Ventas to Acquire High-Quality Life Science and Medical Real Estate Leased By Leading Universities, Academic Medical Centers and Research Companies for $1.5 Billion

  • Diversifies Portfolio with 4.5 Million Square Feet
  • Establishes Growth Platform with Wexford Science & Technology, LLC,
    the Leading University-Focused Developer
  • Consistent with Ventas’s Strategy to Drive Reliable Income and
    Growth from Institutional Quality Tenants
  • Transaction Expected to be Accretive in 2017 by $0.07 to $0.09 Per
    Share to Normalized FFO

CHICAGO–(BUSINESS WIRE)–Ventas, Inc. (NYSE: VTR) (“Ventas” or the “Company”) today announced
that it has signed a definitive agreement to acquire substantially all
of the life science and medical real estate assets of Wexford Science &
Technology, LLC (“Wexford”) from affiliates of Blackstone Real Estate
Partners VIII L.P. for $1.5 billion in cash. The acquisition will add a
related business line to Ventas’s diverse portfolio with 25 class-A
assets that are leased by leading universities, academic medical centers
and research companies, including Yale University, the University of
Pennsylvania Health System, Washington University in St. Louis, Wake
Forest University and Alexion Pharmaceuticals, Inc. The transaction is
subject to the satisfaction of customary closing conditions and expected
to close in the fourth quarter of 2016.

“This acquisition and alliance with Wexford are a natural fit for
Ventas, and reinforce our position as the premier provider of capital at
the intersection of healthcare and real estate. We are excited to add
these world class institutions and advantaged real estate to our
portfolio,” said Ventas Chairman and Chief Executive Officer Debra A.
Cafaro. “This transaction also provides Ventas a unique opportunity to
capitalize on increasing healthcare-driven research and development
spurred and supported by top tier research universities. We believe the
growth opportunity is significant, and look forward to working with
Wexford to help leading universities, academic medical centers and
research companies fulfill their core missions.”

The portfolio includes 23 operating properties that contain 4.1 million
square feet, are 97 percent leased and derive 73 percent of revenue from
excellent credit tenants, including 11 universities with an average
credit rating of Aa2, investment grade companies and public companies
with an equity market capitalization exceeding $1 billion. It also
includes two development assets encompassing approximately 400,000
square feet, that are nearly 60 percent pre-leased and affiliated with
Duke University and Wake Forest University. The Company is also
acquiring nine development sites principally contiguous to existing
assets.

The total consideration for the transaction is $1.5 billion plus the
assumption of $33 million of liabilities. The total consideration for
the 23 operating properties is $1.4 billion (representing a 2017 cash
yield of 6.8 percent); $88 million for the two development properties
(representing an unlevered projected stabilized yield of approximately
7.5 percent inclusive of post-closing capital funding to complete and
lease up the assets to stabilization); and $50 million for the
development sites.

Wexford is the leading real estate development company focused
exclusively on partnering with universities, academic medical centers
and research companies. As part of the acquisition, Ventas will enter
into a long-term management and pipeline agreement with Wexford, whereby
Ventas will own the existing real estate portfolio, Ventas will have
exclusive rights to jointly develop future projects with Wexford, and
Wexford will continue to manage the portfolio. Wexford will be
independently owned and operated by its experienced, existing management
team.

“Through the acquisition of Wexford’s assets, we are adding new
high-quality properties with long lease terms and highly rated,
institutional quality tenants, driving reliable, growing cash flows for
Ventas,” said Ventas Executive Vice President, Chief Investment Officer
John Cobb. “We are pleased to partner with the outstanding Wexford team.
With several projects in the near term pipeline, we look forward to
pursuing additional growth opportunities together.”

“Universities are reliable, consistent drivers of economic activity,
resulting in high, sustainable portfolio occupancies,” said Jim Berens,
President of Wexford. “We are delighted to have Ventas, the leader in
healthcare real estate, as our strategic capital partner to continue
growing a portfolio where there is cutting-edge, institutional-quality
life science research to meet the needs of a growing and aging
population.”

