Ventas Inc (VTR) — Q3 2021 Earnings Call Transcript

Thank you, Alisa. Good morning and welcome to the Ventas Third Quarter Financial Results Conference Call. Earlier this morning, we issued our third 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 risk 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 as well as our most recent SEC filings, all of which are available on the Ventas website. Certain non-GAAP financial measures will also be discussed in 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.

Thanks, Sarah, and good morning to all of our shareholders and other participants. And welcome to the Ventas Third Quarter 2021 Earnings Call. I'm so happy to be hosting this call in person with my trusted colleagues for the first time since early 2020. Ventas delivered positive results in the third quarter, saw outstanding sequential SHOP average occupancy growth, benefited from its large medical office, life science, and healthcare triple-net businesses, and executed on its investment priorities, delivering $0.73 of normalized FFO per share, which is in the upper half of our guidance range. Our same-store SHOP portfolio increased rate and grew occupancy at record levels in Q3 despite the high incidence of COVID-19 in the broader environment. Occupancy in this portfolio has now increased for eight consecutive months through October, demonstrating powerful demand. Our U.S. same-store SHOP portfolio has increased occupancy by 750 basis points since mid-March 2021, lifting the entire same-store SHOP portfolio nearly 600 basis points during the same period. I'm also encouraged that our year-over-year SHOP occupancy turned positive for the first time since the onset of the pandemic, so a robust senior housing recovery is well underway. But as we stated, it may not progress in a straight line. Consistent with macro trends and as we anticipated in our last call with you, the pandemic has created a tight labor market, resulting in labor cost pressures that accelerated in September. Looking ahead, we expect to see meaningful revenue increases in the first quarter of 2022 and improving pricing power. At a macro level, many economists forecast that labor force participation will expand from its current low rate for a variety of reasons. These factors should cause current conditions to ease considerably over time. Even more importantly, Dr. Scott Gottlieb, who has been consistently the most accurate expert throughout the pandemic, stated today that the COVID-19 pandemic is effectively behind us in the U.S. given all the tools we now have to combat it, including Pfizer's new treatment. If Scott continues to be right, it is a momentous day for all of us. We continue to be delighted that one-third of our business consists of medical office, outpatient, and life science research and innovation. Our operational initiatives in medical office and aggressive capital deployment in life science are providing reliable growth and value creation for our enterprise and stakeholders. Turning to capital allocation, we have been highly active with $3.7 billion of investments announced or closed year-to-date. Our current capital allocation focus remains in senior living, selective private medical office building opportunities, and life science R&I. Let me highlight a few new investments we've made. We've completed $2.5 billion in independent living investments, including our accretive acquisition of New Senior's 100-plus independent living communities at an attractive valuation, well below replacement cost. Additionally, we have acquired a six-community Canadian senior living portfolio with one of the new senior operators, Hawthorne. In medical office, we've completed or announced $300 million of investments. First, establishing a new relationship with industry leader Eating Recovery Center, we acquired a class A asset under a long-term lease in this rapidly growing sector. Second, by acquiring our partner PMB's interest in the Center Ventas trophy MOB in downtown San Francisco, we now own 100% of this asset at a 6% yield. With 92% of the MOB already leased, we intend to capture additional NOI growth and value. Finally, we intend to expand our relationship with Arden Healthcare by acquiring 18 of their 100% leased medical office buildings for $200 million by year-end. On our third capital allocation priority, we are delighted to announce that we have commenced the development of a 1 million square foot life science project anchored by Premier Research University, UC Davis, with our exclusive partner, Wexford. Purpose-built for clinical research, this project will be 60% pre-leased to UC Davis, and total project costs are expected to be $0.5 billion. Turning to our robust investment pipeline, our team remains busy evaluating attractive opportunities. In fact, we've now reviewed more deal volume this year than we saw in all of 2019, over $40 billion. We continue to pursue those that meet our multi-factor investment framework. Capital continues to flow into our sectors as global institutional investors agree with our thesis on the favorable trends benefiting all of our asset classes. These strong capital flows are also supporting our intention to recycle $1 billion of capital this year to enhance both our balance sheet and our portfolio. Our diversified business model continues to provide significant benefits. Our early and aggressive investments into medical office and life science are creating significant value. We are also proud to be associated with so many leading care providers, operators, and developers in all our business lines, and to be establishing new platforms for growth through both our investment and our portfolio actions. In closing, the U.S. is in the midst of an impressive economic recovery that together with demographic demand for our asset classes gives us confidence and optimism in our future. We believe that the more widespread administration of vaccines and new efficacious treatments for COVID-19 will benefit both the broader economic recovery and our company. Our aligned and experienced team continues to be focused on capturing the double upside in senior housing from both pandemic recovery and the projected growth in the senior population and also to continuing our long track record of external growth.

