Ventas, Inc. (NYSE: VTR – News; “Ventas” or the “Company”) said today that it has entered into a definitive agreement (the “Purchase Agreement”) to acquire a diverse portfolio of 67 healthcare and seniors housing properties in a transaction with entities affiliated with Canada’s Reichmann family (collectively, the “Seller”) for approximately $649 million.
The facilities are located in 16 states, and the portfolio consists of four separate asset groups and contains 5,855 beds/units:

— Health Care Group – Five high end multi-level retirement communities
(CCRCs) and two dementia care communities located in infill markets in
southern California (the “HCG Portfolio”);

— United Rehab – 19 healthcare assets (17 skilled nursing facilities
and two rehabilitation hospitals) located primarily in Kentucky;

— Elmcroft – Eight newer assisted living communities located in the
southeastern United States; and

— Outlook Pointe – 33 newer assisted living communities located
primarily in the mid-Atlantic region.

“We are excited to announce this acquisition, which exemplifies the continued execution of our strategic growth and diversification plan,” Ventas Chairman, President and CEO Debra A. Cafaro said. “In one step, we are adding an important new tenant relationship, acquiring a diverse portfolio of assets with a large component of private pay revenues, and continuing our commitment to strong internal growth from rental escalations.”

At closing, Ventas will lease the properties to subsidiaries of Senior Care, Inc. (collectively, the “Tenant”) on a 15-year triple-net basis with two five-year extensions. The transaction will initially add about $50 million in annual rent to Ventas’s annual rental revenue, representing a lease rate of 7.75 percent on the portfolio. Ventas expects the transaction to be accretive to the Company’s normalized Funds from Operation (FFO) and to close late in the fourth quarter.

BENEFITS OF THE TRANSACTION
The Company said expected benefits of the proposed transaction include:

— Diversification by tenant and by asset class. Upon closing of the
transaction, (1) annualized REIT revenue from Kindred Healthcare, Inc.
(NYSE: KND – News; “Kindred”) will represent approximately 46 percent of
Ventas’s run rate total revenue, and (2) annualized revenue from
private pay assets in the Company’s portfolio will represent
approximately 48 percent of the Company’s run rate total revenue, in
each case based on the Company’s second quarter revenues and assuming
all acquisitions closed at the beginning of the period.

— The transaction is expected to add approximately $0.04 to the
Company’s normalized fully diluted FFO per share in the first year
following the closing. Ventas expects to issue updated normalized FFO
guidance following the closing of the transaction.

— A seasoned Tenant executive management team led by Pat Mulloy and Tim
Wesley, with economic alignment and a track record of success in
seniors housing. Pat and Tim will serve as Chief Executive Officer
and Chief Financial Officer, respectively, of Senior Care, Inc., a new
national provider of seniors housing and care services headquartered
in Louisville, Kentucky. Gary Smith, the former CEO of Elmcroft
Assisted Living, will join the management team as Chief Operating
Officer.

— Acquisition price per bed/unit of $111,000, which the Company believes
is below replacement costs.

— Continued strong cash flow growth due to annual lease escalations tied
to changes in the Consumer Price Index, with an expected floor of 3
percent and a cap of 5 percent. At an average annual escalation
amount of 4 percent, the unlevered lease yield over the base term of
the lease is expected to be 10.6 percent.

— Well-structured, pooled, multi-facility master leases secured by a
guaranty from Tenant’s parent and a security deposit of approximately
six months’ base rent under the master leases (expected to be
approximately $25 million at closing), as well as up to $18.3 million
of income support from certain Tenant-related entities with respect to
eight unstabilized properties for three years (“Income Support”). The
master leases will be cross-defaulted.

— The current portfolio EBITDAR (earnings before interest, taxes,
depreciation, amortization and rent) to rent coverage of approximately
1.15x after management fees of 3 percent on hospitals and 4 percent on
all other facilities. Earnings include the Income Support.

“We are pleased to be entering into this important relationship with the Louisville-based executive management team at Senior Care led by Pat Mulloy and Tim Wesley,” Ventas Executive Vice President and Chief Investment Officer Raymond J. Lewis said. “We believe Senior Care has excellent prospects for success and growth under their leadership.”

Ventas said the transaction will be funded through a combination of cash and equity issued to the Seller. Ventas will issue approximately 1.7 million shares of its common equity to the Seller at the closing, valued at $65 million based on the average of its recent closing prices prior to the execution of the Purchase Agreement. The cash portion of the purchase price will be funded through the assumption of up to $30 million of existing secured debt, draws on Ventas’s revolving credit facility and the issuance of senior notes or other debt securities.

On August 24, 2006, Ventas made a $156.8 million bridge loan to various affiliates of the Seller, the proceeds of which were used by the Seller to acquire the HCG Portfolio. The loan bears interest at an annual rate of LIBOR plus 500 basis points and matures in one year with a six-month extension option. It is expected that the loan will be repaid concurrently with the closing of Ventas’s acquisition of the Senior Care assets.

“Senior Care will have 74 seniors housing and healthcare assets in 16 states under lease, ownership or management at inception and expects to generate over $15 million in EBITDA (earnings before interest, taxes, depreciation and amortization) in 2007,” Senior Care CEO Pat Mulloy said. “Senior Care will be one of the largest privately held long-term care and seniors housing enterprises in the U.S., with almost 6,000 employees and a capacity to serve approximately 6,200 patients/residents. We are very pleased to begin our corporate life with Ventas’s strong endorsement, evidenced by its $649 million investment in our business.”

Completion of the transaction will be subject to satisfaction of certain conditions, including regulatory approvals. Ventas expects the acquisition to close late in the fourth quarter of 2006, although there can be no assurance that the transaction will close or, if it does, when the closing will occur. In certain cases, Ventas is entitled to receive a fee if the transaction is not completed.

Ventas, Inc. is a leading healthcare real estate investment trust that is the nation’s largest owner of seniors housing and long-term care assets. Its diverse portfolio of properties located in 42 states includes independent and assisted living facilities, skilled nursing facilities, hospitals and medical office buildings. More information about Ventas can be found on its website at http://www.ventasreit.com .

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