UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)
☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2023
OR
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
	ACT OF 1934 FOR THE TRANSITION PERIOD FROM____________TO____________

Commission file number: 1-10989

Ventas, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Delaware	61-1055020
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

353 N. Clark Street, Suite 3300

Chicago, Illinois 60654

(Address of Principal Executive Offices)    

(877) 483-6827

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol	Name of Exchange on Which Registered
Common Stock $0.25 par value	VTR	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒    No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒    No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer ☐	Non-accelerated filer	☐
Smaller reporting company	☐		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐    No ☒

As of May 3, 2023, there were 400,051,793 shares of the registrant’s common stock outstanding.

VENTAS, INC.

FORM 10-Q

INDEX

		Page
PART I—FINANCIAL INFORMATION
Item 1.	Consolidated Financial Statements (Unaudited)	1
	Consolidated Balance Sheets as of March 31, 2023 and December 31, 2022	1
	Consolidated Statements of Income for the Three Months Ended March 31, 2023 and 2022	2
	Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2023 and 2022	3
	Consolidated Statements of Equity for the Three Months Ended March 31, 2023 and 2022	4
	Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2023 and 2022	5
	Notes to Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	45
Item 4.	Controls and Procedures	48
PART II—OTHER INFORMATION
Item 1.	Legal Proceedings	49
Item 1A.	Risk Factors	49
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	49
Item 5.	Other Information	49
Item 6.	Exhibits	50

PART I—FINANCIAL INFORMATION

ITEM 1.    CONSOLIDATED FINANCIAL STATEMENTS

VENTAS, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except per share amounts, unaudited)

	As of March 31, 2023		As of December 31, 2022
Assets
Real estate investments:
Land and improvements	$	2,434,312	$	2,437,905
Buildings and improvements	26,078,611		26,020,048
Construction in progress	335,879		310,456
Acquired lease intangibles	1,345,415		1,346,190
Operating lease assets	309,113		310,307
	30,503,330		30,424,906
Accumulated depreciation and amortization	(9,504,021)		(9,264,456)
Net real estate property	20,999,309		21,160,450
Secured loans receivable and investments, net	501,004		537,075
Investments in unconsolidated real estate entities	606,006		579,949
Net real estate investments	22,106,319		22,277,474
Cash and cash equivalents	145,357		122,564
Escrow deposits and restricted cash	49,924		48,181
Goodwill	1,044,699		1,044,415
Assets held for sale	20,233		44,893
Deferred income tax assets, net	10,889		10,490
Other assets	616,747		609,823
Total assets	$	23,994,168	$	24,157,840
Liabilities and equity
Liabilities:
Senior notes payable and other debt	$	12,342,506	$	12,296,780
Accrued interest	93,543		110,542
Operating lease liabilities	189,911		190,440
Accounts payable and other liabilities	1,007,437		1,031,689
Liabilities related to assets held for sale	4,412		6,492
Deferred income tax liabilities	31,871		35,570
Total liabilities	13,669,680		13,671,513
Redeemable OP unitholder and noncontrolling interests	259,886		264,650
Commitments and contingencies
Equity:
Ventas stockholders’ equity:
Preferred stock, $1.00 par value; 10,000 shares authorized, unissued	—		—
Common stock, $0.25 par value; 600,000 shares authorized, 400,055 and 399,707 shares outstanding at March 31, 2023 and December 31, 2022, respectively	100,065		99,912
Capital in excess of par value	15,562,017		15,539,777
Accumulated other comprehensive loss	(40,469)		(36,800)
Retained earnings (deficit)	(5,611,067)		(5,449,385)
Treasury stock, 275 and 10 shares issued at March 31, 2023 and December 31, 2022, respectively	(13,555)		(536)
Total Ventas stockholders’ equity	9,996,991		10,152,968
Noncontrolling interests	67,611		68,709
Total equity	10,064,602		10,221,677
Total liabilities and equity	$	23,994,168	$	24,157,840

See accompanying notes.

1

VENTAS, INC.

