Good day and thank you for standing by. Welcome to the Ventas second quarter 2021 earnings conference call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. Operator provided instructions on how to ask questions. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Sarah Whitford, Director of Investor Relations. Please go ahead.

Thanks Tammy. Good morning and welcome to the Ventas second quarter financial results conference call. Earlier this morning, we issued our second quarter earnings release, supplemental and investor presentation. These materials are available on the Ventas website at ir.ventasreit.com. As a reminder, remarks made today may include forward-looking statements, including certain expectations related to COVID-19 and other matters. Forward-looking statements are subject to risks and uncertainties and a variety of factors may cause actual results to differ materially from those contemplated by such statements. For a more detailed discussion of those factors, please refer to our earnings release for this quarter and to our most recent SEC filings, all of which are available on the Ventas website. Certain non-GAAP financial measures will also be discussed on this call. For a reconciliation of these measures to the most closely comparable GAAP measures, please refer to our supplemental posted on the Investor Relations section of our website. This earnings call does not constitute an offer to buy or sell or the solicitation of an offer to buy or sell any securities or a solicitation of any vote or approval. In connection with the proposed acquisition of New Senior, Ventas filed with the SEC a registration statement on Form S-4 that includes a preliminary prospectus for the Ventas common stock that will be issued in the proposed acquisition and that also constitutes a preliminary proxy statement for a special meeting of New Senior stockholders to approve the proposed acquisition. The proxy statement prospectus and other documents filed by Ventas and New Senior with the SEC may be obtained free of charge at Ventas' Investor Relations website at ir.ventasreit.com or in New Senior's Investor Relations website at ir.newseniorinv.com as applicable or at SEC's website at www.sec.gov. You should review such materials filed with the SEC carefully because they contain or will contain important information about the proposed transaction, including information about Ventas and New Senior and their respective directors, executive officers and other employees who may be deemed to be participants in the solicitation of proxies in respect of their proposed acquisition and a description of their direct and indirect interests by security holdings or otherwise. I will now turn the call over to Debra A. Cafaro, Ventas Chairman and CEO.

Sarah, well done. Your first public company merger. Congratulations. Well, good morning everyone. I want to welcome our shareholders and other participants to the Ventas second quarter 2021 earnings call. Ventas delivered an outstanding second quarter and we have strong momentum across the board, in health and safety, capital deployment and access, realization of the benefits of prior successful investments, financial strength and most importantly in portfolio growth led by our high quality SHOP business with significant contributions from office and stability in our triple-net lease business. We see a clear path to growth in our demographically driven diversified enterprise through capturing the embedded upside in our senior housing business, the benefit of external investments, reliable cash flow from our office and triple-net businesses and delivery and stabilization of ongoing developments, primarily in the life sciences, research and innovation and Canadian senior housing areas. Our experienced team is committed to winning the recovery for all of our stakeholders. Let me first turn to our second quarter results. We posted $0.73 of normalized FFO per share, which is above the high-end of our previously provided guidance. I am delighted that our same-store property portfolio grew 3.6% sequentially. Our outperformance was driven by SHOP, which produced $111 million in quarterly NOI, a recovery of $50 million of annualized NOI, representing industry-leading growth in same-store cash NOI and occupancy. July continued these positive SHOP trends for the fifth consecutive month of occupancy growth. Importantly, by the end of July, leases reached their highest levels since the pandemic began. Justin will unpack these trends more fully in his remarks. As a result, we have never been more confident that the senior living business is supported by powerful demand that is growing and resilient, while supply remains constrained. If the last 18 months have taught us anything, it is that as soon as our communities and care providers are ready to welcome residents and their families, we experience a surge of leads and move-ins almost immediately, which then build sustainably and rapidly. That said, given the macro uncertainty in the COVID-19 environment, particularly the national and regional rise in cases and the measures that have been taken or may be taken to contain COVID spread, the path to full recovery may not be a straight line, but we believe that it will point inexorably upward. In our third quarter outlook, we have assumed the increase in COVID cases throughout the U.S. may have some impact on the velocity of leasing and expenses. Rounding out our portfolio performance, office grew nicely in the quarter and our triple-net portfolio continued its stability. Pete's efforts to increase leasing, keep high retention rates, improve customer relationships and grow NOI are showing results. Our on-campus and affiliated MOB strategy with leading health systems continues to shine. Turning to health systems, our investment in Ardent also continues to deliver benefit. In addition to strong cash flow coverage on our $1.3 billion leasehold position, our 10% equity stake in the Ardent enterprise is benefiting from excellent Ardent results and our prior purchase of $200 million of Ardent senior notes recently paid off with a $15 million prepayment fee, providing us with a 13% unlevered return on our investment in the Ardent notes. When all is said and done, I believe and hope that our Ardent investment in real estate, equity and debt will prove to be one of our best risk-adjusted return investments. Turning to other capital allocation priorities, we certainly are on our front foot regarding external investments. In total, in 2021 we have over $3.5 billion in investments completed, pending or underway with another $1 billion life science, research and innovation pipeline with our exclusive development partner Wexford, right behind that. Our team is also busy evaluating attractive deals across our asset classes. This year-to-date, we have already reviewed about as many investment opportunities as we saw in all of 2019. We will pursue those that meet our multi-factor investment philosophy, which is focused on growing reliable cash flow and favorable risk-adjusted returns, taking into account factors such as cost per square foot or unit, downside protection and ultimate potential for cash flow growth and asset appreciation. Our $2.3 billion pending investment in New Senior, announced in the second quarter, is a great example. In this deal, we are acquiring over 100 high-quality independent living communities that are well-invested and located in advantaged markets at compelling pricing. The per unit cost is estimated to be 20% to 30% below replacement cost. The 5% cash going-in cap rate is expected to grow to a 6% cap rate on expected 2022 NOI with upside as the senior housing recovery continues. And the FFO multiple of less than 12 times post-synergies 2022 estimated FFO are all attractive valuation metrics. I commend Susan Givens and her team for doing a tremendous job creating and realizing value for their stakeholders. We are also confident that Ventas shareholders will receive immediate and long-term accretion and upside from the deal as senior housing recovers and the large middle-market demographic expands significantly in the near term. As Justin will describe, the New Senior portfolio also fits in with our senior housing strategy and framework. New Senior also performed well in Q2 and into July, with occupancy increasing in the same-store portfolio for five straight months. A unique strategic advantage of the New Senior transaction is the long-standing relationship we have with the principal managers of the portfolio, Atria and Holiday, two leading operators who recently combined to form the second largest senior housing manager. As a one-third owner of Atria, we are excited about the opportunities the combination creates. We will directly benefit from growth in Atria's management platform. And we welcome the combination of Atria and Holiday's talent in Atria's advanced enterprise. Congratulations to Atria for pulling together this industry-changing transaction. Switching to our attractive life science, research and innovation business. It continues to provide us with value-creating opportunities to invest capital. The Ventas life science portfolio now exceeds nine million square feet. It's located in three of the top five cluster markets, includes three ongoing development projects and is affiliated with over 16 of the nation's top research universities. We also have an incremental $1 billion in potential projects we are working on with Wexford. The first and largest new life science project in the pipeline, totaling about $0.5 billion in costs, is gaining steam. Expected to be 60% pre-leased to a major public research university that ranks in the top 5% of NIH funding, this project will be located on the West Coast and should break ground in the first half of 2022. Wexford with its exceptional reputation among universities is also exploring significant additional life science potential projects beyond those in our existing pipeline. North of the border, we continue to invest capital in high-end large-scale independent living communities with our partner, Le Groupe Maurice in Quebec. We have always tried to create value through both internal and external growth and we are pleased that we have returned to being a net acquirer in 2021. Our team is active and engaged beyond our announced deals and our pipeline of potential investments across asset classes. To fund new investments, we have access to significant liquidity and a wide array of capital sources, including the asset dispositions and receipt of loan repayments, as Bob will describe in greater detail. The demand for senior housing has been robust and sustainable, proving out the value proposition of communities and care providers offered to seniors and their families. The sharp recovery has begun and we have started capturing the significant upside embedded in our existing senior housing portfolio from both pandemic recovery and the 17.5% growth in the senior population projected over the next few years. Our diversified business model continues to provide uplift and stability to our enterprise. We are investing nearly $4 billion in announced deals and development projects and our access to and pricing of capital are positive. In closing, the U.S. is in the midst of an impressive economic recovery that, together with demographic demand for all our asset classes, will benefit our business. We embrace the opportunity to take on any near-term challenges that are temporarily caused by the strength and speed of this recovery, especially because now, unlike last year and the beginning of 2021, our employees, residents, tenants and caregivers are largely safe and healthy. As a team at Ventas, we are incredibly pleased about the results we have delivered and the strength and momentum we have demonstrated. Justin, over to you.

