My name is Bailey, and I will be your conference operator today. At this time, I would like to welcome everyone to the Ventas 2nd Quarter 2024 earnings call. All lines have been placed on mute to prevent 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 followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press star and one. I would now like to turn the call over to BJ Grant, Senior Vice President of Investor Relations. You may begin. Thank you, Bailey. Good morning, everyone, and welcome to the Ventas second quarter 2024 results conference call. Yesterday, we issued our second quarter 2024 results release, presentation materials, and supplemental investor package, which are all 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. For a reconciliation of these measures to the most closely comparable GAAP measures, please refer to our supplemental investor package posted on the Investor Relations website. With that, I'll turn the call over to Debra A. Cafaro, Chairman and CEO of Ventas. Thank you, BJ. On behalf of all my colleagues, I want to welcome our shareholders and other participants to the Ventas second q uarter 2024 earnings call. It's an exciting time for our business. We are driving performance in the early stages of an unprecedented multi-year NOI growth opportunity, fueled by powerful demographic demand and the most favorable fundamentals ever in the senior housing industry. Ventas plays an essential role in the longevity economy, serving a large and growing aging population with over half our business in senior housing. This creates a compelling near and long-term growth and value creation opportunity. Today, I'll discuss Ventas's strong results and our latest increase in our 2024 expectations as we generate outperformance in our senior housing operating portfolio, increase SHOP investment activity, optimize net operating income throughout our portfolio, and improve our financial strength. Let's start with results. We began 2024 with momentum, which continued in the second quarter. Our enterprise delivered $0.80 of normalized FFO per share, reflecting 7% year-over-year growth. SHOP led the way with same-store cash NOI growth of over 15%. Total company same-store cash NOI grew nearly 8%, and our balance sheet is trending positively with 50 basis points of leverage improvement already year to date. We are pleased to once again raise our 2024 normalized FFO per share guidance and our total company same-store NOI expectations on the strength of this performance. Our growth expectations and value creation opportunity put us in the top cohort of companies across the REIT landscape. We're executing on our focused strategy designed to deliver growth and value to our stakeholders. As a reminder, there are three prongs to the Ventas strategy: deliver profitable organic growth in our senior housing portfolio, capture value through investments focused on senior housing, and drive cash flow throughout our portfolio. Here are some key updates in each of those areas. In SHOP, we have now delivered 8 consecutive quarters of double-digit year-over-year same-store organic cash NOI growth. More importantly, we see a durable multi-year NOI growth opportunity ahead of us, powered by occupancy gains and revenue growth. Senior living provides invaluable benefits to residents and their families. In the quarter, occupancy grew 320 basis points year-over-year, significantly outperforming industry benchmarks, and revenue expanded 8%. Our data-driven decisions and able execution by talented operators enabled our communities to attract more than our fair share of the strong demographic demand for senior living. Remember that our prior senior housing occupancy peak was 92%. Currently, our portfolio has trended to 84% occupancy and 27% margin. There is an additional $140 million incremental NOI opportunity simply by getting to 88% occupancy and 30% margins in the portfolio, when SHOP NOI would approximate $1 billion a year. From there, we expect our portfolio, operators, and communities to shoot for and potentially beyond that 92% prior occupancy peak because surging demand and suppressed senior housing construction are creating such favorable conditions, particularly in our markets. The SHOP resident base we serve, primarily the over-80 population, should grow by over 24% in the next five years. This population is increasing rapidly each year from about 500,000 people annually now to over 800,000 individuals starting in 2027, as the leading edge of the gigantic baby boomer cohort turns 80. Yet, there were only about 1,300 units of senior housing started in the second quarter, and construction as a percent of inventory is only 1%, both the lowest on record. Equally important, the duration of new construction continues to elongate, and we expect deliveries to be constrained for years to come. This favorable supply-demand backdrop provides powerful tailwinds and a long and unprecedented runway for growth. Justin will explain how our actions, platform, data, and insights, together with our operators, deliver value to seniors and their families and position Ventas to outperform a strong market. We are also increasing our investment activity focused on senior housing as we execute on the second prong of our strategy. We're on track to close about $750 million of investments this year. Given the favorable market conditions and the strength of our pipeline for quality acquisitions, we are committed to ramping up our investment activity. Ventas is one of the country's largest owners of senior housing, and we are excited about the external growth opportunities we see in the market. Rarely in my career have investment conditions been as constructive. We can invest in senior housing assets with high single-digit going-in yields and substantial near-term NOI growth prospects. Replacement cost, net absorption projections, and affordability remain key criteria in our investment approach. These senior housing investments expand our SHOP footprint, increase our enterprise growth rate, and reinforce our consistent commitment to financial strength. Third, we're also focused on driving cash flow and value creation throughout our portfolio. Our outpatient medical and research portfolio once again contributed complementary compounding growth for Ventas, powered by our competitively advantaged Lillibridge operating platform that excels in tenant satisfaction and retention. We also want to provide you with greater clarity on the 23 LTACs operated by Kindred with a lease maturity of April 30, 2025. These long-term acute care hospitals represent about 5% of our NOI, or $110 million annually. We've made a lot of progress since we last updated you. Currently, we are in advanced discussions with Kindred regarding a lease resolution for these properties. While a deal is not done and terms could change, we and Kindred are close to a transaction that would result in a 25%-30% full-year rent reduction on these 23 LTACs starting May 1, 2025. About two-thirds of that amount would be reflected in calendar year 2025. We'll be happy to share more with you if and when a deal is concluded. We continue working toward a positive lease resolution that optimizes Ventas value and the NOI from these 23 properties, strengthens the master lease, and supports Kindred's future success. There are two final items that represent our approach to thoughtful investing and creation of win-win outcomes with our operators over time. First, Ardent recently completed its successful IPO, and we congratulate the