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share amounts, unaudited)

	For the Three Months Ended March 31,
	2023		2022
Revenues
Rental income:
Triple-net leased	$	149,739	$	151,561
Office	203,004		200,540
	352,743		352,101
Resident fees and services	704,993		651,121
Third party capital management revenues	4,177		3,949
Income from loans and investments	13,589		9,847
Interest and other income	1,743		536
Total revenues	1,077,245		1,017,554
Expenses
Interest	128,075		110,794
Depreciation and amortization	282,119		289,064
Property-level operating expenses:
Senior housing	537,222		475,530
Office	66,913		63,183
Triple-net leased	3,796		4,008
	607,931		542,721
Third party capital management expenses	1,706		1,313
General, administrative and professional fees	44,798		42,998
Transaction expenses and deal costs	1,386		19,992
Allowance on loans receivable and investments	(8,064)		(54)
Other	7,762		(27,190)
Total expenses	1,065,713		979,638
Income before unconsolidated entities, real estate dispositions, income taxes and noncontrolling interests	11,532		37,916
Loss from unconsolidated entities	(5,623)		(4,269)
Gain on real estate dispositions	10,201		2,455
Income tax benefit	2,802		4,490
Income from continuing operations	18,912		40,592
Net income	18,912		40,592
Net income attributable to noncontrolling interests	1,395		1,860
Net income attributable to common stockholders	$	17,517	$	38,732
Earnings per common share
Basic:
Income from continuing operations	$	0.05	$	0.10
Net income attributable to common stockholders	0.04		0.10
Diluted:1
Income from continuing operations	$	0.05	$	0.10
Net income attributable to common stockholders	0.04		0.10

______________________________

1 Potential common shares are not included in the computation of diluted earnings per share when a loss from continuing operations exists as the effect would be an antidilutive per share amount.

See accompanying notes.

2

VENTAS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands, unaudited)

	For the Three Months Ended March 31,
	2023		2022
Net income	$	18,912	$	40,592
Other comprehensive (loss) income:
Foreign currency translation income (loss)	3,899		(9,313)
Unrealized loss on available for sale securities	—		(588)
Unrealized (loss) gain on derivative instruments	(8,802)		19,036
Total other comprehensive (loss) income	(4,903)		9,135
Comprehensive income	14,009		49,727
Comprehensive income attributable to noncontrolling interests	161		5,772
Comprehensive income attributable to common stockholders	$	13,848	$	43,955

See accompanying notes.

3

VENTAS, INC.

CONSOLIDATED STATEMENTS OF EQUITY

(In thousands, except per share amounts, unaudited)

	For the Three Months Ended March 31, 2023
2019	Common Stock Par Value		Capital in Excess of Par Value		Accumulated Other Comprehensive (Loss) Income		Retained Earnings (Deficit)		Treasury Stock		Total Ventas Stockholders’ Equity		Noncontrolling Interests		Total Equity
Balance at January 1, 2023	$	99,912	$	15,539,777	$	(36,800)	$	(5,449,385)	$	(536)	$	10,152,968	$	68,709	$	10,221,677
Net income	—		—		—		17,517		—		17,517		1,395		18,912
Other comprehensive loss	—		—		(3,669)		—		—		(3,669)		(1,234)		(4,903)
Net change in noncontrolling interests	—		1,393		—		—		—		1,393		(1,259)		134
Dividends to common stockholders—$0.45 per share	—		—		—		(179,199)		—		(179,199)		—		(179,199)
Issuance of common stock for stock plans, restricted stock grants and other	153		17,839		—		—		(13,019)		4,973		—		4,973
Adjust redeemable OP unitholder interests to current fair value	—		3,077		—		—		—		3,077		—		3,077
Redemption of OP Units	—		(69)		—		—		—		(69)		—		(69)
Balance at March 31, 2023	$	100,065	$	15,562,017	$	(40,469)	$	(5,611,067)	$	(13,555)	$	9,996,991	$	67,611	$	10,064,602

	For the Three Months Ended March 31, 2022
	Common Stock Par Value		Capital in Excess of Par Value		Accumulated Other Comprehensive (Loss) Income		Retained Earnings (Deficit)		Treasury Stock		Total Ventas Stockholders’ Equity		Noncontrolling Interests		Total Equity
Balance at January 1, 2022	$	99,838	$	15,498,956	$	(64,520)	$	(4,679,889)	$	—	$	10,854,385	$	91,375	$	10,945,760
Net income	—		—		—		38,732		—		38,732		1,860		40,592
Other comprehensive income	—		—		5,224		—		—		5,224		3,911		9,135
Net change in noncontrolling interests	—		858		—		—		—		858		(1,862)		(1,004)
Dividends to common stockholders—$0.45 per share	—		—		—		(180,496)		—		(180,496)		—		(180,496)
Issuance of common stock for stock plans, restricted stock grants and other	50		15,290		—		—		—		15,340		—		15,340
Adjust redeemable OP unitholder     interests to current fair value	—		(36,637)		—		—		—		(36,637)		—		(36,637)
Balance at March 31, 2022	$	99,888	$	15,478,467	$	(59,296)	$	(4,821,653)	$	—	$	10,697,406	$	95,284	$	10,792,690

See accompanying notes.

