10-Q 1 vtr-20220331.htm 10-Q vtr-20220331
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2022
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE TRANSITION PERIOD FROM____________TO____________
Commission file number: 1-10989
Ventas, Inc.
(Exact Name of Registrant as Specified in Its Charter)
Delaware61-1055020
(State or Other Jurisdiction of Incorporation or Organization)(I.R.S. Employer Identification No.)
353 N. Clark Street, Suite 3300
Chicago, Illinois 60654
(Address of Principal Executive Offices)    
(877) 483-6827
(Registrant’s Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class
Trading SymbolName of Exchange on Which Registered
Common Stock $0.25 par value
VTRNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes     No 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes     No 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company Emerging growth company  
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐    No 

As of May 3, 2022, there were 399,695,507 shares of the registrant’s common stock outstanding.
    



VENTAS, INC.
FORM 10-Q
INDEX
  Page
 
Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021
Consolidated Statements of Income for the Three Months Ended March 31, 2022 and 2021
Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2022 and 2021
Consolidated Statements of Equity for the Three Months Ended March 31, 2022 and 2021
Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2022 and 2021



PART I—FINANCIAL INFORMATION

ITEM 1.    CONSOLIDATED FINANCIAL STATEMENTS

VENTAS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts, unaudited)

As of March 31, 2022As of December 31, 2021
Assets
Real estate investments:  
Land and improvements$2,452,474 $2,432,065 
Buildings and improvements26,186,628 25,778,490 
Construction in progress275,896 269,315 
Acquired lease intangibles1,373,364 1,369,747 
Operating lease assets318,679 317,858 
30,607,041 30,167,475 
Accumulated depreciation and amortization(8,624,820)(8,350,637)
Net real estate property21,982,221 21,816,838 
Secured loans receivable and investments, net530,388 530,126 
Investments in unconsolidated real estate entities541,914 523,465 
Net real estate investments23,054,523 22,870,429 
Cash and cash equivalents149,599 149,725 
Escrow deposits and restricted cash49,848 46,872 
Goodwill1,045,663 1,046,140 
Assets held for sale26,231 28,399 
Deferred income tax assets, net11,152 11,152 
Other assets613,091 565,069 
Total assets$24,950,107 $24,717,786 
Liabilities and equity  
Liabilities:  
Senior notes payable and other debt$12,413,743 $12,027,544 
Accrued interest93,564 106,602 
Operating lease liabilities195,668 197,234 
Accounts payable and other liabilities1,079,596 1,090,254 
Liabilities related to assets held for sale8,411 10,850 
Deferred income tax liabilities52,750 59,259 
Total liabilities13,843,732 13,491,743 
Redeemable OP unitholder and noncontrolling interests313,685 280,283 
Commitments and contingencies
Equity:  
Ventas stockholders’ equity:  
Preferred stock, $1.00 par value; 10,000 shares authorized, unissued
  
Common stock, $0.25 par value; 600,000 shares authorized, 399,623 and 399,420 shares issued at March 31, 2022 and December 31, 2021, respectively99,888 99,838 
Capital in excess of par value15,478,467 15,498,956 
Accumulated other comprehensive loss(59,296)(64,520)
Retained earnings (deficit)(4,821,653)(4,679,889)
Treasury stock, 0 shares at both March 31, 2022 and December 31, 2021  
Total Ventas stockholders’ equity10,697,406 10,854,385 
Noncontrolling interests95,284 91,375 
Total equity10,792,690 10,945,760 
Total liabilities and equity$24,950,107 $24,717,786 
See accompanying notes.
1


VENTAS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts, unaudited)
 For the Three Months Ended March 31,
 20222021
Revenues  
Rental income:  
Triple-net leased$151,561 $159,885 
Office200,540 197,455 
352,101 357,340 
Resident fees and services651,121 528,650 
Office building and other services revenue3,949 4,950 
Income from loans and investments9,847 19,010 
Interest and other income536 341 
Total revenues1,017,554 910,291 
Expenses  
Interest110,794 110,767 
Depreciation and amortization289,064 314,148 
Property-level operating expenses:
Senior living475,530 417,829 
Office63,183 63,946 
Triple-net leased4,008 4,825 
542,721 486,600 
Office building and other services costs1,313 618 
General, administrative and professional fees42,998 40,309 
Loss on extinguishment of debt, net 27,090 
Transaction expenses and deal costs19,992 4,617 
Allowance on loans receivable and investments(54)(8,902)
Other(27,190)(9,428)
Total expenses979,638 965,819 
Income (loss) before unconsolidated entities, real estate dispositions, income taxes and noncontrolling interests37,916 (55,528)
Loss from unconsolidated entities(4,269)(250)
Gain on real estate dispositions2,455 2,533 
Income tax benefit (expense)4,490 (2,153)
Income (loss) from continuing operations40,592 (55,398)
Net income (loss)40,592 (55,398)
Net income attributable to noncontrolling interests1,860 1,811 
Net income (loss) attributable to common stockholders$38,732 $(57,209)
Earnings per common share  
Basic:  
Income (loss) from continuing operations$0.10 $(0.15)
Net income (loss) attributable to common stockholders0.10 (0.15)
Diluted 1:
  
Income (loss) from continuing operations$0.10 $(0.15)
Net income (loss) attributable to common stockholders0.10 (0.15)
1 Potential common shares are not included in the computation of diluted earnings per share when a loss from continuing operations exists as the effect would be an antidilutive per share amount.

See accompanying notes.
2


VENTAS, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands, unaudited)

 For the Three Months Ended March 31,
 20222021
Net income (loss)$40,592 $(55,398)
Other comprehensive income:  
Foreign currency translation loss(9,313)(16)
Unrealized loss on available for sale securities(588)(4,617)
Unrealized gain on derivative instruments19,036 9,406 
Total other comprehensive income9,135 4,773 
Comprehensive income (loss)49,727 (50,625)
Comprehensive income attributable to noncontrolling interests5,772 4,726 
Comprehensive income (loss) attributable to common stockholders$43,955 $(55,351)
   
See accompanying notes.
3


VENTAS, INC.
CONSOLIDATED STATEMENTS OF EQUITY
For the Three Months Ended March 31, 2022 and 2021
(In thousands, except per share amounts, unaudited)

