filings.toolsItem 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Unless otherwise indicated or except where the context otherwise requires, the terms “we,” “us,” “our,” “Company” and other similar terms in Item 2 of this Quarterly Report on Form 10-Q refer to Ventas, Inc. and its consolidated subsidiaries.
Cautionary Statements
Forward-Looking Statements
This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements include, among others, statements of expectations, beliefs, future plans and strategies, anticipated results from operations and developments and other matters that are not historical facts. Forward-looking statements include, among other things, statements regarding our and our officers’ intent, belief or expectation as identified by the use of phrases or words such as “assume,” “may,” “will,” “project,” “expect,” “believe,” “intend,” “anticipate,” “seek,” “target,” “forecast,” “plan,” “line-of-sight,” “outlook,” “potential,” “opportunity,” “estimate,” “could,” “would,” “should” and other comparable and derivative terms or the negatives thereof.
Forward-looking statements are based on management’s beliefs as well as on a number of assumptions concerning future events. You should not put undue reliance on these forward-looking statements, which are not a guarantee of performance and are subject to a number of uncertainties and other factors that could cause actual events or results to differ materially from those expressed or implied by the forward-looking statements. We do not undertake a duty to update these forward-looking statements, which speak only as of the date on which they are made. We urge you to carefully review the disclosures we make concerning risks and uncertainties that may affect our business and future financial performance, including those made below and in our filings with the Securities and Exchange Commission, such as in the sections titled “Cautionary Statements — Summary Risk Factors” and “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024, this Quarterly Report on Form 10-Q and our Current Reports on Form 8-K as we file them with the Securities and Exchange Commission.
Certain factors that could affect our future results and our ability to achieve our stated goals include, but are not limited to: (a) our exposure and the exposure of our managers, tenants and borrowers to complex and evolving governmental policy, laws and regulations, including relating to healthcare, data privacy, cybersecurity, artificial intelligence, international trade and environmental matters, the impact of such policies, laws and regulations on our and our managers’, tenants’ and borrowers’ business and the challenges and expense associated with complying with such policies, laws and regulations; (b) the impact of market, macroeconomic and general economic conditions on us, our managers, tenants and borrowers and in areas in which our properties are geographically concentrated, including changes in or elevated inflation, interest rates and exchange rates, labor market dynamics and rises in unemployment, tightening of lending standards and reduced availability of credit or capital, events that affect consumer confidence, and the actual and perceived state of the real estate markets and public and private capital markets; (c) our ability, and the ability of our managers, tenants and borrowers, to navigate the trends impacting our or their businesses and the industries in which we or they operate, including their ability to respond to the impact of the U.S. political environment on government funding and reimbursement programs, and the financial condition or business prospect of our managers, tenants and borrowers; (d) our ability to achieve the anticipated benefits and synergies from, and effectively integrate, our completed or anticipated acquisitions and investments; (e) our ability to identify and consummate future investments in healthcare assets and effectively manage our portfolio opportunities and our investments in co-investment vehicles, joint ventures and minority interests; (f) the potential for significant general and commercial claims, legal actions, investigations, regulatory proceedings and enforcement actions that could subject us or our managers, tenants or borrowers to increased operating costs, uninsured liabilities, including fines and other penalties, reputational harm or significant operational limitations, including the loss or suspension of or moratoriums on accreditations, licenses or certificates of need, suspension of or nonpayment for new admissions, denial of reimbursement, suspension, decertification or exclusion from federal, state or foreign healthcare programs or the closure of facilities or communities; (g) our reliance on third-party managers and tenants to operate or exert substantial control over properties they manage for, or lease from, us, which limits our control and influence over such properties, their operations and their performance; (h) our reliance
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and the reliance of our managers, tenants and borrowers on the financial, credit and capital markets and the risk that those markets may be disrupted or become constrained; (i) the risk of bankruptcy, inability to obtain benefits from governmental programs, insolvency or financial deterioration of our managers, tenants borrowers and other obligors which may, among other things, have an adverse impact on the ability of such parties to make payments or meet their other obligations to us; (j) our dependency on a limited number of managers and tenants for a significant portion of our revenues and operating income; (k) our exposure to various operational risks, liabilities and claims from our operating assets; (l) our exposure to particular risks due to our specific asset classes and operating markets, such as adverse changes affecting our specific asset classes and the healthcare real estate sector, the competitiveness or financial viability of hospitals on or near the campuses where our outpatient medical buildings are located, our relationships with universities, the level of expense and uncertainty of our research tenants, and the limitation of our uses of some properties we own that are subject to ground lease, air rights or other restrictive agreements; (m) our ownership of properties or operation of business outside of the U.S. that may subject us to different or greater risks than those associated with our domestic operations; (n) the risk that our management agreements or leases are not renewed or are renewed on less favorable terms, that our managers or tenants default under those agreements or that we are unable to replace managers or tenants on a timely basis or on favorable terms, if at all; (o) the risk that the borrowers under our loans or other investments default or that, to the extent we are able to foreclose or otherwise acquire the collateral securing our loans or other investments, we will be required to incur additional expense or indebtedness in connection therewith, that the assets will underperform expectations or that we may not be able to subsequently dispose of all or part of such assets on favorable terms; (p) risks related to the recognition of reserves, allowances, credit losses or impairment charges which are inherently uncertain and may increase or decrease in the future and may not represent or reflect the ultimate value of, or loss that we ultimately realize with respect to, the relevant assets; (q) the risk of exposure to unknown liabilities from our investments in properties or businesses; (r) the impact of merger, acquisition and investment activity in the healthcare industry or otherwise affecting our managers, tenants or borrowers; (s) risks related to development, redevelopment and construction projects, including costs associated with inflation, rising or elevated interest rates, labor conditions and supply chain pressures, and risks related to increased construction and development in markets in which our properties are located, including adverse effect on our future occupancy rates; (t) our current and future amount of outstanding indebtedness, and our ability to access capital and to incur additional debt which is subject to our compliance with covenants in instruments governing our and our subsidiaries’ existing indebtedness; (u) increases in our borrowing costs as a result of becoming more leveraged, including in connection with acquisitions or other investment activity and rising or elevated interest rates; (v) the risk of potential dilution resulting from future sales or issuances of our equity securities; (w) the availability, adequacy and pricing of insurance coverage provided by our policies and policies maintained by our managers, tenants, borrowers or other counterparties; (x) the risks or uncertainties relating to the use of, or inability to take advantage of, the benefits of artificial intelligence by us or our managers, tenants or borrowers; (y) the occurrence of cybersecurity threats and incidents that could disrupt our or our managers’, tenants’ or borrower’s operations, result in the loss of confidential or personal information or damage our business relationships and reputation; (z) the risk of catastrophic or extreme weather and other natural events; (aa) our ability to attract and retain talented employees; (bb) our ability to maintain a positive reputation for quality and service with our key stakeholders; (cc) the limitations and significant requirements imposed upon our business as a result of our status as a REIT and the adverse consequences (including the possible loss of our status as a REIT) that would result if we are not able to comply with such requirements; (dd) the ownership limits contained in our certificate of incorporation with respect to our capital stock in order to preserve our qualification as a REIT, which may delay, defer or prevent a change of control of our company; and (ee) the other factors set forth in our periodic filings with the Securities and Exchange Commission.
Note Regarding Third-Party Information
This Quarterly Report includes information that has been derived from SEC filings that have been provided to us by our tenants and managers or been derived from SEC filings or other publicly available information of our tenants and managers. We believe that such information is accurate and that the sources from which it has been obtained are reliable. However, we cannot guarantee the accuracy of such information and have not independently verified the assumptions on which such information is based.
Company Overview
Ventas, Inc. is an S&P 500 company focused on delivering strong, sustainable shareholder returns by enabling exceptional environments that benefit a large and growing aging population. We hold a portfolio that includes senior housing communities, outpatient medical buildings, research centers, hospitals and healthcare
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facilities located in North America and the United Kingdom. As of March 31, 2026, we owned or had investments in 1,425 properties consisting of 1,390 properties in our reportable segments (“Segment Properties”) and 35 properties held by unconsolidated real estate entities in our non-segment operations. We are headquartered in Chicago, Illinois with additional corporate offices in Louisville, Kentucky and New York, New York.
We elected to be taxed as a real estate investment trust (“REIT”) under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Code”), commencing with our taxable year ended December 31, 1999. Provided we qualify for taxation as a REIT, we generally are not required to pay U.S. federal corporate income taxes on our REIT taxable income that is currently distributed to our stockholders. In order to maintain our qualification as a REIT, we must satisfy a number of technical requirements, which impact how we invest in, operate and manage our assets.
