Good afternoon, and welcome to Bank of America's Global Real Estate Conference. I'm Joshua Dennerlein, and I cover the healthcare REITs at B of A. We're pleased to have with us Ventas's Chairman and CEO, Debbie Cafaro, and EVP and CFO, Bob Probst, and Justin Hutchens, EVP, Senior Housing and CIO. With that, I'll pass it over to Debbie for opening remarks, and we can jump into Q&A. As always, I encourage audience questions. With that, Debbie. Josh, thank you so much for having us, and thank you for coming to the last meeting of the day. Business is good at Ventas. We are very excited about the execution that we're driving on our strategy. The strategy was articulated at the end of last year and had good momentum coming into this year. Basically, it is capturing the unprecedented upside in our SHOP portfolio through organic growth. We're now in the third year of double-digit, year-over-year NOI growth, where it's an occupancy-driven, multi-year NOI growth opportunity. And this year we're showing, you know, great results on occupancy. Quarter to date, we're at 350 of occupancy growth year -over -year, and it was over 400 in the U.S. And so that is very strong, as expected. The combination of rate growth and occupancy growth is leading to 8% year-over-year revenue growth in the SHOP portfolio, so the most important thing I would say is that not only are we in the third year of this multi-year NOI growth opportunity in SHOP, but because of the unprecedented supply-demand imbalance in our favor and all the actions we've taken and the platform we've developed that's both experiential and analytic, we see a really long runway ahead for this NOI growth opportunity in SHOP, so that's prong one. Prong two is really adding external growth focused on SHOP that will drive higher enterprise growth rate going forward, be accretive and overall really expand our SHOP footprint, and right now, we have a line of sight to $1 billion of investments focused on senior housing. The financial and operating criteria are very attractive, with 7%-8% immediate returns and low- to mid-double-digit unlevered IRR expectations, along with below replacement cost basis, so very attractive, and that pipeline is growing, and we're building on the momentum that we established earlier in the year. The third thing we want to do is really just drive the rest of the portfolio. While senior housing is more than half the business, we do have a large other half of the business, and we're spending time making sure that that part of the portfolio is doing its part to drive performance, and then an equal partner of the one, two, three noted above is really the balance sheet, and we've been focused on improving leverage and liquidity. We just did a long 10-year bond at 5%, and so we're continuing to improve on that front and hope to continue to do so. So as a result of all of that, you know, we've been delivering good TSR, and we're very focused as a team on continuing to drive performance. And with that, we'll be happy to take questions. We could start with prong one. You mentioned just kind of driving the internal growth and the data analytics capabilities. I guess, could you provide just the latest on the Ventas OI platform and maybe where you want to take it from here? Yeah. So yes, we have the micro and the macro working for us. We've talked about the macro in terms of supply and demand, which is strong and getting stronger. And then Justin, of course, leads the SHOP business. And so why don't you talk about the platform you've built and how it's helping us improve performance? Sure. So Ventas OI, what that is, is that's our platform, that it really drives the active asset management across the senior housing portfolio, and it's driven through our operating experience, combined with best-in-class data analytics. The experience analytics are geared to focus in three areas, primarily. First is just markets, and a lot of the asset management activity we've had over the past few years has been centered around market selection. And that includes 100 dispositions that we've had, over 100 acquisitions, over 200 refreshes of assets within our SHOP portfolio, prioritizing the markets that would deliver the best net absorption first, and making sure that we're deploying capital, you know, in a way that would give us a really healthy return on the investment and drive performance. Market selection, it also obviously plays a big role in the external side of capital allocation as well, through acquisitions. We'll get to that later. Next is, you know, the asset selection within the market. You know, everything starts with the market. Have to be in the right place, where you have strong affordability, strong demand for the asset. Within that, are we well-positioned with the right asset to create value? So we focus on the market position of the asset. Is it well invested? Is it delivering appropriate service to meet the demand in that market? If not, we've probably left it, and then finally, you know, the operator selection. We have excellent operators in our SHOP portfolio. We've gone from 10 to 25 operators in that portfolio over the past few years, and we've, you know, with as we've been curating the operator selection within the portfolio, we've had 160 plus transitions to new operators. We have a platform where we've delivered 1,000 plus sessions, where we're