4

VENTAS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands, unaudited)

	For the Three Months Ended March 31,
	2023		2022
Cash flows from operating activities:
Net income	$	18,912	$	40,592
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	282,119		289,064
Amortization of deferred revenue and lease intangibles, net	(14,913)		(17,401)
Other non-cash amortization	4,154		3,109
Allowance on loans receivable and investments	(8,064)		(54)
Stock-based compensation	15,060		15,796
Straight-lining of rental income	(445)		(3,841)
Gain on real estate dispositions	(10,201)		(2,455)
Income tax benefit	(4,299)		(5,805)
Loss and other from unconsolidated entities	5,623		4,269
Distributions from unconsolidated entities	5,472		4,356
Other	1,526		(24,324)
Changes in operating assets and liabilities:
Increase in other assets	(16,885)		(18,177)
Decrease in accrued interest	(17,006)		(13,201)
(Decrease) increase in accounts payable and other liabilities	(18,236)		2,625
Net cash provided by operating activities	242,817		274,553
Cash flows from investing activities:
Net investment in real estate property	—		(343,792)
Investment in loans receivable	(289)		(5,117)
Proceeds from real estate disposals	46,417		6,124
Proceeds from loans receivable	44,354		177
Development project expenditures	(69,079)		(37,591)
Capital expenditures	(43,577)		(36,728)
Investment in unconsolidated entities	(35,792)		(23,790)
Insurance proceeds for property damage claims	1,686		3,391
Net cash used in investing activities	(56,280)		(437,326)
Cash flows from financing activities:
Net change in borrowings under revolving credit facilities	14,340		(9,867)
Net change in borrowings under commercial paper program	22,164		356,674
Proceeds from debt	343,900		70,029
Repayment of debt	(343,876)		(65,000)
Purchase of noncontrolling interests	(110)		(170)
Payment of deferred financing costs	(4,027)		(427)
Cash distribution to common stockholders	(181,422)		(180,021)
Cash distribution to redeemable OP unitholders	(1,539)		(1,534)
Cash issued for redemption of OP Units	(655)		—
Contributions from noncontrolling interests	2,973		19
Distributions to noncontrolling interests	(2,566)		(3,983)
Proceeds from stock option exercises	1,736		5,794
Other	(13,025)		(6,132)
Net cash (used in) provided by financing activities	(162,107)		165,382
Net increase in cash, cash equivalents and restricted cash	24,430		2,609
Effect of foreign currency translation	106		241
Cash, cash equivalents and restricted cash at beginning of period	170,745		196,597
Cash, cash equivalents and restricted cash at end of period	$	195,281	$	199,447

See accompanying notes.

5

VENTAS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(In thousands, unaudited)

	For the Three Months Ended March 31,
	2023		2022
Supplemental schedule of non-cash activities:
Assets acquired and liabilities assumed from acquisitions and other:
Real estate investments	$	—	$	3,171
Other assets	—		47
Other liabilities	—		2,624
Deferred income tax liability	—		594

See accompanying notes.

6

VENTAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1—DESCRIPTION OF BUSINESS

Ventas, Inc. (together with its consolidated subsidiaries, unless otherwise indicated or except where the context otherwise requires, “we,” “us,” “our,” “Company” and other similar terms), an S&P 500 company, is a real estate investment trust (“REIT”) operating at the intersection of healthcare and real estate. We hold a highly diversified portfolio of senior housing communities, medical office buildings (“MOBs”), life science, research and innovation centers, hospitals and other healthcare facilities, which we generally refer to collectively as “healthcare real estate,” located throughout the United States, Canada and the United Kingdom. As of March 31, 2023, we owned or had investments in approximately 1,200 properties (including properties classified as held for sale). Our company was originally founded in 1983 and is headquartered in Chicago, Illinois with additional corporate offices in Louisville, Kentucky and New York, New York.

