VTR - Earnings call transcript Q3 2017

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Operator

Good day, ladies and gentlemen, and welcome to the Q3 2917 Ventas Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions] As a reminder, this conference is being recorded. I would like to turn the conference over to Ryan Shannon, Investor Relations.

begin. may You

Ryan Shannon

morning to Good results to Ventas XXXX. the the Thanks, the and company's call XX, September review quarter its announcement conference third Liane. ended welcome today for regarding

in beliefs, many differ me year company's we We These to statements and company's securities be the risks, well XX-K should laws. may the materially assumptions others other from the made as and company's considered reports express the for Form As periodically refer the you statements be management's website most company. filed are as let comparable conference whether to and and www.ventasreit.com. other call that projections provided based non-GAAP today XX, other supplemental the Debra to forward-looking contingencies, and and I now is the in future SEC, to for call and any reports and of the over conference changes the concerning uncertainties are this a financial schedule December predictions, expressly management. forward-looking forward-looking reflect federal within implied. on information including revisions and with any the The to the statements number Exchange call company's of Commission, are being stockholders are or Investor that all to of on during GAAP annual between results measure, will Please of forward-looking any its recognize the expectations. subject statements Ventas that with and and referenced projections, Securities The measure updates on only certain predictions each XXXX actual expectations, ended CEO our these filed may disclaims release current well section as of report forward-looking reconciliations publicly and on statements Relations expressed Many the quantitative could start, meaning of Cafaro, events. as affect company's control discussion the available at A. disclosure this turn as these Chairman of the factors statements obligation statements. beyond or factors these note this company any to date and directly its that of

Debra Cafaro

you, Ryan. Thank to morning welcome of quarter other the earnings and all And call. Ventas third good shareholders our to participants, and

care are our We natural strategic leading public policy our are on and residence and of exciting year efforts recent and patients cohesive providers this our with very pleased pursuing opportunities year execution some performance highlight positive introduce the Ventas we few the guidance, extraordinary words during with to full on excellent I'll full conclude our keep results the team. on priorities. prospects our the the accelerated quarter, disasters, and safe Today, briefly for touch and

Following quality a from Bob's focus questions. take of delighted strong portfolio At review high of flows diversified Ventas, to a cash your our financial to continue delivering reliable assets results, we on sheet. will balance on we be

normalized FFO grew $X.XX principally and continued NOI increased of to by we property resilient quarter investments. results share, patterns third per The as our driven accretive

attractive and accelerated During our skilled exit from from over we sale and $XXX business mostly nursing the million in following games quarter, with the recognized pricing.

Our sequentially. liquidity financial as credit strength improved stats enhanced better with even and well

impact of for This sales. from SNF our FFO by X.X%. company-wide share points enables XX accelerated delighted same-store in to the us normalized midpoint to per also to improvement our NOI growth our $X.XX basis X% growth range, full despite reduction to expectations previously and guidance maintain NOI property the are We announced improve expectations year earnings

gives us portfolio Our resilient diverse confidence.

residence advantage play and thank why of caring partners report who also and all those take on of on natural rise our evacuation high and us like wellness is patients offices and of demand in providers health executives dangers financially are Emergency markets and facilities sheltering based an partners. business executive logistically humbling. and flooding, kept housing. disaster remain senior value disasters message recent business in to residence The to the and and we to and extreme by acutely seniors by community Ventas, highlight preparedness Atria, nationally further secure Successful taken I'd for place, examples preparation, preparation of and emphasis residence, business our ground by I the individuals level employees more to hurricanes resonating and front with our personnel disasters evacuations, be the that I'd virtually Brookdale, by care and That was patients of Kindred and and and who doing normal tremendous on safe. their behalf to In choosing senior as a communities complicated ill a evacuations efforts the and and complex, proposition and Thanks the back moment through rates including impediments in and penetration am overwhelming to Now, all to of seems safe. at on patients the operating the excellent sacrifice continue to and all the like actions live on natural line focus is are and such housing. employees of family. conditions, the effect capable personnel face wild our of fires. and patients caregivers of strong, kept based happy secure to heroics

construction their In from the cyclical the ago are at years housing quarter, positive two level in peak. to fell starts senior half about We also hardened other by trends. third

period consecutive where the years significant quarter starts improve from In the two this fact same ago. was third

between know and there growth So in of accelerate. upside as rate populations the housing mismatch senior is we in when we timing through work the certain market a execution, operator senior powerful deliveries the

exciting two early into on. opportunities Turning to insight we to actively give want are working we strategic decisions, you

relationship investor regarded highly experience and a management institutional senior creating with an team. with venture housing proposed Our and new of the

First, over by portfolio continue XX we we a senior an Elmcroft form Company. currently The a Senior venture operated on intent with living a Master under Living currently institutional communities. new the own joint to partner with Lease portfolio is

in venture. source and are a discussions preliminary forward joint expand partnering to venture will capital a could The sources advantage joint and to successful look diversifying on capital continues global to detailed competitive company leading We continue grow. provide as the our

relationships. on strategic formed management housing, XX the team and we time years this a senior of transition of new to portfolio intend team, across our a creation. Second, the to will his value a and Elmcroft demonstrated of be operator. creation the With senior valuable operations record Kai housing of company, long success has new we a existing combined and see Kai experience his to colleagues Hsiao company over track To addition operator whose

will upside finalize capital include relationships transactions, reinvestment, with recycling either While down of benefits powerful complete do expect we the down are attractive diversification ability believe portfolio in we for to and still capture the or pay them to get potential expansion Ventas this work have XX well path early a to overtime. these the to to from sources, the capital lot further operators of of our and We XXXX.

a to base will now business momentum this XXXX, and our and buildings continued our over a centers metrics creation Turning by exciting we expanded MOBs and pipeline our University the investment office grow. our science third fantastic institutional remained portfolio vertical. in billion performance life capital of life initial opportunities. have allocation university Since of of Bob medical good discuss to our and and already number opportunities and one September of value and life based which continues XX% of priority. I'll our example sciences office of attractive investment comprises $X.X It our sciences the innovation a attractive Ventas is outstanding highlight NOI.

