Tags: healthcare | Ventas | REIT | VTR

Ventas Healthcare REIT Tops Sector

By    |   Wednesday, 05 Oct 2011 04:27 PM

Recent takeovers have turned Ventas (VTR) into the country’s largest healthcare real estate investment trust (REIT) by stock market value, putting it on top of a lucrative sector. Demand for healthcare seems to do nothing but rise, and that should remain the case as the Baby Boomers age.

Ventas has more than 1,300 senior housing and healthcare properties in 47 states, Washington, D.C., and Canada. The portfolio of high-quality assets provides diversification across all important measures — geography, asset type, tenant-manager mix, revenue source, and operating model.

As for major acquisitions, Ventas in May completed a $3.1 billion purchase of 118 private-pay senior housing communities from Atria Senior Living Group. In July, Ventas closed its takeover of Nationwide Health Properties for $7.6 billion. That includes almost 300 senior housing facilities, medical office buildings, specialty hospitals, and other assets.

Ventas reported that normalized funds from operations, a common metric for measuring REITs, jumped 26.5 percent in the second quarter, to $141.5 million from $111.9 million a year earlier.

Steady income

Standard & Poor’s analyst Royal Shepard has a neutral rating on Ventas shares. He likes the steady income stream from the company’s long-term “triple-net” leases, which require tenants to pay taxes, insurance and maintenance fees.

Another positive for Ventas investors, given the economy’s stagnation, is that the stock correlates less with the economy than most other REITs, Shepard says.

“Longer term, we think the trust should benefit from an aging population and an ongoing shift in the delivery of healthcare services to lower-cost settings, such as senior housing and nursing facilities,” he writes. The company next reports around Nov. 3.

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Recent takeovers have turned Ventas (VTR) into the country s largest healthcare real estate investment trust (REIT) by stock market value, putting it on top of a lucrative sector. Demand for healthcare seems to do nothing but rise, and that should remain the case as the...
healthcare,Ventas,REIT,VTR
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2011-27-05
Wednesday, 05 Oct 2011 04:27 PM
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