Ventas, Inc (NYSE: VTR) This fall 2021 earnings name dated Feb. 18, 2022
Company Members:
Sarah Whitford — Director of Investor Relations
Debra A. Cafaro — Chairman and Chief Govt Officer
J. Justin Hutchens — Govt Vice President of Senior Housing
Robert F. Probst — Govt Vice President and Chief Monetary Officer
John D. Cobb — Govt Vice President and Chief Funding Officer
Peter J. Bulgarelli — Govt Vice President of Workplace, President and Chief Govt Officer of Lillibridge Healthcare
Analysts:
Nick Joseph — Citi — Analyst
Steve Sakwa — Evercore ISI — Analyst
Wealthy Anderson — SMBC — Analyst
Nick Yulico — Scotiabank — Analyst
Jordan Sadler — KeyBanc Capital Markets — Analyst
Steven Valiquette — Barclays — Analyst
Juan Sanabria — BMO Capital Markets — Analyst
Vikram Malhotra — Mizuho — Analyst
Omotayo Okusanya — Credit score Suisse — Analyst
Joshua Dennerlein — Financial institution of America — Analyst
Adam — Morgan Stanley — Analyst
Michael Carroll — RBC Capital Markets — Analyst
Mike Mueller — J.P. Morgan — Analyst
Daniel Bernstein — Capital One — Analyst
Michael Bilerman — Citi — Analyst
Presentation:
Operator
Good morning. My title is David, and I’ll be your convention operator immediately. At the moment, I’d prefer to welcome everybody to Ventas Fourth Quarter Monetary Outcomes Convention Name. [Operator Instructions] Thanks.
Sarah Whitford, Director of Investor Relations, you might start your convention.
Sarah Whitford — Director of Investor Relations
Thanks, David. Good morning and welcome to the Ventas fourth quarter monetary outcomes convention name. Earlier this morning, we issued our fourth quarter earnings launch, supplemental and investor presentation. These supplies can be found on the Ventas web site at ir.ventasreit.com. As a reminder, remarks made immediately might embrace forward-looking statements, together with sure expectations associated to COVID-19 and different issues.
Ahead-looking statements are topic to dangers and uncertainties, and a wide range of elements might trigger precise outcomes to vary materially from these contemplated by such statements. For a extra detailed dialogue of these elements, please consult with our earnings launch for this quarter and to our most up-to-date SEC filings, all of which can be found on the Ventas web site.
Sure non-GAAP monetary measures can even be mentioned on this name. For a reconciliation of those measures to probably the most intently comparable GAAP measures, please consult with our supplemental posted on the Investor Relations part of our web site.
And with that, I’ll flip the decision over to Debra A. Cafaro, Chairman and CEO.
Debra A. Cafaro — Chairman and Chief Govt Officer
Thanks, Sarah, and I need to welcome all of our shareholders and different individuals to the Ventas fourth quarter and yr finish 2021 earnings name. 2021 was a yr that was bracketed by two very optimistic developments. Initially of the yr, we rolled out life-saving vaccines in our senior housing communities, to maintain residents and caregivers protected from COVID-19. And as we shut out 2021 and start a brand new yr, we sit up for posting development within the first quarter and sustained enchancment in our senior housing enterprise by 2022.
In between these e book ends, our Ventas workforce discovered a option to drive our enterprise ahead in a extremely dynamic surroundings. Whereas prioritizing well being and security, we took proactive steps to seize upside within the senior housing restoration, delivered robust natural development in our workplace and triple-net healthcare companies and stayed financially robust. We additionally prolonged our lengthy observe document of value-creating exterior development with $3.7 billion in new investments centered on our strategic priorities of senior housing and life science.
As we enter 2022, we’re reporting a fourth quarter that exceeded our expectations on the power of senior housing and workplace efficiency. Carrying that momentum ahead, we anticipate complete portfolio NOI development, as soon as once more led by our senior housing and workplace companies with extra contributions from funding exercise and deeply appreciated grants from HHS for our assisted dwelling communities within the first quarter.
We’re happy that we will profit from each natural and exterior development within the first quarter, in step with our long-standing worth proposition for shareholders. Let me put our funding exercise in a broader context and focus on a number of the highlights. Since 2010, we’ve averaged over $3 billion per yr in common funding exercise throughout asset courses, executed in a wide range of transaction sorts, giant and small.
2021 offered wonderful examples of our strategy and execution. In keeping with our present capital allocation priorities at this level within the cycle, our 2021 funding exercise was allotted 70% to senior housing in engaging markets with vital development potential, 20% to our excessive worth life sciences enterprise together with the ground-up growth of a brand new analysis facility anchored by College of California, Davis and 10% to increasing our profitable medical workplace constructing franchise.
Throughout the senior housing capital allocation sleeve, we accomplished each the brand new senior funding, buying over 100 unbiased dwelling communities in advantaged submarkets at engaging pricing beneath substitute prices. And we additionally closed a Canadian senior dwelling cope with a handful of well-performing belongings with extra lease-up upside. The Ventas funding workforce is utilizing its many years of {industry} expertise robust and diverse relationships and deal structuring means to handle a particularly strong pipeline as we enter 2022.
We proceed to establish areas of aggressive benefit and choose our spots in step with our strategic priorities and our analytic evaluation of threat reward. We began the yr off nicely, closing over $300 million of investments within the medical workplace and senior housing areas each with good in-place returns and each generated by ongoing relationships.
With vital alternatives in our websites, we’re additionally assured within the array of funding sources obtainable to us as we demonstrated by recycling over $1 billion of capital in 2021, cut up between $850 million of divestitures of non-core senior housing and MOB belongings at engaging valuations and over $350 million of full reimbursement of well-structured loans that yielded unlevered IRRs exceeding 11%.
Along with capital recycling, these transactions enhance the standard of our portfolio and the sustainability of our go-forward money flows, which additionally helps our well-covered dividend. We additionally grew our Ventas Funding Administration enterprise through the yr and efficiently accessed a number of capital markets opportunistically. VIM is a large success story and now has over $4.5 billion in belongings below administration with main international institutional buyers. Our perpetual fund alone raised practically $0.75 billion in untapped commitments this yr. These embedded capital relationships present one other highly effective device to fund development and construct a helpful enterprise on the similar time.