Duke really tenants is Here Recently Street is Chesterfield welcomed and South that health, anchor uses. we tier key top South as Brown plants and buildings. Street our cutting and research innovation and It began tobacco updates. is them world-class Landing Chesterfield that and for Class-A hedge a buildings already XX% to universities Landing see to awesome some leased and repurposed renovations factories is The power research experience XXX%.

existing development the & million Johnson with develop newly institutional innovation own project we $XX to center. further business University, Center. Recently We are and committed we acquisition created Johnson It building Cambridge and ones. science research through The Brown life out a our on Landing. near relationships university Street to ground is and Innovation broke South development preleased XX% recently site

innovation traction a entrepreneurs as this research from and speared interest market medical medical centers, continue universities, by expect academic companies. and increasing hub, major gaining to We

business. to growth in expanding also base, our university addition with are our to campuses university other science existing we life In

a support with ground flowing We to Class-A recent a expect funding occupancy and that awardee of recipient science AA a university XX% NOI further a we increase. innovation its work. affiliated to top is is another NIH Foundation Gates life rated cash property and occupied grant and expect to This and of center breaking acquire

demand housing firms, discussed capital. REITs, flowing pension covered I by and including continues cash estate unabated. As are calls, senior all demographic Global our real assets healthcare and equity of institutional demand few strong types for private in highly investors funds other last sovereign funds, with forward wealth

strong the pipeline several The point. making classes. As paid ever a we in we not a allocation low going recent advantage asset life this customer picking for they cash we've our happy in and the where billion been. at valuable verticals year spot carefully unlevered more capital to result assets yields there in a a across that Within with investment transactions rates than environment, our objective, or them is only relationship. are note $X.X our bid is strategic MOB invested have across our And recent robust science approach, already other is in competitive a but are that Consistent mid-sevens. in strong board have we cap

assessment. returns. also in environmental, was made ESG funding XXXX and developments and on organizations. ESG time healthcare recognized We we governments first American Jones Dow attractive the redevelopment estate I'm first selective have among significant ranking all growth spectrum three leadership continue ranks the up invest permanent North We're at projects two Ventas adjusted real matters listed of Sustainability in by real company delighted the Index ground quartile And the metrics. in stride our by report in risk on upper of to included where social a GRESB re-participants recently across the future also to broad estate Ventas' for

and policy, private Washington squarely focus reform as last significant have I and consequences tax quarter, has public estate public real to Turning companies. moved almost exclusively for to stated could which

of important reaching play job limits and formation treatment on in deductibility, focusing tax creation. As of At GDP, an expense XX% role an reform exchanges we industry real growth, principally state their treatment, furthering the country's capital rates and estate or Ventas, and economic with are potential associated to interest shareholders, local in has pasture repeal. on sustainable the XXXX

the are a the believe or We reform tax I and does. as engaged healthcare cuts legislation of chance monitoring passage major evolve. closely did tax it in are than policy highly have simply that debate reform tax higher

different of capital this people And my of medical immerging like trends forces stayed optimize final XX teams, ready successfully too and and tax CFO, superior Ventas curve point. The changes crisis, With early framework Probst. has While Canadian the XXXX culture term areas and through or our a hedge macro housing opportunities investment experience to the because questionably financial driven and skilled our and over lease create outcomes for that cases our years. economic team winning cycle life and call, I political happy as opportunities XXXX markets, like our reliability that soon final industry call of specific to outcomes Ventas nearly Kindred our science like reform strong in maturities. whether performance. healthcare, the reimbursement, That's consistently our underpin specific am ahead university excellent long shareholders. competitive the are managed growth, has like turn to or with Bob to successfully emerges. for senior office, to And as aligned we are brings

Robert Probst

Debby. Thanks

and quality midpoint. high with prior updating the contributing year segments points all at to same-store quarter basis outlooks showed Our X.X% improving by momentum the third growth rate With are a growth the portfolio our year-to-date year. solid XX overall performance, continued for versus in we

an sequentially. which escalations. available Let same-store business, believe information, quarter XX results our quarter. steady flow EBIT of In NOI. our at for overall with NOI X.X portfolio, coverage for trailing the for triple-net XXXX, XX% times. months, triple-net primarily X.X XXXX, represents by coverage lease me of quarter portfolio portfolio our was these The health its driven at arm in triple-net unpack Cash the the same-store grew our X.X% Starting times by cash stabilized attractive study housing triple-net lease second in-place of third seniors

clustered through cycles. coverage of of X.X triple-net NOI, view housing With to coverage within be average. the to majority market our ranges times around X.X portfolio We the normal seniors

