Ventas has record quarter, unveils SNF spin-off plans

Ray Lewis will lead the skilled nursing facility spin-off from Ventas.
Ray Lewis will lead the skilled nursing facility spin-off from Ventas.

Real estate investment trust heavyweight Ventas flexed its muscles during the first quarter of 2015 as it reported record revenues and a plan to spin off most of its skilled nursing portfolio.

For the quarter ending March 31, Ventas announced that “funds from operations” increased 20% to $387.5 million, from $323.4 million for the comparable 2014 period.

In April, the REIT also announced its plan to spin off most of its skilled nursing facility portfolio into an independent, publicly traded REIT named Care Capital Properties.

“Once again, we are pleased to report record results, in line with our expectations, driven by accretive acquisitions, well-executed capital markets transactions and active asset management of our diverse, high-quality portfolio,” Ventas CEO Debra A. Cafaro said.

“Our recently announced spin-off of most of our skilled nursing portfolio into a pure-play REIT and our pending Ardent hospital acquisition will create two focused higher growth companies and enhance our leading position in healthcare and senior living real estate.” 

Some observers believe, based on other industries, the Ventas spin-off could start a trend among other healthcare real estate investment trusts.

Ventas made investments totaling $3.6 billion during the first quarter of 2015, including five care homes in the United Kingdom, 12 skilled nursing facilities, and development and redevelopment funding at nearly $33.5 million. 

In January, the company completed its previously announced acquisition of 152 healthcare and senior living assets owned by American Realty Capital Healthcare Trust in a stock and cash transaction. 

During the same month, Ventas also issued and sold $1.1 billion of senior notes with a weighted average interest rate below 3.7% and a weighted average maturity of 15 years.