Omotayo Okusanya: Okay, that’s helpful. And then if I could sneak one more in. In terms of Brookdale, which is the other rent lease that’s coming up, again, coverage is great and all that’s fine. But curious if structurally that could changed from being a triple net portfolio to much more of a Ragea [ph] portfolio, just given how well your SHOP portfolio is doing and how strong senior housing fundamentals are generally.
Debra Cafaro: Tayo, thanks for asking that. Brookdale is about 7% of our NOI. And you’re right, the coverage has been improving, and it’s at about 1.3 times on a trailing basis. And again, the trends in those markets also support a lot of intermediate-term occupancy increases. And so there are lots of positive outcomes for Ventas as we think about that, which is as you mentioned, at the end of 2025.
Omotayo Okusanya: So I guess structurally, you expected to stay the same as a triple net?
Justin Hutchens: I think when we say we have a lot of positive options. I mean these communities are in markets that also have a tremendous upside from a supply-demand standpoint, the demand metrics are excellent. For the same point Debbie made on Kindred, the trailing coverage is always a little out of date. So there’s even better performance, I’m sure to come. So we like the opportunity really in any structure to own these communities. And that’s the positive opportunity that we’re facing.
Omotayo Okusanya: Thank you.
Operator: Your next question comes from the line of Juan Sanabria of BMO Capital Markets. Please go ahead.
Juan Sanabria: Hi, good morning. I just wanted to just wanted to ask around acquisitions, and it seems like you’ve got another group of properties maybe you’re looking at. How we should think about funding that? And how you think about your cost of capital with leverage still relatively high but definitely improving.
Robert Probst: Juan, I’ll take that one. Thanks. Starting with the financial returns that we’re seeing on these investments, which Justin articulated are really, really attractive even at the current cost of capital. We talked last earnings call about the fact that on balance sheet financing can work given those returns, and in fact, baked that into our guidance. And that’s what we executed on in the first quarter. We fully funded those senior housing investments with equity. And as we look forward, given the pipeline, what we’ve incrementally added to guidance is more disposition proceeds at the source. So another couple of hundred million across asset classes as a source of funds just because we see the opportunity in front of us. So pretty much doing what we said and building more dry powder would be my summary.
Juan Sanabria: Yes. And a follow-up for Justin on the 1,000 basis points of occupancy upside on the U.S. portfolio. I guess, first, is that a same-store comment or an overall portfolio comment and kind of where is the starting point now. And what do you see as the kind of the structural ceiling for occupancy knowing there’s always some churn of customers or seniors in and out of the communities.
Justin Hutchens: Great question. So first of all, it’s obviously U.S. focused and it’s a total SHOP, and we’re running just under 80% occupied in both our independent living and assisted living products in the U.S. It’s about two third assisted living in the U.S. in our total SHOP portfolio. We do see a lot of upside. The structural upside opportunity in my view, through experience and philosophically is 100% occupied. And we have several communities that are at 99%, 100% occupancy. And so there’s nothing like a completely full community to really demonstrate the operating leverage and also just deliver great care and services. And so that’s the goal. And we have operators that are starting to deliver on that goal, certainly in Canada, it’s starting to happen in the U.S. in certain markets, and we’ll keep driving. And it’s just great to have so much demand at our doorstep and to be able to look forward and have confidence around the opportunity.
Juan Sanabria: Thank you.
Operator: Your next question comes from the line of Ronald Kamdem of Morgan Stanley. Please go ahead.
Ronald Kamdem: Great. Just two quick ones. So one, trying to connect the dots on the occupancy here. You put a lot of bread crumbs in the presentation obviously starting with 1,000 basis points occupancy upside than we’re seeing here that you finally hired senior VP and senior housing. The Ventas OI and sort of the occupancy gains you’re getting on that CapEx investment. I guess the question to be direct is, is 275 to 300 basis points of occupancy gain a year. Is that the new normal, and if not, like what would be sort of stopping that?
Justin Hutchens: So a couple of comments in response here. So I mentioned that our U.S. is projected to be over 300-basis-point occupancy growth this year. So that’s a set to think about. I also mentioned that we’re just at the beginning of the key selling season. So we’ll be seeing how that plays out. You make a good point. We’re optimistic about the trends leading into it. So we’ll see where that goes. We have made a new hire, Senior VP of Senior Housing and Chief Revenue Officer for Senior Housing. This person will introduce when she starts in the first part of June, but her job really will be to lead the SHOP platform to drive performance and has a very, very strong background in top line performance in senior housing and in hospitality, and she’s held leadership roles in global Fortune 500 companies.
So really excited about the addition of the team and continue this momentum and work with what is really a tremendous existing team. That’s really been driving the OI platform. And I think the new addition will just make us even stronger.
Operator: Your next question comes from the line of Joshua Dennerlein of Bank of America. Please go ahead.
Joshua Dennerlein: Great. Hey guys, good morning everyone. The SHOP occupancy update in 1Q that was better than you guys were expecting and then you revised the outlook higher for the year. My question revolves around, is that driven by like the market being better, so like the beta being driven from the aging of America? Or is there some kind of like alpha overlay that you guys are doing internally that’s driving better customer demand, and that’s why you’re getting this like uplift. If the latter, could you just maybe elaborate on what you’re doing to drive that outlook?
Debra Cafaro: It’s both. And I sort of take the macro and then I defer to Justin on all of the kind of OI-driven actions and initiatives to deliver outsized performance within a demand-driven macro.
