From counting silver dollars to building a $32B business: Debra A Cafaro on the Walker Webcast


Debra A. Cafaro is one of the most prolific CEOs in the U.S., bar none. On the latest Walker Webcast, Debra discussed her path to success, from growing up in Pittsburgh to taking over as Chairman and CEO of Ventas and saving the company. She explains the business strategies she is executing at Ventas, the trends she's seeing within the healthcare and real estate industries, her leadership style, and what led her to part ownership of the Pittsburgh Penguins.

In this Walker Webcast, Willy speaks with guest Debra A. Cafaro, Chief Executive Officer of Ventas. A graduate of Notre Dame and the University she’s engaged across non-profit, arts, education, sports and many other sectors and is an owner of the Pittsburgh Penguins. She was born to first generation immigrants who taught her to have a generous spirit even when they didn’t have much. Her father spent a lot of time with her and her sister at a time when not many fathers were doing so, and he gave her a love of sports. Her father was a postman who became interested in rare coins: receiving his paycheck in silver dollars, he began selling rare coins to supplement his income. That money helped Debra go to school; she was the first member of her family to go to college.

She transitioned from law to business in large part because of her willingness to go above and beyond and do anything for her clients. Additionally, a deep love of numbers and deal making played a large part in her transitioning fields, this led her to create meaningful relationships with members of the business community. Debra has been an outspoken advocate for women in business and often speaks to the lack of female CEOs. For women in the mid-point of their careers, she says you need to unflinchingly understand yourself and identify who you truly are and what you want. This allows you to make decisions with confidence, take risks, and organize your life.

Debra joined Ventas 20 years ago when, Debra admits, it was a bit of a trainwreck. She went in without knowing much about healthcare, and she credits a lot of her success to optimism and willingness to learn. In the beginning, her main focus was survival. She revamped the team and brought in experts to help them stay afloat and then built a strategic plan to grow the business, not just survive. She and Willy discuss the plans she made and the moves that helped grow Ventas from one stream of capital to having multiple holdings. 

One of those lines of revenue is senior housing. This business was affected by COVID-19, but Debra believes it will be coming back strong soon. In April of 2021, more seniors moved into senior housing than any other month since June 2019. This is a vital service because loneliness can be more deadly than smoking. Providing community and activity in these senior communities is a vital part of the Ventas business.

Debra never took a business class and says that learning in person and continuing to learn has been important to her. Another area of her focus on diversity. Ventas is a leader in diversity and inclusion. The data shows diverse groups make better decisions and drive better returns.

As the episode ends, Willy and Debra talk about the future and being willing to reinvent yourself.


Learn more about Ventas by visiting their company website
Connect with Debra Cafaro on LinkedIn
Learn more about Willy Walker and connect with him on Twitter and LinkedIn

Key Ideas:

00:49 - Host Willy Walker discusses current stock charts
03:30 - Willy introduced Debra
08:32 - Debra discusses growing up in Pittsburgh and her relationship with her dad
11:14 - How rare coins helped Debra go to college
15:07 - Women in business
20:34 - How Debra changed Ventas
32:30 - How COVID affected senior housing
43:01 - Ventas and diversity

Webcast Transcript:

Willy Walker: Thank you Susan, and welcome everyone to another Walker Webcast. I'm really excited to have my guest Debra Cafaro joining me today.  If you missed last week's discussion with WHOOP founder Will Ahmed, you can listen to the replay on Walker & Dunlop’s YouTube channel or on our podcast Driven by Insight.  If some of you watched the Wells Fargo Classic golf tournament this last weekend you saw WHOOP athlete Rory McIlroy win the tournament wearing his WHOOP strap.  I know that WHOOP, the PGA, and its broadcasters are working to broadcast the PGA players heart rate from their WHOOP strap to show fans what's going on in the players physiology as they step up to approach critical shots in the future. That should be a lot of fun to watch and maybe when Deb and I talk about her ownership in the Pittsburgh Penguins we can figure out whether maybe we’ll be also watching the same type of data from hockey players.  

Lots going on in the markets and a lot of inflationary pressures. I would remind people on the inflationary pressures that we are looking at data that is off of extremely low numbers for March, April, and May of last year and that we're clearly going to see some pretty big prints here.  But all of the data that we're looking at right now whether it's a stock price on various companies being up 100% over the last year, you have to also remember that those stock prices are probably where they would have been without the pandemic having come across.  So, while people are sitting there saying markets look really frothy and companies have gained a huge amount of value on the year look back, I would strongly encourage people to do a two year look back on most stock charts and we will get into Ventas’s two year stock chart because Debbie and her stock chart have been a thing of beauty over the last 20 plus years.  

