker #3: As a result of our strategy and execution, we have already grown senior housing to over 60% of our business, and our communities now serve nearly 100,000 residents.

Speaker #3: In a large and highly fragmented sector where most operators run 10 or fewer communities, our platform gives us unique advantages to drive outperformance at scale through data and experiential insights.

Debra A. Cafaro: In a large and highly fragmented sector where most operators run 10 or fewer communities, our platform gives us unique advantages to drive out performance at scale through data and experiential insights. With our collaborative approach, Ventas OI also attracts many experienced operators who want to manage our communities and benefit from Ventas's aligned approach, people, and platform. We're just getting started.

Speaker #3: With our collaborative approach, Ventas OI also attracts many experienced operators, who want to manage our communities and benefit from Ventas's aligned approach, people, and platform.

Speaker #3: And we're just getting started. In the investment market for SHOP, we have an outstanding private-to-public arbitrage opportunity. We have already closed $1.7 billion of attractive senior housing investments this year, and over $6 billion since the beginning of 2024.

Debra A. Cafaro: In the investment market for SHOP, we have an outstanding private-to-public arbitrage opportunity. We have already closed $1.7 billion of attractive senior housing investments this year and over $6 billion since the beginning of 2024. Our number one capital allocation priority remains US SHOP communities that meet our strategic framework and can deliver unlevered IRRs in the double-digit to mid-teens range at pricing below replacement cost. Interestingly, because there is significant existing and new investor interest in senior housing for all the obvious reasons, we are seeing more owners and potential sellers bringing assets to market and engaging in conversations with us about transacting. This trend is expanding our pipeline significantly. We are confident in our ability to capture more than our fair share of desirable deals because of our momentum in the market and our competitive moat.

Speaker #3: Our number one capital allocation priority remains US SHOP communities, that meet our strategic framework and can deliver unlevered IRRs in the double-digit to mid-teens range.

Speaker #3: At pricing below replacement cost. Interestingly, existing and new investor interest in senior housing—for all the obvious reasons—we are seeing more owners and potential sellers bringing assets to market and engaging in conversations with us about transacting.

Debra A. Cafaro: Interestingly, because there is significant existing and new investor interest in senior housing for all the obvious reasons, we are seeing more owners and potential sellers bringing assets to market and engaging in conversations with us about transacting. This trend is expanding our pipeline significantly. We are confident in our ability to capture more than our fair share of desirable deals because of our momentum in the market and our competitive moat.

Speaker #3: This trend is expanding our pipeline significantly. We are confident in our ability to capture more than our fair share of desirable deals because of our momentum in the market and our competitive moats.

Speaker #3: We have now increased our 2026 investment volume guidance to $3 billion. We are focused on increasing our SHOP business organically and externally to drive our forward enterprise growth rate and serve the nearly 70 million baby boomers who start turning 80 in 2026.

Debra A. Cafaro: We have now increased our 2026 investment volume guidance to $3 billion. We are focused on increasing our SHOP business organically and externally to drive our forward enterprise growth rate and serve the nearly 70 million baby boomers who start turning 80 in 2026. In the next 5 years alone, this group will grow nearly 30%. In the Q1, senior housing construction starts totaled only about 1,500 new units, and total senior housing communities under construction remained at historic lows. With at least a 3-year start-to-finish development cycle, these favorable demand supply trends provide our advantage platform with compelling and durable tailwinds. The Ventas team is unified and enthusiastic about outperforming at scale and the multi-year growth and value creation opportunity ahead.

Speaker #3: In the next five years alone, this group will grow nearly 30%. Yet in the first quarter, senior housing construction starts totaled only about 1,500 new units, and total senior housing communities under construction remained, at historic lows.

Debra A. Cafaro: In the Q1, senior housing construction starts totaled only about 1,500 new units, and total senior housing communities under construction remained at historic lows. With at least a three year start-to-finish development cycle, these favorable demand supply trends provide our advantage platform with compelling and durable tailwinds. The Ventas team is unified and enthusiastic about outperforming at scale and the multi-year growth and value creation opportunity ahead.

Speaker #3: With at least a three-year start-to-finish development cycle, these favorable demand-supply trends provide our advantaged platform with compelling and durable tailwinds. The Ventas team is unified and enthusiastic about outperforming at scale and the multi-year growth and value creation opportunity ahead.

Debra A. Cafaro: We are excited about our improved outlook for 2026 and the setup for the coming years as we pursue our mission to help people live longer, healthier, and happier lives. With our unique brand standing for commitment to each other and our stakeholders, we are in it to win it together. In closing, I wanna recognize our admired colleague, Peter J. Bulgarelli. Peter J. Bulgarelli is retiring after an extraordinary four-decade career in commercial real estate and 8 years leading our OM&R business with excellence and integrity. On behalf of all of us at Ventas, I thank Peter J. Bulgarelli and wish him every continued success and happiness. With that, I'm pleased to turn the call over to J. Justin Hutchens.

Debra A. Cafaro: We are excited about our improved outlook for 2026 and the setup for the coming years as we pursue our mission to help people live longer, healthier, and happier lives. With our unique brand standing for commitment to each other and our stakeholders, we are in it to win it together. In closing, I wanna recognize our admired colleague, Peter J. Bulgarelli. Peter J. Bulgarelli is retiring after an extraordinary four-decade career in commercial real estate and eight years leading our OM&R business with excellence and integrity. On behalf of all of us at Ventas, I thank Peter J. Bulgarelli and wish him every continued success and happiness. With that, I'm pleased to turn the call over to J. Justin Hutchens.

Speaker #3: We are excited about our improved outlook for 2026 and the setup for the coming years, as we pursue our mission to help people live longer, healthier, and happier lives.

Speaker #3: With our unique brand standing for commitment to each other and our stakeholders, we are in it to win it together. In closing, I want to recognize our admired colleague, Pete Balgarelli.

Speaker #3: Pete is retiring after an extraordinary four-decade career in commercial real estate, and eight years leading our Omar business with excellence and integrity. On behalf of all of us at Ventas, I thank Pete, and wish him every continued success and happiness.

Speaker #3: With that, I'm pleased to turn the call over to Justin.

J. Justin Hutchens: Thank you, Debbie. I'm pleased to join you today to discuss another strong Q of execution in senior housing, reflecting continued momentum across both organic performance and external growth in our SHOP portfolio. I'll start with SHOP performance, then provide updates on our active asset management and the full year outlook, and conclude with investments and capital deployment. Starting with SHOP. The Q1 results reflect both strong market fundamentals and sharp execution across the portfolio. In the Q1, SHOP same-store NOI increased over 15% year over year, kicking off our 5th consecutive year of double-digit NOI growth. This is driven by a powerful combination of occupancy growth, pricing strength, and operating leverage, and increasingly supported by the Ventas OI initiatives we are deploying with our operators. Occupancy continues to be the primary driver of performance.

Speaker #2: Thank you, Debbie. I'm pleased to join you today to discuss another strong quarter of execution in senior housing. Reflecting continued momentum across both organic performance and external growth in our SHOP portfolio, I'll start with SHOP performance.

Speaker #2: Then provide updates on our active asset management and the full-year outlook, and conclude with investments and capital deployment. Starting with SHOP. The first quarter results reflect both strong market fundamentals and sharp execution across the portfolio.

J. Justin Hutchens: The Q1 results reflect both strong market fundamentals and sharp execution across the portfolio. In the Q1, SHOP same-store NOI increased over 15% year-over-year, kicking off our 5th consecutive year of double-digit NOI growth. This is driven by a powerful combination of occupancy growth, pricing strength, and operating leverage, and increasingly supported by the Ventas OI initiatives we are deploying with our operators. Occupancy continues to be the primary driver of performance.

Speaker #2: In the first quarter, SHOP same-store NOI increased over 15% year-over-year, kicking off our fifth consecutive year of double-digit NOI growth. This is driven by a powerful combination of occupancy growth, pricing strength, and operating leverage, and increasingly supported by the Ventas OI initiatives we are deploying with our operators.

Speaker #2: Occupancy continues to be the primary driver of performance. Same-store average occupancy increased 310 basis points year-over-year, reaching 90.4%. Performance this quarter was particularly broad-based, with so many operators contributing to our success.

J. Justin Hutchens: Same-store average occupancy increased 310 basis points year over year, reaching 90.4%. Performance this quarter was particularly broad-based, with so many operators contributing to our success, there are too many to name. The results in the US portfolio were especially strong, where same-store occupancy increased 370 basis points year over year and outperformed the NIC top 99 markets by 150 basis points. On pricing, RevPOR increased 5% year over year, reflecting strong in-house rate increases that are running at nearly 8%, as well as continued improvement in street rates across geographies, operators, and product types. Operating expenses increased 5.8% year over year, which was largely driven by higher occupancy levels and winter storm related costs.

J. Justin Hutchens: Same-store average occupancy increased 310 basis points year-over-year, reaching 90.4%. Performance this quarter was particularly broad-based, with so many operators contributing to our success, there are too many to name. The results in the US portfolio were especially strong, where same-store occupancy increased 370 basis points year-over-year and outperformed the NIC top 99 markets by 150 basis points.

Speaker #2: There are too many to name. The results in the US portfolio were especially strong, where same-store occupancy increased 370 basis points year-over-year, and outperformed the NIC top 99 markets by 150 basis points.

J. Justin Hutchens: On pricing, RevPOR increased 5% year-over-year, reflecting strong in-house rate increases that are running at nearly 8%, as well as continued improvement in street rates across geographies, operators, and product types. Operating expenses increased 5.8% year-over-year, which was largely driven by higher occupancy levels and winter storm related costs.

Speaker #2: On pricing, Rev4 increased 5% year-over-year. Reflecting strong in-house rate increases that are running at nearly 8%. As well as continued improvement in street rates across geographies, operators, and product types.

Speaker #2: Operating expenses increased 5.8% year-over-year, which was largely driven by higher occupancy levels in winter storm-related costs. Net-net, NOI grew over 15% year-over-year, and we delivered meaningful operating leverage, with NOI margins expanding 170 basis points year-over-year to 30%.

J. Justin Hutchens: Net net, NOI grew over 15% year over year. We delivered meaningful operating leverage with NOI margins expanding 170 basis points year over year to 30% and incremental margins at 50%. As we continue to deploy our active asset management, we're executing in close partnership with our best-in-class operators and with a talented and recently expanded Ventas SHOP team that is driving performance at the unit, community, and portfolio level. Across the portfolio, we're focused on community level execution alongside our operating partners, supported by the continued evolution of Ventas OI. We are deploying targeted initiatives, including refresh CapEx, price volume optimization guidance, and a sharp focus on sales culture with the ultimate goal of achieving zero lost revenue days in our highly occupied communities.

J. Justin Hutchens: Net net, NOI grew over 15% year-over-year. We delivered meaningful operating leverage with NOI margins expanding 170 basis points year-over-year to 30% and incremental margins at 50%. As we continue to deploy our active asset management, we're executing in close partnership with our best-in-class operators and with a talented and recently expanded Ventas SHOP team that is driving performance at the unit, community, and portfolio level.

Speaker #2: An incremental margins at 50%. As we continue to deploy our active asset management, we're executing in close partnership with our best-in-class operators, and with a talented and recently expanded Ventas SHOP team, that is driving performance at the unit, community, and portfolio level.

J. Justin Hutchens: Across the portfolio, we're focused on community level execution alongside our operating partners, supported by the continued evolution of Ventas OI. We are deploying targeted initiatives, including refresh CapEx, price volume optimization guidance, and a sharp focus on sales culture with the ultimate goal of achieving zero lost revenue days in our highly occupied communities.

Speaker #2: Across the portfolio, we're focused on community-level execution alongside our operating partners, supported by the continued evolution of Ventas OI. We are deploying targeted initiatives, including refresh CAPEX, price-volume optimization guidance, and a sharp focus on sales culture, with the ultimate goal of achieving zero-loss revenue days in our highly occupied communities.

J. Justin Hutchens: We're also implementing unit-level sales strategies supported by boots on the ground site visits from our team, and we're doing it in collaboration with operators, delivering strong revenue and NOI growth while ensuring the senior living value proposition is realized for residents and families through the care services, and peace of mind provided in our communities. This combination of active asset management and structural demand tailwinds has led us to increase our 2026 SHOP outlook, including same-store NOI growth of 16% at the midpoint, which is up from 15%. This is driven by a higher expectation of occupancy growth of approximately 300 basis points, which is leading to increased revenue growth expectations of approximately 8.75%. As we've discussed previously, the key selling season runs from May through September.

Speaker #2: We're also implementing unit-level sales strategies, supported by boots-on-the-ground site visits from our team. And we're doing it in collaboration with operators, delivering strong revenue and NOI growth, while ensuring the senior living value proposition is realized for residents and families through the care, services, and peace of mind provided in our communities.

J. Justin Hutchens: This combination of active asset management and structural demand tailwinds has led us to increase our 2026 SHOP outlook, including same-store NOI growth of 16% at the midpoint, which is up from 15%. This is driven by a higher expectation of occupancy growth of approximately 300 basis points, which is leading to increased revenue growth expectations of approximately 8.75%. As we've discussed previously, the key selling season runs from May through September.