Thank you Debbie. We remain excited about delivering industry-leading occupancy and NOI growth and we are encouraged about recent trends in the senior housing portfolio. Although we are still in the early stages of the recovery, we are off to a very strong start. Ventas is well-positioned to benefit from significant senior housing tailwinds, including the sector recovery upside, supportive demand fundamentals and continued improvement in leading indicators. I will review three topics today. First, our second quarter performance. Second, our perspective on the senior housing operating environment. And third, our continued execution of our senior housing strategy. I will start by covering our second quarter performance. In SHOP, leading indicators continued to trend favorably and accelerated during the quarter, as leads and move-ins each surpassed 100% of 2019 levels, while move-outs remained steady. June marked the best month for leads and move-ins since the start of the pandemic and July has sustained strong momentum. Strong sales activity has now driven five consecutive months of occupancy growth, inclusive of July. In the second quarter approximate spot occupancy from March 31 to June 30 increased 229 basis points, led by the U.S. with growth of 313 basis points and accelerating leads and move-ins. In Canada, the trends were more muted due to a slower vaccine rollout, but approximate spot occupancy still increased during the second quarter, driven by 33 basis points of growth in June. Leading indicators remained strong in our portfolio as the digital footprint of our operators has significantly expanded over the past year, casting a wider net as traditional high-converting lead sources such as personal referrals, respite and professional referrals continue recovery. Turning to SHOP operating results. Same-store revenue in the second quarter increased sequentially by $3.5 million as strong occupancy growth was partially offset by the impact of new resident move-in incentives on pricing, specifically at Atria. I will touch on that more in a minute. Operating expenses declined sequentially by $9.2 million or 2.3% excluding the impact of HHS grants received in the first quarter, driven by a better-than-expected reduction of COVID-19 operating costs, partially offset by a modest increase in routine operating expenses. For the sequential same-store pool, SHOP generated approximately $111 million of NOI in the second quarter, which represents a sequential increase of $12.4 million or 12.6% when excluding the impact of HHS grants. This marks the first quarter of sequential underlying NOI growth since the onset of COVID-19 and approximates a nearly $15 million NOI improvement on an annualized basis. During the quarter, we saw solid contribution to sequential NOI growth in both revenue and operating expenses as average occupancy increased 110 basis points and COVID-19 costs declined substantially and ahead of expectations. Turning to triple-net. Sequential same-store cash NOI was largely stable in the second quarter and 98% of all contractual triple-net rent was received from the company's tenants. Our trailing 12-months cash flow coverage for senior housing, which is reported one quarter in arrears, is 1.2 times and down versus the prior quarter, reflecting the timing associated with coverage reporting which now includes effectively four full quarters of operations impacted by COVID. Moving onto the current operating environment, which is full of green shoots. Our market-leading operators continued to demonstrate their strong market position through broad occupancy gains. Sunrise led the way with 627 basis points of spot occupancy growth from the low point in mid-March to the end of July, benefiting from a rejuvenated management team, significantly well-invested communities and a balanced approach demonstrating very strong occupancy gains and pricing power. We would like to congratulate Sunrise's CEO, Jack Callison, for adding experience and depth to his management team with his recently announced hires. Atria, which benefits from a higher absolute occupancy of 81.8% at July end, continues to deliver solid volume growth. Spot occupancy in July increased 529 basis points since the low point in mid-March, resulting from the combination of their industry-leading vaccine mandate and strategic price incentives to capture movements. Atria anticipates tightening incentives moving forward as pricing power recovers and occupancy stabilizes. Supporting all of this is Atria's industry-leading vaccination rates, which are impressively high at nearly 100% of both residents and employees. Looking ahead, as Debbie mentioned, the third quarter is off to a strong start with July spot occupancy increasing 74 basis points versus June and leases continuing to stand strong at 105% of pre-pandemic levels. Our operators have been prioritizing resident safety and weathering several near-term headwinds, including the Delta variant and transitory wage pressures from staffing shortages in select markets. Underpinning our leading operating partner relationships and recent sales momentum is our attractive market footprint, which positions us to benefit from the compelling supply and demand outlook in the senior housing sector. Our communities in the U.S. are poised for improving performance over time due to our strong presence in submarkets that outpace the U.S. national average in aging population growth and wealth demographics, but with significantly lower exposure to new construction starts and construction as a percentage of inventory. Approximately 30% of our SHOP portfolio on a stabilized basis is located in Canada. The senior housing sector in Canada has performed exceptionally well, with occupancy exceeding 90% every year from 2010 to 2020 and demand outpacing new supply in eight of the last 11 years. As a foundation to these attractive fundamentals, the 75-plus population in Canada is projected to grow more than 20% over the next five years, about twice the pace of the U.S. The Ventas team has been busy executing our senior housing strategy, driven by experiential operating expertise and underpinned by our analytical capabilities to further strengthen our senior housing business. The underlying goal of our strategy is simply to execute portfolio actions that ensure we are located in the right markets, with the right operator, with assets with strong local market positioning. A notable example of our strategy execution is the New Senior transaction. New Senior has a track record of strong operating performance, benefits from a geographically diverse footprint with favorable exposure to compelling market fundamentals and demographics and represents a well-invested high-quality portfolio catering to an attractive market segment. The acquisition also represents an excellent opportunity to further expand our relationships with two long-standing operators in Holiday Retirement and Atria Senior Living and with new relationships such as Hawthorn Senior Living. New Senior will strengthen our existing senior housing business from several strategic perspectives. Operationally, New Senior will enhance Ventas' cash flow generation profile. Its margin has remained resilient in the 35%+ range during COVID-19 and occupancy has weathered the pandemic headwinds approximately 80 basis points better than the NIC industry average. Most recently, New Senior has seen strong sales trends as we progressed through the early stages of the senior housing recovery with powerful upside as the portfolio occupancy grew 100 basis points in June. Geographically, New Senior has a diverse presence across 36 states, which includes exposure to markets with high home values and high household income levels, ideal proximity to premium retail in high visibility locations and favorable supply outlooks versus industry averages. This transaction is a reflection of our focus on adding high-quality assets to our senior housing platform and maintaining balance across independent living and assisted living product types. We see New Senior's independent living assets as complementary to our existing high-end major market portfolio as it provides a lower average resident age and longer length of stay at an accessible price point, with RevPOR of approximately $2,700. The purpose-built nature of these communities, which include consistent layout with 120 units per building also will strengthen our ability to effectively and efficiently redevelop and invest in these assets over time. Moving on to new developments. We continue to drive value from our development pipeline through our relationship with Le Groupe Maurice, where we have opened three communities, with more than 1,000 units over the past year. Two of the three developments were delivered in the fourth quarter of 2020. Both projects had substantial pre-leasing activity and have already stabilized at approximately 95% occupancy. The third project, a 287-unit expansion of an existing Le Groupe Maurice community in Montreal, was delivered in June of this year. Initial leasing activity has been strong with more than half of the new units occupied as of the end of July. Our plans across our broader SHOP portfolio includes significant deployment of refresh and redevelopment capital, strengthening our market-leading position, where we expect to realize occupancy growth and pricing upside over the next few years. We continue to actively manage our portfolio with the disposition of non-strategic assets and the transition of operators in select markets to position our senior housing business for long-term success. In summary, our recovery is off to a strong start. We are well-positioned in markets that benefit from outsized aging and wealth demographics, with rapid portfolio repositioning. We are executing our senior housing strategy to help ensure success in the near and long term. I will now hand over to Pete.

