The operator introduces the conference call for Ventas' third quarter results and BJ Grant, Senior Vice President of Investor Relations, welcomes everyone and reminds them of the availability of materials on the company's website. Debra Cafaro, Chairman and CEO, discusses the strong quarter of normalized FFO and total company same-store cash NOI growth, as well as the company's actions to drive performance and meet the needs of the aging population. The company also raises its full year normalized FFO guidance.

The senior housing operating portfolio of Ventas has contributed significantly to their performance, with year-over-year cash NOI growth exceeding 18%. Their Canadian SHOP communities have also seen a 6% increase in NOI and strong occupancy rates. The company's outpatient medical and research portfolio has also shown consistent growth. Ventas is well-positioned in the commercial real estate market due to strong demand from the aging population, with 20% of the US population expected to be 65 or older by 2030. The senior housing industry is experiencing favorable supply-demand dynamics, with low senior housing starts and limited competition in their SHOP markets.

The favorable supply-demand relationship in the senior housing market, along with increasing investment opportunities and the success of the Ventas Investment Management platform, position Ventas for multiyear growth. The company's portfolio at the intersection of medicine, research, and universities is well occupied and in high demand from institutional investors.

Atrium Health Wake Forest Baptist is creating a new Eye Institute at their redevelopment site, showing the desirability of the location for medical research. Other prestigious organizations, such as the NIH and Siemens Medical Solutions, have also leased space at the site. Nobel Laureate Dr. Drew Weisman will be joining the Penn site later this year. Ventas has raised nearly $3 billion in various capital markets, enhancing their liquidity and demonstrating their competitive advantages. The company is focused on maximizing performance and generating superior total return for shareholders. Their third quarter SHOP results were reported as very good.

The SHOP portfolio experienced strong demand and implemented active asset management strategies, resulting in double-digit same-store cash NOI growth for the fifth consecutive quarter. Occupancy and revenue increased, driven by strong demand and optimal pricing strategies. Operating expenses were well-managed, leading to a margin expansion. The holiday independent-living communities also showed positive performance, with increased occupancy and a renewed focus on execution. The 26 communities under new operators saw improvements in service delivery and performance.

The company's expert approach to transitioning move-in communities to new operators has resulted in high occupancy and revenue growth in their Sunrise portfolio. They are expecting continued growth for the full year, with a projected 17-19% increase in same-store cash NOI. This growth is driven by increased occupancy and revenue per occupied room (RevPOR), with operating expenses also expected to increase. The company also notes that the impact of a special assessment at Sunrise last year will be reversed in the first quarter of 2024. The strong demand for the company's services is a reflection of the positive macro environment and the quality of care they provide to their residents.

In the third quarter, our operating partners focused on providing a positive living experience for residents and a valuable work experience for employees. We made two investments through our VIM platform, including a medical facility portfolio and senior housing assets. Our top investment priorities are generating NOI and acquiring senior housing. In the third quarter, our outpatient medical portfolio saw 3% or greater same-store cash NOI growth, while our university-based R&I portfolio saw a 3.3% increase in same-store cash NOI and strong demand for space from university tenants.

Ventas has experienced strong demand for their recently completed developments at Penn and Pitt, with a combined occupancy rate of nearly 90%. Their asset management teams have been successful in driving performance and value across all asset classes in their equitized loan portfolio. The company also reported a strong third quarter with an increase in normalized FFO per share and same-store cash NOI. They have significant liquidity, with $3.1 billion available to cover their 2024 maturities. Ventas has been proactive in raising capital at attractive rates and has used the proceeds to reduce their 2024 maturities, extend debt duration, and reduce their floating rate.

The speaker discusses the company's strong performance in the quarter and improved outlook for fiscal 2023, citing their access to attractive capital and skill in using it for the benefit of shareholders. They also mention an increase in their full year normalized FFO guidance and highlight significant year-over-year property NOI growth. The speaker reminds listeners to limit their questions to one and turns the call over to the operator for Q&A. The first question is about the impact of last year's special assessments on the portfolio.

