Thank you, Amy. And good morning, everyone, and welcome to the Ventas first quarter two thousand twenty five results conference call. Yesterday, we issued our first quarter twenty twenty five earnings release, presentation materials, and supplemental information package. Which are available on the Ventas website at ir.ventasreit.com. As a reminder, remarks today may include forward looking statements and other matters. Forward looking statements are subject to risks and uncertainties and a variety of topics may cause actual results to differ materially from those contemplated in such statements. For a more detailed discussion of those factors, please refer to our earnings release for this quarter and to our most recent SEC filings, all of which are available on the Ventas website. Certain non GAAP financial measures will also be discussed on this call, and for a reconciliation of these measures to the most closely comparable GAAP measures, please refer to our supplemental information package posted on the Investor Relations website. And with that, I'll turn the call over to Deborah Acuffaro, chairman and CEO of Ventas.

Thank you, BJ.

I'd also like to welcome all of our shareholders and other participants to the Ventas first quarter twenty twenty five earnings call. Today, we'll highlight our positive financial performance and growth, our increasing investment activity, and our advantage position capitalizing on the multiyear NOI growth opportunity in senior housing. As we execute on our one two three strategy, value proposition for Ventas remains clear. We are focused on delivering superior, multiyear growth fueled by internal and external expansion in our senior housing business, which is benefiting from secular demographically driven demand and catalyzed by our advantage platform. We expect to be a top grower in the REIT space projecting 7% normalized FFO per share growth 2025. We possess an excellent financial profile that is improving and we offer a 3% dividend yield that contributes to total return. Our strong first quarter results highlight our strength and our favorable relative positioning across the broader real estate and corporate landscape. Ventas delivered 84¢ of normalized FFO per share, in the first quarter, an increase of approximately 8%. Powered by our senior housing operating portfolio. SHOP's 14% year over year cash same store NOI growth resulted from meaningful increases occupancy and rate. Compelling demand supply fundamentals have combined with our operational and portfolio initiatives to create an unprecedented extended opportunity for us to generate multiyear organic NOI growth.

Demand remains strong if the 80 population is experiencing its highest ever growth, and more residents and their families are choosing senior living for the benefits it provides. The 80 population is increasing by about half a million people this year and again next year and that number jumps to 900,000 a year 2027 and 2030. Meanwhile, on the supply side, the number of new senior housing units started in the first quarter of twenty twenty five. Was the lowest on record. At only 1,287 units. Current supply constraints likely extended because of hard cost increases and labor scarcity, coupled with the step function in senior population growth. Creates strong and long tailwinds. For NOI and occupancy growth in senior housing. And our senior housing portfolio is positioned to capitalize on this unprecedented opportunity. Our communities are located in markets that exhibit over a thousand basis points of expected net absorption in the coming years. Resident affordability is outstanding. We also continue to increase our participation in this multiyear NOI growth opportunity by executing on our acquisition strategy focused on senior housing. Our investment momentum has continued into 2025, and we see compelling opportunities ahead. We have already closed most of our original billion dollar investment guidance in attractive senior housing communities.

And we are now increasing our full year volume expectations to a billion and a half dollars. These investments should enhance our future enterprise growth profile and our value for shareholders. Even more encouraging, our pipeline is expanding as more sellers bring assets to market, Our skilled investment team has grown, and we continue to leverage our data, financial, and relationship advantages to capture attractive opportunities. Within senior housing, we are eager to deploy capital whenever we believe we can achieve compelling risk adjusted returns and create value. The balance of our portfolio led by our Lillibridge managed outpatient medical business continues to perform well. Outpatient medical delivered solid compounding growth and continues to benefit from outsized increases in the over eight 65 age group ongoing trends favoring lower cost care delivery settings, and our competitively advantaged Lilla Bridge property management and leasing business. Finally, we are delivering on our commitment to financial strength and flexibility. Year to date, we've accelerated our progress on our credit profile. Improving both our leverage and our liquidity. At this early stage of the year, we are pleased to reaffirm our normalized FFO per share guidance of 7% growth and confirm our expectations that our shop business will represent over half of our NOI by year end.

While acknowledging that the current macroeconomic backdrop presents a high degree of uncertainty, When you step back, Ventas occupies an enviable position in today's environment. Both sides of the senior housing demand supply imbalance are tipped in our favor. And those conditions should improve materially over an extended time horizon. We have the potential to continue to increase shop revenue from both rate and occupancy growth. Our business model has limited impacts from tariffs and global trade, We have access to attractively priced capital, possess excellent liquidity and a strong balance sheet, and we are well positioned as a preferred acquirer who will get more than our fair share of attractive investments. Coupled with our experience and platform, in an excellent position to outperform. And as we've said, the whole Ventas team is in it to win it. Justin, I'm happy to turn the call over to you.

Thank you, Debbie. I'll provide updates on first quarter senior housing performance and our investments. I'm pleased that we delivered excellent results on both fronts. I'm happy to report that SHOP delivered double digit NOI growth for the eleventh consecutive quarter as we continue to execute through the OI platform our efforts support real time community specific strategies that align with market demand and, importantly, are executed in partnership with our best in class operators. Total SHOP same store cash NOI growth was 13.6%, Revenue growth was 7.4% led by occupancy and rate. In terms of rate, saw solid underlying pricing from internal rent increases averaging 7% and very importantly, street rates are trending favorably. Expenses were roughly in line at 5% and labor expenses were favorable. Same store shop occupancy grew by 290 basis points, led by The US. With occupancy growth of 330 basis points and NOI growth of 16%. The US also significantly outperformed NIC on both rate and occupancy year over year growth. The incremental margin was about 50% for the quarter driven by the operating leverage in the business as we grow occupancy. Demand and move ins in the quarter were strong. And year over year occupancy was very good.