Thanks Justin. I will cover the office and healthcare triple-net segments. Together, these segments represent over 50% of Ventas' NOI. We continue to produce positive and reliable results. Within these segments, we are seeing a changing business climate. Health system and university business confidence is rising, leading to longer term commitments and strategic growth investments. During the pandemic, we kept our business confidence. We remain focused on growth and we continued to invest in incremental leasing resources and in creating a leasing center of excellence, led by an industry veteran. She is now two years in. We have built a technical engineering team to assist our local property teams in running our buildings more efficiently, also led by an industry veteran. He is now 18 months in. We doubled our capital invested in our MOBs to ensure their competitiveness, including major redevelopments in Phoenix, Atlanta and Austin, Texas. We expanded our tenant satisfaction programs under the leadership of our new property management leader. He is also 18 months in. Because of this focus, I am proud to say that our MOBs now rank in the top quartile of tenant overall satisfaction as surveyed by Kingsley, the national real estate survey leader. Happy tenants equals higher occupancy. Our focus on the fundamentals and growth is showing results. Let me describe them now. Office, which includes our medical office and research and innovation segments performed well, delivering 10.5% sequential same-store growth. Office quarterly same-store growth was 12.6% year-on-year. The R&I portfolio benefited from a $12 million termination fee from a large tenant in the Winston-Salem innovation center, anchored by Wake Forest. Adjusted for the termination fee, office sequential same-store growth was 90 basis points and 2.8% year-on-year same-store quarterly growth, a strong quarter. Medical office same-store sequential growth was 80 basis points and year-on-year quarterly same-store growth was 2.4%. For the quarter, we executed 230,000 square feet in office new leasing and 460,000 square feet year-to-date, a 78% improvement from prior year. Medical office had strong same-store retention of 94% for the quarter and 85% for the trailing 12-months. The result is that total MOB occupancy increased 20 basis points sequentially. Total office leasing was 750,000 square feet for the quarter and 1.8 million square feet year-to-date. We are also pleased that our annual escalators for the new MOB leases averaged 2.9% for the quarter, which caused MOB same-store portfolio annual rent escalators to increase from 2.4% to 2.6%. Our R&I business continued to excel as it strives to provide effective facilities to support the record level of investment into life sciences research. Same-store sequential growth was 38.9%. Adjusted for the termination fee, same-store sequential growth was 1.1%. Year-on-year quarterly same-store growth was 42.6%. Adjusted for the termination fee, year-on-year quarterly same-store growth was a strong 3.9%. Quarterly same-store occupancy was now standing 94% with sequential occupancy increasing by 10 basis points. Looking forward, we have three R&I buildings comprising 1.2 million square feet of space under construction. Collectively, they are 78% leased or committed. Of the two buildings in our uCity Complex at Philadelphia, the Drexel building is 100% leased, while one uCity Square is over 55% leased or committed. We are oversubscribed for the remaining space with 11 above pro forma proposals currently outstanding. In Pittsburgh, our new building is 70% pre-leased. University of Pittsburgh and UPMC was significant activity on the remaining space. At our recently opened project with Arizona State University in Phoenix, we are 86% leased or committed and expect to be 100% leased shortly. These performance numbers reflect the quality of our well-located R&I assets. Now let's turn to healthcare triple-net. During the second quarter, our healthcare triple-net assets showed continued strength and reliability with 100% rent collections. Second quarter same-store cash NOI growth was 2.5% year-on-year. Trailing 12-month EBITDARM cash flow coverage through June 30 was strong across the portfolio. Health systems trailing 12-month coverage was an excellent 3.6 times in the first quarter, a 10 basis point sequential improvement. As Debbie mentioned, Ardent continues to perform extremely well in this dynamic market. IRF and LTAC coverage improved 20 basis points to 1.9 times in the first quarter, buoyed by strong business results. Although skilled nursing declined 10 basis points to 1.8 times as the pandemic continued to impact centers, total post-acute coverage increased sequentially by 20 basis points to 1.9 times in the first quarter of 2021. Finally, several of our partners have an approach for M&A opportunities. Kindred is expected to merge with LifePoint and Spire recently entertained multiple offers by Ramsay. It is a testament to the underlying value of our healthcare operators and the associated real estate. With that, I will turn the call over to Bob.

