Debra A. Cafaro
Chairman and Chief Executive Officer at Ventas
Thanks, Sarah, and good morning to all of our shareholders and other participants and welcome to the Ventas third quarter 2021 earnings call. I'm so happy to be hosting this call in person with my trusted colleagues for the first time since early 2020. Ventas delivered positive results in the third quarter, saw outstanding sequential SHOP average occupancy growth, benefited from its large medical office, life science and healthcare triple-net businesses, and executed on its investment priorities. Delivering $0.73 of normalized FFO per share, which is in the upper half of our guidance range. Our same-store SHOP portfolio increased rate and grew occupancy at record levels in Q3 despite the high incidents of COVID-19 in the broader environment.
Occupancy in this portfolio has now increased for eight consecutive months through October. Demonstrating powerful demand, our U.S. same-store SHOP portfolio has increased occupancy 750 basis points since mid March 2021, lifting the entire same-store SHOP portfolio nearly 600 basis points during the same period. I'm also encouraged that our year-over-year SHOP occupancy turned positive for the first time since the onset of the pandemic, so a robust senior housing recovery is well underway. But as we stated, it may not progress in a straight line.
Consistent with macro trends and as we anticipated in our last call with you, the pandemic has created a tight labor market, resulting in labor cost pressures that accelerated in September. Looking ahead, we expect to see meaningful revenue increases in the first quarter of 2022 and improving pricing power. At a macro level, many economists forecast that labor force participation will expand from its current low rate for a variety of reasons. These factors should cause current conditions to ease considerably over time. Even more importantly, Dr. Scott Gottlieb, who has been consistently the most accurate expert throughout the pandemic stated today that the COVID-19 pandemic is effectively behind us in the U.S., given all the tools we now have to combat it, including Pfizer's new treatment.
If Scott continues to be right, it is a momentous day for all of us. We continue to be delighted that one-third of our business consists of medical office outpatient and life science research and innovation. Our operational initiatives in medical office and aggressive capital deployment in life science are providing reliable growth and value creation for our enterprise and stakeholders. Turning to capital allocation, we have been highly active with $3.7 billion of investments announced or closed year-to-date. Our current capital allocation focus remains senior living, selective private medical office building opportunities and life science R&I.
Let me highlight a few new investments we've made. We've completed $2.5 billion in independent living investments, including our accretive acquisition of New Senior's hundred plus independent living communities at an attractive valuation well below replacement costs and a six community Canadian Senior Living portfolio with one of the New Senior operators, Hawthorne. In medical office we've completed or announced $300 million of investments. First, 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.
Second, by acquiring our partner PMB's interest in this Sutter Van Ness Trophy MOB in downtown San Francisco, we now own a 100% of this asset at a 6% yield. With 92% of the MOB already leased, we intend to capture additional NOI growth and value. Finally, we intend to expand our relationship with Ardent Healthcare by acquiring 18 of their 100% leased medical office buildings for $200 million by year-end. On our third capital allocation priority, we are delighted to announce that we have commenced development of a 1 million square foot life science project anchored by Premier Research University, UC Davis with our exclusive partner Wexford.
Purpose-built for clinical research, this project will be 60% pre-leased to UC Davis, and total project cost are expected to be $0.5 billion. Turning to our robust investment pipeline, our team remains busy evaluating attractive opportunities. In fact, we've now reviewed more deal volume this year than we saw in all of 2019, over $40 billion and we continue to pursue those that meet our multi-factor investment framework. Capital continues to flow into our sectors as global institutional investors agree with our thesis on the favorable trend benefiting all of our asset classes.
These strong capital flows are also supporting our intention to recycle $1 billion of capital this year to enhance both our balance sheet and our portfolio. Our diversified business model continues to provide significant benefit. Our early and aggressive investments into medical office and life science are creating significant value. We are also proud to be associated with so many leading care providers, operators and developers in all our business lines and to be establishing new platforms for growth through both our investment and our portfolio actions.
In closing, the U.S. is in the midst of an impressive economic recovery that together with demographic demand for our asset classes gives us confidence and optimism in our future. We believe that the more widespread administration of vaccines and new efficacious treatments for COVID-19 will benefit both the broader economic recovery and our company. Our aligned and experienced team continues to be focused on capturing the double upside in senior housing from both pandemic recovery and the projected growth in the senior population and also to continuing our long track record of external growth. Justin?