We operate through three reportable segments: senior housing operating portfolio, which we refer to as “SHOP,” outpatient medical and research portfolio, which we refer to as “OM&R,” and triple-net leased properties, which we refer to as “NNN.” We also hold assets outside of our reportable segments, which we refer to as non-segment assets, and which consist primarily of corporate assets, including cash and cash equivalents, restricted cash, loans receivable and investments, accounts receivable and investments in unconsolidated entities. Our investments in unconsolidated entities include investments made through our third-party institutional private capital management platform, Ventas Investment Management (“VIM”). Through VIM, we partner with third-party institutional investors to invest in real estate through various joint ventures and other co-investment vehicles where we are the sponsor or general partner, including our open-ended investment vehicle, the Ventas Life Science & Healthcare Real Estate Fund (the “Ventas Fund”). Our investments in unconsolidated entities also includes investments in operating entities, such as Ardent Health, Inc. (together with its subsidiaries, “Ardent”) and Atria Senior Living, Inc. (together with its subsidiaries, “Atria”).
Our chief operating decision maker (“CODM”) evaluates performance of the combined properties in each operating segment and determines how to allocate resources to these segments based on net operating income (“NOI”) for each segment. See our Consolidated Financial Statements and the related notes, including “Note 16 – Segment Information,” included in Item 1 of this Quarterly Report on Form 10-Q.
The following table summarizes information for our portfolio for the three months ended March 31, 2026 (dollars in thousands):
| Segment | NOI (1) | Percentage of Total NOI | Segment Properties | |||||||||||||||||
| Senior housing operating portfolio (SHOP) | $ | 374,458 | 57.5 | % | 783 | |||||||||||||||
| Outpatient medical and research portfolio (OM&R) | 150,603 | 23.1 | 407 | |||||||||||||||||
| Triple-net leased properties (NNN) | 120,170 | 18.5 | 200 | |||||||||||||||||
| Non-segment (2) | 5,847 | 0.9 | n/a | |||||||||||||||||
| $ | 651,078 | 100.0 | % | 1,390 |
(1) Net Operating Income (“NOI”) is defined as total revenues, less interest and other income, property-level operating expenses and third-party capital management expenses. See “Non-GAAP Financial Measures” included elsewhere in this Quarterly Report on Form 10-Q for additional disclosure and a reconciliation to Net income attributable to common stockholders, as computed in accordance with U.S. generally accepted accounting principles (“GAAP”), to NOI.
(2) NOI for non-segment includes management fees and promote revenues, net of expenses related to our third-party institutional private capital management platform, income from loans and investments and corporate-level expenses not directly attributable to any of our three reportable segments.
n/a—not applicable
Business Strategy
For nearly three decades, Ventas has pursued a strategy focused on delivering outsized value to stockholders and other key stakeholders by enabling exceptional environments that benefit a large and growing aging population. Working with industry-leading care providers, partners and research and medical institutions, our collaborative and experienced team is focused on achieving consistent, superior total returns through: (1)
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delivering profitable organic growth in senior housing, (2) capturing value-creating external growth focused on senior housing, (3) generating strong cash flow throughout our portfolio of high-quality assets unified in meeting demographic demand and (4) maintaining financial strength, flexibility and liquidity.
Our objective is to generate reliable and growing cash flows from our portfolio, which enables us to pay regular cash dividends to stockholders and creates opportunities to increase stockholder value.
Market Trends
Our operations have historically been and are expected to continue to be impacted by economic and market conditions. We expect senior housing to benefit from strong supply/demand fundamentals, including robust projected demand growth combined with low projected supply growth.
The performance and growth of our business will also depend on the broader macroeconomic environment, including consumer sentiment, interest rates, inflation and GDP growth.
See “Risk Factors” in Part I, Item 1A of our 2025 Annual Report for additional discussion of risks affecting our business.
2026 Highlights
Investments and Dispositions
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In our SHOP segment, during the three months ended March 31, 2026, we acquired 29 senior housing communities for an aggregate purchase price of $1.0 billion.
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During the three months ended March 31, 2026, we sold one senior housing community in our SHOP segment, one property in our OM&R segment and 10 properties in our NNN segment formerly leased to Brookdale Senior Living (“Brookdale”), for aggregate consideration of $47.1 million and recognized $15.0 million in Gain on real estate dispositions in our Consolidated Statements of Income.
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In our SHOP segment, in April 2026, we acquired two senior housing communities for an aggregate purchase price of $59.0 million; and through a subsidiary in which we hold a 75% controlling interest, we acquired 11 senior housing communities for an aggregate purchase price of $540.0 million.
Liquidity and Capital
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As of March 31, 2026, we had $5.5 billion in liquidity, including approximately $3.5 billion of availability under our unsecured revolving credit facility, $550 million of undrawn capacity on the delayed draw term loan, $183.6 million of cash and cash equivalents on hand, and $1.4 billion of estimated proceeds available under unsettled equity forward sales agreements, calculated using the forward price, net of fees, partially offset by $65.0 million in borrowings outstanding under our commercial paper program and $18.6 million outstanding under our uncommitted line for standby letters of credit.
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During the three months ended March 31, 2026, we amended our $500 million unsecured term loan to, among other things, extend the maturity to January 2031, increase the principal amount to $700 million and establish a $550 million unsecured delayed draw term loan which, as of March 31, 2026, remained undrawn. In connection with the amendment, we also repaid in full our $200 million unsecured term loan due February 2027.
Senior Notes
- In January 2026, we repaid $500.0 million aggregate principal amount of 4.13% Senior Notes due 2026.
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Mortgages
- During the three months ended March 31, 2026, we refinanced a CAD $92.0 million ($67.4 million) mortgage loan with new maturity in February 2031 and repaid a mortgage with principal amount of CAD $87.1 million ($63.8 million).
Equity
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In February 2026, we amended our existing ATM Program, such that the aggregate gross sales price of common stock available for issuance under the ATM Program immediately following the amendment was $2.5 billion.
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During the three months ended March 31, 2026, we entered into equity forward sales agreements under the ATM Program for 13.8 million shares of our common stock for gross proceeds of $1.2 billion, representing an average price of $84.62 per share. During the three months ended March 31, 2026, we settled 10.6 million shares of common stock under outstanding equity forward sales agreements entered into under the ATM Program for net cash proceeds of $800.0 million.
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In April 2026, we entered into equity forward sales agreements under the ATM Program for 2.5 million shares of common stock or approximately $205.5 million in gross proceeds which remain unsettled with maturity in October 2027. As of April 28, 2026, the remaining amount available under the ATM Program for future sales of common stock was $1.2 billion, and we maintained unsettled equity forward sales agreements of 19.6 million shares of common stock, or approximately $1.6 billion in gross proceeds, with varying maturities through October 2027.
Other Items
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During the three months ended March 31, 2026, the Ventas Fund, an equity method investee, acquired one senior housing community for an aggregate purchase price of $62.8 million.
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During the three months ended March 31, 2026, the Pension Fund Joint Venture, an equity method investee, sold one senior housing community for proceeds of $37.8 million.
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In April 2026, the Ventas Fund acquired one senior housing community for an aggregate purchase price of $46.5 million.
Critical Accounting Policies and Estimates
Our Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q have been prepared in accordance with GAAP for interim financial information set forth in the Accounting Standards Codification (“ASC”), as published by the Financial Accounting Standards Board (“FASB”), and with the SEC instructions to Form 10-Q and Article 10 of Regulation S-X. GAAP requires us to make estimates and assumptions regarding future events that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. We base these estimates on our experience and assumptions we believe to be reasonable under the circumstances. However, if our judgment or interpretation of the facts and circumstances relating to various transactions or other matters had been different, we may have applied a different accounting treatment, resulting in a different presentation of our financial statements. We periodically reevaluate our estimates and assumptions and, in the event they prove to be different from actual results, we make adjustments in subsequent periods to reflect more current estimates and assumptions about matters that are inherently uncertain.
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Our 2025 Annual Report contains additional information regarding the critical accounting policies that affect our more significant estimates and judgments used in the preparation of our Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q. There have been no material changes to these policies in 2026.
Recent Accounting Standards
On November 4, 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses (“DISE”), which requires disaggregated disclosure of income statement expenses for public business entities (“PBEs”). ASU 2024-03 requires PBEs to include footnote disclosure that disaggregates, in a tabular presentation, each relevant expense caption on the face of the income statement that includes certain natural expenses relevant to the Company, such as (i) employee compensation, (ii) depreciation and (iii) intangible asset amortization. The tabular disclosure must also include certain other expenses, when applicable. The ASU does not change the expense captions an entity presents on the face of the income statement; rather, it requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. The requirements will be applied prospectively with the option for retrospective application. We are evaluating the impact of adopting ASU 2024-03 on our Consolidated Financial Statements.