Thank you, Debbie. I'll start by saying it is very exciting to see the strong supply-demand fundamentals supporting occupancy growth in the senior housing sector. We have been busy taking actions through acquisitions, dispositions, and transitions to ensure we are strongly positioned during this period of sector recovery. Our industry-leading operators are successfully driving revenue growth in the early stages of the recovery and taking actions to address elevated labor costs driven by the macro backdrop. Moving onto third quarter performance. In SHOP, leading indicators continue to trend favorably during the quarter as leads and move-ins each surpassed 100% of 2019 levels, while move-outs remained steady. Strong sales activity has now driven eight consecutive months of occupancy growth inclusive of October. In the third quarter, average occupancy grew by 230 basis points over the second quarter, led by the U.S. with growth of 290 basis points and a 110 basis points in Canada, which is over 93% occupied. October leading indicators remain solid as leads and move-ins continue to perform above pre-pandemic levels, and move-outs remained relatively stable. Turning to SHOP operating results, same-store revenue in the third quarter increased sequentially by $13.6 million or 3.1% driven by strong occupancy growth and slight rate growth. Regarding rate growth, our operators have proposed rent increases to the residents of 8% in the U.S. and 4% in Canada, which on a blended basis is approximately 200 basis points higher than the historical levels. We also continued to see improvement in our releasing spreads, which are trending close to pre-pandemic levels. Operating expenses increased sequentially by $16.7 million or 5.4%, of which approximately half is due to overtime and agency costs. Although we largely anticipated the additional labor costs, September spiked and represented approximately half of the sequential agency expense increase. We carried the elevated September costs forward in our Q4 guidance, which Bob will cover shortly. Despite the higher agency and overtime costs, our operators are now witnessing net positive hiring and are actively addressing labor challenges through a number of initiatives. These include centralized recruitment of line staff, implementation of applicant tracking systems, delivering on the increased demand by employees for flexible schedules, and other workplace improvements to become more competitive. For the sequential same-store pool, SHOP generated $106.7 million of NOI in the third quarter, which represents a sequential decrease of $3.7 million or 3.4%. Moving on to portfolio actions, our New Senior acquisition closed on September 21st. The portfolio consists of a 103 independent living communities located in attractive markets with favorable demand characteristics. Integration efforts have gone extremely smoothly, and we are on track to realize our expected synergies. We are pleased with the performance and operating trends of the portfolio. Its third quarter spot occupancy grew by 110 basis points sequentially. The same-store pool, which excludes the 33 communities that transitioned to new operators this year, grew 180 basis points in the third quarter and then another 10 basis points in October, marking occupancy growth in six out of the past seven months. We have also recently closed on an acquisition in Canada, which includes 5 independent living and 1 assisted living communities. These acquisitions expand our independent living exposure to 59% of NOI on a stabilized basis. We believe the structural benefits of the independent living model present attractive opportunities to further strengthen our senior housing NOI margin through less intensive staffing requirements, longer resident length of stays, and accessible price points. All underpinned by exposure to a large and growing middle market. This is in combination with our existing portfolio positions as well to capture demographic demand with the 80-plus population expected to grow over 17% over the next five years, while facing less new supply compared to historical levels. I'd also like to note our previously announced transition of 90 assisted living and memory care communities is off to a solid start, as 65 communities have already transitioned, and the rest are planned by year-end. We believe the enhanced oversight provided by the experienced mid-market, midsize assisted living operators will improve the execution of local market strategy and with increased accountability. I have longstanding relationships and familiarity with the incoming CEOs, and I can say they are really fired up about the new portfolios. They're actively engaged with personal site visits to the communities and transition planning. Ventas has 37 operator relationships, including 7 of the top 10 largest operators in the sector, and 8 new relationships added this year. We look forward to the opportunity to grow our relationships with these companies over time. In summary, the senior housing sector is benefiting from a strong macro supply-demand backdrop. We are actively positioning ourselves for success through portfolio actions, and our operators are driving revenue while managing the elevated labor situation. We look forward to forging ahead during a very exciting time of sector recovery.