Final thing I’d say is that I went back and looked in my interview with Peter Linneman from three weeks ago has been watched by 87,000 people, subsequent to Peter and I speaking. If you want to get the real insight from a fantastic economist and also real estate maven, guru, what have you, a good friend of Debbie’s and mine, Peter Linneman, you can go back and watch that. 

Okay. Debra Cafaro is Chief Executive Officer and Chairwoman of the Board of Ventas.  In addition to her work at Ventas, Cafaro is broadly engaged across the business, public policy, arts academic, sports, and nonprofit sectors.  She serves on the board of directors of PNC, she is Chairwoman of the Real Estate Roundtable, Chairwoman of the Executive Committee, and a member of the board of directors of the Economic Club of Chicago.  And she is a member of the Board of Trustees at the University of Chicago and the Chicago Symphony Orchestra. I could call you Mrs. Chicago very easily Deb.  Deb earned her BA Magna Cum Laude from the University of Notre Dame and her JD Cum Laude from the University of Chicago Law School where she was named its 2011 Distinguish Alumna.  Finally, she is an owner and member of the Management Committee of the Pittsburgh Penguins and if all that wasn't enough, she is a six-time honoree in Harvard Business Review’s top 100 CEOs from 2014 to 2020 and Modern Healthcare’s 100 most influential people in healthcare 2012, 2015, and 2019.  

So, Deb, let me start with your childhood. Growing up in Pittsburgh as the grandchild of immigrants from Lebanon and Italy, a father who was a mailman, and where the drive that makes Deb Cafaro the incredible success that you are comes from.

Debra Cafaro: Well, thank you it's great to be here, Willy and I'm very excited for our conversation. I really love talking about my parents and my childhood, because in many ways I am very much the same working-class girl from Pittsburgh that I’ve always been maybe with a few affectations here and there.  But the drive really came from my parents, I believe. We know that immigrants come here to seek a better life for their families, not so much for themselves, because often they make great sacrifices to do that.  And there is a self-selection that goes on, when people pick up and leave everything, they've ever known so that they can make a better life for their children and their grandchildren.  And my parent’s parents did that, and they were very intelligent, incredibly hard-working people and, as a result, I benefited from that drive from them and the opportunities that they worked so hard to give me and then, of course, a lot of luck.

Willy Walker: I know it's a lot more than a lot of luck.  One thing Debbie that I've noticed about you, for as long as I’ve known you, is that you have an incredibly generous spirit.  You have a generous spirit about all that you do, and as you built your career one of the major hallmarks that I’ve watched is that rather than thinking about what was in something for you, you thought about what is in it for others and, as a result of that that has made you be wildly valuable and influential to those relationships.  But that generosity, if you will, of spirit as much as I get it from your parents and that nuclear family. You didn't grow up with the means to be terribly generous. That's the kind of the conflict in my mind. You have this incredible sense of giving and yet you didn't grow up with a whole lot.

Debra Cafaro: Well, thank you for that compliment, honestly, I value what you just said more than anything you could say about me.  But I did get it from my parents. I look back now with all the benefits of the environments, that all of us traffic in, and all of the embarrassment of, you know, gifts that we have, and I look back at my parents and they were so generous, and they had nothing. They had absolutely nothing, as you say, but they always had an extra plate at the table. I talked to one of my kids last night that reminded me that we used to put plates out in the depression, when we hadn't you know, when the grandparents had nothing because they still had a little bit more than the next guy.  And that generosity of spirit, the heart, the empathy really definitely comes from my parents. I don't have nearly as much as they did, even though their circumstances were so much less and really, I marvel at it when I look back now and some of the things that my parents did under the conditions that they live - it's amazing.

Willy Walker: So, you've talked a lot about the role your parents played and also the fact that your Father invested a lot of time and attention in you and your sister and back then, if you will, most working-class men didn't spend a whole lot of time kind of investing in, promoting their daughters per you. Not for my take on that, but you, you said that before.  There's a story that I heard you tell about going to watch a football game in 1972 of the Pittsburgh Steelers playing against the Oakland Raiders and actually being there to watch Terry Bradshaw throw the immaculate reception to win the game at Three Rivers Stadium. Talk about being at that game with your Dad.

