The REIT Master

The real estate industry was severely affected during the 2008 financial crisis. Many companies no longer had access to credit and witnessed their own demise.  Ventas though was another story. The company’s chairman and CEO Debra Cafaro deftly guided the company through the crisis. Ventas has come out even stronger.

Ventas is a publicly traded seniors housing and health care real estate trust (REIT). It had been on an acquisition binge prior to mid-2007. Cafaro saw that there was trouble in the horizon and asked her senior managers to become defensive in nature. This totally shocked them as the only thing they knew was to grow, grow, and grow.

While her company’s stock price was high, Cafaro wisely raised equity and refinanced debt. When the financial crisis hit the company had a solid balance sheet and strong cash position.  Despite the crises and low stock prices she was also able to raise several hundred million dollars in equity and debt during the first half of 2009. This was outstanding considering the fact that there were companies who had little or no access to capital.

The following months saw Ventas lead the REIT sector as the market began to recover.  Ventas which is an S&P 500 company is now one of the leading seniors housing and healthcare REIT in the U.S. It has a well diversified portfolio of over 1,400 seniors housing and healthcare properties in 46 states, the District of Columbia and two Canadian provinces.

As to its financial performance, from 2001-2011 its compound annual total shareholder return of 23.4% greatly outpaced both the healthcare REIT and the overall REIT indexes. Much of the credit goes to Cafaro with her mastery of the real estate and REIT markets.