Speaker #2: This combination of active asset management and structural demand tailwinds has led us to increase our 2026 SHOP outlook. Including same-store NOI growth of 16% at the midpoint, which is up from 15%.

Speaker #2: This is driven by a higher expectation of occupancy growth of approximately 300 basis points, which is leading to increased revenue growth expectations of approximately 8 and three-quarters percent.

Speaker #2: As we've discussed previously, the key selling season runs from May through September. While we enter this season in a favorable position because of the first quarter strength, our success during the key selling season will determine the full-year outcome.

J. Justin Hutchens: While we enter the season in a favorable position because of the Q1 strength, our success during the key selling season will determine the full year outcome. Looking ahead, there's real momentum building for us to expand on several key fronts. Over recent years, we've made intentional strategic moves to ensure Ventas stands ready to harness the growing surge in senior housing demand. Because of those efforts, we're confident that we'll continue to drive solid organic growth fueled by ongoing increases in occupancy and the operating leverage we're achieving across the SHOP portfolio. With our US communities averaging about 87% occupancy, there's still significant runway for us to continue to drive out performance. Importantly, the strength we're seeing in the SHOP performance gives us confidence to continue leaning into external growth.

Speaker #2: Looking ahead, there's real momentum building for us to expand on several key fronts. Over recent years, we've made intentional, strategic moves to ensure Ventas stands ready to harness the growing surge in senior housing demand.

J. Justin Hutchens: Because of those efforts, we're confident that we'll continue to drive solid organic growth fueled by ongoing increases in occupancy and the operating leverage we're achieving across the SHOP portfolio. With our US communities averaging about 87% occupancy, there's still significant runway for us to continue to drive out performance. Importantly, the strength we're seeing in the SHOP performance gives us confidence to continue leaning into external growth.

Speaker #2: Because of those efforts, we're confident that we'll continue to drive solid organic growth fueled by ongoing increases in occupancy and the operating leverage we're achieving across the SHOP portfolio.

Speaker #2: And with our US communities averaging about 87% occupancy, there's still significant runway for us to continue to drive out performance. Importantly, the strength we're seeing in the SHOP performance gives us confidence to continue leaning into external growth.

J. Justin Hutchens: Turning to investments, 2026 is off to an excellent start as we execute our external growth strategy with focus and intention. Year to date, we have completed $1.7 billion of high-quality senior housing acquisitions in the US, building on the fast start we saw in January. Based on this activity and our outlook for the remainder of the year, we are increasing our senior housing focused investment guidance from $2.5 billion to $3 billion for 2026. While there is heightened interest in senior housing investments as additional capital flows into the sector, Ventas remains competitively advantaged. Notably, of the $1.7 billion of investments closed year to date, more than 90% were relationship driven, over 60% were sourced off market, and more than 40% were completed with repeat sellers.

Speaker #2: Turning to investments, 2026 is off to an excellent start as we execute our external growth strategy with focus and intention. Year to date, we have completed $1.7 billion of high-quality senior housing acquisitions in the US, building on the fast start we saw in January based on this activity and our outlook for the remainder of the year.

Speaker #2: We are increasing our senior housing focus investment guidance from 2.5 to 3 billion for 2026. While there is heightened interest in senior housing investments as additional capital flows into the sector, Ventas remains competitively advantaged.

J. Justin Hutchens: While there is heightened interest in senior housing investments as additional capital flows into the sector, Ventas remains competitively advantaged. Notably, of the $1.7 billion of investments closed year to date, more than 90% were relationship driven, over 60% were sourced off market, and more than 40% were completed with repeat sellers.

Speaker #2: Notably, of the $1.7 billion of investments closed year to date, more than 90% were relationship-driven. Over 60% were sourced off-market. And more than 40% were completed with repeat sellers.

J. Justin Hutchens: Since Q4 2024, we have now completed over $5.7 billion of senior housing acquisitions, adding more than 17,000 units to the SHOP portfolio. These investments have been carefully selected to closely align with our right market, right asset, right operator framework, and they are performing in line with our underwritten expectations. We are buying communities that enhance portfolio quality, are located in attractive markets with strong demand growth, are insulated from future supply risk, and deliver low to mid-teens unlevered IRRs. Our investment strategy and team are focused on senior housing investment opportunities with different combinations of growth and yield that can produce attractive risk-adjusted returns. For example, earlier this month, we completed a $540 million acquisition of the Revel portfolio, which represents a value add lease up opportunity at scale.

Speaker #2: Since the fourth quarter of 2024, we have now completed over $5.7 billion of senior housing acquisitions, adding more than 17,000 units to the SHOP portfolio.

Speaker #2: These investments have been carefully selected to closely align with our right market, right asset, right operator framework, and they are performing in line with our underwritten expectations.

J. Justin Hutchens: We are buying communities that enhance portfolio quality, are located in attractive markets with strong demand growth, are insulated from future supply risk, and deliver low to mid-teens unlevered IRRs. Our investment strategy and team are focused on senior housing investment opportunities with different combinations of growth and yield that can produce attractive risk-adjusted returns. For example, earlier this month, we completed a $540 million acquisition of the Revel portfolio, which represents a value add lease up opportunity at scale.

Speaker #2: We are buying communities that enhance portfolio quality, are located in attractive markets with strong demand growth, are insulated from future supply risk, and deliver low to mid-teens unlevered IRRs.

Speaker #2: Our investment strategy and team are focused on senior housing investment opportunities with different combinations of growth and yield that can produce attractive risk-adjusted returns.

Speaker #2: For example, earlier this month, we completed a $540 million acquisition of the Revel portfolio, which represents a value-add lease-up opportunity at scale. This investment consists of newly built, luxury independent living communities located in affluent, high-growth markets across the Western US.

J. Justin Hutchens: This investment consists of newly built luxury independent living communities located in affluent high growth markets across the Western US. With average in-place occupancy in the mid 70% range, the combination of the newer assets, high barrier markets, and significant embedded occupancy upside creates a highly attractive growth profile. This portfolio was acquired at a significant discount to replacement cost, even with its quality, scale, and amenity set. The seller elected to retain a 25% interest in the portfolio to share in the strategic and financial benefits of implementing Ventas OI initiatives across the portfolio to drive unlevered IRRs in the mid-teens. Transactions like this underscore the advantages of scale, relationships, operating expertise, and decisiveness in today's market.

Speaker #2: With average in-place occupancy in the mid-70% range, the combination of the newer assets, high barrier markets, and significant embedded occupancy upside creates a highly attractive growth profile.

J. Justin Hutchens: This portfolio was acquired at a significant discount to replacement cost, even with its quality, scale, and amenity set. The seller elected to retain a 25% interest in the portfolio to share in the strategic and financial benefits of implementing Ventas OI initiatives across the portfolio to drive unlevered IRRs in the mid-teens. Transactions like this underscore the advantages of scale, relationships, operating expertise, and decisiveness in today's market.

Speaker #2: This portfolio was acquired at a significant discount to replacement cost, even with its quality scale and amenity set. The seller elected to retain a 25% interest in the portfolio to share in the strategic and financial benefits of implementing Ventas OI.

Speaker #2: Initiatives across the portfolio to drive unlevered IRRs in the mid-teens. Transactions like this underscore the advantages of scale, relationships, operating expertise, and decisiveness in today's market.

J. Justin Hutchens: Excluding the Revel transaction, our remaining senior housing investments completed so far in 2026 are expected to generate a 6.9% year 1 NOI yield and low to mid-teens unlevered IRRs. These investments also allow us to expand our operator relationships. Our Ventas OI platform provides the capabilities to manage multiple operators at scale, enabling us to retain strong in-place operators and support their growth. Looking ahead, we plan to continue to pursue attractive senior housing investments that combine durable in-place cash flow, embedded growth, and attractive risk-adjusted returns. In closing, we are encouraged by the performance of the SHOP business in Q1 and excited about the opportunities ahead. We are executing from a position of strength with strong organic growth, compelling external investment opportunities, and a long runway for value creation. With that, I'll turn it over to Bob.

Speaker #2: Excluding the Revel transaction, our remaining senior housing investments completed so far in 2026 are expected to generate a $6.9% year-one NOI yield in low to mid-teens unlevered IRRs.

Speaker #2: These investments also allow us to expand our operator relationships. Our Ventas OI platform provides the capabilities to manage multiple operators at scale, enabling us to retain strong in-place operators and support their growth.

J. Justin Hutchens: Looking ahead, we plan to continue to pursue attractive senior housing investments that combine durable in-place cash flow, embedded growth, and attractive risk-adjusted returns. In closing, we are encouraged by the performance of the SHOP business in Q1 and excited about the opportunities ahead. We are executing from a position of strength with strong organic growth, compelling external investment opportunities, and a long runway for value creation. With that, I'll turn it over to Bob.

Speaker #2: Looking ahead, we plan to continue to pursue attractive senior housing investments that combine durable in-place cash flow, embedded growth, and attractive risk-adjusted returns. In closing, we are encouraged by the performance of the SHOP business in the first quarter.

Speaker #2: And excited about the opportunities ahead. We are executing from a position of strength with strong organic growth, compelling external investment opportunities, and a long runway for value creation.

Speaker #2: With that, I'll turn it over to Bob.

Robert Probst: Thank you, Justin, and good morning, everyone. I'll cover 3 areas this morning. First, our financial results for Q1. Second, our balance sheet and capital activity. Finally, our updated outlook for 2026. Starting with our overall enterprise performance, we delivered a strong start to the year, led by over 15% same-store cash NOI growth in our SHOP portfolio. Normalized FFO for Q1 was $0.94 per share, up 9% year-over-year, driven by total company same-store property level growth of nearly 9% and accretive senior housing investments. Our Outpatient Medical & Research Portfolio, or OM&R, delivered 2.4% same-store cash NOI growth. Led by outpatient medical growing 3.1% year-over-year. Occupancy in outpatient medical reached almost 91% in Q1.

Speaker #1: Thank you, Justin, and good morning, everyone. I'll cover three areas this morning. First, our financial results for Q1. Second, our balance sheet and capital activity.

Speaker #1: And finally, our updated outlook for 2026. Starting with our overall enterprise performance, we delivered a strong start to the year led by over 15% same-store cash NOI growth in our SHOP portfolio.

Robert Probst: Normalized FFO for Q1 was $0.94 per share, up 9% year-over-year, driven by total company same-store property level growth of nearly 9% and accretive senior housing investments. Our Outpatient Medical & Research Portfolio, or OM&R, delivered 2.4% same-store cash NOI growth. Led by outpatient medical growing 3.1% year-over-year. Occupancy in outpatient medical reached almost 91% in Q1.

Speaker #1: Normalized FFO for the first quarter was 94 cents per share, up 9% year over year, driven by total company same-store property level growth of nearly 9% and decretive senior housing investments.

Speaker #1: Our outpatient medical and research portfolio, or OMAR, delivered $2.4% same-store cash NOI growth. Led by outpatient medical growing 3.1% year over year. Occupancy in outpatient medical reached almost 91% in the first quarter, a 50 basis point increase year over year, marks the seventh consecutive quarter of occupancy growth.

Robert Probst: A 50 basis point increase year over year marks the seventh consecutive quarter of occupancy growth. Our triple net segment grew same-store cash NOI by 1.6% in the quarter, benefiting from the 35% Brookdale cash rent escalator, which went into effect 1 January 2026. This triple net result is in line with our expectations and supportive of our confirmed full year guidance for the segment. Turning next to our balance sheet. Our balance sheet continues to strengthen as a result of organic SHOP growth and equity funded senior housing investments. Net debt to EBITDA improved to 5 times at quarter end, a 20 basis point sequential improvement, with further improvement expected through the balance of the year. Liquidity is strong with $5.5 billion available at the end of Q1, providing Ventas with significant financial flexibility.

Speaker #1: Our triple net segment grew same-store cash NOI by 1.6% in the quarter, benefiting from the 35% Brookdale cash rent escalator, which went into effect January 1st of 2026.

Speaker #1: This triple net result is in line with our expectations and supportive of our confirmed full-year guidance for the segment. Turning next to our balance sheet, our balance sheet continues to strengthen as a result of organic SHOP growth and equity-funded senior housing investments.

Robert Probst: Turning next to our balance sheet. Our balance sheet continues to strengthen as a result of organic SHOP growth and equity funded senior housing investments. Net debt to EBITDA improved to 5 times at quarter end, a 20 basis point sequential improvement, with further improvement expected through the balance of the year. Liquidity is strong with $5.5 billion available at the end of Q1, providing Ventas with significant financial flexibility.

Speaker #1: Net debt to EBITDA improved to five times that quarter-end, a 20 basis point sequential improvement. With further improvement expected through the balance of the year.

Speaker #1: Liquidity is strong with 5.5 billion available at the end of the first quarter, providing Ventas with significant financial flexibility. Our investment momentum has continued into 2026.

