Mutually Beneficial Agreement to Incentivize
Accelerated NOI Performance at 92 Ventas Senior Housing Communities
Operated by Sunrise
Advances Ventas’s Right Asset, Right Market,
Right Operator TM Senior Housing Strategy
Ventas, Inc. (NYSE: VTR) (“Ventas” or the “Company”) announced
today that it has entered into a revised, mutually beneficial and
highly aligned management agreement with Sunrise Senior Living
(“Sunrise”) to drive enhanced performance and value in Ventas’s
portfolio of 92 high-end senior living communities managed by
Sunrise.
“At this important juncture, we are pleased to reach this
agreement for our market-leading assisted living communities
operated by Sunrise,” said J. Justin Hutchens, Ventas’s EVP of
Senior Housing. “We are confident the new agreement aligns
incentives toward profitable growth. Our enhanced partnership with
Sunrise represents the latest step to advance our senior housing
strategy and position the portfolio to capture the upside from the
senior housing growth trajectory.”
“Sunrise and Ventas have had a successful partnership since
2007, and we are excited to continue to enhance our relationship
with today’s announcement,” said Jack R. Callison, Chief Executive
Officer of Sunrise. “The revised management agreement further
aligns both parties to drive the success of the communities for the
benefit of both Ventas and Sunrise stakeholders.”
The revised management agreement provides strong alignment
between Ventas and Sunrise while simultaneously incentivizing Net
Operating Income (“NOI”) growth at a key inflection point in the
ongoing senior housing industry recovery. The near-term financial
impact to Ventas is expected to be immaterial. Key terms of the
agreement include:
- A new management fee structure, with increased weighting toward
NOI performance, and reduced emphasis on revenue;
- Incentive payments upon achieving mutually agreed upon NOI
growth targets;
- Enhanced operating flexibility to optimize the go-forward
portfolio through selective dispositions;
- Simplification through consolidation of multiple contracts into
a single master agreement while maintaining the existing average
term through 2035;
- Expansion of data collaboration and analytics further enhancing
Ventas Operational InsightsTM platform combined with Sunrise’s
operational expertise to drive outperformance; and
- Agreement to assist and cooperate with achieving customary
industry-leading Environment, Social and Governance (ESG)
commitments in the management contracts with a particular focus on
Diversity, Equity and Inclusion.
About Ventas
Ventas Inc., an S&P 500 company, operates at the
intersection of two large and dynamic industries – healthcare and
real estate. Fueled by powerful demographic demand from growth in
the aging population, Ventas owns a diversified portfolio of over
1,200 properties in the United States, Canada, and the United
Kingdom. Ventas uses the power of its capital to unlock the value
of senior living communities; life science, research &
innovation properties; medical office & outpatient facilities,
hospitals and other healthcare real estate. A globally recognized
real estate investment trust, Ventas follows a successful long-term
strategy, proven over more than 20 years, built on diversification
of property types, capital sources and industry leading partners,
financial strength and flexibility, consistent and reliable growth
and industry leading ESG achievements, managed by a collaborative
and experienced team dedicated to its stakeholders.
Cautionary Statements
Certain of the information contained herein, including
intra-quarter operating information and number of confirmed cases
of COVID-19, has been provided by our operators and we have not
verified this information through an independent investigation or
otherwise. We have no reason to believe that this information is
inaccurate in any material respect, but we cannot assure you of its
accuracy.
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. These forward-looking statements include, among others,
statements of expectations, beliefs, future plans and strategies,
anticipated results from operations and developments and other
matters that are not historical facts. Forward-looking statements
include, among other things, statements regarding our and our
officers’ intent, belief or expectation as identified by the use of
words such as “may,” “will,” “project,” “expect,” “believe,”
“intend,” “anticipate,” “seek,” “target,” “forecast,” “plan,”
“potential,” “opportunity,” “estimate,” “could,” “would,” “should”
and other comparable and derivative terms or the negatives
thereof.