management team and our partners. Ardent has done it right, focusing on patients, quality clinical care, employees, and communities. Ardent's current equity value exceeds $2.5 billion, and as Sam Zell used to say, "Liquidity is value." With $1.6 billion invested in assets operated by Ardent, Ventas has always been happy with Ardent's financial stability, its operational acumen, and its steady growth. The company's IPO has further enhanced this positive investment. In addition, Ventas has an ownership stake in Ardent, currently valued at about $170 million, over four times our original investment. We believe there's additional upside in Ardent's business and its valuation. Also, in the second quarter, we monetized about 10% of our Brookdale warrants for $6 million in cash profits. We received these warrants as part of the successful lease arrangements we concluded with Brookdale in 2020. The warrants provide upside sharing in Brookdale's success and take advantage of the positive macro conditions in senior housing. Our current in-the-money value of our Brookdale warrants is about $70 million. Stepping back, we are optimistic about the future of our business, which is centered on helping a large and growing aging population live longer, healthier, and happier lives. As the broader economy shows significant signs of slowing down and the labor market softens, Ventas's business, with over half in senior housing, is highly advantaged across the REIT space. All our asset classes benefit from inelastic, need-driven, demographically driven demand, and most benefit from a softer employment backdrop. As a result, we have an unprecedented multi-year growth opportunity right in front of us. With favorable results this quarter and our improved outlook, our team is focused on doing everything we can to execute our strategy and continue to drive Ventas performance and returns. With that, I'm happy to turn the call over to Justin. Thank you, Debbie. I'm happy to report on another good quarter for our SHOP portfolio and another guidance raise led by occupancy. As Debbie mentioned, the macro backdrop is very supportive from a supply-demand standpoint. I'm pleased that part one of our strategy, which is to deliver profitable growth in senior housing, is off to a good start, as we are seeing very strong execution from our operators with support from our Ventas OI platform initiatives. The key selling season is delivering strong results so far in May, June, and July, as leading indicators and occupancy are all performing really well, building on our best-in-class occupancy performance. I'd also like to highlight that our net move-in volume year to date was 13 times higher than last year, contributing to our outperformance driven by our Atria and Holiday portfolios, as well as Sinceri, Priority Life, and Discovery Senior Living. The second quarter same-store SHOP revenue grew 8%, and occupancy grew by 320 basis points, led by the U.S. with 380 basis points year-over-year and 90 basis points sequentially, leading to an absolute occupancy of 85.6%, led by Canada at almost 96%, and an overall operating margin of 27.4%, all of which are industry-leading metrics. I'd like to spotlight Le Groupe Maurice, who operates full-service active adult communities for us in Québec and represents nearly 60% of our NOI in Canada. They have consistently delivered stellar performance. The 380 basis points of occupancy gains in the U.S. was driven by broad-based performance across our portfolio, with growth of 400 basis points in assisted living and 340 basis points in independent living year-over-year. Spot occupancy was particularly strong in our communities compared to the market. The U.S. spot occupancy grew 450 basis points year-over-year in the top 99 markets, which is 200 basis points faster than the NIC average. Furthermore, the U.S. spot occupancy grew 150 basis points sequentially in the top 99 markets, almost three times faster than the NIC average. 88% of our total SHOP NOI is included in our same-store portfolio. We were pleased to achieve 8% revenue growth and our eighth consecutive quarter of double-digit NOI growth at 15.2% year-over-year. The spread between RevPOR growth at 4% and OpExPOR growth at 1% remains very healthy at about 300 basis points. The key driver of value creation will continue to be occupancy growth due to the high operating leverage in the business. Margin expansion will increase as occupancy ticks higher, and particularly in communities that are over 90% occupied. I'd like to thank our operating partners. There are too many to mention, as there are so many strong contributors taking great care of people and delivering excellent operating results. Given the outperformance in the first half, we are happy to raise our full-year guidance expectations again on our same-store SHOP portfolio by 50 basis points to 14.5% at the midpoint. Our average occupancy growth expectations have increased to about 280 basis points, up from 270. The remaining key assumptions that drive the midpoint of our range remain in line with what we previously communicated. Now I'll give an update on our Ventas OI platform and initiatives. We continue to advance our Ventas Operational Insights platform, which was formally launched in 2022. This platform is designed to drive outperformance in this multi-year occupancy growth opportunity and is the cornerstone of part one of our strategy, which is to drive organic growth in our SHOP portfolio. This platform enables us to combine our best-in-class analytics with our operating expertise to drive thoughtful conversations and actionable insights with the operators to quickly make informed decisions on critical areas of the business. The increased availability of real-time data through systems and reporting automation has allowed our operating partners to benefit from key insights across a wide variety of initiatives. Our platform has enabled deep analysis into sales and price optimization, market positioning, targeted NOI-generating CapEx, and digital marketing, to name a few. I'll cover some proof points on how we have driven occupancy and NOI with Ventas OI. I'll start with NOI-generating CapEx. In assessing which communities receive refreshed capital investments, we analyze the community's position in the market and prioritize those where investment would most improve occupancy and rate relative to the competitive set. We further analyze overall market characteristics, including forward-looking net demand, home values, net worth, affordability, among other data points to support our position that capital would drive robust NOI growth and generate outsized returns. We have completed 215 projects since the start of this program in late 2022, of which 133 are at least six months post-project completion. This group has grown occupancy by over 530 basis points and outperformed their respective markets by 350 basis points of growth. RevPOR has also grown 6.5%, demonstrating the effectiveness of this Redevelopment program. Next, price volume optimization. We continue to collaborate with operators on a monthly basis, monitoring street rate pricing on nearly all units in our U.S. SHOP portfolio relative to our proprietary market data to ensure pricing is set to optimize move-ins. Our automated monthly rent roll consolidation process enables us to efficiently analyze over 8 million rows of historical street rate pricing data to better understand market positioning and proactively identify price opportunities. We've executed this process and successfully