Hello. Thank you for standing by. My name is Regina. I will be your conference operator today. At this time, I would like to welcome everyone to the Ventas Fourth Quarter 2022 earnings release conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star, then one on your telephone keypad. If you would like to withdraw your question, press star one again. I would now like to turn the conference over to BJ Grant, Senior Vice President of Investor Relations. Please go ahead. Thanks, Regina. Good morning, everyone, and welcome to the Ventas Fourth Quarter Financial Results conference call. Yesterday, we issued our fourth quarter earnings release, supplemental investor package, and presentation materials, 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 factors 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. For a reconciliation of these measures to the most closely comparable GAAP measures, please refer to our supplemental posted on the investor relations website. With that, I'll turn the call over to Debra A. Cafaro, Chairman and CEO. Thanks, B.J. Good morning to all of our shareholders and other participants. Welcome to the Ventas fourth quarter and year-end 2022 earnings call. We are pleased to deliver a strong fourth quarter, which reflects the attractive operating and financial results of our diverse portfolio and the benefits of our key strategic initiatives. Fourth quarter normalized FFO was $0.73 per share, fueled by accelerating SHOP growth at 19%, record medical office building performance, and profitability from our third-party institutional capital management business, VIM. The demand fundamentals that support our business are strong and getting stronger across all Ventas asset classes, which are unified in serving the nation's large and growing aging population. After significant capital recycling and asset management actions, our diverse portfolio of high-quality senior living communities, medical office buildings, R&I labs, and other healthcare assets is well-positioned to capitalize on these demand trends. In 2022, Ventas began what we believe will be a multi-year growth and recovery cycle, led by SHOP and supported by favorable supply-demand fundamentals, actions we've taken in the portfolio, and our post-pandemic rebound. In senior housing, there are compelling supply-demand tailwinds. The over-80 population will grow at record levels in 2023, yet we continue to see construction as a percentage of inventory at its lowest level in five years and substantially better in Ventas markets. Over the last few years, we have taken decisive actions to position our SHOP portfolio to capitalize on this exciting demographically led demand. We strengthened our team, enhanced our powerful analytic capabilities, rolled out the Ventas OI platform, sold, transitioned, and acquired properties, and invested capital in communities with strong market fundamentals, all to win the recovery. Benefiting from these trends and actions, we are well underway to recapturing the post-pandemic SHOP NOI opportunity. Our portfolio has already enjoyed significant occupancy and NOI growth from the COVID trough, and we see even more recapture potential ahead of us in the coming years as we first seek to reach 2019 performance levels and then hopefully exceed them. Bob also took significant steps to maintain our financial strength and flexibility and improve our balance sheet and liquidity. These actions garnered positive credit rating moves in 2022 and reduced our 2023 maturities to a very manageable level. In 2022, we also continued our long history of value creation with $1.2 billion of new investments, often with key partners. These include the $425 million Atrium Health Wake Forest University School of Medicine development in Charlotte, North Carolina; $200 million in senior housing investments, including the acquisition of Mangrove Bay and a new development with Le Groupe Maurice, both in very attractive markets; and $300 million in MOB investments, highlighted by the acquisition of an 18-property MOB portfolio leased to Ardent. We remain committed to our values, including our ESG leadership. We accelerated our progress in 2022 as we further diversified and elevated our board and made a bold commitment to achieve net zero operational carbon emissions by 2040. These efforts will be advanced under the leadership of our General Counsel, Carey Roberts, who has the passion and experience to move us forward. Now, we enter 2023 with strong momentum. Today, we are pleased to introduce full year normalized FFO guidance representing 5% growth at the midpoint. We are projecting unprecedented organic growth in our portfolio, once again driven by SHOP and complemented by the positive compounding contributions of our office business led by Pete. We also will continue to build out our VIM business, which already has over $5 billion in assets under management, and mine our non-property investments for value, as evidenced by both the pending Ardent equity stake sale and our recently completed Atria Glennis software deal, while we also seek to optimize the outcome in our Santerre loan. Finally, we will continue to invest capital wherever we find compelling opportunities to sustain and reinforce our new cycle of success. The macroeconomic assumptions underlying our forecast include some slowing of the economy, moderating inflation, softening labor conditions, and continued, albeit less aggressive, Fed tightening. Against that backdrop and in many other likely scenarios, we believe our business is relatively advantaged because demographic demand for our assets is large, growing and resilient. We have demonstrated strong pricing power in SHOP, and softening economic conditions should benefit our operations in multiple ways. One final note. In January, Justin assumed the additional role of Chief Investment Officer at Ventas. I know you'll want to join me in congratulating Justin, and I want to thank him for his continued leadership, which has been instrumental in our success and positive outlook. Working