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Ventas, Inc. (VTR - Free Report) reported third-quarter 2021 normalized funds from operations (FFO) per share of 73 cents, in line with the Zacks Consensus Estimate. However, the figure declined 2.7% from the year-ago quarter.
The company generated revenues of $976.1 million in the third quarter, which surpassed the Zacks Consensus Estimate of $937.5 million. The top line increased 6.2% year over year.
The quarterly results reflect decent performance of the triple-net leased portfolio, and occupancy improvement in the Senior Housing Operating Portfolio (SHOP) segment.
Quarter in Detail
For the third quarter, same-store cash NOI growth for the total property portfolio (1,135 assets) decreased 3.5%, sequentially. Segment wise, the same-store cash NOI for the office portfolio and SHOP portfolio decreased 7.7% and 3.4% from the prior quarter, respectively. The same inched up 0.5% for the triple-net leased (NNN) portfolio, on a sequential basis.
The SHOP portfolio’s approximate spot occupancy expanded 183 basis points (bps) from June end to September end. This was driven by U.S. SHOP communities. The average SHOP occupancy advanced 230 bps in the third quarter compared to second-quarter 2021.
In the NNN portfolio, the sequential same-store cash NOI increased 0.5% in the third quarter.
The office sequential same-store pool cash NOI declined 7.7%.
In September, Ventas closed its acquisition of New Senior in an all-stock transaction for a purchase price of $2.3 billion.
Balance Sheet Position
Ventas exited third-quarter 2021 with cash and cash equivalents of $143.8 million, down from the $233.8 million recorded as of second-quarter 2021 end. For third-quarter 2021, net debt to adjusted pro forma EBITDA ratio was 7.2x, denoting a sequential improvement of 20 bps from the second quarter.
As of Nov 3, 2021, the company had $2.2 billion of liquidity, consisting of $0.2 billion in cash and cash equivalents on hand, and $2.5 billion of undrawn revolver capacity.
Outlook
Ventas projects fourth-quarter 2021 normalized FFO per share in the range of 67-71 cents. The Zacks Consensus Estimate for the same is pegged at 74 cents.
The company assumes average occupancy for fourth quarter in the same-store SHOP business to expand 80-120 bps, quarter on quarter. Moreover, the company continues to expect $1 billion in asset sales and loan repayments in 2021.
Prologis, Inc. (PLD - Free Report) came up with third-quarter core FFO per share of $1.04, surpassing the Zacks Consensus Estimate of $1.03. Results reflected solid increases in market rents and valuations amid unprecedented low vacancies in its markets.
Boston Properties Inc.’s (BXP - Free Report) third-quarter 2021 FFO per share of $1.73 beat the Zacks Consensus Estimate of $1.70. The quarterly figure also exceeded the mid-point of the company’s third-quarter guidance by 4 cents, highlighting the better-than-projected results from the in-service portfolio and improved parking revenues.
Highwoods Properties, Inc.’s (HIW - Free Report) FFO per share of 96 cents topped the Zacks Consensus Estimate of 93 cents for the September-end quarter. Rental and other revenues of $195.5 million outpaced the consensus mark of $192.2 million.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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Ventas (VTR) Q3 FFO Meets Estimates, Revenues Surge Y/Y
Ventas, Inc. (VTR - Free Report) reported third-quarter 2021 normalized funds from operations (FFO) per share of 73 cents, in line with the Zacks Consensus Estimate. However, the figure declined 2.7% from the year-ago quarter.
The company generated revenues of $976.1 million in the third quarter, which surpassed the Zacks Consensus Estimate of $937.5 million. The top line increased 6.2% year over year.
The quarterly results reflect decent performance of the triple-net leased portfolio, and occupancy improvement in the Senior Housing Operating Portfolio (SHOP) segment.
Quarter in Detail
For the third quarter, same-store cash NOI growth for the total property portfolio (1,135 assets) decreased 3.5%, sequentially. Segment wise, the same-store cash NOI for the office portfolio and SHOP portfolio decreased 7.7% and 3.4% from the prior quarter, respectively. The same inched up 0.5% for the triple-net leased (NNN) portfolio, on a sequential basis.
The SHOP portfolio’s approximate spot occupancy expanded 183 basis points (bps) from June end to September end. This was driven by U.S. SHOP communities. The average SHOP occupancy advanced 230 bps in the third quarter compared to second-quarter 2021.
In the NNN portfolio, the sequential same-store cash NOI increased 0.5% in the third quarter.
The office sequential same-store pool cash NOI declined 7.7%.
In September, Ventas closed its acquisition of New Senior in an all-stock transaction for a purchase price of $2.3 billion.
Balance Sheet Position
Ventas exited third-quarter 2021 with cash and cash equivalents of $143.8 million, down from the $233.8 million recorded as of second-quarter 2021 end. For third-quarter 2021, net debt to adjusted pro forma EBITDA ratio was 7.2x, denoting a sequential improvement of 20 bps from the second quarter.
As of Nov 3, 2021, the company had $2.2 billion of liquidity, consisting of $0.2 billion in cash and cash equivalents on hand, and $2.5 billion of undrawn revolver capacity.
Outlook
Ventas projects fourth-quarter 2021 normalized FFO per share in the range of 67-71 cents. The Zacks Consensus Estimate for the same is pegged at 74 cents.
The company assumes average occupancy for fourth quarter in the same-store SHOP business to expand 80-120 bps, quarter on quarter. Moreover, the company continues to expect $1 billion in asset sales and loan repayments in 2021.
Ventas currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Ventas, Inc. Price, Consensus and EPS Surprise
Ventas, Inc. price-consensus-eps-surprise-chart | Ventas, Inc. Quote
Performance of Other REITs
Prologis, Inc. (PLD - Free Report) came up with third-quarter core FFO per share of $1.04, surpassing the Zacks Consensus Estimate of $1.03. Results reflected solid increases in market rents and valuations amid unprecedented low vacancies in its markets.
Boston Properties Inc.’s (BXP - Free Report) third-quarter 2021 FFO per share of $1.73 beat the Zacks Consensus Estimate of $1.70. The quarterly figure also exceeded the mid-point of the company’s third-quarter guidance by 4 cents, highlighting the better-than-projected results from the in-service portfolio and improved parking revenues.
Highwoods Properties, Inc.’s (HIW - Free Report) FFO per share of 96 cents topped the Zacks Consensus Estimate of 93 cents for the September-end quarter. Rental and other revenues of $195.5 million outpaced the consensus mark of $192.2 million.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.