Our security. additional strong lease protections diversification provide and also

and business, Debbie prior intention XX the X.X triple-net excluding periods. currently enter pressures. over basis lease LTAC As are joint the to same-store IRF to these earlier, mentioned assets In and coverage sequentially housing given continued and times, the impact wage coverage by by of for from labor driven declined our rent we XX assets reimbursement post-acute LTAC reporting and current in points senior now quarter a into in increases, change our our to Elmcroft, supplemental venture

the the ratio the segments. realize the to of just Having of sales represent lower nursing now first continue majority the expect the in skilled and headwinds half volume criteria patient will mix our of proceeds NOI. mitigation of soon SNF our to in starting Kindred in coverage X% SNFs, received coverage industry benefits XXXX. from We Vantas'

SNF portfolio has reliability. protections rent lease additional that provide our remaining healthy and security However, very

delivered and for industry. the top Ventas terrific XXXX our budgeted between three the the in in the at level of the performance improvements XXXX integration year results, rent realized. X.X%. grow encouraging LHP to times at on raising triple-net the asset among of NOI revenue are synergies we is Ardent midpoint being by ranking volume, Ardent now Hospital first points and QX. track half coverage Finally, with same properties, stable the triple-net in remained performers basis At full right year-to-date guidance store are and XX With EBITDA X%

Moving on operating portfolio. to our senior housing

pleased cash prior SHOP growing a same results year. third versus store with We by our in X.X% quarter, NOI are

industry-wide Continued challenges quality profit the our of of resilience underscores our of growth operators. in and strength the portfolio context and the

sequentially increased the points SHOP XX.X% at to P&L, Looking in quarter. basis the third occupancy by XX

As solid expected, we basis select impact markets. point by in basis to growth the XXX driven Encouragingly, competition of continued saw the quarter, new widened rate XXX QX year-over-year second gap occupancy was versus points in the the in of supply competition. price the in overall nearly ahead to increases our quarter at X% also continue our the growing while rate southerly markets Rate expectations. trend with average, which markets barrier-to-entry was above new is high and despite portfolio gap

an Overall wage expense did cost containment quarter. also just health despite where operators third job Our in of increases X.X% excellent pressures. the continued

markets. was double-digit most growing Performance in XX% strength results. second from line secondary bottom the operators also which At NOI addition geographies costs incentives In to the performance non-labor essentially performance held quarter, in see approximately locations in within flexing labor to Canada Los we new Reduced to the strength, strong quarter quarter. Angeles, continues barrier-to-entry the consecutive of top and with high as drove in level, a such occupancy, to momentum Toronto Boston and competition grow notably by Partially strength benefited affected our market flat. offsetting gains. continue very

elevated our third were openings to new third Nick the While relative the quarter areas new the were still construction time, levels, trade flat quarter. starts same second versus in At the delayed projections. in in at

of points housing the new a demand forward As of by of were basis very trade construction these of a carry to up areas again into that deliveries XX our greater quarter factors, impact result see in XXXX. third both underscoring percentage the we pleased the as penetration new above in From housing. once rate residence will penetration a inventory perspective, proposition picked than another current our is trend the in and third a of raise to security The rates level. senior gains of yet of X% the continue senior the hurricanes potential the during among suggesting for value seniors example XX% the increased absorption quarter, of

out X%. guidance and portfolio the operators positively close life business. segment, narrowing science valuable out view of decline For incentivized year-over-year life NOI sharply full updating our X.X% Ventas' is X.X% tentative in portfolio the the SHOP X% To quarter. based said, of credit and now in the to quarter's guidance between NOI portfolio of on help portfolio quality high of quality our investors, bring previous supplemental highly to and year. office our XX% our for representing modest The our focused year the office reporting. medical reporting a XXXX, fourth the to a NOI comprised our grow same-store new university range expanded SHOP That implies and we we're and Rounding have versus and office this versification disclosures midpoint our to strengths are

through continued the at to total operating very quarter. remained perform occupancy portfolio life third excellent well XX.X%. science Our Sequentially,

really cash the reliability been flows. with science have pleased life of We our

leasing fact, the In by In credits derived is from that X.X%. market cash A delivered for diversified strength is leading increased business, in health through billion investment We include XX% tenant third XX% rent capitalization. occupancy quantitative few of a the of equity exceeds medical underlines retention over companies office new rate portfolio. and our our plus with other XX% year-to-date. grade MOB our This our systems. same-store XX.X% affiliated retention with NOI in examples quarter of NOI

same-store a Our in X%. rents. of outpaced tenant's representing our And raised range well growth attractive guidance a of points over credit of portfolio with have item, is basis platform, revenue XX quarter. a office to better. for health revenues. Expenses year-to-date lapping profiles rated MOB quarter valuable X% principally These single to attributes medical the the with midpoint our a for XXXX. base drive in in third results solid assets our X.X% With or systems this on less than grew below health diversified real prior third five top by year Adjusting A our system modestly the from a NOI we estate is quarter of XX% tax expenses affiliated help that revenue credit with XX% up

$XX million our company's hurricanes other our the from into resulting NAREIT cost the financial or Harvey Ventas and and FFO. I normalized costs reduced been company's Irma and overall in for quarter. the share FFO from have the the reported note executed in income per quarter $X.XX from but results, financial on These direct diving XXXX. damage Before operations third of property and continuing in quarter, NOI Total hurricanes including of approximated the expenses impact

we So coverage. have appropriate

have guidance, and amount in in our the uncertain. We review still timing are insurance that, financial our because proceeds QX recognized quarter the overall any or not With let's results.