2019Common
Stock Par
Value
Capital in
Excess of
Par Value
Accumulated
Other
Comprehensive
Loss
Retained
Earnings
(Deficit)
Treasury
Stock
Total Ventas
Stockholders’
Equity
Noncontrolling
Interests
Total Equity
Balance at January 1, 2022$99,838 $15,498,956 $(64,520)$(4,679,889)$ $10,854,385 $91,375 $10,945,760 
Net income   38,732  38,732 1,860 40,592 
Other comprehensive income  5,224   5,224 3,911 9,135 
Net change in noncontrolling interests
 858    858 (1,862)(1,004)
Dividends to common stockholders—$0.45 per share
   (180,496) (180,496) (180,496)
Issuance of common stock for stock plans, restricted stock grants and other
50 15,290    15,340  15,340 
Adjust redeemable OP unitholder interests to current fair value (36,637)   (36,637) (36,637)
Balance at March 31, 2022$99,888 $15,478,467 $(59,296)$(4,821,653)$ $10,697,406 $95,284 $10,792,690 
Balance at January 1, 2021$93,635 $14,171,262 $(54,354)$(4,030,376)$ $10,180,167 $98,024 $10,278,191 
Net (loss) income   (57,209) (57,209)1,811 (55,398)
Other comprehensive income  1,857   1,857 2,916 4,773 
Net change in noncontrolling interests
 3,435    3,435 (1,286)2,149 
Dividends to common stockholders—$0.45 per share
 47  (169,416) (169,369) (169,369)
Issuance of common stock for stock plans, restricted stock grants and other115 24,882   (789)24,208  24,208 
Adjust redeemable OP unitholder
    interests to current fair value
 (12,918)   (12,918) (12,918)
Redemption of OP Units
 (16)   (16) (16)
Balance at March 31, 2021$93,750 $14,186,692 $(52,497)$(4,257,001)$(789)$9,970,155 $101,465 $10,071,620 

See accompanying notes.
4


VENTAS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
 For the Three Months Ended March 31,
 20222021
Cash flows from operating activities: 
Net income (loss)$40,592 $(55,398)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization289,064 314,148 
Amortization of deferred revenue and lease intangibles, net(17,401)(14,766)
Other non-cash amortization3,109 5,272 
Allowance on loans receivable and investments(54)(8,902)
Stock-based compensation15,796 16,072 
Straight-lining of rental income(3,841)(3,863)
Loss on extinguishment of debt, net 27,090 
Gain on real estate dispositions(2,455)(2,533)
Gain on real estate loan investments (74)
Income tax (benefit) expense(5,805)503 
Loss from unconsolidated entities4,269 250 
Distributions from unconsolidated entities4,356 3,897 
Other(24,324)(14,379)
Changes in operating assets and liabilities:
Increase in other assets(18,177)(5,100)
Decrease in accrued interest(13,201)(20,234)
Increase (decrease) in accounts payable and other liabilities2,625 (4,390)
Net cash provided by operating activities274,553 237,593 
Cash flows from investing activities:  
Net investment in real estate property(343,792)(210)
Investment in loans receivable(5,117)(186)
Proceeds from real estate disposals6,124 8,083 
Proceeds from loans receivable177 16,419 
Development project expenditures(37,591)(58,598)
Capital expenditures(36,728)(29,674)
Investment in unconsolidated entities(23,790)(38,452)
Insurance proceeds for property damage claims3,391 6 
Net cash used in investing activities(437,326)(102,612)
Cash flows from financing activities:  
Net change in borrowings under revolving credit facilities(9,867)5,144 
Net change in borrowings under commercial paper program356,674 214,978 
Proceeds from debt70,029 31,157 
Repayment of debt(65,000)(445,050)
Purchase of noncontrolling interests(170) 
Payment of deferred financing costs(427)(17,343)
Issuance of common stock, net 11,075 
Cash distribution to common stockholders(180,021)(168,763)
Cash distribution to redeemable OP unitholders(1,534)(1,842)
Cash issued for redemption of OP Units (25)
Contributions from noncontrolling interests19 5 
Distributions to noncontrolling interests(3,983)(2,653)
Proceeds from stock option exercises5,794 2,106 
Other(6,132)(5,856)
Net cash provided by (used in) financing activities165,382 (377,067)
Net increase (decrease) in cash, cash equivalents and restricted cash2,609 (242,086)
Effect of foreign currency translation241 658 
Cash, cash equivalents and restricted cash at beginning of period196,597 451,640 
Cash, cash equivalents and restricted cash at end of period$199,447 $210,212 

See accompanying notes.
5


VENTAS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(In thousands, unaudited)
 For the Three Months Ended March 31,
 20222021
Supplemental schedule of non-cash activities:  
Assets acquired and liabilities assumed from acquisitions and other:  
Real estate investments$3,171 $468 
Other assets47  
Other liabilities2,624  
Deferred income tax liability594  
Noncontrolling interests 468 

See accompanying notes.
6

VENTAS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

NOTE 1—DESCRIPTION OF BUSINESS

Ventas, Inc. (together with its consolidated subsidiaries, unless otherwise indicated or except where the context otherwise requires, “we,” “us,” “our,” “Company” and other similar terms), an S&P 500 company, is a real estate investment trust (“REIT”) operating at the intersection of healthcare and real estate. We hold a highly diversified portfolio of senior housing communities, medical office buildings (“MOBs”), life science, research and innovation centers, hospitals and other healthcare facilities, which we generally refer to as “healthcare real estate,” located throughout the United States, Canada and the United Kingdom. As of March 31, 2022, we owned or had investments in approximately 1,300 properties (including properties classified as held for sale). Our company was originally founded in 1983 and is headquartered in Chicago, Illinois with additional corporate offices in Louisville, Kentucky and New York, New York.

We primarily invest in a diversified portfolio of healthcare real estate assets through wholly owned subsidiaries and other co-investment entities. We operate through three reportable business segments: triple-net leased properties, senior living operations, which we also refer to as SHOP, and office operations. See “Note 2 – Accounting Policies” and “Note 16 – Segment Information.” Our senior housing communities are either subject to triple-net leases, in which case they are included in our triple-net leased properties reportable business segment, or operated by independent third-party managers, in which case they are included in our senior living operations reportable business segment.

As of March 31, 2022, we leased a total of 332 properties (excluding properties within our office operations reportable business segment) to various healthcare operating companies under triple-net or absolute-net leases that obligate the tenants to pay all property-related expenses, including maintenance, utilities, repairs, taxes, insurance and capital expenditures. Our three largest tenants, Brookdale Senior Living Inc. (together with its subsidiaries, “Brookdale Senior Living”), Ardent Health Partners, LLC (together with its subsidiaries, “Ardent”) and Kindred Healthcare, LLC (together with its subsidiaries, “Kindred”) leased from us 121 properties, 30 properties and 29 properties, respectively, as of March 31, 2022.

