Land & Buildings Seeks Board Changes at Ventas—Again; Activist sets up what could be its second campaign at the big healthcare REIT

Activist investor Jonathan Litt is again seeking board changes at Ventas, the big owner of senior-housing communities.

Litt's Land & Buildings Investment Management says the changes are needed to help reverse underperformance at the real-estate investment trust, according to a letter it plans to send the company's shareholders that was viewed by The Wall Street Journal.

It sets up what could be Land & Buildings' second proxy fight at the company after the investor ran a campaign to nominate Litt and another candidate in 2022, an effort that fell short.

While Land & Buildings notes in its letter that the firm remains open to working with Ventas, Litt writes that it will do "whatever is necessary" to turn things around. That could include nominating multiple directors, according to people familiar with the activist's thinking.

The window for shareholder nominations at Ventas runs from Dec. 18 to Jan. 17, according to a securities filing.

The real-estate-focused investment firm owns roughly $50 million of Ventas's shares, similar to the size of its position in 2022. That amounts to a stake of well under 1%, given Ventas's market value of roughly $17 billion. Shares of Ventas are down about 6% so far this year.

Chicago-based Ventas's portfolio consists of more than 1,200 properties across the country and in Canada and the U.K. It includes over 800 senior-housing communities and more than 400 outpatient medical facilities, according to its website.

Litt, founder and chief investment officer of Land & Buildings, writes in the letter that when the firm previously ran its campaign, some shareholders opted to give Ventas's board the "benefit of the doubt and allow more time to right the ship." The company has been seeking to close a "valuation and performance gap" with Ventas's closest rival, Welltower, according to the letter.

Land & Buildings notes that proxy-advisory firm Institutional Shareholder Services said in 2022—when it recommended Ventas shareholders vote for all of the company's directors—that "should the efforts of the company's leadership to close the multiple gap fall short, shareholders have the potential solution of supporting more substantive changes at next year's annual meeting."

Ventas has lost roughly $7 billion in market value since Land & Building initiated its last contest. Its share price has underperformed Welltower's by more than 30% so far in 2023, the letter says.

The company has said it was among the top-five performing REITs in the S&P 500 for 2022.

This wouldn't be the first time Land & Buildings, founded in 2008 and based in Stamford, Conn., has staged a repeat proxy battle.

In 2017, the firm narrowly lost a campaign for two board seats at mall operator Taubman Centers, now owned by Simon Property Group, only to come back in 2018 and successfully secure one for Litt .

In late 2022, Land & Buildings had one of its two director nominees elected at real-estate investment trust Apartment Investment & Management, or Aimco, in the first proxy contest to go to a vote since new rules requiring the use of a so-called universal proxy card were enacted.

Litt has taken on a number of real-estate-focused companies over the years, including Saks Fifth Avenue parent Hudson's Bay Co., casino-real-estate owner Gaming and Leisure Properties and theme-park operator Six Flags Entertainment.