Ventas Inc, a healthcare real estate investment trust, has teamed up with Le Groupe Maurice, a Montreal-based builder and developer of retirement homes, to invest in a portfolio of apartment-like senior housing assets in Quebec. No financial terms were disclosed. The value of the portfolio is US$1.8 billion. Ventas’ portfolio includes assets in the U.S., Canada and the UK. Ventas is headquartered in Chicago.
CHICAGO–(BUSINESS WIRE)–Ventas, Inc. (NYSE: VTR) (“Ventas” or the “Company”) announced today that it has completed its investment in a Class A portfolio of apartment-like senior housing assets in the attractive Quebec market through an equity partnership with Le Groupe Maurice (“LGM”). LGM is a best-in-class, fully integrated designer, developer and operator of senior housing. LGM will continue to manage the portfolio under the Le Groupe Maurice brand, maintaining its vision for service, quality and innovation.
“We are pleased to complete our compelling investment with Le Groupe Maurice in its outstanding portfolio, with stable cash flows, strong occupancy and built-in growth from existing and new developments,” said Debra A. Cafaro, Ventas Chairman and Chief Executive Officer. “We are delighted to partner with Luc Maurice and his outstanding team as we enter the attractive Quebec seniors market,” Cafaro added.
The President and Founder of Le Groupe Maurice, Luc Maurice, said: “We are very excited about our new partnership with Ventas and look forward to growing our business together as we continue to meet the needs of seniors for an outstanding lifestyle. We expect to embrace the many opportunities we have to create value.”
The high quality portfolio is valued at USD $1.8 billion, consisting of a highly occupied stabilized portfolio, together with communities in lease-up and assets currently in development. Ventas also has rights to fund and own all additional developments under an exclusive pipeline agreement with LGM, creating a new platform for growth.
The LGM investment diversifies Ventas’s portfolio, business model and operator base. Upon completion of the investment, on a pro forma basis:
Net operating income (“NOI”) from the Company’s Canadian senior housing operating property (“SHOP”) portfolio is expected to total 22 percent of the Company’s total annualized SHOP NOI, an increase of 10 percentage points;
Ventas’s Canadian assets will represent 8 percent of the Company’s NOI; and
LGM will represent 4 percent of Ventas’s NOI.
As previously announced, as a result of an attractive valuation with embedded growth, Ventas expects its LGM investment to be neutral to 2019 normalized Funds from Operations (“FFO”) per share and accretive to 2020 normalized FFO by approximately $0.03 per share. In connection with the closing, Ventas’s bridge loan to LGM, which was the first phase of the transaction and funded in July 2019, was repaid in full. Ventas has acquired 87 percent of 34 communities (26 stable, three lease-up and five in-process developments), rather than acquiring 85 percent of 35 communities (28 stable, three lease-up and four in-process developments), due to tax and legal structuring considerations, which represents a slight modification to the originally announced transaction. The financial and other aspects of the transaction, including the cap rate, remain consistent with the originally announced transaction.
About Le Groupe Maurice
LGM is a market leader in the design, development and management of progressive apartment like, independent living senior housing residences in Quebec. Founded in 1998, LGM has over 2,000 employees, a seasoned, high-quality management team with deep industry knowledge and a strong track record of development and operating success. LGM has grown from one property in 2000 to 36 communities, all purpose-built and maintained to the highest industry standard. LGM has a leading 9 percent market share in Quebec with a highly regarded and recognized brand.
Ventas, an S&P 500 company, is a leading real estate investment trust. Its diverse portfolio of approximately 1,200 assets in the United States, Canada and the United Kingdom consists of senior housing communities, medical office buildings, university-based research and innovation 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. References to “Ventas” or the “Company” mean Ventas, Inc. and its consolidated subsidiaries unless otherwise expressly noted. More information about Ventas and Lillibridge can be found at www.ventasreit.com and www.lillibridge.com.