interacting with our operators on operating performance and driving improvement in areas around digital marketing and price-volume optimization and just flat out driving volume. And so the platform is very powerful, it's well established, and it's delivering outsized results. And I think that the key point is really the last point, is that we're outperforming in our markets. And in terms of occupancy, we have a couple stats we can share in that regard. One is... Where is it? Thank you, Bob. So one area is in our markets. We're in the NIC top 99 markets. We have 450 basis points of year-over-year occupancy growth, and that compares to the NIC markets of 250. We have another metric I'd like to share that's related to the assets where we've made investments. We have 133 communities that have benefited from the refresh CapEx and also the new operator selection. Those communities are seasoned now. They've had at least two quarters, you know, post-refresh. They've delivered 530 basis points of occupancy year-over-year, plus 6.5% RevPOR growth. So we're pushing, you know, really nice occupancy and RevPOR growth there, and we've outperformed those respective markets by 350 basis points of occupancy. So the platform is really well positioned to take advantage of all the tailwinds, plus drive outperformance, and that's the expectation we have with our portfolio. Maybe just one follow-up from me. Just the portfolio or the transitions you've done on the operator or, like, the triple-net to SHOP conversion level, like, how should we think about the flow-through to earnings growth over time? Like, where are those? 'Cause... Yeah. So we've had a 160, the 133 I just reported on, that we've done refresh CapEx. Those have overwhelmingly been transition communities, and so that's a pretty good example of the outperformance we can get. That's one thing that we've always been very clear about. If we're moving a community to a new operator, the expectation is we're gonna improve performance. You know, that's the opportunity. It's been a really good opportunity to do that in this period where we have tailwinds, you know, behind us as we're making those moves. So that outperformance we've seen, we've had some other transitions that don't sit in the same store group. There's a pretty big independent living portfolio that was transitioned last year. We've reported in our performance on a quarter-to-date basis, independent living growth is up around 400 basis points year over year. That group that we transitioned last year still sits in the non-same store pool as having similar performance in terms of occupancy growth. So we're really pleased with the occupancy performance in those transition communities. Oh, I guess thinking about, like, the next evolution of the platform, where do you, like, envision, like, Ventas OI going? Like, like, customer acquisition, just, like, reducing turnover. I guess, like, where's kind of the next phase as you think about, like, the build and how you can build the platform further? That's a great question. The platform is really geared overwhelmingly towards top-line growth. Mm-hmm. It's where we have the best data. You know, we have a billion data points that we've worked with so far. 60% of those are operational data points, most of which is top line, so it's all things revenue, price-volume optimization, and volume driven. We have a fully functional sales dashboard across our 25 SHOP operators that's real time, so that gives us ability, with our team's experience, to help to drive sales performance and interact with our operators in a way that we couldn't do it before. The next step really is to focus in on two areas and move to predictive analytics. One is in the area of market selection. The market analysis that we do, we have. You know, we pull from over 40 data points to determine the strength of a market. We'd like to get to a place where that's automated and predictive, and with a number of the inputs we have, plus a learning model and then on the price-volume optimization, as you know, the senior housing industry does not have price transparency, unlike, you know, multifamily and hotels, we can all reserve an apartment or a hotel room today and know exactly what we're gonna pay for the exact unit we're gonna get. Senior housing doesn't work that way. We've managed to, you know, really through a variety of data sources, create good transparency in a way that our operators can help use it for guidance for establishing pricing. That's also an opportunity to automate and make predictive as well. So that's really the next step is to integrate AI learning models, automation, and ultimately, predictive analytics. So what do you think about, like, the senior housing industry? Like, you'll naturally have, like, margin expansion as, like, occupancy comes up. Yes. How should we think about the overlay from just, like, the platform and the potential, like, additional margin expansion? And is there a way for us to kind of see that and, like, parse it out? Yeah, so margin expansion is one of the big opportunities in our portfolio. Our total SHOP portfolio sits around low 80% occupancy. The margin. Because of the high operating leverage, the margin expansion between 80% and 90% will be about 50% incremental margin. From 90% to 100%, we'll have 70% incremental margin, and that's just a function simply of