We of are another pleased more even together earnings to growth quarter with financial report health. robust

Third quarter X% XXXX of the third per grew income share to to Normalized compared compared the X% grew to $X.XX quarter per third quarter XXXX. operations the share of XXXX. third $X.XX from continuing quarter to FFO in

the Third repayments. impact driven results underway. and offset development partially of prior quarter for dispositions principally spend funded science performance by $XX million over after in of were versus property the life projects investments including by notably investment and during quarter, accretive improved currently year, loan Ventas immediately

excited $XXX the Thereby our million to exposure million Kindred SNF SNF nearly reducing of sales of X% value X%. creating X% We to cash and are yield. received $XXX have a GAAP at NOI

timing proceeds sales. use FFO for to have of from represents on exceeding XXXX high We in range, XXXX reduction. incremental sales of debt $XXX to and a gains to SNF XXXX $X.XX recognized the $X.XX guidance The a FFO these end and normalized the due reduction relative reduction prior million our disposition accelerates

life XX% this million development We to our by innovative flexibility X.X at $XXX lower facility asset our exciting end, improvement total fixed structure coverage activity also debt-to-EBITDA renew our The is to anchored fund X.X of a charge robust to steady of quarter increased including science exceptional in to cumulative and financial result liquidity pipeline an business. times. an net value position and indebtedness gross times, revolving at

me guidance out updated our Let close XXXX with company. prepared remarks the our for

basis X.X%, NOI an portfolio at X% to same-store total increase anticipated the of Specifically, points XX cash grow midpoint. to is

the lower to We share. expect and to expenses. per $XX to related $X.XX from Both guidance than modestly principally to previous $XX $X.XX from operations per to share NAREIT fully-diluted to range income from range hurricane continuing $X.XX FFO

material FFO previous the further is close, outlook. of assume our because unchanged to the normalized Our from shares XXX loan or share million have have improved we from year The approximately the Consistent XXXX. of our to range activity in per FFO midpoint with we per with repayments for SNFs Kindreds average range investments, guidance not forecast the accelerated completion To included remains in offsets previous dispositions, thus $X.XX narrowed sales. share any We property XXXX. performance weighted full delivered pleased $X.XX. excellence far practice, normalized capital we're

collaborative However, that course extends over this track and has record just And years one of team it remains Ventas tight, the not of excellence delivered cohesive. is decades and Debbie.

for on nearly to two XX With was proud rank particularly financial companies Business of this once consecutive one excellent out and to one world. Review that operator XX CEOs Review XXX please performing Debbie again one over Business the open list. questions. only that recognized named of We I list to in ask the XXnd that, best by is will call globally before stand. truly Harvard women for as the the CEOs year's years She are the is of the Ventas's Harvard performance years, of

Operator

is first question of with Juan Sanabria America. Bank Your [Operator Instructions] from

line open. Your is

Juan Sanabria

that good just kind detail idea year-over-year on what maybe side, of the expense talk you was I you and sustainability and was lower Hi, hoping added growth morning the for and time. software the to could for? you costs thanks back the of could the that if

Robert Probst

Bob here. see the the growth X.X%. Juan. Sure to pleased We're expense really

see that. of that's guidance the true year we about continue me helps constant We volume and X% call I have given pressure early it wage to and in

at therefore a labor that's great at with quarter. together and relative we of is driving have volume lot in obviously the lower. we time historical believe labor cushion of managing where plenty costs those costs a occupancy of flexing other costs the to back still labor operators occupancy So flexing down remain happening job were savings not to the the in benefits with I doing look levels, go what and is particularly what's sustainable with and

opportunity for continue those So hold there there drive so cost, to to which and is operators to room and have non-labor our to still there. with reduce run that scale still

on care we've second your of for that onetime the terms as so software implementation a in and costs, In software question adjusted and with cost out Sunrise that's non-recurring. putting

Juan Sanabria

what And managing about? it's you kind software, of like if talk just could software, or

Robert Probst

It's for be that really and Juan, care so. care compliance monitor be to track provided resident when to to to and to able able a is ultimately bill for it,

Debra Cafaro

accurately And and do care and efficiently of it care. level related more more of for the pricing in that terms

Robert Probst

software onetime so basically. Right, upgrade

Juan Sanabria

current it that and in was the on value occupancy basis And what to kind gears from here in just tracking Okay. portfolio could kind coverage portfolio of of how how a us and across the potential switching you of then venture, just rent levels is thinking terms or that valuation about of joint generating kind you price NOI sense of give the basis? capital

Debra Cafaro

take that. I'll to be so morning. happy Good Yeah,

enjoy upside partner. with bucket. venture private benefits the for So can is we is portfolio of XX joint some in positioned course pay and that map in longer the reliable potential drive with there's asset think and large - one-one of growing It portfolio talked communities. a significant was is that also and of the largest kind the upside it stable that I one-two a this think and to no want a and powerful great it about the of a to this of for senior over Ventas part We portion well is housing and good as we then heat

Juan Sanabria

Do whatever transpiring may from the that loose you think grow maybe of vehicle there? assets some this is could come acquire and

Debra Cafaro

joint The venture?

Juan Sanabria

Yes.

Debra Cafaro

add But and on venture another Well, of if I diversified in we thought wish think joint should initially would if to asset. as completing obviously on grow there but to should advantage It's acquire to we the their that we focused in we're source pointed a this capital assets capital wish one focused that assets I to source step portfolio, right process. that it of that the there. go joint the will be be competitive appropriate do first is out were venture of now were

Juan Sanabria

in management own operation? do stake a And that new the Okay. you team, management

Debra Cafaro

been we've that before. to known Well, do

We excited going and an relationship forward, that we have really be being management yes. it stake with business about would strategic new significant them we would and have the with a established ownership company in possible

Juan Sanabria

much. you Thank very

Debra Cafaro

Thank you.

