- Company Receives $488 Million in
Proceeds from Completed Sale of 22 SNFs
- Remaining SNF Sales Totaling over
$200 Million Expected to be Complete by Year End 2017
- Sale Price Represents Seven Percent
Yield on Current Cash Rent
- SNF Portfolio Will Represent Only
One Percent of Company Net Operating Income upon
Completion
Ventas, Inc. (NYSE: VTR) has completed the first phase of its
pending sale of 36 owned skilled nursing facilities (the “Ventas
SNFs”) that are currently operated by Kindred Healthcare, Inc.
(NYSE: KND) (“Kindred”) to facilitate Kindred’s exit from its
skilled nursing facility (“SNF”) business. Upon today’s completion
of Kindred’s SNF sale to an affiliate of BlueMountain Capital
Management, LLC, Ventas received its allocable portion of proceeds
for the 22 Ventas SNFs sold in this phase for a total purchase
price of $488 million which represents a seven percent cash yield
on rent for these assets.
“We are delighted to work with Kindred to position both
companies for continued success,” said Debra A. Cafaro, Ventas
Chairman and Chief Executive Officer. “We are also pleased with the
successful completion of the majority of our skilled nursing
facility sales as we continue to deemphasize our SNF business in a
profitable way. These actions differentiate our high-quality
portfolio of leading properties.”
Ventas continues to expect to receive aggregate proceeds of $700
million for the sale of the 36 Ventas SNFs by year end 2017,
inclusive of the completed sale. This total anticipated sale price
represents a seven percent cash yield on current annual cash rent
of $50 million and an eight percent GAAP yield. Ventas is expected
to record a gain exceeding $600 million for the sale of the 36
Ventas SNFs. Following the sales of the Ventas SNFs, the Company’s
percentage of net operating income (“NOI”) received from SNFs will
be only one percent of its aggregate NOI.
As disclosed in the Company’s second quarter 2017 earnings press
release dated July 28, 2017, the timing and volume of SNF closings
will have a significant impact on 2017’s second half results
because larger, earlier dispositions coupled with the anticipated
repayment of LIBOR-based debt will reduce funds from operations
(“FFO”) based metrics by approximately $0.01 per share per month.
The early completion announced today of the majority of the Ventas
SNF sales is therefore expected to reduce 2017 normalized FFO by
approximately $0.01 per share per month commencing September 1,
2017.
Ventas, Inc., an S&P 500 company, is a leading real estate
investment trust. Its diverse portfolio of approximately 1,300
assets in the United States, Canada and the United Kingdom consists
of seniors housing communities, medical office buildings, life
science and innovation centers, inpatient rehabilitation and
long-term acute care facilities, health systems and skilled nursing
facilities. Through its Lillibridge subsidiary, Ventas provides
management, leasing, marketing, facility development and advisory
services to highly rated hospitals and health systems throughout
the United States. References to “Ventas” or the “Company” mean
Ventas, Inc. and its consolidated subsidiaries unless otherwise
expressly noted. More information about Ventas and Lillibridge can
be found at www.ventasreit.com and
www.lillibridge.com.
This press release includes forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. All statements regarding the Company’s or its tenants’,
operators’, borrowers’ or managers’ expected future financial
condition, results of operations, cash flows, funds from
operations, dividends and dividend plans, financing opportunities
and plans, capital markets transactions, business strategy,
budgets, projected costs, operating metrics, capital expenditures,
competitive positions, acquisitions, investment opportunities,
dispositions, merger or acquisition integration, growth
opportunities, expected lease income, continued qualification as a
real estate investment trust (“REIT”), plans and objectives of
management for future operations and statements that include words
such as “anticipate,” “if,” “believe,” “plan,” “estimate,”
“expect,” “intend,” “may,” “could,” “should,” “will” and other
similar expressions are forward-looking statements. These
forward-looking statements are inherently uncertain, and actual
results may differ from the Company’s expectations. The Company
does not undertake a duty to update these forward-looking
statements, which speak only as of the date on which they are
made.
