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Activist Investor Litt Renews Attack On Healthcare REIT Ventas

Activist investor Jonathan Litt is again requesting board changes at healthcare and senior housing REIT Ventas Inc., citing its undervaluation compared to peer Welltower as his main concern.

Ventas' Sutter Van Ness medical office building in San Francisco

Litt’s Land & Buildings, a hedge fund and shareholder of Ventas, issued a letter to fellow shareholders Monday outlining the factors it believes contribute to the Chicago-based REIT’s underperformance.

While acknowledging that the firm remains open to continuing its dialogue with Ventas, "the status quo cannot continue,” Litt wrote.

“While Land & Buildings hopes to reach a constructive resolution with Ventas, it will not hesitate to do whatever is necessary to maximize value at the Company for its long-suffering shareholders,” the letter says. 

According to unnamed sources who spoke to The Wall Street Journal, whatever is necessary could include nominating multiple directors. The letter calls for actions to address “lackluster returns shareholders have suffered” under the current board and management. 

The window for shareholder nominations runs from Dec. 18 to Jan. 17, the WSJ reported, citing a securities filing.

The new action marks Land & Buildings' second run at a proxy battle with Ventas. The investor launched an unsuccessful attempt to nominate Litt and another candidate to the Ventas board last year.

Ventas has more than 1,200 properties in its portfolio, including 800 senior living communities and over 400 outpatient medical facilities across the U.S., Canada and the UK, according to its website. 

Land & Buildings owns about $50M of Ventas shares, representing less than 1% of the REIT’s market value of about $17B, the WSJ reported. 

Litt argued the senior housing market is strengthening due to accelerating demand, declining new competitive salary growth and waning expense headwinds. Yet Ventas has generated a negative return year-to-date, underperforming Welltower by 33%, according to the letter. 

Ventas shares are down about 6% this year, and Ventas has lost roughly $7B of market value since Land & Buildings initiated its last contest in April 2022, the WSJ reported. 

Stamford, Connecticut-based Land & Buildings has staged other proxy battles since its inception in 2008. 

In 2017, the firm lost a campaign for two board seats at mall operator Taubman Centers, which is now owned by Simon Property Group, but Land & Buildings secured a seat for Litt in 2018, according to the WSJ. 

Last year, Land & Buildings had one of its two director nominees elected at Apartment Investment and Management Co., or Aimcoafter months of agitating. Land & Buildings owns 5.8% of Aimco.

In June, Litt released a report targeting Alexandria Real Estate Equities that utilized cellphone data to argue that life sciences spaces are as overvalued as office space.