We primarily invest in a diversified portfolio of healthcare real estate assets through wholly owned subsidiaries and other co-investment entities. We operate through three reportable business segments: triple-net leased properties, senior housing operating portfolio, which we also refer to as “SHOP” and which was formerly known as senior living operations, and office operations. See “Note 2 – Accounting Policies” and “Note 15 – Segment Information.” Our senior housing communities are either subject to triple-net leases, in which case they are included in our triple-net leased properties reportable business segment, or operated by independent third-party managers, in which case they are included in our SHOP reportable business segment.

As of March 31, 2023, we leased a total of 312 properties (excluding properties within our office operations reportable business segment) to various healthcare operating companies under triple-net or absolute-net leases that obligate the tenants to pay all property-related expenses, including maintenance, utilities, repairs, taxes, insurance and capital expenditures. Our three largest tenants, Brookdale Senior Living Inc. (together with its subsidiaries, “Brookdale Senior Living”), Ardent Health Partners, LLC (together with its subsidiaries, “Ardent”) and Kindred Healthcare, LLC (together with its subsidiaries, “Kindred”) leased from us 121 properties, 30 properties (including 19 MOBs) and 29 properties, respectively, as of March 31, 2023.

As of March 31, 2023, pursuant to long-term management agreements, we engaged independent operators, such as Atria Senior Living, Inc. (together with its subsidiaries, including Holiday Retirement (“Holiday”), “Atria”) and Sunrise Senior Living, LLC (together with its subsidiaries, “Sunrise”), to manage 560 senior housing communities.

As of March 31, 2023, we owned or had investments in a total of 373 properties in our office operations reportable business segment. These properties generally consist of MOBs that are predominantly located on or contiguous to a health system campus and life science, research and innovation properties that are affiliated with and often located on or contiguous to a university or academic medical campus. Through our Lillibridge Healthcare Services, Inc. subsidiary and our ownership interest in PMB Real Estate Services LLC, we also provide MOB management, leasing, marketing, facility development and advisory services to highly rated hospitals and health systems throughout the United States.

In addition, from time to time, we make secured and unsecured loans and other investments relating to healthcare real estate or operators.

We have a third-party institutional capital management business, Ventas Investment Management (“VIM”), which includes our open-ended investment vehicle, the Ventas Life Science & Healthcare Real Estate Fund (the “Ventas Fund”). Through VIM, we partner with third-party institutional investors to invest in healthcare real estate through various joint ventures and other co-investment vehicles where we are the sponsor or general partner.

7

VENTAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 2—ACCOUNTING POLICIES

The accompanying Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information set forth in the Accounting Standards Codification (“ASC”), as published by the Financial Accounting Standards Board (“FASB”), and with the Securities and Exchange Commission (“SEC”) instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair statement of results for the interim period have been included. Operating results for the three months ended March 31, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023. The accompanying Consolidated Financial Statements and related notes should be read in conjunction with the audited Consolidated Financial Statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2022 (the “2022 Annual Report”). Certain prior period amounts have been reclassified to conform to the current period presentation.

Accounting Estimates

The preparation of financial statements in accordance with GAAP requires us to make estimates and assumptions regarding future events that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Principles of Consolidation

The accompanying Consolidated Financial Statements include our accounts and the accounts of our wholly owned subsidiaries and the joint venture entities over which we exercise control. All intercompany transactions and balances have been eliminated in consolidation, and our net earnings are reduced by the portion of net earnings attributable to noncontrolling interests.

GAAP requires us to identify entities for which control is achieved through means other than voting rights and to determine which business enterprise is the primary beneficiary of variable interest entities (“VIEs”). Substantially all of the assets of the VIEs are real estate investments, and substantially all of the liabilities of the VIEs are mortgage debt. Assets of the consolidated VIEs can only be used to settle obligations of such VIEs. Liabilities of the consolidated VIEs represent claims against the specific assets of the VIEs. The table below summarizes the total assets and liabilities of our consolidated VIEs as reported on our Consolidated Balance Sheets (dollars in thousands):

