On November 5, Ventas, Inc. announced it acquired an Eating Recovery Center medical office building in Plano, Texas for $58 million. The building is a 102,000-square-foot facility with 72 inpatient beds.
Founded in 1998, Ventas, Inc., owned by The Vanguard Group, is the largest health care REIT in the U.S., owning seniors housing and care properties, medical office buildings and LTAC hospitals with roughly 1,200 properties. Since 2004, Ventas has made more than $40 billion in strategic investments.
The Eating Recovery Center (ERC), founded in 2009, is one of the largest eating disorder treatment providers in the United States with 35 centers across Colorado, California, Illinois, Texas, Ohio, Maryland and Washington. ERC’s treatment offerings include inpatient services, intensive outpatient programming and virtual care. ERC operates a division called ERC Pathlight, which provides mood and anxiety treatment to patients.
This acquisition is Ventas’ first venture into the behavioral health care market as Ventas expands its portfolio of higher-margin senior housing independent living assets in the U.S. and Canada. According to Ventas’ CEO, Debra Cafaro, the decision to acquire this Class A asset was done with the intention of building a relationship with an industry leader in a quickly growing sector.
The transaction was announced as part of the company’s third-quarter 2021 financial performance disclosures. This quarter, Q3:21, was Ventas’ highest-grossing quarter with $976.1 million in revenue, which is its highest since early 2020 when it posted $1.012 billion. Although lower than Q1:20, Q3:21 is still a pandemic high and seems to be indicating a promising upward trend.
Eating Recovery Center’s facility is leased at 100% capacity with 16 years remaining on the lease terms. The acquisition price of $58 million represents a 7.2% yield on the expected 2022 net operating income for Ventas.