optimized price and volume, resulting in improved sales momentum through the second quarter across several operators, including Sunrise, Atria Holiday, and Priority Life Care. These operators have improved their move-in performance by 25%. Next, digital marketing. We've also executed digital marketing initiatives focused on driving higher move-ins. Improving the attractiveness of the website to Google Search, for instance, and user experience improvements have allowed potential residents and families to easily gather information to learn about the living, service, and care options available in our communities. Our focus on digital marketing has produced double-digit improvement in move-ins derived from website referrals. Summarizing Ventas OI, the tools we have created for our platform have enabled us to perform and continue delivering growth. As part of our OI engagements, over 1,000 of which we've completed since I started, we are proactively sharing insights, data, and benchmarks with our operating partners to align on performance expectations. Moving on to investments, where we are executing on part two of our strategy, which is to capture value-creating external growth focused on senior housing. We are in a unique period of time, the best I've seen in my career, where we have the combination of relatively high yield and high growth investment opportunities in senior housing, leading to very attractive unlevered IRRs. The sector is supported by tremendous demographic tailwinds. In the second quarter, we continued our strong run of executing on attractive external growth opportunities. We closed approximately $300 million of value-creating investments in 12 senior housing communities, 10 of which are with existing Ventas operator relationships, bringing the year-to-date volume up to $350 million at a blended going-in yield greater than 8%. In addition to the accretive going-in yield, these investments are positioned squarely within our right market, right asset, right operator framework, and now is the right time to invest in senior housing, as this favorable positioning, amplified by the unprecedented supply-demand backdrop, will drive continued NOI growth, resulting in unlevered IRRs in the low to mid-teens. We also continue to invest at an extremely attractive basis below replacement cost, with an average per unit purchase price of $250,000. Looking forward, our pipeline remains robust, filled with actionable opportunities with both existing and new operator relationships, with a profile similar to the deals already closed in 2024. Specifically, we have line of sight to an incremental $400 million of senior housing investments, bringing the total 2024 senior housing investment volume to $750 million. Additionally, we are deeply engaged in executing this high priority of expanding our SHOP portfolio. We continue to underwrite a large and growing pipeline of attractive near-term opportunities and are confident in our ability to continue creating value via additional external growth going forward. Now I'll hand over to Bob. Thank you, Justin. I'll start with our second quarter performance, provide an update on our leverage and liquidity, and conclude with our updated and improved guidance. I'm pleased to report that Ventas delivered strong second quarter results, led by SHOP and with contributions across the property portfolio. In our outpatient medical and research segment, or OMR, we generated over 3% same-store cash NOI growth in the quarter, with strong margins and stable occupancy. In our outpatient medical portfolio, Pete and team continued to build leasing momentum, executing over 800,000 sq ft of new and renewal deals in the quarter, which translated to 30 basis points of sequential occupancy gains. Further, the Equitized Loan Portfolio outpatient medical assets have made significant progress, increasing occupancy 450 basis points year-over-year to 81.5% in the second quarter, leveraging the Lillibridge operating platform and playbook to drive growth. Meanwhile, our university-based research portfolio increased same-store cash NOI by 5.5% in the second quarter, with 160 basis points of occupancy growth across the same-store portfolio. Our new leasing pipeline is attractive at 1.3 million sq ft, with over half already executed. For the enterprise in the second quarter, we reported net income attributable to common stockholders of $0.05 per share. Our Q2 normalized FFO per share of $0.80 represents a 7% increase year-over-year. Underpinning this result was year-over-year SHOP same-store growth of 15% and total company same-store growth of nearly 8%. We're seeing the benefit of the execution of our strategy, with a 50 basis points improvement in our net debt to EBITDA metrics so far this year. Organic SHOP growth and equity-funded new investments in senior housing are driving the improvement. The multi-year growth expected in senior housing and the robust investment pipeline are expected to continue to improve our leverage ratio going forward. So far this year, we've closed $350 million of new investments and have raised $500 million in equity. We have included in our updating guidance another $400 million in equity-funded investments focused on senior housing that are expected to close this year. Year-to-date, we completed $234 million in asset sales. Our liquidity at the end of the second quarter was strong at $3.3 billion, including over $550 million of cash on hand and with limited remaining debt maturities in 2024. I'll close with our updated and improved 2024 guidance. We raised our outlook for net income attributable to common stockholders to now range from $0.07-$0.13 per diluted share. We increased the midpoint of our full-year normalized FFO guidance to $3.15 per share from the previous midpoint at $3.14 per share. Our improved full-year midpoint is driven by a $0.025 combined improvement from SHOP organic and inorganic growth, partially offset by a $0.015 non-cash impact from potential Kindred lease resolution in 2024. We've also raised our same-store cash NOI year-over-year growth midpoint expectations for each of our segments. Total company same-store cash NOI is now expected to grow 7.25% year-over-year, an increase of 25 basis points from our prior guidance, and 100 basis points higher than our original guidance back in February. For additional 2024 guidance assumptions, please see our Q2 supplemental and earnings presentation deck posted to our website. To close, we are pleased with the results for the first half of the year, and we're committed to continued value creation in the second half and beyond. With that, I'll turn the call back to the operator. At this time, I would like to remind everyone in order to ask a question, press Star and the number one on your telephone keypad. Your first question comes from the line of Nick Joseph of Citi. Your line is open. Thank you. I just want to hopefully get a little more color on the potential Kindred resolution. As you think about resetting those rents, how do you think about rent coverage and the opportunity for growth there? And then just in terms of the timing, when would you expect kind of a final resolution? And is it going to be for all of the facilities, or could some of them come back to you? Thanks. Good morning, Nick. Good to hear from you. The answer to your questions are that we are in advanced discussions. We believe we're close on a transaction that applies to the 23 LTACs, whose maturity is April 30, 2025. And obviously, we're working for multiple goals, which is to