	As of March 31, 2023				As of December 31, 2022
	Total Assets		Total Liabilities		Total Assets		Total Liabilities
NHP/PMB L.P.	$	746,751	$	253,370	$	741,890	$	252,518
Fonds Immobilier Groupe Maurice, S.E.C.	1,963,391		1,186,910		1,957,075		1,170,928
Other identified VIEs	1,688,060		326,910		1,699,949		333,185
Tax credit VIEs	123,285		15,707		128,240		16,767

U.S. Department of Health & Human Services Grants

We applied for grants under the Provider Relief Fund administered by the U.S. Department of Health & Human Services (“HHS”) on behalf of the assisted living communities in our SHOP reportable business segment to partially mitigate losses attributable to COVID-19. These grants are intended to reimburse eligible providers for expenses incurred to prevent, prepare for and respond to COVID-19 and lost revenues attributable to COVID-19. Recipients are not required to repay distributions from the Provider Relief Fund, provided that they attest to and comply with certain terms and conditions, including, not using grants received from the Provider Relief Fund to reimburse expenses or losses that other sources are obligated to reimburse, reporting and record keeping requirements and cooperating with any government audits.

During the three months ended March 31, 2023, we did not receive any HHS grants. During the three months ended March 31, 2022, we received $34.0 million in HHS grants in connection with our applications and recognized these grants within property-level operating expenses in our Consolidated Statements of Income in the period in which they were received.

8

VENTAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 3—CONCENTRATION OF CREDIT RISK

As of March 31, 2023, Atria, Sunrise, Brookdale Senior Living, Ardent and Kindred managed or operated approximately 26.0%, 9.9%, 7.8%, 5.3% and 0.8%, respectively, of our consolidated real estate investments based on gross book value (excluding properties classified as held for sale as of March 31, 2023). Because Atria and Sunrise manage our properties in exchange for a management fee from us, we are not directly exposed to their credit risk in the same manner or to the same extent as triple-net tenants like Brookdale Senior Living, Ardent and Kindred.

Based on gross book value, approximately 11.7% and 54.7% of our consolidated real estate investments were senior housing communities included in the triple-net leased properties and SHOP reportable business segments, respectively (excluding properties classified as held for sale as of March 31, 2023). MOBs, life science, research and innovation centers, inpatient rehabilitation facilities (“IRFs”) and long-term acute care facilities (“LTACs”), health systems, skilled nursing facilities (“SNFs”) and secured loans receivable and investments collectively comprised the remaining 33.6%. Our consolidated properties were located in 47 states, the District of Columbia, seven Canadian provinces and the United Kingdom as of March 31, 2023, with properties in one state (California) accounting for more than 10% of our total consolidated revenues and net operating income (“NOI,” which is defined as total revenues, less interest and other income, property-level operating expenses and third party capital management expenses) for each of the three months ended March 31, 2023 and 2022. See “Non-GAAP Financial Measures” included elsewhere in this Quarterly Report on Form 10-Q for additional disclosure and a reconciliation of net income attributable to common stockholders, as computed in accordance with GAAP, to NOI.

Triple-Net Leased Properties

The properties we lease to Brookdale Senior Living, Ardent and Kindred accounted for a significant portion of our triple-net leased properties segment revenues and NOI for the three months ended March 31, 2023 and 2022. The following table reflects the concentration risk related to our triple-net leased properties including assets held for sale for the periods presented:

	For the Three Months Ended March 31,
	2023		2022
Revenues (1):
Brookdale Senior Living	3.5	%	3.7	%
Ardent	3.1		3.2
Kindred	3.0		3.3
NOI (2):
Brookdale Senior Living	8.0	%	7.8	%
Ardent	7.1		6.8
Kindred	7.0		7.0

______________________________

(1)Total revenues include third party capital management revenues, income from loans and investments and interest and other income.

(2)See “Non-GAAP Financial Measures” included elsewhere in this Quarterly Report on Form 10-Q for additional disclosure and a reconciliation of net income attributable to common stockholders, as computed in accordance with GAAP, to NOI.

Each of our leases with Brookdale Senior Living, Ardent and Kindred is a triple-net lease that obligates the tenant to pay all property-related expenses, including maintenance, utilities, repairs, taxes, insurance and capital expenditures, and to comply with the terms of the mortgage financing documents, if any, affecting the properties. In addition, each of our Brookdale Senior Living, Ardent and Kindred leases is guaranteed by a corporate parent.

