Ventas hosting a conference call this morning. The company's chairman and CEO Debra Cafaro joins us now and another first on CNBC.

Good morning, welcome, thank you very much for being with us.

Ms. DEBRA CAFARO (Ventas Chairman & CEO): Thank you for having us.

HAINES: You were saying while we were on commercial, the demand is insatiable?

Ms. CAFARO: Reits generally are dividend paying stocks...

HAINES: Right.

Ms. CAFARO: ...and so recently, with the historic low interest rates, investors have really sought out that current yield, as well as the growth characteristics of reits.

HAINES: How is the business of the health care properties? Is it enough to sustain the high hopes that shareholders have?

Ms. CAFARO: I think we'll be in a position to deliver superior, consistent, risk-adjusted returns. The reason I think that is we have a great portfolio of 277 health care assets, we're benefiting from the demographic trends of the over 85 population being the fastest growing segment of the population, we have great internal growth and we hope to add with some external acquisitions as well.

HAINES: You had an acquisition, right? Fourteen assisted living and independent living facilities?

Ms. CAFARO: So far, this quarter, we have closed or announced 275 million worth of additional acquisitions in the health care and long term sectors.

HAINES: We should probably explain to people, you own the real estate...

Ms. CAFARO: Yes.

HAINES: ...then lease it to whoever wants to run it.

Ms. CAFARO: We do. We are what are called triple-net land lords so we own these assets in a great supply-demand little sector, then we lease them to providers of long-term and senior care.

HAINES: What are you finding in terms of the assets out there that you want to buy? Are there still buys out there?

Ms. CAFARO: That's a great question. The sector is benefiting from stability in medicare reimbursement, as well as absorption in the nongovernment reimbursed sectors. So, as a result of that stability, we're seeing an increase in pricing. We're being very disciplined as we implement our diversification plan.

Mr. DAVID KAY (Putnam Investments): One of the things I've noticed talking to a lot of individual visitors is they're scrambling around to find any security that's got a yield right now.

Ms. CAFARO: Yes.

Mr. KAY: Sometimes I think people are looking for yield in all the wrong places, but I know that's helped reits in general.

Ms. CAFARO: Yes.

Mr. KAY: Are you afraid the stock price will get too high on this enthusiasm for reits even though the fundamentals are improving?

Ms.CAFARO: I feel good about our ability to produce earnings growth as well as dividend growth. What we're about is a portfolio of assets that should generate reliable, growing cash flow. And over the past 20 years, reits have been very consistent in delivering good total shareholder return which is a combination of earnings growth and dividend. I feel really good about the future, particularly in our asset class where we see the baby boomers and the over 85s just burgeoning.

Mr. KAY: Isn't there going to be a demographic lull? There was a baby bust during the depression, and if I'm doing my math right, within the next year, that's going to move into your space?

Ms. CAFARO: No, I think to the contrary, what you'll find is the over 85s are the fastest growing segment. We've had in the nursing home business where we're the third largest owners of nursing homes in the United States We found really debetting over the last five years so there's very constrained supply but there's this huge demographic push in that population which is the population that uses nursing homes. Then of course we boomers are going to start turning 65 in 2010 and they're the second largest segment of the users.

Mr. KAY: So, there may be a gap but it's quite a ways away?

Ms. CAFARO: Yes, it will be quite a ways away.

Mr. KAY: Also, in the--are you concerned, we've got talk in Washington about how do you reign in the budget deficit. Are you afraid there will be some medicare constraint here which is going to reduce your revenue growth?

Ms. CAFARO: That's a great question. I think there are pressures on medicare. Right now, medicare is quite stable and that's really all we want. We don't expect to see huge rate growth over time.

Mr. KAY: All right.

HAINES: We talked earlier about the cost of assets that are out there on the market that you might acquire.

Ms. CAFARO: Yes.

HAINES: What is currently going on in terms of renewals of leases that are expiring?

Ms. CAFARO: That's great. I mean, it--

HAINES: Do you have pricing power?

Ms. CAFARO: That's great. I think we do have pricing power, but of course it depends on what your existing lease rate is and when it was set. Our leases were set at a trough in medicare reimbursement and therefore we expect our leases to be able to rise both from built-in escalators that we have in our leases, as well as a very unique upside participation we have in the health care sector in 2006.

HAINES: Earlier, we were talking about your dividend but it's pointed out in Merrill Lynch's research that our current dividend pay out ratio is 70 percent, which is healthy but it's still significant below the average payout for reits. Do you expect increases?

Ms. CAFARO: What we try to do is give the shareholders a predictable growing revenue stream. We try to set our dividend level, our payout ratio at a conservative 75 percent level so that we hope year in and year out we'll be able to continue to grow that dividend as our cash flow grows.

HAINES: All right. Thank you very much for your time.

Ms. CAFARO: Thank you, Mark. Thanks, David.

HAINES: Debra Cafaro, chairman and CEO of Ventas.