Turning to our values that dovetail with shareholder priorities, I’d like to focus on our enduring dedication achievement and recognition within the space of environmental, social and governance or ESG. Our ESG management continued throughout 2021 as we considerably elevated our ESG profile.
Amongst different issues, Ventas made significant investments in energy-saving applied sciences at our properties. We had been named to CDP’s A Checklist, the highest 2% of worldwide corporations for tackling local weather change and likewise named Nareit’s Healthcare Chief within the Mild for the fifth consecutive yr. We’ve additionally ramped up our actions to enhance range, fairness and inclusion in our Firm, our {industry} and our nation. We’ve taken definitive steps in recruiting, funding and group engagement and undertake the targets to drive ourselves even tougher within the coming years.
Lastly, our dedication to excellent governance continues with rigorous and common board refreshment, including administrators who’re unbiased and numerous and who carry a document of accomplishment and material experience to our Firm, comparable to not too long ago added administrators, Maurice Smith and Marguerite Nader.
In closing, I’d like to offer an enormous shout out to my Ventas colleagues whose expertise, resilience, agility and dedication to doing their greatest over these previous two years has been inspiring and to our working companions who’ve navigated the pandemic on the entrance strains with braveness, caring and dedication.
We additionally deeply worth and recognize our lenders and fairness buyers who assist and encourage us. We’re dedicated to utilizing all of the instruments at our disposal, together with our high-quality, numerous portfolio, skilled workforce and platform to excel for his or her profit. Justin?
J. Justin Hutchens — Govt Vice President of Senior Housing
Thanks, Debbie. The senior housing outlook stays vivid. In the present day, I’ll converse to the favorable tendencies informing our outlook for development within the first quarter, present an replace on key portfolio technique and actions and recap our robust fourth quarter outcomes.
I’m glad to report that we anticipate occupancy income and NOI to develop within the first quarter. Demand stays strong with January lead volumes at all-time highs because the onset of the pandemic and medical circumstances are dramatically bettering. Core operational efficiency continues to ship robust outcomes as operators climate value challenges, and the macro provide demand backdrop ought to proceed to energy underlying development. I’m happy with the workforce and operator base we’ve assembled as we’ve completed quite a bit during the last two years.
Our senior housing enterprise is competitively positioned to seize the advantages of the continuing sector restoration and I couldn’t be extra excited for the trail forward. Throughout latest group visits, my workforce and I witnessed firsthand the power of the highest of the gross sales funnel, as excursions had been considerable. As COVID circumstances have declined and excursions have picked up, the power at our communities has been evident. We expect vital income development of 10% within the first quarter supported by pricing energy and strong underlying demand. We executed our pricing technique to drive outsized hire will increase led by Atria and Dawn.
Leads in our year-over-year same-store pool of 321 belongings exceeded 16,400 in January, the very best quantity achieved since earlier than the pandemic. We anticipate a robust supply-demand backdrop to additional assist, lead and occupancy development. Provide ranges are anticipated to pattern favorably as development begins and deliveries have improved considerably versus pre-COVID ranges. Moreover, our footprint is nicely positioned as we witnessed new begins in simply three of our high 20 markets. Evidently, I’m very inspired by the basics supporting our enterprise and the chance for development shifting ahead. Bob will cowl our first quarter steering shortly. However for SHOP, it consists of 10% income development on the midpoint and 6% to fifteen% NOI development on the decrease and higher ends, respectively. The principle variable affecting the NOI vary might be working prices.
In January, the surge in COVID circumstances amongst staff pressured the supply of caregivers in what was already a difficult labor market. Our communities have continued to make progress implementing workforce administration and effectivity initiatives. Web hiring tendencies are displaying early indicators of enchancment as recruiting assets have been bolstered, labor monitoring capabilities have been enhanced and focused aggressive wage will increase have been executed. We’re hopeful the bettering medical backdrop and the working initiatives will take maintain and assist the excessive finish of our steering vary, however the midpoint assumes the prices stay elevated.
Shifting on to portfolio actions. Having been right here for 2 years now, I couldn’t be happier with the flexibility of Ventas to execute on key priorities associated to senior housing. We’ve been extraordinarily action-oriented, executing on acquisitions, inclinations, transitions, resolutions and focused capital investments and strengthening our strategic strategy to managing the senior housing platform.
The Ventas benefit is that we have now very deep operational expertise within the senior housing sector. We’ve married this operational experience with our refined analytical capabilities to execute strategic portfolio actions, enhanced efficiency administration and drive focused capital funding. Constructing on the power of our skilled best-in-class working companions, we’re totally engaged in our aligned curiosity to create worth in our senior housing enterprise. Our newest initiative entails the deployment of our Ventas OI in shut partnership with our operators. Ventas brings to the desk an emphasis on operational insights, geospatial analytics and capital allocation priorities.
I couldn’t be extra happy with the joy amongst the operators and my workforce as they’ve engaged on this collectively. Some examples of outputs embrace in-depth pricing methods, workforce recruitment and retention administration, focused value-creating capex and formulation of greatest practices. This strategy takes the perfect of what Ventas has to supply in a collaborative effort with our operators to drive enterprise outcomes.
We’ve taken a number of decisive actions as we proceed executing on our technique of the best asset in the best market with the best operator. Because the begin of 2021 Ventas has added six new senior housing working companions, bringing our portfolio to a complete of 37 relationships. This portfolio steadiness, together with the deep {industry} expertise of our operators of their respective markets positions us to develop {our relationships} and strengthen our senior housing platform over time.
Latest portfolio actions embrace, the gross sales of 29 non-core senior housing properties in 2021, leading to roughly $400 million of gross proceeds. These communities represented orphan belongings in markets with elevated competitors and in want of great capital funding. Extra not too long ago, we accomplished the acquisition of Mangrove Bay and are thrilled so as to add this premium, 160-unit senior housing campus by our rising portfolio. What an ideal alternative to recycle capital out of non-core belongings at a 2.5% yield and right into a Class A asset at 5.5% in a pretty market.