Debra Cafaro: Yes, and it's so funny I even think about with my own children now this is really the memory making business when we go to sporting events together because here I am still talking about this so many years later.  It was the greatest play in NFL history. I have to say that, but my father really as a first-generation Italian American he had 10 sisters and one brother and really girls were totally devalued in that environment. I mean it was a given it was an open fact.  And somehow my father really overcame that with his two daughters and really, we’re very close, he was our biggest supporter, my sister and mine, and part of that was going to sporting events. My mother was also a big sports fan.  And they were at the 1960 - Game 7 of the World Series when Mazeroski hit the famous home run. My Mother and Father were. So this is really deep seated and somehow my Father, but his love for my Sister and me made him overcome his sort of socio-economic DNA and he was just a huge supporter, and so we did lots of sporting things together, and we were at that famous game and we were sitting in our seats and we said oh let's go. So we actually left our seats and then my Father said well let's watch one more play before we leave, and so we stood at the top of the section and, of course, then once Franco Harris scored the touchdown pandemonium broke loose and I would never forgive ourselves if we had really left right before the Immaculate Reception.

Willy Walker: I actually re-watched the videotape of that Deb and I was actually looking for you in the stands of all these people jumping up and down. I was like I wonder whether I can find Deb.  It was pandemonium.

Debra Cafaro: We weren’t in the cheap seats, but we certainly weren’t way up-front Willy.

Willy Walker: They pan the whole stadium.  So, you were valedictorian of your high school class and the first member of your family to go to college and there's a there's a story that you tell.  Talk about how rare coins played a role in getting you through college.

Debra Cafaro: And this also goes to drive really and it's a great example. So my father was a mailman he delivered the mail and that was a good secure kind of federal job and very sought after actually.  He loves numbers. He was super smart with numbers, and someone gave my mom a silver dollar because those were in circulation those days.  And because it was a specific date and condition, it was worth $20. And so my father of course thought wow this is great I probably make this much in a day.  In the you know cold and rain and sleet delivering the mail. This is pretty amazing. So he got smart about which were the rare ones.  And he used to get his mail paycheck every week in silver dollars, he would take his paycheck to the bank, the Bank would give him his paycheck and silver dollars. He would bring them home, we would put them out on the dining room table and look through them to see if he got the rare ones.  And then he would go sell them and he did this, he had two jobs for a long-time, kind of, he had I guess you'd call it a side hustle now, and he started then making more money with the silver dollars then he was making at the post office.  And what amazes me again when I look back is everyone in America could have done that. There were no barriers to entry.  And what was it about my dad, the entrepreneurial spirit, the level of numbers, the kind of laziness that we always accused him of because he didn't want to deliver the mail that he just saw a better way to make a buck.  That really propelled him to open a small coin shop in downtown Pittsburgh, and you know, he would always say his proudest day was when he was able to write that check for me to go to Notre Dame my freshman year and it was all from that.

Willy Walker: So, you went to Notre Dame and then after Notre Dame went on to law school at the University of Chicago and you went out into private practice and you were lawyer for 13 years.  During that period of time, you started to work with Equity Group, and you got to know Sam Zell and you got to know David Neithercut.  I wonder Deb in self-reflection, what was it about you as a lawyer that made such successful businesspeople like Sam and David not only hire you, because we all hire lots of professionals but take a personal interest in you and your career.

Debra Cafaro: Again, I am so fortunate, and it wasn't just; it was Shelly Rosenberg, it was Doug Crocker who was also a client, Richard Kincaid that whole group of people and what I hope I offered them was a prodigious work ethic. I would really take all the messy parts, you know, I would do whatever the client needed within the bounds of the law to accomplish an objective.  And it didn't matter if it was something I wanted to do, it didn't matter if I knew things about it, for example, Shelly asked me to work on tax exempt bonds at one point and I didn't really want to do it, what could be more boring in some ways, but I did it. That actually led to my business career, so it was also a love of numbers. I’ve never taken a business class, but I love numbers. I understand business. I think I became commercial, although I wasn't at the beginning. I love deals, and I hope that I always gave them back more than they expected.  And that's really -- and we built real friendships. I mean there was no networking or anything like that, we built real friendships based on mutual trust and respect. And as a lawyer, you can’t hope for more than that, with who you have as your client.

Willy Walker: So, you're one of only two women on that list of the hundred top CEOs that the Harvard Business Review published.  And you've talked a lot about females in business, the lack of female CEOs.  But you've also talked about that middle period of female careers beginning part you're coming out of college, it's men and women and employers basically ae hiring both. Later on in life, you get to your level, and you are going head-to-head with every single male in the corporate world as it relates to board appointments and all the incredible things that you do both inside and outside of work. But you talk about that middle period and how difficult that is for women. And I think about your career and having moved up in the legal profession and then all of a sudden, making that transfer over to the corporate world right in the middle of those middle years. Talk for a moment about how challenging that was, and if you were to give advice to a talented woman who is in those middle years today with those challenges between work demands and home demands, what would you advise them to think about.