However, we experienced some seasonality elevated clinical move outs in March. Which causes our jumping off point for occupancy to be a bit lower than expected for the second quarter. It's a sad part of our business. [indiscernible] when people pass away. It's also unpredictable. That said, per usual, the key determinant of occupancy for the full year is the timing and slope of the key selling season starts today. We are excited about the upcoming months we expect strong move ins in the second quarter. As we look at the balance of the year, we anticipate another excellent year of shop performance. We are reaffirming our same store full year guidance and our shop portfolio of cash NOI growth of 11 to 16%. Now like to highlight our approach to enhancing our portfolio composition I've worked with my experience in very capable team through deliberate actions over time to ensure that we are located in the right markets, right assets, with the right operators. These deliberate actions all of which are inter underpinned by our o I data analytics platform, include acquisitions, dispositions, conversions from triple net to shop, transitions to new operators, OI driven operational improvements, and CapEx investments to improve our competitive position.

This journey to curate the portfolio has been well underway for a while. However, all things considered equal, the best is yet to come. To our actions to date, our portfolio is positioned with significant embedded and NOI growth per potential. By design, two thirds of the portfolio is in the low eighty % occupancy. With significant upside opportunity. One example of how we were positioning the portfolio for future growth is our decision to convert 45 Brookdale communities from triple net to shop with new operators later this year. These communities are performing really well year to date. And offer significant upside We expect to double the NOI in these communities from approximately $50,000,000 to $100 plus over time. The five operators we have selected for the transitions are enthusiastic and highly engaged in the transition process. We've also expanded our operator base from 10 to 33. Enhancing our ability to grow in high demand markets. This includes a new shop relationship with an operator in The UK. Growing our operator base is important since our 75% of senior housing operators manage fewer than 50 communities in what is a highly fragmented sector. Adding operator relationships is essential to obtaining scale and density in markets as well as expanding our relationship driven investment opportunity set.

Our community refresh program has progressed as planned. We've completed over 250 community redev projects in the past two and a half years, However, there is more work to be done. With a hundred more projects expected to complete by year end. Strengthening our competitive positioning, and setting the table for the opportunity to drive outsized NOI growth over time. As we look ahead, our enhanced portfolio composition provides a powerful foundation to capitalize on historic demand growth unfolding in senior housing. With a deep bench of high quality operators, a growing presence in the right markets, and a well positioned asset base undergoing continual improvement we are strategically positioned to deliver strong sustainable performance. Moving on to investments. We continue to capitalize on our advantage position as Ventas is a housing partner of choice with sellers, brokers and the entire investment community. We have continued to execute on our accelerating run of value creating external growth focused on senior housing in the first quarter. We've closed approximately 900,000,000 in senior housing investments year to date, and 2,800,000,000.0 since the beginning of last year. With most of that completed in the last six months. These investments meet our key criteria of seven to 8% expected year one NOI yields low to mid teens, unlevered IRRs, accretive growth, and pricing well below replacement costs.

The activity significantly expands our shop portfolio. Adding 20 newer vintage communities across eight states, including 11 in high demand Texas markets. With strong net absorption potential in over 1,500 basis points of uncapped net demand over the next few years. These communities offer a full continuum of care and are operated by six high quality managers including three new operator relationships, with strong local execution. The underwritten returns are attractive as we are expecting year one NOI yields of around 7.2% on average and a ten year unlevered IRR in low to mid teens. We've also been encouraged by the initial post closing performance of the $1,800,000,000 in senior housing acquisitions closed in 2024. Actual NOI is in line with underwriting at a blended yield of 7.7% in the first quarter of twenty twenty five. Our investment pipeline is active and growing. As we have now reviewed approximately 30,000,000,000 of senior housing [indiscernible] bid on 9,000,000,000, and closed on 2,800,000,000.0 all since the beginning of last year. Approximately 75% of our closed transactions were relationship driven and sourced off market. We remain flexible and opportunistic pursuing a diverse set of senior housing investments across markets, asset types, operators, and return profiles.

Reflecting our strong pipeline we are raising our full year investment guidance to 1,500,000,000.0 In summary, we had a strong start to the year. Demonstrating solid execution across our senior housing platform, We remain laser focused on advancing parts one and two of our strategy, First, driving profitable organic growth by enhancing operating performance optimizing pricing and occupancy, and leveraging our data driven Ventas OI platform and close collaboration with our high performing operators. And second, capturing value through external growth. With a targeted focus on high quality senior housing acquisitions, that meet our strategic and financial criteria. With favorable demand trends, a well positioned portfolio, and a robust investment pipeline, we are confident in our ability to create long term value and sustain our significant leadership position in the senior housing sector. Bob? Thank you, Justin. I'm pleased to report we're off we're off to a strong start for the year. I'll review our first quarter performance, discuss our reaffirmed 2025 guidance, and close with our balance sheet, liquidity, and capital markets activities. Starting with our overall enterprise performance, we we reported normalized FFO of 84¢ per share, representing nearly 8% year over year growth. Our total company same store cash NOI grew by 7% led by SHOP increasing approximately 14%.

Our outpatient medical and research business or Omar, reported same store cash NOI growth of 1.3% year over year. Adjusting for cash fees received in outpatient medical, Omar same store cash NOI increased by 2.5% year over year. Outpatient medical grew by 3% adjusted for the aforementioned fees. As fundamentals remain solid. Outpatient medical occupancy increased 30 basis points year over year with first quarter new leasing increasing 9% and tenant retention a strong 85% in the quarter. Our research portfolio, same store cash NOI, contracted modestly year over year. This $200,000 reduction in NOI can be explained by 30 basis points of lower occupancy. Pete and team continue to see a solid research leasing pipeline. Including from universities. We are reaffirming our full year Omar same store cash NOI guidance range of 2% to 3%. And that's a good segue to our updated 2025 full year outlook. After a good start to the year, we are reaffirming our previously issued guidance for full year '25 including our earnings per share measures and property same store cash NOI ranges for each segment. As a reminder, our normalized FFO midpoint of $3.41 represents outstanding 7% year over year growth And consistent with our communication in February, this FFO increase continues to be led by SHOP organic growth and accretive senior housing investment activity.