Thanks Pete. In my remarks today, I will cover our second quarter results, our recent liquidity balance sheet and capital activities and finally, our expectations for the third quarter of 2021. Starting with our results in the second quarter. Ventas recorded strong second quarter net income of $0.23 per share and normalized funds from operations of $0.73 per share. Normalized FFO per share was $0.02 above the high end of our initial guidance range of $0.67 to $0.71 for the quarter and is consistent with our June update to be at the high end or better than that original range. The Q2 outperformance was driven by growth in office, continued stable performance from triple-net, strong results from Ardent and better-than-expected NOI in our SHOP portfolio. Turning to capital. We have been busy in proactively managing our capital structure, duration of debt and liquidity since our last earnings call. First, following the announcement of the New Senior agreement, we raised $300 million in equity at an average gross price of approximately $58.60 per share under our ATM program. The $300 million equity raise together with the $800 million of new equity to be issued to New Senior shareholders for the fixed exchange ratio and $1.2 billion of New Senior debt to be assumed or refinanced constitutes the overall $2.3 billion funding of the New Senior transaction. Second, through August 5, we have received $450 million of disposition proceeds and receipt of loan receivable. Included in the $450 million received to-date is repayment of two well-structured loans in July, part of redemption of $200 million of 9.75% Senior Notes due 2026 and Holiday's repayment of $66 million of 9.4% notes due 2025. Medical office buildings sold in the second quarter also resulted in proceeds of approximately $107 million. Using proceeds from this disposition, in the third quarter Ventas will improve its near-term debt maturity profile further by fully repaying a total of $664 million in outstanding 3.25% Senior Notes due August 2022 and 3.13% notes due June 2023. As a result of recovery in senior housing NOI and our capital structure actions, we are seeing strengthening credit metrics. Reported Q2 net EBITDA was better than expectations improving 10 basis points sequentially to seven times. Within that 10 basis point improvement, underlying SHOP annualized EBITDA improved nearly $50 million or 25 basis points beneficial impact of the ratio in just one quarter. This organic improvement was offset by the elimination of SHOP which we experienced in Q2. This provides a proof point of the anticipated material improvement in leverage resulting from the underlying recovery in senior housing over time. Pro forma, for announced ATM issuance and capital activities, Ventas' Q2 net debt to EBITDA went lower from seven times to 6.8 times. I would highlight that the New Senior transaction is expected to be 30 basis point levering on projected New Senior 2020 NOI and is supported by the forecasted growth in cash flows from the New Senior portfolio. Ventas has ample liquidity totaling $3.3 billion. As of August 5, the company had $2.7 billion of undrawn revolver capacity, $600 million cash and no commercial paper outstanding. Let's finish with our future guidance. Third quarter net income is estimated to range from flat to $0.05 per fully diluted share. Our guidance range for normalized FFO for Q3 is $0.70 to $0.74 per share. The Q3 FFO midpoint of $0.72 can be bridged from Q2 of $0.73 by $0.02 benefit from the Ardent loan prepayment fee in Q3, net of the Ardent HHS grants in Q2, offset by $0.02 from lost interest income on the loan repayments and the July equity raise. NOI reductions from assets intended for dispositions describe the last $0.01. In the third quarter, assumptions underlying our guidance are as follows. SHOP Q3 spot occupancy from June 30 to September 30 is forecasted to increase between 150 to 250 basis points, with the midpoint roughly continuation of occupancy growth trends seen in July. Third quarter is expected to be roughly flat sequentially and move-in incentives are expected to narrow in the quarter. Sequential SHOP revenue growth is expected to be offset by increasing operating costs due to an additional day in the quarter, higher occupancy, labor and routine seasonal items including repairs and maintenance and utility costs. No HHS Grants are assumed to be received in the third quarter. Sales performance is expected in the office and triple-net segments. We continue to expect $1 billion in asset sales and loan repayments for the full year 2021 with line of sight for the remaining balance in the second half of this year. Fully diluted share count is now 383 million shares reflecting the equity raise in anticipation of New Senior. Guidance does not include any other announced capital markets activity. Our Q3 guidance excludes any impact from the pending acquisition of New Senior. The New Senior transaction is expected to close in the second half of 2021 and once closed, it is forecast to be between $0.09 to $0.11 accretive to normalized FFO per share in 2022. I would like to underscore that we are still in a highly uncertain environment. Growth trends in SHOP are positive. The pandemic's impact on our business remains very difficult to predict. Ventas is excited about our business in the future and we believe we have the well-diversified portfolio, best-in-class operators and experienced team to win the recovery that is now underway. That concludes our prepared remarks. Before we start with Q&A, we are limiting each caller to two questions to be respectful to everyone on the line. With that I will turn the call back to the operator.

Operator provided instructions on how to ask questions. Your first question comes from the line of Jonathan Hughes.

Hi. Good morning. Justin, can you share some more details on your seniors housing occupancy versus rate philosophy? And why when I look at the rate, it seems that there is a little bit more discounting here than some other portfolios as your RevPOR was down about 2% year over year, some others were up low-single digits? I guess it just seems given demand is rebounding and length of stay is only a few years and affordability is probably as attractive now as it's been perhaps ever, why wasn't RevPOR growth maybe at least flat if not positive?

Hi. Nice to talk to you. Let me start with the year-over-year kind of comment you made. So if you were to look at our year-over-year RevPOR and you exclude Atria, which as I mentioned in the prepared remarks, had some discounting. I will come back to that and exclude LGM which performed really well in this past year but they operate at a lower price point in an active living product in Canada. So there's a mix shift impact from LGM. So if you were to take those two out, our RevPOR would have increased 1.8%. So take LGM aside and let's get back to Atria. You might remember that Atria, starting back during the pandemic had positioned themselves to go for volume in a few different ways. Very early on, they were the first to execute testing broadly. As they moved throughout the pandemic, they saw an opportunity for volume ahead of the worst part of the pandemic, which was emerging in the fall and into the winter. So they offered price incentives. And if you were to look at Atria's occupancy growth, if you go move further back from the low point and start back for instance December 31, they have grown 372 basis points versus the rest of our SHOP in total to be like 227 basis points. And so they are an absolute bonafide leader in driving occupancy volume. They chose to stay with the discounting into recent months. We have noticed in underlying trends that they are starting to tighten. They also have a higher absolute occupancy than the rest of our portfolio and a lot of operators in the sector. So we believe that they are well-positioned to start to push pricing in the markets where they are seeing stabilization. That's their intent. They started to do it. They will continue to do it. They have a long track record of driving both occupancy and price. And we are in the very early stages of this recovery. So we are comfortable and confident that then over time they will deliver. One other point and that is that we have Sunrise Senior Living in our portfolio. Sunrise has a $9,000 RevPOR. They are sitting at 72% occupied. They have been driving a lot of occupancy growth as well. And the mix shift that I mentioned that kind of went the other way with LGM outperforming will shift the other way and Sunrise starts to grow. So I think our RevPOR outlook will be fine in the long term.