Results of Operations
As of March 31, 2026, we operated through three reportable segments: SHOP, OM&R and NNN. In our SHOP segment, we own and invest in senior housing communities and engage operators to operate those communities. In our OM&R segment, we primarily acquire, own, develop, lease and manage outpatient medical buildings and research centers. In our NNN segment, we invest in and own senior housing communities, skilled nursing facilities (“SNFs”), long-term acute care facilities (“LTACs”), freestanding inpatient rehabilitation facilities (“IRFs”) and other healthcare facilities and lease the properties to tenants under triple-net or absolute-net leases that obligate the tenants to pay all property-related expenses, including maintenance, utilities, repairs, taxes, insurance and capital expenditures. Information provided for “non-segment” includes management fees and promote revenues, net of expenses related to our third-party institutional private capital management platform, income from loans and investments and corporate-level expenses not directly attributable to any of our three reportable segments. Non-segment assets consist primarily of corporate assets, including cash and cash equivalents, restricted cash, loans receivable and investments and accounts receivable.
Our CODM is the Chief Executive Officer of the Company. Our CODM evaluates performance of the combined properties in each operating segment and determines how to allocate resources to these segments, based on NOI for each segment. For further information regarding our reportable segments and a discussion of our definition of NOI, see “Note 16 – Segment Information” of the Notes to Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q. See “Non-GAAP Financial Measures” included elsewhere in this Quarterly Report on Form 10-Q for additional disclosure and reconciliations of Net income attributable to common stockholders, as computed in accordance with GAAP, to NOI.
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Three Months Ended March 31, 2026 and 2025
The table below shows our results of operations for the three months ended March 31, 2026 and 2025 and the effect of changes in those results from period to period on our Net income attributable to common stockholders (dollars in thousands):
| For the Three Months Ended March 31, | Increase (Decrease) to Net Income | ||||||||||||||||||||||
| 2026 | 2025 | $ | % | ||||||||||||||||||||
| NOI: | |||||||||||||||||||||||
| SHOP | $ | 374,458 | $ | 264,504 | $ | 109,954 | 41.6 | % | |||||||||||||||
| OM&R | 150,603 | 146,042 | 4,561 | 3.1 | |||||||||||||||||||
| NNN | 120,170 | 152,586 | (32,416) | (21.2) | |||||||||||||||||||
| Non-segment | 5,847 | 6,155 | (308) | (5.0) | |||||||||||||||||||
| Total NOI | 651,078 | 569,287 | 81,791 | 14.4 | |||||||||||||||||||
| Interest and other income | 2,499 | 3,078 | (579) | (18.8) | |||||||||||||||||||
| Interest expense | (156,142) | (149,356) | (6,786) | (4.5) | |||||||||||||||||||
| Depreciation and amortization | (382,468) | (321,525) | (60,943) | (19.0) | |||||||||||||||||||
| General, administrative and professional fees | (62,746) | (53,149) | (9,597) | (18.1) | |||||||||||||||||||
| Loss on extinguishment of debt, net | (449) | — | (449) | nm | |||||||||||||||||||
| Transaction, transition and restructuring costs | (6,659) | (5,982) | (677) | (11.3) | |||||||||||||||||||
| Other expense | (9,700) | (1,412) | (8,288) | nm | |||||||||||||||||||
| Income before unconsolidated entities, real estate dispositions, income taxes and noncontrolling interests | 35,413 | 40,941 | (5,528) | (13.5) | |||||||||||||||||||
| Loss from unconsolidated entities | (7,350) | (3,311) | (4,039) | nm | |||||||||||||||||||
| Gain on real estate dispositions | 15,046 | 169 | 14,877 | nm | |||||||||||||||||||
| Income tax benefit | 15,937 | 10,557 | 5,380 | 51.0 | |||||||||||||||||||
| Net income | 59,046 | 48,356 | 10,690 | 22.1 | |||||||||||||||||||
| Net income attributable to noncontrolling interests | 3,134 | 1,488 | 1,646 | nm | |||||||||||||||||||
| Net income attributable to common stockholders | $ | 55,912 | $ | 46,868 | $ | 9,044 | nm |
nm - not meaningful
NOI—SHOP Segment
The following table summarizes results of operations in our SHOP segment for the three months ended March 31, 2026 (dollars in thousands):
| For the Three Months Ended March 31, | Increase (Decrease) to NOI | ||||||||||||||||||||||
| 2026 | 2025 | $ | % | ||||||||||||||||||||
| NOI—SHOP: | |||||||||||||||||||||||
| Resident fees and services | $ | 1,292,790 | $ | 968,904 | $ | 323,886 | 33.4 | % | |||||||||||||||
| Less: Property-level operating expenses | (918,332) | (704,400) | (213,932) | (30.4) | |||||||||||||||||||
| NOI | $ | 374,458 | $ | 264,504 | $ | 109,954 | 41.6 |
| Segment Properties at March 31, | Average Unit Occupancy for the Three Months Ended March 31, | Average Monthly Revenue Per Occupied Room for the Three Months Ended March 31, | |||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||||
| Total communities | 783 | 654 | 88.5 | % | 86.0 | % | $ | 5,573 | $ | 5,134 |
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Resident fees and services include all amounts earned from residents at the senior housing communities in our SHOP segment, such as rental fees related to resident leases, extended healthcare fees and other ancillary service income. Property-level operating expenses related to our SHOP segment include labor, food, utilities, real estate taxes, insurance, repairs and maintenance, marketing, management fees, supplies and other costs of operating the properties. For senior housing communities in our SHOP segment, occupancy generally reflects average operator-reported unit occupancy for the reporting period. Average monthly revenue per occupied room reflects average resident fees and services per operator-reported occupied unit for the reporting period.
The increase in our SHOP segment NOI for the three months ended March 31, 2026 compared to the same period in 2025 was primarily driven by revenue growth due to an increase in average occupancy, revenue per occupied room, additional properties acquired and conversions of senior housing communities from our NNN segment to our SHOP segment. The revenue increase is partially offset by higher operating expenses in 2026, driven by an increase in the number of communities in our SHOP segment, increase in occupancy and inflation.
The following table compares results of operations for our 563 Same-Store SHOP communities (dollars in thousands). See “Non-GAAP Financial Measures**—**NOI” included elsewhere in this Quarterly Report on Form 10-Q for additional disclosure regarding Same-Store NOI for each of our reportable business segments.
| For the Three Months Ended March 31, | Increase (Decrease) to NOI | ||||||||||||||||||||||
| 2026 | 2025 | $ | % | ||||||||||||||||||||
| Same-Store NOI—SHOP: | |||||||||||||||||||||||
| Resident fees and services | $ | 954,776 | $ | 878,104 | $ | 76,672 | 8.7 | % | |||||||||||||||
| Less: Property-level operating expenses | (667,908) | (629,571) | (38,337) | (6.1) | |||||||||||||||||||
| NOI | $ | 286,868 | $ | 248,533 | $ | 38,335 | 15.4 |
| Segment Properties at March 31, | Average Unit Occupancy for the Three Months Ended March 31, | Average Monthly Revenue Per Occupied Room for the Three Months Ended March 31, | |||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||||
| Same-Store communities | 563 | 563 | 90.4 | % | 87.3 | % | $ | 5,512 | $ | 5,249 |
The increase in our Same-Store SHOP segment NOI for the three months ended March 31, 2026 compared to the same period in 2025 was primarily driven by higher average occupancy and revenue per occupied room, partially offset by higher property-level operating expenses due to higher occupancy and inflation.
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NOI—OM&R Segment
The following table summarizes results of operations in our OM&R segment for the three months ended March 31, 2026 (dollars in thousands). For properties in our OM&R segment, occupancy generally reflects occupied square footage divided by net rentable square footage as of the end of the reporting period.
| For the Three Months Ended March 31, | Increase (Decrease) to NOI | ||||||||||||||||||||||
| 2026 | 2025 | $ | % | ||||||||||||||||||||
| NOI—OM&R: | |||||||||||||||||||||||
| Rental income | $ | 230,104 | $ | 221,319 | $ | 8,785 | 4.0 | % | |||||||||||||||
| Third-party capital management revenues | 800 | 680 | 120 | 17.6 | |||||||||||||||||||
| Total revenues | 230,904 | 221,999 | 8,905 | 4.0 | |||||||||||||||||||
| Less: | |||||||||||||||||||||||
| Property-level operating expenses | (80,301) | (75,957) | (4,344) | (5.7) | |||||||||||||||||||
| NOI | $ | 150,603 | $ | 146,042 | $ | 4,561 | 3.1 |
| Segment Properties at March 31, | Occupancy at March 31, | Annualized Average Rent Per Occupied Square Foot for the Three Months Ended March 31, | |||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||||
| Total OM&R | 407 | 426 | 88.6 | % | 88.1 | % | $ | 40 | $ | 38 |
The $4.6 million increase in our OM&R segment NOI for the three months ended March 31, 2026 compared to the same period in 2025 was primarily due to new leasing activity, high tenant retention and additional NOI from a development project placed in service, partially offset by higher property-level operating expenses and dispositions.
