Sabra Health Care REIT (SBRA) 8 Aug 242024 Q2 Earnings call transcript

Company Profile

Participants

Lukas Hartwich	executive
Rick Matros	executive
Talya Nevo-Hacohen	executive
Michael Costa	executive
Elmer Chang	analyst
Austin Wurschmidt	analyst
Robin Haneland	analyst
Joshua Dennerlein	analyst
Michael Griffin	analyst
Vikram Malhotra	analyst
William John Kilichowski	analyst
Richard Anderson	analyst
Michael Stroyeck	analyst
Alec Feygin	analyst

Call transcript

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Operator

Good day, everyone. My name is Christina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Sabra Second Quarter 2024 Earnings Call. [Operator Instructions] I would now like to turn the call over to Lukas Hartwich, SVP of Finance.

Mr. ahead, go Please Hartwich.

Lukas Hartwich

good and morning. you, Thank

concerning I Before XXXX and investment results we in of our remind our and questions that regarding operations, operators, including guidance expectations to be we response financial making for plans. and your and our begin, and will comments forward-looking you our regarding our and regarding tenants earnings want expectations statements position expectations disposition our our acquisition, to future in our

to on current differ the you furnished cause in reflect expectations release based as later the not subject are as We risks our the SEC yesterday. and to we could valid. XX-K still and are year no that in listed forward-looking statements make that to quarter statements the Form XX, circumstances, press the should X-K XXXX, included actual well undertake forward-looking These for or management's comments December our to obligation Form risks we materially, update as that and today ended earnings assume uncertainties in are the to events Exhibit results subsequent including XX.X our

included website will of encouraged the as explanation section non-GAAP call during made results. Investors on Financials of these financial Investors financial reconciliation and page sabrahealth.com. the our comparable are In this results well the references to addition, GAAP non-GAAP be these the of review to measures at as to measures

of XX-Q, website. also accessed Form be in the Our release our Investors section and earnings can supplement

Care and the CEO, REIT. Chair Health call Sabra And over with to President turn that, Matros, let of me Rick

Rick Matros

joining Thanks, us. Lukas. for everybody. Good We appreciate it. day, Thanks

areas. increased. the press progress quarter our in all in Guidance key demonstrated noted release, was As

growth SHOP was Our NOI cash XX.X%.

Housing Nursing Senior occupancy EBITDARM Senior portfolio. coverage and and Housing Skilled increased Leased assets our for Nursing both increased, - Skilled rent Our our

well approximately to occupancy levels. XXX fact, in XXXX, surpass Nursing And hit was our coverage which all Our higher is of the than high than it higher pre-pandemic bodes we future. continues today, in for basis really Skilled points portfolio is which

top million of concerning year's with down. announced a XXX Medicaid but are XX coverage Leverage rent increases. weighted EBITDARM with no came investments. $XXX ticked to being our only approximately improved X%, that X the operators is didn't, in coverage points at trends. strong one had on in X.XX be rate new higher We basis increases roughly last than basis estimated which a McGuire

year. new have July states rates effective every of X Sabra of XX% on Medicaid

Medicaid top throughout finalized The other are X X.X%. The increase for of course, actually And of Medicare year. XX.X%. states X SNF our increase market spread basket tenants the rate of its was has different months then,

Nursing Skilled our basis up XXX Additionally, points. mix was

class, ago. Our agency year down XXXX. including asset now labor now March at contract that is costs, are since And level of labor lowest a from XX% their for

Our Skilled lower occupancy, margins with now still than about EBITDARM points And higher that's basis pre-pandemic Nursing occupancy. are again, than pre-pandemic XXX margins.

see we margins coverage fully to to expect improve. So would continue and

make One want on our I to segment. comment Behavioral

down and if down, quarters, up was segment. you but last look the it's the in coverage X rent at always Behavioral Our

coverage much stay, You have is business Housing, was The Nursing dynamic, differently little it strong X.XX. are at shorter to which very point Skilled quite occupancy. bit at much very lower notwithstanding. behavioral And businesses, think a still a length than about pandemics also predictable and actually of has breakeven Senior but the

room lot there. So there's of a breathing

no have concerns we So about that.

you little in Skilled forward expect move to And asset to Nursing more asset down and our see Senior than expect you would Housing class or bit should up see that going our a class.