Debra Cafaro: Well, that's a quite a question.  First of all, in terms of CEOs even in the S&P 500 there are still only 5% women CEOs overall.  So that is really important to understand the context after all these years. And some of that is this attrition that we see mostly in the middle parts with young children, not exclusively, and what I would suggest; I’ve made a lot of sacrifices for my career and I consider them just choices. We all make choices in life, whether we're men or women.  At its foundation, you really need to know who you are and what you want. And not everyone wants the same thing, I never sought balance, I sought achievement, excellence, learning, broadening, having new experiences, and that's not for everyone.  I think we all need to make those choices and we need to unflinchingly understand ourselves and not what our spouse wants for us, our parents, what we thought we wanted for ourselves, but who we truly are. And when you can really assess that, the rest really falls into place, because you can then make decisions with confidence and organize your life accordingly.  And so that's the advice that I would give and be willing to take some risks. Be willing to do kind of an upside downside analysis to say, hey, if I want this thing and I’m going to go for it, if I fail then, where will I be will. Will I still be better off, can I recover, just like you would in a deal and that can help you make good career decisions.

Willy Walker: So, you just did an interview this week for the Economic Club of Chicago with Jane Frazier the new CEO of Citigroup and the first female to run a major U.S. bank. What was the one question or her response to your question that stands out from that interview Deb?

Debra Cafaro: Well, for me, when I think about running these behemoths financial institutions and you know something about that.

Willy Walker: I wouldn’t call us a behemoth, but I appreciate the compliment.

Debra Cafaro: I just can't imagine how they run these organizations and of course Citi with its global footprint and its own history seems really, really hard to run. Again, over $2 trillion in assets, in 160 countries, I mean think about running that thing.  And so, what I was drawn to with Jane is first of all she's a rock star. I love brains Willy. And she is very, very brainy.  And I also love financial services and so when I asked her about running Citi what really struck me was her belief that she will be able to take the best of Citi’s globality, is the word that she used, and its footprint and reconcile that with increasing simplicity and focus.  And that's a challenge.

Willy Walker: Did that make you think, I know Ventas is in the UK, did her comments about globality make you think about taking Ventas to new places around the globe, where you aren't today?

Debra Cafaro: Well, my wanderlust and desire to travel would certainly encourage me that way. We've looked many, many times at other jurisdictions and healthcare, but I still think the best risk/reward for us in our fragmented market is in the U.S.  So, I’ll just take vacations to these other places.

Willy Walker: Yeah, I was gonna say you might need a bigger plane as well.  Let's dive into Ventas for a second because the story is unbelievable and it's not, as you and I have spoken before, having the long-term outlook that you and I both share for shareholder value and sort of getting in and grinding it out every single day.  Both of us can look back on track records as public companies with fantastic success there.  But as it relates to Ventas, I mean when you came in in 2000, it was it was a turnaround, first of all. It had a market cap of $200 million and today, 20 years later, it has a market cap of over $20 billion.  The compound annual growth of that in your stock price has been well over 20%.  What is it as you look back on that, and I’m going to take away a couple of your answers to try and get at the real core here? I know you have a great team. I know you went into a part of the market that didn't have a lot of competition.  But beyond those two things, which are very important, building a great team and finding a market that doesn't have a lot of competition to it are two huge factors. But there's something about Deb Cafaro and the way you have built this success that I want to try and understand a little more about.

Debra Cafaro: Okay, so calling Ventas a turnaround in 1999 is a huge compliment.  It was a train wreck.  And you know it is interesting that-- I was called by Doug Crocker my old client, to do this job, and I didn't know anything about healthcare.  It's a real lesson to me and really taking risks right with your career and really assessing the upside/downside, in it, because it was so far gone; I believe that no one would ever blame me if this thing went haywire.  But on the other hand, I could learn to be a CEO after a very short professional career in business, it was only 18 months at Ambassador Apartments.  And you know, maybe I could learn about health care, and I really thought public company CEO jobs were kind of like coaching.  You know people like to hire people who've been in the seats, it really didn't even matter whether you are good or bad in some way.  So, I thought the upside in my career of taking this job that Doug offered was a good idea.  That attitude, and I think that optimism and the willingness to learn about healthcare and really, really get my fingernails dirty with kind of nothing being above me and just getting in there, learning, trying to really understand what mattered. Okay, and at the beginning all that mattered was survival.  So just focusing on okay, we have to survive, how do we do that? And that involves kind of changing out the team that was there, it involves bringing in third party experts who hadn't been at the company who knew how to fight the good fight for survival and that was critically important at the beginning. After we survived, and there were many times when we thought we wouldn't, after that, we thought we had something of value that I thought other people would want.  And there the key insights were really about the demographics. About the fact that this was a gigantic market. About the fact that it was really fragmented and no one else was really doing anything. And the simple ideas that well, the demographics are in support, there's investment opportunities, I knew that having one tenant who is bankrupt was not good, so we wanted to have more tenants.  I knew that having one capital source was not a good idea, so we would have multiple capital sources.  And I knew that just having government reimbursed assets, which was the source of all of the disruption, was also not a good idea. So we came up with a strategic plan that was simple yet very powerful. That's what I added and then recruited the team.  You know, I really then said okay we have this strategic plan of growing and diversifying. We need a team with leaders who would be teams of one to help us execute on this plan and had again the foresight and persistence to recruit the right people, and we were off to the races. And that's really what I brought. It's quite simple but hard to do.