The company is focused on price volume optimization and has seen strong growth in RevPOR despite a bad year-over-year comparison due to the impact of Sunrise. They are also seeing growth in acquisition opportunities with attractive returns and have the advantage of liquidity and the VIM platform for funding. They are optimistic about the cost of capital and yields for senior housing investments.

Justin Hutchens discusses the opportunities that are currently building in the pipeline, particularly in the recent months and weeks. These include sellers dealing with debt and fund maturities, with returns ranging from 6% to 8%. The company is primarily interested in growing in the senior housing market, where they have expertise and can achieve double-digit low to mid double-digit IRRs. They have also recently closed a medical office building acquisition through their VIM platform. In response to a question about Kindred, the company did not provide any specific details.

The speaker discusses the Kindred lease for 23 LTACs, which is up for renewal in 2025. They mention the importance of considering the earnings capacity of these assets post-2025 and the initiatives Kindred has adopted to improve operating performance. They also note that there is a pool of qualified operators for LTACs and that the pace of development leasing in the R&I portfolio has been steady, with one project in Charlotte, North Carolina already 80% pre-leased.

The speaker discusses the company's recent operator transition and how they are evaluating their relationships with operators. They have made sure to be in the right markets and have invested in their communities. They are pleased with the results of the transition and have taken steps to ensure a smooth process, such as getting boots on the ground and securing a lead bank. They continue to prioritize finding the best operators for their assets.

During the Q&A session of the earnings call, the company's executives discussed their satisfaction with the early results of the business and their focus on maintaining pricing power. They also mentioned that senior housing investing and CapEx spending were top priorities, with a focus on a 2-3% RevPOR export spread. The company is expecting 18% same-store NOI growth in the SHOP business, which may be partially influenced by the deployment of CapEx. The executives were also asked to provide more information on the cadence of capital spending for 2023 and 2024.

The speaker is asking for clarification on the company's recent projects and their return on investment. The company has 170 projects set to be completed by the end of the year, with a focus on mid-market communities and unit upgrades. The early results show a 20%+ ROI and overall growth in the portfolio. The company plans to continue investing in these projects for multiple years before returning to normal levels.

Jesus asked about the equitized loan portfolio and how Ventas is handling the CapEx needs and leasing conversations for their outpatient medical assets. They also asked for more information on the SNFs and their favorable cash yields. Debra Cafaro turned the question over to Pete, who talked about the progress they have made in transitioning 32 buildings onto the Lillibridge platform and replacing 12 out of 23 leasing agents. They have an 85% retention rate and 200,000 square feet of new leasing in the pipeline. Pete also shared an anecdote about a 45,000 square foot building in suburban Atlanta that was empty when they acquired it.

The speaker discusses the occupancy rate and leasing progress of their portfolio, specifically mentioning a recent lease and capital investments. They also address a decline in occupancy in the MOB portfolio, attributing it to two off-campus properties. The success of the transitions at Holiday is mentioned, and there is a question about potentially transitioning another group and the status of the Brookdale lease.

The speaker discusses the performance of communities operated by Holiday by Atria, which have been performing relatively well due to a more streamlined and focused approach. They have also seen improved performance in their Brookdale portfolio. There is a focus on sales execution and tour conversions, and the company expects to see good results. The speaker also mentions tracking pricing trends in the independent living market, but notes that their price volume optimization strategy has been successful. They have seen both price and volume increase together. Finally, the speaker addresses an investment strategy, but it is unclear what specific investments are being discussed.

The speaker asks about Ventas' potential for investment opportunities in the coming year, including potential deals with smaller operators and larger portfolios. The CEO responds by mentioning a new relationship with Benchmark and the company's interest in expanding in senior housing. The speaker then asks about a recent public M&A deal, but the CEO declines to comment and reiterates the company's focus on senior housing. The call ends with the CEO expressing satisfaction with the quarter's results and a positive outlook for the future.

The speaker from Ventas thanks the audience for their attention and interest in the company and invites them to visit in Los Angeles. The operator thanks the speakers and ends the call.

This summary was generated with AI and may contain some inaccuracies.