Close up image of a caretaker helping older woman walk

Between a 2015 spin off and the sale last year of almost all its remaining skilled nursing facilities, Ventas has just 1% of its business left in the segment.

And executives told the National Association of Real Estate Investment Trusts’ investors conference Wednesday that it would take some major convincing to get them back in the market.

CFO Bob Probst told investors that valuations were at record highs in 2015, despite “quite clear” warnings about shifting operating fundamentals like shortening length-of-stays.

“There was an obvious opportunity for us given those dynamics to efficiently sell those assets in a tax-efficient way … and thereby minimize our exposure,” Probst said. “And indeed, that’s been very prescient.”

Probst said operational challenges remain, while cap rates have expanded.

Asked what it would take to re-enter the skilled nursing space, CEO Debra Cafaro laughed.

“We would have to believe it would be one our best capital allocation uses,” Cafaro said. “Right now, we think we have far better risk-adjusted returns in other areas.”

Among those, she said, are partnerships with “best-in-class” operators in different healthcare segments, including Brookdale Senior Living.

Cafaro said private-pay, high-quality senior housing organizations that cater to the 80-plus crowd will continue to see demand grow, despite a bubble of “anticipatory supply” coming online this year.

Ventas recently reworked a $175 million lease agreement with Brookdale, reducing payments by an average of $6 million over the lifetime, which now runs to 2026.  The agreement also would allow Ventas to capitalize if Brookdale sells off some of its non-strategic assets — a possibility that looks likely.

President and CEO Lucinda “Cindy” Baier said Tuesday that Brookdale could reduce the number of communities in its portfolio by at least 20% over the next two or three years.