CHICAGO—Timing and opportunity lay behind Ventas Inc.'s simultaneous decisions to expand into the $1-trillion hospital business and spin off most of its skilled nursing facility platform into a separate company. In a conference call Monday, the REIT's chairman and CEO, Debra A. Cafaro, said that “we've been waiting a long time” to find the right vehicle to enter the hospital sector and that “there is great opportunity in the marketplace” for an SNF spinoff, currently known as SpinCo.

VTR's decision to acquire Nashville-based Arden Healthcare Services comes as both hospital expenditures and emergency room visits are trending upward, according to an investor presentation. Additionally, Americans age 65 and older are expected to increase from 14% of the total US population in 2012 to 22% in 2060. The Ardent acquisition, Cafaro said on Monday's call, “positions us to be a consolidator in that huge, attractive space.”

With 3.2 million square feet of hospital space across 10 campuses in in Amarillo, TX. Tulsa, OK and Albuquerque, NM, the $1.75-billion Ardent deal will carve out a new slice of the NOI pie for VTR. Once the deal closes, hospitals will represent 6% of the REIT's NOI—a percentage that could grow significantly over time, since REITs have “minimal” representation in the US hospital market, according to the presentation.

Conversely, acute care/skilled nursing will comprise a smaller slice of that pie: about 5% of post-spinoff NOI, compared to 18% currently. VTR's remaining SNF portfolio will be run by publicly traded operators, whereas SpinCo's 355 triple-net leased SNFs will be operated by 44 private companies.

Following completion of the spin-off, approximately 83% of Ventas's NOI will come from the top 20 operators in seniors housing, post-acute facilities and hospitals, Cafaro said on Monday's call. Approximately 83% will come from private pay assets, and more than 50% will derive from medical office buildings and seniors housing operating assets that have greater upside to a growing economy. Cafaro said the impact of the Ardent and SpinCo deals is “compelling” from a shareholder standpoint: higher NOI and funds from operations per share growth and dividend growth of at least 10%.

VTR's president since 2010, Raymond Lewis, will become CEO of SpinCo. Lori Wittman, who will serve as SpinCo's EVP and CFO, currently is SVP, capital markets and investor relations at VTR. Douglas Crocker II, a VTR director since 1998, will serve as non-executive chairman of SpinCo's board.

Bloomberg Business reported Monday that market reaction to VTR's news was positive. Shares of the REIT saw their biggest intraday increase since the fall of 2011.