The following table compares results of operations for our 400 Same-Store OM&R properties (dollars in thousands):
| For the Three Months Ended March 31, | Increase (Decrease) to NOI | ||||||||||||||||||||||
| 2026 | 2025 | $ | % | ||||||||||||||||||||
| Same-Store NOI—OM&R: | |||||||||||||||||||||||
| Rental income | $ | 219,018 | $ | 211,728 | $ | 7,290 | 3.4 | % | |||||||||||||||
| Less: Property-level operating expenses | (74,590) | (70,607) | (3,983) | (5.6) | |||||||||||||||||||
| NOI | $ | 144,428 | $ | 141,121 | $ | 3,307 | 2.3 |
| Segment Properties at March 31, | Occupancy at March 31, | Annualized Average Rent Per Occupied Square Foot for the Three Months Ended March 31, | |||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||||
| Same-Store OM&R | 400 | 400 | 90.3 | % | 89.7 | % | $ | 39 | $ | 38 |
The $3.3 million increase in our Same-Store OM&R segment NOI for the three months ended March 31, 2026 compared to the same period in 2025 is primarily due to higher occupancy driven by new leasing activity and high tenant retention, partially offset by higher property-level operating expenses.
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NOI—NNN Segment
The following table summarizes results of operations in our 200 NNN segment properties for the three months ended March 31, 2026 (dollars in thousands):
| For the Three Months Ended March 31, | (Decrease) / Increase to NOI | ||||||||||||||||||||||
| 2026 | 2025 | $ | % | ||||||||||||||||||||
| NOI—NNN: | |||||||||||||||||||||||
| Rental income | $ | 123,071 | $ | 156,113 | $ | (33,042) | (21.2) | % | |||||||||||||||
| Less: Property-level operating expenses | (2,901) | (3,527) | 626 | 17.7 | |||||||||||||||||||
| NOI | $ | 120,170 | $ | 152,586 | $ | (32,416) | (21.2) |
In our NNN segment, our revenues generally consist of fixed rental amounts (subject to contractual escalations) received from our tenants in accordance with the applicable lease terms. We report revenues and property-level operating expenses within our NNN segment for real estate tax and insurance expenses that are paid from escrows collected from our tenants.
The $32.4 million decrease in our NNN segment NOI for the three months ended March 31, 2026 compared to the same period in 2025 was primarily driven by a $23.2 million decrease in rental income from senior housing communities that converted to our SHOP segment and a $9.6 million decrease in rental income as a result of dispositions.
Occupancy rates may affect the profitability of our tenants’ operations. For senior housing communities and post-acute properties in our NNN segment, occupancy generally reflects average operator-reported unit and bed occupancy, respectively, for the reporting period. Because triple-net occupancy reporting is delivered to us following the reporting period, occupancy is reported in arrears. The following table sets forth average continuing occupancy rates for the trailing 12 months ended December 31, 2025 and 2024 related to the triple-net leased properties we owned and that were included in our NNN segment at March 31, 2026 and 2025, respectively. The table excludes (i) properties classified as held for sale, (ii) non-stabilized properties, (iii) certain properties for which we do not receive occupancy information and (iv) properties acquired or properties that transitioned operators for which we do not have a full quarter of occupancy results.
| Number of Properties at March 31, 2026 | Average Occupancy for the 12 Months Ended December 31, 2025 | Number of Properties at March 31, 2025 | Average Occupancy for the 12 Months Ended December 31, 2024 | |||||||||||||||||||||||
| Senior housing communities | 117 | 80.1% | 190 | 78.9% | ||||||||||||||||||||||
| SNFs | 25 | 81.1 | 18 | 84.6 | ||||||||||||||||||||||
| IRFs and LTACs | 42 | 58.3 | 34 | 54.6 |
The following table compares results of operations for our 199 Same-Store NNN segment properties (dollars in thousands):
| For the Three Months Ended March 31, | Increase to NOI | ||||||||||||||||||||||
| 2026 | 2025 | $ | % | ||||||||||||||||||||
| Same-Store NOI—NNN: | |||||||||||||||||||||||
| Rental income | $ | 123,100 | $ | 121,480 | $ | 1,620 | 1.3 | % | |||||||||||||||
| Less: Property-level operating expenses | (2,901) | (3,301) | 400 | 12.1 | |||||||||||||||||||
| NOI | $ | 120,199 | $ | 118,179 | $ | 2,020 | 1.7 |
The increase in our Same-Store NNN segment rental income for the three months ended March 31, 2026 compared to the same period in 2025 was attributable primarily to contractual rent escalators.
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NOI—Non-Segment
Non-segment NOI includes management fees and promote revenues, net of expenses, related to our third-party institutional private capital management platform, income from loans and investments and corporate-level expenses not directly attributable to any of our three reportable business segments. The $0.3 million decrease in non-segment NOI for the three months ended March 31, 2026 compared to the same period in 2025 was primarily due to a reduction in interest income as a result of loan repayments to us.
Corporate Results
Interest and other income
The $0.6 million decrease in Interest and other income for the three months ended March 31, 2026 compared to the same period in 2025 was primarily due to a decrease in overall cash and cash equivalents invested in short-term money market funds coupled with lower interest rates.
Interest expense
The $6.8 million increase in Interest expense for the three months ended March 31, 2026 compared to the same period in 2025 was driven primarily by higher rates. Our weighted average effective interest rate was 4.58% and 4.47% for the three months ended March 31, 2026 and 2025, respectively. Our weighted average debt outstanding was $13.2 billion for both the three months ended March 31, 2026 and 2025.
Depreciation and amortization
The $60.9 million increase in Depreciation and amortization expense for the three months ended March 31, 2026 compared to the same period in 2025 was primarily due to an increase of $54.7 million associated with recent acquisition activities.
General, administrative and professional fees
The $9.6 million increase in General, administrative and professional fees for the three months ended March 31, 2026 compared to the same period in 2025 was primarily due to our expanded employee base, consistent with enterprise growth, higher compensation expense and inflation.
Transaction, transition and restructuring costs
The $0.7 million increase in Transaction, transition and restructuring costs for the three months ended March 31, 2026 compared to the same period in 2025 was primarily due to higher volume of relevant activities.
Other expense
The $8.3 million increase in Other expense for the three months ended March 31, 2026 compared to the same period in 2025 was primarily due to mark to market adjustments to our derivative instruments in 2025.
Loss from unconsolidated entities
The $4.0 million increase in Loss from unconsolidated entities for the three months ended March 31, 2026 compared to the same period in 2025 was primarily due to higher depreciation and amortization expense and interest expense due to assets being placed in service.
Gain on real estate dispositions
For the three months ended March 31, 2026, we sold 12 properties for a $15.0 million gain. For the three months ended March 31, 2025, we sold one property and recognized no gain.
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Income tax benefit
The $15.9 million income tax benefit for the three months ended March 31, 2026 is primarily due to the reversal of valuation allowances recorded against the net deferred tax assets of certain of our TRS entities, partially offset by increases in the valuation allowance for certain TRS entities during the period. The $10.6 million income tax expense for the three months ended March 31, 2025 is primarily due to the reversal of valuation allowances recorded against the net deferred tax assets of certain of our TRS entities, partially offset by increases in the valuation allowance for certain TRS entities during the period.
Non-GAAP Financial Measures
We consider certain non-GAAP financial measures to be useful supplemental measures of our operating performance. A non-GAAP financial measure is a measure of historical or future financial performance, financial position or cash flows that excludes or includes amounts that are not so excluded from or included in the most directly comparable measure calculated and presented in accordance with GAAP. Described below are the non-GAAP financial measures used by management to evaluate our operating performance and that we consider most useful to investors, together with reconciliations of these measures to the most directly comparable GAAP measures.
The non-GAAP financial measures we present in this Quarterly Report on Form 10-Q may not be comparable to those presented by other companies, which may define similarly titled measures differently than we do. You should not consider these measures as alternatives for, or superior to, financial measures calculated in accordance with GAAP. In order to facilitate a clear understanding of our consolidated historical operating results, you should examine these measures in conjunction with the most directly comparable GAAP measures as presented in our Consolidated Financial Statements and other financial data included elsewhere in this Quarterly Report on Form 10-Q.