behavioral also opportunities of finally the see We're months. cost with to in course seeing increase in we're SHOP coming relative of some Skilled continue more rates and attractive on create the point the of set investment our the our pipeline At -- before the course pipeline, over much SHOP a expect began the of And -- we base cap invest In the to the which this execute as year, year Nursing to space. well. an SHOP in we much to terms in in uptick starting and from to XXXX. to to expect capital, stronger continue we'll grow we continue

the I'll with Talya. turn And over to that, call

Talya Nevo-Hacohen

very This Thank is Canada. strong quarter property cash NOI the margin a in for cash Housing increase, including of we that's X.X% portfolio, and product total, a ventures same-store sequential growth had with share, including have portfolio managed include the you, Senior XX past basis, sequential. trends quarter. which XX at Housing XX the Senior quarters. Sabra's managed the gains, in communities, REVPOR X.X% of few Sabra's ventures noting and occupancy Rick. flattening expenses properties, portfolio joint at XX managed and NOI in joint share U.S. and continued and are been quarterly On non-stabilized had a

non-stabilized same-store our headline the Excluding revenue by with communities revenue grew year-over-year quarter assets, X.X% are for X.X%. portfolio the growing numbers Canadian

XXXX the points, and stabilizing for while increased quarter NOI and in in by of X.X% REVPOR In Cash a and sequentially. quarter XX the the our and X.X% functioning both expenses XX.X% decreased XX.X% second growing over year-over-year, occupancy XX.X% year-over-year for sequentially. NOI basis cash second the exPOR quarter by quarter of increased grew Canadian U.S. communities, Canada. of XXXX

Senior Housing at cash past nearly occupancy XX% accelerated has quarter NOI this Canada's recovery margin exceeding and XX%. with

but of story NOI. occupancy the reap given growth. several even has focus the potential quarters, is margin Domestically, operating While greater the for gain similar occupancy as into been of leverage moved is to benefit grow path opportunity to has expense strong the the control and cash

the increasingly leased and static stabilized have begun more Housing rising class, activity. and behavioral as in the segment Senior in committed health quarter. operators brokers total consistently remains Investors Rick Sabra's As interested investment to see continues to coverage, and focus our We've recovery. relatively mentioned, interest net with operational underlying asset Rick thrive portfolio this this reflecting rent are in accelerating mentioned. are

Officer. Sabra's And call over I that, Financial Michael with turn will to the Chief Costa,

Michael Costa

Talya. Thanks,

FFO quarter $X.XX, we second results. million, driven per of portfolio. improved up rents recognized AFFO increase higher normalized primarily to quarter first quarter; of and normalized XXXX, collected the cash share and Senior managed The by rents $X.XX quarter the Housing from both first in of following: sequential For our second $X.X related $X.XX was the of of our from per collected cash were $X.X basis million that share NOI

cash to a under higher by expense increase period. compensation credit our up facility truing outstanding expense This offset a was during result $X estimates increase interest revolving partially due of borrowings in a performance-based $XXX,XXX as in cash G&A million the and

of quarter, recognized last that Additionally, $XXX,XXX we interruption was nonrecurring. insurance income business

our X by moving parts are What to normalized improvement our quarters growth numbers of shines this driven both quarter, various which experienced nonrecurring. in While year-over-year over many in is was Senior that through the have normalized which and FFO X% we there were the growth share. last translates the in AFFO managed earnings performance, continued Housing per

of improved, normalized the the to FFO outlook continued XXXX Because increase for in AFFO stability our has and resulting our triple-net portfolio, in normalized our and an year remainder share of the per this guidance. improvement

to ranges normalized FFO, guidance FFO, share $X.XX $X.XX; of diluted full $X.XX; are FFO, XXXX $X.XX; net and follows: adjusted to $X.XX adjusted year to to as $X.XX per normalized income, to basis a on updated $X.XX FFO $X.XX Our $X.XX. $X.XX;

updated I few embedded that points our highlight are to would like a data in guidance.

which consistent First, approximately XXXX. year first the our is $XX million per run rate is with second for quarter, cash results actual the of the triple-net NOI of half of the half

G&A cash also with of of quarter, results for run recurring rate is $XX.X actual the first for second half million consistent XXXX. the year our Second, which the per half is the

cash compensation approximately is second per XXXX. expect to expense, of recurring quarter G&A in from stock Excluded we half $X.X million the which be

growth NOI our mid-to-high in year-over-year guidance to managed portfolio be assumes teens. the Lastly, for our same-store cash

guidance investment investment, does under not offering disclosed. additional all and Our disposition at-the-market already announced those capital equity transactions program the as assume or as disposition activity and well activity incorporates the beyond announced

to balance turning briefly Now the sheet.

