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Ventas Enterprise Growth To Be Deferred Until After 2020 Says CEO

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Ventas Inc. reported a strong quarter of normalized FFO $0.96 per share with performance driven by accretive investments, excellent capital markets activity and growth in our office and triple-net lease business. On the firm’s Q3 earnings call, Debra Cafaro, chairman and CEO, said that the company also refined its full-year normalized FFO per share guidance range to $3.81 to $3.85 per share, maintaining our midpoint at $3.83 per share. This expected outcome for 2019 is also consistent with the upper half of the normalized FFO guidance range we initiated in the first quarter of this year.”

She explained that the REIT is benefiting significantly from its diversified portfolio and its effective investment in capital markets activity. “Indeed in the quarter, the 70% of our same-store portfolio represented by our office triple net lease and Canadian senior housing portfolios grew cash NOI by nearly 3%. However, in our US SHOP business, which represents 25% of our enterprise, we experienced dynamic operating conditions in the quarter and occupancy took a precipitous leg down at the end of September.”

According to Cafaro, the company expects its 2019 shop performance to fall below our original guidance range, mostly, she says, “because our portfolio did not experience the strong seasonal lift in occupancy that is typical and rate softness continued during the quarter. These trends are continuing into the fourth quarter leading to a reduction in our full year SHOP 2019 guidance. Because we will end 2019 and enter 2020 off a lower base, we have also concluded that our enterprise growth will be deferred until after 2020.”