Turning to fourth quarter efficiency. Complete SHOP NOI achieved the excessive finish of our expectations within the fourth quarter of ’21 and same-store common occupancy — within the fourth quarter of ’21 versus the fourth quarter of ’20 grew by 200 foundation factors to 83.4%. Fee and income grew for the primary time because the begin of the pandemic as same-store income elevated 3.3% year-over-year.
As we anticipated, working bills, excluding HHS grants elevated sequentially by $8.7 million or 2.6%, nearly all of which was pushed by incremental labor bills. SHOP NOI, excluding HHS grants for the sequential same-store pool declined modestly by simply $1 million or 90 foundation factors and NOI for the year-over-year same-store pool declined $3.8 million or 3.6%. Each are main outcomes amongst friends. For the non-same-store pool, underlying efficiency was steady.
In closing, my enthusiasm for the outlook in our senior housing enterprise stays excessive as we’re nicely positioned to achieve what we anticipate to be a good macro backdrop.
With that, I’ll hand the decision over to Bob.
Robert F. Probst — Govt Vice President and Chief Monetary Officer
Thanks, Justin. I’m going to leap straight to our first quarter outlook and end up with a number of abstract ideas on our steadiness sheet earlier than turning the decision to Q&A. Our Q1 steering is for web earnings to vary from $0.07 to $0.11 per totally diluted share. Q1 normalized FFO is anticipated to vary from $0.76 to $0.80 or $0.78 on the midpoint.
Integrated in our steering is $0.08 of HHS grants acquired in Q1 ’22. When excluding HHS grants in each durations and adjusting our This fall for the one-time $0.03 Kindred M&A charge acquired within the quarter, we’re describing a This fall of $0.68 to a Q1 of $0.70. That development may be merely described by $0.02 sequential development from our senior housing portfolio.
When it comes to Q1 ’22 property expectations, web of HHS grants, we anticipate Q1 year-over-year same-store money NOI for the overall same-store portfolio to develop within the vary of two.5% to five.5%. At a section stage, our SHOP steering is to extend occupancy, 410 foundation factors year-over-year to develop income by 10% led by occupancy good points and powerful in-place fee will increase and to develop NOI within the vary of 6% to fifteen% ex HHS grants. On the steering midpoint, Ventas expects working prices to stay elevated by the primary quarter whilst COVID-19 medical circumstances average. We anticipate our triple-net portfolio to be down 1.5% to flat within the first quarter, with escalator led development, offset by modest hire reductions within the triple-net senior housing portfolio from the influence of the pandemic on a few of our smaller tenants.
Over time, we anticipate the advantages of the senior housing restoration will accrue to those operators in addition to to Ventas. We anticipate one-third of our portfolio that’s the workplace enterprise to develop Q1 same-store NOI by a pretty 4% to five%. Pete Bulgarelli has led a sequence of differentiated operational initiatives in MOBs in the previous couple of years that are actually bearing fruit. The outcomes of those efforts had been evident within the wonderful fourth quarter efficiency for the MOB portfolio, which grew same-store fourth quarter NOI by 3.4%.
The second quarter in a row the place same-store development exceeded 3%. In the meantime, MOB new leasing was up roughly 55% and buyer retention was 92% for the quarter. That power is anticipated to hold into the primary quarter. Ultimate Q1 steering assumptions of notice embrace no new HHS grants past the $33 million already acquired, no new unannounced materials acquisitions or capital markets actions and 403 million totally diluted shares.
We’ve offered extra insights and disclosure in our enterprise replace deck and our supplemental together with our Q1 versus This fall sequential store assumptions in addition to a reported section NOI to FFO trending schedule to permit for simpler perception into distinctive gadgets in our outcomes. Some remaining feedback on steadiness sheet leverage and liquidity. In 2021, the Firm enhanced its portfolio and strengthened its steadiness sheet by $1.2 billion in asset inclinations and mortgage repayments used to cut back near-term debt. In the meantime, we prolonged period and elevated our fastened fee debt to 91% by tapping into the bond markets within the US and Canada, together with a 10-year US unsecured providing at 2.5%, the perfect 10-year healthcare REIT fee in 2021.
Web debt to EBITDA was steady at 7.2 instances within the fourth quarter, with the senior housing restoration now underway, anticipated to enhance that ratio over time. And that’s a great segue to shut with our enthusiasm as we glance into 2022 based mostly on the robust senior housing restoration that’s now underway and the boldness that we have now the portfolio, companions and workforce to create worth for all our stakeholders.
And that concludes our ready remarks. Earlier than we begin with Q&A, we’re limiting every caller to at least one query to be respectful to everybody within the line.
With that, I’ll flip the decision again to the operator.
Questions and Solutions:
Operator
Thanks. [Operator Instructions] We’ll take our first query from Nick Joseph with Citi. Your line is open.
Nick Joseph — Citi — Analyst
Thanks. And initially, thanks for the elevated disclosure. It is extremely useful. However I assume my query might be on senior housing. So medical tendencies proceed to pattern favorably and assuming there’s no disruption from one other variant or something, how do you consider the flexibility to lower using company labor going ahead?
J. Justin Hutchens — Govt Vice President of Senior Housing
Hello, it’s Justin. So if we step again and also you have a look at the type of macro backdrop that was inflicting labor shortages, this was occurring within the third quarter. We anticipated that, that will proceed into the fourth quarter. What occurred — throughout that interval is we had web hiring in our portfolio in order that we’re inspired in regards to the hiring tendencies. After which Omicron occurs, and that actually had a big effect within the first a part of the primary quarter. You may see some tendencies in our enterprise replace, the place we present the medical circumstances amongst our staff. And what’s encouraging is you’ll be able to see that these circumstances are coming down. However we’re not all the way in which out of the woods but. So the very first thing we’re going to search for is to have a wholesome workforce, the second factor is to proceed these web hiring tendencies. After which as that continues, then we’d anticipate the company value to have the ability to come down.
Operator
Subsequent, we’ll go to Steve Sakwa with Evercore ISI.
Steve Sakwa — Evercore ISI — Analyst
Nice. Thanks. Good morning. I simply wished to remain on senior housing. Justin, the leads they usually’re definitely optimistic right here. And I’m simply questioning in the event you may speak in regards to the — perhaps the gross sales cycle. And I understand you’re forecasting for a modest decline in occupancy however I’m simply questioning, given the pent-up demand that appears to be there and the truth that circumstances are coming down so rapidly, what’s the possibility that you may really transfer people in perhaps later this month and into March and exceed type of the minus 20 foundation factors on the occupancy facet?