with our strong teams, Justin will use his experience and insights to create value by making good investments across our asset classes, enhancing the connection between our investment activity and business operations, and deploying the powerful Ventas OI platform across our organization. Now I'm happy to turn the call over to the man himself. Justin? Thank you, Debbie. I'll start by noting how excited I am about the execution in our SHOP portfolio. Over the past few years, we have taken many actions to put ourselves in a position to achieve positive performance as we aim to recapture NOI in this multiyear growth and recovery cycle. We have been successful executing portfolio actions which include over 50 triple net communities converted to SHOP and over 130 transitions to new operators. We've acquired over 100 new communities and executed 30 dispositions and 8 new developments. Finally, we have over 100 communities that are in the process of getting refreshed and are expected to complete during the key selling season. I am really proud of our tremendous team that supports our senior housing business that has executed Ventas OI. Our approach to collaborative oversight, where we leverage our operating expertise and best-in-class data analytics to the benefit of our operating partners to drive positive results, which has gained tremendous momentum. Our programmatic approach addresses 2 priorities in parallel. First, timely market, financial, and operating insights to influence near-term performance and revenue-enhancing capital expenditures. Second, tackling key strategic challenges that will deepen our competitive advantage and maximize the long-term value of our portfolio. Now, I'll cover the fourth quarter SHOP results in our year-over-year same store pool of 478 communities. Our SHOP portfolio continues to perform really well. The fourth quarter was ahead of our expectations while delivering excellent year-over-year growth due to pricing power, occupancy growth, and moderating expenses. NOI in our Q4 year-over-year pool grew 19.1%, which is above the midpoint of our SHOP guidance range and includes 22.2% growth in the U.S., led by Sunrise and Atria, while Canada demonstrated positive growth again with 11.7% led by Le Groupe Maurice. I would like to thank all of our operating partners for their significant achievements, delivering excellent services and care and financial results. We continue to benefit from operating leverage even at this relatively low occupancy, resulting in margin improvement from a 23% in Q3 to 23.6% in Q4. Same-store average occupancy grew year-over-year by 140 basis points to 82.5%. Revenue in the quarter grew ahead of expectations, increasing 8.3% year-over-year due to continued acceleration in RevPAR growth and positive trends in occupancy. Pricing power continues to impress. At 6.5% year-over-year growth, RevPAR is the strongest we've seen in the last 10 years, primarily driven by in-house rent and care increases and improving re-leasing spreads. As expected, expenses were $4.7 million per day. As a reminder, our year-over-year expense growth peaked in Q2 2022 at 11%. It reduced to 8% in Q3 and was lower again in Q4 at 6%. Leading indicators in the U.S. remain strong as we experience leads as a percentage of 2019 at 120%. Move-ins at 101% and outs at 101%. Canada continues to deliver growth and high occupancy at 95%. Demand accelerated in January, with move-ins at 104% of 2019 in the U.S. and 111% in Canada. Now, I will cover 2023 SHOP guidance and our expanded same-store year-over-year pool, which includes 508 communities representative of 92% of our portfolio. There are three primary drivers of our positive outlook: occupancy growth, rate growth, and moderating expenses. SHOP same-store cash NOI is expected to accelerate from 13.4% growth in 2022 to growth in the range of 15%-21% year-over-year in 2023. The low and high end of the guidance range is driven by occupancy and expense performance. We expect margin expansion of 200 basis points at our midpoint. We anticipate year-over-year revenue growth of approximately 8% at the midpoint of the same-store cash NOI guidance range, driven by continued strong rate growth and occupancy growth of 130-170 basis points. With the deployment of our Ventas OI platform and excellent execution by our operators, we are able to achieve substantial rent increases this season of approximately 10%. This, in combination with improved care pricing, rising street rates, and typical resident attrition, results in about 6% expected REVPOR growth in 2023. It is important to note that 80% of our revenue growth in 2023 will be driven by the REVPOR growth, much of which has already been realized as over half of our resident population have already received the rent increases. In regards to occupancy growth, we project that more residents will move into our communities in 2023 compared to prior year. We also project our net move-ins to be higher. We expect to return to more normal seasonal occupancy patterns, which include typical clinical conditions and slightly elevated financial move-outs in the first quarter. We expect a significant occupancy ramp throughout the year, supported by an accelerating aging demographic and muted new supply, translating to about 150 basis points of year-over-year average occupancy improvements in 2023. We also expect moderating inflationary expense impacts and lower contract labor year-over-year, with overall expense growth expected to be around 5%. Through the execution of initiatives to improve employee recruitment and retention, we have had five consecutive quarters of net hiring, which are providing the tailwinds needed to stabilize the workforce and support the moderation of expenses. Moving on to investments. I'm really excited to work with our deeply experienced investments team in my newly expanded responsibilities. I am very pleased to step into a situation where I can work to continue our strong track record in expert capital allocation. We have a wealth of existing relationships