Here are differing opinions as to what motivated Ventas to spin out most of its skilled nursing portfolio.
There has been a lot of talk about the recent announcement by Ventas to spin out most of its skilled nursing properties into a new publicly traded REIT. In our April newsletter issue, we stated that it was a smart move for Ventas, and a great move for Ray Lewis, who will become CEO of the new spin out. But tongues have been wagging in terms of whether this was a defensive move on the part of Ventas, meaning that management has decided that the skilled nursing business is not something they want to focus on, at least not with small operators in their portfolio. Or, was it an offensive move, both to allow for faster growth in its remaining portfolio as well as giving shareholders more value in the spin-out than it may have been getting while residing in the large Ventas portfolio? The answer is, most likely both, as we don’t see Ventas doing a bunch of smallish SNF deals with local or regional operators. Also, we have to believe there are some not so great properties in the spin-out portfolio that Ventas picked up with its acquisition of Nationwide Health Properties for $7.4 billion in 2011. The discussion will continue.