Willy Walker: Super hard to do and I love hearing you talk through it. You've said that Ventas sits at the intersection of real estate and healthcare.  The concept makes perfect sense when you hear you say it.  In the you know early 2000’s sitting at the crossroads of healthcare and real estate was not somewhere that a lot, that was not a corner a lot of people hung out on.  When you talk about building that strategic plan, if you think about coming into the to the brush fire, if you will, or the dumpster fire that you stepped into in 2000, when was it then you actually had the opportunity to say okay, we're out of the penalty box, if you will, and we're ready to get back and play a normal game. What time frame was that and is there a seminal a moment where sort of, if you will, the future where you could kind of really step forward showed itself. You said no, 2008 was an incredible year for us because of this or that or 2008 was obviously a terrible year in the overall world economy. So where was it that you could really start to put your foot on the pedal.

Debra Cafaro: So, there are different phases. So, ‘99 to ‘01 was really the restructuring and at that point in time, we were the centrifugal force in a multibillion-dollar restructuring of our only tenant who had filed for bankruptcy. So, they emerged from bankruptcy in 2001 with a good business and a sustainable capital structure of which we were the largest part. So, that was the first phase. The second phase was really thinking about selling ourselves, and it was relatively short-lived, and I really had to make the case as to why we now had, yes, we still had one tenant, but we had this unbelievably growing, reliable cash flow from this single tenant. And as I would go around and talk to people and make the case of what it could be, everyone didn't want to talk to me! I remember Mike Fascitelli saying, “Debbie, we have to stop talking. People are going to think we're going to buy you and my stock will go down!” I mean that's how bad it was, that exciting intersection of healthcare and real estate, and I was trying to make this macro point and getting us in the indices. That was really important because we weren't in the stock indices, and explaining how this was 20% of GDP, and it was not a niche sector, it's a main food group! I had some success but limited, and so, in making that case I sort of convinced myself that we had an incredible growth opportunity. So that's what we did, from ‘03 after we hired the team, all the way up until the financial crisis when we were insightful enough, and had really understood that things were not as they should be, and we really went into the crisis in a highly over equitized position, very strong financially, and that helped us. So, we were good during those years, and then we came out really hard and hit the accelerator after the financial crisis and did billions and billions of consolidations.

Willy Walker: So, you now own over 1100 assets and their cross various, if you will, food groups inside of the healthcare space. So, you've got senior housing, you've got medical offices, you've got rehab facilities. Talk for a moment about that diversification, because there are a lot of people who think Ventas, and they say, “Oh, they operate Senior’s housing facilities!” and you don't operate senior housing facilities, you own senior housing facilities that other operates operate. Very much similar to the hospitality market where Hyatt, Hilton, and Marriott don't really own the real estate, they just operate them and somebody else actually owns the real estate. So, to anybody who doesn't understand Ventas, they own the real estate, they don't operate the assets. Talk about going from being really focused on the senior space specifically, and then bringing it down to medical office, rehab, hospitals, and all the tech investments you've made, and we'll get to that in a moment, but just talk about the overall portfolio today.

Debra Cafaro: Well, what's really important again is this intersection of health care in real estate. It’s a huge part of GDP, it’s a huge real estate market, and it's highly fragmented.  What ties our five verticals together it's really, these are all within healthcare, and they are demographically driven forms of real estate that the users, the ultimate users, whether they’re senior housing residents, or people who are going to use the drugs that are discovered in our labs, or visits to medical office, they're all driven by specific demographic and healthcare trends.  