Operator

Your Rose Citi. from with is Smedes next question

line is open. Your

Smedes Rose

Hi, want maintain just the lease just allowed expiring you something natural thanks. you're don't and if completely say bit, a if basically them on I any to work ask you have from this mechanics wanted that or just are to contract Elmcroft recourse it's the was they to you, little pulling they say to out? management they to

Debra Cafaro

original and them They They relationship part good been known long a years atria. good a the have We at off as we've partners, have ago with of for spun Elmcroft. time. originally where Vencore many many,

a we that's we are with collaboratively go So happen. the them with transition the portfolio we to working have how are making so back way it them relationships and and

Smedes Rose

- that more improving with of the then in the the or are portfolio they your for the with a And triple-net overall you're just facilities that kind the sticking still or is coverage, you said past I Okay. whole? Brookdale think underperforming moment, in the line relative to case group a as

Debra Cafaro

Yeah, housing including and clustering lot a there triple-net the lot around say of mentioned average. of there's a Brookdale on senior Bob side, consistency I a segment

very So consistent.

Smedes Rose

anything cost you're kind side operators into also just on from What and banks some Bob, it of on the okay. for puts into I side. XXXX the labor because portfolio you that's year I on anything this, financing XXXX this senior continue and And other ask if are delays mentioned that takes a will operating you just some mean of lending the building from of guess always at all? housing guess we that then I is the to hearing construction Okay, you're the hearing,

Robert Probst

to of two Well, we quoted to it's to Debbie some steps of years down to Sure. difficult in locations financing, nearly which ago find anecdotally terms more to are good terms get XX%. find of relative the hear in to supply, continue starts find difficult operators

the both would pleased the we're facts there's and which there a trend with. positive So suggest anecdotes

into how me labor guidance. As will we wage think to XXXX, again. seeing will pressures we turn that's a rate going pressures to price with early the to labor encouraging. give we X% about continue, going on and we're pleased continue I saw I'd the a do across there. bit XXXX year we're that Therefore really and are think obviously again emphasis into portfolio side

Debra Cafaro

too tremendous construction, to on side I mean Texas constraint the that's for necessary on so thing development. an to on And that's demand labor one going Florida. with hurricanes, and materials the be construction additional on be new in the rebuilding and and going there is

Smedes Rose

right. All Thank Appreciate you. it. Okay.

Debra Cafaro

Thank you, Smedes.

Operator

from Your next Tayo Jefferies. question with is Okusanya

is line open. Your

Tayo Okusanya

everyone. good yes, Yeah, morning

Debra Cafaro

Good morning.

Tayo Okusanya

in trying coverage is and still going Quick how in increase I'm I'm understand of question expected just comes moving to moving to flattish, because the do triple-net the NOI, quarter, parties some trying, down directions but portfolio, seem forward, to down have parts all I to seems the together? understand cash mean just the under different NOI, a to you for same morning. guidance just its all trying Good I'm year-over-year this really of occupancy was coverage kind go the it store

Debra Cafaro

want to you do with Bob that? start Okay.

Robert Probst

Sure.

me and Let same-store. asset performance underlying our triple-net between differentiate

portfolio stability the store quarters has really the fact well everything and to about income. same And of reflects that see done Our to X triple-net year-to-date we've that performed in really the very X.X year. rental three race the

guidance us. through that So for

same store trends the underlying to same the portfolio, I think same senior the the housing in terms portfolio industry. triple-net headwind In of

again go And pressure that within think so we probably to on will some times industry. norms within forward But X.X got the underlying we see we here. as

Tayo Okusanya

Debbie, you could how all given you're to kind reform, helps point talk at from in That bringing the see trying about thinking some a hospital cycle this a about systems? you're the public bit what hospitals bit. the healthcare little of of Okay.

Debra Cafaro

mean I thinking we're about is Absolutely, here how it.

series and we Within and that diversified time. that performing followed continue that extremely is been through we've success both love quarter to the look generally. now is we we third all, for the in preservation think very of them selective. opportunities we value a some and in the property made the a It at market First on to creation hospital path space, our that that, selective long great investments with very portfolio will issue a in well and performance we've and value

as think potential the we that continue but we've it's are successful be and record. to very going so is So big same track where We selective we it want and a very one far always. opportunity been

Tayo Okusanya

Got it.

Okay. generally a and just how markets And I international you of bit thought they're lastly little then doing? your talk

Debra Cafaro

that that have I first investment international we was very obviously early and that started some in and performing Yes, in mean certainly real that our well well doing that's exceptionally U.K. beachhead investment have cut back investments in are in the and we we a Canada, we trend XXXX also.

done good to U.K. and the be continued be in and there selective those work the very We look have as and a we continental will lot in can of markets attractive, there but well.

Tayo Okusanya

Thank you. Okay.

Debra Cafaro

Thank you.

