Ventas Inc.

Company Overview

Business Model: Ventas, Inc. is an S&P 500 company operating as a real estate investment trust (REIT) that focuses on delivering shareholder returns by investing in and managing a diversified portfolio of healthcare real estate assets. The Company's primary revenue generation mechanisms involve owning and investing in senior housing communities (SHOP segment), acquiring, owning, developing, leasing, and managing outpatient medical buildings and research centers (OM&R segment), and investing in and owning triple-net leased senior housing, skilled nursing facilities (SNFs), long-term acute care facilities (LTACs), freestanding inpatient rehabilitation facilities (IRFs), and other healthcare facilities (NNN segment). In its SHOP segment, Ventas, Inc. participates directly in the financial performance of the communities' operations, typically engaging third-party managers. For OM&R and NNN segments, revenue is primarily generated through lease payments from tenants, who are responsible for property-related expenses. The Company also manages third-party institutional private capital through Ventas Investment Management (VIM), earning management and promote fees.

Market Position: Ventas, Inc. holds a diversified portfolio of 1,409 properties, including 1,374 Segment Properties, across North America and the United Kingdom. The Company is positioned to benefit from a large and growing aging population, with the 80+ population in the United States projected to grow by 28% through 2030. It leverages Ventas OI™, a proprietary data and analytics platform, to inform real-time decisions, enhance community performance, and support investment and capital expenditure decisions in its SHOP segment. The Company competes for investments with a broad range of entities including other healthcare REITs, real estate partnerships, and private equity firms. Its managers, tenants, and borrowers compete locally and regionally based on care quality, reputation, price, location, and physical appearance of properties.

Recent Strategic Developments:

• Acquisitions: Acquired 52 senior housing communities in the SHOP segment for $2.3 billion during 2025. Post-year-end, acquired an additional 26 SHOP senior housing communities for $842.2 million in January and February 2026.
• Dispositions: Sold three SHOP senior housing communities, six OM&R properties, and 14 NNN properties for aggregate consideration of $223.2 million in 2025, recognizing $17.8 million in gain. Also recognized a $20.8 million gain from a lease modification on 12 OM&R properties, resulting in a sales-type lease receivable.
• Portfolio Transitions: Converted 63 U.S. senior housing communities from the NNN segment to the SHOP segment during 2025. Also transitioned 26 SHOP communities to new managers and converted 11 U.K. senior housing communities from NNN to SHOP with a new manager.
• Brookdale Senior Living, Inc. Master Lease: Extended the Master Lease for 65 senior housing properties with Brookdale Senior Living, Inc. to December 31, 2035. The remaining 56 properties from the original 121 were either converted to SHOP (42 in 2025, 3 in 2026), sold (2 in 2025), or held for sale (9 as of December 31, 2025).
• Capital Structure Enhancements: Amended its unsecured revolving credit facility in April 2025, increasing borrowing capacity from $2.75 billion to $3.5 billion. Increased the commercial paper program capacity from $1.0 billion to $2.0 billion in August 2025. In January 2026, Ventas Realty, Limited Partnership amended a $500.0 million unsecured term loan, extending its maturity to January 2031 and increasing the principal to $700.0 million, and established a new $550.0 million unsecured delay draw term loan.
• Equity Offerings: Entered into equity forward sales agreements for 46.2 million shares of common stock for gross proceeds of $3.2 billion in 2025, with 13.9 million shares ($1.1 billion gross proceeds) unsettled as of year-end.
• Ventas Investment Management (VIM) Activity: The Ventas Life Science & Healthcare Real Estate Fund acquired three senior housing communities and two outpatient medical buildings for $279.5 million in 2025. The Pension Fund Joint Venture sold five senior housing communities for $302.5 million in 2025.

Geographic Footprint: Ventas, Inc. owns or has investments in properties located in the United States, Canada, and the United Kingdom. As of December 31, 2025, properties in California accounted for more than 10% of the Company's total revenues.

Financial Performance

Revenue Analysis

Profitability Metrics (2025):

• Gross Margin: N/A
• Operating Margin: 3.50%
• Net Margin: 4.48%

Investment in Growth (2025):

• R&D Expenditure: N/A
• Capital Expenditures: $363,863k
• Strategic Investments: Acquired 52 senior housing communities in the SHOP segment for $2.3 billion.

Business Segment Analysis

Senior Housing Operating Portfolio (SHOP)

Financial Performance (2025 vs 2024):

• Revenue: $4,276,163k (+26.8% YoY)
• Operating Margin: N/A
• Key Growth Drivers: The increase in SHOP segment NOI was primarily driven by revenue growth due to an increase in average occupancy (87.3% in 2025 vs 84.5% in 2024), higher revenue per occupied room ($5,255 in 2025 vs $4,923 in 2024), additional properties acquired, and conversions of senior housing communities from the NNN segment to the SHOP segment. This growth was partially offset by higher operating expenses due to the increased number of communities, higher occupancy, and inflationary increases.