Again, the diversification is a reaction against those early days, and it served us incredibly well in this last year, and sometimes I think real estate investors do not understand that power of the different verticals within an overarching demographically driven umbrella.  Both on the ability to play offense, and then on the ability to play defense like we did this last year during Covid. So, we have strategically curated the portfolio to be in senior housing, as you say, that place to those over-85 population, over 80, which is growing, you know, 17.5% over the next five years. It plays to Baby Boomers, 10,000 of which will turn Medicare-eligible every day. They visit the doctor five times as much as the rest of the population, so that plays to the medical office and then, if you think about life science, the life science really is to promote longer, healthier lives. 

So, by 2030, 171 million people will have chronic conditions. It's going to be the most efficient cost-effective way to care for those conditions to prolong and make our lives better and stay outside of the hospital if we are able to develop cures and treatments for some of these chronic conditions as we age. So, they're all tied together. They all have different drivers and different structures, and senior housing is less than 50% of it, but it's a business that you know, I think is going to be coming back very strongly, but obviously was affected by the Covid-19 pandemic.

Willy Walker: Dive into that for a second as it relates to Covid’s impact on senior housing. It started inside of a Senior’s housing community up in the state of Washington. Technology has sort of changed the way that Seniors are interfacing and it's impacting the way that, typically, it's the eldest daughter, who moves close to Mom and Dad to make sure that they're okay, and goes and sees them, and takes care of them, and makes that decision about moving from either truly independent living to assisted living, or into Senior’s housing. How has the pandemic changed that view from your standpoint as it relates to specifically independent living and Senior’s housing?

Debra Cafaro: Well, I am a deep believer in the value that the care providers in Senior living give to Senior residents and their families. My parents were customers of the product, and so I saw it as a consumer as well. Senior living is really a consumer-driven business, and it is about socialization, it is about care, it is about safety, and we are seeing, and this is amazing to me, but it's extremely important to understand. In April of this year, last month, we saw more seniors move into our senior living communities than we saw in any month since June of 2019. And what that says to you is we are offering something that is highly valuable to these residents and their families. After everything that we've been through, in all the headlines, we have thrown everything we have at keeping seniors safe. We provide a safe environment, a healthy environment, an environment where people can socialize.  You know loneliness is more dangerous than smoking. I don't know if you know that, but that is a medical truism, and these communities really are homes for seniors where we know that they can talk to their neighbor, have communal activities, communal dining, and it really keeps people lively and that's really important.

Willy Walker: So, one of the things that I found to be very interesting in reading your quarterly report when you did earnings last week was the point that the average age of move-in on Senior’s housing is 84 years old, and back to your comment on demographics, that means that you haven't even started selling to Baby Boomers with that product. And actually, the product that you have today that actually gets to Boomers is your medical office, because they're the ones who are going and interfacing with doctors on a much higher frequency. Talk about those two products, and then I want to get to research and development.

Debra Cafaro: Yes, so that you're 100% right. Now, what's called the oldest old, which is this kind of eighty and over demographic, is incredibly fast-growing. Again, it's going to go from 12.5 million people now to 20 million by 2030, and it grows at a CAGR of 3-4% over the next couple of years and actually spike 6% in 2027. So, this is a very fast-growing group. We're adding 2 million of those of those potential customers, as I like to think about them, just over the next couple of years, and they are not the Baby Boomers. And you're correct, then the Baby Boomers are their own cohort, 1946 – 64, and they are the ones who are turning Medicare-eligible 10,000 a day. They’re the ones who are going to the doctor's office much more frequently. Over 65 spend about $20,000 a year on medical care, a lot of that is in the medical office buildings, and so we're focused on these different cohorts really within the healthcare system.

Willy Walker: I’ve heard you talk about Ventas being a finance company and I sit there, and I stop, and I say, “Hang on a second. Deb talks about Ventas being a finance company, but they are a real estate investment trust, and they also own over 1,100 physical assets,” so explain to me how one should think about you as a finance company, rather than as a real estate company.

Debra Cafaro: It’s so interesting because it's hard. Ventas is at one level, very simple, but in another somewhat complicated. So, always trying to explain to people what we do, and how we do it, and so, I think we're a third finance, a third real estate, a third healthcare. And sometimes I say we're kind of like a private equity firm in a public shell. What I mean by that is we invest in these health care businesses, typically via ownership in real estate. And it tends to be a capital source for the leading providers of care, as we own the buildings, they can operate them, they take that capital, and if there may be a private equity owner, they can do a recapitalization. If they are an owner-operator they can use that money for growth capital. It can be essentially 100% financing if you will, because you know, that's how a little bit financially, that's how people think about it. Now, we have to really understand that operator in that business and the position the business is in the marketplace, because what we're looking at is what is this sustainable EBITDA generation that can come from that building? And that's where it gets a little bit more like a private equity investment, but only in the real estate.  I hope that’s clear. Is that clear?