Partially offset by higher net interest expense FX, and dilution from a higher share price. I would remind everyone that the all important senior housing key selling season begins in the second quarter and runs through September. We have updated our guidance for full year 2025 investments. Focused on senior housing, from 1,000,000,000 to 1 and a half billion as a result of a growing pipeline of deals. We expect a $500,000,000 increase in the investment guidance to close later in the year. So net net, we expect the FFO contribution of the incremental investment guidance to be minimal for 2025. We've already largely funded the increased investment guidance with 1,300,000,000.0 in aggregate equity raised together with $200,000,000 of disposition activity. Previously included in guidance and expected to close in the second quarter. Our balance sheet continues to strengthen as a result of SHOP organic [indiscernible] and equity funded senior housing investments. Our q one net debt to EBITDA of 5.7 times represents a 30 basis point sequential improvement from year end twenty twenty four and a full turn reduction versus prior year first quarter. We expect further leverage improvement in the balance of the year driven by our senior housing growth engine.

We also repaid nearly 1,000,000,000 of senior notes in the first quarter at a rate of approximately 3% utilizing the proactive senior notes we issued in September at approximately 5%. Our liquidity position is robust with available liquidity of $3,600,000,000 as of April 2025. This liquidity was bolstered in April by a 750,000,000 increase in our revolving credit facility to 3 and a half billion to support our growing enterprise. Had robust subscription from our bank group which demonstrates their strong support of our platform. For additional 2025 guidance assumptions, please refer to our q one supplemental and earnings presentation posted to our website. To close, we're pleased with our start to 2025. The entire Ventas team is enthusiastic about the future and focused on delivering superior performance for our shareholders. And with that, I'll turn the call back to the operator.

Thank you. The floor is now open for questions. If you would like to ask a question, please press star followed by the number one on your telephone keypad to join the one. If you called, if you're called upon to ask your question and are listening on loud speaker on your device, we ask that you please pick up your handset and ensure that you're phone is not on mute when asking your question. The first call or first question comes from the line of James Cameron with Evercore. Your line is now open.

Good morning. Thank you. Justin, you always give great statistics on the SHOP update. And I'm just curious, what other color can you provide about sort of the dynamic when you get to 85, 87, 88 type occupancy, how that translates to margin? Expansion, pardon me?

Alright. Yep. One of my favorite topics So, you know, we are, you know, in this period of growing occupancy and and facing a period of significant more occupancy growth given the demand that Debbie outlined that we've been seeing over the past few years and especially over the the upcoming years. So this question starts to become more relevant the higher occupied you get. What we tend to focus on is simple rules of thumb One is that when you get to 90% occupancy and you look backwards, you should have achieved around, you know, 50% incremental margin during that journey 80 to 90% occupancy.

Same when you get to a hundred.

When you get to a % occupied and you look backward to 90, you'll see about a 70% incremental margin. The operating leverage in the business is what allows this. At a certain point, you're you're fully staffed. Most of your expenses are fixed. You have some variability in expenses, which is why there's still some margin. But the it's one of the powerful aspects of the business model. And as we grow occupancy certainly, occupancy in itself is a great opportunity. But margin expansion is as well as occupancy grows.

Thanks. And then the genesis of the question is I was kinda looking you know, you provide very helpful information on the page 11 of the supplemental. Regarding the Canadian portfolio and maybe that's a decent proxy, maybe it isn't. I don't know if operating dynamics are that different. But you're able to extract still perhaps double digit NOI growth at 95% actually because you seem to be getting 5% to 6% RevPAR growth. But at some point, you have no more Oxy to gain. But is it still achievable then? Get double digit NOI growth from a portfolio at that time?

Well, so first of all, we're really happy to have a very high quality, high performing Canadian portfolio. It's been an excellent contributor to NOI growth for us. Even at high occupancies, you know, around 97%. It's still been delivering. It's one of my favorite examples around full being full in this sector. You know, if you're 90% or 92 or 95% occupancy, you're not full yet. And Canada is demonstrating this to your point. So they're at 97%. They're still growing We've had relatively good rate performance. We've had good increases but we've also in terms of rent increases, but we've also had mix impact as as our as assisted living portfolio in Ontario has picked up occupancy growth, and that's helped RevPOR as well. At some point, it's probably not a double digit grower. You know? This is something that's probably more in the single digits. But it's it's been encouraging to see the performance in in recent years even at high And, Justin, Jim, thanks for noticing page 12. It's a it's a good new page for investors. And, Justin, could you touch on really the the two thirds of the portfolio where we we have a significant occupancy upside in the margin and NOI growth.

In that because that's really a lot of where your efforts are focused.

This is team.

Yep. So the on page 12, you'll notice this is one of other favorite favorite topics. Because it's been a lot of work in the making to get to this point. We decided I'll call it five years ago, when we got to this point where we are at today, we need to be well positioned to capitalize on the demand that we're seeing in the marketplace. You can see it coming. We looked at our portfolio. And we started taking actions to make sure that we're in the right markets, first of all. That would generate know, strong absorption and strong affordability. And to do that, you know, we acquired a 90 communities. We sold over a hundred communities. Transitioned over well over a hundred communities from the triple net structure to the shop structure. And what that did is it's brought in communities that have lower absolute occupancy. So what this graph shows is that group's 79% occupied. The rest of The US is 84%. Canada, when you include everything, because it's outside the same store, we have some lease up communities there as well as 95%. The big opportunity for occupancy growth is in The US. And the portfolio, as I said in my prepared remarks, at low low eighties occupancy, is well positioned for a lot of occupancy upside, but it's also in markets that should deliver that [indiscernible] And then when you layer on the actions we've taken through investments in the assets and making sure we have the right operators in place, to deliver the successful outcome we feel really good about how well positioned we are.

Yeah. Thank you for all that information. I'll get off the line. Thank you.

Thanks, Jim.

Your next question comes from the line of John Kilchowski. From Wells Fargo. Your line is now open.

Good morning. Thank you.

I I would just like to talk about the investments that you made this quarter and just kind of looking at the change this quarter versus last quarter. And I wanted to ask about basis. It looks like your cost per bed took a meaningful step up. I'm curious if that's to do with the competitive landscape or just where you're buying. And then also if you could give color on what's replacement cost in the markets that you're buying in, I'd like to know if you're operating still at a pretty steep discount or if we're starting to buy above that. Hi. It's Justin. Thanks. Great question. So when you look at the profile of of what we bought, you mentioned the per unit numbers. It was around, what, $2.70 last year, $3.50 in this this recent tranche of 900,000,000. So there's a step up in in the per unit values, a couple drivers behind that. One of them is that they're newer communities. So we've had newer vintage communities that we bought in this tranche around seven years on average. Inherent in in doing so, you're gonna spend more on a per unit basis. They also happen to be in in as good as as the markets were that we entered last year.