Strategic and Financial Benefits

  • Consistent with Ventas’s Strategy of Driving Reliable Income and
    Growth from a Diversified Portfolio.
    The transaction marks
    Ventas’s entry into the attractive university-affiliated life science
    real estate business. These 100 percent private pay assets will
    provide Ventas with additional diversification, reliable income and
    growth. Wexford’s assets are affiliated with 11 leading universities
    that collectively account for 10 percent of U.S. university research
    and development spending. Pro forma for the Wexford transaction, the
    acquired assets will generate approximately five percent of Ventas’s
    total net operating income (“NOI”). Upon closing of the transaction,
    the Wexford portfolio will increase Ventas’s NOI contribution from
    private pay assets to 84 percent.
  • Adds High-quality Properties Generating Growing Cash Flows. The
    acquired portfolio of 25 properties includes highly rated tenants and
    favorable triple-net lease structures with a weighted average lease
    term of 10 years and two percent annual rent escalators. The two
    development properties are expected to open in 2017, leading to
    additional near term growth. 2017 cash NOI is expected to
    approximate $94.6 million.
  • Establishes New Platform for Growth. Similar to what Ventas has
    successfully achieved with Lillibridge Healthcare Services and
    Atria Senior Living, this transaction adds the leading real estate
    development company focused exclusively on partnering with
    universities, academic medical centers and research companies as a
    strategic partner for growth. Ventas will have an exclusive pipeline
    agreement with Wexford that will provide Ventas with the opportunity
    to capture real estate demand for the institutional life science and
    medical market, which is benefitting from the increasing longevity of
    the aging U.S. population and biopharma drug development growth
    opportunities. Wexford currently has a significant pipeline of near
    term, attractive investment opportunities.
  • Accretive Transaction on a Leverage Neutral Basis. The
    transaction is expected to be accretive to Ventas’s normalized funds
    from operations (“FFO”) in 2017 by $0.07 to $0.09 per share on a
    leverage-neutral basis.
  • Enhanced Sustainability Profile with 15 LEED Properties. 13 of
    the operating properties are LEED certified and both of the
    development properties are expected to be LEED certified, enhancing
    Ventas’s sustainability profile.

Advisors

J.P. Morgan Securities LLC is acting as financial advisor to Ventas, and
Kirkland & Ellis LLP is acting as its legal counsel in connection with
the transaction. Eastdil Secured group of Wells Fargo Securities LLC is
acting as financial advisor to Blackstone, and Simpson Thacher &
Bartlett LLP is acting as its legal counsel.

Additional Materials

A presentation regarding the acquisition of Wexford’s university
affiliated life science and medical real estate assets and a link to a
video property tour can be found on the Company’s website under the
“Investor Relations” section.

About Ventas

Ventas, Inc., an S&P 500 company, is a leading real estate investment
trust. Its diverse portfolio of approximately 1,300 assets in the United
States, Canada and the United Kingdom consists of seniors housing
communities, medical office buildings, skilled nursing facilities,
specialty hospitals and general acute care hospitals. Through its
Lillibridge subsidiary, Ventas provides management, leasing, marketing,
facility development and advisory services to highly rated hospitals and
health systems throughout the United States. More information about
Ventas and Lillibridge can be found at www.ventasreit.com
and www.lillibridge.com.

About Wexford

Wexford Science & Technology, LLC is a real estate company exclusively
focused on partnering with universities, academic medical centers and
research companies. Wexford targets strategic opportunities with
top-tier research universities that are directly on or contiguous to
dense, urban campuses.

This press release 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.
All
statements regarding the Company’s or its tenants’, operators’,
borrowers’ or managers’ expected future financial condition, results of
operations, cash flows, funds from operations, dividends and dividend
plans, financing opportunities and plans, capital markets transactions,
business strategy, budgets, projected costs, operating metrics, capital
expenditures, competitive positions, acquisitions, investment
opportunities, dispositions, merger or acquisition integration, growth
opportunities, expected lease income, continued qualification as a real
estate investment trust (“REIT”), plans and objectives of management for
future operations and statements that include words such as
“anticipate,” “if,” “believe,” “plan,” “estimate,” “expect,” “intend,”
“may,” “could,” “should,” “will” and other similar expressions are
forward-looking statements.
These forward-looking statements are
inherently uncertain, and actual results may differ from the Company’s
expectations.
The Company does not undertake a duty to update
these forward-looking statements, which speak only as of the date on
which they are made.