Operator

with Your next Street question Green from Michael Advisors. is Knott

open. now Your line is

Michael Knott

for you on SHOP. question everyone, Hey,

degree a all is this things, couple and at a curious year continue XXXX? huge outperformance then surprise just to expect Canada you versus you of divergence U.S. Canadian that in would the On

Robert Probst

quarters of is in we've Michael occupancy, we high within Canada nearly light Canada, operated. been of supply demand consecutive a with the two Canada equilibrium we in when what in growth. double-digit occupancy really assets pleased you course of great XX%, again. price very pushing have now look course have And been well We've the And

think a driver performance. I that's of this big

next hope the I year will fundamentals are top So it be obviously there. but

go if I year think so side, far. the portrayed on of beginning we very U.S. is really surprises and laid so really where of there that's the to know kind out it's the we framework consistently very the On year as back we've guidance the much you

Michael Knott

about disclosure lease take right? you adjust to X.X just [ph] to Brookdale suggest H-City if quarter Tower the on and we your their again of follow-up were last then zero that and mean somewhere EBITDA, point triple-net know X.X in a range. times showed it EBITDA they then X.X, and coverage on And like sound EBITDA Okay. one I Wall we Is would to downward you're two

Debra Cafaro

and get the and if you cost kind the type. at their because think rest Kindred and as again has X% operators X%, this asset. able which at with That - is of reason look that stated you a to asset we depending look would the decisions housing arm make EBIT we number you on it's been and - to of subject on and We EBIT consistent shed look incremental the tremendous rid stable what When again look we have at experience another X%, you senior and look closer or X.X. we they arm much operator be when at which how they talked Well, this management truly we tends say if is they're relatively overhead of way at if others. about much triple-net how with to our look

is think good really arm place look. a we to so that And EBIT

math it's pretty management, depending look at see coverage the so you in clear on of that is, how consistent kind we what stable are area. And but

Michael Knott

you. Thank

Debra Cafaro

you. Thank

Operator

Ullico is question next Your with UBS. Nick from

Your open. line is

Unidentified Analyst

for Nick This our morning. good taking with here Hi, supply is and you… [indiscernible] thanks On on questions.

Debra Cafaro

morning. Good

Unidentified Analyst

in Good you top in but your morning. of new markets a to your X% little in bit supply, this rose remarks looks stock. like on XX On prepared roughly supply it touched after

great you're a if So drive could supply you changed major more this results little seeing a much is because markets during looking to how on rate what new is your through quarter you growth, to the in threat color the results of growth. give where for best the that you're

Robert Probst

carry believe drove underlying about a again is in equally. this had see them, the engine think and starts. industry and new are The and consider XXXX. start look is the strong Within in to did things the together this therefore construction new think performance to there's clearly very, the quarter a a demand view, we part portfolio for And York ratio up. which that New starts, I supply Sure. what as growth will delays Well, terms very flattish quarter, also we markets deliveries our of that over our step I've of I with of a and described Boston trends two back, for And we as highlighted. important deliveries that of at in as we point market room from one that and that's LAs,

strong have access online, in and coming the new again So there strong particularly some though is areas engine the been certain rate that. room in is

we feeling So about it. are good

Unidentified Analyst

much. that. very if Thank Okay. I'll Appreciate I you may. follow-up

about Could it's JV, of the how recently You it is today, I your talk is valued announced demonstrates how fresh. about portfolio? value talked possibly know JV you the you just and the being so announced

Debra Cafaro

call, from have move to in to type of as I there have the going a are to a that bid mentioned few we we colors I is types many all other on, strong take. our But have As asset we capital. across mentioned

metrics. in happy strong so they we say sematic forward with color. of again as valuation because be I valuations asset so flows, would provide resilient, are repeat to we'll move that cash this because to transaction, Thanks because are for Q - they And demand, said. as the types very people and the But I demographic additional is interested are

Debra Cafaro

Okay, thanks.

Let's go caller. to the next

Operator

from Richard Mizuho Securities. is Your with Anderson question next

open. is line Your

Richard Anderson

good morning. Thanks,

X% the for in SHOP mentioned that So in terms growth, fourth Bob growth the same-store does plus again? presume Canada negative of you quarter

Robert Probst

Continued strength…

Debra Cafaro

Hi Rich.

Robert Probst

Rich. hi Yes,

Debra Cafaro

you. Good morning to

Richard Anderson

talk first. to Trying you. Thank

Robert Probst

pacing I'll dynamic of midpoint is applied quarter fourth really to U.S. views again of down supply. The assumes. and mean really new in that the it's really deliveries try to. I

line. something more on have the We compression occupancy

So we'll but what that that's see assumption. driving

Richard Anderson

to anticipate deliver, and early, the you could a situation maybe And happening, expirations start or to, expirations addressing next that trust? XXXX a Okay. guess sort back even to see attacking year the of transaction to we or in Brookdale, but two start do put I you not

Debra Cafaro

away we as we've we're open our And always both and gone positive you with about find to Ventas. relationships active from outcomes lease right, are time you Well, than maturities know two of at are to for And again here working that all and that. more years time I sides. think

Richard Anderson

question. last Okay

enough. disruption That's good of come And will on transition? it reducing might people know the last from kind relationship then Kai, taking with on many him really thereby of Okay. is you type the of this the maybe Elmcroft that

Debra Cafaro

a in interrupted. virtually property transitions these people And you on company Elmcroft that as is expectation a the be Well, that and good there. they almost know all of lot will have case the it's the good always people is and carried

Richard Anderson

very you much. thank Okay,

Debra Cafaro

Thanks Rich.

