Ventas(US:VTR)2023-02-10 17:56Financial Data and Key Metrics Changes - The fourth quarter normalized FFO was $0.73 per share, reflecting strong performance driven by a 19% growth in SHOP and record performance in Medical Office Buildings [6][28] - Total company and SHOP same-store cash NOI growth was 8.5% and 19.1% respectively for the fourth quarter [28] - The company projects full year normalized FFO guidance representing 5% growth at the midpoint for 2023 [12][33] Business Line Data and Key Metrics Changes - The SHOP portfolio experienced a 19.1% growth in NOI year-over-year, with U.S. growth at 22.2% and Canada at 11.7% [18][19] - The Medical Office Buildings (MOB) business achieved a same-store cash NOI growth of 3.8% for fiscal year 2022, with year-end occupancy at 92% [29] - Research and Innovation (R&I) also posted a 5.1% growth in same-store cash NOI for the full year 2022 [29] Market Data and Key Metrics Changes - Leading indicators in the U.S. showed strong demand with leads at 120% of 2019 levels and move-ins at 101% [20] - Canada maintained high occupancy at 95% and demonstrated a 12% growth in the fourth quarter [64][29] - The company anticipates a significant occupancy ramp throughout 2023, supported by an aging demographic and muted new supply [24][87] Company Strategy and Development Direction - The company is focused on a multiyear growth and recovery cycle led by SHOP, supported by favorable supply-demand fundamentals [8][12] - Strategic initiatives include capital recycling, with $1.2 billion in new investments in 2022, and a commitment to ESG leadership [10][11] - The company aims to optimize its portfolio through the Ventas OI platform and enhance investment activities across asset classes [26][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong demand fundamentals for senior housing, driven by the growing over-80 population [7][8] - The macroeconomic outlook includes expectations of slowing economic growth and moderating inflation, which the company believes will benefit its operations [13] - Management anticipates a return to 2019 performance levels in the SHOP portfolio, with potential for further growth beyond that [9][51] Other Important Information - The company has reduced its 2023 maturities to a manageable level, with only 4% of consolidated debt due in 2023 [31] - The company has significant liquidity of $2.4 billion at year-end 2022, enhancing its financial flexibility [32] - The company is committed to achieving net zero operational carbon emissions by 2040 [11] Q&A Session Summary Question: Background on the Santerre Health Investors loan allowance - Management explained that the $20 million allowance was due to timing issues related to asset recovery from COVID and rising interest rates, but they remain current on interest payments [39] Question: Magnitude of CapEx investments in SHOP - Management indicated that they are investing about $1 million per property for 100 communities undergoing refreshes, which will be spread over time and is expected to enhance performance [41][42] Question: Insights on leading indicators and SHOP NOI opportunity - Management noted strong lead volumes and move-ins, with expectations for continued improvement in occupancy and pricing power [49][50][87] Question: Differences in growth between legacy and new properties - Management confirmed that all operators are contributing to growth, with new senior properties also playing a significant role in the overall performance [54][55] Question: Expectations for RevPOR growth - Management indicated that RevPOR growth is expected to be around 6%, driven by strong in-house rent increases and care pricing [100]