9

VENTAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Kindred Lease

As of March 31, 2023, we leased 29 properties to Kindred pursuant to a single, triple-net master lease agreement (together with certain other agreements related to such master lease, collectively, the “Kindred Lease”). Pursuant to the Kindred Lease, the 29 properties are divided into two groups. The first group is composed of 6 properties (“Group 1”) and the second group is composed of 23 properties (“Group 2”). The existing term of the Kindred Lease expires on April 30, 2028 for Group 1 and April 30, 2025 for Group 2. Kindred has the option to renew the Group 1 properties for two, 5-year extension at the greater of escalated rent and fair market rental. Kindred has the option to renew the Group 2 properties for one, 5-year extension at escalated rent, and following that, two additional 5-year extensions at the greater of escalated rent and fair market rent. The Kindred Lease is guaranteed by a parent company.

Senior Housing Operating Portfolio

As of March 31, 2023, Atria and Sunrise, collectively, provided comprehensive property management and accounting services with respect to 334 of our 551 consolidated senior housing communities, for which we pay annual management fees pursuant to long-term management agreements.

As of March 31, 2023, Atria and its subsidiaries, including Holiday, managed a pool of 242 senior housing communities for Ventas. Ventas has the ongoing right to terminate the management contract for 91 of the communities with short term notice.

As of March 31, 2023, Sunrise managed 92 communities for Ventas pursuant to multiple management agreements (collectively, the “Sunrise Management Agreements”). Our Sunrise Management Agreements have initial terms expiring between 2035 and 2040. Ventas has the ability to terminate some or all of the Sunrise Management Agreements upon certain circumstances with or without the payment of a fee.

We rely on our managers’ personnel, expertise, technical resources and information systems, proprietary information, good faith and judgment to manage our senior housing operating portfolio efficiently and effectively. We also rely on our managers to set appropriate resident fees, provide accurate property-level financial results in a timely manner and otherwise operate our senior housing communities in compliance with the terms of our management agreements and all applicable laws and regulations.

NOTE 4—DISPOSITIONS AND IMPAIRMENTS

2023 Activity

During the three months ended March 31, 2023, we sold five senior housing communities (three of which were vacant), four MOBs and two vacant triple-net leased properties for aggregate consideration of $46.4 million and recognized a net gain on the sale of these assets of $10.2 million in our Consolidated Statements of Income.

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VENTAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Assets Held for Sale

The table below summarizes our real estate assets classified as held for sale including the amounts reported on our Consolidated Balance Sheets, which may include anticipated post-closing settlements of working capital for disposed properties (dollars in thousands):

	As of March 31, 2023					As of December 31, 2022
	Number of Properties Held for Sale	Assets Held for Sale		Liabilities Related to Assets Held for Sale		Number of Properties Held for Sale	Assets Held for Sale		Liabilities Related to Assets Held for Sale
SHOP	2	$	20,209	$	3,557	3	$	44,852	$	5,675
Office operations	—	24		855		—	41		817
Total	2	$	20,233	$	4,412	3	$	44,893	$	6,492

Real Estate Impairment

We recognized impairments of $8.6 million and $14.3 million for the three months ended March 31, 2023 and 2022, respectively, which are recorded primarily as a component of depreciation and amortization in our Consolidated Statements of Income. The impairments recorded were primarily a result of a change in our intent to hold or a change in the future cash flows of the impaired assets.

NOTE 5—LOANS RECEIVABLE AND INVESTMENTS

As of March 31, 2023 and December 31, 2022, we had $525.4 million and $561.4 million, respectively, of loans receivable and investments, net of allowance, relating to senior housing and healthcare operators or properties. The following is a summary of our loans receivable and investments, net, including amortized cost, fair value and unrealized gains or losses on available for sale investments (dollars in thousands):    

	Amortized Cost		Allowance		Carrying Amount		Fair Value
As of March 31, 2023:
Secured/mortgage loans and other, net (1)	$	513,004	$	(12,000)	$	501,004	$	501,073
Non-mortgage loans receivable, net (3)	28,975		(4,557)		24,418		23,585
Total loans receivable and investments, net	$	541,979	$	(16,557)	$	525,422	$	524,658
As of December 31, 2022:
Secured/mortgage loans and other, net (1)	$	513,669	$	(20,000)	$	493,669	$	493,627
Government-sponsored pooled loan investments, net (2)	43,406		—		43,406		43,406
Total investments reported as secured loans receivable and investments, net	557,075		(20,000)		537,075		537,033
Non-mortgage loans receivable, net (3)	28,959		(4,621)		24,338		23,416
Total loans receivable and investments, net	$	586,034	$	(24,621)	$	561,413	$	560,449

______________________________

(1)Includes the Company’s cash-pay non-recourse mezzanine loan to Santerre Health Investors (the “Santerre Mezzanine Loan”), which is no longer outstanding. Other included investments have contractual maturities in 2024 and 2027.

