Ventas Still Sees Potential for Large Scale Acquisitions

While Ventas (NYSE:VTR) hasn’t completed any major senior housing acquisitions to date in 2013, the market for growth through acquisitions remains very strong. The Chicago, Ill.-based real estate investment trust (REIT) says there are a variety of acquisition opportunities it’s looking at, from individual properties to regional players, and large portfolios.

“The market is dynamic and there is the potential for large deals,” said Lori B. Wittman, Ventas senior vice president, capital markets and investor relations, during the Jefferies Global Healthcare Conference earlier this week. “You never know the timing of the deals, but there are a lot of opportunities for continued consolidation and change in the market.”

One area of senior housing where Ventas doesn’t plan on making any large investment is the skilled nursing area. 


“Until there is some clarity [from the government], you won’t see us make a big bet; [although] maybe some stuff around the edges,” said Wittman.

Other REITS are also staying away or lowering their exposure to skilled nursing as well. Health Care REIT (NYSE:HCN) told the Wall Street Journal it was negotiating to sell approximately $250 million in nursing-home properties to several of its operators and plans to lower its overall exposure to between 12% and 15% of its portfolio. 

The stocks of most health care REITs have fallen over the last few weeks due to concerns of a rising interest rate environment. Whether it’s something investors should be concerned about depends on why rates are rising, Wittman said. If rates are rising because the economy is growing, there will likely be a lag before cap rates catch up.


“The acquisition market might take a pause, but then [cap rates] will [catch up] and we can go on acquiring externally,” she said. 

If rates are rising because of monetary policy decisions and the underlying economy isn’t improving, it’s not favorable to the market.

“I don’t think that’s a good situation for anyone, us included,” said Wittman.

Written by John Yedinak 

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