improve Ventas Enterprise value, to get the most NOI from those properties that we can, and also to strengthen the master lease and to support Kindred's future success. So those are all factors in how we're thinking about it. Thank you. Then maybe just pivoting to the acquisition pipeline. Sounds like it's starting to grow there. So just curious kind of what you're seeing are these lease-up opportunities and a more stabilized kind of just color broadly on the opportunity set that you're looking at. Justin? Sure. So we are seeing a number of different opportunities. Where we're leaning in is when the pipeline meets our investment criteria, and we're very focused on the market asset operator framework. We're looking for markets that have strong supply-demand fundamentals and support strong net absorption and affordability. We do like applying the Ventas OI platform. We're also underwriting the strong track record in the communities and looking for generally well-invested communities as well. We're primarily expanding with existing operator relationships, but we have had the opportunity to add some new relationships as well. We're looking for campuses that include independent living, assisted living, and memory care, rental campuses. We're seeing those in the pipeline. The pipeline's been growing throughout the year, and we were actively engaged in it, and we like our opportunity to continue to grow. Thank you very much. Thank you. Your next question comes from the line of Michael Carroll with RBC Capital Markets. Your line is open. Yep, thanks. I wanted to touch on the Kindred update real quick. I know, Debbie, you probably can't talk about too much directly related to this discussion, but in general, why would Ventas record about $0.015 non-cash charge in 2024? I mean, is there a cash payment that's expected that needs to be amortized this year? I guess what's some of the reasons that would drive that? Yeah. Yeah, it's all non-cash. I mean, it's a pretty simple, but it's a GAAP-related, somewhat counterintuitive rule. Basically, if you have a lease with a tenant and it gets extended, you basically sum up the rent over the years, and you divide by the period left, and that can pull forward an impact. And that's really all it is. And that happens from the time you sign the deal. Yeah. So it happens immediately. So it's just a GAAP reflection of the expectations on cash rent that we gave you. Okay. No, that makes a lot of sense. Thanks. And then just real quick on the SHOP guidance, I know that the RevPOR target is 5%, and you're tracking a little behind that in the first half of the year. I guess, are you able to push street rates higher, and is that why you think you can generate slightly better SHOP RevPOR growth in the second half of the year, kind of accelerating that growth compared to the first half of the year? Well, so first of all, on the guidance, it's occupancy-led. We've obviously raised our occupancy expectation, and we've raised our NOI expectation as well. We did not change the other metrics. RevPOR, in this environment where you have a lot of occupancy growth, mix can be more impactful just due to the sheer volume of occupancy growth that we've had. In the second quarter, there's a couple of things impacting RevPOR. We had mix, where we had very strong occupancy growth in our mid-price point products, so it just has an impact on the weighted average. And then there's a year-over-year comp that's affecting it because of the very strong rent increases we had in certain operators in the first half of last year. And as we move forward, we would expect that there's better comps in the second half of the year. We have a large part of the key selling season still ahead of us, a lot of potential volume as part of that. So mix will remain in focus. And so we thought leaving the ~5 was appropriate, given those facts, and look forward to growing NOI. Okay, great. Thank you. Your next question comes from the line of Joshua Dennerlein with Bank of America. Your line is open. Yeah, morning, everyone. I just wanted to ask about the acquisitions that you're including in guide now. I guess historically, you only included what was signed up until that point. I guess, why change your strategy here? And then if you could maybe just let us know how much of a benefit that additional acquisitions is for 2024. I guess I'm just trying to get a sense of the timing and whatnot. Hi, Josh. Thanks for your question. We're excited about the opportunities to invest in senior housing, and Bob will answer your impact question. You're right to say that that started this year in February, including deals that we hadn't closed was unusual for us, but we feel very confident given the pipeline and the team that we can execute on those deals. We started the year at $350 million in our guidance, done, closed. We have now $400 million in the forecast to close this year. So doing what we said, the contribution from those is in the $0.025 increased guidance on FFO from SHOP organic and inorganic. I would say the split of those is roughly equal, if not tipped a bit towards the new investment. So they are accretive from the get-go, equity-funded, and very consistent with the strategy we laid out. Okay. And then I guess maybe just the acquisitions themselves, what kind of cap rates are you seeing? And is it all senior housing in the RIDEA structure, or is there a kind of mix of other things in there? Josh, our capital allocation priority is focused on senior housing SHOP investments. And Justin will touch on there's a series of both qualitative, data-driven characteristics we're looking for, as well as financial. Yep, absolutely. So starting, I'll just kind of highlight, for example, some metrics around the deal activity that's already closed. In those deals, we underwrote net absorption upside over a three-year period in the markets of around 1,000 basis points, very strong population growth, near zero new supply deliveries expected in the next few years within the markets, very attractive investment basis at $250,000 per unit, well below replacement costs. They're about 10 years old on average. There are 124 units offering independent living, assisted living, and memory care. Good margins going in, but a lot of upside, going in margin around 28%, a lot of upside as we grow occupancy and rate over time. And aligned management contracts that are rewarding growth both for revenue and NOI outcomes to the manager. And then good operators, most of which are existing relationships, but we're also working with some new operators. And the going-in yields have been really above 8% thus far. We were targeting 7%-8% overall. The unlevered IRRs, low to mid-teens. So that's the characteristics we've seen and continue to see in this next tranche with very similar characteristics in this $400 million that we have lined up on. Appreciate that. Thank you. Thanks. Your next question comes from the line of Ronald Kamdem with Morgan Stanley. Your line is open. Hey, just two quick ones for me. Just staying on acquisitions. Obviously, you've seen a pickup this year, which is why you increased the guidance. But trying to figure out, is there sort of volume and opportunity that you could get to $1 billion on an annual run rate basis is sort of question number one. And number two is just, can you remind us the sellers? Are these all sort of funds coming due? Just the nature of the sellers here. Thanks. Well, we're certainly interested in ramping up the activity. We haven't put any targets out there in terms