Major REIT Ventas Enters Behavioral Health With $58M Eating Recovery Center Acquisition

Chicago-based Ventas Inc. (NYSE: VTR) revealed it acquired a building where Eating Recovery Center operates for $58 million, marking an entry into behavioral health for the health care-focused real estate investment trust.

Ventas announced the deal as part of its third-quarter 2021 financial performance disclosures. The REIT is one of the largest owners of health care real estate in the United States, with about 1,200 properties in senior housing, life science, medical office and other health care areas. Ventas did not name the seller in its announcement.

The company’s entrance into the “higher yielding” behavioral health sector came as the REIT stepped up its acquisition activity generally last quarter, BMO Capital Markets analysts remarked in a note.


“Establishing a new relationship with industry leader Eating Recovery Center, we acquired a Class A asset under a long-term lease in this rapidly growing sector,” Ventas CEO Debra Cafaro said on the REIT’s Q3 earnings call.

The Eating Recovery Center building is a 102,000-square-foot facility in Plano, Texas. It houses 72 inpatient beds as well. 

The building was acquired by Cawley Partners in 2018 and leased with ERC who eventually took over the whole building.


Travis Ives and Gino Lollio of Cushman & Wakefield’s US Healthcare Capital Markets Team in collaboration with other members of the firm’s Healthcare Advisory Group represented Cawley Partners in the sale to Ventas.

Eating Recovery Center is a national provider of eating disorder treatments, and Ventas identifies the company as a leader in a rapidly growing market, according to a news release.

Apax Funds and Oak HC/FT partnered to acquire Denver-based Eating Recovery Center for $1.4 billion from CCMP Capital, Behavioral Health Business reported in October.

Eating Recovery Center is one of the nation’s largest eating disorder treatment providers, operating around 30 centers across Colorado, California, Illinois, Texas, Ohio, Maryland and Washington.

The Plano facility was established in 2014 and offers one of the most comprehensive, medically-supervised eating disorder treatment programs in the country, according to the Eating Recovery Center website. It serves all ages at all levels of care. This includes inpatient, residential, partial hospitalization and intensive outpatient services.

The facility is 100% leased with 16 years remaining in the lease term, Ventas disclosed. The acquisition price represents a 7.2% yield on the expected 2022 net operating income.

Over the first nine months of 2021, Ventas completed or announced $3.7 billion in investments. The company’s focus is on expanding its portfolio of higher-margin senior housing independent living assets in the U.S. and Canada; deepening its presence in life sciences, research and innovation facilities; and selectively expanding its medical office portfolio.

On September 21, Ventas closed its acquisition of real estate investment trust New Senior in an all-stock transaction for a purchase price of $2.3 billion.

Other REITs that historically have focused on senior housing — such as Murfreesboro, Tennessee-based National Health Investors (NYSE: NHI) and Irvine, California-based Sabra Health Care REIT (Nasdaq: SBRA) — also have been expanding into the behavioral health market.

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