Ventas FFO Soars - Analyst Blog

Ventas Inc. (VTR), a leading healthcare real estate investment trust (REIT), reported first quarter 2010 recurring funds from operations (FFO) of $105.2 million or 67 cents per share, compared to $95.7 million or 67 cents per share in the year-earlier quarter. Fund from operations, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and other non-cash expenses to net income.
 
The increase in year-over-year FFO was primarily due to rental increases from its triple-net lease portfolio, higher Net Operating Income (NOI) from its senior living and medical office building (MOB) operating portfolios, and lower interest expense, partially offset by higher weighted average diluted shares outstanding during the quarter.
 
Ventas currently has an operating portfolio of 79 senior housing communities in North America that are managed by Sunrise Senior Living Inc. (SRZ). In about 19 of these, Ventas has 100% ownership stake, while in the remaining 60 communities Ventas has a partnership share of 75% to 85% with the balance being owned by Sunrise. During the quarter, NOI from all 79 properties was $33.8 million compared to $30.5 million in the year-ago period.



During the quarter, Ventas invested $27.7 million, and decided to sell 5 senior housing properties for $25 million. Since the beginning of the year, the company has received $235 million of commitments for additional credit capacity under its revolving credit facilities. Consequently, Ventas has increased its revolving credit facility to $1 billion.
 
At quarter end, Ventas had $961.8 million available under its revolving credit facility, and $132.7 million of cash and short-term cash investments. The company’s debt to total capitalization at quarter end was approximately 27% with net debt to adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) being 4.1x.



For full year 2010, Ventas has reiterated its earlier recurring FFO guidance in the range of $2.69 to $2.75 per share.
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Read the full analyst report on "SRZ"
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