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Health Care REIT Finds Sweet Spot in Aging Population

Tuesday, 30 Nov 2010 | 1:38 PM ET

With a recent acquisition, Ventas—a leading healthcare real estate investment trust (REIT) with a portfolio of nearly 600 health care properties and senior citzen housing assets in the U.S. and Canada—will own about $14 billion in real estate.

"Healthcare is a huge market. It's going to be 19 percent of the GDP (gross domestic product)by the end of this decade," Debra Cafaro, chairman, president and CEO of Ventas told CNBC's "The Strategy Session" on Tuesday.

The company currently yields at 4 percent and is the best-performing publicly traded financial in the past decade (ending December 31, 2009), with the total shareholder return exceeding 2,000 percent for the period. In addition, Ventas is one of the ten largest REITs in the United States.

The over-85 population will be the fastest growing, with many residing in assisted-living communities, and there is very limited supply (of that kind of housing), Cafraro said.

Spotlight on Health Care REITs
Debra Carfaro, CEO of Ventas, a leading health care REIT and the best performing publicly traded financial in the past decade, discusses her industry with "The Strategy Session" crew.

"Demand is growing. There is very limited new supply, construction is down across real estate asset types. But I would argue that our asset type has the biggest fundamental demand drivers within the real estate business," she said, adding, "that's over 85 [years of age]."

In addition, Cafaro wants Ventas to be a leader in the Baby Boomer space as well.

"As the baby boomers become medicare eligible [in 2011] and health care reform comes to bear on us, we're going to see visits to those assets growing by 30 percent in the next ten years," Cafaro said.

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