As of March 31, 2022, pursuant to long-term management agreements, we engaged independent operators, such as Atria Senior Living, Inc. (together with its subsidiaries, including Holiday Retirement (“Holiday”), “Atria”) and Sunrise Senior Living, LLC (together with its subsidiaries, “Sunrise”), to manage 555 senior housing communities for us.

Through our Lillibridge Healthcare Services, Inc. subsidiary and our ownership interest in PMB Real Estate Services LLC, we also provide MOB management, leasing, marketing, facility development and advisory services to highly rated hospitals and health systems throughout the United States. In addition, from time to time, we make secured and non-mortgage loans and other investments relating to senior housing and healthcare operators or properties.

Continuing Impact of and Response to the COVID-19 Pandemic and Its Extended Consequences

During fiscal 2020 and 2021 and continuing into fiscal 2022, our business has been and is expected to continue to be impacted by both the COVID-19 pandemic itself, including actions taken to prevent the spread of the virus and its variants, and its extended consequences.

Accounting Considerations. We have not identified the COVID-19 pandemic, on its own, as a “triggering event” for purposes of evaluating impairment of real estate assets, goodwill and other intangibles, investments in unconsolidated entities and financial instruments. However, as of March 31, 2022, we considered the effect of the pandemic on certain of our assets and our ability to recover the respective carrying values of these assets. We applied our considerations to existing critical accounting policies that require us to make estimates and assumptions regarding future events that affect the reported amounts of assets and liabilities. We based our estimates on our experience and on assumptions we believe to be reasonable under the circumstances. For both the three months ended March 31, 2022 and 2021, we recognized no COVID-19 related charges in our Consolidated Statements of Income.

Provider Relief Grants. We applied for grants under the Provider Relief Fund administered by the U.S. Department of Health & Human Services (“HHS”) on behalf of the assisted living communities in our senior living operations reportable business segment to partially mitigate losses attributable to COVID-19. These grants are intended to reimburse eligible providers for expenses incurred to prevent, prepare for and respond to COVID-19 and lost revenues attributable to COVID-19. Recipients are not required to repay distributions from the Provider Relief Fund, provided that they attest to and comply with certain terms and conditions.

7

VENTAS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

During the three months ended March 31, 2022 and 2021, we received $34.0 million and $13.6 million, respectively, in grants in connection with our applications and recognized these grants within property-level operating expenses in our Consolidated Statements of Income in the period in which they were received.

Continuing Impact. The trajectory and future impact of the COVID-19 pandemic and its extended consequences remain highly uncertain and will depend on a variety of factors, including the impact of new variants of the virus and the effectiveness of available vaccines against those variants; ongoing clinical experience, which may differ considerably across regions and fluctuate over time; and other future developments, including the ultimate duration, spread and intensity of the outbreak, the availability of testing, the extent to which governments impose, roll-back or re-impose preventative restrictions and the availability of ongoing government financial support to our business, tenants and operators. Due to these uncertainties, we are not able at this time to estimate the ultimate impact of the COVID-19 pandemic on our business, results of operations, financial condition and cash flows.

NOTE 2—ACCOUNTING POLICIES

The accompanying Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information set forth in the Accounting Standards Codification (“ASC”), as published by the Financial Accounting Standards Board (“FASB”), and with the Securities and Exchange Commission (“SEC”) instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair statement of results for the interim period have been included. Operating results for the three months ended March 31, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022. The accompanying Consolidated Financial Statements and related notes should be read in conjunction with the audited Consolidated Financial Statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2021 (the “2021 Annual Report”). Certain prior period amounts have been reclassified to conform to the current period presentation.

Principles of Consolidation

The accompanying Consolidated Financial Statements include our accounts and the accounts of our wholly owned subsidiaries and the joint venture entities over which we exercise control. All intercompany transactions and balances have been eliminated in consolidation, and our net earnings are reduced by the portion of net earnings attributable to noncontrolling interests.

GAAP requires us to identify entities for which control is achieved through means other than voting rights and to determine which business enterprise is the primary beneficiary of variable interest entities (“VIEs”). A VIE is broadly defined as an entity with one or more of the following characteristics: (a) the total equity investment at risk is insufficient to finance the entity’s activities without additional subordinated financial support; (b) as a group, the holders of the equity investment at risk lack (i) the ability to make decisions about the entity’s activities through voting or similar rights, (ii) the obligation to absorb the expected losses of the entity, or (iii) the right to receive the expected residual returns of the entity; and (c) the equity investors have voting rights that are not proportional to their economic interests, and substantially all of the entity’s activities either involve, or are conducted on behalf of, an investor that has disproportionately few voting rights. We consolidate our investment in a VIE when we determine that we are its primary beneficiary. We may change our original assessment of a VIE upon subsequent events such as the modification of contractual arrangements that affects the characteristics or adequacy of the entity’s equity investments at risk and the disposition of all or a portion of an interest held by the primary beneficiary.

We identify the primary beneficiary of a VIE as the enterprise that has both: (i) the power to direct the activities of the VIE that most significantly impact the entity’s economic performance; and (ii) the obligation to absorb losses or the right to receive benefits of the VIE that could be significant to the entity. We perform this analysis on an ongoing basis.

As it relates to investments in joint ventures, GAAP may preclude consolidation by the sole general partner in certain circumstances based on the type of rights held by the limited partner or partners. We assess limited partners’ rights and their impact on our consolidation conclusions, and we reassess if there is a change to the terms or in the exercisability of the rights of the limited partners, the sole general partner increases or decreases its ownership of limited partnership (“LP”) interests or there is an increase or decrease in the number of outstanding LP interests. We also apply this guidance to managing member interests in limited liability companies (“LLCs”).

8

VENTAS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

We consolidate several VIEs that share the following common characteristics:

the VIE is in the legal form of an LP or LLC;
the VIE was designed to own and manage its underlying real estate investments;
we are the general partner or managing member of the VIE;
we own a majority of the voting interests in the VIE;
a minority of voting interests in the VIE are owned by external third parties, unrelated to us;
the minority owners do not have substantive kick-out or participating rights in the VIE; and
we are the primary beneficiary of the VIE.

We have separately identified certain special purpose entities that were established to allow investments in life science, research and innovation projects by tax credit investors (“TCIs”). We have determined that these special purpose entities are VIEs, we are a holder of variable interests and we are the primary beneficiary of the VIEs, and therefore, we consolidate these special purpose entities. Our primary beneficiary determination is based upon several factors, including but not limited to the rights we have in directing the activities which most significantly impact the VIEs’ economic performance as well as certain guarantees which protect the TCIs from losses should a tax credit recapture event occur.