operating leverage kicking in, and then revenues, you know, layering on as you're filling the communities. Where we've been particularly good in driving margin, you know, one area was episodic, which was really reducing agency spend within our communities, and that's been a big focus, and we've basically accomplished that. But the bigger opportunity really is to drive occupancy and rate together. And so the example I gave of the 133 communities that have been transitioned and have had refreshes, when you get... When you're driving 500 basis points of occupancy and 6.5% of RevPOR, margin is significantly expanding. And I think that's where our, really, our best skill set is driving that top line to ultimately drive margin. Mm-hmm. Questions from the field? And then maybe just, like, switching gears a little bit, just, you gave the operating update on, I guess, the quarter to date. Yep. Update on the SHOP, same-store growth. I guess, just kind of walk us through that. Like, what are you seeing on the field? Like, I mean, we know demand's like accelerating and stuff, but, like, maybe how is that just... Maybe is there any way to kind of quantify that from just demand profile versus, like, maybe what you're doing on the platform side, just drawing in customers and occupancy? Do you wanna talk about the accelerating? Yeah, let me kind of give you some sense of the occupancy performance, which has been really strong. It really started this time last year, where we saw acceleration in occupancy, and that has continued through to today, and the 350 basis points year over year, quarter to date, reflects that, and when you look at that 350 basis points, 400 basis points year over year in the U.S., Canada, which is 96% occupied, is the other piece of that equation, and within the U.S., IL and AL, both growing very, very strongly, and when we talked about the first half performance, for example, the net move-ins were 13 times the level of what we saw in the prior year, same period. And so that is just the demand at the doorstep, together with the initiatives that Justin just described. Another data point I would give you is sequentially- Mm-hmm. We're growing a hundred and ten basis points quarter to date versus last quarter average. Again, this is the key selling season, so you would expect to see a nice sequential performance, but that is, I would suggest, your outperformance from- Yes. from the market. Yes. Broad-based and continuing. How should I think about the occupancy increase of 350 basis points versus, like, your full year guide of 280 basis points? Is there a slowing that you're expecting in the back half of the year on a year-over-year basis, or is that just not updated? It's really lapping that prior year acceleration I mentioned- Okay. that started this time last year Okay. that you see in the balance of the year, right? That's, that's really the key. But we continue to see. We expect to continue to see strong demand, strong occupancy growth. Okay. Yes. Okay. Yes. Just- And last year- It's just a comparable. ... we outperformed normal seasonal patterns, and occupancy really started taking off, as Bob said, in September. So that's your year-over-year comparison. I would say that our projection for this year is obviously really strong, continued strong occupancy and a return to a more typical seasonal pattern. So that creates the year over year that Bob's talking about. Yeah, exactly. And it's a different dynamic on the rate front, if I recall correctly from a prior discussion? Good. Yes- Yes. Bob. So again, the acceleration last year, this time on occupancy, was in part because we really started driving the price volume optimization initiative. And so our strongest rate was H1 of last year, and H2 of last year, therefore, is an easier comparable on RevPOR. And so occupancy, tougher comp in the second, really effectively from here on, and the opposite is true on RevPOR. Okay. They go together. The key thing to step back and say: They're both driving revenue growth, right? And that 8% revenue growth this year, we think is- Mm-hmm ... is very strong. Okay. Any questions? With this labor markets, seeing improvements- Yes ... That comp is going to be a lot easier next year? There's two questions there. The first one is, are labor markets good? It's really the best we've seen in five years in terms of hiring. That really brings a lot of stability and to the costs of operating the business. The comp is a different part of the question because what we're lapping this year and even last year was a reduction in agency spend, which is three times, you know, the amount of a regular staff person per hour. As that's been coming out of the system, it's given us a very favorable year-over-year, you know, comparison. Next year, we expect to go back to just normal, you know, expense growth and really add just kind of a normal wage rate moving forward, given the favorable backdrop we have from a labor standpoint. But as you think about a macro where there may be a softer economy, our business is very favorably advantaged because we have demand that is strong and getting stronger, demographically driven, inelastic. And if you have a softer labor market in senior housing and in healthcare more broadly, that is the vast majority of the expense load. And so to have that be a softer environment after we've taken out all the agency