Ventas Aims for Bold Expansion as Senior Housing Constitutes 50% of NOI
Senior housing has become a significant focus for Ventas (NYSE: VTR), now accounting for approximately half of the company’s net operating income. The Chicago-based real estate investment trust (REIT) is strategically positioning itself to capitalize on the growing demand for senior housing over the next decade.
Since mid-2024, Ventas has completed an impressive $4.1 billion in senior housing investments. This aggressive acquisition strategy has resulted in a 20% increase in the size of its senior housing operating portfolio (SHOP) in recent years.
Leadership at Ventas has emphasized that a larger SHOP segment enhances the company’s ability to support its operating partners in areas such as pricing, sales, expense management, and capital expenditures. Looking ahead, the REIT plans to pursue even more ambitious growth, as outlined by CEO Debra Cafaro.
“We’re going to continue to try to rapidly expand that business from internal and external investment activity,” Cafaro stated during the REIT’s third-quarter earnings call.
The company’s acquisition pipeline is gaining momentum, with 2025 projected to mark the fourth consecutive year of double-digit SHOP net operating income (NOI) growth. Justin Hutchens, Ventas’ Chief Investment Officer and Executive Vice President, leads the senior housing portfolio and noted, “We’ve seen the opportunity to buy assets that are delivering significant growth potential.”
In an analyst note from BMO Capital Markets, Managing Director Juan Sanabria pointed out Ventas’ “modest earnings beat,” with the SHOP segment reporting “solid but not spectacular results.” He anticipates a positive reaction from the market, as SHOP guidance assumptions remain largely intact.
In a related move, Ventas’ peer REIT Welltower recently sold an 18 million square foot portfolio of outpatient medical real estate assets for $7.2 billion. Cafaro mentioned that Ventas is “always evaluating different portfolio actions,” with a current focus on aggressively growing its private pay SHOP business.
On the stock market, Ventas shares rose by $4.58 to settle at $74.36, reflecting a 6.56% increase. The company also reported normalized funds from operations (FFO) per share of $0.88 for the third quarter, further solidifying its financial standing.
Currently, Ventas boasts a portfolio of over 850 senior living properties.
‘Momentum in our pipeline’
Senior housing REITs have been actively acquiring properties in 2025, as the financial feasibility of new development projects remains challenging. Ventas is experiencing “momentum in our pipeline,” according to Hutchens, who emphasized the company’s commitment to aggressively growing its SHOP segment.
This year alone, Ventas has executed 20 transactions for 50 communities, totaling approximately 6,200 units across 15 states. Additionally, the company has established a SHOP relationship with U.K.-based operator CCG, converting 11 triple-net communities in London to SHOP. However, Hutchens reiterated that the company’s primary focus remains on U.S.-based communities, despite its international holdings.
“The U.S. is where all the action is,” he asserted, noting that Ventas can acquire properties at prices significantly below current replacement costs.
Positive operational results are fueling Ventas’ expansion. U.S. SHOP occupancy rose by 340 basis points in the third quarter of 2025 compared to the previous year, reaching an average of approximately 85%. Overall, senior housing occupancy improved to 89%, with rent per occupied room increasing by 5% during the same period. The company reported a margin of 28%, a 200 basis point increase, along with 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 explained. However, he cautioned that Ventas does not consider 90% occupancy as stabilized in markets with net absorption opportunities. The company sees potential for occupancy gains through conversions from Brookdale to other operators, as some communities were previously under-occupied.
“We transitioned the lower occupied communities from triple-net to SHOP, and we have a long runway,” Hutchens added.
While he refrained from predicting performance indicators for 2026, Hutchens highlighted opportunities for increasing occupancy and rent through a dynamic pricing approach with operators, which supports revenue per occupied room (RevPOR) growth.
Brookdale transitions, CapEx conversions, tech improvements
In addition to expanding its SHOP segment, Ventas is focused on enhancing the performance of its operating partners. The company is transitioning 45 communities previously managed by Brookdale Senior Living (NYSE: BKD) to five local market-focused operators as part of its triple-net lease conversions. As of the third quarter, 27 of these transitions have been completed, with the remainder expected to finalize in the fourth quarter of 2025.
Operators taking over this portfolio include Discovery Senior Living, Grace Management, Priority Life Care, Senior Lifestyle, and Sinceri Senior Living. Ventas plans to allocate capital expenditures for routine upgrades in these communities, including common area enhancements, new paint, and updated furniture and fixtures, all aimed at minimizing disruptions.
During the earnings call, Ventas leaders emphasized that all operators in the portfolio utilize end-to-end technology for various functions, including safety monitoring, care compliance, medication management, customer relationship management, and maintenance. Many of these systems are now enhanced with AI capabilities, according to Hutchens.
The company’s “Ventas OI” data platform has enabled dynamic pricing efforts in key markets while also managing capital projects and performance metrics. Following a temporary dip in mortality-driven move-outs earlier in the year, Ventas has maintained its full-year guidance of 270 basis points in occupancy gains and reported the best selling season in the last four years, typically running from spring to summer.