In general, the assets of consolidated VIEs are available only for the settlement of the obligations of the respective entities. Unless otherwise required by the LP or LLC agreement, any mortgage loans of the consolidated VIEs are non-recourse to us. The table below summarizes the total assets and liabilities of our consolidated VIEs as reported on our Consolidated Balance Sheets (dollars in thousands):
As of March 31, 2022As of December 31, 2021
Total AssetsTotal LiabilitiesTotal AssetsTotal Liabilities
NHP/PMB L.P.$752,970 $250,825 $749,834 $251,352 
Other identified VIEs3,970,582 1,570,662 3,949,294 1,556,136 
Tax credit VIEs452,646 99,701 458,953 103,992 

Investments in Unconsolidated Entities

We report investments in unconsolidated entities over whose operating and financial policies we have the ability to exercise significant influence under the equity method of accounting. We adjust our investment in unconsolidated entities for additional contributions made, distributions received as well as our share of the investee’s earnings or losses, which is included in loss from unconsolidated entities in our Consolidated Statements of Income.

We base the initial carrying value of investments in unconsolidated entities on the fair value of the assets at the time we acquired the joint venture interest. We estimate fair values for our equity method investments based on discounted cash flow models that include all estimated cash inflows and outflows over a specified holding period and, where applicable, any estimated debt premiums or discounts. The capitalization rates, discount rates and credit spreads we use in these models are based upon assumptions that we believe to be within a reasonable range of current market rates for the respective investments.

We generally amortize any difference between our cost basis and the basis reflected at the joint venture level, if any, over the lives of the related assets and liabilities and include that amortization in our share of income or loss from unconsolidated entities. For earnings of equity method investments with pro rata distribution allocations, net income or loss is allocated between the partners in the joint venture based on their respective stated ownership percentages. In other instances, net income or loss may be allocated between the partners in the joint venture based on the hypothetical liquidation at book value method (the “HLBV method”). Under the HLBV method, net income or loss is allocated between the partners based on the difference between each partner’s claim on the net assets of the joint venture at the end and beginning of the period, after taking into account contributions and distributions. Each partner’s share of the net assets of the joint venture is calculated as the amount that the partner would receive if the joint venture were to liquidate all of its assets at net book value and distribute the resulting cash to creditors and partners in accordance with their respective priorities. Under the HLBV method, in any given period, we could record more or less income than the joint venture has generated, than actual cash distributions we receive or than the amount we may receive in the event of an actual liquidation.

9

VENTAS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Redeemable OP Unitholder and Noncontrolling Interests

We own a majority interest in NHP/PMB L.P. (“NHP/PMB”), a limited partnership formed in 2008 to acquire properties from entities affiliated with Pacific Medical Buildings LLC (“PMB”). Given our wholly owned subsidiary is the general partner and the primary beneficiary of NHP/PMB, we consolidate NHP/PMB as a VIE. As of March 31, 2022, third party investors owned 3.9 million Class A limited partnership units in NHP/PMB (“OP Units”), which represented 34% of the total units then outstanding, and we owned 7.5 million Class B limited partnership units in NHP/PMB, representing the remaining 66%. The OP Units may be redeemed at any time at the election of the holder for cash or, at our option, 0.9051 shares of our common stock per OP Unit, subject to adjustment in certain circumstances. We are party by assumption to a registration rights agreement with the holders of the OP Units that requires us, subject to the terms and conditions and certain exceptions set forth therein, to file and maintain a registration statement relating to the issuance of shares of our common stock upon redemption of OP Units.

The OP Units are classified outside of permanent equity on our Consolidated Balance Sheets because they may be redeemed by third parties under circumstances that are outside of our control. We reflect the OP Units at the greater of cost or redemption value. As of March 31, 2022 and December 31, 2021, the fair value of the OP Units was $217.2 million and $182.1 million, respectively. We recognize changes in fair value through capital in excess of par value, net of cash distributions paid and purchases by us of any OP Units. Our diluted earnings per share includes the effect of any potential shares outstanding from redemption of the OP Units.

Certain noncontrolling interests of other consolidated joint ventures were also classified as redeemable at March 31, 2022 and December 31, 2021. We record the carrying amount of these noncontrolling interests at the greater of their initial carrying amount (increased or decreased for the noncontrolling interests’ share of net income or loss and distributions) or the redemption value, which is primarily based on the fair value of the underlying real estate asset. Our joint venture partners have certain redemption rights with respect to their noncontrolling interests in these joint ventures that are outside of our control, and the redeemable noncontrolling interests are classified outside of permanent equity on our Consolidated Balance Sheets. We recognize changes in the carrying value of redeemable noncontrolling interests through capital in excess of par value on our Consolidated Balance Sheets.

Noncontrolling Interests

Excluding the redeemable noncontrolling interests described above, we present the portion of any equity that we do not own in entities that we control (and thus consolidate) as noncontrolling interests and classify those interests as a component of consolidated equity, separate from total Ventas stockholders’ equity, on our Consolidated Balance Sheets. For consolidated joint ventures with pro rata distribution allocations, net income or loss, and comprehensive income, is allocated between the joint venture partners based on their respective stated ownership percentages. In other cases, net income or loss is allocated between the joint venture partners based on the HLBV method. We account for purchases or sales of equity interests that do not result in a change of control as equity transactions, through capital in excess of par value. We include net income attributable to the noncontrolling interests in net income in our Consolidated Statements of Income and we include the noncontrolling interests’ share of comprehensive income in our Consolidated Statements of Comprehensive Income.

Accounting for Historic and New Markets Tax Credits

For certain of our life science, research and innovation centers, we are party to contractual arrangements with TCIs that were established to enable the TCIs to receive benefits of historic tax credits (“HTCs”), new markets tax credits (“NMTCs”) or both. As of March 31, 2022, we owned six properties that had syndicated HTCs or NMTCs, or both, to TCIs.

In general, TCIs invest cash into special purpose entities that invest in entities that own the subject property and generate the tax credits. The TCIs receive substantially all of the tax credits and hold only a nominal interest in the economic risk and benefits of the special purpose entities.

HTCs are delivered to the TCIs upon substantial completion of the project. NMTCs are allowed for up to 39% of a qualified investment and are delivered to the TCIs after the investment has been funded and spent on a qualified business. HTCs are subject to recapture within five years of substantial completion. The amount of the recapture is equal to 100% of the HTCs during the first year after the completion of the historic rehabilitation and is reduced by 20% each year during the subsequent five year period. NMTCs are subject to recapture until the end of the seventh year following the qualifying investment. We have provided the TCIs with certain guarantees which protect the TCIs from losses should a tax credit recapture
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VENTAS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

event occur. The contractual arrangements with the TCIs include a put/call provision whereby we may be obligated or entitled to repurchase the interest of the TCIs in the special purpose entities at the end of the tax credit recapture period. We anticipate that either the TCIs will exercise their put rights or we will exercise our call rights prior to the applicable tax credit recapture periods.

