Ventas Flexes REIT Muscle in Latest Deal, Prepares for More

Following two blockbuster deals Monday totaling a value of $3.5 billion, Ventas, Inc. (NYSE:VTR) will surpass competitor Health Care REIT (NYSE:HCN) as the largest healthcare real estate investment trust in the country.

Monday’s $2.6 billion announced acquisition of American Realty Capital Healthcare Trust (NASDAQ:HCT) and the $900 million agreement to acquire Holiday Retirement’s Canadian senior living portfolio will bring the Chicago-based Ventas’ enterprise value to $33 billion.

Pending the anticipated deal closings in the third quarter, Ventas will surpass long-time rival Health Care REIT, which currently lists an enterprise value of approximately $30 billion, according to the Toledo, Ohio company’s June 2014 presentation at the National Association of Real Estate Investment Trusts conference in New York this week.


Ventas’ acquisition of ARC Healthcare may not be the first harbinger of the REIT-to-REIT consolidation analysts have forecasted, however, the company is prepared to pounce on any future investments and consolidation opportunities that may arise.

“People should expect us to look at all transactions where there is a robust pipeline,” John Cobb, executive vice president and chief investment officer at Ventas, told SHN. “We’re constantly active in the market.”

This means looking at investment opportunities both at home and abroad, Cobb said. The company currently has tenant and operator relationships with various healthcare providers, including senior housing and medical office buildings, in Canada and the United Kingdom, where Ventas plans to build upon more than $100 million it has invested in the country already.


“For Ventas, both transactions solidify our position as a global leader in the senior housing and medical office building space,” Cobb said. “They’re very consistent with our strategy and we’re excited about both.”

Though the company did not explicitly state specific acquisition targets, future large scale deals might not be out of the question for a company carrying $33 billion worth of equity capital.

Multi-billion dollar REITs are among the few buyers with enough capital to entertain mega-deals valued in the billions, according to various analyst reports that suggested several REITs may have been potential buyers of Emeritus before the company agreed to merge with Brookdale Senior Living (NYSE:BKD) in a deal valued at approximately $2.8 billion.

A proxy statement on the merger disclosed that Brookdale’s purchase of Emeritus may have likely avoided a mega-merger between two REITs, though the companies listed in the statement remained anonymous.

For Ventas, which analysts suggested as one of the potential REITs interested in buying Emeritus, the company remains optimistic of the opportunities future consolidation will present.

“There have always been consolidations,” Cobb said. “We’re excited about it.”

Written by Jason Oliva

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