J. Justin Hutchens — Govt Vice President of Senior Housing
Hello. Certain. So that you’ve in all probability famous that leads are actually excessive. In reality, I discussed that they’re the very best occasion because the onsite of the pandemic. Leads are going to be vital to supporting this — the senior housing restoration that’s underway. Attending to the type of your query, it definitely appears attainable that the move-ins that didn’t transfer in late January, may circulate over into February, and we’d positively qualify that as pent-up demand. As you already know, numerous the move-in exercise occurs in the direction of the top of the month. So we’re wanting ahead to see how that performs out.
Operator
Subsequent, we’ll go to Wealthy Anderson with SMBC. Your line is open.
Wealthy Anderson — SMBC — Analyst
Thanks. Good morning. So Welltower had their name this week and I urged that there would by no means be an elephant looking kind of Firm when it comes to exterior development. I’m curious when you have a crimson line by that mentality as nicely. And particularly, I’m eager about the way you recognized senior housing and life sciences, your strategic priorities. Might a situation unfold the place MOBs develop into — given the pricing that’s being attributed to that sector, be a major supply of funds to be redeployed into in some vital means that will qualify as elephant looking. Thanks.
Debra A. Cafaro — Chairman and Chief Govt Officer
Hello, Wealthy, good to listen to your voice. Look, I believe our aggressive benefit has actually all the time been our means to do all various kinds of offers throughout our asset courses and to take action in a means that’s created worth and that features form of moving into MOBs early and constructing an ideal enterprise. It consists of, in fact, allocating capital to senior housing and most not too long ago, our vital funding in value-added life sciences.
I imply, that has simply been actually actually extremely optimistic for our shareholders. So we have now offered MOBs as we talked about this quarter, I believe recycling that capital has enabled us to improve our portfolio in a really optimistic means. And we’ll proceed to search for alternatives to try this whereas on the similar time, our funding actions will proceed our lengthy sample of actually choosing our spots the place we have now a aggressive benefit and suppose we’re going so as to add worth from good risk-adjusted return.
Operator
Subsequent, we’ll go to Nick Yulico with Scotiabank. Your line is open.
Nick Yulico — Scotiabank — Analyst
Nice. Thanks. When it comes to simply going again to the company labor prices, I wished to see in the event you guys had the quantity for the entire portfolio or a minimum of, I do know you break it out for a similar retailer within the presentation, which could be very useful. It’s 7.7% of labor, however you’ve gotten the larger portfolio now with new senior and others. So I’m simply attempting to know like a full company labor quantity that was in for the fourth quarter and if you’re saying for the primary quarter that it’s going to be elevated? Or is it simply actually like the identical quantity of company labor within the first quarter? Thanks.
Robert F. Probst — Govt Vice President and Chief Monetary Officer
Hey, Nick, it’s Bob. I direct you to web page 16 of our investor deck. I believe there’s a pleasant description of the pie chart of income and its decomposition. And you may see inside that in-house labor is 42%, contract labor is 4%. You may apply that to all the portfolio or subsets of the portfolio. It will provide you with the identical relative composition and also you’ll see the image down beneath of what which means for the year-over-year pool. Although contract labor is necessary, and it has accelerated and certainly in January, speed up even additional, the underlying prices actually are pushed by the in-house labor. And that’s actually the important thing. And therefore, that’s why we’re so centered on bringing that in-house. Ought to we try this efficiently, that’s clearly upside given the fee per hour. However finally, it’s a a lot smaller piece of the general value than in-house labor, however clearly a possibility there. And you may apply that proportion to wherever you prefer to get to the reply.
Operator
Subsequent, we’ll go to Jordan Sadler with KeyBanc Capital Markets. Your line is open.
Jordan Sadler — KeyBanc Capital Markets — Analyst
Thanks, and good morning. Are you able to guys focus on — Justin, you touched on the non-same-store portfolio within the quarter I believe the remark I heard was that efficiency was steady. I’m curious in the event you may type of flesh that out for us a bit bit, particularly because it pertains to the NAND transition properties that passed off? What’s occurring with these? After which what’s embedded in your steering for 1Q sequentially for the transition portfolio?
Robert F. Probst — Govt Vice President and Chief Monetary Officer
Let me take the numbers first, then I’ll let Justin give a number of the shade. So the outperformance on the excessive finish of our vary that we delivered within the fourth was led by senior housing inside led by the non-same-store portfolio. There are two items of that within the fourth. There’s new senior within the transition 90 belongings. Each these swimming pools carried out nicely on the increased finish of our expectations. which we’re actually happy with. The idea carrying that then into the primary is sustained stability, notably inside the transition. The brand new senior belongings I’d spotlight are within the sequential pool within the first. And in order you have a look at the steering for the sequential pool, you’ll see the influence of recent senior, which is rising properly. And that’s the outlook. So Justin, any commentary on the 90 and the way it’s going?
J. Justin Hutchens — Govt Vice President of Senior Housing
Yeah. The one factor I’d add is that we — as deliberate, we efficiently transitioned all of these communities by the primary of the yr to totally different operators and all the things goes comparatively clean.
Operator
Subsequent, we’ll go to Steven Valiquette with Barclays. Your line is open.
Steven Valiquette — Barclays — Analyst
Thanks, and good morning, everyone. So only a query or two right here on the triple-net portfolio. So Ventas through the nook with a so optimistic SS NOI within the fourth quarter in triple web. And with the information for that to be down 1.5% to flat within the first quarter with senior housing and the street to restoration general, can we assume that the hire resets are hopefully behind us now inside the triple-net portfolio?
Debra A. Cafaro — Chairman and Chief Govt Officer
Good morning. Thanks to your query. I believe we have now a web page on this additionally within the enterprise replace. We’ve actually been action-oriented, as Justin talked about and have addressed the lion’s share of our senior housing portfolio, which is absolutely 50% Brookdale, and also you’ve seen the EBITDA information they’ve there. Due to the size of the pandemic, there are a few small operators which are nonetheless challenged by the size of the pandemic. And actually, the end result there may be fairly dependent upon HHS assist, however extra importantly, the restoration within the senior housing enterprise, which we anticipate to be strong, and we anticipate to get the advantage of that over time.
