Debra A. Cafaro
Chairman and Chief Executive Officer at Ventas
Thank you, Sarah. Good morning to all of our shareholders and other participants. I want to welcome you to the Ventas first quarter earnings call. I'm delighted to be joined by my Ventas colleagues, who have worked so hard for shareholders, each other, our partners and our other stakeholders over the past two-plus years. We are off to a strong start in 2022. We are delighted to deliver on our commitment to grow normalized FFO and same-store SHOP NOI year-over-year for the first time since the pandemic began. It is certainly worth pausing to appreciate a quarter that returns us to growth and underscores our positive momentum and the senior housing recovery that is underway.
In the quarter, we continued to benefit from stability and growth in our office and health care triple-net lease businesses. And in SHOP, we saw outstanding year-over-year NOI revenue and occupancy growth that overcame meaningful impacts of COVID-19 and inflationary pressures during the quarter. Looking forward, the power of our well-positioned communities, strong demand evidenced by leads that consistently exceed pre-pandemic levels into April, pricing power and advantaged markets should translate into sustained NOI growth through the balance of the year. These trends should be further enhanced by favorable supply-demand fundamentals, supporting net absorption in our markets. Specifically, Q1 2022 starts are down 2/3 from the peak just as the over-80 population is set to grow over 20% during the next several years.
But we are not just relying on demographics to win the recovery. Justin and his senior housing team continue to take decisive actions following the right asset, right market, right operator approach to best position our senior housing portfolio to capture the upside ahead. We've already started to see the benefit of these actions with a strong first quarter, and our SHOP portfolio has outperformed industry benchmarks for comparable senior housing communities over the last year. Today, we've announced another important step in this progress. We have revised our agreement with Sunrise to align our interest toward profitable growth and value creation.
We've been working together with Sunrise since 2007 and are delighted to reset the relationship with the current management team at this point in the cycle. In addition to organic growth, we also benefited from the investments we've made under our consistent long-term capital allocation philosophy and priorities. On the investment front, we posted about $4 billion of investment activity since the beginning of 2021, with our first quarter 2022 capital allocation priorities continuing to be the acquisition and development of senior housing, life science and select medical office buildings. I want to highlight two of our first quarter investments and show how they demonstrate our investment approach.
The two investments have reliable going in cash yields, limited downside and room for growth. And both came from trusted relationships built over long periods of time through repeated and mutual success. Mangrove Bay is an irreplaceable senior housing community located on the waterfront in the high wealth submarket of Jupiter, Florida. Acquired for $107 million, Mangrove has large units, high REVPOR and a strong, consistent operating history. Since the acquisition, performance has been strong and our investment yield has grown to 6%.
Our recent value-add investment in the uCity Philadelphia submarket represents an opportunity to add another component to our incredibly well-performing research and innovation portfolio located between Penn and Drexel. We intend to convert a portion of the building to high-demand lab space and achieve a 7% stabilized yield on our aggregate investment costs. The Penn-Drexel market has been very successful for us, with our two ongoing developments now 90% leased or committed, and rents up 40% since we put a shovel in the ground. I'd like to touch on three more points before closing. Our continued focus on driving total shareholder return, ESG leadership and the macro environment.
First, as a continuation of our commitment to driving TSR performance, I welcome BJ Grant to the VTR team. He is a highly regarded long-time REIT investor, who has a distinct appreciation for health care and senior housing real estate. BJ is going to work with the Ventas team and externally with the investment community to reinforce the Ventas value proposition. Second, I'd like to highlight our sustainability leadership, which continues with our announced commitment to achieve net zero carbon emissions over the next two decades and our recent recognition as the number one medical office building owner operator for ENERGY STAR certifications.
Finally, let's discuss the all-important macro economy, particularly current inflationary pressures and the tightest labor market we've seen in 50 years. It is encouraging that today's Jobs Report evidenced some emerging indications of stability. Emanating from a confluence of factors, annual inflation is expected to continue to run high, perhaps exceeding 8% through the second quarter and then moderate by a couple of percentage points in the back half of the year and moderate again by another couple of percentage points by mid-2023.
While significant uncertainty remains, this improvement in expectations is the result of various policy actions, including Fed tightening tempering demand, greater balance in workforce supply and demand from expansion of the labor force participation rate and a slower pace of job creation and some supply chain normalization. Whether these forces result in a soft landing or trigger a recession, Ventas is relatively well positioned. Our demand is robust, it is need based and it is growing. Pricing power is strong and has the potential to strengthen further as occupancies continue to recover. Softening the rate of growth in labor and other expenses should improve our margin particularly as revenue and occupancy increase.
But regardless of the macro environment and uncertainty, at Ventas, we will remain agile, execution-focused and performance-driven. With an attractive valuation and high-quality portfolio, growth potential, a well-covered advantaged dividend, 90% fixed rate debt and the opportunity to drive external growth, we are very well positioned. In closing, I want you to know that all of us at Ventas are committed to using every tool at our disposal to excel and create sustained value for our shareholders and other stakeholders.
Thank you. Justin?