The portion of the TCI’s investment that is attributed to the put is recorded at fair value at inception in accounts payable and other liabilities on our Consolidated Balance Sheets, and is accreted to the expected put price as interest expense in our Consolidated Statements of Income over the recapture period. The remaining balance of the TCI’s investment is initially recorded in accounts payable and other liabilities on our Consolidated Balance Sheets and will be relieved upon delivery of the tax credit to the TCI, as a reduction in the carrying value of the subject property, net of allocated expenses. Direct and incremental costs incurred in structuring the transaction are deferred and will be recognized as an increase in the cost basis of the subject property upon the recognition of the related tax credit as discussed above.

Accounting for Real Estate Acquisitions

When we acquire real estate, we first make reasonable judgments about whether the transaction involves an asset or a business. Our real estate acquisitions are generally accounted for as asset acquisitions as substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. Regardless of whether an acquisition is considered a business combination or an asset acquisition, we record the cost of the businesses or assets acquired as tangible and intangible assets and liabilities based upon their estimated fair values as of the acquisition date.

We estimate the fair value of buildings acquired on an as-if-vacant basis or replacement cost basis and depreciate the building value over the estimated remaining life of the building, generally not to exceed 35 years. We determine the fair value of other fixed assets, such as site improvements and furniture, fixtures and equipment, based upon the replacement cost and depreciate such value over the assets’ estimated remaining useful lives as determined at the applicable acquisition date. We determine the value of land either by considering the sales prices of similar properties in recent transactions or based on internal analyses of recently acquired and existing comparable properties within our portfolio. We generally determine the value of construction in progress based upon the replacement cost. However, for certain acquired properties that are part of a ground-up development, we determine fair value by using the same valuation approach as for all other properties and deducting the estimated cost to complete the development. During the remaining construction period, we capitalize project costs until the development has reached substantial completion. Construction in progress, including capitalized interest, is not depreciated until the development has reached substantial completion.

Intangibles primarily include the value of in-place leases and acquired lease contracts. We include all lease-related intangible assets and liabilities within acquired lease intangibles and accounts payable and other liabilities, respectively, on our Consolidated Balance Sheets.

The fair value of acquired lease-related intangibles, if any, reflects: (i) the estimated value of any above or below market leases, determined by discounting the difference between the estimated market rent and in-place lease rent; and (ii) the estimated value of in-place leases related to the cost to obtain tenants, including leasing commissions, and an estimated value of the absorption period to reflect the value of the rent and recovery costs foregone during a reasonable lease-up period as if the acquired space was vacant. We amortize any acquired lease-related intangibles to revenue or amortization expense over the remaining life of the associated lease plus any assumed bargain renewal periods. If a lease is terminated prior to its stated expiration or not renewed upon expiration, we recognize all unamortized amounts of lease-related intangibles associated with that lease in operations over the shortened lease term.

We estimate the fair value of purchase option intangible assets and liabilities, if any, by discounting the difference between the applicable property’s acquisition date fair value and an estimate of its future option price. We do not amortize the resulting intangible asset or liability over the term of the lease, but rather adjust the recognized value of the asset or liability upon sale.

In connection with an acquisition, we may assume rights and obligations under certain lease agreements pursuant to which we become the lessee of a given property. We generally assume the lease classification previously determined by the prior lessee absent a modification in the assumed lease agreement. We assess assumed operating leases, including ground leases, to determine whether the lease terms are favorable or unfavorable to us given current market conditions on the acquisition date. To the extent the lease terms are favorable or unfavorable to us relative to market conditions on the acquisition date, we recognize an intangible asset or liability at fair value and amortize that asset or liability to interest or rental expense in
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VENTAS, INC.
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(Unaudited)

our Consolidated Statements of Income over the applicable lease term. Where we are the lessee, we record the acquisition date values of leases, including any above or below market value, within operating lease assets and operating lease liabilities on our Consolidated Balance Sheets.

We estimate the fair value of noncontrolling interests assumed consistent with the manner in which we value all of the underlying assets and liabilities.

We calculate the fair value of long-term assumed debt by discounting the remaining contractual cash flows on each instrument at the current market rate for those borrowings, which we approximate based on the rate at which we would expect to incur a replacement instrument on the date of acquisition, and recognize any fair value adjustments related to long-term debt as effective yield adjustments over the remaining term of the instrument.

Fair Values of Financial Instruments

Fair value is a market-based measurement, not an entity-specific measurement, and we determine fair value based on the assumptions that we expect market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, GAAP establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within levels one and two of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within level three of the hierarchy).

Level one inputs utilize unadjusted quoted prices for identical assets or liabilities in active markets that we have the ability to access. Level two inputs are inputs other than quoted prices included in level one that are directly or indirectly observable for the asset or liability. Level two inputs may include quoted prices for similar assets and liabilities in active markets and other inputs for the asset or liability that are observable at commonly quoted intervals, such as interest rates, foreign exchange rates and yield curves. Level three inputs are unobservable inputs for the asset or liability, which typically are based on our own assumptions, because there is little, if any, related market activity. If the determination of the fair value measurement is based on inputs from different levels of the hierarchy, the level within which the entire fair value measurement falls is the lowest level input that is significant to the fair value measurement in its entirety. If the volume and level of market activity for an asset or liability has decreased significantly relative to the normal market activity for such asset or liability (or similar assets or liabilities), then transactions or quoted prices may not accurately reflect fair value. In addition, if there is evidence that a transaction for an asset or liability is not orderly, little, if any, weight is placed on that transaction price as an indicator of fair value. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.

We use the following methods and assumptions in estimating the fair value of our financial instruments whose fair value is determined on a recurring basis.

Cash and cash equivalents - The carrying amount of unrestricted cash and cash equivalents reported on our Consolidated Balance Sheets approximates fair value due to the short maturity of these instruments.

Escrow deposits and restricted cash - The carrying amount of escrow deposits and restricted cash reported on our Consolidated Balance Sheets approximates fair value due to the short maturity of these instruments.

Loans receivable - We estimate the fair value of loans receivable using level two and level three inputs, including underlying asset performance and credit quality. We discount future cash flows using current interest rates at which similar loans with the same terms and length to maturity would be made to borrowers with similar credit ratings.

