CHICAGO–(BUSINESS WIRE)–Ventas, Inc. ,an S&P 500 company and one of the world’s leading owners of healthcare, senior housing and research & innovation properties, announced today it has formed a joint venture with GIC. The JV will initially own four in-progress university-based Research & Innovation development projects with total project costs estimated at $930 million. The JV may be expanded to include other pre-identified future R&I development projects.We are excited to announce this attractive R&I development partnership with GIC, one of the world’s most respected real estate investors,” said Debra A. Cafaro, Ventas Chairman & CEO. “With this strategic partnership, we continue to diversify our capital sources, retain a majority interest in our ongoing R&I developments, accelerate additional projects from our pipeline of opportunities and enhance our liquidity and financial flexibility. With GIC and Wexford, we look forward to successfully completing our in-progress R&I projects and launching additional R&I developments from our existing pipeline together.”
Following the successful launch and continued growth of our perpetual life vehicle focused on investing in core healthcare real estate, we are pleased to further expand our third-party capital management platform through this JV to now have over $3 billion in assets under management. Our success demonstrates the strength of Ventas’s capabilities, relationships and team in the healthcare real estate market. We are confident in our ability to extend our track record of value creation.”
Lee Kok Sun, Chief Investment Officer of Real Estate, GIC said, “As a long-term investor, we are confident that the life sciences sector will continue to flourish, driven by the growing and aging global population, as well as increased public and private funding for life sciences R&D. We are pleased to establish this partnership with Ventas, and look forward to scaling our venture together.”
Transaction Highlights
- Ventas contributed its ownership interest in the Initial R&I JV Projects into the JV. Ventas will own an over 50 percent interest, and GIC will own a 45 percent interest, in the Initial R&I JV Projects. Ventas’s exclusive development partner, Wexford Science & Technology, remains the developer of, and a minority partner in, all of the Initial R&I JV Projects.
- Ventas will act as manager of the JV, with customary rights and obligations, and will receive customary fees and incentives.
- Total costs for the Initial R&I JV Projects are expected to approximate $930 million. The Initial R&I JV Projects will contain 1.4 million square feet when completed and are approximately 65 percent pre-leased in aggregate. They are expected to open between 2021 and 2023 and include:
- One uCity: Expansion of the Philadelphia uCity Square submarket associated with the University of Pennsylvania. Construction on this project recommenced on October 1, 2020 after having been paused as part of Ventas’s proactive capital conservation actions in response to COVID-19.
- College of Nursing and Health Professions (“CNHP”), Drexel University: State-of-the-art academic medicine facility, also in uCity Square, which will provide CNHP students, faculty and staff with immediate access to Drexel’s full suite of on-campus resources.
- Pitt Immune Transplant & Therapy Center (Phases I & II): Creation of a research, academic medicine and innovation hub anchored by a new relationship with the University of Pittsburgh to house cutting-edge immunotherapy research in collaboration with the University of Pittsburgh Medical Center (“UPMC”) and co-located with UPMC’s Shadyside Hospital.
- Arizona State University: Class-A, fully lab-enabled R&I center anchored by Arizona State University and focused on biomedical discovery and innovation in health outcomes.
- Total project costs of approximately $180 million have been incurred to-date on the Initial R&I JV Projects, which are in various stages of development and construction. At closing, GIC reimbursed Ventas for its share of costs incurred to-date.
- Ventas and GIC will each contribute its pro rata share of the future costs to complete the Initial R&I JV Projects. The Initial R&I JV Projects are expected to be financed with approximately $500 million in construction financing.
- Ventas and GIC have the opportunity to add certain additional pre-identified R&I development projects currently in the Company’s pipeline to the JV over time (the “Pipeline JV Projects”). The Pipeline JV Projects, if all completed, would expand the JV to encompass over $2 billion in total expected project costs. Wexford is also the developer of, and would be a minority partner in, the Pipeline JV Projects.
Financial and Strategic Benefits
- The JV diversifies Ventas’s capital sources via a new, strategic partnership with GIC, a leading, global real estate investor with significant office, life science and healthcare expertise.
- Ventas maintains a majority interest in Initial R&I JV Projects and its R&I development pipeline.
- Ventas’s enterprise liquidity and financial profile are enhanced through GIC’s responsibility for its share of already incurred and future development costs of the Initial R&I JV Projects.
- The JV demonstrates the strength of Ventas’s capabilities, platform and team and represents an expansion of its third-party capital management business. This partnership builds on Ventas’s positive momentum and access to private capital, following the successful launch and growth of the Ventas Life Science and Healthcare Real Estate Fund including its recent acquisition of a $1 billion portfolio of trophy life sciences properties in South San Francisco.
Advisors
Eastdil Secured acted as sole financial advisor to Ventas. Additionally, Eastdil Secured is acting as debt placement agent for the JV on its construction financing. King & Spalding LLP acted as Ventas’s legal counsel. Skadden, Arps, Slate, Meagher, & Flom LLP acted as GIC’s legal counsel.
About Ventas
Ventas, an S&P 500 company, operates at the intersection of two powerful and dynamic industries – healthcare and real estate. As one of the world’s foremost Real Estate Investment Trusts (REIT), we use the power of capital to unlock the value of real estate, partnering with leading care providers, developers, research and medical institutions, innovators and healthcare organizations whose success is buoyed by the demographic tailwind of an aging population. For more than twenty years, Ventas has followed a successful strategy that endures: combining a high-quality diversified portfolio of properties and capital sources to manage through cycles, working with industry leading partners, and a collaborative and experienced team focused on producing consistent growing cash flows and superior returns on a strong balance sheet, ultimately rewarding Ventas shareholders. As of September 30, 2020, Ventas owned or managed through unconsolidated joint ventures approximately 1,200 properties.
About GIC
GIC is a leading global investment firm established in 1981 to manage Singapore’s foreign reserves. A disciplined long- term value investor, GIC is uniquely positioned for investments across a wide range of asset classes, including equities, fixed income, private equity, real estate and infrastructure. GIC invests through funds and directly in companies, partnering with its fund managers and management teams to help world-class businesses achieve their objectives. GIC has investments in over 40 countries and has been investing in emerging markets for more than two decades. Headquartered in Singapore, GIC employs over 1,700 people across 10 offices in key financial cities worldwide. For more information about GIC, please visit www.gic.com.sg.
About Wexford
Wexford Science & Technology, LLC is a real estate company exclusively focused on partnering with universities, academic medical centers and research institutions to develop vibrant, amenity-rich, mixed-use Knowledge Communities built on a foundation of research, discovery, entrepreneurial activity, corporate engagement, and community inclusion. Wexford targets strategic opportunities with top-tier research universities that are directly on or contiguous to dense, urban campuses. More information about Wexford can be found at www.wexfordscitech.com.
The Company routinely announces material information to investors and the marketplace using press releases, Securities and Exchange Commission 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 https://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.