across our targeted asset classes of senior housing, life science and R&I, and medical office. I look forward to contributing to the ongoing success of our investment platform by combining the advantages embedded in the enterprise with my extensive network and investment experience to drive external growth. I look forward to expanding Ventas OI across the enterprise to drive portfolio optimization, external growth, and refresh redev capital across our senior housing and office portfolios. We will continue to pick our spots in investments and work with our best-in-class partners on attractive opportunities. Moving forward, I am confident in the demand drivers of the business and believe we are well-positioned to continue this positive trajectory. Bob? Thanks, Justin. I'm going to share some highlights on our fourth quarter performance, touch on our balance sheet, and close with our 2023 outlook. We are proud of the fourth quarter results. Throughout 2022, we were accurate in our forecasts and followed our mantra to do what we say. In the fourth quarter, normalized FFO was $0.773, at the higher end of our guidance range. Fourth quarter property growth was particularly strong, with total company and SHOP same-store cash NOI growth of 8.5% and 19.1% respectively. I'd like to give a shout-out to Pete Bulgarelli and our office team. Office had a great year, growing same-store cash NOI by 3.8% in fiscal year 2022. That office result was led by our MOB business, which posted some outstanding metrics, including strong leasing performance with same-store year-end occupancy of 92%, the highest level since 2017. Tenant satisfaction measures exceeded 93% of all MOBs. Same-store operating expenses increased just 2.6% year-on-year, well below inflation. As a result, full year 2022 MOB same-store cash NOI grew 3.4%, the highest on record for the company. R&I also posted attractive organic performance, growing same-store cash NOI by 5.1% in the full year 2022, led by leasing at higher rates and solid expense management. I'd highlight two other items in the fourth quarter. We earned our first promote approximating $0.02 per share as general partner of the Ventas Fund, which was $0.01 better than our guidance. We're also eligible to earn further promotes in 2023. Second, we recognized a $20 million non-cash CECL allowance on our $486 million mezzanine loan investment to Santerre Health Investors. Interest coverage on the loan has declined through year-end. The loan remained fully current through January 2023, and full interest is expected in February. Next, a few comments on our balance sheet. Over the last two years, we enhanced our portfolio and strengthened our balance sheet through $1.3 billion in asset dispositions and loan repayments, with proceeds used to reduce near-term debt. We also issued $2.7 billion of new debt in that period, extending duration at attractive pricing before the run-up in interest rates. As a result, we have just 4% of our consolidated debt, or under $500 million, coming due in 2023. We've made good progress towards this refinancing, having locked in all-in cash rates of 4.2% on nearly two-thirds of this requirement. Consistent with our long-held risk management approach to maintain 10%-20% of floating rate debt, 12% of our consolidated debt was floating in the fourth quarter. We have plans to issue $500 million in new secured fixed-rate debt, with proceeds designated to pay down floating rate debt in 2023, which would bring our floating rate debt to the lower end of our targeted range. We have significant liquidity of $2.4 billion at year-end 2022. Finally, our net debt to adjusted for pro forma EBITDA improved by 30 basis points to 6.9x in the fourth quarter, with SHOP NOI growth steadily moving that ratio back toward our pre-pandemic target range. Last but not least, I'm extremely pleased to reintroduce full year 2023 guidance. This is tangible evidence that we are in a post-pandemic world, and our guidance demonstrates the exciting post-pandemic organic property growth opportunity for Ventas. The key components for our 2023 guidance are as follows. Net income attributable to common stockholders is estimated to range between $0.20 and $0.34 per fully diluted share. Normalized FFO is forecast to range from $2.90 to $3.04 per share. We expect our portfolio same-store cash NOI to grow 7.5% at the midpoint, led by SHOP same-store cash NOI growth of 18% at the midpoint. Our 2023 FFO guidance at the midpoint of $2.97 represents growth year-over-year of 5% or $0.13 per share against a rebased 2022. The FFO bridge describing the $0.13 is straightforward with two main drivers. First, we expect $0.29 from outstanding year-over-year organic property growth in SHOP. Second, and partially offsetting, is a $0.16 reduction, principally from the impact of higher interest rates. A stronger US dollar against the Canadian dollar and the pound is also a contributor. Other guidance items include receipt of over $300 million in capital recycling proceeds, no additional promote revenue, G&A approximating $151 million at the midpoint, and 404 million weighted average fully diluted shares. The low and high end of our FFO guidance range are largely described by changes in the macro environment, including potential changes in inflation expectations and interest rates. A few thoughts on phasing of our normalized FFO through the year. We expect FFO in the first quarter of 2023 to be roughly flat to the fourth quarter of 2022 of $0.71 when adjusted for the $0.02 promote received in the fourth quarter. The first quarter of 2023 is the seasonal low point for SHOP. As the key selling season in SHOP kicks in and interest rates plateau, FFO growth is expected to pick up in the balance of 2023. A more fulsome discussion of our 2023 guidance can be found in the earnings and outlook presentation posted to our website. To close, we enter 2023 with momentum. The entire Ventas team is fully engaged and excited to deliver on our 2023 plans and to reignite a new cycle of success for the company and our