These are even better. So So we have, you know, stronger affordability. We have better net absorption and uncapped net demand. I mean, it's a thousand basis points of net absorption, uncapped demand of 1,500 basis points They're in markets that have know, those characteristics, and and then we also added some very high quality operators. So the quality of the portfolio, I would say, is a step up The combined portfolio is gonna deliver excellent outcomes for us. One other thing that you noted that I'll note is that there's clearly some temporary compression. Because we were reporting year one you know, yields of seven seven last year. In fact, I mentioned in my remarks we're realizing that as well. This year, we're we're pointing to a seven two, so there's compression. Having said that, we're still investing within the range. So the weighted average, obviously, is into the lower sevens, but we're still seeing opportunities that are up towards eight. So it's it's a little bit of both. In terms of replacement cost, we're still buying below replacement cost. Of significant discount, to replacement cost, even at the three a unit. Mhmm.

Yeah. And as we as we've discussed, the replacement cost is rising for a host of reasons, including hard cost inflation, labor scarcity, And so, you know, most of these cases, you would expect the replacement cost to start with the four. And so we're still buying at a significant discount to that. And with unlevered return expectations in the low to mid teens, which obviously is important when we're looking at the risk reward proposition. For these investments.

Alright. Very helpful. Thank you. And, Justin, just to confirm, you said a seven two is roughly the number you're looking at for the entire 1.5 guide or am I misconstruing that?

No. It's the 900,000,000 that we closed. Sorry. Of the 900. Okay. Thank you. Yep.

You bet.

Thank you. Your next question comes from the line of Michael Carroll with RBC Capital Markets. Your line is now open.

Yes, thanks. Justin, can you give us some more color on the performance of the Brookdale assets that Ventas is going to be taking over and or at least transitioning to the seniors housing operating portfolio? I know I think your prepared remarks saying that the EBITDAR is around $50,000,000 I believe last time the update was in the mid-50s So has that changed? Or should we expect that to change you start to transition those assets when that occurs?

Yeah. So, I I'm probably gonna hesitate to give you the exact number We'll give you we'll update that when we get to the period of actually transitioning. But what I I'm encouraged about is a couple things. First of all, you know, these are communities that are in transition. So there's always, you know, heightened awareness of that and focus that we put on communities when that's happening. The 45 communities that are transitioning new shop operators are actually outperforming the least assets that are staying behind in a lease.

That's exceptionally supportive of the decision we made but also just our encouragement around you know, where they should be performing when we actually make the transition. A couple things about that. So we've been on the ground quite a bit these communities. We've been engaged with the five new operators that are taking them on. They've been in communities as well.

I've visited several of these and the team's pretty consistent with exactly what we expected, which is you know, when you have a these communities, very high quality communities that are located in [indiscernible] but can benefit from some additional focus and especially investment into the asset to be competitively better positioned There's a lot of excitement on the ground when you when you tell that story.

So it's been really fun to be interacting with the teams and laying out the game plan for when they transition later this year. And I do think it's notable point out that they're outperforming you know, the rest of the, the rest of the current portfolio with with the that we have with Brookdale.

And I know in with most transitions usually, is a period of disruption where you could see EBITDAR dip lower as your kind of moving in the new team. I mean, should we expect that to happen with these specific Or is it going to be more seamless than like the historical examples?

Well, it's it's a wait and see. But but I can tell you that we have through the number of let's see. We've had 200 communities that have transitioned to new operators in our experience over the past several years. In that experience, particularly in this circumstance where you have a [indiscernible] community that's performing behind market and will benefit from the new investment. We've seen good growth opportunity. Whether or not there's a little disruption, in the period of transition, we have seen growth to follow. I'm gonna give you an example of this. We actually have a case study on that same page that that Debbie highlighted, page 12. We had 41 transitions that we completed in 2023. It was mostly independent living communities. Those communities are now in our same store pool. So in the first quarter, we were able to report on year over year results. And those results have been 820 basis points of occupancy growth, It outperformed where we're located in the next top 99 We've outperformed by 480 basis points and year over year NOI growth has been 40%. So when we look at the Brookdale opportunity, we have a lot of confidence in our ability to execute.

And we'll do everything we can to try to mitigate any potential disruption. But, of course, disruption can be inherent in in transitions. The results that we've been realizing through our experience have been really good. K. Great. Thank you. You bet.

Your next question comes from the line of Vikram Malhotra with Mizuho. Your line is now open.

Morning. Thanks for taking the question. Justin, I guess, wanted to dig in a bit more into the March comments you made about sort of move outs. I know it's unfortunate, Is that due to, like, flu or some specific properties And and has that trend continued into April?

Hi, Vikram. It's ironic you're asking this question because had a we had an interaction on the last earnings call around this topic of of seasonality. And when we talked about it last time, I was mentioning that you know, we although there's been some periods where we've had counter seasonal results, there's always the the opportunity to experience seasonality. And what I had in my mind at the time was the flu season around The US was was elevated. Interestingly, there's no correlation in these clinical move outs and the flu season. In fact, it's uncorrelated to any specific trend whatsoever. It just happened. And it it's important that that our investors understand that our move in activity is very good. It's in line with last year, which is one of our best years ever. The tour activity, moving activity that we anticipate in the key selling season should be very strong. This was a move out issue, and it's entirely driven by these clinical move outs. Which are unfortunate. It's a sad part of the business. And and they're unpredictable. That's really the color I have on it.

No. No. Makes sense. And you're absolutely right. I did ask you the question. I think and you had said that you baked a normal seasonality into the guide. So, this is obviously in line with with with with what you said. Just maybe on the pricing side, know, your full year still is four and a half. You had really good bumps. And and you've kept that intact. Does that essentially suggest pricing power sort of accelerates through the year on a year over year basis? And do you mind sort of giving us a view between Canada and The US? Thanks.