Thanks, Justin. I'll close out our prepared remarks by quickly touching on our third-quarter office and enterprise results, discussing our recent balance sheet and capital activities, and laying out our fourth-quarter expectations. Our life science and MOB businesses, led by Pete Bulgarelli, in which we represent nearly one-third of our company's NOI, once again delivered robust and reliable growth in the third quarter. These businesses, taken together, increased same-store NOI by 4.2% year-over-year and increased 1.2% sequentially on an adjusted basis. MOB NOI grew 3.2% year-over-year and R&I increased 7.1%. Some stats of interest that underpin this strong performance. MOB occupancy is up 130 basis points year-to-date, same-store MOB occupancy of 91.3% is at its highest point since the first quarter of 2018. MOB tenant retention was 91% in the third quarter, and MOB new leasing increased 43% versus the prior year. R&I occupancy remains outstanding at 94.4% and improved 50 basis points sequentially due to exciting demand for lab space. MLP expenses increased less than 1% year-on-year as a result of completed energy conservation projects and sourcing initiatives. For the second year in a row, we ranked in the top quartile of our peer group for tenant satisfaction as measured by Kingsley Associates. 2021 rankings for each major key performance indicator increased when compared to 2020. At the enterprise level, we delivered $0.73 of FFO per share in the third quarter. This result is at the higher end of our $0.70 to $0.74 guidance range and benefited from the stable performance of our diversified portfolio, as well as the $0.04 Ardent bond prepayment fee that was included in our guidance. We're also very active in the third quarter managing our balance sheet and capital structure. Consistent with our prior $1 billion disposition guidance, we now have $875 million of disposition proceeds in the bank with $170 million of senior housing and MOB portfolios under contract and expected to close in the fourth quarter. These dispositions have enhanced and reshaped our portfolio, and we've used these proceeds to reduce $1.1 billion of near-term debt so far this year. We also issued $1.4 billion of equity in the third quarter, including $800 million for New Senior and $600 million in ATM issuance at $58 a share. As a result, our net debt to EBITDA ratio, excluding New Senior, improves sequentially to 6.9 times, while including New Senior, Q3 leverage was better than forecast at 7.2 times. As an administrative side note, we plan to enter into a new ATM program, replacing our 2018 program, which is nearly complete. Turning to Q4 guidance, we expect fourth-quarter net income will range from a penny to $0.05 per fully diluted share. Q4 normalized FFO is expected to range from $0.67 to $0.71 per share. The Q4 FFO midpoint of $0.69 can be bridged from Q3 of $0.73 by $0.01 net impact of tenant fees. The impact of capital recycling for debt reduction and pre-funding of new investments is $0.02, and various items round up to explain the last penny. Our SHOP portfolio NOI is estimated to be flat sequentially. Key fourth-quarter assumptions underlying our guidance are as follows: starting with our SHOP same-store expectations; SHOP Q4 average occupancy is forecast to increase between 80 and 120 basis points versus the Q3 average, growing ahead of pre-pandemic levels while following seasonal trends. At the guidance midpoint, spot occupancy from September 30 to December 31 is expected to be approximately flat. The resulting sequential SHOP revenue growth is expected to be offset by increased operating expenses due to continued elevated labor costs. No HHS grants are assumed to be received in the fourth quarter, though our licensed assisted living communities have applied for qualified grants under Phase 4 of the provider relief fund for COVID losses incurred at the communities. Outside of SHOP, continued stable performance is expected in the office and triple-net segments. We expect to receive an M&A fee in Q4 of $0.03 for the announced Kindred sale, which Kindred communicated is expected to be completed in the fourth quarter, subject to customary closing conditions. We continue to expect a billion asset sales and loan repayments for the full year 2021 at a blended yield in the high 5s. Our fully diluted share count is now 403 million shares, reflecting the equity raised to date. I'd like to underscore that we're still in a highly uncertain environment, and the pandemic's impact on our business remains very difficult to predict. To close, my colleagues and I are excited for the future of Ventas given the expected robust recovery in senior housing and the external growth opportunities, both under our belt and that lie ahead. That concludes our prepared remarks. With that, I will turn the call back to the Operator.