shareholders. That concludes our prepared remarks. For Q&A, we ask each caller to stick to one question to be respectful to everyone on the line. With that, I'll turn the call back to the operator. As a reminder, to ask a question, simply press star 1 on your telephone keypad. Our first question will come from the line of Joshua Dennerlein with Bank of America. Please go ahead. Yeah. Hey, guys. Thanks for the time. I just want to ask about that Santerre Health Investors loan. Could just provide more background, why the allowance? Then, Debbie, I think you mentioned you're looking to optimize the outcome. Kind of just help us think through, like, the outcomes that you're expecting. Sure. Good morning. The loan is part of our normal business. You know, over the last five years, I think we've collected about $1.7 billion in loans that we've made on healthcare properties or to healthcare operators. This particular loan took a $20 million allowance in the quarter. We continue to be current in terms of interest, receipt of interest payments. It's under some compression of coverage because some of the assets haven't recovered from COVID while interest rates have been increasing. It's really a timing issue, if you wanna think about it that way. We would expect to work through that, and we have a lot of experience and tools and rights at our disposal to do that. Our next question will come from the line of Vikram Malhotra with Mizuho. Please go ahead. Thanks for taking the question. I just wanted to understand in your, in your deck, you outlined potential CapEx investments, I guess, in SHOP and maybe triple net to position the portfolio. I'm wondering, you know, then CapEx was a little elevated in the fourth quarter. I'm wondering if you can give us a sense of just like the magnitude of these investments over the next, call it two or three years to achieve what you want with the portfolio and perhaps tie those CapEx to the bridge you've outlined in terms of the SHOP NOI growth. Hi, it's Justin. I'll start, and Bob probably wanna jump in. You know, first of all, it is a large initiative. You know, we have 100 communities that they're in the process of being refreshed. We do believe that it'll be impactful. It's about $1 million a pop. It should help improve performance. Certainly, we've considered that when we gave our guidance for 2023. You know, there's more to do, but, you know, at this stage, you know, we picked our highest priorities and we've been executing, you know, aggressively. We look forward to these projects coming online during the key selling season. I'd add, the $1 million a pop we've mentioned, you know, 100 properties, that's obviously $100 million. The timing of that clearly isn't all in 1 quarter. It'll be spread over the course of time. These are NOI generating opportunities. You know, ROI generating opportunities and are indeed embedded in the forecast we've given you in terms of the NOI growth. I believe, you know, top use of our cash, best use of our cash is to reinvest in these assets given the backdrop of SHOP and senior housing. Sorry, could you just clarify this $100 million, is that this year, or is it spread out? I'm just trying to tie it back to. Yeah ... ultimately the FAD growth coming through. Yeah ... if these are multiple years of $100 million, then maybe the FAD growth gets depressed. Yeah. Well, first of all, we started these last year. You mentioned the fourth quarter seeing some acceleration. That clearly is part of it. Second point to make is just in terms of classification of the CapEx spend. This is ROI generating or redev. You'll see that acceleration in redev. At the same time, FAD CapEx will increase. Again, the top priority is investing behind our SHOP assets. You'll see that increase at the same time. It's a multi-year program. it's a multi-year NOI impact as well, we believe. Right ... going forward, really investing into this multi-year recovery in senior housing and supply demand fundamentals in our market. Got it. Thank you. Thank you. Your next question will come from the line of Ronald Kamdem with Morgan Stanley. Please go ahead. Great. Just a quick two-parter. Thanks for the presentation. It was super helpful. Two things caught our eyes. The first was just the leading indicators and the lead generators being pretty strong, both in four Q and January. Maybe just a little bit more color on what that's capturing, conversion rates. Just thought that was really interesting. The second piece is, you know, I think on the end of the presentation, talked about sort of a $900 million SHOP NOI opportunity with all things said and done. If we take a step back, just curious how you guys are thinking about sort of the margin profile at that point versus pre-COVID. Thanks. Well, Ronald, we're glad you liked the deck. We obviously, you know, pride ourselves on our analytics, but your old colleague, BJ Grant, helping us put it in the best format for our external constituencies. We're glad that you like it. I'll turn it over to Justin to start to answer your question. Sure. In, in regards to leading indicators, you've noted they're looking really good. We've had, we think the highest fourth quarter lead volumes on record in terms of leads. Move-ins were solid. You noted the conversion rate. We had an operator that put in place a website upgrade interim month in December. It slowed down leads a bit, slowed down move-ins. Those move-ins have since recovered in January already, so no worries there. We expect to follow normal seasonal trends, you'll see, you know, move-outs be a little bit higher. We've had, it's normal to have, you know, additional clinical move-outs. It's normal to have additional financial move-outs. So far in January, you know, we're off to a strong start with move-ins at 104% of 2019 in the U.S., 111% in Canada. All looking pretty good from a leading indicator standpoint. In regards to the margin question, you know, there's one thing that we're all excited about. Obviously, Debbie noted it, I noted it, and that's the pricing