Nareit Funds From Operations and Normalized Funds From Operations Attributable to Common Stockholders
Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time. However, since real estate values historically have risen or fallen with market conditions, many industry investors deem presentations of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. For that reason, we consider Nareit Funds From Operations attributable to common stockholders (“FFO”) and Normalized FFO attributable to common stockholders (“Normalized FFO”) to be appropriate supplemental measures of operating performance of an equity REIT. We believe that the presentation of FFO, combined with the presentation of required GAAP financial measures, has improved the understanding of operating results of REITs among the investing public and has helped make comparisons of REIT operating results more meaningful. Management generally considers FFO to be a useful measure for understanding and comparing our operating results because, by excluding gains and losses related to sales of previously depreciated operating real estate assets, impairment losses on depreciable real estate and real estate asset depreciation and amortization (which can differ across owners of similar assets in similar condition based on historical cost accounting and useful life estimates), FFO can help investors compare the operating performance of a company’s real estate across reporting periods and to the operating performance of other companies. We believe that Normalized FFO is useful because it allows investors, analysts and our management to compare our operating performance across periods on a consistent basis. In some cases, we provide information about identified non-cash components of FFO and Normalized FFO because it allows investors, analysts and our management to assess the impact of those items on our financial results.
We use the National Association of Real Estate Investment Trusts (“Nareit”) definition of FFO. Nareit defines FFO as net income attributable to common stockholders (computed in accordance with GAAP) excluding gains (or losses) from sales of real estate property, including gain (or loss) on re-measurement of equity method investments and impairment write-downs of depreciable real estate, plus real estate depreciation and amortization, and after adjustments for unconsolidated entities and noncontrolling interests. Adjustments for unconsolidated entities and noncontrolling interests will be calculated to reflect FFO on the same basis. We define Normalized FFO as Nareit FFO excluding the following income and expense items, without duplication: (a) gains and losses on derivatives, net and changes in the fair value of financial instruments; (b) the non-cash impact of income tax benefits or expenses; (c) gains and losses on extinguishment of debt, net including the write-off of unamortized deferred financing fees or additional costs, expenses, discounts, make-whole payments,
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penalties or premiums incurred as a result of early retirement or payment of our debt; (d) transaction, transition and restructuring costs; (e) amortization of other intangibles; (f) non-cash stock-based compensation expense; (g) net expenses or recoveries related to significant disruptive events; (h) the impact of expenses related to asset impairment and valuation allowances; (i) the financial impact of contingent consideration; (j) gains and losses on non-real estate dispositions and other normalizing items related to noncontrolling interests and unconsolidated entities; and (k) other items set forth in the Normalized FFO reconciliation included herein.
The following table summarizes our FFO and Normalized FFO for the three months ended March 31, 2026 and 2025 (dollars in thousands):
| For the Three Months Ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Net income attributable to common stockholders | $ | 55,912 | $ | 46,868 | |||||||||||||||||||
| Adjustments: | |||||||||||||||||||||||
| Depreciation and amortization on real estate assets | 380,811 | 320,198 | |||||||||||||||||||||
| Depreciation on real estate assets related to noncontrolling interests | (4,255) | (4,171) | |||||||||||||||||||||
| Depreciation on real estate assets related to unconsolidated entities | 22,099 | 15,995 | |||||||||||||||||||||
| Gain on real estate dispositions | (15,046) | (169) | |||||||||||||||||||||
| Loss on real estate dispositions related to unconsolidated entities | 34 | 38 | |||||||||||||||||||||
| Nareit FFO attributable to common stockholders | 439,555 | 378,759 | |||||||||||||||||||||
| Adjustments: | |||||||||||||||||||||||
| Gain on derivatives, net | (114) | (8,384) | |||||||||||||||||||||
| Non-cash impact of income tax benefit | (19,237) | (13,781) | |||||||||||||||||||||
| Loss on extinguishment of debt, net | 449 | — | |||||||||||||||||||||
| Transaction, transition and restructuring costs | 6,659 | 5,982 | |||||||||||||||||||||
| Amortization of other intangibles | 119 | 121 | |||||||||||||||||||||
| Non-cash stock-based compensation expense (1) | 24,842 | 18,827 | |||||||||||||||||||||
| Significant disruptive events, net | 2,185 | 4,066 | |||||||||||||||||||||
| Normalizing items related to noncontrolling interests and unconsolidated entities, net | 1,160 | 488 | |||||||||||||||||||||
| Normalized FFO attributable to common stockholders (1) | $ | 455,618 | $ | 386,078 |
(1)Beginning with the first quarter of 2026, the Company excludes non-cash stock-based compensation expense from the calculation of Normalized FFO. Results for prior periods have been updated to conform to this presentation.
NOI
We consider NOI an important supplemental measure because it allows investors, analysts and our management to assess our unlevered property-level operating results and to compare our operating results between periods on a consistent basis. We define NOI as total revenues, less interest and other income, property-level operating expenses and third-party capital management expenses. In order to facilitate a clear understanding of our historical consolidated operating results, NOI should be examined in conjunction with Net income attributable to common stockholders as presented in our Consolidated Financial Statements and other financial data included elsewhere in this Quarterly Report on Form 10-Q.
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The following table sets forth a reconciliation of Net income attributable to common stockholders to NOI (dollars in thousands):
| For the Three Months Ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Net income attributable to common stockholders | $ | 55,912 | $ | 46,868 | |||||||||||||||||||
| Adjustments: | |||||||||||||||||||||||
| Interest and other income | (2,499) | (3,078) | |||||||||||||||||||||
| Interest expense | 156,142 | 149,356 | |||||||||||||||||||||
| Depreciation and amortization | 382,468 | 321,525 | |||||||||||||||||||||
| General, administrative and professional fees | 62,746 | 53,149 | |||||||||||||||||||||
| Loss on extinguishment of debt, net | 449 | — | |||||||||||||||||||||
| Transaction, transition and restructuring costs | 6,659 | 5,982 | |||||||||||||||||||||
| Other expense | 9,700 | 1,412 | |||||||||||||||||||||
| Net income attributable to noncontrolling interests | 3,134 | 1,488 | |||||||||||||||||||||
| Loss from unconsolidated entities | 7,350 | 3,311 | |||||||||||||||||||||
| Gain on real estate dispositions | (15,046) | (169) | |||||||||||||||||||||
| Income tax benefit | (15,937) | (10,557) | |||||||||||||||||||||
| NOI | $ | 651,078 | $ | 569,287 |
See “Results of Operations” for discussions regarding both NOI and Same-Store NOI. We define Same-Store as properties owned, consolidated and operational for the full period in both comparison periods and that are not otherwise excluded; provided, however, that we may include selected properties that otherwise meet the Same-Store criteria if they are included in substantially all of, but not a full, period for one or both of the comparison periods, and in our judgment such inclusion provides a more meaningful presentation of our segment performance.
Newly acquired development properties and recently developed or redeveloped properties in our SHOP reportable segment will be included in Same-Store once they are stabilized for the full period in both periods presented. These properties are considered stabilized upon the earlier of (a) the achievement of 80% sustained occupancy or (b) 24 months from the date of acquisition or substantial completion of work. Recently developed or redeveloped properties in our OM&R and NNN reportable segments will be included in Same-Store once substantial completion of work has occurred for the full period in both periods presented. SHOP and NNN properties that have undergone operator or business model transitions will be included in Same-Store once operating under consistent operating structures for the full period in both periods presented.
Properties are excluded from Same-Store if they are: (i) sold, classified as held for sale or properties whose operations were classified as discontinued operations in accordance with GAAP; (ii) impacted by significant disruptive events such as flood or fire; (iii) for SHOP, those properties that are currently undergoing a significant disruptive redevelopment; (iv) for OM&R and NNN reportable segments, those properties for which management has an intention to institute, or has instituted, a redevelopment plan because the properties may require major property-level expenditures to maximize value, increase NOI, or maintain a market-competitive position and/or achieve property stabilization, most commonly as the result of an expected or actual material change in occupancy or NOI; or (v) for SHOP and NNN reportable segments, those properties that are scheduled to undergo operator or business model transitions, or have transitioned operators or business models after the start of the prior comparison period.
To eliminate the impact of exchange rate movements, our same-store NOI and same-store SHOP communities average monthly revenue per occupied room (RevPor) performance-based disclosures assume constant exchange rates across comparable periods using the following methodology: the current period’s results are shown in actual reported USD, while prior comparison period’s results are adjusted and converted to USD based on the average monthly exchange rate for the current period.