The Company’s actual future results and trends may differ
materially from expectations depending on a variety of factors
discussed in the Company’s filings with the Securities and Exchange
Commission. These factors include without limitation: (a) the
ability and willingness of the Company’s tenants, operators,
borrowers, managers and other third parties to satisfy their
obligations under their respective contractual arrangements with
the Company, including, in some cases, their obligations to
indemnify, defend and hold harmless the Company from and against
various claims, litigation and liabilities; (b) the ability of the
Company’s tenants, operators, borrowers and managers to maintain
the financial strength and liquidity necessary to satisfy their
respective obligations and liabilities to third parties, including
without limitation obligations under their existing credit
facilities and other indebtedness; (c) the Company’s success in
implementing its business strategy and the Company’s ability to
identify, underwrite, finance, consummate and integrate
diversifying acquisitions and investments; (d) macroeconomic
conditions such as a disruption of or lack of access to the capital
markets, changes in the debt rating on U.S. government securities,
default or delay in payment by the United States of its
obligations, and changes in the federal or state budgets resulting
in the reduction or nonpayment of Medicare or Medicaid
reimbursement rates; (e) the nature and extent of future
competition, including new construction in the markets in which the
Company’s seniors housing communities and medical office buildings
(“MOBs”) are located; (f) the extent and effect of future or
pending healthcare reform and regulation, including cost
containment measures and changes in reimbursement policies,
procedures and rates; (g) increases in the Company’s borrowing
costs as a result of changes in interest rates and other factors;
(h) the ability of the Company’s tenants, operators and managers,
as applicable, to comply with laws, rules and regulations in the
operation of the Company’s properties, to deliver high-quality
services, to attract and retain qualified personnel and to attract
residents and patients; (i) changes in general economic conditions
or economic conditions in the markets in which the Company may,
from time to time, compete, and the effect of those changes on the
Company’s revenues, earnings and funding sources; (j) the Company’s
ability to pay down, refinance, restructure or extend its
indebtedness as it becomes due; (k) the Company’s ability and
willingness to maintain its qualification as a REIT in light of
economic, market, legal, tax and other considerations; (l) final
determination of the Company’s taxable net income for the year
ended December 31, 2016 and for the year ending December 31, 2017;
(m) the ability and willingness of the Company’s tenants to renew
their leases with the Company upon expiration of the leases, the
Company’s ability to reposition its properties on the same or
better terms in the event of nonrenewal or in the event the Company
exercises its right to replace an existing tenant, and obligations,
including indemnification obligations, the Company may incur in
connection with the replacement of an existing tenant; (n) risks
associated with the Company’s senior living operating portfolio,
such as factors that can cause volatility in the Company’s
operating income and earnings generated by those properties,
including without limitation national and regional economic
conditions, costs of food, materials, energy, labor and services,
employee benefit costs, insurance costs and professional and
general liability claims, and the timely delivery of accurate
property-level financial results for those properties; (o) changes
in exchange rates for any foreign currency in which the Company
may, from time to time, conduct business; (p) year-over-year
changes in the Consumer Price Index or the UK Retail Price Index
and the effect of those changes on the rent escalators contained in
the Company’s leases and the Company’s earnings; (q) the Company’s
ability and the ability of its tenants, operators, borrowers and
managers to obtain and maintain adequate property, liability and
other insurance from reputable, financially stable providers; (r)
the impact of increased operating costs and uninsured professional
liability claims on the Company’s liquidity, financial condition
and results of operations or that of the Company’s tenants,
operators, borrowers and managers, and the ability of the Company
and the Company’s tenants, operators, borrowers and managers to
accurately estimate the magnitude of those claims; (s) risks
associated with the Company’s MOB portfolio and operations,
including the Company’s ability to successfully design, develop and
manage MOBs and to retain key personnel; (t) the ability of the
hospitals on or near whose campuses the Company’s MOBs are located
and their affiliated health systems to remain competitive and
financially viable and to attract physicians and physician groups;
(u) risks associated with the Company’s investments in joint
ventures and unconsolidated entities, including its lack of sole
decision-making authority and its reliance on its joint venture
partners’ financial condition; (v) the Company’s ability to obtain
the financial results expected from its development and
redevelopment projects; (w) the impact of market or issuer events
on the liquidity or value of the Company’s investments in
marketable securities; (x) consolidation activity in the seniors
housing and healthcare industries resulting in a change of control
of, or a competitor’s investment in, one or more of the Company’s
tenants, operators, borrowers or managers or significant changes in
the senior management of the Company’s tenants, operators,
borrowers or managers; (y) the impact of litigation or any
financial, accounting, legal or regulatory issues that may affect
the Company or its tenants, operators, borrowers or managers; and
(z) changes in accounting principles, or their application or
interpretation, and the Company’s ability to make estimates and the
assumptions underlying the estimates, which could have an effect on
the Company’s earnings.
The Company routinely announces material information to
investors and the marketplace using press
releases, SEC filings, public conference calls, webcasts
and the Company’s website
at www.ventasreit.com/investor-relations. The information that
the Company posts to its website may be deemed to be material.
Accordingly, the Company encourages investors and others interested
in the Company to routinely monitor and review the information that
the Company posts on its website, in addition to following the
Company’s press releases, SEC filings and public
conference calls and webcasts. You may automatically receive e-mail
alerts and other information about the Company when you enroll your
e-mail address by visiting the “Sign up to Receive Email Updates”
section of the Company’s website
at www.ventasreit.com/investor-relations.
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Ventas, Inc.Ryan K. Shannon(877) 4-VENTAS
Ventas (NYSE:VTR)
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