Ventas’ Profit Plummets 66% in 2Q After Spending Billions on Real Estate Investments

Ventas,Inc.’s (NYSE:VTR) profit plummeted more than 66% for the second quarter, after spending billions of dollars on real estate investments in the first six months of 2011.

“Year-to-date 2011 has been outstanding, as we completed $11 billion of high-quality acquisitions while simultaneously improving our balance sheet and credit profile and delivering excellent results to our shareholders. With the completion of our acquisition of the Atria properties and our acquisition of Nationwide Health Properties on July 1, Ventas has a diversified portfolio of over 1,300 productive healthcare and seniors housing assets,” said Ventas Chairman and Chief Executive Officer Debra A. Cafaro, adding that they expect to generate nearly 70% of their net operating income from private pay sources.

In the past few months, Ventas acquired 117 private pay senior living communities and one entitled development parcel from Atria Senior Living Group, LLC, which is still managing the communities, in addition to completing the acquisition of Nationwide Health Properties.


Net income attributable to common stockholders fell to $19.7 million, and $0.11 per diluted share, for the quarter ending on June 30, 2011, compared to last year’s $58.1 million, and $0.37 per diluted share.

Despite net income dropping, normalized funds from operation (FFO) saw an increase of 26.5%, to $141.5 million, and $0.80 per share, up from 2Q 2010’s $0.71.

Total revenues went up to $364.7 million, significantly more than last year’s $243.3 million. Income from loans and investments more than doubled from the 2Q 2010 to 2011.


Ventas updated their earnings forecast for net income attributable to common stockholders to range between $0.53 and $0.71, less than the previously expected $1.12 to $1.35. Normalized FFO is expected to range from $3.17 to $3.23, higher than the previous forecast of $3.06 to $3.14.

Written by Alyssa Gerace

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