Ventas Reports Rise in Q4 FFO
Ventas Records a 4.1% Increase in Q4 Normalized FFO
Ventas announced a 4.1% rise in its fourth-quarter normalized funds from operations (FFO) on Wednesday, driven by strong demand for its assisted living and senior housing properties. The real estate investment trust (REIT) based in Chicago has seen significant growth in these areas.
Senior Housing Portfolio Growth Predicted for 2024
Despite the positive news, Ventas expects that the growth in its senior housing portfolio in 2024 will be partially offset by higher interest expenses. As a result, the company has forecasted full-year normalized FFO below expectations.
2024 Normalized FFO Estimates
Ventas anticipates 2024 normalized FFO to be in the range of $3.07 to $3.18 per share, falling short of analysts’ average estimates of $3.21 per share, according to LSEG data. This projection has caused a decrease of 2.6% in the company’s shares during after-the-bell trading.
Increasing Demand for Senior Housing
The growing demand for senior housing in the U.S. is attributed to an aging population. However, the slow development of new facilities in a high-interest rate environment and uncertain macroeconomic conditions has been a challenge for the industry.
Challenges Faced by Ventas
Between 2009 and 2019, the number of people in the U.S. aged 65 and over increased by 14.4 million, outpacing the growth of the under-65 population. Elevated interest rates have made borrowing more expensive for Ventas, impacting its senior housing and healthcare properties across the United States and the United Kingdom.
Financial Performance
Ventas reported a fourth-quarter normalized funds from operations of 76 cents per share, surpassing 73 cents from the previous year. Additionally, the same-store net operating income from its senior housing rose by 15% in the quarter.
