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Ventas (VTR) Q1 FFO Beats, Senior Housing Occupancy Dips

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Ventas, Inc. (VTR - Free Report) has reported first-quarter 2021 normalized funds from operations (FFO) per share of 72 cents, surpassing the Zacks Consensus Estimate of 70 cents. However, the figure declined 26% from the year-ago quarter’s number.

The company generated revenues of $910.3 million in the first quarter, which surpassed the Zacks Consensus Estimate of $906.3 million. However, the top line declined 10.1% year over year.

While growth in office building and other services’ revenues aided the healthcare REIT’s results, a decline in same-store cash net operating income (NOI) at the senior housing operating portfolio (“SHOP”) and the triple-net leased portfolio due to the pandemic’s impacts continue to remain a headwind.

Quarter in Detail

For the first quarter, same-store cash NOI growth for the total property portfolio (1,091 assets) declined 20.2% year over year. Segment-wise, same-store cash NOI for the triple-net leased portfolio declined 12.7% year over year, while the SHOP portfolio plunged 42.5%. Meanwhile, the office portfolio reported a year-over-year rise of 0.5%.

Average same-store SHOP occupancy declined 260 basis points (bps) sequentially to 76.5% in the first quarter. Nonetheless, occupancy was notably better than the mid-point of the company’s guidance of a decline of 250-325 bps.

Moreover, in March, Ventas expanded its life-science portfolio with an investment of $272 million in two life science assets adjacent to the Johns Hopkins Medical Campus.

Balance Sheet Position

Ventas exited first-quarter 2021 with cash and cash equivalents of $169.7 million, down from $413.3 million recorded as of the 2020 end. Further, as of Mar 31, 2021, its net debt to adjusted pro-forma EBITDA ratio was 7.1X.

The company had $2.7 billion of liquidity, consisting of $0.2 billion of cash and cash equivalents, $2.7 billion of available capacity on hand, and $0.2 billion of commercial paper outstanding as of May 5.


Ventas expects second-quarter 2021 results to reflect improvement in the SHOP segment, which is being affected by the pandemic. Accordingly, first-quarter 2021 normalized FFO per share is guided at 67-71 cents. The Zacks Consensus Estimate for the same is pegged at 71 cents.

Also, the company expects spot occupancy in its sequential same-store SHOP business (434 assets) to improve 150-250 bps sequentially in the second quarter.

Ventas, Inc. Price, Consensus and EPS Surprise


Ventas, Inc. Price, Consensus and EPS Surprise

Ventas, Inc. price-consensus-eps-surprise-chart | Ventas, Inc. Quote

Ventas currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other REITs

PS Business Parks, Inc. (PSB - Free Report) reported first-quarter 2021 core FFO per share of $1.67, in line with the Zacks Consensus Estimate. However, the reported figure decreased 2.9% year over year.

Boston Properties Inc.’s (BXP - Free Report) first-quarter 2021 FFO per share of $1.56 beat the Zacks Consensus Estimate of $1.55. The quarterly figure also surpassed the mid-point of the company’s guidance by a cent, highlighting better-than-projected portfolio performance and higher fee income.

Highwoods Properties, Inc.’s (HIW - Free Report) first-quarter 2021 FFO per share of 91 cents surpassed the Zacks Consensus Estimate of 87 cents. However, FFO per share declined 2.2% from 91 cents recorded in the year-ago period.

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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