of volume, but more is the priority for sure, given the fundamentals and the returns that we're seeing in the investments. The types of sellers, there's certainly sellers that have debt maturities, and they're having to make a decision. Even though fundamentals are good, do they put more capital in, or do they sell the asset and move on to other priorities? We've been able to take advantage of some of those opportunities. There's other sellers that just, quite frankly, are dealing with fund maturities, and they're just active sellers. And then there's others that are selling senior housing a little bit reluctantly because they have other asset classes that they're dealing with and debt and other aspects of their fund. And so we've had a wide variety. And what's been consistent, though, is good fundamentals. We're targeting markets that have really great upside, and then the returns have been excellent. Great. That's it for me. Thank you. Thank you. Your next question comes from the line of Jim Kammert with Evercore ISI. Your line is open. Thank you. Good morning. Certainly appreciate, Debbie. Good morning. Certainly appreciate Debbie's comment regarding the elastic need-based profile of this industry. I don't think many would disagree, but you also hear, at least I have, that some of the arguments that staying at home is still cheaper than senior care. How do you maybe, within your OI or marketing initiatives, one, I guess, do you agree with that statement? And two, how do you educate the consumer here about the trade-offs? Great question. One of the things we care a lot about is that we and the operators are offering residents and their families a really important service, and it's really valuable. Anyone who's gone through it in their families really understands that. Penetration is back at or above that is utilization by the population is at or above where it was pre-COVID. That's trending in the right direction. The numbers are gigantic, so that dwarfs the impact even of penetration rate. Importantly, there are a lot of studies that show not only are seniors more secure and enjoy better lives when they move to senior housing from their homes, that it's safer, it's more secure, it's more social, but also it is more expensive to stay in your home. That the cost of replacing all those services, even if you can do it, which in many cases, if you live alone in a suburban home, you can't even get those services on a regular basis, that it is more economical to move to senior housing. You don't have lawn mowing and maintenance and taxes and insurance, meals, etc. So it really is a replacement for what you're spending anyway or even better if you're requiring in-home health services. Great. I need to do more reading. Thank you. Then a quick one to pick on, Bob. The good news is here, I think your exchangeable notes are in the money. Could you remind me, given today's share price, could you just remind me how is the accounting for that? I know you have the option to settle the conversion value in cash, but how will you account for that in potential dilution if, presuming the stock stays above the conversion price? Thanks. Yeah, Jim, it is a high-quality situation for sure. The conversion price is just below $55. Those get accounted for in the fully diluted shares. It's a really modest impact at this stage and effectively embedded in the guidance. But I put this in the high-quality problem camp. But de minimis, as we think about the numbers this year, as it stands now. Right. Thank you. Yep. Your next question comes from the line of Juan Sanabria with BMO. Your line is open. Hi, good morning. Just a bigger picture strategic question for Debbie, I guess. Obviously, rightfully so, bullish on the acquisition opportunity in seniors' housing, and you have a successful third-party management business. Is there an opportunity to kind of accelerate your investments in seniors' housing using some of the capital partners you have or maybe new ones to do stuff in a joint venture or fund format? Hi, Juan. We do have a successful Ventas Investment Management business, including an open-end fund. It is a great advantage to have that capital available to us. At the present time, because of the REIT's kind of footprint and experience and platform in senior housing, we are focused on capturing those opportunities really at the enterprise level. But we have, in selective appropriate circumstances, done a few senior housing assets with our partners. So most should be to the balance sheet, and maybe ones that have a little bit less growth could be appropriate for a more core-like investor base. Thanks. And then just with regards to the SHOP business and kind of guidance, how should we think about occupancy growth going forward? You've noticed some seasonality on the RevPOR side. Is there anything equivalent on the occupancy side or any impact from changes in the pool in the second half of the year? Yeah, good question on the timing. So, Bob, do you want to take that? Sure. There's no pool impact, Juan. That's been very consistent since February. Depending on whether you're looking year-over-year or sequentially, there clearly is seasonality in senior housing. Again, the key selling season is Q3, running into Q3. Typically, through September, it could bleed into October. Then typically, you'll have some moderation in the fourth on a sequential basis. For us, what we're seeing again is just this robust year-over-year growth that's driving the improved midpoint. But if you're modeling sequentially, you should factor that in. Your next question comes from the line of Omotayo Okusanya with Deutsche Bank. Your line is open. Hi, yes. Good morning, everyone. Just wanted to go back to Kindred a little bit. So the guidance seems like you were calling for a 25%-30% rent reduction. I do recall commentary that the business itself is improving fundamentally. So just curious, why give up that upside by just having kind of an immediate kind of rent reduction? Good morning, Omotayo. Thanks for the question. Look, we want to give our shareholders some kind of broad directional guidance of our expectations at this time on what the rent levels will be. Obviously, we have a lot of tools in our toolbox that we've used in connection with leases over the years, and that would be equally true here. Remember our goals. We do want to strengthen the master lease. We do want to capture as much NOI as we can. And we want Kindred to be successful. So we put all those efforts in the basket as we think about structuring and making decisions about a lease extension. Okay. That's helpful. And if you could, a second question. Some of your managerial contracts in our SHOP, Sunrise that are a little bit more tied to the top line. Curious that when those managerial contracts themselves expire, so do you, or the idea of being able to move those contracts more towards contracts tied more towards the bottom line such that Ventas and the third-party managers are a little bit better aligned in terms of bottom-line performing? Yeah. Operational alignment is one of Justin's favorite topics, so. It is, for sure. So Sunrise, that contract, we actually updated a few years ago. It's well aligned. It's really driven through revenue and NOI performance. The fees are driven through great alignment. I'm very happy with that agreement. We have windows in the upcoming few years in the legacy Atria portfolio. That'll also be a good opportunity just to improve upon the alignment and that relationship. Everything else in the SHOP