The following table shows the same-store metrics for the prior year’s results with and without the impact from applying a constant exchange rate:
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| For the Three Months Ended March 31, 2025 | ||||||||||||||
| Constant Exchange Rate | Without Constant Exchange Rate | |||||||||||||
| Same-Store NOI—SHOP | ||||||||||||||
| Resident fees and services | $ | 878,104 | $ | 872,492 | ||||||||||
| Less: Property-level operating expenses | (629,571) | (626,209) | ||||||||||||
| NOI | $ | 248,533 | $ | 246,283 | ||||||||||
| Same-Store NOI—NNN | ||||||||||||||
| Rental income | $ | 121,480 | $ | 121,220 | ||||||||||
| Less: Property-level operating expenses | (3,301) | (3,301) | ||||||||||||
| NOI | $ | 118,179 | $ | 117,919 |
| For the Three Months Ended March 31, 2025 | ||||||||||||||
| Constant Exchange Rate | Without Constant Exchange Rate | |||||||||||||
| Same-Store RevPor - SHOP Communities | $ | 5,249 | $ | 5,216 |
Concentration Risk
We use concentration ratios to identify, understand and evaluate the potential impact of economic downturns and other adverse events that may affect our asset types, geographic locations, business models, and managers, tenants and borrowers. We evaluate concentration risk in terms of investment mix and operations mix. Investment mix measures the percentage of our investments that is concentrated in a specific asset type or that is operated or managed by a particular manager, tenant or borrower. Operations mix measures the percentage of our operating results that is attributed to a particular manager, tenant or borrower, geographic location or business model. See “Note 3 – Concentration of Credit Risk” included elsewhere in this Quarterly Report on Form 10-Q for additional disclosure on the concentration of our credit risk.
The following tables reflect our concentration risk as of the dates and for the periods presented:
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| As of March 31, 2026 | As of December 31, 2025 | ||||||||||
| Investment mix by asset type (1)****: | |||||||||||
| Senior housing communities | 70.2 | % | 69.2 | % | |||||||
| Outpatient medical buildings | 17.6 | 18.2 | |||||||||
| Research centers | 5.4 | 5.6 | |||||||||
| Other healthcare facilities | 4.1 | 4.1 | |||||||||
| Inpatient rehabilitation facilities (“IRFs”) and long-term acute care facilities (“LTACs”) | 1.7 | 1.8 | |||||||||
| Skilled nursing facilities (“SNFs”) | 0.6 | 0.7 | |||||||||
| Secured loans receivable and investments, net | 0.4 | 0.4 | |||||||||
| Total | 100.0 | % | 100.0 | % | |||||||
| Investment mix by manager and tenant (1)(2)****: | |||||||||||
| Atria | 19.0 | % | 19.6 | % | |||||||
| Lillibridge | 9.2 | 9.5 | |||||||||
| Sunrise | 9.1 | 9.3 | |||||||||
| Le Groupe Maurice | 6.0 | 6.2 | |||||||||
| Discovery | 5.6 | 5.4 | |||||||||
| Wexford | 5.2 | 5.3 | |||||||||
| Ardent | 4.4 | 4.5 | |||||||||
| PMB RES | 3.9 | 4.0 | |||||||||
| All other | 37.6 | 36.2 | |||||||||
| Total | 100.0 | % | 100.0 | % |
(1)Ratios are based on the gross book value of consolidated real estate investments (excluding properties classified as held for sale, development properties not yet operational and land parcels and including secured loan receivable and investments, net) as of each reporting date.
(2)Certain figures have been updated to reflect order of significance.
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| For the Three Months Ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Operations mix by manager and tenant and business model: | |||||||||||||||||||||||
| Total Revenues: | |||||||||||||||||||||||
| SHOP | 78.0 | % | 71.3 | % | |||||||||||||||||||
| Ardent | 2.4 | 2.8 | |||||||||||||||||||||
| Kindred | 2.0 | 2.7 | |||||||||||||||||||||
| All others | 17.6 | 23.2 | |||||||||||||||||||||
| Total | 100.0 | % | 100.0 | % | |||||||||||||||||||
| Net operating income (“NOI”): | |||||||||||||||||||||||
| SHOP | 57.5 | % | 46.5 | % | |||||||||||||||||||
| Ardent | 6.0 | 6.7 | |||||||||||||||||||||
| Kindred | 5.2 | 6.3 | |||||||||||||||||||||
| All other | 31.3 | 40.5 | |||||||||||||||||||||
| Total | 100.0 | % | 100.0 | % | |||||||||||||||||||
| Operations mix by geographic location: | |||||||||||||||||||||||
| Total Revenues: | |||||||||||||||||||||||
| California | 11.6 | % | 12.9 | % | |||||||||||||||||||
| Texas | 9.0 | 7.2 | |||||||||||||||||||||
| New York | 8.0 | 6.9 | |||||||||||||||||||||
| Quebec, Canada | 4.9 | 5.3 | |||||||||||||||||||||
| Illinois | 4.5 | 4.5 | |||||||||||||||||||||
| All others | 62.0 | 63.2 | |||||||||||||||||||||
| Total | 100.0 | % | 100.0 | % |
See “Non-GAAP Financial Measures” included elsewhere in this Quarterly Report on Form 10-Q for additional disclosure and reconciliations of Net income attributable to common stockholders, as computed in accordance with GAAP, to NOI.
Triple-Net Lease Performance and Expirations
Any failure, inability or unwillingness by our tenants to satisfy their obligations under our triple-net leases could have a material adverse effect on us. Also, if our tenants are not able or willing to renew our triple-net leases upon expiration, we may be unable to reposition the applicable properties on a timely basis or on the same or better economic terms, if at all. Although our lease expirations are staggered, the non-renewal of some or all of our triple-net leases that expire in any given year could have a material adverse effect on us. During the three months ended March 31, 2026, we had no triple-net lease expirations that, in the aggregate, had a material impact on our financial condition or results of operations for that period.
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Tenant Lease Expirations
The following table summarizes our lease expirations in our OM&R and NNN segments, excluding real estate assets classified as held for sale, over the next 10 years and thereafter, assuming that none of the tenants exercise any of their renewal or purchase options, as of March 31, 2026 (dollars and square feet in thousands):
| Expiration Year | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Remainder of 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 | 2033 | 2034 | 2035 | Thereafter | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| OM&R: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Square Feet | 1,838 | 3,009 | 2,531 | 2,649 | 2,371 | 1,758 | 1,562 | 1,240 | 2,542 | 841 | 1,843 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| OM&R Annualized Base Rent (1) | $50,435 | $91,210 | $74,947 | $76,088 | $68,545 | $43,173 | $45,748 | $38,719 | $70,906 | $23,393 | $53,508 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| % of Total OM&R Annualized Base Rent | 8 | % | 14 | % | 12 | % | 12 | % | 11 | % | 7 | % | 7 | % | 6 | % | 11 | % | 4 | % | 8 | % | |||||||||||||||||||||||||||||||||||||||||||
| NNN: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Segment Properties | 12 | 6 | 16 | 18 | 27 | 20 | 7 | 4 | 5 | 80 | 4 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| NNN Annualized Base Rent (1)(2) | $12,898 | $10,795 | $43,899 | $12,151 | $87,312 | $30,081 | $9,271 | $1,570 | $16,481 | $214,417 | $18,344 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| % of Total NNN Annualized Base Rent | 3 | % | 2 | % | 10 | % | 3 | % | 19 | % | 7 | % | 2 | % | — | % | 4 | % | 47 | % | 4 | % | |||||||||||||||||||||||||||||||||||||||||||
| Total OM&R and NNN Annualized Base Rent | $63,333 | $102,005 | $118,846 | $88,239 | $155,857 | $73,255 | $55,019 | $40,289 | $87,387 | $237,810 | $71,851 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| % of Total OM&R and NNN Annualized Base Rent | 6 | % | 9 | % | 11 | % | 8 | % | 14 | % | 7 | % | 5 | % | 4 | % | 8 | % | 22 | % | 7 | % |
(1)Annualized Base Rent (“ABR”) represents the annualized contractual cash base rent as of quarter end. ABR does not include future rent escalators, percentage rent, which is a rental charge typically based on certain tenants' gross revenue, common area maintenance charges or non-cash items such as straight-line rental income, the amortization of above / below market lease intangibles or other items.