labor, is a very favorable backdrop for our business. Let me, are there any other expenses that we should be watching out for? I know labor is, like, one of the biggest ones, but kind of any, like, kind of moving pieces within the expense stack? Maybe just switching to the prong two, the external growth. Mm-hmm. Like you mentioned, did you say it was a billion-dollar pipeline or expect? Thank you for asking. We have a line of sight- Uh. - to $1 billion of investments. Our pipeline is larger than that and growing. Okay. And that's been continuing since the beginning of the year. But our expectation is that we have $1 billion of transactions that we expect to close. Okay. The pipeline is bigger, as I said, and continuing to grow. Is that a billion by end of this year or a billion that you expect to close over- It's a near-term line of sight. Timing is always a little bit suspect or, you know, and so. But it's near term- Okay. I would say. Our guidance had $7.50 in it to close this year. Okay. So today, we talked about an incremental 250 with near-term line of sight. Okay. Yeah. But haven't quantified yet when that's gonna happen. Exactly the date. Okay. Yeah. Okay. Okay. Okay. And we hope to build on that. And so- Right. I mean, Justin, really, maybe you can touch on, like, the what type of assets and financial returns we're expecting from. Yeah, you bet. So, you know, consistent with the volume that we've already closed, which is $350 million, plus the $400 additional million we've already announced and had included in the guidance, and now another $250 million coming, they all line up with the attributes I'm gonna share. So starting with the, you know, going in yields of 7%-8%, plus, you know, growth, and so unlevered IRRs are in the low-to-mid teens. If I had to characterize this, the assets we're buying, they're high-performing, high-quality communities with upside. These are communities that have already established themselves as market leaders. They've been around 10 years old on average, you know, to date. They have high, you know, mid-high 80% occupancy, somewhere over 90%. So very strong performers, but in markets that have strong net absorption expectations from a projection standpoint. They have very strong affordability, operators that are appropriate to really drive that value creation, and therefore, we have expectations for strong growth as well, both in occupancy and then rate over time. So it's a pretty unique opportunity to buy, you know, this high-performing asset at a strong yield and to deliver growth. Mm-hmm. A couple other things about these, you know, they're over 100 units in size, so large communities. They offer a continuum of care, including independent living, assisted living, and memory care. Some just have assisted living and memory care. You know, they're just well-established, strong performers within their markets. Justin, what's catalyzing those sales? You outlined a pretty exciting opportunity- Mm-hmm. - for good initial yield plus growth. Why don't the sellers try to recap, wait longer? So most of the sellers. Well, really, in every case, you know, you have either, you know, large institutional private equity or small private equity firms, or friends and family investors that have really, you know, held the asset for three to five years or longer, and they've some of them have kind of went through the whole pandemic period and had delayed their exit. And so now they're at a place where you have strong fundamentals behind the asset. Sometimes there's debt maturities that are having to be dealt with, and, these days, with the debt maturities, you have a lower LTV available, so you're putting more capital in. The cost of debt is a little bit more than they would have anticipated in their modeling, and so the opportunity is really just to sell the asset. We've had some assets that came back to us. They were for sale last year. We couldn't. There was a bid-ask disconnect that occurred. Now, the NOI has grown. We have another year of NOI growth under the asset, so it lined up for us. But, you know, these are, you know, they're kind of typical sellers, and the timing is right for them, and the timing is right for us. Of the two hundred and fifty million incremental- Mm-hmm. Near term, how are they coming in? Are they coming in individual assets, lots of assets? I mean, how is the market set evolving? It's a mixture. I mean, it's everything from a single asset to what I could characterize as, you know, portfolios of a handful or fewer, and then some larger transactions, and they come in through a variety of channels. They could be brokered transactions, they could be off-market transactions, or kind of something in between, where there's a, a smaller process and people know. Look, deals beget deals. People know that we're active in the market. They know we're a sophisticated buyer and owner. Operators like to work with Justin and value the insights that the platform is providing. And so through all those different channels, we're seeing, you know, different profiles of investment opportunities. Are you seeing any differences in pricing, depending on how, you know, small or big the purchases are? How is the pricing across- The pricing- Yeah. Yeah. I mean, Yeah ... there hasn't really been, like, a price differential, in terms of size, and we're, you know, using our investment