Available for sale securities - We estimate the fair value of marketable debt securities using level two inputs. We observe quoted prices for similar assets or liabilities in active markets that we have the ability to access. We estimate the fair value of certain government-sponsored pooled loan investments using level three inputs. We consider credit spreads, underlying asset performance and credit quality, and default rates.

Derivative instruments - With the assistance of a third party, we estimate the fair value of derivative instruments, including interest rate caps, interest rate swaps, and foreign currency forward contracts, using level two inputs.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Interest rate caps - We observe forward yield curves and other relevant information.

Interest rate swaps - We observe alternative financing rates derived from market-based financing rates, forward yield curves and discount rates.

Foreign currency forward contracts - We estimate the future values of the two currency tranches using forward exchange rates that are based on traded forward points and calculate a present value of the net amount using a discount factor based on observable traded interest rates.

Stock warrants - We estimate the fair value of stock warrants using level two inputs that are obtained from public sources. Inputs include equity spot price, dividend yield, volatility and risk-free rate.

Senior notes payable and other debt - We estimate the fair value of senior notes payable and other debt using level two inputs. We discount the future cash flows using current interest rates at which we could obtain similar borrowings. For mortgage debt, we may estimate fair value using level three inputs, similar to those used in determining fair value of loans receivable (above).

Redeemable OP unitholder interests - We estimate the fair value of our redeemable OP unitholder interests using level one inputs. We base fair value on the closing price of our common stock, as OP Units may be redeemed at the election of the holder for cash or, at our option, shares of our common stock, subject to adjustment in certain circumstances.

Impairment of Long-Lived and Intangible Assets

We periodically evaluate our long-lived assets, primarily consisting of investments in real estate, for impairment indicators. If indicators of impairment are present, we evaluate the carrying value of the related real estate investments in relation to the future undiscounted cash flows of the underlying operations. In performing this evaluation, we consider market conditions and our current intentions with respect to holding or disposing of the asset. We adjust the net book value of properties and other long-lived assets to fair value if the sum of the expected future undiscounted cash flows, including sales proceeds, is less than book value. We recognize an impairment loss at the time we make any such determination.

If impairment indicators arise with respect to intangible assets with finite useful lives, we evaluate impairment by comparing the carrying amount of the asset to the estimated future undiscounted net cash flows expected to be generated by the asset. If estimated future undiscounted net cash flows are less than the carrying amount of the asset, then we estimate the fair value of the asset and compare the estimated fair value to the intangible asset’s carrying value. We recognize any shortfall from carrying value as an impairment loss in the current period.

We evaluate our investments in unconsolidated entities for impairment at least annually, and whenever events or changes in circumstances indicate that the carrying value of our investment may exceed its fair value. If we determine that a decline in the fair value of our investment in an unconsolidated entity is other-than-temporary, and if such reduced fair value is below the carrying value, we record an impairment.

We test goodwill for impairment at least annually, and more frequently if indicators of impairment arise. We first assess qualitative factors, such as current macroeconomic conditions, state of the equity and capital markets and our overall financial and operating performance, to determine the likelihood that the fair value of a reporting unit is less than its carrying amount. If we determine it is more likely than not that the fair value of a reporting unit is less than its carrying amount, we proceed with estimating the fair value of the reporting unit. A goodwill impairment, if any, will be recognized in the period it is determined and is measured as the amount by which a reporting unit’s carrying value exceeds its fair value.

Estimates of fair value used in our evaluation of goodwill (if necessary, based on our qualitative assessment), investments in real estate, investments in unconsolidated entities and intangible assets are based upon discounted future cash flow projections or other acceptable valuation techniques that are based, in turn, upon all available evidence including level three inputs, such as revenue and expense growth rates, estimates of future cash flows, capitalization rates, discount rates, general economic conditions and trends, or other available market data such as replacement cost or comparable sales. Our ability to accurately predict future operating results and cash flows and to estimate and determine fair values impacts the timing and recognition of impairments. While we believe our assumptions are reasonable, changes in these assumptions may have a material impact on our financial results.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


Revenue Recognition

Triple-Net Leased Properties and Office Operations

Certain of our triple-net leases and most of our MOB and life science, research and innovation centers (collectively, “office operations”) leases provide for periodic and determinable increases in base rent. We recognize base rental revenues under these leases on a straight-line basis over the applicable lease term when collectability of substantially all rents is probable. Recognizing rental income on a straight-line basis generally results in recognized revenues during the first half of a lease term exceeding the cash amounts contractually due from our tenants, creating a straight-line rent receivable that is included in other assets on our Consolidated Balance Sheets. At March 31, 2022 and December 31, 2021, this cumulative excess totaled $180.0 million and $176.9 million, respectively (excluding properties classified as held for sale).

Certain of our leases provide for periodic increases in base rent only if certain revenue parameters or other substantive contingencies are met. We recognize the increased rental revenue under these leases as the related parameters or contingencies are met, rather than on a straight-line basis over the applicable lease term.

We assess the probability of collecting substantially all rents under our leases based on several factors, including, among other things, payment history, the financial strength of the tenant and any guarantors, the historical operations and operating trends of the property, the historical payment pattern of the tenant, the type of property, the value of the underlying collateral, if any, expected future performance of the property and current economic conditions. If our evaluation of these factors indicates it is not probable that we will be able to collect substantially all rents under the lease, we record a charge to rental income. If we change our conclusions regarding the probability of collecting rent payments required by a lease, we may recognize adjustments to rental income in the period we make such change in our conclusions.

Senior Living Operations

Our resident agreements are accounted for as leases and we recognize resident fees and services, other than move-in fees, monthly as services are provided. We recognize move-in fees on a straight-line basis over the average resident stay.

Other

We recognize interest income from loans and investments, including discounts and premiums, using the effective interest method when collectability is reasonably assured. We apply the effective interest method on a loan-by-loan basis and recognize discounts and premiums as yield adjustments over the related loan term. We evaluate collectability of accrued interest receivables separate from the amortized cost basis of our loans. As such, we recognize interest income on an impaired loan to the extent we believe accrued contractual interest payments are collectable. Otherwise interest income is recognized on a cash basis.

We evaluate a current estimate of all expected credit losses over the life of a financial instrument, which may result in recognition of credit losses on loans and other financial instruments before an actual event of default. We establish reserves for any estimated credit losses with a corresponding charge to allowance on loans receivable and investments in our Consolidated Statements of Income. Subsequent changes in our estimate of credit losses may result in a corresponding increase or decrease to allowance on loans receivable and investments in our Consolidated Statements of Income.