Forward-looking statements are based on management’s beliefs as
well as on a number of assumptions concerning future events. You
should not put undue reliance on these forward-looking statements,
which are not a guarantee of performance and are subject to a
number of uncertainties and other factors that could cause actual
events or results to differ materially from those expressed or
implied by the forward-looking statements. We do not undertake a
duty to update these forward-looking statements, which speak only
as of the date on which they are made. You are urged to carefully
review the disclosures we make concerning risks and uncertainties
that may affect our business and future financial performance,
including those made below and in our filings with the Securities
and Exchange Commission, such as in the section titled “Cautionary
Statements — Summary Risk Factors,” “Risk Factors” and
“Management’s Discussion and Analysis of Financial Condition and
Results of Operations” in the Company’s Annual Report on Form 10-K
for the year ended December 31, 2021 and Quarterly Report on Form
10-Q for the quarter ended March 31, 2022.
Certain factors that could affect our future results and our
ability to achieve our stated goals include, but are not limited
to: (a) the impact of the ongoing COVID-19 pandemic and its
extended consequences, including of the Delta, Omicron or any other
variant, on our revenue, level of profitability, liquidity and
overall risk exposure and the implementation and impact of
regulations related to the CARES Act and other stimulus legislation
and any future COVID-19 relief measures; (b) our ability to achieve
the anticipated benefits and synergies from, and effectively
integrate, our acquisitions and investments, including our
acquisition of New Senior Investment Group Inc.; (c) our exposure
and the exposure of our tenants, managers and borrowers to complex
healthcare and other regulation and the challenges and expense
associated with complying with such regulation; (d) the potential
for significant general and commercial claims, legal actions,
regulatory proceedings or enforcement actions that could subject us
or our tenants, managers or borrowers to increased operating costs
and uninsured liabilities; (e) the impact of market and general
economic conditions, including economic and financial market
events, inflation, changes in interest rates, supply chain
pressures, events that affect consumer confidence, our occupancy
rates and resident fee revenues, and the actual and perceived state
of the real estate markets, labor markets and public capital
markets; (f) our ability, and the ability of our tenants, managers
and borrowers, to navigate the trends impacting our or their
businesses and the industries in which we or they operate; (g) the
risk of bankruptcy, insolvency or financial deterioration of our
tenants, managers, borrowers and other obligors and our ability to
foreclose successfully on the collateral securing our loans and
other investments in the event of a borrower default; (h) our
ability to identify and consummate future investments in or
dispositions of healthcare assets and effectively manage our
portfolio opportunities and our investments in co-investment
vehicles, joint ventures and minority interests; (i) risks related
to development, redevelopment and construction projects; (j) our
ability to attract and retain talented employees; (k) the
limitations and significant requirements imposed upon our business
as a result of our status as a REIT and the adverse consequences
(including the possible loss of our status as a REIT) that would
result if we are not able to comply; (l) the risk of changes in
healthcare law or regulation or in tax laws, guidance and
interpretations, particularly as applied to REITs, that could
adversely affect us or our tenants, managers or borrowers; (m)
increases in our borrowing costs as a result of becoming more
leveraged or as a result of changes in interest rates and phasing
out of LIBOR rates; (n) our reliance on third parties to operate a
majority of our assets and our limited control and influence over
such operations and results; (o) our dependency on a limited number
of tenants and managers for a significant portion of our revenues
and operating income; (p) the adequacy of insurance coverage
provided by our policies and policies maintained by our tenants,
managers or other counterparties; (q) the occurrence of cyber
incidents that could disrupt our operations, result in the loss of
confidential information or damage our business relationships and
reputation; (r) the impact of merger, acquisition and investment
activity in the healthcare industry or otherwise affecting our
tenants, managers or borrowers; (s) disruptions to the management
and operations of our business and the uncertainties caused by
activist investors; and (t) the risk of catastrophic or extreme
weather and other natural events and the physical effects of
climate change.
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version on businesswire.com: https://www.businesswire.com/news/home/20220505005875/en/
Sarah Whitford (877) 4-VENTAS
Ventas (NYSE:VTR)
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