Willy Walker: Yeah, no it's clear. I guess now I’m going to go to another area that you're investing a lot of time and money and effort in. It's not quite 10% of your NOI, but in your research and development on the campuses of major top universities like Duke, and Yale, and other places where Ventas is going into partnerships with those universities to do R&D, and so now all of a sudden, I’m saying, “Well no! She's not a finance company, she's a biotech company!”

Debra Cafaro: No, I like to say that we aren’t curing cancer, but we are supporting people who do and that's really what it is Willy. I am super jazzed up about our life science and research and innovation business, we got into it about five years ago when we exited the nursing home business.  We got into this life science business, and now we have over 9 million square feet. We have an incredible pipeline of ground up development, as you say, we are really affiliated with the 15 largest, best research Universities in the nation, whether it's Penn, Yale, Johns Hopkins, WashU, it's incredible what these researchers and scientists do, and we are incredibly proud to be a part of it. We've also recently found a way to invest in three of the top five of what are called cluster markets in life science that are really Cambridge; we did a billion-dollar acquisition in South San Francisco this summer which is a lab building that is really incredible and then we just bought some life science on the campus of Johns Hopkins and we're extremely excited about the promise of this sector. The capital flows into the business whether they're from the NIH or whether they're from venture capital funds are just growing by leaps and bounds and that's of course the real estate utilization of the buildings and it's been one of the hottest asset classes during the pandemic. Its CAP rates have continued to compress and hopefully we've created a lot of value through this switcheroo between nursing homes and life science in 2016.

Willy Walker: So, as you’ve grown Ventas from a, you know, a good size, but relative to where you are today, very small company to a very large company, you're now generating $2 billion of NOI on an annual basis, how have you had to change the way you lead?

Debra Cafaro: Well, I hope I’ve learned, and I hope I’ve grown and matured as a leader and some of it is almost required because of the scale and complexity of the businesses were in. Some of it, is freed up because of the incredible capabilities of the people who are at Ventas now. I still like to know the details, I do.  There are still certain areas where I can add at a very granular level and then in other areas, I can delegate and really play at a very kind of top level, involved in decision making. And so I’ve evolved and learned, people have taught me, again, just like I never took a business class, I never took a management class, and I do think I have some blind spots, I do, I think I have blind spots in management.

Willy Walker: It’s unbelievable that you never took a management class, I have to tell ya. One of the most successful CEOs in the entire world never took a management class, that says a lot about the value of my MBA, I’ll tell you that.

Debra Cafaro: Well, I’m sure it's served you incredibly well. But I do, I do have deficiencies in certain of these areas and hopefully, I have enough people sense and good intuition and experience and observation, coupled with listening to people that I continue to be able to improve at management.  

Willy Walker: Hearing you talk about your attention to details makes me think back to your dinner table with your father and looking at the year of the silver coins.  So, Ventas has been extremely forward-thinking as it relates to diversity, your board is very diverse, your management team is very diverse and you also won the ENERGY STAR Partner of the Year Award from the US EPA and the Department of Energy. Talk for a moment about diversity and how important it is to you and the way you run Ventas?

Debra Cafaro: Well, we are, it is true that Ventas has been a leader in this area and it's something we've dedicated ourselves to for a decade or more. And on the people diversity front, on the board, we have 11 directors four are women two are black.  Everybody is incredibly accomplished, and they make the company better, our board is a competitive advantage. And when you look at data, the data tells you that diverse groups make better decisions and drive better returns And if you think about so many different areas whether its financial returns, whether it's making business decisions.  I don't know if you know this, but the cure for smallpox was developed because farmers and milkmaids were involved in making observations. And I just think that you're just so much more excellent if you have different viewpoints that are coming to the table. So that's been easy to dedicate myself to and I’m glad that we continue to drive forward on diversity. In terms of some of the sustainability initiatives again, I think it’s really good business and I think that we've done a lot of energy saving activities and sustainability activities that are great investments to improve the performance of the portfolio and also benefits the planet. So, again we try to find ways that are authentically Ventas, that serve multiple purposes, including ESG and again ESG is just a fancy way of saying we're going to do the right thing for our employees, for our communities and for our partners and it's very simple, but again, hard to do well.