(2)The expiration of ABR in 2028, 2030 and 2034 includes rent associated with 6, 20 and 5 properties, respectively, currently leased to Kindred. The expiration of ABR in 2035 includes rent associated with 65 properties currently leased to Brookdale and 11 properties currently leased to Ardent. See “Risk Factors—Risks Relating to Our Business Operations and Strategy—Our inability to renew our management agreements with our SHOP managers or our leases with our NNN and OM&R tenants on as favorable terms or at all, and our inability when necessary, to effectively and efficiently transition a SHOP community to a new manager or a NNN or OM&R property to a new tenant, may have an adverse effect on our business, financial condition and results of operations” included in Part I, Item 1A of this Annual Report.
Liquidity and Capital Resources
Our principal sources of liquidity are cash flows from operations, proceeds from the issuance of debt and equity securities, borrowings under our unsecured revolving credit facility and commercial paper program, and proceeds from asset sales.
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For the next 12 months, our principal liquidity needs are to: (i) fund operating expenses; (ii) meet our debt service requirements; (iii) repay maturing mortgage and other debt; (iv) fund acquisitions, investments and commitments and any development and redevelopment activities; (v) fund capital expenditures; and (vi) make distributions to our stockholders and unitholders, as required for us to continue to qualify as a REIT. Depending upon the availability of external capital, we believe our liquidity is sufficient to fund these uses of cash. We expect that these liquidity needs generally will be satisfied by a combination of the following: cash flows from operations, cash on hand, unsettled equity forward sales agreements, debt assumptions and financings (including secured financings), issuances of debt and equity securities, dispositions of assets (including, in whole or in part, through joint venture arrangements) and borrowings under our revolving credit facility and commercial paper program. However, an inability to access liquidity through multiple capital sources concurrently could have a material adverse effect on us.
Our material contractual obligations arising in the normal course of business primarily consist of long-term debt and related interest payments, and operating obligations which include ground lease obligations. During the three months ended March 31, 2026, our material contractual obligations decreased primarily due to the net repayment of debt. See “Note 10 – Senior Notes Payable and Other Debt” and “Note 12 – Commitments and Contingencies” of the Notes to Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for further information regarding our long-term debt obligations and operating obligations, respectively.
We may, from time to time, seek to retire or purchase our outstanding indebtedness for cash or in exchange for equity securities in open market purchases, privately negotiated transactions or otherwise. Such repurchases or exchanges, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions, prospects for capital and other factors. The amounts involved may be material.
Credit Facilities, Commercial Paper, Unsecured Term Loans and Letters of Credit
As of March 31, 2026, our $3.5 billion unsecured revolving credit facility had no borrowings outstanding and $0.8 million restricted to support outstanding letters of credit. We use our unsecured revolving credit facility to support our commercial paper program and for general corporate purposes.
Our wholly-owned subsidiary, Ventas Realty, Limited Partnership (“Ventas Realty”), may issue from time to time unsecured commercial paper notes up to a maximum aggregate amount outstanding at any time of $2.0 billion. The notes are sold under customary terms in the U.S. commercial paper note market and are ranked pari passu with Ventas Realty’s other unsecured senior indebtedness. The notes are fully and unconditionally guaranteed by Ventas. As of March 31, 2026 and December 31, 2025, we had $65.0 million and no borrowings, respectively, outstanding under our commercial paper program.
As of March 31, 2026, Ventas Realty had an unsecured term loan in aggregate principal of up to $1.25 billion, consisting of a $700 million unsecured term loan and a $550 million unsecured delayed draw term loan which, as of March 31, 2026, remained undrawn. The term loan is priced at SOFR plus 0.85%, which is subject to adjustment based on Ventas Realty’s debt ratings. This term loan is fully and unconditionally guaranteed by Ventas and subject to certain customary covenants and other terms and conditions. It is scheduled to mature in January 2031 and includes an accordion feature that permits Ventas Realty to increase the aggregate borrowings thereunder to up to $1.75 billion, subject to the satisfaction of certain conditions, including the receipt of additional commitments for such increase. The term loan, originally issued in June 2022, was amended in January 2026 to, among other things, extend the maturity from June 2027 to January 2031; increase the principal amount of the unsecured term loan from $500 million to $700 million, which increase was used to repay in full Ventas Realty’s $200 million unsecured term loan due February 2027; and establish the $550 million unsecured delayed draw term loan. The amended term loan was primarily accounted for as a debt modification resulting in no gain or loss.
As of March 31, 2026, we had a $100.0 million uncommitted line for standby letters of credit, which had an outstanding balance of $18.6 million. The agreement governing the line contains certain customary covenants and other terms and conditions. Under its terms, we are required to pay a fixed rate commission on each outstanding letter of credit.
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Exchangeable Senior Notes
In June 2023, Ventas Realty issued $862.5 million aggregate principal amount of its 3.75% Exchangeable Senior Notes due 2026 (the “Exchangeable Notes”) in a private placement. The Exchangeable Notes are senior, unsecured obligations of Ventas Realty and are fully and unconditionally guaranteed on an unsecured and unsubordinated basis by Ventas. The Exchangeable Notes bear interest at a rate of 3.75% per year, payable semi-annually in arrears on June 1 and December 1 of each year, beginning on December 1, 2023. The Exchangeable Notes mature on June 1, 2026, unless earlier exchanged, redeemed or repurchased.
As of March 31, 2026, we had $856.1 million, aggregate principal amount of the Exchangeable Notes outstanding with an effective interest rate of 4.62% inclusive of the impact of the amortization of issuance costs. During the three months ended March 31, 2026, we recognized $8.0 million of contractual interest expense and amortization of issuance costs of $1.8 million related to the Exchangeable Notes. Unamortized deferred financing costs of $1.2 million as of March 31, 2026 were recorded as an offset to Senior notes payable and other debt on our Consolidated Balance Sheets. During the three months ended March 31, 2026, noteholders exchanged $6.4 million principal amount of the Exchangeable Notes pursuant to the terms of the governing indenture.
The Exchangeable Notes are currently exchangeable at an exchange rate of 18.2936 shares of our common stock per $1,000 principal amount of Exchangeable Notes (equivalent to an exchange price of approximately $54.66 per share of common stock). The exchange rate is subject to adjustment, including in the event of the payment of a quarterly dividend in excess of $0.45 per share, but will not be adjusted for any accrued and unpaid interest. Upon exchange of the Exchangeable Notes, Ventas Realty will pay cash up to the aggregate principal amount of the Exchangeable Notes to be exchanged and elected to deliver shares of common stock in respect of the remainder, if any, of its exchange obligation in excess of the aggregate principal amount of the Exchangeable Notes being exchanged. As of March 1, 2026, until the close of business on the business day immediately preceding the maturity date, the Exchangeable Notes are exchangeable at the option of the noteholders at any time.
Senior Notes
In January 2026, we repaid $500.0 million aggregate principal amount of 4.13% Senior Notes due 2026.
Mortgages
During the three months ended March 31, 2026, we refinanced a CAD $92.0 million ($67.4 million) mortgage loan with new maturity in February 2031 and repaid a mortgage with principal amount of CAD $87.1 million ($63.8 million).
Derivatives and Hedging
In the normal course of our business, interest rate fluctuations affect future cash flows under our variable rate debt obligations, loans receivable and marketable debt securities, and foreign currency exchange rate fluctuations affect our operating results. We follow established risk management policies and procedures, including the use of derivative instruments, to mitigate the impact of these risks.
We do not use derivative instruments for trading or speculative purposes, and we have a policy of entering into contracts only with major financial institutions based upon their credit ratings and other factors. When considered together with the underlying exposure that the derivative is designed to hedge, we do not expect that the use of derivatives in this manner would have any material adverse effect on our future financial condition or results of operations.
We enter into interest rate swaps in order to maintain a capital structure containing targeted amounts of fixed and variable-rate debt and manage interest rate risk. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for our fixed-rate payments. These interest rate swap agreements are used to hedge the variable cash flows associated with variable-rate debt.
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Periodically, we enter into interest rate derivatives, such as treasury locks, to partially hedge the risk of changes in interest payments attributable to increases in the benchmark interest rate during the period leading up to the probable issuance of fixed-rate debt. We designate our interest rate locks as cash flow hedges. Gains and losses when we settle our interest rate locks are amortized over the life of the related debt and recorded in Interest expense in our Consolidated Statements of Income.
As of March 31, 2026, our variable rate debt obligations of $1.1 billion reflect, in part, the effect of $75.3 million notional amount of interest rate swaps with maturities in March 2027, that effectively convert fixed rate debt to variable rate debt. These interest rate swaps were not designated for hedge accounting.
As of March 31, 2026, our fixed rate debt obligations of $11.5 billion reflect, in part, the effect of $125.3 million and C$591.6 million ($425.2 million) notional amount of interest rate swaps with maturities ranging from June 2027 to April 2031, in each case, that effectively convert variable rate debt to fixed rate debt. These interest rate swaps were designated as cash flow hedges.