Robert Probst: Our investment momentum has continued into 2026. To fund this growth, we raised approximately $2.4 billion of equity designated for 2026 investment activity, including $800 million settled during Q1 and $1.6 billion currently available through forward equity sales agreements. Given our encouraging start to the year, we are improving our outlook for 2026. We now expect normalized FFO per share to range from $3.82 to $3.89, or $3.86 at the midpoint, a $0.03 increase from our prior outlook. Bridging from our prior guidance midpoint, the $0.03 increase is driven by stronger organic property performance led by SHOP and accretive senior housing investment activity, which together contribute a $0.04 per share increase.

Speaker #1: To fund this growth, we raised approximately $2.4 billion of equity designated for 2026 investment activity. Including $800 million settled during the first quarter, and $1.6 billion currently available through forward equity sales agreements.

Speaker #1: Given our encouraging start to the year, we are improving our outlook for 2026. We now expect normalized FFO per share to range from $3.82 to $3.89, or $3.86 at the midpoint, a 3 cent increase from our prior outlook.

Robert Probst: We now expect normalized FFO per share to range from $3.82 to $3.89, or $3.86 at the midpoint, a $0.03 increase from our prior outlook. Bridging from our prior guidance midpoint, the $0.03 increase is driven by stronger organic property performance led by SHOP and accretive senior housing investment activity, which together contribute a $0.04 per share increase.

Speaker #1: Bridging from our prior guidance midpoint, the 3 cent increase is driven by stronger organic property performance led by SHOP, and decretive senior housing investment activity.

Speaker #1: Which together contributed 4 cent per share increase. These favorable items are partially offset by one penny from the higher forward interest rate curve. We're also increasing our total company same-store cash NOI growth outlook to nearly 10% at the midpoint.

Robert Probst: These favorable items are partially offset by $0.01 from the higher forward interest rate curve. We're also increasing our total company same-store cash NOI growth outlook to nearly 10% at the midpoint, resulting from a 100 basis point higher SHOP midpoint of 16%. More fulsome discussion of our guidance assumptions can be found in our Q1 supplemental earnings presentation posted to our website. To close, we are very pleased with our start to 2026. The Q1 reinforces the strength of our organic performance, the durability of senior housing demand, and the embedded growth profile of our portfolio. With that, I'll turn the call back to the operator.

Speaker #1: Resulting from 100 basis point higher SHOP midpoint of 16%. More fulsome discussion of our guidance assumptions can be found in our Q1 supplemental, earnings presentation posted to our website.

Speaker #1: To close, we are very pleased with our start to 2026. The first quarter reinforces the strength of our organic performance, their durability of senior housing demand, and the embedded growth profile of our portfolio.

Speaker #1: With that, I'll turn the call back to the operator.

Operator: Thank you so much. At this time, I would like to remind everyone, in order to ask a question, press star and the number one on your telephone keypad. Your first question comes from the line of Giuliano Bologna with Goldman Sachs. Your line is open.

Speaker #2: Thank you so much. At this time, I would like to remind everyone that in order to ask a question, please press star and the number one on your telephone keypad.

Speaker #2: Your first question comes from the line of Julian Bluell with Goldman Sachs. Your line is open.

Speaker #3: Line is open.

Giuliano Bologna: Yes, thank you for taking my question. I just wanted to touch maybe on the $540 million Revel investment. I guess in your view, what had sort of driven the underperformance of that portfolio, keeping it in the mid 70% range? As we think of how Ventas OI sort of plugs in there, what are sort of the lowest hanging fruit that Ventas OI can sort of allow you to improve? What are some of the longer term gains that the platform gives you?

Speaker #4: Yes, thank you for taking my question. I just wanted to touch maybe on the $540 million Revel investment. I guess in your view, what had sort of driven the underperformance of that portfolio keeping it in the mid-70% range?

Speaker #4: And then as we think of how Ventas OI sort of plugs in there, what are sort of the lowest-hanging fruit that Ventas OI can sort of allow you to improve?

Speaker #4: And what are some of the longer-term gains that the platform gives you?

J. Justin Hutchens: Hi, it's Justin. Great question. I'll step back a little bit, answer your question, give you a little history, and then some of the attributes of the acquisition and the opportunity ahead. This is a portfolio that was built by The Wolff Company, which is a large multifamily developer with a very long history. They're based in Scottsdale. They entered this senior housing sector with this really exciting development because it's a resort-like, independent living product that would appeal to a very active senior, highly amenitized luxury setting. At the beginning, when they entered the space, they used third-party management. When they got into it, they realized that they were probably better off setting up their own platform.

Speaker #1: Hi, it's Justin. Great question. So, I'll step back a little bit and answer your question, give you a little history, and then some of the attributes of the acquisition and the opportunity ahead.

Speaker #1: So this is a portfolio that was built by Wolf Company, which is a large multifamily developer with a very long history. They're based in Scottsdale.

J. Justin Hutchens: They entered this senior housing sector with this really exciting development because it's a resort-like, independent living product that would appeal to a very active senior, highly amenitized luxury setting. At the beginning, when they entered the space, they used third-party management. When they got into it, they realized that they were probably better off setting up their own platform.

Speaker #1: They entered this senior housing sector with this really exciting development because this is a resort-like independent living product that would appeal to a very active senior highly amenitized luxury setting.

Speaker #1: And at the beginning, when they entered the space, they used third-party management. And when they got into it, they realized that they were probably better off setting up their own platform.

Robert Probst: They set up Revel, and that was a slow start. Now they have a team that is very talented, really across the board. You know, it's probably obvious that one of the reasons they wanted to work with Ventas is the Ventas OI platform and the ability also to stay in through the joint venture so they could participate in some of the upside. What we like about it is the quality of the assets are really high. We're buying at below replacement cost. We see operational upside that's significant, and it's us and the Revel team, and our team's already been on the ground. You know, we're seeing pretty immediate, you know, sales upside. We're catching the portfolio at a time where it has pretty good momentum already.

J. Justin Hutchens: They set up Revel, and that was a slow start. Now they have a team that is very talented, really across the board. You know, it's probably obvious that one of the reasons they wanted to work with Ventas is the Ventas OI platform and the ability also to stay in through the joint venture so they could participate in some of the upside.

Speaker #1: So they set up Revel. And that was the slow start. Now they have a team that is very talented, really across the board. One of the it's probably obvious that one of the reasons they wanted to work with Ventas is Ventas OI platform.

Speaker #1: And the ability also to stay in through this joint venture so they could participate in some of the upside. And what we like about it is the quality of the assets are really high.

J. Justin Hutchens: What we like about it is the quality of the assets are really high. We're buying at below replacement cost. We see operational upside that's significant, and it's us and the Revel team, and our team's already been on the ground. You know, we're seeing pretty immediate, you know, sales upside. We're catching the portfolio at a time where it has pretty good momentum already.

Speaker #1: We're buying at below replacement costs. We see operational upside that's significant. And it's us and the Revel team, and our team's already been on the ground, and we're seeing pretty immediate sales upside.

Speaker #1: We're catching the portfolio at a time where it has pretty good momentum already. We're facing a forward market that has 1,200 basis points of net demand over the next few years.

Robert Probst: We're facing a forward market that has 1,200 basis points in net demand over the next few years. We're playing into tailwinds as well. When you put the whole package together, it's a really exciting high-growth investment opportunity of really high-quality assets sourced completely off market. It should, you know, generate really good returns for us moving forward.

J. Justin Hutchens: We're facing a forward market that has 1,200 basis points in net demand over the next few years. We're playing into tailwinds as well. When you put the whole package together, it's a really exciting high-growth investment opportunity of really high-quality assets sourced completely off market. It should, you know, generate really good returns for us moving forward.

Speaker #1: So we're playing into tailwinds as well. And so when you put the whole package together, it's a really exciting high-growth investment opportunity. Really high-quality assets.

Speaker #1: Source completely off-market, and it should generate really good returns for us moving forward.

Giuliano Bologna: Thank you. I guess just more generally on the current transaction environment, I mean, how would you describe the current level of competition in capital chasing transactions? Are you seeing a lot more bidders showing up when you are participating in sort of more widely brokered opportunities? Are you starting to see that reflected in some of the cap rates? Have you changed sort of your expectations at all on the cap rate front for the rest of the year?

Speaker #4: Thank you. And then, I guess just more generally on the current transaction environment, how would you describe the current level of competition and capital chasing transactions?

Speaker #4: Are you seeing a lot more bidders showing up when you are participating in sort of more widely brokered opportunities? And are you starting to see that reflected in some of the cap rates?

Speaker #4: And have you changed sort of your expectations at all on the cap rate front for the rest of the year?

J. Justin Hutchens: I'm gonna step back again. It's another great question, but just important to frame it. You know, we just updated our investment guidance from $2.5 to 3 billion. We're doing this in a period where there is more interest in the sector. You know, there's clearly new investors. There's a wide variety of PE that's entered the space, both large and small, owner-operators, other REITs, there's institutional capital. With that in mind, you know, we've updated our investment guidance to the highest we've had in 3 years with high confidence. The reason we can do that is because of all the advantages that Ventas has. You know, we have our competitive moat, which includes the Ventas OI platform, the ability to manage operators at scale in a highly fragmented sector.

Speaker #1: So I'm going to step back again. It's another great question, but just important to frame it. So, we just updated our investment guidance from $2.5 to $3 billion.

Speaker #1: We're doing this in a period where there is more interest in the sector. There's clearly new investors as a wide variety of PE that's entered the space, both large and small owner-operators, other REITs.

Speaker #1: There's institutional capital. And in with that in mind, we've updated our investment guidance to the highest we've had in three years, with high confidence.

J. Justin Hutchens: With that in mind, you know, we've updated our investment guidance to the highest we've had in 3 years with high confidence. The reason we can do that is because of all the advantages that Ventas has. You know, we have our competitive moat, which includes the Ventas OI platform, the ability to manage operators at scale in a highly fragmented sector.

Speaker #1: And the reason we can do that is because of all the advantages that Ventas has. We have our competitive moat, which includes the Ventas OI platform, the ability to manage operators at scale in a highly fragmented sector. We're up to 44 operators now.

J. Justin Hutchens: We're up to 44 operators now. When we enter deals, we have no financing contingency. You know, the liquidity obviously is very high. Our track record of executing on deals has been excellent. I mentioned in the prepared remarks that, you know, 90% are relationship-oriented, 60% off-market, 40% are repeat sellers. We have a growing pipeline. The broader market is bringing more to the market as well. We just have a track record of delivering on what we say we're gonna do. I mentioned on the previous call that, you know, there's a drift down in cap rates from the sevens and into the sixes.

Speaker #1: When we enter deals, we have no financing contingency. The liquidity obviously is very high. Our track record of executing on deals has been excellent.

Speaker #1: And I mentioned in the prepared remarks that 90% are relationship-oriented, 60% off-market, and 40% repeat sellers. We have a growing pipeline. The broader market is bringing more to the market as well.

Speaker #1: And we just have a track record of delivering on what we say we're going to do. I mentioned on the previous call that we had there's a drift down in cap rates.

Speaker #1: From the 7s and into the 6s. We printed in our supplemental around a 6.5 all in. And that includes the Revel deal. It's 6.9 without.

J. Justin Hutchens: We printed in our supplemental, you know, around, you know, 6.5 all in, and that includes the Revel deal. It's 6.9 without. When you look at the rest of the pipeline throughout the year, we're expecting high sixes moving forward, and that includes a mix of value add and high-performing communities with upside moving forward. One thing that's interesting is that even though the cap rates have drifted down a bit, our IRRs have remained solid, and that's because of Revel and some other value add opportunities we have that's delivering growth for us.

Speaker #1: When you look at the rest of the pipeline throughout the year, we're expecting high 6s moving forward. And that includes a mix of value-add and high-performing communities with upside moving forward.

Speaker #1: One thing that's interesting is that even though the cap rates have drifted down a bit, our IRRs have remained solid. And that's because of Revel and some other value-add opportunities we have that's delivering growth for us.

Rachelle Smith: Thank you very much.

Giuliano Bologna: Thank you very much.

Speaker #4: Thank you very much.

Operator: Your next question comes from the line of James Kammert with Evercore. Your line is open.

Speaker #3: Your next question comes from the line of Jim Kemmert with Evercore. Your line is open.

James Kammert: Good morning. Thank you. Justin, I think you mentioned ex-export was 5.8% this quarter, if I'm not mistaken. Just generically, how much of that would you say is, say, recurring food and labor maybe versus temporal, say, sales commissions or weather?

Speaker #5: Good morning. Thank you. Justin, I think you mentioned Explore was 5.8% this quarter. If I'm not mistaken. But just generically, how much of that would you say is, say, recurring food and labor maybe versus temporal, say, sales commissions or weather?

J. Justin Hutchens: Yeah. It's actually, it wasn't poor. It was total expenses, 5.8%. You know, it was a lot of it was weather-related. We had a little bit of volume impact. The full year guide is 5.5, that includes the weather-related expense that in Q1, also some volume impacts throughout the rest of the year.

Speaker #1: Yeah. Actually, it wasn't poor. It was total expenses 5.8%. And there's it was a lot of it was weather-related. We had a little bit of volume impact.