Willy Walker: Extremely hard to do well and you've done it exceptionally well. Given that you are the longest tenured female CEO on the S&P 500, that's a pretty significant responsibility. You're doing so much outside of Ventas and have been an incredible Chairwoman of the Real Estate Roundtable which is where I spend the majority of my time with you. But as I said, at the top of the webcast you also have your mind and your heart in a lot of other things.  a) How long do we have you around Ventas? And then second, what are the next chapters for you as it relates to the impact you want to make going forward?

Debra Cafaro: I mean, it is an honor to be the Chair of the Roundtable and the Economic Club and honestly, I can't believe I’ve been at Ventas for 22 years.  The average public company CEO tenure is three to five years or something like that. And I’m sure you challenge yourself just like I do, to be different from that, and better than that, and I have a theory that I’ll try on you. Leaders are often built for a cycle or a certain set of facts, you know, I’m a growth guy, I’m a workout guy, I’m a cost cutting guy, whatever the case may be, and I think I’ve always challenged myself to say, “can I be the person that the company needs. Can I be nimble enough and adaptable enough to see what's coming and adapt to what's needed.” And that is something that I want to be, and have tried to be as Ventas has gone through these macro cycles, as well as you know, specific things that have affected the company over the years and I’m proud of that, and I hope to keep learning and keep doing that, I’m all in.

Willy Walker: I had lunch with Jim Collins, the author of Good to Great, just before the pandemic, so a year and a half ago in his office in Boulder. And as Jim and I were talking, he sort of said, “you know it's pretty evident Willy that you're pretty good at what you do, how long you going to keep doing it”? And I said, “you know, I love what I do Jim, I have no plans on retiring anytime soon.” I’m at that time, 53 years old and I said, “but you know, at some point I think about, I don't know, running a nonprofit or doing something in the public service realm or something else, but who knows.” And he looked at me and he said, “you know, I don't think you ought to do anything else, because I think your best years are going to be between 60 and 75 years old.” and what I thought I loved about that Deb was two things, one, he was basically telling me that I’m not as good today as I think I am, which I thought was great, and then second of all, just the concept that a decade from now, I’ll even be better at what I’m doing than I am today, is a really fun thing to think about.  And to your point, there aren't that many CEOs because many companies are run by sort of hired guns, if you will, and you and I do have the great luxury of being both chairman and CEO of companies that started very small and have gotten quite large, and that gives us the ability from a tenure standpoint to just sort of stick around and keep on growing it as long as we're getting better and better every year.

Debra Cafaro: Well, and look at what you just did with Ivy Zelman which I read about, you have to be willing to reinvent yourself, to reinvent the company and to learn, and if you do, and you love what you do, and the people you do it with, I think we're in very lucky positions to be able to continue to lead our respective organizations.

Willy Walker: So, Mario Lemieux calls you up and says I’m putting together an investor group to buy out the Pittsburgh Penguins. You've already told us your experience, being a Pittsburgh Steelers fan but talk about hockey and talk about becoming part of the Managing Committee at the Pittsburgh Penguins.

Debra Cafaro: Yes, well if there's anything you can understand about me after this hour of conversation is what would a working-class girl from Pittsburgh, who loves sports, made good do? She wouldn't buy a yacht, she wouldn't you know, I don't know what, but sports is always where I come back to and the opportunity to be partners with the great Mario Lemieux, a great organization in the Pittsburgh Penguins, and drink from the Stanley Cup which is standstill, as the greatest moment of my life, bar none, has really energized me in a way that I really can't think of anything else, that would bring that to my life, it's brought my extended family together. I’m able to really enjoy it with friends and colleagues and it's just been a great part of my life and so it's a natural extension of my life and I’m again. lucky as can be to be a part of it and now we're getting ready for the playoffs Willy.

Willy Walker: I know we are, and I align with you on pretty much everything Deb, other than your love of the Pittsburgh Penguins versus my Washington Capitals.  I was gonna say, as an owner, couldn't you do something to just get Crosby to retire a little bit early because he is such an incredible player.

Debra Cafaro: Well, maybe we'll see each other at one of the playoff games if we're lucky.

Willy Walker: That would be a lot of fun. Deb, this has been a real pleasure. I am in awe of your career, your track record, your success, the returns you have provided to your shareholders and the vision that you've given to Ventas and what you have created their and also all the time and efforts that you give to others in your philanthropy and in all the nonprofit's that you are on the board of and for you to take an hour and talk to me about your fantastic career is a real honor. So, thank you for taking the time. I look forward to seeing you at the next Roundtable meeting and I hope everybody has a fantastic day and I look forward to seeing you all in the Walker webcast next Wednesday. Thank you Deb.

Debra Cafaro: Thank you very much, wonderful to be with you Willy.

Willy Walker: Have a great day, bye.

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