Sure. So, you know, pricing like I said in my prepared remarks, has been really good. Supported by internal rent increases. It's supported by our street rate growth as well. In fact, you know, when you adjust for the leap year, which is a simple calculation, you just add to the calculation for RevPOR is revenue divided by occupied units. You just add a step and divide by days. Which is important, you know, if you wanna get to a good comparison when there is a leap year because we do have one operator that actually builds on a daily basis. So that number, when you when you run that calculation, is around 5%. So good, you know, pricing year over year, a leap year adjusted basis around 5%. We're off to a strong start. So know, that's the rest of the year remains to be seen. You know, we have a lot of the year left to play out and it it's in what's typically a good very, very it's the strongest demand season for us in the key selling season. And then Canada, you mentioned too. So Canada has had good good pricing opportunity as well, and and we've had, you know, in Quebec, we've had a little bit more opportunity to pass along rent increases because, the the regulatory body that that oversees that is is lightened up.

The restrictions there, which has helped us to pass expenses [indiscernible] which are always part of the part of the operation every year. Ontario has always been a little bit better. It's been a lot better for us, though, in recent years because of the lease up we've had in our assisted living portfolio, which is higher price points. So we're getting a mixed impact as well. But good pricing power, you know, an opportunity really across the board.

Alright. Thank you. Your next question comes from the line of Jeff Spector with Bank of America. Your line is now open.

Great. Thank you.

Debbie, in your initial comments, you did talk about the high degree of macro uncertainty. I guess, but you guys have also discussed you know, the strong move in tour activity. It sounds like through April, Can you just walk us through a bit this leasing season and the importance of, let's say, or anything else we should be watching as as risk to the the coming months? To increasing that occupancy in senior housing? Thank you.

Yes. Hi, Jeff. So, yes, there is a lot of macro uncertainty We all know that. But, what we believe at Ventas is that senior housing is one of the, if not the top asset class within real estate. And there's a lot of reasons for that as you mentioned. Demographic demand is extremely powerful. The supply picture is as muted as it could be, and if it's three years start to finish and you're seeing increased cost, to build, and you have a step function in the senior population growth starting in 2027, you can see why these strong tailwinds should benefit us for a very extended period of time. And so we feel really good about that. In terms of the demand at the doorstep, as just likes to say, we are seeing you know, strong demand, and we this is the key selling season. And so we have expectations for you know, strong activity. In terms of the housing market, there is modest correlation, and the housing market actually just saw a big jump in pending home sales. Most seniors don't have mortgages on their homes, and our residents, you know, when you think about the 75 population, the average net worth of those households is a million 6.

So we continue to have good affordability. I said it was excellent. So all of these trends really combine to give us a lot of optimism about this extended multiyear NOI growth opportunity. In senior housing that Justin and the team in collaboration with the operators is really focused on delivering.

Great. Thank you. And then Thank you.

Clearly, the the focus is on senior housing Can you talk a little bit more about the strategy around the research portfolio? Thank you.

Yes. I mean, our one two three strategy is really focused on senior housing with the first, of course, being driving organic growth, the second being expanding our participation and elevating our growth rate investing in senior housing. And then the third is to match performance in the rest of the portfolio. The outpatient medical, is it about 20% of that business, and it's of our business, and it is going going strong. Continuing to deliver that compounding growth. Research is the smallest. It's a single digit kinda NOI contribution all in. And our strategy is really what what number three is, which is to maximize the NOI opportunity there. And and what I would just leave you with on that is that we've built this life science portfolio differently and that is it's a you know, three quarters of the tenants are credit tenants, and we have a nine to ten year wall. And so, that portfolio really was was built to be steady and stable even during more challenging times. And so we feel we feel good about that even though that segment certainly has its some challenges right now. [indiscernible] our strategy is to maximize NOI and, it's a credit business.

And Pete and the team are are going about doing that.

Okay. Thank you.

Thank you.

Your next question comes from the line of Richard Anderson with Wedbush. Your line is now open.

Justin, you talked about the Brookdale transitions to RIDEA. The assets outperforming those that are staying behind in the net lease model. I guess the question is, how much money are you leaving on the table there? Did you foresee that that delta, when you made the deal with them? And just curious, you know, if if if you had just sort of done everything, all of it, as opposed to some leaving some behind with Brookdale, if that would have been the better option?

Hey. Hey, Rich. She broke up.

Halfway through, I think. Think. Okay.

I'll I'll my Rich, we'll we'll take that offline, but I think it's fair to say that the know, the entire Brookdale portfolio is generally improving in performance. We like the 45 assets. That [indiscernible] moving to shop and the remaining are also performing well in the way that we're improving NOI in that remaining lease is through, a significant rent increase on lease renewal. So we'll come back and get the rest of your question.

Can you hear me now?

Because it because you broke up offline.

Thank you. Still.

Okay.

Your next question comes from the line of Omotayo Okusanya with Deutsche Bank. Your line is now open.

Yes. Good morning, everyone.

So I I guess focusing on shop, they clearly were way the stock is before business morning, I think. There's some concern just around same store NOI growth. Kind of slowing this quarter relative to the 15% plus It's kind of been putting up I don't know whether you can kind of talk to that, whether there were just some idiosyncrasies with this quarter. I think you just kinda mentioned some move out activity in March. And kind of going forward, how once you kind of think about you know, hitting into the lower or higher end of your 11 to 16% full year guidance.

Yeah. So I'll it's Bob. I'll take that one. So we we're pleased with the first quarter, 14% Very good start. In fact, above our expectation. Internally. And that was really was RAV four, that was labor, you know, so a good a good start there. And we've highlighted multiple times so far that in terms of phasing, we expect the second half on a year over year basis. To be higher than the first half. And as always, you know, beat the the drum here. It's the key selling season that is the that is the determinant of that. So from our where we sit, strong start, you know, ahead of expectation in the quarter and know, the phasing consistent with what we've been saying. [indiscernible] I I guess the the the pushback is, again, if you just kinda take a look at Simile, in one q twenty four, were kind of above your current same store NOI growth. And I don't know whether again, whether it's harder to get you over your occupancy gains. I guess, just trying to figure it out of you know, getting people comfortable with the idea that the higher end is achievable.