(2)Repaid at par in February 2023.

(3)Included in other assets on our Consolidated Balance Sheets.

On May 1, 2023, we took ownership of the collateral that supported the Santerre Mezzanine Loan by converting the outstanding principal amount of the Santerre Mezzanine Loan to equity, with no additional consideration being paid. As a result, the Santerre Mezzanine Loan is no longer outstanding. The properties consist of a diverse pool of medical office buildings, senior housing operating portfolio communities, triple-net leased skilled nursing facilities and hospital assets in the United States (such assets, collectively, the “Santerre Portfolio”). Our ownership of the Santerre Portfolio is subject to an existing approximately $1 billion non-recourse senior loan (the “Santerre Senior Loan”). See “Note 9 – Senior Notes Payable And Other Debt.”

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VENTAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

As of December 31, 2022, we recognized a $20.0 million allowance on the Santerre Mezzanine Loan in our Consolidated Statements of Income. The allowance for the Santerre Mezzanine Loan was calculated using the “current expected credit loss”, or “CECL”, model, which considers relevant information about past events, current conditions and reasonable and supportable forecasts to estimate expected losses as of the most recent balance sheet date. During the three months ended March 31, 2023, we recorded an $8.0 million partial reversal of the allowance in our Consolidated Statements of Income resulting in a $12.0 million allowance as of March 31, 2023, primarily due to a change in the fair value of the Santerre Senior Loan and working capital.

NOTE 6—INVESTMENTS IN UNCONSOLIDATED ENTITIES

We report investments in unconsolidated entities over whose operating and financial policies we have the ability to exercise significant influence under the equity method of accounting. We are not required to consolidate these entities because our joint venture partners have significant participating rights, nor are these entities considered VIEs, as they are controlled by equity holders with sufficient capital. We invest in both real estate entities and operating entities which are described further below.

Investments in Unconsolidated Real Estate Entities

Through our Ventas Investment Management Platform, which combines our extensive third-party capital ventures under a single platform, we partner with third-party institutional investors to invest in healthcare real estate through various joint ventures and other co-investment vehicles where we are the sponsor or general partner.

Below is a summary of our investments in unconsolidated real estate entities as of March 31, 2023 and December 31, 2022, respectively (dollars in thousands):

	Ownership as of (1)		Carrying Amount as of
	March 31, 2023	December 31, 2022	March 31, 2023		December 31, 2022
Investment in unconsolidated real estate entities:
Ventas Life Science & Healthcare Real Estate Fund	21.0%	21.0%	$	261,319	$	263,979
Pension Fund Joint Venture	23.3%	22.9%	28,490		25,028
Research & Innovation Development Joint Venture	51.5%	51.0%	307,791		284,962
Ventas Investment Management Platform			597,600		573,969
Atrium Health & Wake Forest Joint Venture	48.5%	48.5%	9,359		5,403
All other (2)	34.0%-38.0%	34.0%-38.0%	(953)		577
Total investments in unconsolidated real estate entities			$	606,006	$	579,949

______________________________

(1)     The entities in which we have an ownership interest may have less than a 100% interest in the underlying real estate. The ownership percentages in the table reflect our interest in the underlying real estate. Joint venture members, including us in some instances, have equity participation rights based on the underlying performance of the investments, which could result in non pro rata distributions.

(2)     Includes investments in land parcels, parking structures and other de minimis investments in unconsolidated real estate entities.

We provide various services to our unconsolidated real estate entities in exchange for fees and reimbursements. Total management fees earned in connection with these services were $3.6 million and $3.5 million for the three months ended March 31, 2023 and 2022, respectively. Such amounts are included in third party capital management revenues in our Consolidated Statements of Income.

Investments in Unconsolidated Operating Entities

We own investments in unconsolidated operating entities such as Ardent and Atria, which are included within other assets on our Consolidated Balance Sheets. Our 34% ownership interest in Atria entitles us to customary minority rights and protections, including the right to appoint two members to the Atria Board of Directors.

