Big Data, Senior Housing Partnerships to Fuel Ventas’ Growth in 2020

Ventas (NYSE: VTR) has a plan to “pivot to growth” in 2020, and it sees big data and close relationships with its senior housing operating partners as key to that effort.

The Chicago-based real estate investment trust (REIT) laid out its multifaceted growth strategy during its investor day presentation in Philadelphia on Tuesday. That strategy will include four main building blocks: realizing the coming upside of the senior housing industry; research and innovation development; external growth; and expanding the company’s core property portfolio, which includes triple-net medical office buildings and senior housing communities.

“Most recently, we’ve pursued a multi-year period, during which we’ve deliberately reshaped and elevated our portfolio, extended and added key partnerships, and retained, empowered and expanded our team,” CEO Debra Cafaro said during the event. “And now, we’re ready to pivot to growth.”


On the senior housing side, Ventas believes its proprietary data collection, expanding stable of operating partners and more favorable supply-demand dynamics in the months ahead will lead to growth next year and beyond.

Ventas is among the largest owners of senior housing in the country, with 673 properties spread across 40 states and additional holdings in Canada and the United Kingdom (U.K.).

Benefits of big data


One key component to Ventas’ growth plan is the way in which it collects information about the sub-markets it does business in. To that end, the company has an exclusive agreement with Tiger Analytics, an analytics consulting firm with 250 data scientists.

“We spent a significant amount of time to collect data to truly give us a picture of what’s happening in the industry,” said Ricardo Dalmas, vice president of strategic initiatives.

Ventas’ proprietary dataset includes not only demographics, penetration rates and new supply, but also information such as net migration of older adults and where its competitors are located.

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That robust data collection has helped Ventas better target the best sub-markets for its senior housing operating portfolio (SHOP), among other benefits.

Big data doesn’t just help Ventas make forecasts about where to develop or buy new communities, either. To date, Ventas has used its dataset to determine how it should reposition communities, which business models or lease arrangements might make the most sense, and even which operators to choose.

The company also tracks unique bits of information, such as CMS drug prescription data, to get a feel for trickier demand metrics — such as how many residents in a given area need memory care services, according to Chris Cummings, senior vice president, asset management, senior housing.

“By tying into CMS data, we’re able to [know] how many dementia patients are on prescription drugs within that sub market,” Cummings said. “And therefore [determine] how much demand there is relative to the memory care units in that sub market.”

The company’s senior housing operating portfolio is currently in 194 out of 1,400 identified sub-markets in the U.S., according to the data. Specifically, it’s poised to grow its occupancy rates in those markets by around 300 to 500 basis points over the next five years.

Operator update

Another key part of Ventas’ growth strategy is the operators it works with, such as SHOP partners Louisville, Kentucky-based Atria Senior Living and its newest partner, Quebec, Ontario-based Le Groupe Maurice (LGM). Ventas earlier this month agreed to acquire LGM’s portfolio of 31 existing properties and four in development through an 85%/15% equity partnership. The total portfolio, which includes the in-progress developments, is valued at $1.8 billion

On the triple-net side of the portfolio, Ventas maintains a stable of about 30 different operating partners. The largest of these are Brentwood, Tennessee-based Brookdale Senior Living (NYSE: BKD) and Winter Park, Florida-based Holiday Retirement. The two companies make up 23% and 8.3% of the company’s triple-net net operating income (NOI), respectively.

With its major dispositions and lease rearrangements largely behind it, Ventas believes it should see smoother sailing in the year ahead.

Some of the REIT’s recent headaches were related to Brookdale, which has seen its share price slide precipitously in recent years, as it faced supply headwinds and operational issues, and a troubled integration with one-time rival Emeritus Corp. Through this period, rumors swirled about various potential takeover bids by private equity.

Ventas is indifferent on whether Brookdale is publicly traded,, Cafaro believes its public company status may have hurt the senior living operator, especially during its more turbulent years.

“Being public has hurt them in terms of retention and operations because it’s very hard to manage a business … while there’s all this noise around the company,” Cafaro said. “That’s one of the big mistakes of a real estate investor, not really understanding what makes Brookdale successful.”

On the whole, though, Cafaro was positive that Brookdale is on the right path. The company named a new CEO in early 2018 and committed to an operational turnaround strategy.

“I do believe Brookdale is making decisions, they are taking action,” Cafaro said. “And I do think they will be benefited by the overall silver wave.”

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