Hi. Let me address this, Justin. So you know, as we look ahead, like I was saying, we have you know, significant occupancy upside in the portfolio. There's various things that impact performance at different times. I, you know, I remember last year, we had agency coming out of system, you know, that was benefiting expenses. And so that that gave us an an opportunity for outsized performance. What we have happening now, and I was trying to articulate earlier, is a lot of action that's underway but the best is yet to come. So we have a a strong conviction around the growth opportunity. Like I said, we have a hundred more projects that we're refreshing this year that are they're underway. We have all these new operators that we've added. A lot of which are coming through acquisitions, others that we're bringing in to it's through transitions over time that we've done. They're getting they're finding their sea legs. And so and we're never ever stopping focusing on trying to improve performance. I mean, this is this will be a continuous improvement in performance opportunity. My team's fixated on that. So we're not ready to say we we haven't seen the we've already seen the best we're gonna see.

I mean, we're we're just now also into the the strongest period of demand that the sector has ever seen by a long shot. So so I think the best is hopefully, you know, all things considered equal, the best is yet come.

I I appreciate that those comments. Can ask one more just on the on the life sciences, the part of the business. Again, Debbie, just with this change in NIH funding, where the indirect cost match from the federal government can get capped 15%, Have you taken a look at just how high that number has been at all the universities you're involved in and whether that could become a real issue going forward.

Thanks, Tayo. Yes. Know, we do business with the leading biomedical research institutions in the country. And, you know, we have a detailed understanding of the the so called indirect cost, I would I would tell you that it first of all, the proposal that the administration put forward is on hold. And so it has not been pushed through. If it were to be pushed through there would be an impact that would be you know, on average, maybe a, you know, mid single digits impact to the overall research budget for most of the leading universities and, that is manageable in light of the double a credit rating that we have in our portfolio. For the university tenants as well as the nine to ten year wall. So these are juggernauts who have a lot of resources to weather weather the storm.

I appreciate that. Thank you.

Thank you, Tayo.

Thank you. Your next question comes from the line of Juan with BMO Capital Markets. Line is now open.

Hi. Just on the acquisition front, given the $500,000,000 incremental that's added to the guidance that you said is back half loaded. Is there the expectation then or should we be thinking that there is maybe a temporary pause until deals are reloaded Is that fair to kind of assume just given the timing of guidance? Or is there other stuff that could fill the interim that could happen pretty quickly here? Hi. It's Justin. So, you know, I I just stepping back for a minute. One thing I I highlighted in my prepared remarks intentionally was the amount of the 2,800,000,000.0 that we've done. Most of that over the past year [indiscernible] happened over the last six months. And so we've had this acceleration of investment activity We you know, added another 500,000,000. We have good line of sight on the 500,000,000. We have a pipeline that that is much bigger than that. So we're gonna keep working on finding opportunities within the pipeline and some that are maybe not there yet. That have, you know, the criteria that we like, you know, which is, know, first and foremost, you know, an asset that will deliver, you know, strong IRRs.

You know, it's low to mid teen unlevered IRRs. And we're we're flexible with the, know, with the the type of assets we're looking for. We're looking for good combination of high quality, strong markets growth. That's all completely continuing. Juan. It can be lumpy, you know, like, you know, because you know, know, you have you you have a period of time where, you know, you are working you you know, access a deal and then you work to close close the deals. And so there can be lumpiness in terms of when you actually deliver deals to close. And I think that's the the point we're trying to make.

If I could ask a follow-up on the shop and the our clinical move outs You noticed noted a kind of a lower endpoint or starting point for the second quarter. Would you guys be able to or can you provide the March thirty one year over year figure or what the occupancy was on for the same store pool, just so we can calibrate and kind of fully take into account that move out impact?

Yeah, Juan. So I wanna make the first point, which is move ins. [indiscernible] First quarter, expect to be strong. Second quarter, you know, we were two ninety year over year first quarter. We reaffirmed two seventy full year.

Balance of the year Clearly, the jumping off point or start point of the second quarter is lower because of the the mortality that Justin mentioned. And clearly in reaffirming the guide, if you just do the math balance of the year, it's below that two ninety. Number. But, you know, I think it's it's right to say we not look at spot numbers. We should look at trends. We should look at you know, the year. And really focus on the the move ins and the key selling season, which is right in front of us. So that's how we think about it.

Thank you.

Your next question comes from the line of Seth Bershree with Citi. Your line is now open.

Hi, guys. Thanks for taking my question.

Kind of going back to the yields, is there any thought about acquiring more type of four plus assets versus you know, the newer you know, maybe better positioned in the market assets where you can leverage the Ventas platform you know, your network of operators and Ventas OI to kinda drive a higher yield Mhmm.

Hi, Seth. It's Debbie. I would definitely confirm that, you know, we are eager to deploy capital when the acquisition or investment opportunity provides good risk adjusted return, when it provides the kinda low to mid teens unlevered IRRs that we're looking for, which is which is paramount when we can buy below replacement cost. And, you know, our aperture for investments is you know, pretty broad based, and we certainly will consider different types of profiles. To get to the that unlevered IRR They could be lower occupied, higher occupied, but it's all about the risk adjusted return that we see in the asset asset and the replacement cost and that's really where our investment team is focused.

Great. Thanks.

Your next question comes from the line of Austin Verschmidt with KeyBanc Capital Markets. Your line is now open.

Great. Thanks and hello everybody. Bob, you hit a little bit on my first question which is going be that the comment you previously made about expecting same store growth senior housing to be better in the second half versus the first half. Can you just give us what the biggest drivers of that improvement is? Because clearly, you alluded to being lower. So is it Rev four growth reaccelerating versus the first half of the year? Is it something on the expense side that's driving that reacceleration or just changes to the same store pool? Just any color you can shed on that. Thanks.

