The paragraph is from a Ventas earnings conference call led by Gail, the conference operator, and Bill Grant, Senior Vice President of Investor Relations. The call discusses the fourth quarter and full year 2024 earnings results. It includes references to a press release and supplemental information available on Ventas' website, and mentions the potential for forward-looking statements that carry risks and uncertainties. Bill then introduces Debra Cafaro, the Chairman and CEO, who expresses gratitude to shareholders and participants while remarking on Ventas' strong performance in 2024.

The company reported strong results driven by growth in senior housing and has raised its dividend by 7%. It successfully executed its strategy in 2024, achieving significant NOI growth in senior housing and making over $2 billion in investments in this sector. The full-year normalized FFO per share was $3.19, exceeding forecasts, and same-store cash NOI grew nearly 16%. The company attributed success to increased demand, limited supply, and well-positioned communities, alongside commendable service from care providers during challenges like the California fires. Additionally, the company has favorable expectations for 2025.

The paragraph discusses strategic investments in senior housing, which have enhanced growth and value through equity funding, data analytics, and operator relationships. In 2024, the company achieved significant growth with $2.2 billion in annualized EBITDA, improved leverage, and nearly 8% cash NOI growth. The Ventas Investment Management platform grew, managing over $5 billion in assets. Looking ahead, the company plans to expand its senior housing investments to exceed 50% of NOI by year-end, aiming for a 7% growth in normalized FFO per share in 2025, while maintaining a focus on financial strength and creating exceptional environments for the aging population.

The company is presenting a positive outlook for 2025, highlighting its plans to deliver substantial growth in funds from operations (FFO) per share, property net operating income (NOI), and investments. They plan to enhance their balance sheet and increase their quarterly dividend by 7%. The company remains optimistic due to favorable market conditions and strategic competitive advantages, particularly in the senior housing sector. Factors such as increasing demand from the over-80 population, low construction starts, and a favorable pricing environment are expected to drive growth. Justin Hutchens reports that 2024 was a successful year for the company's senior housing portfolio, with double-digit growth in same-store shop NOI for the third consecutive year, thanks to effective platform initiatives and strong operator relationships. This growth was supported by high occupancy rates across various geographies and asset types.

The US shop communities of Ventas have outperformed market benchmarks with significant growth, driven by favorable supply and demand dynamics in senior housing. A projected 28% growth in the 80-plus age group over the next five years is expected to boost demand, while new construction remains limited, creating a net absorption opportunity. Ventas is well-positioned to capitalize on this, using data analytics and insights to optimize their portfolio. Their network of 29 operators has shown strong growth, and they aim to continue this momentum through collaboration and improvements in their community environments.

The paragraph details the company's recent and future initiatives to enhance its performance and drive NOI growth. By year-end, they completed 228 projects, including modernizing over 4,500 resident units and 150 employee break rooms. They aim to complete 50 more refresh projects by the key selling season. Additionally, they plan to convert 45 senior housing communities with 5,700 units from a triple net structure to shop, shifting to five high-performing operators. This should bolster occupancy, pricing, and environmental improvements, potentially doubling the NOI of the 77% occupied communities. The shop portfolio is expected to cover over 50% of the company's enterprise NOI by year-end, with an 8% unit increase. Looking towards 2025, the company anticipates sustained double-digit NOI growth for the fourth consecutive year in its same-store shop portfolio, driven by revenue, occupancy, and pricing improvements, though also expecting a 5% increase in operating expenses. A successful selling season and stable inflation are critical for achieving these results, with U.S. occupancy growth projected to outpace expectations. January occupancy has begun positively.

The organic shop growth is strong, with a focus on expanding senior housing investments. In 2024, $1.9 billion in investments were closed, adding 52 new communities with 90% occupancy on average. Despite fast growth, the company maintains disciplined underwriting, reviewing $18 billion in opportunities and closing on $2 billion. The experienced team, guided by a data-driven approach, seeks the best deals in suitable markets. The investment pipeline is robust, with various potential deals due to debt and fund maturities, and transactions involving diverse seller profiles. The team plans to expand to continue executing its growth strategy.