power. That's really helped to accelerate our margin expansion. Occupancy growth does as well. You know, we do anticipate margins to continue to expand and also to Debbie's point, we're anticipating and hoping to get back to that 2019 level again. You know, margins should settle out, but also should continue to grow because of the strong demand for the senior housing sector. Thanks so much. You're welcome. Your next question will come from the line of Michael Carroll with RBC Capital Markets. Please go ahead. Yeah, thanks. Just regarding to your SHOP same-store growth forecasts, is there a meaningful difference between the legacy same-store assets versus the new properties coming in in terms of growth? I mean, I think that a lot of the new stuff being added is from new seniors. Is the growth profile of the new senior assets different than the legacy same-store portfolio? Hi, Mike. I'm glad you asked that, and I'm gonna ask Bob to answer it. Yeah. Mike, I'd say first off, all the pools, all the operators are contributing really attractive growth, you know, across the board, literally, as you look at it. This is broad-based growth and recovery and improvement across the portfolio. You mentioned New Senior. New Senior importantly a part of that contribution. When you look at the fourth quarter of 2022, you'll see almost the same asset pool, and that growth in the fourth quarter reflects that broad base- Mm-hmm ... that broad-based strength. Yeah. I mean, what I think you should like about it is we now have the vast majority of our SHOP business in the same-store pool. That makes it more meaningful for investors to understand the performance of the business. Our next question will come from the line of Steve Sakwa with Evercore ISI. Please go ahead. Thanks. Good morning. Justin, I guess I was just hoping you could speak a little bit about the occupancy growth. You know, you picked up, I think, 300 basis points in 2022. Your forecast is for 150 at the midpoint, this year. I'm trying to figure out, was the 300 maybe, you know, picking up low-hanging fruit in the early parts of the recovery and the 150's a more normalized pace, or do you think the 150 is a bit of a slowdown as you have maybe got a bit of a cautious view towards the economy? I'm just, you know, trying to reconcile that with the leads and the move-ins that you sort of talked about. Yeah, that's a great question. You know, let me start with describing, you know, the 300 basis points, and I wanna relate it to seasonality. When we grew 300 basis points in 2022, we had two things helping that growth metric. One was that Q1 of 2022 performed better than typical seasonality. Very strong start in 2022. There really wasn't much clinical activity at all. That was helping us. It was also comparing to a prior year, Q1 of 2021, that was pandemic impacted. You have a stronger start in 2022, and you have a favorable comparison. Moving ahead into 2023, I mentioned in the prepared remarks that we're experiencing normal seasonality, so we have a lower starting point in Q1. You know, effectively Q1 has lower occupancy than Q4. It's in line with normal seasonality. Typically, you see about 100 basis points change downward from Q4 to Q1. What we'll see this year is an acceleration in growth. As I said, we're expecting more move-ins. We're expecting more net move-ins. In fact, the growth rate in 2023 will be stronger. The effective growth rate is stronger, but the average overall is at the midpoint of about 150 basis points of growth. Because of timing. Right. Phasing. Exactly. Thanks, Steve. Your next question will come from the line of Jonathan Hughes with Raymond James. Please go ahead. Hi. Good morning. I appreciate the full year guidance and the confidence in the senior housing recovery, you know, that providing that outlook conveys. I was hoping you could give us the SHOP NOI growth guidance breakdown between the U.S. and Canada. Canada seems to have been where, you know, some of the upside versus guidance came in the fourth quarter, but I know there are some price restrictions in some provinces north of the border. I just would find that breakdown between the U.S. and Canada for this year would be helpful. Thanks. Hi, it's Justin. Well, everything's included in the full year guidance in 2023. As Bob said, everyone's contributing. You know, Canada does sit at a higher occupancy. It does tend to generate less growth overall, but it is contributing growth and we'd expect the U.S. be on the higher end of the average of the guidance range. Canada a little bit on the lower side, but with everyone contributing to the growth. I'd emphasize 95% occupancy in Canada, and we delivered 12% growth in the fourth quarter. You know, that business is performing well. Obviously the US is the engine driving the overall midpoint. All right. Thank you. Your next question will come from the line of Michael Griffin with Citi. Please go ahead. Great. Thanks. Justin, in your conversations with your operating partners, can you give us a sense what the better performing partners are doing right on the labor side of the equation? Conversely, for those that might be underperforming, what the plan is to bring them sort of up to snuff. Ultimately, if they're not performing, would you look to transition them maybe to some of your better partners? Any expansion there would be great. Sure. Well, first of all, really similar to how everyone's contributing to the NOI growth in 2023, all of our operating partners are contributing to, you know, the improvement in managing the labor costs. It's done a few ways. You know, one was to professionalize the recruitment of line staff, where that had been a local priority. It's become a central priority for operators. That's done through automation. It's also done by gearing your recruitment professionals towards that person. There's been more emphasis on retention as well. There was wage increases that were competitive, that were put in place all the way back starting in 2021 and throughout 2022 that helped to be more competitive. Just