Okay. Yes. That's helpful. It's just tough for us to see the mix shift on our side. But the color is really helpful. I appreciate you sharing that. And then just one more for me on the life science and the R&I pipeline. Are you still planning to utilize some JV partners on some of those future potential developments to help spread out risk and lower the earnings dilution? Or given the strength of that business, is there maybe a desire now to keep those wholly-owned, let that value creation benefit drop to shareholders?

Good morning. That's a great question. We are excited about this business that is going to continue to grow and Wexford has a lot of opportunities. But I would say the answer will be some and some. There are some pre-identified projects that are in the pipeline that would do in joint ventures. And they are carefully selected to make sure we have a coherent strategy around the joint venture. And there are others that Wexford is working on that may go on balance sheet depending on, again, the risk-reward profile. So I think we will have a lot of benefits from this business initiative going forward, both on balance sheet and with our joint venture strategy.

Okay. I will jump off. Thanks for the time.

Thank you.

Your next question comes from the line of Nick Joseph with Citi.

Thanks. Good morning. I was hoping to get more color on the underlying assumptions for the SHOP occupancy growth in third quarter. Obviously, you have already had July at about 75 basis points and recognize the recovery won't be straight line as you said. But how do you think about the near term risks from the Delta variant and the impact on at least near-term senior housing occupancy?

Sure. I will start on that, Nick. So this, in terms of the numbers, the outlook is 150 to 250 spot occupancy gains. You are right to say 74 in the first month. So at the time that is above the midpoint. And you are right to say it's not a straight line. I mean clearly the pandemic backdrop is something we are thinking about, no doubt about it as you think about occupancy. And it's never month-to-month if you look at it, take one month times three. That said, the strength in leads in July is worth noting as well. In light of that, what translates into move-ins in the future. So we are still seeing very positive trend now five consecutive months of occupancy and strong leads. But with a backdrop of caution is the right way to think about it.

Thanks. Then you talked about the supply outlook on senior housing kind of being positive for the near to medium term. Given the recovery that's underway, when would you expect that supply to start picking up in terms of new starts?

Yes. So it's Justin. There is a little bit of catch-up in terms of supply from last year that we are experiencing in the short term. It's a bump in the road but starts and deliveries are very low and so there is a window that we can look out. We think a few years of runway to really have strong absorption in the sector. Certainly, capital will follow the fundamentals. We expect to see development chase this sector. But when they do, they will be faced with the strongest aging demographic that the sector has ever faced. So we are certainly bullish and confident on the demand for senior housing.

Thank you.

Your next question comes from the line of Joshua Dennerlein with Bank of America.

Yes. Hi everyone. Hope everyone is doing well. Curious on Ardent, since you got the loan repayment. Just curious, maybe if you have any interest to kind of expand further into the hospital sector? It just feels like—yes, just kind of curious there.

Well, good morning. Thanks for the question. No, Ardent has been a great investment in many different ways. Great risk-adjusted return, great performance and I think even better days ahead. I would say that if we were able to find additional assets in the health system space that have the characteristics that we like about Ardent, we certainly would commit additional capital there. And those characteristics really are around growing market position in local markets, being one of the leaders, having pricing power with commercial payers and those types of characteristics, obviously population growth and so on and good strong experienced care providers. So we continue to explore opportunities in this space and if we can find anything even close to as good as Ardent, I think we would be happy to commit additional capital there.

Okay. And then on the disposition guidance, the $1 billion, did that originally include the Ardent repayment? And is that additional or kind of takes the place of maybe some other sales that you were going to do?

Yes. Josh, that was in the initial $1 billion that the $200 million loan repayment, that was in our guidance originally. So no surprises there. And the balance being property real estate dispositions continues to be the assumption, both senior housing and MOBs. But that was in our first guidance.

Okay. Just one real quick follow-up. If Colony was to, I think Colony could repay back their loan, that's not included? Or is that?

Correct. That is correct.

Correct. That is not in $1 billion. That is not assumed.

Okay. Got it.

You got it. Thank you.

Your next question comes from the line of Michael Carroll with RBC Capital Markets.

Yes. Thanks. I wanted to stay on the RevPOR outlook real quick. And can you talk about how operators are setting rates today? Are they able to be more aggressive pushing rates, I guess in August versus February, beginning of this year? And then, if not, at what point will they be able to be more aggressive? I mean does occupancy have to hit back into the mid 80% range?

Yes. Hi, it's Justin. So even throughout the second quarter, we could see underlying tightening, particularly in asking rents. Operators tend to use short-term incentives first and foremost. And we think those will persist as asking rents tighten. Clearly, the demand is really strong for independent and assisted living. If that continues, I would expect pricing power to return and particularly as communities and markets reach pre-pandemic occupancy. So we think there is plenty of potential ahead to drive pricing. Of course, as Debbie mentioned it may not be a straight line as we face this next phase of the recovery.

And different operators will clearly pursue different strategies. And we support and work with them on their strategies and we should see the benefit from that going forward.

Okay. And then back in 2014 or 2015 when the SHOP portfolio had occupancy of 90%-plus. I mean at that point, how aggressive were your operators able to push rate? I mean, could we expect RevPOR or maybe not expect to I mean could we see RevPOR get back into the mid single digits if something like that occurs?

Yes. So it's completely different market moving forward than it was then. That would have been really the beginning of facing new supply and there was still some pricing power persisted during that time with the outlook moving ahead given the demographic backdrop and the new supply backdrop that we are facing. It certainly supports occupancy growth and pricing power.

Yes. I mean, Michael you are reminding me of the very good times and thank you for doing that where occupancies were in the low to mid 90s and RevPOR was growing considerably. And so as Justin said, with the demographic growth and we have this window where the supply is baked over a multiyear period and that's going to be baked at low levels, that is a very constructive backdrop for getting back to very positive outcomes, RevPOR growth, occupancy growth, et cetera.

Okay. Great. Thank you.

Your next question comes from the line of Steven Valiquette with Barclays.

Great. Thanks. Hi. Good morning everybody.

Good morning.

So with the New Senior transaction focused mainly on the independent living market, just I am curious to hear any updated thoughts you have around strategy and senior housing by property type? Are you just thinking about it on memory care versus AL versus IL, we have seen some operators and the large operators talk about some of the biggest gains in occupancy in memory care. I am just curious on your thoughts by property subtype in light of a transaction, how you think about those three areas on the pace of recovery? Thanks.