The paragraph discusses Ventas's plans and achievements related to senior housing investments. The company expects to maintain its growth momentum into 2025 with around $1 billion in senior housing investments, mostly in the year's first half. Ventas is recognized as a leading partner in the senior housing sector, benefiting from its industry experience, platform capabilities, and strong investment team. The company announces the addition of Alex Russo as Senior Managing Director of Investments to further bolster its team. In 2024, Ventas reported strong financial performance, with a net income per share of $0.19 and normalized FFO per share of $3.19 for the year, representing a 7% increase from the previous year. The company's same-store cash NOI grew by nearly 8%, driven by broad-based portfolio growth, particularly a 16% increase in shop-related growth.

In 2024, the outpatient medical and research business saw growth of 3%, with research increasing by 4.6% and outpatient medical by 2.6%. The company closed $1.9 billion in senior housing investments and raised $2.2 billion in total equity, with $1.2 billion since the third quarter at an average share price of $62.90. They have $250 million in unsettled forward equity for 2025 senior housing investments, strengthening their balance sheet. Their net debt to EBITDA improved to 6.0 times, entering their target range. The company has nearly $4 billion in liquidity and used proceeds from a senior note issuance to pay down $1 billion of maturing debt in 2025. For 2025, they project net income of $0.48 per share and normalized FFO of $3.41 per share, a 7% increase driven by NOI growth in their shop business and senior housing investments. The company's same-store cash NOI is expected to grow 6.75% year-over-year.

The paragraph discusses Ventas's financial guidance and plans for 2025. The company plans to invest approximately $1 billion in senior housing, predominantly funded through equity, with $250 million already raised and an additional $200 million expected from capital recycling efforts. There's an expected increase in net interest expense due to refinancing maturing debt at higher rates and lower cash balances. Detailed guidance assumptions are available in their Q4 supplemental and earnings presentation. Ventas is pleased with its 2024 performance, focusing on growth strategy and increased normalized FFO per share, with a commitment to maintaining this momentum in 2025. A Q&A session follows, where Omotayo Okusanya from Deutsche Bank inquires about medical office building occupancy declines and the expected strong same-store NOI growth in 2025. Robert Probst acknowledges the question, noting more leasing activity beginning in 2024.

The paragraph discusses a company's leasing progress and occupancy plans. They've achieved 15% more leasing than the previous year and have completed 34% of their 2025 leasing plan, which they view positively. They anticipate occupancy gains and associated NOI growth for 2025. Omotayo Okusanya asks about senior housing and demographic trends favoring the company. Justin Hutchens explains that Ventas OI supports strategic decisions by providing localized market and operational data, aiding in investment, disposition, and asset management. The platform helps ensure sustained performance through informed decisions. The section concludes with gratitude expressed to Omotayo Okusanya by Robert Probst and transitions to a question from Michael Griffin.

In the paragraph, Nick Joseph and Justin Hutchens discuss their acquisition strategy focused on investing in stabilized senior housing assets that offer both yield and growth potential. They highlight their stringent criteria, having reviewed $18 billion in opportunities but only pursuing $5 billion, to ensure high-quality, high-performing investments. These assets are market leaders with 90% occupancy, yet still have room for growth in occupancy and pricing. They are targeting larger communities with independent living, assisted living, and memory care services in markets with strong absorption and affordability. The unlevered IRRs are expected to be in the low to mid-teens, driven by growth. They plan to continue with this strategy into 2025.

The paragraph discusses the impact of acquisitions on the company's growth. Robert Probst explains that the acquisitions are immediately beneficial and funded entirely by equity, contributing to a 7% year-over-year growth in normalized FFO per share. Although the contribution from new acquisitions in the year might be lesser due to timing, the aim is to replicate the previous year's success. When asked about the pipeline and competitive environment, Justin Hutchens notes that the current pipeline is larger compared to the previous year, with a strong start of $1 billion in the acquisition guide. He acknowledges increased competition with new and returning players but emphasizes the company's competitive advantage due to its platform.