Senior housing has become a significant focus for Ventas (NYSE: VTR), now accounting for approximately half of the company’s net operating income. The Chicago-based real estate investment trust (REIT) is strategically positioning itself to capitalize on the growing demand for senior housing over the next decade.
Since mid-2024, Ventas has completed an impressive $4.1 billion in senior housing investments. This aggressive acquisition strategy has resulted in a 20% increase in the size of its senior housing operating portfolio (SHOP) in recent years.
Leadership at Ventas has emphasized that a larger SHOP segment enhances the company’s ability to support its operating partners in areas such as pricing, sales, expense management, and capital expenditures. Looking ahead, the REIT plans to pursue even more ambitious growth, as outlined by CEO Debra Cafaro.
“We’re going to continue to try to rapidly expand that business from internal and external investment activity,” Cafaro stated during the REIT’s third-quarter earnings call.
The company’s acquisition pipeline is gaining momentum, with 2025 projected to mark the fourth consecutive year of double-digit SHOP net operating income (NOI) growth. Justin Hutchens, Ventas’ Chief Investment Officer and Executive Vice President, leads the senior housing portfolio and noted, “We’ve seen the opportunity to buy assets that are delivering significant growth potential.”
In an analyst note from BMO Capital Markets, Managing Director Juan Sanabria pointed out Ventas’ “modest earnings beat,” with the SHOP segment reporting “solid but not spectacular results.” He anticipates a positive reaction from the market, as SHOP guidance assumptions remain largely intact.
In a related move, Ventas’ peer REIT Welltower recently sold an 18 million square foot portfolio of outpatient medical real estate assets for $7.2 billion. Cafaro mentioned that Ventas is “always evaluating different portfolio actions,” with a current focus on aggressively growing its private pay SHOP business.
On the stock market, Ventas shares rose by $4.58 to settle at $74.36, reflecting a 6.56% increase. The company also reported normalized funds from operations (FFO) per share of $0.88 for the third quarter, further solidifying its financial standing.
Currently, Ventas boasts a portfolio of over 850 senior living properties.
‘Momentum in our pipeline’
Senior housing REITs have been actively acquiring properties in 2025, as the financial feasibility of new development projects remains challenging. Ventas is experiencing “momentum in our pipeline,” according to Hutchens, who emphasized the company’s commitment to aggressively growing its SHOP segment.
This year alone, Ventas has executed 20 transactions for 50 communities, totaling approximately 6,200 units across 15 states. Additionally, the company has established a SHOP relationship with U.K.-based operator CCG, converting 11 triple-net communities in London to SHOP. However, Hutchens reiterated that the company’s primary focus remains on U.S.-based communities, despite its international holdings.
“The U.S. is where all the action is,” he asserted, noting that Ventas can acquire properties at prices significantly below current replacement costs.
Positive operational results are fueling Ventas’ expansion. U.S. SHOP occupancy rose by 340 basis points in the third quarter of 2025 compared to the previous year, reaching an average of approximately 85%. Overall, senior housing occupancy improved to 89%, with rent per occupied room increasing by 5% during the same period. The company reported a margin of 28%, a 200 basis point increase, along with 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 explained. However, he cautioned that Ventas does not consider 90% occupancy as stabilized in markets with net absorption opportunities. The company sees potential for occupancy gains through conversions from Brookdale to other operators, as some communities were previously under-occupied.
“We transitioned the lower occupied communities from triple-net to SHOP, and we have a long runway,” Hutchens added.
While he refrained from predicting performance indicators for 2026, Hutchens highlighted opportunities for increasing occupancy and rent through a dynamic pricing approach with operators, which supports revenue per occupied room (RevPOR) growth.
Brookdale transitions, CapEx conversions, tech improvements
In addition to expanding its SHOP segment, Ventas is focused on enhancing the performance of its operating partners. The company is transitioning 45 communities previously managed by Brookdale Senior Living (NYSE: BKD) to five local market-focused operators as part of its triple-net lease conversions. As of the third quarter, 27 of these transitions have been completed, with the remainder expected to finalize in the fourth quarter of 2025.
Operators taking over this portfolio include Discovery Senior Living, Grace Management, Priority Life Care, Senior Lifestyle, and Sinceri Senior Living. Ventas plans to allocate capital expenditures for routine upgrades in these communities, including common area enhancements, new paint, and updated furniture and fixtures, all aimed at minimizing disruptions.
During the earnings call, Ventas leaders emphasized that all operators in the portfolio utilize end-to-end technology for various functions, including safety monitoring, care compliance, medication management, customer relationship management, and maintenance. Many of these systems are now enhanced with AI capabilities, according to Hutchens.
The company’s “Ventas OI” data platform has enabled dynamic pricing efforts in key markets while also managing capital projects and performance metrics. Following a temporary dip in mortality-driven move-outs earlier in the year, Ventas has maintained its full-year guidance of 270 basis points in occupancy gains and reported the best selling season in the last four years, typically running from spring to summer.