extra emphasis where you have, you know, the leading indicator is always agency, which you probably noted in our, you know, numbers that's been coming down. If a community's entering agency or a market's entering agency, that's an indicator to put additional focus on that locality. Really good execution. There has been, I think, changes that have been made that will be lasting, in terms of just process improvement. Great. Thanks. Your next question will come from the line of Juan Sanabria with BMO. Please go ahead. Hi. Good morning. Just a question. Hi, Juan. on FAD CapEx. Good morning. Just a question on FAD CapEx, maybe to piggyback off of Vikram's question. Just curious, I guess, what the guidance is for what we should be thinking about is in the 23 guide. As well as maybe a little bit of color on what gets included in the ICE versus normal FAD CapEx. If I kinda add the two together and compare that to the average units for 22, it implies about $2,300-$2,400 per unit per year, which seems a little low given the inflation. So just curious on that breakout and what we should be expecting for the year. Thanks. Well, I mean, start out with the principle that FAD CapEx is really routine recurring non, income producing kind of steady state in activity. Bob will go further. The second premise is ICE is really a function of either transitioned or acquired assets bringing up to market standard. Part of what you'll see in 2023 versus 2022 is a reduction, significant reduction in ICE simply because we haven't had that activity in the last, call it year or so. That's, that flushes out of the system. Bringing you back to core CapEx and FAD, which I would expect to see some acceleration in, I mentioned that earlier. Our best use of cash to invest behind the properties, both front of house and back of house. You will see an increase in that. More meaningfully, the increase in redev, which is really these front of house refresh ROI projects, which we mentioned the $100 million number as a placeholder. Both will be going up. I think net, I would think about it in terms of the bottom line FAD contribution in 2023 also growing, driven by the cash flows of the properties. Any dollar guidance for total CapEx spend then? No. Simply the change. I'll give you a redev up by $100 million as a year-on-year as a number. Thanks. You got something out of him, Juan. Your next question will come from the line of Tayo Okusanya with Credit Suisse. Please go ahead. Hey, good morning, everyone. Morning. quick question on the guidance side. Again, very strong underlying fundamentals built in 2023. I'm trying to understand a little bit more about some of the kind of the drags on the numbers, if I may use that word that results in the on the guidance. Specifically on the interest and FX side, trying to understand the FX assumptions being made and quantitatively how much of a drag that is on earnings this year in case FX becomes better than expected. Also trying to understand the assumptions around the $500 million of refinancing that's baked into the numbers. Exactly what kind of rates are you expecting to refinance that at? Great. I'll take that. Page 14 of the deck we posted yesterday is helpful here because it really focuses on the impact of rising interest rates. Of the $0.16 I noted in the bridge, the vast majority is interest rates. And the vast majority of that is really the curve on floating rate that we see and show in the, in the deck. FX is a contributor, but a small contributor. In large part because we have in Canada, Canadian debt, and that's a natural hedge to what is a stronger US dollar, which is having translation impact on NOI. That's the primary driver. In terms of the $500 million, this year of refinancing, again, that's in Canada, principally, and we've been able to secure some attractive pricing, on mortgages in Canada. That's gonna be a key source of funds, as well as some agency debt here in the U.S., which we're planning to issue, which we'll use to pay down floating rate debt. Those are really the two key drivers of the guidance in terms of refinancing. Specifically for the 500, could you give us a sense of what the new rate's gonna be versus the old rate? Well, I mean, it depends on the ten-year. Yeah, it depends on the 10-year. In the fives would be a reasonable expectation depending on where the 10-year is. Great. Pete, you're giving me 2% to 3% MOB next year. Going down, I still like it. We're feeling good. Our next question will come from the line of Nick Yulico with Scotiabank. Please go ahead. Thanks. Good morning. I just also in terms of the guidance, a question on the $300 million of capital recycling proceeds that you're getting. If you could just give the breakdown on the loan repayments versus property dispositions in that number. As a second part on that would just be, you know, how we should think about your using those proceeds. I mean, you're earmarking for, you know, debt pay down, acquisitions, or development. Any color there would be helpful. Thanks. Hi, Nick, it's Debbie. On the $300 million, a couple hundred million, as we show in the deck, is based on office dispose, some of which are purchase option-driven. We got full repayment on a Freddie Mac loan in January that was $43 million, I think, at a double-digit interest rate. We got paid in full on that. Then the balance is, you know, other small items. Our next question will come from the line of Rich Anderson with SMBC. Please go ahead. Thanks. Good morning, everybody. I wanna talk about the supply side of the house. As some people may not remember, the senior housing business was not in a great spot prior to the pandemic because of oversupply. I know that you, it's trending down substantially, as shown in page 11 of your deck. The rule of thumb for supply is, in my mind, is if you're anywhere over 2% of existing stock, you know, it's on the table as a possible problem. Tell me, you know, why, even though it's down substantially over the past five years, that comp year of five years ago was not a great