The paragraph discusses a business strategy in senior housing, emphasizing the importance of selecting operators with strong track records in specific asset classes and markets. It highlights the company's ability to manage multiple operators effectively, viewing this as a competitive advantage. The strategy has been developed over many years and recently accelerated as they re-enter the senior housing market. The discussion shifts to development, where Justin Hutchens notes that they are not close to achieving viable development conditions due to high land, material, and labor costs, and the need for significant rent increases to justify spending. As a result, development starts are limited, and the environment doesn't currently support new supply growth.

In the discussion, Debra Cafaro addresses concerns about potential changes to NIH funding due to new administration policies, highlighting that any current changes have been halted and that NIH grants make up a small portion of the large research budgets at universities, which should continue receiving full funding. Additionally, Cafaro discusses Ventas' strategy for capital recycling, planning to sell around $200 million worth of assets, primarily skilled nursing facilities, to reinvest in senior housing investments.

In the article paragraph, Vikram Malhotra from Mizuho questions Robert Probst about whether their financial guidance for 2025 factors in a typical seasonal pattern of dips and rises in demand, to which Probst confirms they are using historical seasonality in their projections. Additionally, Justin Hutchens explains that about 25% of their portfolio is less than 80% occupied, whereas the U.S. average is 84% occupied, indicating growth potential. He notes there's a strong relationship between high occupancy rates and higher pricing, with highly occupied properties achieving significantly better moving rents.

The paragraph discusses financial performance and strategies, highlighting RevPAR (Revenue per Available Room) growth and expectations for higher occupancy and pricing in the coming years. It also touches on the success of a fund business, which Ventas uses to benefit itself and its investors, emphasizing its good performance relative to benchmarks. The conversation then shifts to acquisition strategies, noting a focus on high-performing properties with around 90% occupancy, though there is excitement about potential improvements in a Brookdale property with 77% occupancy.

The paragraph discusses the strategic focus on lower-risk opportunities within the senior housing sector, highlighting that the current market conditions are favorable for such investments. Debra Cafaro and Justin Hutchens explain that their approach involves balancing overall portfolio composition similar to an investor managing risk and reward. They note significant growth potential in their existing portfolio, with current occupancy at 84% in the U.S., and detail strategies like converting communities from triple net leases to operate in-house (shop), which has improved value. They also mention high-performing acquisitions that meet unlevered IRR expectations. A question arises regarding the percentage of the portfolio with occupancy below 80%.

In the paragraph, Justin Hutchens explains that the sector has largely returned to pre-pandemic occupancy levels, with over half of their portfolios achieving this. The company has been repositioning communities for outsized growth and has seen positive results over the past few years, indicating growth opportunities. Hutchens believes they're just beginning a period of demographic strength with muted supply, which sets a positive outlook for the future. Debra and Justin use sports analogies to describe the current stage of their progress. The operator then introduces a question from Michael Carroll of RBC Capital Markets, asking about potential reasons for Ventas losing a senior housing transaction.

In the paragraph, Justin Hutchens from Ventas discusses the company's success in securing deals by being the highest bidder and forming partnerships with owner-operators. He explains that they have advantages like unique opportunities and prior relationships that build trust during transactions. If Ventas loses a deal, it's often due to a differing valuation of the asset compared to the buyer. Despite being outbid occasionally, Ventas is confident in their strategy and the deals they pursue. Michael Carroll inquires about their competition, leading to Debra Cafaro taking over the conversation.