Speaker #1: And then the full-year guide's 5.5. And that includes the weather-related expense that in the first quarter, but also some volume impacts throughout the rest of the year.

Robert Probst: Yeah. The principal drive from the OpEx guide from 5% to 5.5% is volume, Jim. It's more OpEx.

Speaker #5: Yeah. The principal drive in the OPEX guide from 5 to 5.5% is volume, Jim. It's more opportunity. That's helpful. And do you think I mean, who knows, right?

James Kammert: Okay. That's helpful. I mean, who knows, right, with labor costs, et cetera, how does Ventas educate its senior housing residents regarding that sort of expense dynamic vis-à-vis probable price increases? Do you think residents understand that?

Speaker #5: With labor costs, etc., how does Ventas educate its senior housing residents regarding that sort of expense dynamic vis-à-vis probable price increases? Do they think—do you think—residents understand that?

Debra A. Cafaro: Well, James, good morning. It's Debra. One important point to start the conversation is that the labor market has been, you know, pretty constructive. That's an important point given, you know, that we do hire caregivers to take care of the residents.

Speaker #6: Well, Jim, good morning. It's Debbie. So one important point to start the conversation is that the labor market has been pretty constructive. And so that's an important point given that we do hire caregivers to take care of the residents.

J. Justin Hutchens: Yeah. I think that the other point on that is really the value proposition that the residents are realizing, and there's a wide variety. I mean, they're engaging with us because they're looking for safety, socialization, peace of mind, ease of living, the amenities, and, you know, the care delivery that they can receive in the assisted living and memory care settings. You know, if you're delivering services and care the right way and engaging with your residents and their families in a way that builds and maintains that trust, the value proposition is well understood, and the price discussion is understood as well.

Speaker #1: Yeah, and I think that the other point on that is really the value proposition that the residents are realizing, and there's a wide variety.

Speaker #1: I mean, they're engaging with us because they're looking for safety, socialization, peace of mind, ease of living. The amenities. And the care delivery that they can receive and the assisted living and memory care settings.

J. Justin Hutchens: You know, if you're delivering services and care the right way and engaging with your residents and their families in a way that builds and maintains that trust, the value proposition is well understood, and the price discussion is understood as well. There is certainly an active dialogue, you know, particularly between our operators and the residents around, you know, the cost of service and care delivery and then the prices that we charge in association with that.

Speaker #1: And if you're delivering services and care the right way, and engaging with your residents and their families in a way that builds and maintains that trust, the value proposition is well understood.

Speaker #1: And the price discussion is understood as well. And so there is certainly an active dialogue particularly between our operators and the residents around the cost of service and care delivery.

J. Justin Hutchens: There is certainly an active dialogue, you know, particularly between our operators and the residents around, you know, the cost of service and care delivery and then the prices that we charge in association with that.

Speaker #1: And then the prices that we charge in association with that.

James Kammert: Appreciate it. Thank you.

Speaker #5: I appreciate it. Thank you.

J. Justin Hutchens: You bet.

Speaker #1: You bet.

Operator: Your next question comes from the line of Seth Bergey with Citi. Your line is open.

Speaker #3: Your next question comes from the line of Seth Bergy with Citi. Your line is open.

Nick Joseph: Thanks. It's Nick Joseph here with Seth. Just in terms of your comments on increased competition or more interest in the sector, and, you know, in your prepared remarks, you mentioned that supply and construction starts are still very low. I guess the question is, you know, at what point are you starting to see any of that capital as returns compress or at least cap rates compress a bit, and you see more and more interest move into development, particularly giving your comments on acquisitions versus replacement costs? I know there's still a gap there, but are we getting closer to some of that capital becoming interested in starting new supply?

Speaker #5: Thanks. It's Nick Joseph here with Seth. Just in terms of your comments on increased competition or more interest in the sector and in your prepared remarks, you mentioned that supply and construction starts are still very low.

Speaker #5: So I guess the question is, at what point are you starting to see any of that capital as returns compress or at least cap rates compress a bit and you see more and more interest move into development particularly given your comments on acquisitions versus replacement costs?

Speaker #5: I know there's still a gap there. But are we getting closer to some of that capital becoming interested in starting new supply?

J. Justin Hutchens: It's another really good question. We're still 20% to 40% off in terms of where rents need to be for, you know, most developments to pencil. We've talked about this before. You know, when developments start to be delivered at some point, when you see starts announced, it's most likely gonna be a very high price point product that's so disconnected from the existing market that the underwriting, you know, supports a supposedly, you know, high-end market that's available. If we just look at across our markets, we see 20% to 40% higher rents needed to support new supply. Doesn't mean there's not interest in it, you know, from potential capital players and operators and developers out there.

Speaker #1: So it's another really good question. We're still 20 to 40 percent off in terms of where rents need to be to for most developments to pencil.

Speaker #1: We've talked about this before. When developments start to be delivered, at some point when you see starts announced, it's most likely going to be a very high price point product.

Speaker #1: That's so disconnected from the existing market that the underwriting supports disposably high-end market that's available. And but if we just look across our markets, we see 20 to 40 percent higher rents needed to support new supply.

J. Justin Hutchens: If we just look at across our markets, we see 20% to 40% higher rents needed to support new supply. Doesn't mean there's not interest in it, you know, from potential capital players and operators and developers out there. Given the fundamentals are so strong and the demand outlook is so incredibly strong, it makes sense, and we'll need it at some point. It still doesn't seem near term.

Speaker #1: Doesn't mean there's not interest in it from potential capital players and operators and developers out there. Given the fundamentals are so strong and the demand outlook is so incredibly strong, it makes sense.

J. Justin Hutchens: Given the fundamentals are so strong and the demand outlook is so incredibly strong, it makes sense, and we'll need it at some point. It still doesn't seem near term.

Speaker #1: I mean, we'll need it at some point. But it's still doesn't seem near term.

Nick Joseph: Thank you. Just maybe in terms of the asset sales, obviously, just given the strength of the transaction market and the interest there, what's the opportunity from the Ventas portfolio side to recycle any of your senior housing assets that maybe you can harvest the value and redeploy into other opportunities?

Speaker #5: Thank you. And then just maybe in terms of the asset sales, obviously just given the strength of the transaction market and the interest there, what's the opportunity from the Ventas portfolio side to recycle any of your senior housing assets that maybe you can harvest the value and redeploy into other opportunities?

J. Justin Hutchens: You know, we've been. You know, each year we have a small amount of targeted, you know, dispos, you know, usually a few hundred million or so what we targeted. There's always some. Some of it's still senior housing. You know, one of the key parts of our strategy is to make sure that we're in the right markets with the right assets. If we see anything that we don't think supports the growth profile that we're targeting, then we'll introduce it to the market as a sale. We've been doing that consistently over the past several years, and we'll continue to always look for that, you know, bottom, you know, bottom part of the portfolio that we can sell.

Speaker #1: Yeah. So each year, we have a small amount of targeted dispose—usually a few hundred million or so is what we targeted. And there's always some.

Speaker #1: And some of it's still senior housing. One of the key parts of our strategy is to make sure that we're in the right markets with the right assets.

Speaker #1: And if we see anything that we don't think supports the growth profile that we're targeting, then we'll introduce it to the market as a sale.

Speaker #1: We've been doing that consistently over the past several years, and we'll continue to always look for that bottom part of the portfolio that we can sell.

Nick Joseph: Thank you.

Speaker #5: Thank you.

Operator: Your next question comes from the line of Vikram Malhotra with Mizuho. Your line is open.

Speaker #3: Your next question comes from the line of Vikram Malhotra with Mizuho. Your line is open.

Vikram Malhotra: Morning. Thanks for taking the question. I guess two for me. One, just going back to the Revel deal. Can you maybe, you know, give us a little bit more flavor as to why the occupancy kind of hasn't picked up and kind of, you know, the positioning of the portfolio in terms of, you know, the product mix. Are there more studios, for example, when people want larger studios? Is it a price point issue or a labor issue in terms of the right people? What could, you know, get you trending higher in terms of occupancy over the next year or two?

Speaker #5: Morning. Thanks for seeing the question. So I guess two for me. One, just going back to the Revel deal, can you maybe give us a little bit of flavor as to maybe a bit more flavor as to why the occupancy kind of hasn't picked up and kind of the positioning of the portfolio in terms of the product mix?

Speaker #5: Are there more studios, for example, when people want larger studios? Is it a price point issue or a labor issue in terms of the right people?

Speaker #5: What could get you trending higher in terms of occupancy over the next year or two?

J. Justin Hutchens: Yeah. Good question. There's no structural issue. It's not, it's not a situation where you have, you know, the, you know, studios in a one-bedroom market, for instance. You know, this is an investment that it was, you know, well-built for the type of resident they're trying to serve. One thing that's interesting when you visit is you don't see many residents hanging around in their apartments. I mean, these are very active communities that have a significant focus on health and wellness, fitness, education around those topics. You know, there's a social event with music playing. There's a activity at the bar. We were there in the afternoon. It's just a great time.

Speaker #1: Yeah, so good question. So there's no structural issue. It's not a situation where you have studios and a one-bedroom market, for instance. This is an investment that was well-built for the type of resident they're trying to serve.

Speaker #1: The one thing that's interesting when you visit is you don't see many residents hanging around in their apartments. I mean, these are very active communities.

Speaker #1: That have a significant focus on health and wellness, fitness, education around those topics. There's a social event with music playing. There's an activity at the bar.

Speaker #1: We were there in the afternoon, and it was just a great time. And so, I think they've done a great job of introducing a product that will work and be really popular in many of the locations.

J. Justin Hutchens: I think they've done a great job of introducing a product that will work and be real popular. In many of the locations, it's already proven to deliver a stabilized occupancy, but a lot of the newer product is still in lease up. We'll be targeting, you know, those communities and work with the team that's in place that has generated some momentum already to try to help improve on really sales delivery, you know, sales execution. Also, there's some price sophistication opportunities as well that we can bring through the Ventas OI platform.

Speaker #1: It's already proven to deliver a stabilized occupancy. But a lot of the newer product is still in lease up. And so we'll be targeting those communities.

Speaker #1: And work with the team that's in place that has generated some momentum already to try to help improve on really sales delivery, sales execution, also there's some price sophistication opportunities as well that we can bring through the Ventas OI platform.

Vikram Malhotra: Okay. Just one more. I guess, you know, I am wondering, is it time for Ventas to maybe use the fund it already has or create a new fund, in the sense, monetize certain maybe core higher occupancy senior housing or maybe even some life sciences where, you know, you could perhaps get fees from malls, et cetera. Just given where we are in the cycle and the deviation in, say, life sci versus senior housing, I am wondering if there is an opportunity for Ventas in the fund business.

Speaker #5: Okay. And then just one more. I guess I'm wondering is it time for Ventas to maybe use the fund it already has or create a new fund in the sense monetize certain maybe core higher occupancy senior housing or maybe even some life sciences where you could perhaps get fees to promote etc.?

Speaker #5: Just given where we are in the cycle and the deviation in, say, life sci versus senior housing, I'm wondering if there's an opportunity for Ventas in the fund business.

Debra A. Cafaro: Vikram, this is Debbie. Thanks for the question. We do have a Ventas Investment Management business that includes an open-end fund and some other vehicles. Certainly, with all the interest in senior housing and with Ventas' competitive advantages and brand, we're well-positioned to continue to try to expand our footprint in senior housing in a variety of ways, which could include things like additional vehicles.

Speaker #3: Vikram, this is Debbie. Thanks for the question. We do have a Ventas investment management business that includes an open-end fund and some other vehicles.

Speaker #3: And certainly with all the interest in senior housing and with Ventas' competitive advantages, and brand, we're well positioned to continue to try to expand our footprint in senior housing in a variety of ways, which could include things like additional vehicles.

Operator: Your next question comes from the line of Austin Wurschmidt with KeyBanc Capital Markets. Your line is open.

Speaker #3: And your next question comes from the line of Austin Worschmidt with KeyBank Capital Markets. Your line is open.

Austin Wurschmidt: Hey, good morning. Justin, the incremental margin within SHOP segment has remained around the 50% level, which I think you previously assumed in initial guidance. Has anything changed relative to what's assumed in the revised guidance? I guess, you know, given occupancy within the same-store pool is now above 90%, when do you think you could start to see that incremental margin improve, you know, into the 60%, 70% range or better?

Speaker #4: Hey, good morning. Justin, the incremental margin within shop segment has remained around the 50% level. Which I think you previously assumed an initial guidance.

Speaker #4: Has anything changed relative to what's assumed in the revised guidance? And I guess, given occupancy—within the same store pool—is now above 90%.

Speaker #4: When do you think you could start to see that incremental margin improve into the 60, 70 percent range or better?

J. Justin Hutchens: Yep. Another one of our favorites. The incremental margin's around 50%. It's been that way for years in a row now, as we were on that journey from the kind of mid-80s to 90% occupancy. You know, the guidance really assumes that it's in the 50s this year as we're, you know, we're at this 90% occupancy mark now. We know that in our portfolio, that communities that are, you know, in that kind of 90% plus range of occupancy that have not had an occupancy change year over year. They've had a flat occupancy. They deliver a 70% incremental margin.

