Cafaro Says Ventas' Income Growth Product of Diversifying Business

Debra Cafaro

Debra Cafaro, chairman and CEO of health care REIT Ventas, Inc. (NYSE: VTR), joined REIT.com for a CEO Spotlight video interview at REITWorld 2016: NAREIT’s Annual Convention for All Things REIT at the JW Marriott Phoenix Desert Ridge.

Cafaro commented on Ventas’ third quarter growth in income from continuing operations of more than 200 percent. She attributed the gain to Ventas’ ongoing efforts to “diversity, elevate and re-shape the business.”

As part of that process, Ventas has almost fully exited the skilled nursing business. The health care REIT also has added a “very compelling” life science business and increased its presence in the $1 trillion hospital business, Cafaro noted.  “All of those things have really come to benefit our shareholders this year,” she said.

Cafaro also stressed the importance demographics play in driving Ventas’ business. She cited “tremendous demand” from the over-65 population and the over-85 population, and “no election is going to change that.” Cafaro pointed out that the over-85 group is the fastest growing segment of the population.

Meanwhile, the life science segment has seen an “explosion to the upside” since the election, based on expectations that pharmaceutical development and research will continue to be supported, according to Cafaro.

Cafaro also noted that while there may be changes to the Affordable Care Act under President-elect Donald Trump's administration, “I’d expect that insured individuals will continue to be insured.” Looking ahead, insurance may be offered through different structures, “but we still feel positive about building a formidable business in the health care space,” she said.

Cafaro added that Ventas expects the over-65, Medicare-eligible population to fuel growth for its medical office properties. She also described Ventas as an “acquisition machine,” and said she expects the market to offer more acquisition opportunities in 2017.