Ventas Inc. agreed to acquire privately held Lillibridge Healthcare Services Inc. and real-estate interests in 95 medical office buildings and ambulatory facilities for between $300 million and $400 million, part of Ventas’s strategy to expand in the sector.
Like many of its peers, the health-care real-estate investment trust has said acquisition opportunities have been rising as the economy normalizes. Ventas owns senior housing communities, skilled nursing facilities and hospitals. Chairman and Chief Executive Debra A. Cafaro noted Thursday the medical-office-building and ambulatory-facility market is estimated at $173 billion and expected to grow more than 30% in coming years.
Under the deal, expected to close in the third quarter, Ventas will get a 100% interest in 37 medical office buildings, a 20% stake in 24 more and a 5% interest in 34. Ventas will be a managing member of the joint ventures and property manager of the properties. An institutional third party holds the remaining property interests and Ventas will have the right of first offer on them.
Chicago-based Lillibridge owns and manages 128 properties in 43 markets in 17 states.
Acquisitions are important for healthcare REITs as they help drive internal growth, which is otherwise limited due in part to the nature of the leases the REITs sign with their tenants.
The deal will leave Ventas, the second-largest healthcare REIT by market capitalization, with a combined portfolio of 154 medical office buildings comprising 8.4 million square feet.
Ventas expects the deal to “modestly” boost 2010 funds from operations, an important profitability measure for REITs. The company expects to update its FFO guidance in the third quarter.
Ventas closed Wednesday at $47.88 and were inactive premarket. The stock is up 74% in the past year.