Operator
Subsequent, we’ll go to Juan Sanabria with BMO. Your line is open.
Juan Sanabria — BMO Capital Markets — Analyst
Hello. Simply hoping to observe up on Steven’s query on the triple-net portfolio, what proportion is paying type of money 1 instances EBITDA? Are you able to quantify the potential upside as these leases revert to market — to the contract rents?
J. Justin Hutchens — Govt Vice President of Senior Housing
Yeah, positive. So there’s — as Debbie mentioned, that operators which have had elongated challenges. There’s just some they usually every signify lower than 1% of our general portfolio. These operators will profit from HHS funds, they’ll profit from operational enhancements and the restoration of senior housing simply as our SHOP portfolio does as nicely. So we’re anticipating that the triple web would behave equally by our store portfolio. We do have some money circulate paying tenants, and that’s in a spread of round 15% to twenty%.
Operator
Subsequent, we’ll go to Vikram Malhotra with Mizuho. Your line is open.
Vikram Malhotra — Mizuho — Analyst
Morning. Thanks for taking the query. So perhaps simply stepping again, Debbie and Justin, simply eager about form of the exterior development piece of it, as you outlined the observe document and what you’ve completed in 2021. As we glance to ’22 and ’23, are you able to speak about simply how you consider rising in senior housing, specifically, with what you’re seeing essentially the longer-term development alternatives and perhaps particularly speak about on steadiness sheet versus perhaps utilizing extra of a JV construction?
Debra A. Cafaro — Chairman and Chief Govt Officer
Good. I’m going to ask John Cobb to handle the senior housing query, and I’d anticipate most of our senior housing to be on steadiness sheet.
John D. Cobb — Govt Vice President and Chief Funding Officer
Yeah, that is John Cobb. Yeah, I imply, I believe most of our pipeline, which is pretty strong immediately actually type of mirrors what we talked about in 2021. We’re seeing numerous senior housing. We’re seeing some choose life science growth alternatives with our companions, Wexford. And we’re seeing a number of medical workplace buildings, primarily with our current companions that we have now in our portfolio. However by and enormous, it’s senior housing, we’re seeing some actually good high-quality portfolios on the market which are — we anticipate to transact in 2022. So we’re very excited and taking a look at these transactions and hopefully, buying them.
Operator
Subsequent, we’ll go to Tayo Okusanya with Credit score Suisse. Your line is open.
Debra A. Cafaro — Chairman and Chief Govt Officer
Tayo?
Operator
Go forward. Your line is open.
Omotayo Okusanya — Credit score Suisse — Analyst
Hey. Are you able to hear me?
Operator
Yeah. Go forward.
Debra A. Cafaro — Chairman and Chief Govt Officer
Sure, we will.
Omotayo Okusanya — Credit score Suisse — Analyst
Good. Sure, good. Good morning, everybody. Good quarter, nice to see issues on the right track. I wished to maneuver off senior housing, speak a bit bit in regards to the workplace portfolio. After which in 4Q, actually robust same-store NOI development but once more from the MOB, considerably weaker on the Life Sciences facet. I puzzled in the event you may speak a bit bit about what occurred with each areas to type of carry out the robust efficiency at considerably underperformance? After which how can we take into consideration that going ahead in 2022?
Debra A. Cafaro — Chairman and Chief Govt Officer
Effectively, you met [Phonetic] Pete Bulgarelli right here. So Pete, are you able to deal with the drive [Phonetic] within the first?
Peter J. Bulgarelli — Govt Vice President of Workplace, President and Chief Govt Officer of Lillibridge Healthcare
Yeah, to determine the best way to activate my mic. It’s simply so uncommon. Yeah. So let’s first speak about MOBs. We had a terrific actually second half in 2021. As Bob had already talked about, we did a major quantity of recent leasing. Actually, for all of workplace, we did 3.7 million sq. ft of complete leasing. The brand new leasing was considerably increased than 2020 and for MOBs and even increased than 2019. Our retention, as Bob talked about, was 86% for the complete yr. For the quarter, it was 92% and most enjoyable for December was 95%.
What I’d say is that it simply wasn’t numerous leasing in MOBs. It was actually high-quality leasing. Simply to offer you an instance or two, our weighted common lease time period for brand new leases had been 9 years. And what that did within the — that’s for the quarter, and what that did is prolonged the entire portfolio’s Walt from 4.8 years to 5 years. Identical factor on escalators.
Our escalators for brand new leasing had been 2.9% for the quarter. And that elevated the entire portfolios escalators by 30 foundation factors. So very substantial. And what that allowed us to do is to develop for the primary time in a very long time, two quarters in a row at per quarter. So in the event you undertaking ahead on MOBs within the first quarter of ’22, we’d anticipate that pattern to proceed, actually on the premise of getting increased occupancy late within the yr and that carrying over. And I can inform you, in January, we’re on observe in MOBs to realize what we mentioned we’re going to do. So shifting to R&I, and I’ll return to the fourth quarter I believe you want a bit context. In R&I, we had an excellent yr. We grew by 13.9% for the complete yr.
And with out the termination charge, we nonetheless grew by nearly 4%. And in the event you have a look at the supplemental, income was high-quality. We had good income for R&I within the fourth quarter. however we had some increased bills than regular within the fourth quarter, primarily round as buildings begin up, you go from rogue dust to a constructing to an occupied constructing Actual property taxes take some time to type of catch up. And that’s one of many elements within the fourth quarter. We had a really giant tax cost within the fourth quarter.
Secondarily, lots of the buildings type of got here again to life grew to become occupied once more within the fourth quarter. In consequence, utilities went up considerably along with in Baltimore and in Philadelphia, two of our bigger places, there have been giant utility fee will increase. So now — so we’re very pleased with the R&I efficiency in ’21. So in the event you undertaking ahead to ’22, they are going to cowl the steadiness of what I already described for MOBs, it is going to be largely on fee — sorry, on occupancy development carrying into the primary quarter and powerful expense management. So I’m very bullish in regards to the workplace enterprise actually in 2022. Sorry for the lengthy reply, I acquired carried away.
