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Cafaro: Health Care Fundamentals Receive Positive Prognosis

06/18/2010 | By REIT.com

NAREIT Chair Debra Cafaro, chairman, president and CEO of Ventas, Inc. (NYSE: VTR), spoke with REIT.com during REITWeek 2010: NAREIT's Investor Forum. Ventas was ranked the best-performing financial stock of the last decade. Cafaro was asked about the impact health care reform legislation would have on her company and the sector as a whole.

"Health care reform will initially bring in another 32 million uninsured people into the health care system," Cafaro said. "That should be very positive for utilization, demand and for growth."

The boost from health care reform comes on top of already strong demand drivers from the over-85 population and aging Baby Boomer generation. In addition, fundamentals in the sector held up very well during the recession, Cafaro said.

"Health care is a need-driven business," Cafaro said. "We continue to see strong fundamentals and cash-flow growth."

With its balance sheet on strong footing, Cafaro said Ventas remains in a position to grow through acquisitions as the deal pipeline begins to pick up in the near term.

She added that she sees all the underpinnings for Ventas and the health care sector as a whole to be among the fastest growing components of the REIT market over the next two to five years.

As to what she credits Ventas' long-term success to, Cafaro said the company's outperformance traces back to 2002 and the assembly of a cohesive management team and then strategically executing its business plan.

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