Ventas, Inc. (NYSE:VTR), an S&P 500 company and real estate investment trust, issued the following statement regarding the on-going COVID-19 pandemic.
“At Ventas, our first priority is the health and safety of our residents and tenants, our employees and the caregivers who work for our operating partners,” said Debra A. Cafaro, Chairman and CEO of Ventas. “We are carefully monitoring the impact of the COVID-19 pandemic, and the ongoing efforts to manage and contain it.”
Ms. Cafaro continued, “In our senior housing portfolio, and enterprise wide, our 2020 results through February were in-line with our previously announced expectations. However, until we have a clearer understanding of the depth, duration and geographic reach of the COVID-19 pandemic, we believe it is appropriate to withdraw our previously provided 2020 financial guidance. While we cannot predict how long this situation will last, we are focused on maintaining a strong balance sheet, liquidity and financial flexibility. As a precautionary measure, we recently drew on the Company’s revolving credit facility in the amount of $2.75 billion.”
“Ventas has a long track record of successfully preparing for, and managing through, dynamic and challenging markets conditions. Our diversified portfolio, leading operating partners and experienced and tenured team are important assets in these extraordinary times,” Cafaro concluded.
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Senior Housing Business
The Company’s interdisciplinary teams were early and comprehensive in their active engagement with its senior housing operating partners and tenants, who are implementing CDC or local-equivalent protocols and other best practices in response to COVID-19. Most of the Company’s operating partners are now restricting or limiting access to their communities, either voluntarily or in response to regulatory restrictions. Ventas’s operating partners are also taking other risk mitigation actions, such as coordinating with third-party contract labor providers, procuring stand-by professional cleaning services and providing enhanced COVID-19 training to staff.
Through February 2020, the senior housing operating business has delivered results in-line with the Company’s expectations. Further, thus far in 2020 the Company has received substantially all of its NNN rent payments, as expected.
However, there are now strong indications that tours and move-ins are beginning to slow and the pandemic raises the risk of an elevated level of move-outs. The operating costs of Ventas’s partners are increasing as they respond to the COVID-19 pandemic. The Company expects these trends to accelerate. Accordingly, although it is too early to know the extent of the impact, the Company is withdrawing its previously provided 2020 financial guidance.
Liquidity
The Company is taking prudent stepsto increase liquidity and preserve financial flexibility. In addition to the March 1, 2020 closing of Ventas’s perpetual life vehicle, which provided $0.6 billion in proceeds, the Company recently drew $2.75 billion under its $3.0 billion Revolving Credit Facility. Upon receipt of the full proceeds, the Company expects to have approximately $2.75 billion in cash on its balance sheet.
Because of the proactive steps the Company has recently taken, it has limited debt maturities through 2021, negligible commercial paper outstanding and no unannounced investment commitments.
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