Great. And Justin will answer that. Thank you. I mean with the New Senior pro forma, I think we are going to be over 50%, including Canada in the IL products which we really like and it's a less labor intensive model, for example. But we do like the diversification in our enterprise and we also like it within our senior housing portfolio. So I will ask Justin really to describe this strategy and framework that we are thinking about as we build the portfolio with Justin's kind of imprint upon it.

Thanks. So first and foremost, we just wanted to make sure, as I mentioned in our prepared remarks and I like to say this a lot, that we are in the right markets with the right asset and the right operator managing that asset. So that might be memory care, assisted living or independent living, really all the product types have good characteristics. The assisted living and memory care are more need-driven. You have higher price points. They also do run at tighter cost. And so depending on the RevPOR associated with the products, your margins can vary. But it's a product that does tend to recover quickly. It did after the financial crisis, doing really well after the pandemic so far. So it's great to have exposure as long as you are in the right markets with the right operator to that product. Independent living has a longer length of stay. It also has less new competition facing it. In the case of New Senior, there is extreme affordability relative to an AL product. It's about at least twice as good in terms of, if you are a resident making a choice within your local market for a New Senior independent living versus for AL. So it reaches a broader audience. It also has pricing upside through investments and faces the same strong demographic wave that are subscribing earlier. One other thing about independent living because it faces less new competition, it does have a higher ceiling. Pre-pandemic it was outpacing AL and memory care by about 400 basis points. We don't see any reason why coming out the other side that it doesn't also have higher ceiling moving forward.

Okay. Great. That's helpful. Just one other real quick follow-up on New Senior transaction. You have a bullet point above Ventas expecting to make revenue generating capital investments for additional value and opportunities. Just curious to hear more about that and how critical that is as part of the overall transaction?

Yes. So this is Justin again. This is a product type that I mentioned that has great characteristics. There are 120 units, large units. If you have been to a Holiday community, you have kind of been to all of them because they are exactly the same. Big open floor plan when you walk in. Open dining. There's three stories. And so it lends itself well to redevelopment or refresh investment. And we are happy to be situated in several markets that are great locations or high traffic locations or located close to premium retail. They have strong incoming wealth and aging demographics. So a lot of cases, we think we are pushing out open the door to make additional investments. And the goal, on a targeted basis, is to make investment, support the occupancy growth but also push pricing. So we are in the process of evaluating those opportunities and we will integrate that into our plans over the next couple of few years.

Got it. Okay. Thanks.

Thank you.

Your next question comes from the line Juan Sanabria with BMO Capital.

Hi. Good morning.

Good morning.

I was just hoping to talk a little bit about big picture strategy. Just trying to gauge how much appetite you have to truly meaningfully grow the seniors housing exposure at this point in the cycle, given this nice window you have over the next few years versus kind of the long-term stated desire to be diversified across asset types and different products? And so just curious how you are thinking about it given the opportunity set in seniors housing in that nice window for the next couple of years.

Yes. Well, we have definitely put our money where our mouth is in terms of the New Senior investment of $2.3 billion and well-invested well-located senior living. We are excited about that. That will increase our percentage NOI coming from the senior living area and will enable us not only to capture embedded upside in the Ventas portfolio in senior housing but also New Senior. So that's great and we will continue to invest where we think there is good risk-adjusted return and upside in the senior living business. We do believe, as you know, in a diversified model and we will continue to invest in other areas of our business that have performed exceedingly well for us and have really proven their value over the last year, because the benefit of diversification really is that you never know really what the external market and environment are going to throw at you. And these different asset classes are unified by demographic demand that they perform differently in different environments. And we have gotten the benefit of that so much so in the medical office area, the life science area, the hospital area over the last year that we remain of a belief that that is the best profile to deliver the kind of value proposition we want to deliver to our shareholders.

Great. Thank you. Super helpful.

Thank you.

And then just on seniors housing, I guess for Justin. Just curious on the latest thoughts on the flow-through of incremental revenue to the NOI line. And if I could be sneaky just any thoughts on or latest data points on the Delta variant, if there is any implications on operators' visitation policies as a result of the uncertainty in Canada, a very fluid landscape?

Sure. So I will start with the flow-through and maybe just kind of refer to it as margin. One thing that's interesting, you can kind of see in the supplemental you will catch this, our operating margin, even on a much lower occupancy right now, is only like a 150 or 200 basis points off of the margin from a year ago on a much higher occupancy. And so margin is kind of hanging in there. We think if you fast forward and get the portfolio back to pre-pandemic occupancy, we think you are very, very close potentially to within 100, 200 basis points of the pre-pandemic margin plus there should be some pricing power plus there should be some more occupancy upside than we were seeing at that time. So we feel good about the flow-through and it's going to be, we are in this period where Atria has one of our best performing operators as I mentioned in terms of occupancy, but they have another 700 basis points to go to get back to where they were pre-pandemic. And during this kind of next wave of occupancy fill that we expect to see the flow-through really increase and margin grow as well. And then the second part of your question is view of the Delta.

Right. I mean, right now it's kind of business as usual. But as I mentioned in my remarks and you clearly understand, there is fluidity and the environment is very dynamic. And so we want to be prudent in our thought process about the third quarter. But right now the communities are all open for new move-ins and visitation and we hope that that continues because the communities are so highly vaccinated and protected. And that is the comfort and the happiness frankly that we have sitting here today that we feel really good about.

Fingers crossed. Good luck everybody.

Exactly. Thank you.

Your next question comes from the line of Lukas Hartwich with Green Street.

Thanks. Good morning. Can you provide any color on the in-process senior housing disposition? Just maybe level of ventures? And is there a sense of how pricing compares to pre-COVID levels?

Well, we are making good progress. We have a line of sight to, as Bob said, to the balance of the investments which are composed of medical office and senior housing. And because the outlook for senior housing is very favorable, there is significant interest in the asset class. And we think pricing will be in line with our expectations.

Great. And then during the quarter, it looked like a tenant exercised a purchase option. Can you provide a sense of how pervasive those types of options are in the portfolio?

They are absolutely de minimis because this is a historical one, frankly, that we got from NHP that is going back to PMB. So this is a long-standing one. We did recognize a very significant gain on the sale which was $30 million or $40 million, I can't remember, on $100 million deal. So that was good. But we have very, very limited purchase options for tenants.

Great. Thank you.

Thanks Lukas.

Your next question comes from the line of Jordan Sadler with KeyBanc Capital Markets.

Thanks. Good morning. I wondered, just a quick follow-up on the Colony loan investment. Any update there surrounding your expectations? Or the fact that you excluded it from the sales guide in the Q, that you still don't expect it to be repaid?

I think the latter. As you know from the Colony call they have moved that portfolio to intended-for-disposition of the real estate portfolio that is encumbered by our loan and the loan continues to perform well. And my guess would be that and it's only a guess, is that buyer of the real estate portfolio would likely assume the existing capital stack.