Yes. Thanks. Debbie, I want to talk a little bit about the investment markets. I guess with the Delta wave and the labor pressures have you seen an uptick in the number of investment opportunities, particularly in Senior Housing? I mean, should we continue to see that activity from year-end persist over the next several months in quarters?

Good morning, Mike. I mean, as I mentioned, we have just seen a tremendous volume across the board all year long, more than we've ever seen. And we do expect that to continue.

Thanks. I appreciate all the comments on expenses, and rate and occupancy, but just as you step back and think about kind of margin, once we get through some of these transitory issues, how do you think margin long-term for Senior Housing will compare versus pre-COVID levels?

Thank you, Justin.

Sure. Hi, Nick. So just stepping back and thinking about the ultimate drivers of margin, you've probably heard us describe a train before. The front of the train really is leads, leads come first, that drives move-ins, net movement activity drives occupancy, pricing certainly supports revenue growth as well, and then there's expense management. Over time, we certainly expect that there will be margin expansion for two reasons. One is that the supply-demand characteristics that we're facing support occupancy growth and should present opportunity for pricing power. Clearly in the near term, there's expense pressure due to labor that we mentioned, but the macro backdrop does seem to be improving. And as I mentioned, our operators are taking significant actions to address the issue.

Good morning. I have a question about vaccine mandates at the property level and how they are being managed. I don't recall the specific number for Ventas, and I would appreciate it if you could share that information. Who ultimately decides on this? I assume that Ventas has some influence in a SHOP's execution, but I could be mistaken. I'm also interested in your thoughts on vaccine mandates at the property level, especially considering the recent Pfizer news and your plans moving forward. Thank you.

Hi, Rich. I'll start and then turn it to Justin. Our operators have, by and large, been early adopters of vaccine mandates within the communities to keep the residents safe and we're at very high levels now, nearly 100% of both resident and staff. We've been way ahead of the federal requirements for vaccines because we are caring for vulnerable seniors and also had access early on from the vaccine rollout, for both employees and residents. And so that has been both a moral and a business imperative. It's worked really well. Our operators have led on it and they have made the decision, but with our financial support and encouragement.

Thanks. Good morning. I was wondering if you could provide some information about the increase in labor expenses quarter-over-quarter and year-over-year. Additionally, I would appreciate your thoughts on the trend of labor expenses for next year, as I understand there is some optimism regarding improvement. However, I am still unclear about why the use of contract labor and similar factors would decrease in the current job market.

Bob will cover the quantitative aspects of your question. At a high level, the timing and extent of changes are uncertain, but several macro factors will encourage an increase in labor and workforce participation. These factors include children returning to school, vaccinations for children, the examination of public policies like the federal unemployment stipend, and individuals exhausting their savings due to these situations. All these elements contribute to the overall macro perspective on improving labor conditions. If we take a step back, one positive aspect of this recovery is the rapid resurgence in demand, not only in our business but across the board. The supply chain and labor force are still adjusting and have not yet caught up. Over time, these elements will find balance, as economists predict, leading to better workforce participation. Bob, would you like to discuss the specifics?

Sure. And the next page of the business update that we issued this morning could be helpful, because it lays out the operating expense increase we saw sequentially between the second and third quarter, which is roughly $17 million. Within that, labor represents, call it, half of that increase. And if you further analyze the labor piece, call it two-thirds of that would be contract labor. I want to reinforce that in our guidance for the fourth quarter, we saw this acceleration in contract labor in September. We effectively assume that to continue through the fourth quarter in light of the backdrop. It's important to note that contract labor is at least two times as expensive as in-house labor, and so these initiatives that we laid out to increase staffing and reduce that contract labor would have a positive mix benefit. But quantitatively, that hopefully helps you.

Hey, good morning guys. And thanks for having me on the call. It's good to be a first-time caller, long-term listener. I did want to talk through and maybe hear a little bit more about your operator contracts. One of your peers have talked about maybe half of them renewing in Q1, and the other half rateably throughout the year. I'm wondering if you see something similar and maybe you can unpack that for us.

Good, and welcome. Yes, this is addressed also in our business update. Justin, do you want to take that?