Speaker #1: Yeah, another one of our favorites. So, the margin's been around—the incremental margin's been around 50%. It's been that way for years in a row now.

Speaker #1: And that's, as we were on that journey from the kind of mid-'80s to 90% occupancy, and where the guidance really assumes that it's in the 50s this year as we're at this 90% occupancy mark now.

Speaker #1: We know that in our portfolio that communities that are in that kind of 90% plus range of occupancy, that have not had an occupancy change year over year.

Speaker #1: So they've had a flat occupancy. They deliver a 70% incremental margin. And obviously, we have a group of communities that we're still in lease up across our US portfolio, which is only 87% occupied.

J. Justin Hutchens: You know, obviously, we have a group of communities that we're still in lease up, you know, across our US portfolio, which is only 87% occupied. We still have a lot of communities that are delivering occupancy growth. When you isolate those and that didn't deliver occupancy growth year over year, that rule of thumb we've talked about is certainly achievable. Our goal over time is gonna be to get as many communities in that category as possible.

Speaker #1: So we still have a lot of communities that are delivering occupancy growth. But when you isolate those and that didn't deliver occupancy growth year over year, that rule of thumb we've talked about is certainly achievable.

Speaker #1: And our goal over time is going to be to get as many communities in that category as possible.

Austin Wurschmidt: That's helpful. You know, you reiterated kind of that the May to September key selling season's really gonna determine how the year plays out. You did go ahead and increase occupancy given, you know, I guess, the lack of seasonality you saw in Q1. How much of that occupancy guidance increase was specific to Q1 versus, you know, flowing through, I guess, a better, a better outcome through the balance of the year?

Speaker #4: That's helpful. And then you reiterated kind of that the May to September key selling season is really going to determine how the year plays out.

Speaker #4: But you did go ahead and increase occupancy given I guess the lack of seasonality you saw in one queue. How much of that occupancy guide and increase was specific to one queue versus flowing through, I guess, about a better outcome through the balance of the year?

J. Justin Hutchens: Yeah. You know, this key selling season hasn't even started yet. We do have, you know, optimism heading into it, you know, because of the strong start we had. I would really think about it as the strong start really delivering the increase from 270 to 300 on the full year, and knowing that we have a lot of, you know, execution left to, you know, during the most important part of the year, which is the key selling season.

Speaker #1: Yeah. So it's this key selling season hasn't even started yet. And we do have optimism heading into it. Because of the strong start we had.

Speaker #1: But I would really think about it as the strong start really delivering the increase from 270 to 300 on the full year. And knowing that we have a lot of execution left to during the most important part of the year, which is the key selling season.

Austin Wurschmidt: Thank you. Very helpful.

Speaker #4: Thank you. Very helpful.

Operator: Your next question comes from the line of Michael Carroll with RBC Capital Markets. Your line is open.

Speaker #3: Your next question comes from the line of Michael Carroll with RBC Capital Markets. Your line is open.

Michael Carroll: Yeah, thanks. With seniors housing occupancy now above 90%, I mean, does it make more sense for operators to push for higher rates as opposed when occupancy was in the low 80% range, I guess? Said another way, does the improved occupancy level allows these operators to be a little bit more aggressive for their operating strategy, trying to push for higher rates?

Speaker #4: Yeah. Thanks. With seniors housing occupancy now above 90%, I mean, does it make more sense for operators to push for higher rates as opposed to when occupancy was in the low 80% range?

Speaker #4: I guess or said another way, does the improved occupancy level allow these operators to be a little bit more aggressive for their operating strategy trying to push for higher rates?

J. Justin Hutchens: Well, I would just wanna remind you that we're 87% occupied in the US, we see our opportunity very much as volume driven. We're happy that we're, you know, we're seeing good performance from both occupancy and from rate, and that's delivering the eight and three quarter percent revenue guide that we made on the full year. Everything's contributing to the revenue growth and the improved outlook on revenue. However, volume remains the number one focus. We do know when you have higher occupied communities that there's better opportunity for price performance, and we see that in our portfolio. The opportunity really is to continue to drive occupancy in the US.

Speaker #1: Well, I would just want to remind you that we're 87% occupied in the US. So we see our opportunity very much as volume driven.

Speaker #1: We're happy that we're seeing good performance from both occupancy and from rate, and that's delivering that 8 and three-quarter percent revenue guide that we made on the full year.

J. Justin Hutchens: Everything's contributing to the revenue growth and the improved outlook on revenue. However, volume remains the number one focus. We do know when you have higher occupied communities that there's better opportunity for price performance, and we see that in our portfolio. The opportunity really is to continue to drive occupancy in the US.

Speaker #1: So everything's contributing to the revenue growth in the improved outlook on revenue. However, volume remains the number one focus. We do know when you have higher occupied communities that there's better opportunity for price performance.

Speaker #1: And we see that in our portfolio. But the opportunity really is to continue to drive occupancy in the U.S.

Debra A. Cafaro: Right. That's what sets up the multi-year growth and value creation opportunity from organic growth in SHOP is the rate and occupancy working together to deliver outperformance.

Speaker #3: Right. And that's what sets up the multi-year growth and value creation opportunity from organic growth in SHOP—is the rate and occupancy working together to deliver outperformance.

Michael Carroll: Okay, great. I appreciate that. Just circling back on potential developments. I mean, have there been interesting development opportunities that crossed Ventas' desk that they're willing to pursue, or is it still just mainly focused on acquisitions at this point?

Speaker #4: Thank you, Greg. I appreciate that. And then just circling back on potential developments, I mean, have there been interesting development opportunities across Ventas's desk that they're willing to pursue?

Speaker #4: Or is it still just mainly focused on acquisitions at this point?

J. Justin Hutchens: We are certainly focused on acquisitions. We are in our 3rd year of a very successful run of acquiring communities that have attractive, they are accretive year 1, and have a growth profile that's supporting low-to-mid 10s unlevered IRRs. That pipeline has grown, and we're executing on it. That's our 1st priority. Along with, of course, continuing to drive organic performance across the SHOP portfolio, and looking for opportunities to improve performance in those communities that we already own. Development opportunities, I'm sure there'll be some in the future, but that's not our focus at the time.

Speaker #1: We are certainly focused on acquisitions. This has been we're in our third year of a very successful run of acquiring communities that have attractive they're a creative year one.

Speaker #1: And have a growth profile that's supporting low-to-mid teen unlevered IRRs. And that pipeline has grown, and we're executing on it. So that's our first priority.

Speaker #1: Along with, of course, continuing to drive organic performance across the shop portfolio. And looking for opportunities to improve performance in those communities that we already own.

Speaker #1: Development opportunities, I'm sure there'll be some in the future. But that's not our focus at the time.

Michael Carroll: Okay, great. Thanks.

Speaker #4: Okay. Great. Thanks.

Debra A. Cafaro: Thanks, Mike.

Speaker #3: Thanks, Mike. Your next question comes from the line of Wes Golliday with Bayard. Your line is open.

Operator: Your next question comes from the line of Wesley Golladay with Baird. Your line is open.

Wesley Golladay: Hey. Good morning, everyone. I just wanna go back to the Revel portfolio. Just looking on the website, A Place for Mom looks really highly rated. I just wanna go back into, you know, what the game plan will be. Is it, you know, is it really leaning into this Ventas OI, given the new, I guess, the operator, more data, advice on pricing? Just trying to see, you know, what the near term opportunity is. Will their portfolio be ready for the key leasing season?

Speaker #5: Hey, good morning, everyone. I just want to go back to the Revel portfolio. Just looking on the website, A Place for Mom looks really highly rated.

Speaker #5: And so I just want to go back into what the game plan will be. Is it really leaning into this Ventas OI given the new, I guess, the operator more data?

Speaker #5: Advice on pricing, just trying to see how near-term what the near-term opportunity is. Will the portfolio be ready for the key leasing season?

J. Justin Hutchens: Well, I'll start with the last part. It is absolutely ready for the key selling season. You know, these are just really well-constructed resort-like communities that will be very competitive. You know, as we met with The Wolff Company in the early stages, it became very clear quickly that the combination of these great communities, high demand markets, their newly reinvigorated, you know, talented management team, and the Ventas OI platform, which includes the benefit of all of our data analytics, but also our boots on the ground approach, which has already started, that we can really create value in this together. That's why the joint venture was a great fit. We'll look forward to doing that. Obviously, the biggest opportunity is to continue to drive sales.

Speaker #1: Yeah. Well, I'll start with the last part. It's absolutely ready for the key selling season. These are just really well constructed. Resort-like communities that will be very competitive.

Speaker #1: And as we met with Wolf's in the early stages, it became very clear quickly that the combination of these great communities, high-demand markets, they're newly reinvigorated, talented management team, and the Ventas OI platform, which concludes the benefit of all of our data analytics, but also our boots on the ground approach, which is already started.

Speaker #1: That we can really create value in this together. That's why the joint venture was a great fit, and we'll look forward to doing that.

Speaker #1: Obviously, the biggest opportunity is to continue to drive sales. And also, when you're working on sales, price and volume always work together. So we'll bring our expertise in both areas to the platform.

J. Justin Hutchens: When you're working on sales, price and volume always work together. We'll bring our expertise in both areas to the platform.

Wesley Golladay: Okay. When you look at the pipeline, you know, I mean, is this a unique opportunity you have? Or when you look at the like future pipeline, are you seeing any cities where, you know, you have the stuff that's in core a little bit higher yielding, but you can also have these, you know, just plug it into the OI, and then you get a nice lift in a few years?

Speaker #5: All right. And then when you look at the pipeline, is this a unique opportunity you have? When you look at the future pipeline, are you seeing any of these where you have the stuff that's in core a little bit higher yielding with you also have these just plug it into the OI and then you get a nice lift in a few years?

J. Justin Hutchens: Yeah, I think what you're. You broke up a little bit, but I think what you're asking is this a unique opportunity and are there other value add opportunities in the, in the portfolio? We've had a number like this already. They've just been smaller. This is the first one at scale that we're pretty excited about. We have other value add opportunities in the $3 billion, you know, dollar guide. We're, you know, looking forward to delivering, you know, accretive investments with growth in a wide variety.

Speaker #1: Yeah, I think you broke up a little bit, but I think what you're asking is, is this a unique opportunity? And are there other value-add opportunities in the portfolio?

Speaker #1: We've had a number like this already. They've just been smaller. And so this is the first one at scale that we're pretty excited about.

Speaker #1: We have other value-add opportunities in the 3 billion. So we're looking forward to delivering a creative investments with growth. And a wide variety.

Wesley Golladay: Okay. I did break up. Yeah, sorry about breaking up.

Speaker #5: Okay. I did break up. Yeah. Sorry about breaking up. But you did get the question. Thank you.

J. Justin Hutchens: Yeah.

Wesley Golladay: You did get the question. Thank you.

J. Justin Hutchens: All right, good. Great. Thanks.

Speaker #1: All right. Good. Great. Thanks.

Operator: Your next question comes from the line of Juan Sanabria with BMO Capital Markets. Your line is open.

Speaker #3: And your next question comes from the line of Juan Sanabrio with DMO Capital. Your line is open.

Juan Sanabria: Hi, good morning. Just a question on seniors. You know, there's been press articles about, given the tight markets, about operators being able to charge entrance fees and maybe generate some revenue off of waitlists. Just curious on your approach and how that may or may not contribute to kind of the 100% occupancy goal or zero days downtime.

Speaker #6: Hi. Good morning. Just a question on seniors. There's been press articles about, given the tight markets, about operators being able to charge entrance fees and maybe generate some revenue off of waitlists.

Speaker #6: So just curious on your approach and how that may or may not contribute to kind of the 100% occupancy goal or zero days downtime.

Debra A. Cafaro: Well, it starts with the value proposition. I think it's really interesting that this is, as you know, a private pay consumer-driven business that people are choosing where they want to live for the security it offers them and their families. That is a very encouraging, especially when coupled with the demographic demand that we see accelerating and then remaining elevated for a long period of time. That's really important to think about. I'll turn it over to Justin really to talk about the, you know, different management of communities as they go up the curve in terms of occupancy, which we see happening, and over time will happen more in our portfolio.

Speaker #3: Well, it starts with the value proposition. I think it's really interesting that this is, as you know, a private pay consumer-driven business that people are choosing for to where they want to live for the security it offers them in their families.

Speaker #3: So that is a very encouraging, especially when coupled with the demographic demand that we see accelerating and then remaining elevated for a long period of time.

Speaker #3: So that's really important to think about. And I'll turn it over to Justin, really, to talk about the different management of communities as they go up the curve in terms of occupancy, which we see happening and, over time, will happen more.

Speaker #3: And our portfolio.

J. Justin Hutchens: Yeah. You, Juan, you mentioned entrance fees. I'm gonna reframe it and call it community fees, which is a fee that's been really a fee that's been part of the industry pricing package for many years. In more competitive periods, it would be reduced or waived. In this period, where we have increased demand, it's actually going up. So we are seeing, you know, higher community fees, you know, across our portfolio, so that's consistent with what you're reading about. We're also starting to see, you know, waitlists form. Now we've had them for many years already in Canada. That's where our longest waitlist exists in Quebec. We're starting to have some waitlists in the US.