Operator
Subsequent, we’ll go to Joshua Dennerlein with Financial institution of America. Your line is open.
Joshua Dennerlein — Financial institution of America — Analyst
Yeah. Hey, everybody.
Debra A. Cafaro — Chairman and Chief Govt Officer
Hello.
Joshua Dennerlein — Financial institution of America — Analyst
I simply wished to ask about perhaps the residential or the resident renewals going out now? I do know for the January 1, I believe it was 8%. Simply curious how they trended for the folks rolling later. After which perhaps simply an replace on the re-leasing spreads and the way we should always take into consideration them going ahead.
Debra A. Cafaro — Chairman and Chief Govt Officer
Yeah. I’m glad you raised that as a result of clearly, as we speak about income development and the in-place January 1 fee will increase are extraordinarily necessary I believe it’s necessary to notice that, that applies to part of our portfolio, and we’ll proceed to have pricing alternatives as we cope with the anniversary renewals and fee will increase as we cope with new residents coming into the portfolio as occupancy is growing and likewise the care element, which may enhance all year long. So these are all alternatives that we have now in entrance of us. And clearly, it was a great begin with the 8% enhance in January.
J. Justin Hutchens — Govt Vice President of Senior Housing
After which I’d simply add that as we’re working to establish what the suitable pricing is shifting ahead. As I discussed, Ventas OI, which actually stands for operational insights, and actually taking the perfect of our knowledge analytics, combining it with our working expertise and the expertise and experience of our working companions. We gather huge quantities of geospatial knowledge and demographics wealth penetration charges, new development to coach our demand and provide forecasting fashions, which have been remarkably correct because it pertains to decision-making on pricing, acquisitions, inclinations. So we have now that strategy our disposal and the levers that Debbie talked about round care, avenue charges and the anniversary hire will increase that can occur all through the remainder of the yr.
Debra A. Cafaro — Chairman and Chief Govt Officer
And the demand that we’re seeing from the leads clearly demonstrates the worth proposition and the robust shopper demand for these companies. And so that’s tailwind as nicely that ought to assist these efforts.
Robert F. Probst — Govt Vice President and Chief Monetary Officer
I’ll add. I don’t know in the event you talked about this, the re-leasing spreads have been bettering. Market value is firming. It’s clearly basic.
Debra A. Cafaro — Chairman and Chief Govt Officer
Sure.
Robert F. Probst — Govt Vice President and Chief Monetary Officer
So the mix of the in-place will increase and bettering re-leasing unfold, the care element, which may be priced all year long and the anniversary pricing. In a dynamic inflationary surroundings, there’s a variety of totally different levers at our disposal.
Debra A. Cafaro — Chairman and Chief Govt Officer
Thanks, Josh.
Operator
Subsequent, we’ll go to Richard Hill with Morgan Stanley. Your line is open.
Adam — Morgan Stanley — Analyst
Hey, you’ve gotten Adam [Phonetic] on for Wealthy. Good morning, guys. I hope you guys are all nicely. I simply wished to type of ask in regards to the type of the expense management and the company labor. I acknowledge that the type of the pressures there. type of wished to see in the event you may perhaps type of quantify the type of December versus January versus February up to now impacts. How have tendencies gone the company labor utilization elevated over these three months, lower type of in the event you may simply type of quantify the sequential transfer that I believe could be type of useful to consider how type of the quarter is enjoying out and what sort of the outlook could be for the subsequent couple of quarters?
Robert F. Probst — Govt Vice President and Chief Monetary Officer
Certain. Once more, I’ll direct you to web page 16 of the enterprise deck. I believe it’s good to have the ability to see how labor breaks down. And for this pool, there’s $16 million of contract labor within the fourth quarter. I’ll name it, simply $5 million-ish on a run fee foundation. We noticed that speed up to name it $6 million in December and into January. And that’s what we’ve successfully carried ahead in our assumptions. Every pool is totally different, however that type of provides you a taste of it. Clearly, if the medical scenario improves, the staffing continues to get traction, that will be a possibility. However that’s how we dimensional that value.
Operator
Subsequent, we’ll go to Michael Carroll with RBC Capital Markets.
Michael Carroll — RBC Capital Markets — Analyst
Sure, thanks. You guys did a great job detailing your latest capital recycling transactions. I assume the place does Ventas stand in that general course of? Imply how a lot of the present portfolio particularly within the seniors housing type of falls in that non-core bucket that the Firm would more likely to finally promote out of?
J. Justin Hutchens — Govt Vice President of Senior Housing
Hello. It’s Justin. I’m glad to report, as I mentioning all of the actions we’ve taken that — the heavy lifting is absolutely behind us. There’ll all the time be some non-core belongings that we’re seeking to promote or transition or spend money on or do one thing to create worth, however it is going to be a small quantity shifting ahead.
Operator
Okay. Subsequent, we’ll go to Mike Mueller with J.P. Morgan.
Mike Mueller — J.P. Morgan — Analyst
Yeah. Hello. For the $205 million of 4Q store labor, the place do you suppose that quantity goes to you’re totally staffed at market costs however with out the heavy contract labor element?
Robert F. Probst — Govt Vice President and Chief Monetary Officer
The actual query I believe that you need to reply for that’s what’s occurring to the $189 million of in-house labor. Once more, I believe the main focus could be very a lot and rightly so been on contract labor, however the important thing when it comes to complete value is in-house labor. And that will get to the macro query of the place the labor market and due to this fact, inflation go, which I’m not going to fake I do know the reply to. I believe the economists will inform you lots of them that, that can — that macro scenario will enhance within the again half. We subscribe to that, however very robust to name. And so we’re not going to make a long-term focus.
Debra A. Cafaro — Chairman and Chief Govt Officer
And within the close to time period, we’re projecting primarily a run fee within the quarter.
Robert F. Probst — Govt Vice President and Chief Monetary Officer
Proper.
Operator
Subsequent, we’ll go to John Pawlowski with Inexperienced Avenue.