Product Portfolio: The SHOP segment includes independent living communities, assisted living communities, memory care communities, and continuing care retirement communities. These communities offer services ranging from central dining and housekeeping to supportive care for activities of daily living and specialized memory care.

Market Dynamics: Charges for room, board, and services are generally paid from private sources, with limited reliance on government reimbursement programs. The segment leverages Ventas OI™, a proprietary data and analytics platform, for operational insights, marketing and sales analytics, competitive intelligence, and geospatial analytics. The majority of SHOP communities are "qualified health care properties" operated by third-party managers.

Sub-segment Breakdown:

• Atria Senior Living, Inc.: 17.7% of Total NOI, 194 Segment Properties (14.1% of Segment Properties). Ventas, Inc. holds a 34% ownership interest.
• Sunrise Senior Living, LLC: 6.8% of Total NOI, 98 Segment Properties (7.1% of Segment Properties).
• Le Groupe Maurice: 5.6% of Total NOI, 37 Segment Properties (2.7% of Segment Properties).

Outpatient Medical and Research Portfolio (OM&R)

Financial Performance (2025 vs 2024):

• Revenue: $897,902k (+2.3% YoY)
• Operating Margin: N/A
• Key Growth Drivers: The increase in OM&R segment NOI was primarily due to new leasing activity, high tenant retention, and additional NOI from a development project placed in service, partially offset by higher property-level operating expenses and dispositions. Occupancy increased to 88.6% in 2025 from 88.3% in 2024, and annualized average rent per occupied square foot increased to $38 from $37.

Product Portfolio: The OM&R segment primarily includes outpatient medical buildings and research centers. Outpatient medical buildings are generally multi-tenant properties leased to health systems and medical practices, requiring customized space and enhanced systems. Research centers contain laboratory and office space leased to universities, academic medical centers, technology, biotechnology, medical device, and pharmaceutical companies, featuring advanced electrical, mechanical, and HVAC systems.

Market Dynamics: Properties are leased to tenants under varying lease types, typically fixed-term, with tenants often responsible for a proportionate share of property-related expenses. Ventas, Inc. provides management, leasing, marketing, facility development, and advisory services through its Lillibridge subsidiary and 50% ownership in PMB Real Estate Services LLC.

Triple-Net Leased Properties (NNN)

Financial Performance (2025 vs 2024):

• Revenue: $601,578k (-3.3% YoY)
• Operating Margin: N/A
• Key Growth Drivers: The decrease in NNN segment NOI was primarily driven by a $35.6 million decrease in rental income from senior housing communities converted to the SHOP segment and a $23.9 million decrease from dispositions. This was partially offset by a $14.6 million increase in rental income attributed to the net non-cash revenue impact of changed revenue recognition related to a senior housing triple-net tenant, a $13.1 million increase in rental income from acquisitions in the third quarter of 2024, and a $10.0 million net increase in rental income from lease renewals, contractual rent escalators, and timing of rent collection.

Product Portfolio: The NNN segment includes senior housing communities, skilled nursing facilities (SNFs), long-term acute care facilities (LTACs), freestanding inpatient rehabilitation facilities (IRFs), and other healthcare facilities. These facilities provide rehabilitative, skilled nursing, medical treatment, and specialized care for medically complex patients.

Market Dynamics: Properties are leased under triple-net or absolute-net leases, obligating tenants to pay all property-related expenses and typically including annual or periodic rent escalators. Charges for services are generally paid from a combination of government reimbursement (Medicare/Medicaid) and commercial insurance/private sources.

Sub-segment Breakdown:

• Ardent Health Partners, LLC: 6.4% of Total NOI, 30 Segment Properties (2.2% of Segment Properties). Ventas, Inc. holds an approximately 6.6% ownership interest.
• Brookdale Senior Living, Inc.: 6.2% of Total NOI, 77 Segment Properties (5.6% of Segment Properties). (Note: Brookdale Senior Living, Inc. is not expected to represent a significant portion of Total NOI or properties for the NNN segment in 2026 and thereafter due to recent conversions and sales).
• Kindred Healthcare, LLC: 5.8% of Total NOI, 31 Segment Properties (2.3% of Segment Properties). Ventas, Inc. holds warrants exercisable for 9.9% of the common equity of a parent company of Kindred Healthcare, LLC.

Capital Allocation Strategy

Shareholder Returns (2025):

• Share Repurchases: $47.8k (637k shares at average price of $75.09 per share), representing