portfolio is on our newer agreements. But one thing I want to say is that Atria, given a lot of the transition they've gone through, there's not a question in my mind in terms of the level of focus they have on operations, particularly on ours. There's been a number of actions that have led to a much tighter footprint, some that we've taken, some that they've taken, and other owners. So the level of focus that we've seen with them under the new leadership and the contributions they've made to the occupancy across the board that I mentioned, and especially in independent living, where we've had 340 basis points of occupancy growth year-over-year, we have their full attention, and they have our full support. So we'll look forward to ongoing good performance with them. That's helpful. Thank you. Thanks. Your next question comes from the line of Austin Wurschmidt with KeyBanc Capital Markets. Your line is open. Great. Thanks. Just going back to the SHOP guidance, same-store NOI growth for that segment implies some deceleration in the back half of the year. And I guess just given the operating leverage, low total portfolio occupancy, and just relative to the backdrop that you outlined in your prepared remarks, what are sort of the limiting factors in the near term impacting you from sustaining that mid-teens growth that you've achieved year to date? So one of the things that's happened is we're off to a really strong start. So we've actually raised guidance twice now, and that's due to the outperformance we've had early in the year. As you get into later in the year, Bob mentioned some of the seasonality. You can see in occupancy. You can also see some seasonality in expenses. We've assumed kind of regular inflation in the expenses. That's what's driving that 2.5% OpEx core growth metric that you see as part of the guidance page. There's utilities and other seasonal impacts you can have in the second half. So you might accuse us of being a little conservative on the expense side, but we're just anticipating kind of normal seasonality. I like your words, mid-teens, because the first half, we grew 15%. Our guidance for the year is 14.5%. So pretty darn consistent, I would say. Yeah, that's fair. How does Canada affect kind of the same-store NOI growth level going forward, given you are more highly occupied in that region? And what's sort of your thoughts on the remaining upside for the region? Thank you. Well, so we have a page, and if you have our earnings deck, page 10, well, articulates the performance of Canada. Canada grew 12% in the second quarter year-over-year. That was driven by really good rate growth, which was also mix-driven. We had a higher price point product that outperformed Canada and drove the RevPOR up. And their occupancy is still growing, 170 basis points. Canada is 96% occupied now, and they keep growing occupancy. And so it's just a good performer, and we wouldn't expect it to continue to be a double-digit performer going forward, but it's been a good year in Canada. Thanks for the time. Thank you, Austin. Your next question comes from the line of Vikram Malhotra with Mizuho. Your line is open. Good morning. The question, I just wanted maybe first to get some more color. You mentioned the comps or maybe even conservatism on OpExPOR, on the expense side. But you're sort of going from the 1s to the 2.5 guidance you gave. So I'm wondering, is there any specific region or maybe it's just labor costs you're anticipating that would drive that up so much in two quarters? Good. Bob's going to take that. Yeah, Vikram, I think the key thing to note, as you'll recall, is the contract labor or agency labor profile last year, which, as we were staffing up, really came down first half to second half. And so on a year-over-year basis in the first half, on OpExPOR, that's a good guy. You don't have that same dynamic in the back half of the year. So that's a really important part of the answer to your question. Okay. That's helpful. And then you mentioned the mix shift on RevPOR and obviously with Sunrise. But I'm wondering if you just segment the SHOP portfolio. I'm sure there are markets or segments where you have 90% occupancy. What's the distribution in terms of where you're seeing the most pricing power versus maybe what's lagging? Yeah. So we've seen really broad-based growth. We've had better occupancy growth in our products that are closer to a mid or mid-high price point. We've seen better growth in the west, which is a relatively lower price point than the east. There's been better growth in lower acuity assisted living and independent living than the higher acuity product, but very strong occupancy growth. And so the mix is really just a combination of reasons why our lower price point product is outperforming. It also happens to be the recipient of a lot of the NOI generating CapEx. And so within that group, we had over 500 basis points of occupancy growth, but also had 6.5% of RevPOR growth. So within it, it's a strong contributor to both occupancy and to rate. But as it's a big part of the growth story and the growth profile, it brings the weighted average down from a RevPOR standpoint. So I think that the reality is, like I said earlier, the volume is so high, mix becomes a bigger factor in the metrics. But key takeaway is 8% revenue growth and 14.5% NOI and really strong occupancy performance. Makes sense. And then just a last one. Could you just give us an update on the Brookdale leases that come due next year, just what the metrics are in terms of coverage or just latest thoughts on what you might do there? Hi. So it's Justin again. So Brookdale, I'll start here. So it's a well-covered lease. You'll probably notice that if you look at the supplemental, that they've moved up a row. And so good coverage, good performer. We've had growth in our portfolio. They're in markets that we project around 1,000 basis points of net absorption upside. So really strong growth profile opportunities ahead of it. So really, if this portfolio were to make its way to our SHOP portfolio, it would be very happy. So we're really not concerned about an extension. Brookdale has the opportunity to extend the lease. And if they do that, they have to decide by the end of November. It's an all-or-nothing extension. If they do extend, then the lease will escalate in 2026 at least 3% and as high as 10% based on a fair market value review. Considering the performance and the coverage that I've mentioned and the upside opportunity of the markets, we would expect that it could be on the better end of that, but we'll have to wait and see. But we love the optionality we have here. And kind of worst case, Brookdale extends and you have a well-covered lease. Thank you. Thank you. Your next question comes from the line of Richard Anderson with Wedbush Securities. Your line is open. Hey, thanks. Good morning and nice quarter. So question I asked on the Welltower call and I got fully shut down. I'm going to ask you the same question to see what you say. So as occupancy gets higher, so does it become increasingly more difficult to grow it from there? So my theory is at 75% occupancy, you have the full range of unit options to offer people. But if you're at 85%, you have fewer options. So it's just harder to fill that Swiss cheese effect, if I can use that. Do you agree with that, that when you get to sort of post-pandemic occupancy and then start targeting that 92% peak in your history, that that process will maybe logically take longer to achieve? I'm going to let Mr. zero lost