fundamental period for the business. Tell me why this is a good thing, beyond just the optics of it being down. Also, you know, what you think the window is for you to sort of to see this ramp in demand that we're all seeing and expecting, and when you think supply starts to sort of muddle in the story again, because it certainly will, particularly with development costs coming down now. If you can comment more color on that would be great. Thanks. Good. I mean, it all starts with the demand side, as you know, with the record, 80-plus population growth in 2023. In terms of supply, I would analogize where we are to a little bit after the financial crisis because during those years, construction and development and starts obviously were paused for a period of time, because of the Great Financial Crisis. This is similar really to what we're seeing from kind of the pre-COVID period that you referenced but then also kind of during COVID and then continuing now because costs are still quite high, particularly capital costs. I mean, construction loans are extremely expensive now. The costs remain, for the time being, very high. And there's tend to be, because starts are really low in our markets. Justin can give you the specifics, but we believe we have a good multiyear window here where we know kind of the demand profile and can capture that while at the same time deliveries should remain muted, very muted, because they'll be seeing the effects, again, much like we did after the financial crisis, where deliveries were low. I think at that point, occupancies got up in and around the 92% level, and that's really where we wanna be able to see if we can get back to that kinda 92% level in this nice window that we have. Kind of that's the game plan. Yeah. I mean, I think you summed it up perfectly. I would, you know, just point out again that the 80-plus population, which what's different from that period is growing at record levels and will continue to for the next several years. That's obviously very supportive. On the demand side, supply, you'll notice our supplemental, we have starts in our top markets. It's like it's in the basis points. It's like 10 basis points. It's exceptionally low. That supports the window that Debbie's describing, you know, over the next few years. You know, this is a sector that has tremendous demand fundamentals, so the capital will see through those, and we'll bring supply eventually. We do have a window that's formed that's really exciting and supportive of the recovery that we've been talking about. Your next question will come from the line of Mike Mueller with J.P. Morgan. Please go ahead. Yeah. Hi. I'm curious for SHOP. Should the RevPOR growth moderate a lot in 2024 and 2025 just given the pace of how your expense growth has been moderating? Hi. It's Justin. You know, I'm gonna go back to what I was just talking about, which is demand. You know, another part of this is just affordability in our markets, which is very high, and there's demand for the services. You have a combination of people needing the service and people having the ability to pay, and with numbers that we've never seen before, in terms of demand at the doorstep. That should be supportive of pricing power moving forward. There's always some sensitivity relative to inflation and CPI. What you're really working to do to generate earnings growth is to create a spread. We've been effective in doing that in this cycle. You would think as you take capacity out of the market through higher occupancies that you may maintain some, all, or more of this pricing power. Got it. Okay, thank you. Your next question will come from the line of Derek Johnston with Deutsche Bank. Please go ahead. Hi, everybody. Good morning. on SHOP OpEx relief and specific to labor costs and agency, you know, pre-pandemic, you know, I don't recall agency labor being material at all or even, you know, utilized outside of, you know, very special situations. There's been improvement, no doubt, but how do you plan to get agency labor out of your centers? Can you achieve, you know, pre-pandemic levels of agency labor by year-end 2023? Hi, Justin. You're absolutely right. You know, agency was close to 0, you know, pre-pandemic. Obviously, there's been big shifts in the labor market since then. You know, we've had it enter our sector as it has others. We've managed to bring it down, which you've noted. In our 2023 guidance, we assume lower agency than we did in 2022 year-over-year. That's supportive of our moderating expenses. We are, in fact, carrying that Q4 run rate, which is, like, 2% of revenue, forward throughout the year. You know, there's. You know, I mentioned in my prepared remarks that the guidance range, you know, you know, it assumes, you know, lower expenses and more occupancy at the top end works the other way on the bottom. We've incorporated that into our thinking. We're anticipating that agency remains relatively stable. This is true across healthcare writ large and is principally a function of the labor force participation rate and other kind of macro factors. The key is really to take the actions at the hiring level that Justin mentioned about positive net hiring, where you're at least getting your fair share of that workforce. Got it. thanks, Debbie, and congrats, Justin. Thanks. Your next question comes from the line of Steven Valiquette with Barclays. Please go ahead. Great. Thanks. Good morning, everybody. Morning. You know, just on the SHOP, you know, you talked about the seasonality earlier. On slide 18 of the presentation, you know, you talk about expecting normal historical seasonality in 1Q '23 versus 4Q '22. You know, it's a little bit of a sensitive subject, but I guess to the extent that high flu prevalence historically leads to, let's call it elevated levels of resident expirations. I thought that would have been a trend that maybe would have hurt occupancy a little bit in the fourth quarter just given the, you know, the normal spike in flu happened so much earlier this season, you