(EDITOR’S NOTE: The three acquired properties include the two Genesis Towers, which is comprised of the South Tower, a 12 story, 340,000 square foot structure, and North Tower, which is 21 stories and 375,000 square feet. The third structure is the 90,000 square foot 4000 Shoreline Court building on the other side of US Highwhay 101.)
Ventas, Inc. (VTR) (“Ventas” or the “Company”) today announced that the Ventas Life Science and Healthcare Real Estate Fund, L.P. (the “Fund”) has acquired a trophy life science portfolio in the premier South San Francisco life science cluster for $1.0 billion. Ventas is the Sponsor and General Partner of the Fund, which is a perpetual life vehicle focused on investments in core and core plus life science, medical office and senior housing real estate in North America.
“We are pleased to further expand our growing research & innovation footprint into the premier South San Francisco life science cluster with the acquisition of this outstanding lab portfolio,” said Debra A. Cafaro, Ventas Chairman and Chief Executive Officer. “Strong and growing capital flows into the life science sector are accelerating innovation and discovery. These flows support the demand for first class lab space in dynamic markets like South San Francisco. Ventas now owns or has an investment in over seven million square feet of research & innovation properties located in the life science clusters of Cambridge, South San Francisco, and on the campuses of over 15 top tier research universities.”
“The Ventas Life Science and Healthcare Real Estate Fund has raised more than $1 billion of equity, with continued capacity to grow, and more than doubled its assets under management to $1.8 billion. The growth of the Fund is a testament to the tremendous market opportunity across the healthcare sectors of life science, medical office and senior housing real estate,” added Cafaro. “Our stakeholders continue to benefit from Ventas’s capabilities, strategic reach and team.”
Portfolio & South San Francisco (“SSF”) Market Overview
- The Class A trophy portfolio is strategically positioned at the entrance to the South San Francisco life science cluster.
- The portfolio consists of a campus of three newly developed or renovated buildings totaling nearly 800,000 square feet. It is 96 percent leased with a weighted average lease term of over six years.
- Nearly half of the tenant base consists of public companies averaging over $10 billion in market cap with the balance comprised of a diverse group of early to-mid stage life science companies backed by leading venture capital and private equity firms.
- The portfolio is purpose-built for advanced research functions, and is predominantly dedicated to best-in-class lab space supporting biotechnology and other life sciences research. Tenant suites feature a modular benching system designed to meet the needs of substantially all life sciences companies, promoting efficient and cost-effective re-tenanting.
- The campus is well-positioned for continued strong occupancy due to its vibrant community environment which facilitates research and employee engagement, as well as an unparalleled location in a market known for its rich talent and new company formations.
- The SSF market consistently ranks as one of the elite life science clusters in the world with less than two percent lab vacancy, unparalleled access to a large concentration of life science firms, an extensive venture capital network and world-class talent pool sourced from three major research universities.
Valuation & Capital Structure
- The purchase price for the portfolio represents approximately a five percent capitalization rate on forward cash net operating income (“NOI”). The average escalator for the portfolio exceeds three percent. The seller is an affiliate of the partnership from which Ventas acquired 1030 Massachusetts Avenue, in Cambridge, Massachusetts in 2019.
- The portfolio was acquired principally by the Fund with a co-investment vehicle. Ventas has a 21 percent interest in the acquired portfolio.
- The acquisition was financed with over $400 million of attractive property level debt.
- The transaction is expected to be neutral to Ventas’s 2020 Normalized Funds from Operations and credit profile.
Ventas’s Research & Innovation Business
Ventas now owns or has investments in a research & innovation portfolio:
- Containing 7.3 million square feet and spanning 39 operating properties.
- Including a presence in the top two life science clusters, SSF and Cambridge.
- Residing on the campuses of over 15 top tier research universities, including University of Pennsylvania, Yale University, Washington University in St Louis, Duke University and Brown University, collectively ranking in the top 5 percent of all NIH funding and conducting over 10 percent of all university life science research and development in the nation.
- Expanding with four new properties, consisting of 1.5 million additional square feet, currently under development with three leading research institutions, the University of Pittsburgh, Arizona State University and Drexel University.
Ventas, Inc. (together with its subsidiaries, unless otherwise expressly noted), an S&P 500 company, is a real estate investment trust with a highly diversified portfolio of senior housing, life science, and healthcare properties located throughout the United States, Canada and the United Kingdom. As of June 30, 2020, Ventas owned or managed through unconsolidated joint ventures approximately 1,200 properties (including properties classified as held for sale), consisting of senior housing communities, medical office buildings, life science centers, inpatient rehabilitation and long-term acute care facilities, and health systems. 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 Ventas Life Science and Healthcare Real Estate Fund, L.P
Ventas Life Science and Healthcare Real Estate Fund, L.P. (the “Fund”) is a perpetual life vehicle focused on investments in core and core plus life science, medical office and senior housing real estate in North America. As of October 15, 2020, the Fund has $1.8 billion in assets under management (nearly two million square feet). Ventas is the Fund Sponsor and General Partner in the Fund.
The Company routinely announces material information to investors and the marketplace using press releases, Securities and Exchange Commission (“SEC”) filings, public conference calls, webcasts and the Company’s website at www.ventasreit.com/investor-relations. The information that the Company posts to its website may be deemed to be material. Accordingly, the Company encourages investors and others interested in the Company to routinely monitor and review the information that the Company posts on its website, in addition to following the Company’s press releases, SEC filings and public conference calls and webcasts. Supplemental information regarding the Company can be found on the Company’s website under the “Investor Relations” section or at www.ventasreit.com/investor-relations/annual-reports—supplemental-information. A comprehensive listing of the Company’s properties is available at www.ventasreit.com/our-portfolio/properties-by-stateprovince.