Bank of America Reiterates Buy, $62 Target on Ventas

Bank of America maintains its Buy rating and $62 price target on Ventas VTR as the company looks to grow MOB portfolio with $765M CSA acquisition. Bank of America says, "VTR announced an agreement to acquire healthcare REIT Cogdell Spencer (CSA) for $4.25/share. VTR would assume ~$250M of mortgage debt. Pricing at ~$200/SF with an expected initial yield of 7.0-7.5% before G&A synergies compares to recent comps of ~$220/SF and 7.0-8.0% cap rates, per RCA and other healthcare REIT MOB transactions. VTR expects the transaction to add +3-5c per year to normalized FFO. The proposed transaction fits well with VTR's strategies of growing its MOB (Medical Office Building) platform and private pay exposure." VTR closed at $55.37 per share on Tuesday.