Speaker #1: Yeah. And Juan, you mentioned entrance fees. I'm going to reframe it and call it community fees. Which is a fee that's been really a fee that's been part of the industry pricing package for many years.

Speaker #1: In more competitive periods, it would be reduced or waived. In this period, where we have increased demand, it's actually going up. So, we are seeing higher community fees across our portfolio.

J. Justin Hutchens: So we are seeing, you know, higher community fees, you know, across our portfolio, so that's consistent with what you're reading about. We're also starting to see, you know, waitlists form. Now we've had them for many years already in Canada. That's where our longest waitlist exists in Quebec. We're starting to have some waitlists in the US.

Speaker #1: So that's consistent with what you're reading about. And we're also starting to see waitlists form. Now, we've had them for many years already in Canada.

Speaker #1: That's where our longest waitlist exists in Quebec. And we're starting to have some waitlists in the US. And there's certainly the deposits that are required for waitlists.

J. Justin Hutchens: You know, there's certainly, deposits, you know, that are required for waitlists, and in some cases, you can charge to be on a waitlist. We're at the front end of that, you know, you know, there's demand, and as Debbie mentioned, the value proposition is very appealing, to those that are interested. It, it has supported better pricing.

Speaker #1: And in some cases, you can charge to be on a waitlist. And we're at the front end of that. But the there's demand and as Debbie mentioned, the value proposition is very appealing.

Speaker #1: To those that are interested. So it has supported better pricing.

Juan Sanabria: Just going back to development or supply that's come up a couple times. Curious on the appetite to structure something, either with maybe a preferred or mezz type component to where you guys could earn a return during the build-out or lease-up. Historically, you guys haven't done US development in seniors housing. Just curious if that is something that would be of interest. I mean, a couple of the leading operators, including Sunrise, have talked about looking at development, so it seems like it's coming near term. Just curious on your appetite, maybe not traditional fee simple, but in other structures to where you could earn a return during that initial phase.

Speaker #6: And just going back to development or supply that's come up a couple of times, curious on the appetite to structure something either with maybe a preferred or mez type component to where you guys could earn a return during the build-out or lease-up.

Speaker #6: Historically, you guys haven't done U.S. development in seniors' housing, so just curious if that is something that would be of interest. I mean, a couple of the leading operators, including Sunrise, have talked about looking at development.

Juan Sanabria: Just curious if that is something that would be of interest. I mean, a couple of the leading operators, including Sunrise, have talked about looking at development, so it seems like it's coming near term. Just curious on your appetite, maybe not traditional fee simple, but in other structures to where you could earn a return during that initial phase.

Speaker #6: So it seems like it's coming near-term. So just curious on your appetite, maybe not traditional. Simple, but in other structures to where you could earn a return during that initial phase.

J. Justin Hutchens: Well, you know, there certainly are structures that can, you know, that we can utilize that makes sense and, you know, when it comes to development. We can, you know, with the, with the right opportunity, can underwrite returns. We have a lot of partners that would be qualified to do that with. It's just not a big area of focus for us. We're focused on acquisitions, you know, as described, you know, they're delivering, you know, accretive growth opportunities, but also the unlevered IRRs that are in the limited to mid-teens. I know that's not quite what you're asking. The answer is yes, there's a way to do it. It's also important to know that that's really not where we're focused at in, on a, at, in scale at this point.

Speaker #1: Well, so there certainly are structures that can that we can utilize that make sense. And when it comes to development, and we can with the right opportunity, can underwrite returns.

Speaker #1: And we have a lot of partners that would be qualified to do that with. It's just not a big area of focus for us.

J. Justin Hutchens: We're focused on acquisitions, you know, as described, you know, they're delivering, you know, accretive growth opportunities, but also the unlevered IRRs that are in the limited to mid-teens. I know that's not quite what you're asking. The answer is yes, there's a way to do it. It's also important to know that that's really not where we're focused at in, on a, at, in scale at this point.

Speaker #1: We're focused on acquisitions. As described, they're delivering the creative growth opportunities, but also the unlevered IRRs that are in the limited to mid-teens. And so I know that's not quite what you're asking.

Speaker #1: The answer is, yes, there's a way to do it. But it's also important to know that that's really not where we're focused at on in scale at this point.

Juan Sanabria: Thank you.

Speaker #6: Thank you.

Operator: Your next question comes from the line of Farrell Granath with Bank of America. Your line is open.

Speaker #3: Your next question comes from the line of Pharrell Granas with Bank of America. Your line is open.

Farrell Granath: Hi. Good morning. This is Farrell Granath. I first just wanted to ask about the increase in the cash G&A. I know you had mentioned about adding some staff as well on the SHOP platform. I was curious if there's any other contributing factors or if there are any initiatives that are also going into that figure.

Speaker #7: Hi. Good morning. This is Pharrell Granas. I first just wanted to ask about the increase in the cash unit I know you had mentioned about adding some staff as well on the shop platform.

Speaker #7: I was curious if there's any other contributing factors or if there are any initiatives that are also going into that figure.

J. Justin Hutchens: Yeah, I'll take that one. For cash G&A, we mentioned in February, you see it in the numbers in Q1, we are investing behind the business. We're obviously growing and scaling the platform, investing behind that people process technology in order to be able to accelerate that growth is definitely part of the playbook. We continue to believe that growth on cash G&A will be in line with the growth of the enterprise. We continue to stay focused on efficiency and effectiveness, you know, you know, Q1 is representative, I think, of the plan.

Speaker #1: Yeah. I'll take that one. For cash GNA, we mentioned in February and you see it in the numbers in the first quarter. We are investing behind the business.

Speaker #1: We're obviously growing. And scaling the platform. And so investing behind that, people process technology in order to be able to accelerate that growth is definitely part of the playbook.

Speaker #1: We continue to believe that growth on cash unit will be in line with the growth of the enterprise. We continue to stay focused on efficiency and effectiveness.

Speaker #1: But the first quarter is representative, I think, of the plan.

Farrell Granath: Great. Also on, the rollout of Ventas OI, is that fully integrated with all your operators currently on your SHOP platform, or is there an additional rollout that we could expect?

Speaker #3: Great. And also on the rollout of Ventas OI, is that fully integrated with all your operators currently on your shop platform? Or is there an additional rollout that we could expect?

J. Justin Hutchens: Yeah, it's fully integrated. If you're new to us, there's a period of time that has to pass before you're fully integrated. We have a number of newer operators that have joined us in the recent months. Yeah, this is a fully integrated platform across all of our operators, across all of our geographies, primarily in the US. You know, combining the advantage of the data analytics platform and the experiential insights that we deliver through a number of avenues, including boots on the ground site visits with our operators.

Speaker #1: Yeah, it's fully integrated. If you're new to us, there's a period of time that has to pass before you're fully integrated. We have a number of newer operators that have joined us in the recent months.

Speaker #1: But yeah, this is a fully integrated platform across all of our operators, across all of our geographies, primarily in the US. And combining the advantage of the data analytics platform and the experiential insights that we deliver through a number of avenues, including boots on the ground, site visits with our operators.

Farrell Granath: Great. Thank you so much.

Speaker #3: Great. Thank you so much. Your next question comes from the line of Rich Andersen with Cantor Fitzgerald. Your line is open.

Operator: Your next question comes from the line of Richard Anderson with Cantor Fitzgerald. Your line is open.

Richard Anderson: Thanks. Good morning. Great quarter. Question number one is, you know, early on, Debbie, you said, you know, you're seeing increased engagement to do deals with Ventas, and I guess I'm curious why anyone would be a motivated seller with everything just sort of starting to happen here. You know, it's not like they're getting 5 caps on deals to get, you know, paid for the opportunity set going forward. You know, I get the Revel deal, but, like, what is in it for people to be a seller today? Along those lines, do you think there'll be more in the way of JV type of deals that you'll have to accommodate to continue to grow, maybe OP Unit deals?

Speaker #1: Thanks. Good morning. Great quarter. Question number one is, early on, Debbie, you said you're seeing increasing engagement to do deals with Ventas. And I guess I'm curious why anyone would be a motivated seller with everything just sort of starting to happen here.

Speaker #1: It's not like they're getting five caps on deals to get paid for the opportunity set going forward. So what is the I get the Revel deal, but what is in it for people to be a seller today?

Speaker #1: And along those lines, do you think there'll be more in the way of JV-type deals that you'll have to accommodate to continue to grow, maybe OP unit deals?

Richard Anderson: I'm just curious how that dynamic might be playing into the future.

Speaker #1: I'm just curious how that dynamic might be playing into the future for external growth standpoint.

Debra A. Cafaro: Mm-hmm.

Richard Anderson: For an external growth standpoint.

Debra A. Cafaro: Yeah. I mean, you know, good question. It is true that more and more people are bringing assets to market, which is building our pipeline considerably and giving us a great opportunity set. You know, sellers come in different varieties, you know, private equity sellers, other holders who have limited life vehicles or other holding periods that have been perhaps exceeded because of, you know, the last couple years, and who also, you know, wanna make sure that they can, you know, achieve returns and then perhaps, you know, recycle capital. We see a lot of that. We see some debt maturities. You know, the truth is, when the assets get in our hands, they're likely to perform better.

Speaker #3: Yeah. I mean, as good question. It is true that more and more people are bringing assets to market, which is building our pipeline considerably and giving us a great opportunity set.

Speaker #3: And sellers come in different varieties. Private equity sellers, other holders, who have limited life vehicles or other holding periods that have been perhaps exceeded because of the last couple of years, and who also want to make sure that they can achieve returns and then perhaps recycle capital we see a lot of that.

Speaker #3: We see some debt maturities. And the truth is, when the assets get in our hands, they're likely to perform better. And so we may be having better returns than the seller could have if they held on to the asset.

Debra A. Cafaro: You know, we may be having better returns than the seller could have in, you know, if they hold on to the asset. It tends to be longer hold periods, different types of sellers who maybe don't have the advantage platform that we have. This is a very difficult business to run in a, you know, just a one-off basis or in small scale, and that's why we're building this platform to be able to outperform at scale. Those are some of the reasons. I don't know if, Justin, you wanna add any.

Speaker #3: So it tends to be longer hold periods, different types of sellers who maybe don't have the advantage platform that difficult business to run in a just a one-off basis or in small scale.

Speaker #3: And that's why we're building this platform to be able to outperform at scale. So those are some of the reasons. I don't know if Justin, you want to add any, or?

J. Justin Hutchens: Yeah.

Debra A. Cafaro: if that covered it.

J. Justin Hutchens: There is a second part of the question regarding joint ventures.

J. Justin Hutchens: There is a second part of the question regarding joint ventures. What I would say is, you know, the Revel deal is obviously a joint venture. It's a strength on strength joint venture opportunity, go create value. In any investment we make, we're always looking for alignment. We found it that way, you know, in that case, through a joint venture. Most of our seniors housing investments, we're doing it through aligned management agreements. That's helping us, you know, to be on the same page with the operators, you know, from day one when we start a new relationship.

Speaker #1: Yeah. Just—there's a second part of the question regarding joint ventures. And what I would say is, the Revel deal is obviously a joint venture.

Richard Anderson: Mm-hmm.

J. Justin Hutchens: What I would say is, you know, the Revel deal is obviously a joint venture. It's a strength on strength joint venture opportunity, go create value. In any investment we make, we're always looking for alignment. We found it that way, you know, in that case, through a joint venture. Most of our seniors housing investments, we're doing it through aligned management agreements. That's helping us, you know, to be on the same page with the operators, you know, from day one when we start a new relationship.

Speaker #1: It's a strength-on-strength joint venture opportunity to go create value. In any investment we make, we're always looking for alignment. And we found it that way in that case through a joint venture.

Speaker #1: And most of our senior housing investments, we're doing it through alignment management agreements. And so that's helping us to be on the same page with the operators from day one, when we start a new relationship.

Debra A. Cafaro: The rest of our expected investment activity is 100% equity ownership by Ventas.

Speaker #3: The rest of our expected investment activity is 100% equity ownership by Ventas.

Richard Anderson: Okay. Next question is, you know, a lot of your, you know, a lot of REITs and others, again, to reiterate a recurring theme, are sort of going after this opportunity, which you have to do, right? Like, this is a great dynamic, supply-demand dynamic, going forward for the next several years. You know, everyone is sort of standing on the same side of the boat. When that happens, you know, eventually, you know, the boat tips. I am wondering if, you know, do you see an opportunity of people that are buyers today that may be necessary sellers a couple of years from now when you think about development coming back into the fray? You know, 20% below rents needed to justify development.

Speaker #1: Okay. Next question is a lot of your a lot of REITs and others again, to reiterate a recurring theme, are sort of going after this opportunity.

Speaker #1: What you have to do, right? This is a great dynamic supply-demand dynamic going forward for the next several years. But everyone is sort of standing on the same side of the boat.

