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 just 10% or so 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
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
There's no doubt Ventas' management has created massive value for shareholders over time (average annual total shareholder returns of roughly 13% since 1997 versus 4% for the S&P 500) through effective asset management, prudent financing, and sound Read more
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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