Okay. Although I guess if it goes to somebody, I mean who looks to parcel off the portfolio or it doesn't mean to own or hold the entire portfolio, there is a possibility that they might have to repay that loan, right? Because it's supported by the entire portfolio?

Yes. It is supported by the pool portfolio, definitely. And you know it's a very well structured loan. And we always feel good when our loans get repaid even though we have to recycle the capital. But it proves the merits of the investment, if you will. So we are open-minded. I think either way could be favorable for Ventas.

Okay. Thank you.

Thank you.

Your next question comes from the line of Daniel Bernstein with Capital One.

Hi. Good morning. Congrats on a good quarter with SHOP. So kind of a broad question here on seniors housing, I mean there has been some real success from the larger operators like Brookdale, Sunrise obviously the merger of Atria and Holiday. It's just kind of I just want to get your perspective on maybe the importance of scale in seniors housing going forward? Historically, scale has not worked out too well versus regional operators in terms of performance. But maybe that's changing. And just wanted to try to get your perspective on that? And maybe how Ventas as a REIT can participate in that?

Well, that's a great question. It's clearly from someone who has been around the industry for a long time. As we said, as a third owner of Atria, we do like the combination of the talent, the IL and the AL capabilities coming together on a very advanced platform that Atria has to become the second largest operator. So that can really yield some benefits, I would say, with the data, analytics and technology capabilities and the talent all coming together. So it's more about that than it is about the scale, I would say. There also can be benefits from smaller operators. Justin mentioned, we are going to have some, a new relationship with Hawthorne and those were, as you know, the original Holiday guys, if you will. And I think there are some strong benefits that those local operators can provide as well. So we look forward to having those relationships and building them out as appropriate.

Okay. And then I guess the other question, I just wanted to go back to labor. I mean you have heard from some other REITs and operators that maybe a lack of labor could slow down occupancy gains at more maybe skilled nursing seems challenging. But kind of wanted to get your thoughts whether there is any limits in terms of near-term occupancy momentum that could occur because of the shortage of labor?

Right. Well, I mean again I think we, as a country and we at Ventas with our strong second quarter, have a really what I would call, my mother would call, a high-class problem. And that is that our economy is recovering and demand is recovering in such a speedy and robust way that both the labor market and the supply chain are having trouble kind of keeping up with it. And that is an environment that we feel very comfortable kind of managing through to the other side, because when you step back, it's really all about that demand, the demographics, building that occupancy and pricing power and capturing that embedded upside in both Ventas senior housing as well as now New Senior. So we would rather have this environment than many others and I think we can successfully really manage through it because of the demand that is right in front of us.

Okay. That's a helpful perspective. Thanks.

Right. And to the specific question, I mean our communities are able to take residents. There hasn't been any capacity constraint to-date on our ability to accept occupancy.

All right. Thank you.

Thank you.

Your next question comes from the line of Amanda Sweitzer.

Thanks. Good morning. You touched on higher conversion lead sources continuing to recover in your prepared remarks. Can you just expand on where those higher conversion sources are trending today relative to pre-COVID levels? And how much additional upside you think you could realize through those?

Yes. Sure. So there's really kind of two things happening. One is the digital footprint that is expanding and then the other is the traditional leads coming back. So referral agencies and Internet-based leads are way over 100%, 150%, 160% of pre-pandemic levels. And so they have played a huge role in driving leads. That's maybe a silver lining that came from the pandemic where it forced operators to invest into that source of referrals and it's a game changer, really. And so we have seen most leads tick up. Now those do convert at a lower rate though, but the more the merrier. So in addition to that, there's three other lead sources. There is respite, professional referrals and personal referrals. Personal referrals in the second quarter for us, we are at 110% of pre-pandemic levels. So those have come roaring back. Professional still down around 74% to 75%. And respite just under that. So there is still a ways to go yet with professional and the respite to recover which we think is encouraging because the lead levels have been quite strong.

Well, that's great and helpful. And then following up on your expense growth guidance, particularly for the third quarter, just your expectation that increased SHOP expenses will largely offset the increased revenue growth. What did you see in terms of sequential expense growth in July? And how meaningful are the potential COVID-related expenses that you are including in guidance?

Yes. I will have a go with that one for the third quarter. So you are right to say revenue growth pretty much offset by expense growth. There's a number of different buckets within the expense line, I think, worth highlighting. One is simply an extra day which is meaningful when you think sequentially third quarter versus the second quarter. That has a meaningful impact. The next is, I call it typical seasonal cost increase in the third quarter. Utilities is the easy one. Repairs and maintenance is another. But you see that every third quarter. The third bucket is really a function of occupancy growth and activity levels increasing in the communities. And then obviously you have incremental cost associated with that which is a good thing. And kind of overlaying all of that is, back to this question of short-term wage pressure in light of the labor market, which is effectively embedded in the thinking. But there is a series of different buckets that altogether add up to that third quarter expense number.

That's helpful. Appreciate the time.

Thank you.

Your next question comes from the line of Nick Yulico with Scotiabank.

Thank you. I guess I just wanted to follow up on that expense question. Maybe if you could just give us a feel for how this is going to work in terms of, as you get increased occupancy in the portfolio, how much of an offset going forward that's going to be from same-store expense growth? Meaning that, if your occupancy instead was up 400 basis points in the third quarter and not 200 basis points, would you then have same-store NOI growth sequentially? Just trying to think about how, as occupancy is going up as well as some of your deflexing of labor that worked on the downside is now, I guess, going against you a bit on the expense side.

Yes. Nick, I think it's right to say that as occupancy grows you are going to have some level. It's not a perfect linear one-for-one relationship whereby you add occupancy you add a head. It is more of a step-change type function. This always creates a beta as to what level that is. I think, qualitatively, we would tell you we are in that. We are growing labor as we are growing occupancy right now as a consequence of having come out the other side flexing labor, as you say, which should reach a level where then there is some scale advantage, if you like, that you can then hold off until you get to the next level of occupancy. I can't give you a number on that. But we are certainly in that upward trajectory right now.

Okay. Yes. I appreciate that. And I guess, just following up on that. I know earlier, Justin, you were saying about the margin outlook. You thought there's a good chance to get back, I think you said within the 100, 200 basis points of pre-COVID margin as you are building the occupancy back. And I guess the way, is that the right way to think about this that in the meantime, over the next year, you are still going to be about 100, 200 basis points below on margin versus where you were? Because if I look at the third quarter guidance, it does feel like your margins are going to be about 20% in SHOP and the third quarter a year ago was almost 22%. So that kind of fits that piece of still being down a bit which is, maybe it's COVID expenses, it's also, I guess, the RevPOR being down year-over-year.

