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OFA Group has entered a joint venture with Next Investments LLC to develop a senior care facility. The joint venture combines OFA's financial and architectural expertise with Next's operational acumen and property base. The transaction advances OFA's expansion into asset-backed real estate and next-generation senior living.

Ventas, Inc. (NYSE: VTR) and Brookdale Senior Living have extended their lease agreement, marking a significant milestone in Ventas' strategic expansion into the senior housing market. The new agreement, set to commence January 1, 2026, includes a 38% cash rent increase and a 10-year term for 65 communities averaging 62 units each. This extension is part of a broader strategy to convert 44 large-scale senior housing communities into Ventas' Senior Housing Operating Portfolio (SHOP) starting September 1, 2025 [1].

The extended lease agreement is mutually beneficial, providing Brookdale with a 38% cash rent increase and Ventas with a 10-year lease extension. Additionally, Ventas has agreed to invest $35 million in capital expenditures over three years to enhance the communities' performance and resident environments. These investments are expected to yield an approximate 8% return [1].

Ventas' SHOP conversion strategy aims to leverage its proven operational insights and local market-focused operators to drive performance and occupancy. The selected SHOP communities, located in attractive markets, are expected to support strong net absorption in the coming years. Upon conversion, Ventas will receive the Net Operating Income (NOI) from these communities, while Brookdale will no longer pay rent [1].

The agreement also includes plans to sell 11 communities in 2025, with Brookdale continuing to pay full contractual rent until the end of the year. The 2025 cash and GAAP rent/NOI impacts are expected to be materially consistent with Ventas' previous disclosures of the expected impacts of a non-renewal of the Master Lease [1].

This strategic move by Ventas underscores its commitment to driving profitable growth in its senior housing business and expanding its SHOP footprint. The extension of the lease agreement and the SHOP conversion strategy are part of Ventas' broader initiative to enhance the environments for residents and their families while delivering outsized performance [1].

References:
[1] https://www.businesswire.com/news/home/20241218780306/en/Ventas-Reaches-Mutually-Beneficial-Agreements-with-Brookdale-Senior-Living