Accounting for Leased Property

We lease real property, primarily land and corporate office space, and equipment, primarily vehicles at our senior housing communities. At lease inception, we establish an operating lease asset and operating lease liability calculated as the present value of future minimum lease payments on our Consolidated Balance Sheets. As our leases do not provide an implicit rate, we use a discount rate that approximates our incremental borrowing rate available at lease commencement to determine the present value. Our lease expense primarily consists of ground and corporate office leases. Ground lease expense is included in interest expense and corporate office lease expense is included in general, administrative and professional fees in our Consolidated Statements of Income.

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VENTAS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Recently Issued Accounting Standards

In November 2021, the FASB issued Accounting Standards Update 2021-10, Disclosures by Business Entities about Government Assistance (“ASU 2022-10”), which requires expanded annual disclosures for transactions involving the receipt of government assistance. Required disclosures include a description of the nature of the transactions with government entities, our accounting policies for such transactions and their impact to our Consolidated Financial Statements. We adopted ASU 2021-10 on January 1, 2022 and the adoption of this standard is not expected to have a material impact on our Consolidated Financial Statements.

NOTE 3—CONCENTRATION OF CREDIT RISK

As of March 31, 2022, Atria, Sunrise, Brookdale Senior Living, Ardent and Kindred managed or operated approximately 26.7%, 9.9%, 7.7%, 5.3% and 0.8%, respectively, of our consolidated real estate investments based on gross book value (excluding properties classified as held for sale as of March 31, 2022). Because Atria and Sunrise manage our properties in exchange for a management fee from us, we are not directly exposed to their credit risk in the same manner or to the same extent as triple-net tenants like Brookdale Senior Living, Ardent and Kindred.

Based on gross book value, approximately 12.8% and 54.2% of our consolidated real estate investments were senior housing communities included in the triple-net leased properties and senior living operations reportable business segments, respectively (excluding properties classified as held for sale as of March 31, 2022). MOBs, life science, research and innovation centers, inpatient rehabilitation facilities (“IRFs”) and long-term acute care facilities (“LTACs”), health systems, skilled nursing facilities (“SNFs”) and secured loans receivable and investments collectively comprised the remaining 33.0%. Our consolidated properties were located in 47 states, the District of Columbia, seven Canadian provinces and the United Kingdom as of March 31, 2022, with properties in one state (California) accounting for more than 10% of our total consolidated revenues and net operating income (“NOI”) for the three months then ended. NOI is defined as total revenues, less interest and other income, property-level operating expenses and office building and other services costs. See “Non-GAAP Financial Measures” included elsewhere in this Quarterly Report on Form 10-Q for additional disclosure and a reconciliation of net income attributable to common stockholders, as computed in accordance with GAAP, to NOI.

Triple-Net Leased Properties

The properties we lease to Brookdale Senior Living, Ardent and Kindred accounted for a significant portion of our triple-net leased properties segment revenues and NOI for the three months ended March 31, 2022 and 2021. The following table reflects the concentration risk related to our triple-net leased properties including assets held for sale for the periods presented:
 For the Three Months Ended March 31,
 20222021
Revenues (1):
  
Brookdale Senior Living3.7 %4.1 %
Ardent3.2 3.5 
Kindred
3.3 3.6 
NOI (2):
Brookdale Senior Living7.8 %8.8 %
Ardent6.8 7.5 
Kindred
7.0 7.8 
(1)Total revenues include office building and other services revenue, income from loans and investments and interest and other income.
(2)See “Non-GAAP Financial Measures” included elsewhere in this Quarterly Report on Form 10-Q for additional disclosure and a reconciliation of net income attributable to common stockholders, as computed in accordance with GAAP, to NOI.

Each of our leases with Brookdale Senior Living, Ardent and Kindred is a triple-net lease that obligates the tenant to pay all property-related expenses, including maintenance, utilities, repairs, taxes, insurance and capital expenditures, and to comply with the terms of the mortgage financing documents, if any, affecting the properties. In addition, each of our Brookdale Senior Living, Ardent and Kindred leases has a corporate guaranty.
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VENTAS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


In December 2021, Kindred Healthcare, LLC was acquired and began operating under a new healthcare system called ScionHealth. As of March 31, 2022, we leased 29 LTACs to Kindred pursuant to a master lease agreement. Unless extended, the lease term for six of the LTACs ends on April 30, 2023 (the “2023 Pool”) and the lease term for the remaining LTACs ends on April 30, 2025. Although Kindred has the right to renew each pool of LTACs for an additional lease term, we cannot assure you that Kindred will exercise its renewal option for either pool. Annual rent for the LTACs in the 2023 Pool for the 12-month period ending on March 31, 2022 was $31.9 million.

Senior Living Operations

As of March 31, 2022, Atria and Sunrise, collectively, provided comprehensive property management and accounting services with respect to 347 of our 546 consolidated senior housing communities, for which we pay annual management fees pursuant to long-term management agreements.

On July 30, 2021, Atria acquired the management services division of Holiday, which at the time managed a pool of 26 communities for Ventas. As of March 31, 2022, Atria and its subsidiaries, including Holiday, managed a pool of 255 senior housing communities for Ventas. Ventas has the ongoing right to terminate the management contract for 91 of the communities with short term notice.

As of March 31, 2022, Sunrise managed a pool of 96 senior housing communities for Ventas. Subsequent to March 31, 2022, Ventas and Sunrise Senior Living entered into a revised management agreement for 92 communities with a term expiring May 31, 2035. Under the new management agreement, Sunrise will receive a management fee based on a percentage of revenue and net operating income generated by the applicable communities. Sunrise is also entitled to certain incentive fees if specified performance targets are met. Ventas has the right to freely terminate the management agreement as to all communities if certain performance metrics are not met and may freely terminate the management agreement as to certain specified communities at any time. In addition, Ventas may also terminate the management agreement as it relates to three communities per year subject to the payment of a fee and an aggregate cap on such terminations over the term of the agreement.

We successfully transitioned the operations of 90 senior living communities owned by us and operated under management agreements with Eclipse Senior Living, Inc. (“ESL”) to seven experienced managers on or before January 2, 2022. ESL ceased operation of its management business in early 2022 following completion of the transitions. We incurred certain one-time transition costs and expenses in connection with the transitions, which were recognized within transaction expenses and deal costs in our Consolidated Statements of Income.

We rely on our managers’ personnel, expertise, technical resources and information systems, proprietary information, good faith and judgment to manage our senior living operations efficiently and effectively. We also rely on our managers to set appropriate resident fees, provide accurate property-level financial results in a timely manner and otherwise operate our senior housing communities in compliance with the terms of our management agreements and all applicable laws and regulations.