revenue days take that. Go ahead. So Debbie's referring to my passion project, which is encouraging our operators and communities to get to where they're achieving zero loss revenue days. We benchmark this and we report on it every month. And commonly known as 100% occupancy. Exactly. But a truly 100%. So one thing I love about the senior housing business is that you can truly be 100%. We do have communities already in our portfolio that literally are turning units. They might have four or five out. They're turning all of them with new move-ins within the same month and having zero frictional vacancy. So my point of view, Rich, is it's actually easier the higher occupied you get. And the reason for that is because you've established yourself as a strong market participant or market leader. Usually, there's an opportunity to fill the last unit or two with just extra effort. I'm not going to say it's easy, but it's much easier to fill a unit or two than to look upward at 20 units. So I like the opportunity in our communities that are over 90% to push all the way to 100% or as close as they can get to it. And the other thing that comes with that, obviously, is scarcity value and price goes with it. So that's the big opportunity. So I don't think I agree with you. Okay. Spoiled again. My next question, when you talk about the redevelopment program in SHOP and you mentioned some of the occupancy lift that you got from that, is that factoring in at all to the same store optics or results that you got in the quarter? In other words, the 380 basis point improvement in the U.S., is there any amount of that that is benefiting from the CapEx program where you get the revenue lift and the occupancy lift, but you're still capitalizing the costs? Yeah. Good question. I mean, one thing that's good about the way we're showing our SHOP results is that the vast majority of our communities are in our same-store results. And so most of those projects stay in during the redevelopment process. And we take the downs to the extent there are any during that time, and then they remain in now. That's true for almost all, right, Justin? Yep. That's right. So when we're reporting on 133 seasoned projects, those are all same-store. And they never came out. They were in during the construction period. And so there's a little disruption we've absorbed already, and now we're experiencing the benefits of the upside opportunity from the investment. There's some projects that are a bigger redev that do come out. Those are more intrusive, and there's a lot of criteria around defining which projects qualify for that to be in the non-same-store pool. But these that we're reporting on are definitely in the pool. So when you think about the redev's activity, is it a wash then? The stuff that's sort of underwhelming occupancy and the stuff that's boosting occupancy when you net those two, the 380 in the US would probably still be pretty close to 380? I think it's a net gainer, Rich. There is some disruption, but honestly, you can sell the redev in many cases to the residents. You can show the plans. They can see the opportunity. And so you see in advance of the completion, you see occupancy and price lift. So though there is some disruption, that's definitely a positive. And you're trying to get them done so that you're meeting this intensive demand that's present at this time, so. Okay. Got it. Thanks very much. Thank you, Rich. Thank you. Your next question comes from the line of Michael Stryer with Green Street. Your line is open. Thanks for fitting me in. Good morning. Maybe one on the transaction market. What's a typical cap rate spread that you're seeing on assisted living deals versus independent living? So really, everything we've bought has had a combination of services. I really wouldn't be able to comment on a freestanding independent living cap rate, for instance, versus a freestanding assisted living. Most of what we're buying has both independent living and assisted living on the campus along with memory care services. I know historically there's been a spread because of the longer length of stay to independent living, a little less volatility. There's been a 50 basis points spread in the past. I don't know that I can really confirm that that exists today just based on the activity that we have in our pipeline. Okay. That makes sense. And then it looks like a couple of research assets have entered the redev pool this quarter. What sort of return are you targeting on those projects? And should we expect additional research assets to enter redevelopment in the coming quarters? Thanks for the question. This is Pete. I'm happy to answer. We don't expect additional assets to go into redevelopment in the foreseeable future. The return aspects will be substantial. These buildings are in really good markets. They're well located in these markets. They're quality buildings, and they just need a bit of upgrade to compete in the marketplace itself. And one good example is 3711 Market in Philadelphia. It's a great market for us, performing really well. It's a healthy life sciences market. The building has about 50% office tenants. Some of those office tenants have left. We have an opportunity to turn it into research space, which will dramatically increase the rental rate that we can achieve in that building. And we're looking forward to really strong rate growth and rent growth in the next year or so from that asset. Got it. Thank you. Thanks. Your next question comes from the line of John Kilichowski with Wells Fargo. Your line is open. All right. Thank you. So just to circle back to OpExPOR, I understand you get sort of the tougher comps on agency labor, but it sounds like we're hearing reports from other operators that labor expenses have started to soften recently, which matches the job reports we saw this morning. And I'm just curious if you're keeping your guide here as expressing a little bit of conservatism as there could be greater availability of labor in the second half of the year if unemployment ticks up. Yeah. I mean, there could be some conservatism in that metric. We have tildes around everything. We were very explicit around two metrics, one being occupancy, the other being NOI. The others, RevPOR has some mixed considerations, and then OpExPOR, and they both have year-over-year considerations. And the OpExPOR, we have some considerations as well as just an expectation of normal inflation. So we'll just have to see how it plays out. But the labor market's been very favorable. Yeah. You're right. You're right. Today's report may influence that, and we'll continue to monitor and make sure we have a healthy spread between the two key metrics to drive revenue and NOI growth. Understood. I mean, would you be able to comment at all what you've seen quarter to date from labor? Is it starting to shift in your favor, or is it same old, same old as it was in 2Q? Again, we should distinguish between year-over-year and sequential. I do think that what Bob said is important in the year-over-year comparisons. And then as we look forward, again, the labor market is pretty dynamic right now. And so we're assuming kind of steady as she goes. But as you point out, especially based on today's report, we may see a little improvement in that going forward, but it's too early to say. Got it. And then maybe just jumping to the dispositions in the quarter. It looks like really strong execution there, but is there any color you could give on what drove the low cap rates on those assets? Are these