The Company’s actual future results and trends may differ materially
from expectations depending on a variety of factors discussed in the
Company’s filings with the Securities and Exchange Commission.
These
factors include without limitation: (a) the ability and willingness of
the Company’s tenants, operators, borrowers, managers and other third
parties to satisfy their obligations under their respective contractual
arrangements with the Company, including, in some cases, their
obligations to indemnify, defend and hold harmless the Company from and
against various claims, litigation and liabilities; (b) the ability of
the Company’s tenants, operators, borrowers and managers to maintain the
financial strength and liquidity necessary to satisfy their respective
obligations and liabilities to third parties, including without
limitation obligations under their existing credit facilities and other
indebtedness; (c) the Company’s success in implementing its business
strategy and the Company’s ability to identify, underwrite, finance,
consummate and integrate diversifying acquisitions and investments; (d)
macroeconomic conditions such as a disruption of or lack of access to
the capital markets, changes in the debt rating on U.S. government
securities, default or delay in payment by the United States of its
obligations, and changes in the federal or state budgets resulting in
the reduction or nonpayment of Medicare or Medicaid reimbursement rates;
(e) the nature and extent of future competition, including new
construction in the markets in which the Company’s seniors housing
communities and medical office buildings (“MOBs”)
are located;
(f) the extent of future or pending healthcare reform and regulation,
including cost containment measures and changes in reimbursement
policies, procedures and rates; (g) increases in the Company’s borrowing
costs as a result of changes in interest rates and other factors; (h)
the ability of the Company’s tenants, operators and managers, as
applicable, to comply with laws, rules and regulations in the operation
of the Company’s properties, to deliver high-quality services, to
attract and retain qualified personnel and to attract residents and
patients; (i) changes in general economic conditions or economic
conditions in the markets in which the Company may, from time to time,
compete, and the effect of those changes on the Company’s revenues,
earnings and funding sources; (j) the Company’s ability to pay down,
refinance, restructure or extend its indebtedness as it becomes due; (k)
the Company’s ability and willingness to maintain its qualification as a
REIT in light of economic, market, legal, tax and other considerations;
(l) final determination of the Company’s taxable net income for the year
ended December 31, 2015 and for the year ending December 31, 2016; (m)
the ability and willingness of the Company’s tenants to renew their
leases with the Company upon expiration of the leases, the Company’s
ability to reposition its properties on the same or better terms in the
event of nonrenewal or in the event the Company exercises its right to
replace an existing tenant, and obligations, including indemnification
obligations, the Company may incur in connection with the replacement of
an existing tenant; (n) risks associated with the Company’s senior
living operating portfolio, such as factors that can cause volatility in
the Company’s operating income and earnings generated by those
properties, including without limitation national and regional economic
conditions, costs of food, materials, energy, labor and services,
employee benefit costs, insurance costs and professional and general
liability claims, and the timely delivery of accurate property-level
financial results for those properties; (o) changes in exchange rates
for any foreign currency in which the Company may, from time to time,
conduct business; (p) year-over-year changes in the Consumer Price Index
or the UK Retail Price Index and the effect of those changes on the rent
escalators contained in the Company’s leases and the Company’s earnings;
(q) the Company’s ability and the ability of its tenants, operators,
borrowers and managers to obtain and maintain adequate property,
liability and other insurance from reputable, financially stable
providers; (r) the impact of increased operating costs and uninsured
professional liability claims on the Company’s liquidity, financial
condition and results of operations or that of the Company’s tenants,
operators, borrowers and managers, and the ability of the Company and
the Company’s tenants, operators, borrowers and managers to accurately
estimate the magnitude of those claims; (s) risks associated with the
Company’s MOB portfolio and operations, including the Company’s ability
to successfully design, develop and manage MOBs and to retain key
personnel; (t) the ability of the hospitals on or near whose campuses
the Company’s MOBs are located and their affiliated health systems to
remain competitive and financially viable and to attract physicians and
physician groups; (u) risks associated with the Company’s investments in
joint ventures and unconsolidated entities, including its lack of sole
decision-making authority and its reliance on its joint venture
partners’ financial condition; (v) the impact of market or issuer events
on the liquidity or value of the Company’s investments in marketable
securities; (w) consolidation activity in the seniors housing and
healthcare industries resulting in a change of control of, or a
competitor’s investment in, one or more of the Company’s tenants,
operators, borrowers or managers or significant changes in the senior
management of the Company’s tenants, operators, borrowers or managers;
(x) the impact of litigation or any financial, accounting, legal or
regulatory issues that may affect the Company or its tenants, operators,
borrowers or managers; and (y) changes in accounting principles, or
their application or interpretation, and the Company’s ability to make
estimates and the assumptions underlying the estimates, which could have
an effect on the Company’s earnings.

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Contacts

Ventas, Inc.
Ryan K. Shannon
(877) 4-VENTAS