As of March 31, 2023, we held a 9.8% ownership interest in Ardent, which entitled us to customary minority rights and protections, including the right to appoint one member to the Ardent Board of Directors. In May 2023, we sold

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

approximately 24% of our ownership interest in Ardent to a third-party investor for approximately $50 million in total proceeds. As a result of the sale, we expect to recognize approximately $34 million of gain in the second quarter of 2023 in income from unconsolidated entities in our Consolidated Statements of Income and our ownership interest in Ardent will be reduced to approximately 7.5%. Following the transaction, we continue to have the same minority rights and protections, including the right to appoint one member to the Ardent Board of Directors.

NOTE 7—INTANGIBLES

The following is a summary of our intangibles (dollars in thousands):

	As of March 31, 2023			As of December 31, 2022
	Balance		Weighted Average Remaining Amortization Period in Years	Balance		Weighted Average Remaining Amortization Period in Years
Intangible assets:
Above-market lease intangibles (1)	$	128,867	5.2	$	129,038	5.4
In-place and other lease intangibles (2)	1,216,548		8.4	1,217,152		8.0
Goodwill	1,044,699		N/A	1,044,415		N/A
Other intangibles (2)	34,408		5.4	34,404		5.6
Accumulated amortization	(1,093,129)		N/A	(1,061,305)		N/A
Net intangible assets	$	1,331,393	8.1	$	1,363,704	7.8
Intangible liabilities:
Below-market lease intangibles (1)	$	333,652	8.5	$	333,672	8.6
Other lease intangibles	13,498		N/A	13,498		N/A
Accumulated amortization	(262,169)		N/A	(258,639)		N/A
Purchase option intangibles	3,568		N/A	3,568		N/A
Net intangible liabilities	$	88,549	8.5	$	92,099	8.6

______________________________

(1)     Amortization of above- and below-market lease intangibles is recorded as a decrease and an increase to revenues, respectively, in our Consolidated Statements of Income.

(2)     Amortization of lease intangibles is recorded in depreciation and amortization in our Consolidated Statements of Income.

N/A—Not Applicable

Above-market lease intangibles and in-place and other lease intangibles are included in acquired lease intangibles within real estate investments on our Consolidated Balance Sheets. Other intangibles (including non-compete agreements, trade names and trademarks) are included in other assets on our Consolidated Balance Sheets. Below-market lease intangibles, other lease intangibles and purchase option intangibles are included in accounts payable and other liabilities on our Consolidated Balance Sheets.

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VENTAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 8—OTHER ASSETS

The following is a summary of our other assets (dollars in thousands):

	As of March 31, 2023		As of December 31, 2022
Straight-line rent receivables	$	190,635	$	187,536
Non-mortgage loans receivable, net	24,418		24,338
Stock warrants	24,592		23,621
Other intangibles, net	6,189		6,393
Investment in unconsolidated operating entities	93,609		95,363
Other	277,304		272,572
Total other assets	$	616,747	$	609,823

Stock warrants represent warrants exercisable at any time prior to December 31, 2025, in whole or in part, for 16.3 million shares of Brookdale Senior Living common stock at an exercise price of $3.00 per share. These warrants are measured at fair value with changes in fair value being recognized within other expense in our Consolidated Statements of Income.

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VENTAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 9—SENIOR NOTES PAYABLE AND OTHER DEBT

The following is a summary of our senior notes payable and other debt (dollars in thousands):

	As of March 31, 2023		As of December 31, 2022
Unsecured revolving credit facility (1)(2)	$	40,210	$	25,230
Commercial paper notes	425,000		403,000
2.55% Senior Notes, Series D due 2023 (2)	—		202,967
3.50% Senior Notes due 2024	400,000		400,000
3.75% Senior Notes due 2024	400,000		400,000
4.125% Senior Notes, Series B due 2024 (2)	184,980		184,515
2.80% Senior Notes, Series E due 2024 (2)	443,951		442,837
Unsecured term loan due 2025 (2)	369,959		369,031
3.50% Senior Notes due 2025	600,000		600,000
2.65% Senior Notes due 2025	450,000		450,000
4.125% Senior Notes due 2026	500,000		500,000
3.25% Senior Notes due 2026	450,000