Well, I would I'd really point to what we saw in the first quarter so far and, you know, kind of the balancing items. Obviously, the demand was strong in the form of move ins, and the key selling season is the vast majority of the full year move ins. So that's that's point one. You know, as you go down to the p and l, we mentioned RevPOR was was favorable. In the first quarter, you know, both both in terms of in place and street. Both performing well. I would highlight on the on the OpEx, which we really haven't talked about, 5% on OpEx in the first quarter year over year. In line with our full year guide. When you unpack that, and we gave this in the in the deck, you can see labor versus non labor. Are actually trending quite favorably. And that's that's very encouraging. And so as we look at it, the composition of it you know, that first quarter is is encouraging and I'm gonna be going back to the key selling season. But that's that's what we saw so far.

Got it. And then, Justin, maybe what what do you attribute to the reacceleration in RevPOR growth on a leap year adjusted basic basis, is it more mix related to the assets where you're growing occupancy or is it more a function of the the street rate growth you guys have highlighted a few times?

Yep. So we have a very deliberate effort our OI platform and the team that delivers those insights to our operators to focus on price volume optimization. And in doing so, you know, we're looking for quite frankly, just to be priced right. We all set pricing, but we give guidance in terms of where we think the the opportunity is to either obtain price or to deliver occupancy growth. And through those efforts, we're seeing you know, encouragingly, you know, move in rents have been, stronger than we've seen in recent years. So we're starting to see a pickup on from a street rate slash move in rent standpoint. Had 7% internal rent increases, and and I always like to remind everyone Debbie especially does too, that we still have relatively low occupancy. You know? So we're we're put we have good price opportunity even in occupancy that, you know, around 84% in The US. Canada is also benefited from those trends, but it's also benefited, from the mix shift as well. But The US is is more around the deliberate actions that that our operators have taken with some insights from us as well. To to deliver better pricing.

Thank you. Your next question comes from the line of Michael Stroiak with Green Street. Your line is now open.

Thanks, and good morning. Maybe going back to the research [indiscernible] Can you just remind us how much of the tenant base is in the traditional biotech sectors? And what the average wall, is specifically on those leases?

I I'll I'm gonna turn it over to my colleague, Pete, for a But, again, 75% of the single digit NOI that we get kind of all in from research is credit tenants with wealth between 910%. So in some senses, Michael, it's a inverse of that, but I'll turn it over to Pete to provide more specifics.

Sure. So as Debbie said, you know, about three quarters of the tenants are investment grade.

And 50% are universities with that double a rating. So it's really a strong tendency, very different than most. And just to give you a perspective, at Shear, we have about 6,000,000 square feet of of space in the research portfolio.

Only a 48,000 square feet are in the three most stressed, cities which is San Francisco, Cambridge, and San Diego.

So it's a very different portfolio portfolio that's been built. Having said that, about the remaining 25% is a mix of retail, biotech, flexible innovation space, and so forth. And about half of that our revenue generating you know, their kind of past their inflection points.

So we think about roughly 12% of our portfolio is is, kind of the the earlier stage biotech or innovation flex space. And at least terms for those are typically for the for the innovation spaces, those are ten years plus. And for the you know, the pre revenue biotechs, they're usually five to seven years.

And, Michael, one final point on this. I mean, it I believe Bob mentioned it, but we are continuing to see really good institutional demand for the portfolio. And that really runs across highly rated university users, medical research and medical users, and some of our some of our, you know, non cluster markets, which have basically no new supply. That when I mentioned that these organizations are juggernauts, I mean, they've got you know, fifty to hundred year plans. And we really are in a in a good position because we're seeing very current LOIs, leasing active activity, and other interest from these institutional users. In the portfolio and, we're trying to take trying to capitalize on that. So the the near term on those users, you know, continues to show good activity and and interest.

Got it. That's that's helpful. Maybe maybe just sticking with that point then, like, where where do you expect occupancy to trend over the next twelve months within the the research portfolio?

Well, again, you know, right now, we're reaffirming the Omar, you know, same store cash NOI growth of two to 3%.

Would I would highlight in the total research portfolio that we have a number of the assets in up in redevelopment mode. Notably in Philly. Which is having an impact on occupancy. But you know, we believe that those redevelopments are gonna be value creating. And so that's a it's a timing issue. Thank you.

The next question comes from the line of Ron Camden with Morgan Stanley. Your line is now open.

Great. Hey, just two quick ones for me. Clearly, the the conversions really jump out and the success that you've had. Think I asked this last quarter as well, but as you're sort of relooking the N and N portfolio is there ways to create recreate more conversion opportunities? Just can you talk us through just know, the puts and takes there? Because it would seem like financially, it would make a lot of sense to do more. Yep. Hi. It's Justin.

So we've we've certainly have put a lot of energy into that, you know, given the number of conversions we've had. We've talked about Brookdale. When we haven't talked about yet is The UK. I mentioned in the prepared remarks that we have a new operator. And that came by way of of converting triple net to shop. There's 11 London area in Southeast England area care homes that were in a triple net portfolio. Now SHOP. They're operated by CCG. Who is an operator who has who's known for turnaround, redev, and they've grown their enterprise to a hundred locations across England, Scotland. So we we have that right operator. We're in some markets that I'm particularly excited about. [indiscernible] right in between Walton on temps and Richmond on temps. And if you know that that part of the of England, you might know Hampton Palace, which is a great place to visit. It's my old stomping grounds. Our location is right near the river. Great campus, very well run care home, that has particularly very strong price and occupancy opportunity with investment. You know? So with the right operator and with the right investment into the community, I'm really excited about that.

And several of the other locations, And I'm also excited to have a shop portfolio in The UK now so we can we can, you know, lean in a little bit, over time into that market, which also has very strong fundamentals. Having said that, The US, remains our our our first and foremost priority, and we have tremendous opportunity in The US. But we do keep looking for opportunities to convert from triple net to shop, and that's the most recent example. Great. Helpful. And then I just wanna go back to the acquisition slide in question. You know, I think the slide makes it looks like cap rates are compressing 50 basis points, which this may not be apples to apples. But I guess I'd love to hear you know, as more competition, cap rate trends, a little bit more color on that. On what you're seeing in the pipeline? Thanks.

