Ventas Expanding Presence in Life Science Real Estate

Debra Cafaro, chairman and CEO of health care REIT Ventas, Inc. (NYSE: VTR), joined REIT.com for a CEO Spotlight video interview at REITWeek 2017: NAREIT’s Investor Forum at the New York Hilton Midtown.

Cafaro described Ventas as an “investment machine” that has entered some “exciting” business lines during the past 12 months.

One new area of investment is university-based life science real estate, Cafaro said. Ventas has already committed about $2 billion to the segment.

Ventas’ recent investment in South Street Landing in Providence, Rhode Island, is a good example of the type of project the company is pursuing in the segment, according to Cafaro. Located on the Brown University campus, South Street Landing offers state-of-the-art facilities for medical training and is 100 percent pre-leased by Brown and the University of Rhode Island, she noted.

With almost an unlevered yield of almost 7 percent, “we think it’s a great risk-adjusted return,” Cafaro said.

Cafaro also commented on trends in the senior housing business. “We see this incredible wave of demand coming for all sectors of Ventas’ business, including senior housing,” she said.

Cafaro noted that there are some areas of the country where senior housing development is picking up in anticipation of increased demand, “and there might be a slight timing mismatch.” However, she added that about 70 percent of Ventas’ assets are located in coastal markets, “where we see equilibrium or better.”

On average, Ventas’ portfolio is performing well, and the company has pricing power in those coastal markets, Cafaro said.