Ventas came out with its first quarter earnings at the end of April, and although the results were decent, it may not have been the best timing to follow the strong quarter posted by Welltower earlier this week, as Ventas’s stock price tumbled 6.4% seemingly because the REIT affirmed its full-year guidance rather than increased it. By contrast, Welltower raised guidance and its stock price jumped 3.5% on the news.
Ventas provided commentary on guidance for 2025 normalized FFO per share, outlining that it benefited from NOI growth in the SHOP segment and from accretive seniors housing investment activity in 2024 and expected in 2025. But it was partially offset by the impact of higher net interest expense, foreign exchange and the dilutive impact of a higher share price. Ventas also offered that it has increased its 2025 guidance for senior housing investment volume to $1.5 billion, from $1 billion, with the incremental investments expected to be second half weighted and funded primarily with its existing unsettled forward equity commitments and disposition proceeds.
On a same-store cash NOI basis, the SHOP segment grew approximately 13.6% year over year, with NOI margin growth of 150 basis points. That falls below the 16% growth rate from full-year 2024 over full-year 2023, and it was below the 21.7% growth rate from Welltower’s same-store SHOP in its first quarter earnings (not to compare again). Ventas’s CFO Bob Probst added during the earnings call that the 14% NOI growth rate beat internal expectations and emphasized that they are entering the key selling season. Justin Hutchins also touted the occupancy upside in the portfolio. SHOP same-store average occupancy grew 290 basis points year over year to 87%, with average monthly REVPOR rising by 3.8% year over year to $5,079.
Turning to acquisitions, Ventas has already closed approximately $900 million of investments year to date focused on senior housing and sees its acquisition activity accelerating. They are expected to increase the company’s growth rate on a multiyear basis, generate attractive NOI yields, are priced below replacement cost and offer significant multiyear NOI growth potential. The quality of properties being acquired appears to be increasing as well, as are market prices for seniors housing properties. The average price per unit for Ventas rose from approximately $270,000 per unit in 2024 to around $350,000 per unit in the tranche of 2025 closings, so far. The more recent group of properties were newer vintage, averaging around seven years, and were located in stronger markets, per Ventas. They are still being valued below replacement cost, however.
Also, in April 2025, Ventas increased its liquidity by expanding its unsecured credit facility by $750 million to an aggregate $3.5 billion. As of March 31, 2025, the company had $2.9 billion in liquidity, so there is more room to acquire in the ensuing quarters.