Sure, yeah. If you look at page 14 in the business update, you'll see this. And first of all, the headline is that our operators are proposing to our residents an 8% increase in rent in the U.S. and 4% in Canada. If you look to the left, you'll see how this breaks down. 55% of our residents are eligible for increases in the first quarter, 35% get an anniversary rent increase, and so those will happen throughout the rest of the year, and then those that moved in late '21, obviously, wouldn't be eligible for an increase yet. So there's a huge opportunity to grow revenue. This is a consistent process, it's tried and true. It's just that we're going to pass along more rent increases this year, and I will just add that our operators are very careful about taking local market considerations into their planning so that they're in line with market and can successfully execute. There's also a level of care which is really acuity driven, and that can increase throughout the year as well, both in terms of how much we charge, but also the acuity level of the resident would drive additional charges, and that's just standard as part of the revenue package that operators offer.

Hi everyone. Good morning. Can we go into some detail on the SHOP transitions to the more experienced local operators in various markets, but really specifically, how that may have impacted these transitions, the Q4 guidance. But at the same time, how the transitions could benefit Q1 in 2022. Thanks.

Thank you. Yes. I'm going to turn that to Bob and Justin to talk about the transitions, which as Justin said, are well underway.

Okay. Thank you. I'll start with really just some of the rationale for why we did it and why we think this is going to be helpful to performance. And you'll notice on Page 13 on the right-hand side that we highlight this. We selected operators that have experience. They have experience within these markets and they have experience running regional markets. One thing I've been very encouraged about is that the CEOs of these companies have been actively engaged in the transitions. We have a cooperative transition with the former manager, so we've actually been able to get on the ground, into the communities, start assessing, getting to know people, and be ready to try to get off to a strong start when the transition begins. You have the advantage when you have a mid-sized company with a regional presence that you have senior management that is very close to the community. So we do expect the oversight to be very strong, and these companies are excited to grow. There's just an energy to it that's really positive and it's well assessed, and we look forward to positive results. Having said that, we would expect to have some transition noise in the early going that was factored into the fourth quarter. And I'll hand over to Bob.

Yeah, that's really again back to the labor theme frankly. This normal noise is a function of turnover at the communities, new staff, etc. So that's the context obviously, then with this tight labor market, we've assumed increases in the labor costs in the fourth for this portfolio. So that's embedded in the guidance for overall SHOP planning.

Hi, good morning. Just a question for Justin on asset management. You seem to be making a transition to more smaller regional operators, which makes sense. But just curious on a couple fronts on the data analytics front, what you guys are doing and maybe some hires you've made there in the efforts that are being put forth? And then secondly, just as we look forward, should we expect more dispositions heading into '22, given some of the stuff that was on the market didn't transact, and you haven't necessarily sold a ton of assets, and the leverage is still a bit high. So just curious on go-forward dispositions, thinking about '22 and any cleanup that you guys want to do for the portfolio as we exit COVID.

Hi Juan. I'll start and then Bob will jump in as well. And we start with the data analytics. We have made new hires. We've become much deeper and was already a strength in terms of market analytics. We study supply and demand in great detail and have really good familiarity with local markets. Which has helped to inform some of the decisions we've made, but also it helps to inform growth decisions we make moving forward. We have a great team. We've also enhanced our operational analysis through hiring people that have experience in operating companies and have high analytical strategic experience as well. So that's given us insights into the business that are extremely valuable and inform our decisions but also help to inform the decisions that the operators make in their planning as well.

And I'll take the disposition question, Juan. The short answer is no. We don't, as we think about '22, expect significant dispositions in senior housing. We do have $170 million yet to go under contract this year, and a good chunk of that is senior housing. But beyond that, no significant plans.

Hi, this is Eric Glenn on behalf of Steve. I guess, as the labor pressure eventually starts to subside, how do you think this affects long-term productivity? I know one of your peers had mentioned it would take several quarters to reach the same level of historical productivity, due to the time that it takes to ramp new staff up to speed and deal with onboarding. I was just curious if this is affecting you at all or is the actual staff turnover not really high enough to have an impact here? Thanks.

I would simply say that the labor pressure is influencing when we expect conditions to improve. The industry has seen challenges in onboarding new workers, and there is a constant turnover of on-site workers, which is a characteristic of the industry. However, it will take some time for these conditions to improve due to various factors, including the time needed for training and getting new employees up to speed. This situation involves a multi-faceted analysis.