know, in the fourth quarter instead of 1Q. Inversely, you know, with flu really kind of, you know, falling off dramatically here in 1Q 2023, I would have thought the historical downtick maybe would not really happen this year in 1Q. Hopefully all that kind of makes sense. I just wanted to get your thoughts on, you know, this early flu potentially altering some of the normal seasonal trend. Thanks. The great points, or observations. I'll start with the clinical side. The clinical side I would just describe as kind of normal. You know, it certainly wasn't representative of the headlines that there were around flu. It's very normal, you know, kind of typical seasonality in both December and so far in January. We, you know, we have had financial move-outs, which is also typical around this time because I mentioned that, you know, over half of our residents have received their in-house rent increases. We've also mentioned they're relatively high this year as well. So that's contributing to the move-out trend, which is normal. That's kind of the point I was, you know, trying to make and in that regard, we're kind of back to normal trends. From a move-in expectation standpoint, a net move-in expectation standpoint, we expect those to continue to improve due to the demand at the doorstep. Got it. Okay. Thanks. Your next question will come from the line of Tao Qiu with Stifel. Please go ahead. Hey, good morning. Thank you for taking my question. Justin, the SHOP guidance assume a 6% RevPOR growth, which is kind of slowly, slightly lower than the higher single digit and even 10% increase rate increase that some senior housing operator have been talking about. Could you comment on the expectation on the moving rates and the current promotional activities? Are you still expecting the positive release in spreads for 2023? And as a quick follow-up, on the Colony loan, how much of the $50 million annualized interest income do you take out the guidance? How about I start with the pricing question. There's a page in the deck for those that have it, page 20, that addresses this. First, you know, the contributors to RevPOR, strong in-house rent increases running around 10%, care pricing 11%. Then street rates have increased as well. You know, really everything is going up in that regards. One thing about care, it's adjustable throughout the year. It represents about 15% of our RevPOR. Then there's just normal attrition, typical attrition. In other words, not every resident's receiving the full benefit of these increases throughout the whole year. That's why you're seeing a 6% RevPOR, rather than, you know, around 10, which the numbers above might indicate. On Colony, I would say there's a range of outcomes basically bracketing the FFO contribution in 2022. Got it. Thank you. Thank you. Your next question will come from the line of John Pawlowski with Green Street. Please go ahead. Thanks for the time. I just had a follow-up question on the mezzanine loan. Can you remind me what loan-to-value range your mezz tranche sat at in the capital stack when you originated the loan? Can you give us a sense for what magnitude of NOI increases are needed at these properties to fully service the debt? I believe the interest rates lie more plus 640 basis points, and that's really, really painful for cash flows. Just any thoughts on how you got comfortable about not taking a larger impairment would be helpful. Sure. I mean, I think, again, as we said, there's a post-COVID impact on some of the assets, and rates have increased. The full loan stack is really closer to L + 3.30-ish, if you will, in the senior and the junior. You know, the original underwriting was very conventional, kind of 75%, 80% LTV. It's this, you know, timing mismatch, if you will. You know, the borrower, we believe, is taking actions on the portfolio side, and the rates are the rates. We value the collateral in making our decision at the 12/31 balance sheet and, made, you know, reasonable, consistent assumptions about valuation. On the timing mismatch, if rates stay where they are, when will NOI operating income start to fully cover the loans? Well, it's being paid now, so it's covering the loan. Interest is being paid. All right. I'll jump back in. Thanks. Great. Thank you. Our final question will come from the line of Dave Rodgers with Baird. Please go ahead. Yeah, good morning. Probably for you, Justin. In terms of capital employment this year, you guys put out, I think, $1.2 billion last year. You know, where are you seeing kind of the best opportunities today outside of the redevelopment, which you've mentioned earlier in the call? Are you seeing more opportunities commercially to put more money to work in life science or MOB? Or do you think it will continue to be in SHOP by bringing new portfolios on? I guess, where are the biggest dislocations today in your mind, and how much are you interested in taking advantage of those? Yeah. First of all, you know, we're fortunate to have a wide variety of capital sources to fund our acquisitions. We'll prioritize, you know, our key asset classes. Senior housing obviously is one of those, life science, medical office as well. The market itself is, you know, is not normal. You know, there's exceptions to this, but, you know, there tends to be fewer market participants right now. The deals that we're seeing are getting repriced. Again, there's exceptions to that. Pricing can be unclear on the stabilized assets. We remain very interested in expanding the portfolio and growing in our preferred asset classes. At this time, I'll turn the conference back over to management for any concluding remarks. Thank you so much. I wanna sincerely thank everyone for joining us on the call today. We really appreciate your interest in the company. We look forward to seeing you. We're all very optimistic and aligned around our 2023 momentum and opportunities and are ready to get after it. Thank you very much. Ladies and gentlemen, that will conclude today's meeting. Thank you all for joining. You may now disconnect.