In the paragraph, Justin Hutchens discusses the company's approach to bidding for assets, highlighting that they often choose not to bid higher because they don't value certain assets as much as others might, particularly due to risk-reward considerations. This approach leads to them rarely missing out on desired deals. Ronald Kamdem from Morgan Stanley asks about expenses and the labor market, to which Justin responds by saying that their expense forecast accounts for current inflationary trends, including a 5% increase that encompasses wage hikes and occupancy-related impacts. He notes that the labor market has been favorable for their operations with strong hiring and retention. Kamdem further inquires about opportunities for portfolio conversions, asking how much potential exists for conversions in the next three to five years.

The paragraph involves a discussion about a company's lease portfolio and capital expenditures during a conference call. The lease portfolio is described as strong with good assets and satisfied tenants, with potential for repurposing some leases. Jenna Pawlowski from Green Street inquires about the rise in capital expenditures to $285 million, which is up 15% from the previous year. Robert Probst clarifies that the increase is mainly due to more units from recent activities and inflation, and that expenditures might continue to rise with more asset acquisitions and conversions, including those related to Brookdale. Jenna also asks about RevPAR growth rates, and Justin Hutchens confirms that growth rates are 30 to 40% higher in high occupancy properties compared to low occupancy ones.

In the paragraph, various executives discuss the opportunities and challenges in the senior housing market. They mention that despite increased competition, they are still achieving their targeted returns of 7 to 8% yield. With rising ten-year rates, capital access and pricing remain a strategic advantage. Peter Bulgarelli highlights improvements in the Santeria portfolio's tenant satisfaction and occupancy, suggesting ongoing positive developments. The conversation includes inquiries about future prospects for their MOB (medical office building) portfolio, potentially impacting 2026.

The paragraph discusses the transition of Brookdale assets from a triple net lease to a different structure and its impact on financial performance. Robert Probst explains that for most of the year, the assets will remain under the triple net lease, with the transition beginning towards the end of the year. Significant financial impact from the transition is anticipated in 2026, mainly affecting capital expenditures. Austin Wurschmidt inquires about occupancy gains and confidence in revenue growth for the year. Justin Hutchens responds by noting the uncertainties and reliance on key selling seasons for growth, highlighting the importance of outperforming during these periods.

The paragraph is a conference call discussion where Michael Mueller from JPMorgan asks about the status of four development projects. Debra Cafaro explains that three of the projects are focused on two buildings in Charlotte, 80% pre-leased, influencing their stabilization dates. One of these is 100% leased, while the other is 60% leased. The projects are progressing well, with significant preleasing. Additionally, Justin Hutchens responds to a question about entry fee communities, noting the growing 80-plus population presents opportunities in that sector, although they are not currently investing in it.

The paragraph discusses RevPAR (Revenue Per Available Room) growth in senior housing. Nicholas Yulico from Scotiabank inquires about the dynamics behind RevPAR growth, noting the disparity between the 7% January rent increase and the annual 4.5% RevPAR guidance. Debra Cafaro and Justin Hutchens explain that there's a two-thirds relationship between January rent increases and RevPAR. In the U.S., rent increases are 8%, similar to the previous year. The January increase only impacts about half the population because new quarter-four move-ins don’t get an increase until their anniversary. Furthermore, assisted living and memory care facilities see additional revenue through level of care charges, which are about 20% and increase over the resident's stay.

The paragraph discusses the financial aspects of senior housing investments. It explains that when new residents move in at lower care levels, this can lower potential revenue per available room (RevPAR). However, there's potential for growth if move-in rents increase to match current in-house rent hikes. The sector is optimistic due to market affordability, rising demand, and increasing occupancy rates. The conversation shifts to financial guidance, indicating that acquisitions will likely be funded through equity, with a possible billion-dollar equity raise being modeled. They aim to improve net debt to EBITDA, both organically and inorganically within the senior housing market, with $250 million already raised. The approach of using all-equity funding for senior housing is seen as successful.

The paragraph reflects gratitude for the support of Ventas, with a commitment to achieving excellence in 2025. The operator concludes the call, thanking the participants and indicating that they can now disconnect. Debra Cafaro also expresses her thanks.

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