Ventas and Brookdale Forge Agreements for Senior Housing Growth

Ventas Collaborates with Brookdale to Enhance Services

Ventas, Inc. (NYSE: VTR) is proud to announce a significant partnership with Brookdale Senior Living. Through this collaboration, both organizations are set to enhance the quality of life for seniors across multiple communities. These agreements mark a pivotal evolution in Ventas’s strategy to foster profitable growth in its senior housing sector.

Strategic Agreement Overview

The newly reached agreements encompass all assets under the current Master Lease with Brookdale, which was originally set to conclude by the end of 2025. The arrangement allows Ventas to utilize its innovative Ventas OI™ strategy across forty-four select senior housing communities. This strategy is designed to optimize operational efficiency and increase occupancy rates.

Rising Cash Rent and Lease Extension

One of the highlights of this agreement includes a notable cash rent increase of 38% on sixty-five senior housing communities. These communities, which feature an average of sixty-two units, will enjoy a ten-year lease extension starting from January 2026. This extension is a testament to the confidence both Ventas and Brookdale have in the future of senior living.

Flexible Transition and Portfolio Growth

Starting September 1, 2025, Ventas plans to significantly grow its Senior Housing Operating Portfolio (SHOP). The forty-four select communities will be transitioned to this model, focusing on areas with promising market potential and the prospect of strong occupancy rates. Brookdale is committed to facilitating this transition smoothly, ensuring that the senior residents experience minimal disruption.

Investment in Capital Expenditures

To further strengthen this partnership, Ventas has earmarked $35 million for capital expenditures within these communities. This initiative aims to enhance service offerings and improve facility conditions, thereby increasing the overall living experience for residents. These investments are expected to yield a return of around 8%, solidifying Ventas’s commitment to quality senior living environments.

Projected Financial Impacts and Community Enhancements

As a result of these agreements, Ventas anticipates substantial positive impacts on its cash and GAAP rent/NOI metrics starting in 2025. The firm is poised to retain the proceeds from the sale of eleven additional senior housing communities slated for sale in 2025, with Brookdale continuing to meet its contractual rent obligations through that period.

Characteristics of the Selected Communities

The selected SHOP Communities possess various favorable traits, including an expected annualized NOI of approximately $54 million by the third quarter of 2024. Their strategic locations are projected to support significant market growth, particularly with an expected net absorption of 1,000 basis points over the coming years. This growth is bolstered by a mix of independent living, assisted living, and memory care services that these communities provide.

About Ventas

Ventas, Inc. (NYSE: VTR) is a prominent real estate investment trust recognized on the S&P 500, dedicated to creating superior living environments for an increasingly aging population. With a portfolio of around 1,350 properties across North America and the United Kingdom, Ventas plays a vital role in the longevity economy. The company operates more than 800 senior housing communities, carefully designed to cater to the needs of residents while providing them with a thriving environment.

The Ventas portfolio also extends to outpatient medical facilities and research centers, showcasing the company’s comprehensive approach to healthcare and senior living. The seasoned team at Ventas prioritizes integrity, excellence, and a shared mission of fostering healthier, happier lives for seniors.

Frequently Asked Questions

What are the main goals of the agreements between Ventas and Brookdale?

The agreements aim to enhance operational efficiency, increase occupancy rates, and expand the senior housing portfolio while ensuring quality living conditions for residents.

How will the cash rent increase affect Brookdale’s operations?

The 38% cash rent increase will provide an opportunity for Brookdale to enhance service levels while ensuring stable revenue streams for Ventas.

When will the transition of the SHOP Communities begin?

The transition to the SHOP model for the selected communities will commence on September 1, 2025.

What investment is Ventas making in these agreements?

Ventas is committing $35 million for capital improvements within the communities to enhance their performance and resident experiences.

How does Ventas plan to utilize its Ventas OI™ strategy?

Ventas intends to deploy its Ventas OI™ strategy to improve occupancy rates and increase net operating income (NOI) by engaging proven local operators and refurbishing communities.

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