With Senior Housing Now Making Up Half of NOI, Ventas Targets More ‘Aggressive Growth’

Senior housing now makes up about half of net operating income at Ventas (NYSE: VTR), and the company is building on its momentum to reap demand in the next decade.

The Chicago-based real estate investment trust (REIT) has since the middle of 2024 completed $4.1 billion in senior housing investments. Thanks to those and other acquisitions, Ventas has increased the size of its senior housing operating portfolio (SHOP) by 20% in the last few years.

Ventas leaders have previously outlined how a bigger SHOP segment gives the company more ability to support its operating partners’ pricing, sales, expense control and capital expenditures. And looking ahead, the REIT is planning more “ambitious” growth in line with recent years, according to CEO Debra Cafaro.

“We’re going to continue to try to rapidly expand that business from internal and external investment activity,” Cafaro said during the REIT’s third-quarter earnings call Thursday.

The company’s acquisition pipeline is accelerating, with 2025 expected to be the fourth consecutive year of double-digit SHOP NOI growth, according to Ventas Chief Investment Officer Justin Hutchens, who leads the REIT’s senior housing portfolio with a dual role as executive vice president.

“We’ve seen the opportunity to buy assets that are delivering significant growth potential and that’s where we’re leaning in and we’re using the market, asset, operator framework to help determine where to focus,” said Hutchens.

In an analyst note from BMO Capital Markets, Managing Director Juan Sanabria highlighted Ventas’ “modest earnings beat” with the company’s SHOP segment reporting “solid but not spectacular results.”

“We expect the shares to react well with SHOP guidance assumptions largely maintained,” Sanabria wrote.

Ventas peer REIT Welltower earlier this week sold an 18 million square foot portfolio of outpatient medical real estate assets for $7.2 billion in multiple tranches through mid-2026. According to Cafaro, Ventas is “always evaluating different portfolio actions.

“Currently, our main focus is aggressively growing our private pay SHOP business,” she said during the earnings call.

Ventas stock rose $4.58 today to rest at $74.36, an increase of 6.56%. The company also reported normalized funds from operations (FFO) per share of $0.88 for the third quarter.

Ventas now has a portfolio of over 850 senior living properties.

‘Momentum in our pipeline’

Senior housing REITs have been on a buying spree in 2025 as the financial math for new development projects remains tough to pencil out. Heading into the end of the year, Ventas “has momentum in our pipeline,” Hutchens said. Cafaro noted that the company seeks to “aggressively” grow the company’s SHOP segment.

This year, Ventas has in 50 communities over 20 different transactions totaling about 6,200 units in 15 U.S. states. Ventas also this year established a SHOP relationship with U.K.-based operator CCG after converting 11 triple-net communities in the London area in the U.K. to SHOP and formed a relationship with the turnaround operator. But Hutchens said the company’s “first, second and third” priorities lie with investing in the U.S.-based communities despite the company’s holdings in Canada and the U.K.

“The U.S. is where all the action is,” he added.

Ventas can buy properties by as much as half below current replacement costs, Hutchens added.

Fueling the company’s expansion are positive operational results in its SHOP segment. SHOP occupancy rose 340 basis points in the third quarter of 2025 compared to the same period last year to an average occupancy of approximately 85%. Overall, the company’s senior housing occupancy improved to 89% as rent per occupied room increased 5% in the third quarter. Ventas reported a margin of 28%, an increase of 200 basis points and RevPOR growth of 4.7% and revenue growth of 8% in the third quarter.

“Once you start getting over 90%, you start to see a higher incremental margin closer to 70%,” Hutchens said.

But Hutchens noted that Ventas does not view 90% occupancy as stabilized in markets with net absorption opportunity. He added that occupancy gain opportunities lie in the conversions from Brookdale to other operators as some of those communities were lower occupied.

“We transition the lower-type communities from triple-net to SHOP and we have a long runway ahead of growth opportunity with tailwinds to support it and a platform designed to deliver on that,” Hutchens said.

While Hutchens would not predict 2026 performance indicators, he noted the company has opportunities to increase occupancy through in-house rate increases and pricing power on move-in rents, which reinforces momentum for revenue per occupied room (RevPOR). Dynamic pricing is also assisting in RevPOR growth in balancing rate activity across the company’s senior living portfolio.

Brookdale transitions, CapEx conversions, tech improvements

Other than growing its SHOP segment, Ventas also has its collective eye on improving the performance of its operating partners.

Ventas is transitioning 45 communities formerly managed by Brookdale Senior Living (NYSE: BKD) to five local market-focused operators as triple-net lease conversions proceed. As of the third quarter, Ventas has completed 27 of those transitions, with the remainder to change hands in 4Q25.

Operators taking over the portfolio segment include Discovery Senior Living, Grace Management, Priority Life Care, Senior Lifestyle and Sinceri Senior Living..

Ventas will deploy CapEx dollars for routine refreshes in the communities, including things like common area upgrades, new paint, updated furniture, fixtures and equipment, with a goal of minimizing disruptions at the communities from construction.

During Thursday’s call, Ventas leaders said every operator in the company’s portfolio runs end-to-end technology for things like safety monitoring, care and compliance, medication management, customer relationship management, food service and maintenance, with most of them being AI-enhanced now, Hutchens said.

The company’s “Ventas OI” data platform has allowed Ventas to pursue dynamic pricing efforts in popular markets while also managing CapEx projects and performance management.

Coming off a temporary blip in mortality-driven move-outs in the spring, Ventas maintained its full-year guidance of 270 basis points in occupancy gains and reported the best selling season in the last four years. The prime selling season often runs from spring to summer.

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