Richard Anderson: When that happens, you know, eventually, you know, the boat tips. I am wondering if, you know, do you see an opportunity of people that are buyers today that may be necessary sellers a couple of years from now when you think about development coming back into the fray? You know, 20% below rents needed to justify development. Well, if you start today, three years from now, it might have made a whole lot of sense to start a development today. I just wonder if you think that there's a second chapter of people that are buyers today that'll be sellers tomorrow for Ventas. Thanks.

Speaker #1: And when that happens, eventually, the boat tips. And I'm wondering if do you see an opportunity of people that are buyers today that may be necessary sellers a couple of years from now when you think about development coming back into the fray?

Speaker #1: 20% below rents needed to justify development. Well, if you start today, three years from now, it might have made a whole lot of sense to start a development today.

Richard Anderson: Well, if you start today, three years from now, it might have made a whole lot of sense to start a development today. I just wonder if you think that there's a second chapter of people that are buyers today that'll be sellers tomorrow for Ventas. Thanks.

Speaker #1: So I just wonder if you think that there's a second chapter of people that are buyers today that will be sellers tomorrow for Ventas.

Debra A. Cafaro: Yeah, I mean, I agree with you, and the reason is more about the expertise and data that are necessary to really do well in this business. I do think some new entrants will find it more challenging, frankly, and they will likely be sellers, because you really have to know what you're doing, as, you know, Justin does from his decades in the industry, and we've spent, you know, five years building this platform, and it's just very effective and differentiated. If you don't have that, it's much harder to succeed. I do think that will give us more opportunities as we look in the next couple of years.

Speaker #1: Thanks.

Speaker #3: Yeah. I mean, I would have I agree with you. And the reason is more about the expertise and data that are necessary to really do well in this business.

Speaker #3: I do think some new entrants will find it more challenging, frankly, and they will likely be sellers. Because you really have to know what you're doing, as Justin does from his decades in the industry.

Speaker #3: And we've spent five years building this platform, and it's very effective and differentiated. And if you don't have that, it's much harder to succeed.

Speaker #3: So I do think that will give us more opportunities as we look in the next couple of years.

Richard Anderson: Okay, great. Thanks very much.

Speaker #1: Okay. Great. Thanks very much.

Debra A. Cafaro: Thank you, Rich.

Speaker #3: Thank you, Rich. Your next question is from Michael Goldsmith with UBS Financial. Your line is open.

Operator: Your next question is from Michael Goldsmith with UBS. Your line is open.

Michael Goldsmith: Hey, it's Michael Goldsmith. I'm here with Justin Hutchens. Thanks a lot for taking our questions. Maybe sticking with the Revel investment, it sounded like you've done some smaller lease up or unstabilized acquisitions in the past. This one's clearly a bit bigger. Maybe the follow-up question to that is just, are you more willing now to be a buyer of these type of properties? If so, is that driven by the improved backdrop or something else in the environment that makes this more attractive now? Thanks.

Speaker #4: Hey. It's Michael Goldsmith. I'm here with Justin Hoswig. Thanks a lot for taking our questions. Maybe sticking with the Revel investment, it sounded like you've done some smaller lease-up or unstabilized acquisitions in the past.

Speaker #4: This one's clearly a bit bigger. So maybe the follow-up question to that is just, are you more willing now to be a buyer of these types of properties?

Speaker #4: And if so, is that driven by the improved backdrop or something else in the environment that makes this more attractive now? Thanks.

J. Justin Hutchens: I mean, we've been, really from the beginning of this investment run we've been on, which started in 2024, we've been focused on unlevered IRRs in the low to mid-teens. You know, we have been delivering on that through a variety of different types of investments in senior housing. Certainly, you know, a value add opportunity is great because it'll support, you know, more growth. This particular one hits the mid-teens on whatever IRRs. You know, we like that opportunity. There's others, smaller opportunities like that that we've had. We've had others that are in the pipeline in the $3 billion that we've mentioned that will deliver some, you know, more close to the mid-teens as well.

Speaker #1: Yeah. I mean, we've been—really from the beginning of this investment run we've been on, which started in '24—we've been focused on unlevered IRRs in the low-to-mid teens.

Speaker #1: We have been delivering on that through a variety of different types of investments in senior housing. And certainly, a value-add opportunity is great because it'll support more growth.

Speaker #1: And in this particular one, it hits the mid-teens unlevered IRRs, and so we like that opportunity. There are other, smaller opportunities like that that we've had.

J. Justin Hutchens: There's others, smaller opportunities like that that we've had. We've had others that are in the pipeline in the $3 billion that we've mentioned that will deliver some, you know, more close to the mid-teens as well. You're really pulling two levers to get there, right? You have the going in year 1 yield and then the expected growth profile of the asset over time. Those are working together in everything we've been investing in to deliver the IRRs that we're targeting.

Speaker #1: We've had others that are in the pipeline in the $3 billion that we've mentioned that will deliver some more close to the mid-teens as well.

J. Justin Hutchens: You're really pulling two levers to get there, right? You have the going in year 1 yield and then the expected growth profile of the asset over time. Those are working together in everything we've been investing in to deliver the IRRs that we're targeting.

Speaker #1: And you're really pulling two levers to get there, right? You have the going in year-one yield and then the expected growth profile, the asset over time, and those are working together and everything we've been investing in to deliver the IRRs that we're targeting.

Michael Goldsmith: Got it. As a follow-up, you know, maybe can you provide an update on the Brookdale transitions, how those 45 assets are trending? Are you largely in line with your expectation of realizing $50 million of upside on those? If so, what's the timeline there?

Speaker #4: Got it. And as a follow-up, maybe can you provide an update on the Brookdale transitions—how those 45 assets are trending? Are you largely in line with your expectation of realizing $50 million of upside on those?

Speaker #4: And if so, what's the timeline there?

J. Justin Hutchens: Yep. Yeah, remind everybody, we got 45 communities that we transitioned late last year, earlier this year from our Brookdale lease to our SHOP portfolio. These are large scale communities that are located in markets with high demand. Tailwinds that we're playing into. They require additional investment to be competitive. We'll have completed by next month a majority of those investments in the portfolio. The CapEx deployment's really on track. All five operators are fully integrated now into the communities, and they're getting a handle on the operation and really focused on the key selling season. That's going as planned. Like I said before, we really viewed 2026 as the year to put all the pieces in place, and 2027 is, and beyond, is really the NOI growth opportunity.

Speaker #1: Yep. Yeah. So remind everybody we've got 45 communities that we transitioned. Late last year, earlier this year, from our Brookdale lease to our shop portfolio.

Speaker #1: These are large-scale communities that are located in markets with high demand. So tailwinds that were playing into. They require additional investment to be competitive.

Speaker #1: We've completed we'll have completed by next month a majority of those investments in the portfolio. So the CapEx deployments really on track. All five operators are fully integrated now into the communities.

J. Justin Hutchens: We'll have completed by next month a majority of those investments in the portfolio. The CapEx deployment's really on track. All five operators are fully integrated now into the communities, and they're getting a handle on the operation and really focused on the key selling season. That's going as planned. Like I said before, we really viewed 2026 as the year to put all the pieces in place, and 2027 is, and beyond, is really the NOI growth opportunity.

Speaker #1: And they're getting handle on the operation. And really focused on the key selling season. So that's going as planned. And then like I've said before, we really viewed '26 as the year to put all the pieces in place.

Speaker #1: And then '27 is and beyond is really the NOI growth opportunity. And you're right. We did see a double the NOI opportunity because it was around a $50 million run rate back at the end of '24 when we put this deal together.

J. Justin Hutchens: You're right, we did see a double the NOI opportunity because it was around a $50 million run rate back at the, you know, the end of 2024 when we put this deal together. We're anticipating over the next, you know, few years to be able to double that. We've put all the pieces in place now to get started on that process.

Speaker #1: And we're anticipating over the next few years to be able to double that. And we've put all the pieces in place now to get started on that process.

Michael Goldsmith: Thank you very much. Good luck in the Q2.

Speaker #4: Thank you very much. Good luck in the second quarter.

J. Justin Hutchens: Thank you.

Speaker #1: Thank you.

Operator: Your next question comes from the line of Michael Stroyak with Green Street. Your line is open.

Speaker #3: Your next question comes from the line of Michael Strojek with Green Street. Your line is open.

Michael Stroyak: Thanks, good morning. With the bidding tensions getting more competitive, particularly within high quality, well-stabilized product, have you seen meaningful declines in your win rates within that subset of the market?

Speaker #5: Thanks, and good morning. It was with the bidding tense getting more competitive particularly within high-quality, well-stabilized product. Have you seen meaningful declines in your win rates within that subset of the market?

J. Justin Hutchens: You know, interestingly enough, our win rate has been pretty consistent. You know, the pipeline's become bigger. The actual pipeline is a little bigger, our win rate is consistent, therefore that's why we've raised our investment guidance. Yeah, there's exceptional deals here and there that go for, you know, some pretty aggressive cap rates. Like I said, we've been able to exploit all the strengths that we have and the great track record and continue to have confidence in our ability to execute within the market.

Speaker #1: Interestingly enough, our win rate has been pretty consistent. And the pipeline's become bigger. The actual pipeline is a little bigger. And then in our win rate is consistent.

Speaker #1: Therefore, that's why we've raised our investment guidance. And so, yeah, there's exceptional deals here and there that go for some pretty aggressive cap rates.

Speaker #1: But like I said, we've been able to exploit all the strengths that we have and the great track record and continue to have confidence in our ability to execute within the market.

Debra A. Cafaro: Our win rates stayed high too because a lot of the deals are really off market and bilateral in nature, and so that helps give us an advantage.

Speaker #3: And our win rates stayed high too, because a lot of the deals are really off-market and bilateral in nature. And so that helps give us an advantage.

Michael Stroyak: Got it. Makes sense. Maybe a separate question. You've highlighted the growth in operator count over the years. Just philosophically, how does the company think about operator count? What are the gives and takes of, you know, greater operator diversification? Do you expect your operator count to grow or contract from here?

Speaker #5: Got it. Makes sense. Maybe a separate question. You've highlighted the growth in operator count over the years. Just philosophically, how does the company think about operator count?

Speaker #5: What are the gives and takes of greater operator diversification? And do you expect your operator count to grow or contract from here?

J. Justin Hutchens: Debbie mentioned in her prepared remarks the fragmented nature of the sector. You know, most of the industry is operated by operators that have 10 or fewer assets, these are small operators. The large ones are usually around 100 or less. You know, not particularly big. There's a few on the bigger side. If you're going to invest in the space and you're going to do it at scale, you really need a platform that can accommodate, you know, multiple operators. We're very focused on doing that right. It starts with the operating selection criteria to ensure that, you know, that the operator has a strong local market focus and reputation. They have expertise in the particular product type that they're operating.

Speaker #1: So Debbie mentioned in her preparer remarks that the fragmented nature of the sector. Most of the industries operate by operators. They have 10 or fewer assets.

Speaker #1: And so these are small operators. And then the large ones are usually around 100 or less. And so in that particularly big, there's a few on the bigger side.

Speaker #1: So if you're going to invest in the space and you're going to do it at scale, you really need a platform that can accommodate multiple operators.

Speaker #1: And so we're very focused on doing that right. And it starts with the operating selection criteria, to ensure that the operator has a strong local market focus and reputation.

Speaker #1: They have expertise in the particular product type that they're operating. The talent is experienced, and the management team is a team that we can rely on to create value and deliver great care and services.

J. Justin Hutchens: The talent is experienced and the management team is a team that we can rely on to create value and deliver great care and services. The culture in senior housing is critical. Ensuring that they're measuring customer satisfaction, they're measuring employee satisfaction, they have initiatives in place to improve on those fronts, and have strong engagement with their residents and their families. That the managers can deliver growth. Are these operators that we can do repeat business with and have more growth moving forward as well? Will they engage with Ventas a lot? Years ago when we started putting the platform together, that was one of the big questions. It's no longer a question.

Speaker #1: The culture in senior housing is critical. So, ensuring that they're measuring customer satisfaction, they're measuring employee satisfaction, they have initiatives in place to improve on those fronts, and have strong engagement with their residents and their families.

Speaker #1: And then that the managers can deliver growth. And are these operators that we can do repeat business with and have more growth moving forward as well?

Speaker #1: And then will they engage with Ventas OI? And years ago, when we started putting the platform together, that was one of the big questions.

J. Justin Hutchens: It's become a competitive advantage, and the engagement couldn't be more collaborative, more positive, more impactful than it is. We really like our competitive advantage to have more operators. We're at 44 now. Certainly, you know, we continue to plan on growing within senior housing, and we believe to do that you have to be able to manage, you know, have a platform that can, that can handle multiple operators.

Speaker #1: It's no longer a question. It's become a competitive advantage. And the engagement couldn't be more collaborative, more positive, more impactful than it is. And so we really like our competitive advantage to have more operators.

Speaker #1: And we're at 44 now. Certainly, we continue to plan on growing within senior housing. And we believe to do that, you have to be able to manage—have a platform that can handle multiple operators.

Michael Stroyak: Great. Thanks for the time.