Jordan Sadler — KeyBanc Capital Markets — Analyst
Hey, thanks for the time. Justin, a fast query for you, and apologies in the event you’ve chatted about this in latest quarters, however I hope you’ll be able to assist quantify the working upside of latest initiatives you rolled out and you might be at present rolling out new to the Firm? So simply attempting to know how a lot increased the earnings and the NOI energy of the SHOP portfolio might be below your purview versus the Ventas developed?
J. Justin Hutchens — Govt Vice President of Senior Housing
Hello. Yeah. Effectively, so the — there’s been numerous actions during the last couple of years. Actually, some priorities had been accelerated based mostly on the truth that we had been going by the pandemic. And the aim of all the actions, whether or not we’re buying or disposing or making a call to speculate capex, transitioning belongings below new administration is to create worth and create only a better alternative to drive NOI over time. So I believe actually, time goes to inform. We’re off to a great begin. We’re happy with that we set expectations within the fourth quarter, and we’re capable of meet these expectations, and we’re excited in regards to the development within the first quarter off to a great begin.
Operator
Subsequent, we’ll go to Daniel Bernstein with Capital One. Your line is open.
Daniel Bernstein — Capital One — Analyst
Good morning. No person get excited. I’m going to ask an MOB query. I simply — go forward. Not simply you guys, however your friends have I’ve additionally spoken within the final a number of quarters about higher re-leasing spreads, higher annual hire bumps and MOBs. And so given the inflationary surroundings, type of what — how do you suppose the hire bumps can enhance going ahead? I imply can we push north of three% on hire bumps? Can we see increased re-leasing spreads and type of what’s the willingness of tenants and MOBs to simply accept that previously, that hasn’t been the case. However not too long ago, it looks as if it has been.
Debra A. Cafaro — Chairman and Chief Govt Officer
I imply one factor that’s actually necessary to recollect within the MOB enterprise is that the belongings are priced and have a low cap fee due to the reliability of the money flows, as we’ve seen over the previous two years, the advantage of that and the dependable development. Additionally they have increased margin, a a lot decrease labor element. And so you need to have a look at either side of the equation, I believe, if you’re eager about the chance/reward of an asset class. And so Pete can reply, we ask him each quarter-hour if they’ll get increased escalators. And so we’ll let him reply that.
Peter J. Bulgarelli — Govt Vice President of Workplace, President and Chief Govt Officer of Lillibridge Healthcare
Daniel, I believe it’s an ideal query. That is Pete. And on condition that our portfolio is essentially on-campus, there aren’t numerous choices simply sitting there ready to compete with you. Often, it requires new development to compete. And positively, with inflation and the surroundings, we have now immediately, the price of constructing a brand new MOB and the required leasing charges have gone up. And so our leasing workforce are is all — it’s very location in city-specific so far as what’s occurring to the demand of medical workplace area in addition to development prices. However in lots of circumstances, we’re competing in opposition to brand-new medical workplace buildings, which does give us room to boost our escalators and truthfully, our preliminary rental charges.
Debra A. Cafaro — Chairman and Chief Govt Officer
Yeah. And bear in mind, you’re pushing by the expense will increase to the tenants as nicely. So you actually have to take a look at the income and the expense facet to actually consider the advantages of the MOB.
Peter J. Bulgarelli — Govt Vice President of Workplace, President and Chief Govt Officer of Lillibridge Healthcare
Yeah. We solely have a few p.c of our leases which are gross leases. Relaxation are some style of pass-throughs of bills.
Debra A. Cafaro — Chairman and Chief Govt Officer
Thanks, Daniel.
Operator
And subsequent, we have now a follow-up from Juan Sanabria with BMO.
Juan Sanabria — BMO Capital Markets — Analyst
Hello. Only a fast modeling query. For 2020, realizing you’re not giving full yr steering for earnings. However simply wished to get a way of what you guys expect from a FAD capex and G&A perspective for these two line gadgets?
Robert F. Probst — Govt Vice President and Chief Monetary Officer
Certain. So I’ll begin with G&A. We did give a $37 million quantity for the primary quarter with inventory comp amortization, which is our FFO remedy on that. So $37 million. And in the event you have a look at simply 2021 G&A Clearly, that was an excellent yr when it comes to year-over-year in value administration. We hope this yr, we get again to regular enterprise as traditional, to some extent, which can clearly have an effect when it comes to simply T&E and issues like that going up. However first quarter, very a lot in keeping with threat quarter year-over-year, frankly. When it comes to FAD capex, actually, there’s issues — a number of issues I’d spotlight. Clearly, with the acquisitions we’ve completed, notably in new senior in the next store portfolio base. There’s extra FAD capex {dollars}. And secondly, and Justin ought to contact on this, extra alternatives for us, I believe, to actually focus utilizing our OI as now branded to establish alternatives to spend money on the portfolio. And so we’ll see some acceleration there.
J. Justin Hutchens — Govt Vice President of Senior Housing
Yeah. And I’d simply say in step with a few of my different feedback, the aim is to create worth. Capex is a device at disposal and with using our analytics and operational experience and mixed with the working companions, native market expertise, we will make sensible selections and anticipate returns on that funding.
Operator
Subsequent, we have now a follow-up from Jordan — we have now a follow-up from Jordan Sadler with KeyBanc Capital Markets.
Debra A. Cafaro — Chairman and Chief Govt Officer
Okay.
Jordan Sadler — KeyBanc Capital Markets — Analyst
Thanks. A fast one right here for you, Justin, after which a follow-up to Bob. Simply Justin, form of the restoration this yr, simply mathematically, I’m curious in the event you’ve taken a have a look at the portfolio uplift potential all year long, I imply, may this yr look much like final yr when it comes to the occupancy good points, given form of the strengths and lead you’re seeing early on?
I do know it’s very troublesome to look out. However I’m type of saying mathematically, given form of the — a little bit of a rise in occupancy already. How are you eager about form of the potential uplift in occupancy all year long within the SHOP portfolio? After which, Bob, simply on the asset gross sales or really, there’s a mortgage maturing this yr, let’s say, nearly $500 million. I’m simply interested in timing or expectations will or not it’s repaid or prolonged? Thanks.