non-core and maybe lower quality where there's a pro forma upside for the buyer, or are these high-quality assets and they're just here to fund acquisitions because we're strategically rotating more in a SHOP? Yeah. I'll take that one. So just some numbers. We've sold about $230-odd million. We've got a full-year guide of $300. So the majority is cash in the bank. It's a very low cap rate, kind of in the 2-3 range, which is great. And that's led by senior housing. And your other question was, is this capital recycling, upgrading the portfolio, exiting non-strategic markets? Yes. And using the data analytics that we have to identify those markets that may not have that opportunity to grow like the rest of the portfolio, the buyer may see that opportunity and therein lies the transaction. And so we're pleased with that growth rate. Clearly, that's another source of capital for us while upgrading the portfolio. So we're happy with the result. Yeah. And then senior housing with the data analytics, we're curating the portfolio on the buy and the sell side. Same. Yeah. Same approach. Yep. Got it. Thank you. Thank you. Your next question comes from the line of Wes Golladay with Baird. Your line is open. Hey. Good morning, everyone. I just want to get your thoughts on deleveraging, essentially over-equitizing deals ahead of a strong cycle. Are you looking to create investment capacity for a much bigger pipeline? Are there any macro concerns? Are you just waiting for the cost of debt to fall? Just get your thoughts on that. Yeah. I mean, our whole strategy is designed to increase our enterprise growth rate, expand our SHOP footprint, and because of the way we are funding the assets, continue to improve our balance sheet. And you saw that year to date. Yeah. The playbook has been, first and foremost, the organic growth in SHOP is going to be the key driver of leverage improvement. And if you just look at numbers on that, $130 million or so organic growth this year, that by itself is 40 basis points of leverage improvement, but that tidbit there. Then in addition to that, equity-funded investments is the gravy on top. Indeed, we've been able to do both this year. We're 50 basis points lower so far from the start of this year to now. That same playbook is going to continue to run out. It provides financial flexibility and opportunity to go on offense. That's why we like the five to six times range, and we'll continue to execute on the strategy to get there. Okay. Then turn into the senior housing development. Is there any point where you'd want to start any developments, deliver countercyclical in a few years from now? Any markets that they may be the first to get supply, and then maybe a look into Canada, obviously a little bit more stabilized market, would they start to get supply at any point? I mean, right now, our overarching capital allocation priority is to invest in cash-flowing senior housing assets that meet the characteristics that Justin outlined and provide near-term accretion, even when equity-funded, and immediate near-term growth that enhances our enterprise value. That could change over time, but right now, we're very, very focused in that area. Okay. Thanks for the time. Thank you. Your next question comes from the line of Nikita Bely with J.P. Morgan. Your line is open. Hey. Good morning, guys. Can you talk a little bit about your development program, specifically in your outpatient medical and research, the progress that you guys have made and so far conversations you're having on the remaining leasing you still have to do on that? Yes. We can talk about those, and there are quite a few that are well underway. And Pete, can you take that? Sure. Sure. So for outpatient medical, we have really a fairly minor list of assets that are under redevelopment. We have sub-redevelopments, which are development. Okay. So let me just finish what I was going to say. So redevelopment, many times we're looking to do is upgrade the buildings, create spec suites, and so forth, and those have been very good returns for us. On medical office buildings, we have in outpatient medical, we have one asset with Sutter that is 100% leased. It just came online or complete, and we're really excited about that asset. We talked a bit about development and life sciences redevelopment, but on the development assets themselves, you have to think about it in really two different tranches. We have a set of assets that are online, they're operating, and they're largely full. Examples would be Pitt 1 and Pitt 2, where they're 100% occupied. You've got our asset in Phoenix with Arizona State University, which is attracted National Institutes of Health as a major tenant. It's under construction, the tenant improvements. In Philadelphia, you've got One uCity, which is 93%, and Drexel University, which is 100%. We have another tranche of assets that are under development, still under construction. They're optimistic about one associated with UC Davis, two that are with Atrium Health in Charlotte, and 4 MLK. And they're under construction. They have good pre-leasing, 60%, 70% pre-leasing, and we're optimistic about those assets going forward. Your next question will come from the line of Nick Yulico with Scotiabank. Your line is open. Thanks. Just a couple of quick ones. On July, I want to see if we can get the SHOP same-store occupancy to get a feel how it's improved sequentially. What I can tell you is that I mentioned in the prepared remarks that the key selling season is off to a strong start, including July. And that's what we have for now. I mean, any reason not to give it? I mean, multifamily self-storage gives it. Why not? Senior housing? Well, they operate their own portfolios for one, but I think what Justin said is a good data point for now. Okay. And then in terms of the investments, can you just give us a feel? I know you quote the initial yield, but I think it's a year-one yield. How much NOI growth is embedded in that assumption to get to a stabilized yield? Just so we're modeling this correctly. Yeah. Say that again, Nick. I think I. Yeah. I'm just trying to understand in terms of the initial yield that you're quoting for senior housing, how much NOI growth is embedded in the first year to get to that initial yield? Just want to make sure we're modeling this correctly. Thanks. Got it. I mean, it gets into our underwriting, obviously. We look at the last year's, we look at pre-COVID numbers, we look at trailing three, and where it is kind of at the time of acquisition, and we model what our expectations are going forward. Given the fundamentals, you would expect that there would be some growth from, say, the trailing three or the in-place in that number, typically a modest amount. And in some cases, if occupancy is 100%, we may actually diminish it a little bit. So it really depends on the asset. And most of them will have, as we talked about, given the template for the investments, 7%-8% yields going in with significant near-term growth. You'll see some elevation from the at-closing NOI number, but it's modest, but it's ramping. Okay. Thanks. Yep. There are no further questions at this time. I will turn it back over to Debra A. Cafaro, Chairman and CEO, for closing remarks. Bailey, thank you so much. And I want to thank all the participants on today's call for your interest and support of Ventas. We hope you have a great rest of the summer, and we look forward to seeing you in person soon. Thank you. This does conclude today's conference call. You may now disconnect.