Operator

question next Michael RBC You Carroll is with Markets. from Capital

Your open. line is

Michael Carroll

what can deals Yeah, classes attractive morning. are life robust thanks. the asset your investment on in outside in other the and more are us and tracking classes, mentioned you you asset pipeline Debby, you science that right prepared remarks give is life color Good of some now? science

John Cobb

John This is Cobb. think - I And

hospital medical pipeline life robust the officer. senior sector, in verticals, and we all seen housing see it the in science, have poor the We the sector

You we seeing know you are quarter-in quarter-out, pipeline. good know a

Michael Carroll

comprised or the mostly these how or now smaller about larger portfolios any Okay, should think we of deal size? transactions

John Cobb

you as deals, at and - seen four seen deals think smaller last and you over all. so at I do deals the or look us big see the three we years, also we them medium

Michael Carroll

Okay, thank you.

Debra Cafaro

Mike. Thanks

Operator

John BMO Your with next Kim Capital is from Markets. question

open. is line Your

John Kim

congratulations the you and recognition. on continued Thank

Debra Cafaro

Thank John. you,

John Kim

discuss the the the nature discussed in in real for investor can You market on joint healthcare you general, but of venture? estate breath the the investor

Debra Cafaro

think are doing some have in our them what some insights we as activities Certainly as trying early we do to is us follow, transparency. strategies can we to provide case - do some more investors where more where come ask and happy cases pieces and I the that's that That this are in early to to into together. that give disclose

John Kim

then assume fair and given a higher selling coverage, this it the reduced? low has portfolio cap what Okay portfolio, EBIT arm you Elmcroft than be the is it rate a have would recently and that maybe been rent to

Debra Cafaro

nice flows part the about as outsized I this portfolio growing performance. portion of two. in a cash is portfolio is mentioned stable potential And this performance is and existing and there NOI performance about again there biggest of is Well,

a benefit partner. So the potential and stay that attractive obviously the and in who of portfolio get is us, to both wants to to also that

John Kim

you Okay. this And can year-to-date? finally, was either quarter you or disclose revenue what then enhancing CapEx

Debra Cafaro

on at get respond move next look to we'll that and let's we'll and And to in caller that. the

Operator

Ford Karin from Securities. with is question MUFG next Your

line Your is open.

Karin Ford

good Hi, morning.

With the Kindred the like pipeline is here? down, from winding sales what looking disposition

Debra Cafaro

another in XXX the term. near the expecting or Yeah, well, maybe you we're Kindred you know know XXX currently including

Karin Ford

as you to self-side the on active looking being about thinking XXXX? you are And

Debra Cafaro

things. continue we Well, evaluate to

we a return dispositions. And really both about had with attractive we've have opportunities quality and is this talked risk I elevated adjusted also last will we've year mix attractive position investment. found as over of sort this years our and I balanced about the of X.X Ventas think of spin what's couple grow been as good billion and SNF to portfolio a

to So we opportunities strong we are think like invest. And flows take right again as both now to to to and Karin. well cash that's I as divest deliver where

Karin Ford

the portfolio triple-net on lease a clarification quick sharp is be to one Elmcroft to deal? a is, just And from Thanks. that going converted

Debra Cafaro

the managed our in company and want we of benefit as the the Yes, outperformance enjoy that future joint we new by the the ultimate it's importantly venture is to to for reason potential be going stated with partner.

Karin Ford

Thank you.

Debra Cafaro

you. Thank

Operator

Capital Your with next question Markets. KeyBanc is Jordan Sadler from

is open. line Your

Jordan Sadler

me squeezing for in. Thanks

Debra Cafaro

Okay, good morning.

Jordan Sadler

Good ahead. morning. Go

Debra Cafaro

Bob is going prior question. answer to the quickly

Jordan Sadler

ahead, Go

Robert Probst

profit the question split was year-to-date. XXX it's science capital really adding between It's and SHOP. The and spend life

Debra Cafaro

to Okay. you. now Jordan,

Jordan Sadler

Debby. Thanks

look a $X would So what that billion, portion Elmcroft, you minority? on to be would majority it you had books on of of the I monetize, that think or

Debra Cafaro

stay Yeah, for are - I offline, little the would high. may expect think to a know piece significant the reason But in we stated. you they talk we to for number need your to

Jordan Sadler

us occupancy Bob? XXX you a of the of of give And we are year the lastly SHOP, year, the tracking the full points guide bit on average for insight was basis down terms the how in I rest can believe Okay. on for then for little year,

Robert Probst

pretty And same. about going pretty think is the the that's still to I there Sure. number good, good having, here

Jordan Sadler

Okay, in bit guidance? year little quarters what's a on worth the the the into so last year baked probably from well based down more

Jordan Sadler

The where think range third from out we quarter. I a may the year-over-year a timing either that's on low have gap we'll little the of bit bit be end, but we that the assuming on were to end and is in going high

Jordan Sadler

Okay, thanks for the time.

Debra Cafaro

range The that. straddles of kind Yep.

Jordan Sadler

Thank you.

Debra Cafaro

Jordan. you, Thank

Operator

question next with Chad Your from is Vanacore Stifel.

open. is line Your

Chad Vanacore

morning. good Hi,

Debra Cafaro

morning. Good

Chad Vanacore

the $XX such in were million disasters, there, - the you about relatively good many $X all large and operator $XX they a to in add on took hit, properties back million morning. relatively the especially out why are million housing about Thinking Just related SHOP, is largest the impacted are senior how which high side? and a impact so expense the respect it seems natural Brookdale,

Robert Probst

Yeah, with bit associated down evacuation, that so split for damage The things other and half costs XX-XX call break meals, little between XX like property lodging let it you. million other is really cetera. a et the me direct

have We any proceeds insurance not any yet - emphasis to assumed reimbursements.

have We obviously types to covers insurance those of events.