Debra A. Cafaro — Chairman and Chief Govt Officer
Yeah. I’ll take the mortgage. That’s a mortgage that may be prolonged. And so we — that’s our expectation on the present time. After which when it comes to occupancy, I believe we’re projecting vital year-over-year occupancy within the first quarter, which has been outperforming but following seasonal patterns. And so that’s one thing to consider if you’re wanting on the slope for the yr.
Operator
Subsequent, we have now a follow-up from Tayo Okusanya with Credit score Suisse.
Omotayo Okusanya — Credit score Suisse — Analyst
Sure. Thanks very a lot. Only one for Justin perhaps Bob. You probably did speak in regards to the re-leasing spreads bettering, however nonetheless being detrimental. And I assume the query I’ve is, with that to being detrimental, I assume I’m nonetheless so what shocked that you may push renewals as excessive as particularly type of given once more, industry-wide occupancy continues to be type of nicely delivered, it was pre-pandemic. So attempting to know these dynamics of why is it that you just don’t get that a lot pushback when there’s nonetheless a excessive emptiness industry-wise and market fee simply to type of beneath the place renewal charges are.
Debra A. Cafaro — Chairman and Chief Govt Officer
That’s an ideal commentary. I believe it actually does go to a worth proposition that being supplied by the communities for the theaters and their households that at this stage of occupancy, we have now been capable of efficiently drive pricing within the first as of the start of the yr, and that portends nicely type of for the longer term as occupancy will increase. So Justin, do you need to speak in regards to the regular re-leasing spreads and the way.
J. Justin Hutchens — Govt Vice President of Senior Housing
Certain. Yeah. So the re-leasing unfold, Bob talked about this, that we noticed it tighten by the top of ’21, even all the way in which again to pre-pandemic ranges, which had been like detrimental mid-single digits. That — the high-class drawback is that we have now the big will increase that occur in January, and then you definitely begin evaluating to comparatively increased rents. And so technically, the releasing unfold widens, however it doesn’t imply that your pricing energy doesn’t proceed to enhance. And one factor that we do sit up for that this backdrop appears to assist is the chance given the demand on the doorstep, to finally get to a spot the place you’ve gotten optimistic re-leasing spreads once more, which we’ve had in different components — different — all through the sector’s historical past, we’ve seen that at instances. And positively, there appears to be assist shifting ahead for that to occur once more.
Debra A. Cafaro — Chairman and Chief Govt Officer
Thanks, Tayo.
Operator
And subsequent, we’ll go to a follow-up for Vikram Malhotra with Mizuho.
Vikram Malhotra — Mizuho — Analyst
Thanks a lot. Simply perhaps one broader query as we glance into second half ’22 and ’23. With new senior and simply your different acquisitions, you now have extra of a tilt in the direction of IL versus AL within the RIDEA pool finally same-store pool. What does that imply from an expense development standpoint after which a pricing energy standpoint for the second half in ’23?
J. Justin Hutchens — Govt Vice President of Senior Housing
Effectively, definitely, unbiased dwelling is a high-margin enterprise, has comparatively low labor prices in comparison with assisted dwelling. It’s rather less need-driven. So you might not see the occupancy pop, however we anticipate the next ceiling in occupancy and unbiased dwelling over time as a result of there’s much less fly that faces it. And that’s in step with historic observe document of unbiased dwelling as nicely. So we sit up for income development within the unbiased dwelling communities and definitely assisted dwelling is need-driven. It performs nicely. It looks as if it doesn’t matter what the backdrop is so long as there’s a option to pay for the service, which given the housing values and wealth demographics there may be. And so we anticipate that to proceed as nicely. And the chance actually is to cost in labor prices over time. And we’re — as we’ve mentioned, we’re off to a great begin given our highest in-house unfold will increase.
Debra A. Cafaro — Chairman and Chief Govt Officer
One different factor we like about unbiased dwelling is absolutely — it meets — that is — we’re attending to the interval of now we’re over 8% — rising over 3%. So we’re actually hitting type of that demographic growth. And the unbiased dwelling tends to satisfy that [Phonetic] buyer had a bit bit earlier age. In order that’s one other a part of the enterprise as well as type of the decrease labor value that we like. Nice. Okay. We’ve yet one more query. Okay.
Operator
Subsequent, we’ll go to Nick Joseph with Citi.
Michael Bilerman — Citi — Analyst
Hey, it’s Michael Bilerman right here with Nick. Good morning. I hoped to go simply when it comes to acquisitions when it comes to the fund, as your value of capital has improved, each from a debt and fairness perspective, how do you form of have a look at that chance to purchase inside the fund relative to on steadiness sheet? And the way are you balancing that as you’re wanting on the transaction marketplace for alternatives?
Debra A. Cafaro — Chairman and Chief Govt Officer
Yeah. Thanks. Yeah. So the fund is a superb device. Clearly, our VIM enterprise goes robust, and it provides us an ideal device to proceed to develop. It was very — the fund itself was very thoughtfully conceived with the intention to be a web additive element of our development technique in order that it truly is designed to handle — we’re very disciplined about capital value and capital allocation. And so it’s actually designed to handle lots of the alternatives that had been actually not as engaging to us on steadiness sheet due to the connection between our value of capital and the pricing of that kind of belongings.
An incredible instance is our South San Francisco life science constructing, our John Hopkins life science constructing, which had been put within the fund with nice success. And people are issues that we might not have been capable of purchase had we been doing it on steadiness sheet, however now we have now 20% curiosity in it. We’ve asset administration charges. We’ve finally, different varieties of financial incentives if the efficiency is sweet, which it has been. So a really considerate type of outlined technique to make use of them to develop our enterprise for the profit each of our public shareholders and the third-party institutional capital.
Operator
And that concludes immediately’s question-and-answer session. I’ll now flip it again over to Debra Cafaro, Ventas’ Chairman and CEO.
Debra A. Cafaro — Chairman and Chief Govt Officer
Effectively, it’s been an ideal name, and I’m very glad to finish the yr on an excellent quarter and sit up for one other optimistic one within the first. I actually need to thank everybody for becoming a member of our name immediately. I can’t inform you how a lot we recognize your ongoing assist and curiosity within the Firm, and we sit up for seeing you in individual quickly. Thanks.
Operator
[Operator Closing Remarks]