NOTE 4—ACQUISITIONS OF REAL ESTATE PROPERTY

We acquire and invest in senior housing, medical office buildings, life science, research and innovation centers and other healthcare properties primarily to achieve an expected yield on our investment, to grow and diversify our portfolio and revenue base, and to reduce our dependence on any single tenant, operator or manager, geographic location, asset type, business model or revenue source. Each of our acquisitions disclosed below was accounted for as an asset acquisition.

2022 Acquisitions

During the first quarter of 2022, we acquired 18 MOBs leased to affiliates of Ardent and one behavioral health center, all of which are reported within our office operations segment, and one senior housing community, which is reported within our senior living operations segment, for an aggregate purchase price of $349.2 million.

Subsequent to March 31, 2022, we acquired one research and innovation center in Philadelphia, Pennsylvania for $46.1 million.

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VENTAS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

NOTE 5—DISPOSITIONS AND IMPAIRMENTS

2022 Activity

During the three months ended March 31, 2022, we sold one vacant land parcel for $5.6 million and recognized a gain on the sale of this asset of $2.2 million.

Assets Held for Sale

The table below summarizes our real estate assets classified as held for sale, including the amounts reported on our Consolidated Balance Sheets, which may include anticipated post-closing settlements of working capital for disposed properties (dollars in thousands):
As of March 31, 2022As of December 31, 2021
Number of Properties Held for SaleAssets Held for SaleLiabilities Related to Assets
Held for Sale
Number of Properties Held for SaleAssets Held for Sale Liabilities Related to Assets
Held for Sale
Office Operations2 3,098 1,558 2 3,435 1,529 
Senior Living Operations2 23,133 6,853 2 24,964 9,321 
Total4 $26,231 $8,411 4 $28,399 $10,850 

Real Estate Impairment

We recognized impairments of $14.3 million and $78.5 million for the three months ended March 31, 2022 and 2021, respectively, which are recorded primarily as a component of depreciation and amortization in our Consolidated Statements of Income. The impairments recorded were primarily the result of a change in our intent to hold the impaired assets or a change in the expected future cash flows of the subject properties.

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VENTAS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

NOTE 6—LOANS RECEIVABLE AND INVESTMENTS

As of March 31, 2022 and December 31, 2021, we had $554.5 million and $549.2 million, respectively, of net loans receivable and investments relating to senior housing and healthcare operators or properties. The following is a summary of our loans receivable and investments, net, including amortized cost, fair value and unrealized gains or losses on available for sale investments (dollars in thousands):    
Amortized CostAllowanceUnrealized GainCarrying AmountFair Value
As of March 31, 2022:
Secured/mortgage loans and other, net$488,827 $ $ $488,827 $483,491 
Government-sponsored pooled loan investments, net (1)
40,312  1,249 41,561 41,561 
Total investments reported as secured loans receivable and investments, net
529,139  1,249 530,388 525,052 
Non-mortgage loans receivable, net (2)
29,449 (5,333) 24,116 23,826 
Total loans receivable and investments, net$558,588 $(5,333)$1,249 $554,504 $548,878 
As of December 31, 2021:
Secured/mortgage loans and other, net$488,913 $ $ $488,913 $478,931 
Government-sponsored pooled loan investments, net (1)
39,376  1,836 41,213 41,213 
Total investments reported as secured loans receivable and investments, net
528,289  1,836 530,126 520,144 
Non-mortgage loans receivable, net (2)
24,418 (5,394) 19,024 19,039 
Total loans receivable and investments, net$552,707 $(5,394)$1,836 $549,150 $539,183 
______________________________
(1)Investment in government-sponsored pool loans has a contractual maturity date in 2023.
(2)Included in other assets on our Consolidated Balance Sheets.

NOTE 7—INVESTMENTS IN UNCONSOLIDATED ENTITIES

We report investments in unconsolidated entities over whose operating and financial policies we have the ability to exercise significant influence under the equity method of accounting. We are not required to consolidate these entities because our joint venture partners have significant participating rights, nor are these entities considered VIEs, as they are controlled by equity holders with sufficient capital. We invest in both real estate entities and operating entities which are described further below.

Investments in Unconsolidated Real Estate Entities

Through our Ventas Investment Management Platform, which consolidates our extensive third-party capital ventures under a single brand and umbrella, we partner with third-party institutional investors to invest in healthcare real estate through various joint ventures and other co-investment vehicles where we are the sponsor or general partner.

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VENTAS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Below is a summary of our investments in unconsolidated real estate entities as of March 31, 2022 and December 31, 2021, respectively (dollars in thousands):
Ownership as of (1)
Carrying Amount as of
March 31, 2022December 31, 2021March 31, 2022December 31, 2021
Investment in unconsolidated real estate entities:
Ventas Life Science & Healthcare Real Estate Fund21.1%21.1%$264,675 $267,475 
Pension Fund Joint Venture22.9%22.9%28,248 29,192 
Research & Innovation Development Joint Venture51.1%51.0%244,115 221,363 
Ventas Investment Management Platform537,038 518,030 
All other (2)
34.0%-50.0%
34.0%-50.0%
4,876 5,435 
Total investments in unconsolidated real estate entities$541,914 $523,465 
______________________________
(1) The entities in which we have an ownership interest may have less than a 100% interest in the underlying real estate. The ownership percentages in the table reflect our interest in the underlying real estate. Joint venture members, including us in some instances, have equity participation rights based on the underlying performance of the investments which could result in non pro rata distributions.
(2) Includes investments in land parcels, parking structures and other de minimis investments in unconsolidated real estate entities.

We provide various services to our unconsolidated real estate entities in exchange for fees and reimbursements. Total management fees earned in connection with these services were $3.5 million and $2.7 million for the three months ended March 31, 2022 and 2021, respectively. Such amounts are included in office building and other services revenue in our Consolidated Statements of Income.

Investments in Unconsolidated Operating Entities

We own investments in unconsolidated operating entities such as Ardent and Atria, which are included within other assets on our Consolidated Balance Sheets. Our 34% ownership interest in Atria entitles us to customary minority rights and protections, including the right to appoint two members to the Atria Board of Directors. Our 9.8% ownership interest in Ardent entitles us to customary minority rights and protections, including the right to appoint one member of the Ardent Board of Directors.

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VENTAS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

NOTE 8—INTANGIBLES

The following is a summary of our intangibles (dollars in thousands):
 As of March 31, 2022As of December 31, 2021
 BalanceWeighted Average
Remaining Amortization
Period in Years
BalanceWeighted Average
Remaining Amortization
Period in Years
Intangible assets:    
Above-market lease intangibles (1)
$129,118 5.8$129,121 5.9
In-place and other lease intangibles (2)
1,244,246 7.11,240,626