the you uncertainty light have timing of and of got recognized the amount. We

I that's It and highlighted from excluding the so gross it's below a number. as So normalized NOI prepared is of through P&L, flowing it's in but including line the NOI. expense still FFO. in And other remarks, the continuing therefore

Debra Cafaro

did then I The would but am manager there are to to property other thing incurred I Brookdale extent not guess there how would that mention sure the the it I Brookdale. that to would for others be there expenses is is owners that any

Chad Vanacore

agreements just moving JV in right in you strategic behind there the could then or comparative rationale triple-net? layout And thanks. Alright, one say more,

Debra Cafaro

Could question? you rephrase the

Chad Vanacore

going agreements JV why are versus triple-net? the you few so in JV starting do would normally Yeah, agreements, where either to you

Debra Cafaro

and and strategy. are customize it the we so assets the I not assets diversification a we own understand are that know of that I in time in cycle that's am now, know What so leased, we try XXX%, own you And managed, the with you you is ventures I assets tell them question. forth. what sure will is have the asset that to all joint is type appropriate a part we to structure do life and where on

quality capital we aligning of new for with all the what are And sourcing, do growth, think tool that. of a really intending about excited diversification we really high are to having we another So manager. benefits are

Chad Vanacore

Okay. thanks. I'll follow-on offline, on you with

Debra Cafaro

you. thank Okay,

Robert Probst

Thank you.

Operator

question from Jonathan is Raymond James. of next Hughes Your

Your line is open.

Jonathan Hughes

Hey, good morning.

Just me. from one

Debra Cafaro

Hi.

Jonathan Hughes

Hi, good morning.

top a construction extension about non-stabilized your kind the that's markets, at but Just of trade of look XX of include area, within number like inventory? and SHOP X% portfolio is next you earlier when looking what the question an on the inventory

Robert Probst

do in that at in. analysis, non-stabilized, in stabilized we versus same-store nor We close don't differentiate so

our when look equation our demand pages, X% point. demand the that's to side on think you we back important of continue framework equilibrium as at thing look average then I the to have to the harking at construction the where

new And as so is coming is there many well. markets where construction demand high of online, these there

Jonathan Hughes

enough, I'll the fair for Okay, follow-up offline. Thanks time.

Debra Cafaro

we you. Alright, it. for forward look Thank

a Okay, couple we more. got

Operator

from question with is One. Capital next Your Daniel Bernstein

open. is Your line

Daniel Bernstein

Good morning.

Debra Cafaro

Dan. Hi

Daniel Bernstein

the SHOP, really a the your XX quick months coming about down markets, question the little secondary growth the there, talk in in One you Hi. like market came construction NOI secondary looks on it hurting say what can next secondary see bit you in is fundamental what's markets? supply there and like and seems in

Robert Probst

Sure.

versus competition market did highlight into we looked I'd - portfolio it of for like where see is we city it Lake And markets our flow markets when blunt segmented is example that the secondary a The and and Salt new equilibrium of we markets are see segmentation. secondary have where can clearly are in secondary we surplus. say quite to we where the do that's seeing the impact in Many have where surplus markets, quarter. you those and so the

Daniel Bernstein

do see And all be might or Okay. that you at is there improving fundamentals stable?

Robert Probst

of in I I of will terms these in dynamics XXXX double into think new deliveries supply carry some the same markets. mentioned no

Debra Cafaro

forward And then environment. they as the obviously effect reduce starts

cycle, you talk discussed. have you growth and you the So the this you of you that's when down upside about the occupancy powerful powerful have seniors in in upside have then where are are - that's where where ticking I you you population get starts acceleration this

Daniel Bernstein

secondary in mainly are assets markets? uncrossed And Okay.

Debra Cafaro

and The the very very, assets estate interestingly market. good real have uncrossed supply are new very in limited

Daniel Bernstein

off, a good it's I know that's call. know. been long to hope Okay, I'll

Debra Cafaro

it Yep, is.

thank So welcome back. you,

let's it finish on. Okay,

Operator

McGrath is Sheila Evercore. question Last from with

is open. line Your

Sheila McGrath

growth, upon supply renewal of growth mentioned on recently you of wondering rents markets higher how most rents it's you the to rent the Bob I insight expire any in morning. vacated think new Good even am and lease rental just by compared that that challenge you positive units? have rent with might the driven

Robert Probst

is important question call being very really some I rent of good how that a I shame very spread spread rent overtime. is seeing in portfolio new day, the do norms great is a think that the about operators And trending growth, releasing that a of our but and And interesting. we in we acceptable. base of releasing combination last releasing are job that is have That's And they generally one mentioned pretty increases. markets it's the supply. the I the what what as And it's within our growth are is and it feel understanding good those also

So rate is really held the equation side us. the of

Sheila McGrath

Okay, thank you.

Debra Cafaro

other in there resilient your great a your want everyone I diverse high Are sincerely quality portfolio continue interest flow. for any thank generate today and you. and to Okay, I to Ventas. in further questions? has industry we're for Thank well cash strong potential tremendous attention believe that that even a

see deliver have on those you. and are Ventas, And diversified have access who fund lucky security We to super team investment for long sources can a to opportunities capital to cohesive to we continue of them. attractive capitalize all performance to things term of at

you Look again. thank everyone So seeing forward to soon.

Operator

great a day. for today's have program the and you This may thank gentlemen, in and concludes all Ladies Everyone participating disconnect. conference. you

Ventas (VTR) 27 Oct 172017 Q3 Earnings call transcript