Yeah. It's it I mean, it these are know, when you compare the the activity of last year to the activity this year, these are two big samples, you know, of what we're what we are able to demonstrate in the market. One was seven seven last year. Seven two this year. So clearly, there's there's cap rate compression. But it's also still in our stated range that that, quite frankly, we established a year and a half ago. Of seven to eight. And then unlevered IRRs still remain know, is really exactly where they were, which is, you know, low to mid teens and a great opportunity to acquire both yield and growth. In these these communities that we've been purchasing.

There is more competition. Clearly, you know, given how strong the senior housing fundamentals are in the sector and the standout asset class amongst real estate. More players are coming to the table. But that's when the advantage platform that Ventas has really starts to shine. You know, we enter deals. With the track record of having closed all these recent transactions and the credibility of delivering out what we say we're gonna do, We deny a financing contingency. When we we we enter deals. We have a platform to manage scale and senior housing that is is unrivaled, by the in entire capital sector that faces the the industry except for one. [indiscernible] And, therefore, we feel very good about our opportunity to continue to compete. And we are also benefiting from the relationships we have in the portfolio. Like I said, 5% of our deals have have been born, you know, of these relationships, and it it that's advantaged us as well. So yeah, we'll we'll see more competition, and we'll also be to continue to compete.

Thank you. Your next question comes from the call of Nick Ulicia Ulicia.

With Ulico. Okay. Here it's from here. Your line is now open.

Yes. I've experienced that a lot in my life. Good morning, everyone. So you know, I guess just maybe just going back to the commentary on the move outs in March, the clinical outcomes.

I was just hoping to get a little bit more of maybe the math, if you could flesh that out a little bit because I think what we and some others are kinda struggling with right now is if you have know, 60,000 units in your senior housing same store pool, how could mathematically your occupancy really be affected by some level of clinical move outs? I mean, it's the the the we're not probably gonna get into the exact numbers, but the the the simple answer is our move in activity was consistent with last year. Our move out activity was higher, and it's driven by by the by the the mortality rate being high. So you you just have a relative to our original expectation, you have you know, a a lower jumping off point and they happen late in the quarter, and that that's what impacts the jumping off point. So it does have an impact. I mean, just like conversely, the key selling season, which was which is substantially all of the net movement activity happens that has the the opposite impact. We tend to see around 10% more movements during that period. We usually see around 5% less move outs.

Together, that's what the key selling season delivers. You know, May to September. And delivers all that occupancy growth that that we hope to see again this year. So just how the the seasonality tends to play out. Okay. And then and then I guess you know, just going back to I know you and your company, others in the industry have moved away from you know, wanting to give monthly data and, you know, I think it was asked earlier about where was March occupancy. And so I guess I'll try asking again about if there's any way you could give a feel for how March occupancy is, how April trending? And the reason I'm asking is that I think you guys kind of opened the door to know, this being a natural question when you said that the jumping off point is lower to start in the second quarter. So as everyone's looking at testing your guidance assumptions, I know you've already said that you feel good about your full year guidance, but people are thinking about impacts potentially to the guidance or even how you could exceed guidance, it would be pretty helpful to understand where March and April occupancy is for the portfolio.

Yeah. I think you're right, Nick. To say that the industry has gone away from that sort of you know, timing in light of the fact is we should all be focused on the trends. You know, I'll say again, you can do the math and say February, two seventy full year, [indiscernible] and that gives you a number, which is a start point. You know, a reasonable approximation of of the start point. So you know, beyond that, I would just keep our eyes focused on on the trends in the longer term, you know, notably the key selling season.

Right?

Right ahead of us.

Okay. Thank you.

Thank you, Nick Yulico.

Thank you. And then final question comes from the line of Mason Guel with Baird. Your line is now open.

Thank you. Good morning, everyone.

You expect independent living occupancy growth to continue outpacing assisted living throughout 2025? And would the gap be consistent with first quarter? Hi. It's Justin. So, you know, historically and currently across the sector, independent living does tend to have a higher absolute occupancy. It's also been a strong contributor of growth for us, you know, in The US around 370 basis points where for assisted living with which was also very strong of 300 basis points. So, you know, we've had a lot of portfolio actions that have been directed towards independent living, putting it, you know, operators and investments in the portfolio. It's also been the case for assisted living. So we'll anticipate growth really in in both categories of senior housing moving ahead. And and hope that they both continue to be really strong as we get into this key selling season. Great. And have you seen a notable difference in competition for independent living versus assisted living product? And you mean in In investment From a consumer standpoint or from a acquisition standpoint?

From an acquisition standpoint.

Oh, from an acquisition standpoint?

Acquisitions.

Yeah. Yeah. So so we've been focusing, by and large, on campuses that offer a combination of services, independent living and living, memory care, For the most part, you know, it's been it's been those those three services. On a campus, sometimes there's it's an assisted living memory care combination. There's been some independent living that are freestanding that we purchased as well. I'm talking about over 70 communities that that we've invested in over the over the past the beginning of last year. So yeah, we there's competition for the highest quality assets, which is what we've been pursuing. And we've been perform know, pursuing communities that are high performing with upside. One of the things that really helps us to compete is the preference among our operator relationships. That's been that's played a key role for us, and that is that wanna work with us. And continue to work with us. And there's a lot of new operators we've added as well.

So when we find ourselves in a competitive situation, know, that's one aspect that's helped.

Helped us to win deals. Obviously, our financial strength and flexibility is is another aspect. And then a track record with counterparties as an acquirer of assets is excellent. So we we like our opportunity to continue to compete and even for the best the best assets. Great. Thanks, everyone.

Thank you. That's all the time that we have questions for today. So I'd like to please turn this back to Ventas Chairman and CEO, Deborah A. Caffaro, for closing remarks.

Thanks, Amy. So to conclude Ventas delivered strong results in the first quarter. Demand for senior housing is strong and getting stronger and supply remains highly constrained. The multiyear NOI growth opportunity driven by senior housing is well underway with 11 quarters in a row of double digit NOI growth. And yet the best is still ahead. So we look forward to seeing all of you soon to discuss this and more, and hope to see you in New York. Thanks.