Morningstar Rating

Stock Research and Analysis

by Todd Lukasik, CFA

Bulls Say

Ventas' strategy allows it to consider a range of opportunities across property type, leasing model, and means of external growth, each of which may be more or less attractive at any point in the commercial real estate cycle.
Ventas estimates that less than 15% of the $1 trillion or greater health-care real estate market is in REITs' hands, providing robust external growth potential.
Ventas enjoys favorable industry tailwinds, including a growing and aging population and regulatory changes that are set to expand the pool of potential participants in the health-care system. Read more 

Bears Say

Health-care inflation has run at a rate roughly 2.5 times general levels of inflation in the economy, which is unsustainable. As health-care inflation is reined in, rent growth at Ventas' facilities will slow.
If market rents fail to increase at the inflation-plus escalation rates generally embedded in Ventas' leases, tenants will push for lower rents upon lease expiration.
Ventas paid high prices to roughly triple its balance sheet since 2010. It's unclear whether this rapid growth will pay off for shareholders over the long term. Read more 

Management

There's no doubt that Ventas' management has created massive value for shareholders, with returns on its stock far greater than returns on the S&P 500 since 1997. We attribute this to effective asset management, prudent financing, and sound acquisitions,  Read more 

Profile

Recently, Ventas owned nearly 1,500 health-care properties, including senior housing communities (54% of NOI), skilled nursing facilities (20%), medical office buildings   Read more 

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