Yes. I would kind of stretch out your timing a little further. As Bob mentioned, there is going to be kind of you will have periods we have revenue increase and a little bit of expense catch up. Debbie mentioned that the near-term outlook as transitory. So if you kind of push out the timetable away and we don't really have the crystal ball in terms of when we stabilize. But I was thinking more on a stabilized basis. We get there to that pre-pandemic occupancy margins should be within reach of where they were and then from there the pricing power and the occupancy upside for even higher margins over time. So that's all I was saying. And I didn't really mean to kind of pin it as kind of a near-term picture, except to say that our margins in Q2 were only like 150, 200 basis points off of the year ago.

Okay. Thank you everyone.

Thank you.

Your next question comes from the line of Vikram with Morgan Stanley.

Thanks so much. Good morning. Thanks so much for taking the question. So I guess, Justin, going back to sort of the occupancy increase near term but also maybe over the next 12 to 18 months. So first, I guess if I look at your slide and look at the lead volumes very recently, they are over 100% of 2019 and your move-outs are trending lower and certainly the leads are higher than the last few months or the second quarter numbers. So why would the occupancy uptick just be similar to what you saw, in your view, in the second quarter? Why wouldn't the midpoint of your guidance be the low point because your leads are just higher than what you have seen in the last, call it four months?

Yes. Well, this is Debbie. You know again in July, well, first of all, we are really happy that leads in July are the highest they have been since beginning of the pandemic. That is a very important and meaningful statistic. And certainly portends to me, it means there's demand and it portends higher occupancy. So that is really good, as you say. In July, as we have talked about, we had spot-to-spot growth of about 75 basis points. And you know there is a lot of uncertainty in the environment. So if you just rolled that forward, that's near the midpoint of the 150 to 250. And that's how our guidance is constructed.

Got it. Okay. No, I mean you are right, like the July lead should translate into whatever August, September. I don't think it's more than that in terms of conversion time. But it just feels like the setup is one for, you would pretty easily get to your mid to maybe even the high end of your number of your occupancy guide. And I guess just tied to that, a lot of smaller operators surveyed by NIC do have a view that they could get back to pre-COVID occupancy next year. I wanted to just ask you from your perspective, like, do you think that's too optimistic? What's your sort of broad view on the puts and takes? I recognize the strategy that's different in terms of occupancy versus rent, et cetera, but where do you think, A, do you think those smaller operators are maybe too bullish? Or what are the puts and takes?

Yes, I mean the pace and slope of the recovery and the clinical environment broadly in the U.S. is really going to determine how quickly we get back to that pre-pandemic occupancy levels. We are on a good path. I think it's very sustainable. It has been so far. And we are very encouraged by that as well as the demographic growth that's right in front of us. I think Justin mentioned Atria had about, what, 700 basis points of occupancy to continue to get back to pre-pandemic levels. And again, it's really going to depend upon this, we were predicting the third quarter, we have visibility and line of sight to that. And thereafter I think we want to be conscious that it continues to be a pretty dynamic environment. So we are encouraged and I hope you are right about many of the things that you said, Vikram.

Debbie, if I can just—sorry, go ahead.

I was just trying to say things to kind of support that. So right, as we currently sit, we only have just around or just about 20% of our communities that are at the pre-pandemic occupancy. Over 60% are achieving pre-pandemic move-in levels. So we have great activity. And we are really pleased with this early recovery. But we have a long way to go and so far really good support for it. But there is still a ways to go yet.

Okay. Great. Debbie, if I can just squeeze one bigger picture question. I am struck now by how the big three healthcare REITs are now different from maybe several years ago they were. There were a lot more similarity. You have strong momentum in the life science, research segment. Obviously senior housing, there's a lot of momentum as you have just laid out on this call. I am just wondering and from a strategic and maybe a differentiation and value perspective, the MOB segment there seems to be a lot of demand on the private side. Cap rates are really low, pretty good. I know maybe three years ago, you set out to maybe sell, correct me if I am wrong, I think it was $600 million, $700 million of assets. Why is this not a good time to maybe exit a fair amount of MOBs and become more pure-play, I guess or focused on two segments, life science and senior housing?

Love the question. Thank you. Again we do believe that we have created a lot of value with our MOB portfolio as you point out. We have a differentiated strategy with our Lillibridge management platform that Pete runs and that's going really well. We have mentioned, that is part of the $1 billion of 2021 capital recycling that is MOBs and senior housing. So you are right on there, I do think that we have benefited from the stability of the cash flows at the MOBs with our strategy of being on campus and affiliated. And I think you are right that it has very low cap rate, but it also provides a really good differentiated and diversifying aspect to our overall cash flow stream. And so we like that. So we will trim here and there. We will recycle capital. We will take advantage of some of the value that we have created. But we really believe that owning the MOB business as we do is a benefit to our shareholders.

Okay. I will follow up on that offline, but thanks so much and have a great weekend.

Thank you.

Your next question comes from the line of Rich Anderson with SMBC.

Well, I am sorry to keep you going. I logged in about two hours ago and found out it didn't take for some reason. So one question from me.

It might be you.

Yes. Fat fingers or something, I don't know. The one question I have or that I will ask in the interest of time is, concentration risk. With Atria following new Holiday and following their own merger with Holiday, gets over 20% depending on how you slice it. I am curious how much of that is an issue to you and how quickly, you would like to whittle that down through other investments outside of it? The idea of concentration in the past, at the time, sounds good and I recognize Atria is a great operator. But people have come to regret concentration risks as time has moved on. So I am curious if that's something that's sort of high on your radar screen to get back down to something in the mid teens or something like that over the next couple of years? Thanks.

Yes. Rich, thank you for asking that because that has always been something that is near and dear to my heart. And there is always this tension, as you mentioned, between really putting your assets with the right operator, the right markets and certainly the best operators. And Atria has been that. Holiday has been a leading operator. So there is a tension between that and making sure you don't put all your eggs in one basket and you manage your concentration wisely. And so we do think that the combination of Atria and Holiday provides the strategic benefits to us as an owner of Atria. And we like that. We like the growth in Atria's platform. That having been said, I think we do have a lot of flexibility in the New Senior management contracts and our own Holiday contracts that gives us the ability through both growth and the way the management contracts are structured to move in the right direction on the diversification of manager points.

Okay. Great. Thanks very much.

So we have all the tools we need to manage it in the right way.

What's your like long term, is this is much of I want to own or have a piece of my pie? Is it 10% or 15%? Is that the kind of the threshold for Ventas?

I mean, it will change over time and with specific situations. But that seems directionally the right kind of way to think about it.

Okay. Great. Thank you.

Thank you.

And there are no other audio questions at this time.

Well, thank you all for sticking with us and for your interest in Ventas. We really appreciate it. We are so delighted with a great quarter of health and safety and results and we look forward to seeing you all in person soon. Thank you again.

This concludes today's conference call. Thank you for participating. You may now disconnect.