2026 Activity
During the three months ended March 31, 2026, approximately $0.5 million of realized losses primarily relating to our interest rate swaps and treasury locks were reclassified into Interest expense in our Consolidated Statements of Income. Approximately $0.1 million of unrealized gains, which are included in Accumulated other comprehensive income as of March 31, 2026, are expected to be reclassified into earnings within the next 12 months.
Capital Stock
In February 2026, we amended our existing ATM Program, such that the aggregate gross sales price of common stock available for issuance under the ATM Program immediately following the amendment was $2.5 billion. As of March 31, 2026, the remaining amount available under the ATM Program for future sales of common stock was $1.4 billion.
During the three months ended March 31, 2026, we entered into equity forward sales agreements under the ATM Program for 13.8 million shares of our common stock for gross proceeds of $1.2 billion, representing an average price of $84.62 per share. During the three months ended March 31, 2026, we settled 10.6 million shares of common stock under outstanding equity forward sales agreements entered into under the ATM Program for net cash proceeds of $800.0 million.
In April 2026, we entered into equity forward sales agreements under the ATM Program for 2.5 million shares of common stock or approximately $205.5 million in gross proceeds which remain unsettled with maturity in October 2027. As of April 28, 2026, the remaining amount available under the ATM Program for future sales of common stock was $1.2 billion, and we maintained unsettled equity forward sales agreements of 19.6 million shares of common stock, or approximately $1.6 billion in gross proceeds, with varying maturities through October 2027.
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From time to time, including under our ATM Program, we may enter into equity forward sales agreements. An equity forward sales agreement enables us to secure a share price on the sale of shares of our common stock at or shortly after the time the forward sales agreement becomes effective, while postponing the receipt of proceeds from the sale of shares until a future date. Equity forward sales agreements generally have a maturity of one to two years. At any time during the term of an equity forward sales agreement, we may settle that equity forward sales agreement by delivery of physical shares of our common stock to the forward purchaser or, at our election, subject to certain exceptions, we may settle in cash or by net share settlement. The forward sales price we expect to receive upon settlement of outstanding equity forward sales agreements will be the initial forward price, net of commissions, established on or shortly after the effective date of the relevant equity forward sales agreement, subject to adjustments for accrued interest, the forward purchasers’ stock borrowing costs in excess of a certain threshold specified in the equity forward sales agreement and certain fixed price reductions for expected dividends on our common stock during the term of the equity forward sales agreement. Our unsettled equity forward sales agreements are accounted for as equity instruments. Refer to “Note 15 – Earnings Per Share.”
Dividends
During the three months ended March 31, 2026, we declared a dividend of $0.52 per share of our common stock. In order to continue to qualify as a REIT, we must make annual distributions to our stockholders of at least 90% of our REIT taxable income (excluding net capital gain). In addition, we will be subject to income tax at the regular corporate rate to the extent we distribute less than 100% of our REIT taxable income, including any net capital gains. We intend to pay dividends greater than 100% of our taxable income, after the use of any net operating loss carryforwards, for 2026.
We expect that our cash flows will exceed our REIT taxable income due to depreciation and other non-cash deductions in computing REIT taxable income and that we will be able to satisfy the 90% distribution requirement. However, from time to time, we may not have sufficient cash on hand or other liquid assets to meet this requirement or we may decide to retain cash or distribute such greater amount as may be necessary to avoid income and excise taxation. If we do not have sufficient cash on hand or other liquid assets to enable us to satisfy the 90% distribution requirement, or if we desire to retain cash, we may borrow funds, issue additional equity securities, pay taxable stock dividends, if possible, distribute other property or securities or engage in a transaction intended to enable us to meet the REIT distribution requirements or any combination of the foregoing.
Capital Expenditures
From time to time, we engage in development and redevelopment activities within our reportable business segments and through our investments in unconsolidated entities. For example, we are party to certain agreements that commit us to develop properties funded through capital that we and, in certain circumstances, our joint venture partners provide. In addition, from time to time, we engage in redevelopment projects with respect to our existing senior housing communities, outpatient medical buildings and research centers to maximize the value, increase NOI, maintain a market-competitive position, achieve property stabilization or change the primary use of the property.
The terms of our triple-net leases generally obligate our tenants to pay all capital expenditures necessary to maintain and improve our triple-net leased properties. However, from time to time, we may fund the capital expenditures for our triple-net leased properties through loans or advances to the tenants, which may increase the amount of rent payable with respect to the properties in certain cases. We may also fund capital expenditures for which we may become responsible upon expiration of our triple-net leases or in the event that our tenants are unable or unwilling to meet their obligations under those leases.
We expect that these liquidity needs generally will be satisfied by a combination of the following: cash flows from operations, cash on hand, debt assumptions and financings (including secured financings), issuances of debt and equity securities, dispositions of assets (in whole or in part through joint venture arrangements) and borrowings under our revolving credit facilities and commercial paper program.
To the extent that unanticipated capital expenditure needs arise or significant borrowings are required, our liquidity may be affected adversely. Our ability to borrow additional funds may be restricted in certain circumstances by the terms of the instruments governing our outstanding indebtedness.
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Cash Flows
The following table sets forth our sources and uses of cash flows for the three months ended March 31, 2026 and 2025 (dollars in thousands):
| For the Three Months Ended March 31, | Change | ||||||||||||||||||||||
| 2026 | 2025 | $ | % | ||||||||||||||||||||
| Cash, cash equivalents and restricted cash at beginning of period | $ | 786,137 | $ | 957,233 | $ | (171,096) | (17.9) | % | |||||||||||||||
| Net cash provided by operating activities | 394,607 | 321,144 | 73,463 | 22.9 | |||||||||||||||||||
| Net cash used in investing activities | (1,068,505) | (883,744) | (184,761) | (20.9) | |||||||||||||||||||
| Net cash provided by (used in) financing activities | 89,963 | (149,136) | 239,099 | 160.3 | |||||||||||||||||||
| Effect of foreign currency translation | (912) | 466 | (1,378) | (295.7) | |||||||||||||||||||
| Cash, cash equivalents and restricted cash at end of period | $ | 201,290 | $ | 245,963 | $ | (44,673) | (18.2) |
Cash Flows from Operating Activities
Cash flows from operating activities increased $73.5 million during the three months ended March 31, 2026 compared to the same period in 2025 primarily due to growth in our SHOP business.
Cash Flows from Investing Activities
Net cash used in investing activities increased $184.8 million during the three months ended March 31, 2026 compared to the same period in 2025 primarily due to a $204.2 million increase from higher real estate investments in our SHOP business and a $28.1 million increase in development and redevelopment projects, partially offset by a $33.8 million increase in proceeds from dispositions.
Cash Flows from Financing Activities
Net cash provided by financing activities increased $239.1 million during the three months ended March 31, 2026 compared to the same period in 2025 primarily due to a $368.4 million net increase from debt, commercial paper and revolving credit facilities, partially offset by a $77.2 million decrease in proceeds from common stock issuances and a $32.2 million increase in cash distribution to common stockholders and noncontrolling interest.
Off-Balance Sheet Arrangements
We own interests in certain unconsolidated entities as described in “Note 7 – Investments in Unconsolidated Entities.” Except in limited circumstances, our risk of loss is limited to our investment in the entities and any outstanding loans receivable. Further, we use financial derivative instruments to hedge interest rate and foreign currency exchange rate exposure. Finally, as of March 31, 2026, we had $19.4 million outstanding letters of credit obligations.
Commitments and Contingencies
Guarantor and Issuer Information - Registered Senior Notes
Ventas, Inc. has fully and unconditionally guaranteed the obligation to pay principal and interest with respect to the outstanding senior notes issued by our 100% owned subsidiary, Ventas Realty, that were issued in transactions registered under the Securities Act of 1933. No other Ventas entities are issuers or guarantors of debt securities registered under the Securities Act.
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Under certain circumstances, contractual and legal restrictions, including those contained in the instruments governing our subsidiaries’ outstanding mortgage indebtedness, may restrict our ability to obtain cash from our subsidiaries for the purpose of meeting our debt service obligations, including Ventas Realty’s payment obligations and our payment guarantees with respect to Ventas Realty’s registered senior notes.
Ventas Realty is a direct, wholly owned subsidiary of Ventas, Inc. Excluding investments in subsidiaries, the assets, liabilities and results of operations of Ventas Realty and Ventas, Inc., on a combined basis, are not material to the consolidated financial position or consolidated results of operations of Ventas. Therefore, in accordance with Rule 13-01 of Regulation S-X, we have elected to exclude summarized financial information for the issuer and guarantor of our registered senior notes.
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