Hi, there. I just wanted to circle back on the ESL transition assets and maybe I think in the press release last month, you talked about no contribution of NOI in the second quarter. I'm curious what the progression was sequentially. I know we haven't seen same-store numbers, but I'm curious what the ESL portfolio did sequentially? And then I'm curious what the outlook would be because I would think that operator transitions historically have caused some disruption. So it's what sort of the outlook would be in terms of looking at the curve of a recovery in the cash flow to go for that portfolio when we should expect that to start to at least bottom and then start to recover. Thank you.

I appreciate your question, Jordan. I can't show you a visual, but as we progressed from the second quarter to the third, we noticed some decline in net operating income for this portfolio. I anticipate that trend will persist into the fourth quarter due to ongoing labor cost pressures and the typical challenges that come with transitions. However, as Justin mentioned, once these new operators take over, their expertise is expected to significantly enhance the portfolio's performance in 2022 and beyond. That's our objective, and we're actively working on it right now.

Hi. I'm wondering, how much of the higher labor expense pace do you think is attributable to recent rate pressures for existing staff that may be a little bit more sticky versus the idea of just having to utilize more higher-cost contract labor?

Yeah. Good question. Justin, do you want to comment on that?

Sure. It's really more around just the availability of staff. The ability to staff fully with your existing people. One thing, there's a series of steps that operators take. The first thing they do is they try to make sure that they're utilizing all the full-time hours available for their existing staff. Most operators don't schedule the 40-hour week, since there's always room to expand a little bit, so they'll do that first. Next step is they'll use overtime, obviously your continuity of your existing staff to deliver care and services, and then the last resort is really to add agency. One interesting tidbit around this is that there's not really a certain MSA where we are seeing agency use. It's clearly a macro backdrop issue. But within MSAs, there are certain communities that really have an outsized amount of agency that's being utilized, which points to the opportunity for an operational solution. So we have plenty of evidence that this can be managed, and as I said in prepared remarks, we're already starting to see hiring picking up across the operators.

Sorry guys. I was on mute there. I was looking at the rep for growth for the same-store pool, just kind of curious if you have any kind of expectations as we go forward when it might turn to positive growth on a year-over-year basis?

I mean, the trends have been encouraging and Justin, do you want to comment specifically?

Sure. Yes. There's a few moving parts in RevPOR; one is mix, which is really just the contribution of RevPOR from certain product types. We are benefiting this year. I've mentioned this before that we would benefit from the U.S. recovery because we'll see our higher price point product, particularly in Sunrise for instance, that's a driver of RevPOR overall. So we're getting some mix shift benefit. Probably more importantly, though, is we are getting the benefit of better re-leasing spreads. And that's been consistent. We saw the underlying trends in the second quarter; we saw it through the third quarter. When we get into next year, obviously we have the in-house rent increases that we mentioned, but the pricing power should continue to improve because what starts to happen is you're covering movements that occurred in 2020. They came in at a relatively low rate, and as the momentum picks up in the sector, our operators are able to charge more. We're looking forward to a period of really improved pricing in RevPAR moving ahead.

Yeah. And I know that existing Senior's Housing residents generally don't like to move away from the communities that they are in. There has been a small percentage that didn't like to do that pre-COVID. Has that trend come back post-COVID, or are residents still hesitant to move in because of the pandemic, or move out, sorry?

Could you repeat that, Mike? And welcome back. You got a short question the first time, so can you repeat that last part?

Hi, it's Justin. During this recovery period, there was one month, which I believe was April, when we noticed an increase in move-out activity. We attributed this to people seizing the opportunity to relocate after not being able to during the pandemic. In April, move-in activity also increased, so it seemed like there was a lot of movement happening as operators were swapping residents. However, since that time, move-out activity has been stable and consistent.

Operator, did you have any further questions?

I do. As I said, we have a lot of optimism and confidence. It just happens to be a momentous day with the advent of additional COVID treatments and a real line-of-sight to this pandemic possibly being over. Our business is doing really well. It is diversified and benefiting from the internal and external growth avenues that we have. We have a great set of partners and a great team here at Ventas. We're very appreciative, as always, of your interest and your support in our company. And we look forward to seeing you soon. Thank you.