criteria on transactions of all sizes. There's probably some larger deals that haven't traded yet in the market, where the price expectation just was. The cap rate was low market cap rates, and so it hasn't traded. So, if you wanna call that, you know, a comp, I don't know if you can, if it hasn't actually traded. So sometimes there's a portfolio premium or some, you know, expectations that there's a bid-ask disconnect still on some of the larger deals. But we have a large and growing pipeline that are really meeting the criteria that I've outlined. Josh? Any other questions from the field? Yeah, and what is the average age of the near-term investments? Mm-hmm. How does that compare to your existing shop portfolio? So, the effective age of our existing shop portfolio is, give or take, around 17 years. That's about probably where we're investing. You know, the actual age of where we're making acquisitions is newer, but we've done a good job of investing in our existing portfolio so that the economic age is at 17. So far, it's been around 10 years on average. Some range between 10 and 20 years is where we expect to see you know, the acquisitions that we're targeting. Other questions from the field? Outside of senior housing, any other updates on the other segments of the business? You want to talk about this? So the medical office business is doing well, or Outpatient Medical, as we describe it. You know, reliable 3% grower. Similar to the research portfolio, which is really university-based, anchored by universities, also in that same zip code. So, you know, reliable, growing cash flows, and a nice, if you like, complement to the growth we're seeing in senior housing. The life science side, are we hearing anything? You know, obviously, activities here in Florida are kind of low volumes in life science. You're not seeing any impact on the work or? Our exposure to, you know, traditional life science cluster markets is quite small. You know, we do have some, but it's through the fund, so it's pretty, pretty small. It's really our university-based business is, is the majority of our business, which is itself 8% of our NOI, so relatively small. Pardon? 8%? 8% of our NOI. Yeah. Maybe sticking with, like, other areas of the business, just, is there any incremental news on Kindred to report or? There's a bit of incremental news, which is, that we're very close to being done, and, along the same lines with respect to the lease that we outlined previously. Okay. So we feel good about that. Okay. And then, any kind of color on maybe timing? Like, is it closer to year-end, or, like, the next earnings cycle, or just kind of out of your control at this point? Just trying to think through, like, catalysts and stuff. Very close to being done. All right. Next time, we'll schedule this on Thursday. And then the other kind of optionality you have is on Brookdale. I guess, just kind of what's your latest thinking on that? I guess on a two-pronged approach, just like the Brookdale warrants, you have the optionality there- Yeah ... but then I think the lease, like, when I did some work on that, it seems like a lot of good things could potentially fall your way. Just kind of thinking about how you're thinking about it. Yeah, so it's the Brookdale lease, it's senior housing, obviously. And you're right, it is a situation where there are multiple positive outcomes for Ventas, and we can talk about specifically, you know, two easy directions to talk about, both of which... You know, Justin, why don't you do that? Sure. Yeah, so there's quite simply two positive potential positive outcomes. First one is Brookdale extending. Brookdale has the right to do this. It's an all or nothing extension. They can decide to do it by November 30th. If they do it, they're extending the lease on the entire portfolio, and then in 2026, rent will increase by somewhere between 3% and 10%. It'll. We can either agree upon it together, or it'll be a fair market value review to determine the new lease rate. It'll be a ten-year renewal. This is 20% of the business. These are assets that are in markets that have 1,000 basis points of upside in their markets. They've been good performers with good coverage and improving coverage. There's a case to be made that perhaps they do that. Should they not extend, then, you know, we have the proven playbook. We've articulated, you know, the strength of our OI platform and the results we get, where we can outperform market. We like the opportunity to do this in markets that have a thousand basis points of upside, and in communities that we're familiar with, and with operators that we've established through the growth of the SHOP portfolio. That would be a good opportunity as well. We could go SHOP with it. We could do the extension. We like both opportunities, and we'll see where that plays out. Mm-hmm. Any last questions? If not, we're at time, but we do have three rapid-fire questions we've been asking everyone. The first one is: Do you expect real estate transactions to increase once the Fed starts to cut, yes or no? Yes. It's a multiple choice. Yes. And then, if yes, when do you expect them to pick up? A, 4Q 2024, B, H1 2025, or C, H2 2025. I think the evidence of it will be H1 of 2025. How would you characterize demand for space today? Improving, steady or weakening? Unprecedentedly positive. I'll mark it down as A.