Speaker #5: Great. Thanks for the time.

Operator: Your next question comes from Michael Mueller with JP Morgan. Your line is open.

Speaker #3: Your next question comes from Michael Mueller with JPMorgan. Your line is open.

Michael Mueller: Yeah, hi. Just one here. For the US portfolio, what are your current thoughts on where your AL and IL occupancy should be able to max out to over time?

Speaker #4: Yeah, hi. Just one here. For the U.S. portfolio, what are your current thoughts on where your AL and IL occupancy should be able to max out to over time?

J. Justin Hutchens: Well, that remains to be seen. You know, we've had outperformance in our IL occupancy growth. You know, Debbie mentioned the demand kind of profile. We're really not even to the point where for our business yet. It's not surprising to see independent living. You know, we've seen better performance in independent living as the baby boom population started turning 80 this year. Assisted living has really strong demand as well, we think both will have really strong demand. Both will probably, you know, surpass, you know, previous industry highs. Our goal is to outperform. We'll tell you when we get there, we expect both categories to be well into the 90%.

Speaker #1: Well, it remains to be seen. We've had outperformance in our IL occupancy growth. And Debbie mentioned the demand kind of profile. And we're really not even to the point where for our business yet.

Speaker #1: It's not surprising to see independent living, we've seen better performance in independent living. As the baby boom population started turning 80 this year, assisted living has really strong demand as well.

Speaker #1: And we think both will have really strong demand. Both will probably surpass previous industry highs. And our goal is to outperform. So we'll tell you when we get there.

Speaker #1: But we expect both categories to be well into the 90%.

Michael Mueller: Okay, thanks.

Debra A. Cafaro: Justin's a people leader in the zero lost revenue days, so.

Speaker #3: Justin's a bit of a leader in the zero-loss revenue days. So he won't be happy till every room is happily occupied by a happy resident.

J. Justin Hutchens: Yeah

Debra A. Cafaro: he won't be happy till every room is happily occupied by a happy resident.

J. Justin Hutchens: Yeah, key word is happy, because if you're delivering best-in-class care and services, then, you know, I think it's a mandate that, you know, people should live with us. We're gonna do our best to deliver on that.

Speaker #1: Yeah. And keyword is happy. Because if you're delivering best-in-class care and services, then I think it's a mandate that people should live with us.

Speaker #1: And so, we're going to do our best to deliver on that.

Debra A. Cafaro: Thanks, Mike.

Speaker #3: Thanks, Mike. Your next question comes from the line of Nicholas Yuliko with Scotiabank. Your line is open.

Operator: Your next question comes from the line of Nicholas Yulico with Scotiabank. Your line is open.

Nicholas Yulico: Thanks. Good morning. Just going back to Revel. I know you gave the stats on, you know, 6 years old on average, mid-70% occupancy on average. Can you just give us the feel, though, in terms of the vacancy? Is it more concentrated sort of evenly across the portfolio? Is it, you know, in more in, like, recent deliveries?

Speaker #5: Thanks. Good morning. Just going back to Revel. I know you gave the stats on six years old on average, mid-70 occupancy on average. Can you just give us a feel, though, in terms of the vacancy?

Speaker #5: Is it more concentrated, sort of evenly across the portfolio? Is it more in recent deliveries?

J. Justin Hutchens: Yeah, the vacancy is more in the more recent deliveries. We have, you know, there's a handful that are stabilized, and then there's the more recent deliveries that have the most upside. We were able to look at the track record of some of the early developments and see their lease up once they got the new management team in place and anticipate, you know, leveraging that approach combined with the OI platform to deliver more occupancy growth where we have vacancy.

Speaker #1: Yeah. The vacancy is a little higher in the more recent deliveries. We have a handful that are stabilized, and then there are the more recent deliveries that have the most upside.

Speaker #1: And so we were able to look at the track record of some of the early developments and see their lease up once they got the new management team in place.

Speaker #1: And anticipate leveraging that approach combined with the OI platform to deliver more occupancy growth where we have vacancy.

Nicholas Yulico: Okay, thanks. My second question is for you, Debbie. You know, we spent the vast majority of this call talking about senior housing. It's where you're having a lot of operating success. You're expanding your portfolio. It's still SHOP is, you know, 56% of NOI. My question is about, you know, the rest of the portfolio and how are you thinking about it because, you know, when we look at outpatient medical research, IRFs, LTACs, health systems, they're not, you know, realizing this is sort of these are legacy investments when there was diversification within healthcare REITs. There's a move away from that now. They're kind of not adding to your growth rate or your multiple. My question is, you know, how are you thinking about that and is there opportunity to JV assets, sell them?

Speaker #5: Okay. Thanks. And then my second question is for you, Debbie. We spent - I don't know - the vast majority of this call talking about senior housing.

Speaker #5: It's where you're having a lot of operating success. You're expanding your portfolio, but it's still SHOP is 56% of NOI. So my question is about the rest of the portfolio.

Speaker #5: And how are you thinking about it? Because when we look at outpatient medical research, IRFs, LTACs, health systems, they're not realizing it's just sort of these are legacy investments when there was diversification within healthcare REITs.

Nicholas Yulico: There's a move away from that now. They're kind of not adding to your growth rate or your multiple. My question is, you know, how are you thinking about that and is there opportunity to JV assets, sell them? How are you thinking about, you know, that, and what would be the sort of the trigger where you would look to perhaps reduce exposure there? Thanks.

Speaker #5: There's a move away from that now. They're kind of not adding to your growth rate or your multiple. So my question is, how are you thinking about that?

Speaker #5: And is there opportunity to JV assets, sell them, how are you thinking about that? And what would be the sort of the trigger where you would look to perhaps reduce exposure there?

Nicholas Yulico: How are you thinking about, you know, that, and what would be the sort of the trigger where you would look to perhaps reduce exposure there? Thanks.

Debra A. Cafaro: Mm-hmm. Great. Well, when we developed our 1, 2, 3 strategy in 2023, the focus is on basically growing SHOP organically and externally. That's number 1 and 2. Number 3 is really to, you know, drive performance across the portfolio. We have been successful in executing that strategy because as SHOP is growing, you know, 5th year, double-digit NOI growth, we're adding, you know, $6+ billion of investments in SHOP, we're seeing that, you know, become a much larger part of our portfolio. Senior housing itself is over 60%. By definition, the other parts of the portfolio are becoming a smaller portion of the overall enterprise, and that is all part of the strategy.

Speaker #5: Thanks.

Speaker #3: Great. Well, when we developed our one, two, three strategy in 2023, the focus is on basically growing SHOP organically and externally. That's number one and two.

Speaker #3: And number three is really to drive performance across the portfolio. And the main reason we have been successful in executing that strategy is because, as SHOP is growing, fifth year, double-digit NOI growth, and we're adding $6-plus billion of investments in SHOP, we're seeing that become a much larger part of our portfolio.

Speaker #3: Senior housing itself is over 60%. And by definition, the other parts of the portfolio are becoming a smaller portion of the overall enterprise. And that is all part of the strategy.

Debra A. Cafaro: As far as, you know, actions, we've shown a willingness over time to take actions to modify the portfolio when we really think it's gonna create long-term value. You know, we're certainly open to that. Right now, our real focus is on growing SHOP organically and externally, and that we're devoting, you know, all of our efforts to, with great effect to that because we think it's creating value for stakeholders.

Speaker #3: As far as actions, we've shown a willingness over time to take actions, to modify the portfolio, when we really think it's going to create long-term value.

Speaker #3: And we're certainly open to that. But right now, our real focus is on growing shop organically and externally in that we're devoting all of our efforts to with great effect to that.

Speaker #3: Because we think it's creating value for stakeholders.

Nicholas Yulico: Okay, thanks.

Speaker #5: Okay. Thanks.

Operator: Your next question comes from the line of Ronald Kamden with Morgan Stanley. Your line is open.

Speaker #3: And your next question comes from the line of Ronald Kadim with Morgan Stanley. Your line is open.

Ronald Kamden: Hey, just 2 quick ones. Just going back to pricing, I know the RevPOR guide was unchanged, but if you could talk about where the operators put out increases this year, maybe versus last year, and maybe talk about how the philosophy about, you know, new versus renewal pricing and where you think you could push.

Speaker #1: Hey, just two quick ones. Just going back to pricing, I know the RevPOR guide was unchanged. But if you could talk about where the operators put out increases this year, maybe versus last year, and maybe talk about how the philosophy about new versus renewal pricing and where you think you could push.

Debra A. Cafaro: The revenue guide obviously increased to about 8.75%, and Justin will comment on the in-place increases.

Speaker #3: The revenue guide obviously increased to about 8 and three-quarters. And Justin will comment on the in-place increases.

J. Justin Hutchens: We've had, you know, another good year. It was around 8%, you know, all in in the January, which is where half the increases take place. It was around 7% last year, so we've seen improvement in that category. There's, you know, some underlying trends in move-in rents, which are very favorable as well. As we get into a period where demand continues to pick up and occupancies continue to go up, we would expect that to continue. Still, you know, like all the occupancy upside opportunity though. You know, it's kind of volume first and then, you know, prices opportunity with price down the road.

Speaker #1: Yeah. We've had another good year is around 8% all in in the January, which is where we're half the increases take place. It was around 7 last year.

Speaker #1: So we've seen improvement in that category. There are some underlying trends in moving rents, which are very favorable as well. And as we get into a period where demand continues to pick up and occupancies continue to go up, we would expect that to continue.

Speaker #1: And still like all the occupancy upside opportunity, though. So it's kind of volume first, and then price is opportunity with price down the road.

Ronald Kamden: Got it. That's helpful. I guess just on the acquisition mix, I think a couple years ago, you were much more focused on sort of the, you know, stabilized sort of assets. Obviously, with this Revel deal and maybe other deals upcoming, is there sort of more of a shift to maybe taking on a little bit more lease-up risk, you know, given the better growth, given sort of your conviction in being to get those portfolios filled? I'm just wondering if there's a shift down versus what you were doing two or three years ago? Thanks.

Speaker #5: Got it. That's helpful. And I guess just on the acquisition mix, I think a couple of years ago, you were much more focused on sort of the stabilized sort of assets.

Speaker #5: Obviously, with this Revel deal, and maybe other deals upcoming, is this is there sort of more of a shift to maybe taking on a little bit more lease-up risk, given the better growth, given sort of your conviction in being to get those portfolios filled?

Speaker #5: I'm just wondering if there's sort of a shift down versus what you were doing two or three years ago. Thanks.

J. Justin Hutchens: Sure. The, you know, the focus has really been to, you know, use the market asset operator framework to determine where we make investments. We obviously, if you get the markets in right and you have assets that can be competitive within those markets, you're well-positioned. From there, it's finding the right operator, whether we're keeping operators in place or transitioning to new managers. By the way, we're overwhelmingly keeping the operators. That's been our typical approach. You know, once we get that right, then we're looking for the targeted returns, which at this stage are double digits to mid-teens. We've been delivering on low to mid-teens.

Speaker #1: Sure. So the focus is really been to use the market asset operator framework to determine where we make investments. And obviously, if you get the markets right and you have assets that can be competitive within those markets, you're well-positioned.

Speaker #1: And then from there, it's finding the right operator, whether we're keeping operators in place or transitioning to new managers and by the way, we're overwhelmingly keeping the operators.

Speaker #1: That's been our typical approach. And so, once we get that right, then we're looking for the targeted returns, which at this stage are double-digit to mid-teens.

Speaker #1: We've been delivering on low to mid-teens. Unlevered IRRs over the past few years. We've had a wide variety of different types of senior housing communities.

Debra A. Cafaro: Unlevered

J. Justin Hutchens: ... unlevered IRRs over the past few years. We've had a wide variety of different types of senior housing communities, deliver on our underwritten expectations so far, and some of those did include value add opportunities. This one just happens to be a little bit bigger, and so we're able to showcase it as a case study. We'd anticipate, you know, really repeating the playbook moving forward.

Speaker #1: Deliver on our underwritten expectations so far. And some of those did include value-add opportunities. This one just happens to be a little bit bigger.

Speaker #1: And so we're able to showcase it as a case study and we'd anticipate really repeating the playbook moving forward.

Ronald Kamden: Thanks so much.

Speaker #5: Thanks so much.

Debra A. Cafaro: Thank you.

Speaker #3: Thank you. And there are no further questions at this time. I will now hand the call back over to Debra A. Cafaro, Chairman and CEO of Ventas, for closing remarks.

Operator: There are no further questions at this time. I will now hand the call back over to Debra A. Cafaro, Chairman and CEO of Ventas, for closing remarks.

Debra A. Cafaro: Thanks, Bailey, and thanks to all of you for joining us today and for your interest in Ventas as we, you know, drive forward on this multi-year growth and value creation opportunity. We look forward to seeing you in person soon.

Speaker #4: Thanks, Bailey. And thanks to all of you for joining us today. And for your interest in Ventas as we drive forward on this multi-year growth and value creation opportunity.

Speaker #4: And we look forward to seeing you in person soon.

Operator: Thank you. This concludes today's conference call. You may now disconnect.

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