was as June X.XXx March ratio X.XXx decrease XXXX, a EBITDA adjusted of XXXX. to XX, debt XX, net from Our of

with million, $XXX liquidity have As of equivalents available are cash cash and and all June our XXXX, covenants facility. our revolving in $XXX million million unrestricted ample compliance under of borrowings of and of $XX XX, of consisting of we debt credit

are under of capital the recent our equity investing that initial forward per fund utilize we to price to we an at price shares Year-to-date, an net our of our during have cost share, initial X million ATM share, improvements the to commissions, and fund to subsequent currently activity. our future source in up average X.X program per of of the $XX.XX $XX.XX to use of the average allow sale ATM of investment million capital, net announced to shares With commissions, with and utilized weighted the match quarter weighted activity. available our for to

on August on Finally, per quarterly XX, to Board XXXX, of stock. a paid of declared X, $X.XX XXXX, of stockholders cash AFFO the of our business be quarter on August share XX% August represents dividend per dividend common Directors The will close Sabra's XXXX. is dividend record of The of normalized adequately and of as of second payout a common XX, covered share.

we'll open that, with Q&A. the for lines And up

Operator

question Instructions] comes Nick line your Yulico of Scotiabank. from first [Operator the And from

Elmer Chang

the have how segment -- you you and is growth seniors with second more improving. at on same-store explicitly housing This there can operators? your growth color leverage NOI operating expense any be Nick. the you to might remarks impact ramp And Chang But in for more this in expectations provide mentioned growth seems your is -- the Elmer for appreciate half year of or to seems We operating that that expectations. occupancy managed communicating around

Talya Nevo-Hacohen

we're across some all in that portfolio. you to and both see the growth tell in -- AL IL can I Well, continuing consistent

worried and they I in where to puts In at supply fact, were supply. right we end around what the all the were XX% increasing going portfolio holiday before the at know we at at together, currently when were XXX of all basis occupancy. about below with of July, that and points -- XXXX our same they're them pandemic, that the do hit about end

we're there. think the occupancy, on portfolios So the momentum together our at We're I [ Canada, leased just think ] second XX% is XX% our -- our it at also Canadian occupancy. leased where X/X I quarter. number of where of in similar for our in operators And portfolio you momentum in of under ahead occupancy gave portfolio seeing about call -- seeing is or our the higher I -- are it in

-- to be it's good. looking really it's just growing. So It seems

XX% what into the going is numbers keep throughout increase of being are supply in the came that it's in pandemic, and these total, on the a I going Senior to, of absorbed. in pandemic big And in up. additional that's so which yet, Housing supply number. really alluded And market that's and excess kind substantial, the And

Elmer Chang

know And segment for could Got is it. high-level are investment what seeing managed that I cash you what board yield, the that. then might numbers on the across around all side, pricing, initial in sticking X% mean of well as activity? investment of there you're the deals terms today? Appreciate that that transaction is and mentioned you And the pipeline segments. activity you're any to more seeing -- does the put of representative that

Talya Nevo-Hacohen

first. the the take I'll Okay. first question second --

that. they're to The Housing, say locations. are today on And cap going for not X.X-ish Xs, Senior rate Xs, acquire going in at X% to looking to active of be X% able if X%. we going guess at so you're in lower pursuing I'd X in cap we've relatively that for are old in they're general adult, modern assets an X%. So start active good Housing, or up and adults, a well but yield than are and is it's it's the Senior the My rates leased new. so younger, to completely kind They're initially they're going or been years market in

I the that's markets are, where where debt frankly. the that's because market is think

debt, debt on that really us outprice or used availability -- competition of pricing the availability. so based and was their it's So drove cost the and pricing to down

under we we're placing LOIs our on that amount does significant that's LOI and being deals selective because In a improves of portion submitted, make our those them committed then what seeing of pipeline, will A are That and or at. very Sabra's would proceed way there's It means investments we're where capital in small that to is we're we're them. really to review. portfolio. just terms $X.XX of tell you to deal have mean right of enhances looking of our flow. intent out a not now, I probably billion

Rick Matros

the on The going rates pandemic. make yields that in the and only are recovering other those I'd from is comment still SHOP cap business the is

forward we've looking growth So all in we're nice that to those investments announced. really

Operator

of Capital Austin from question Next the comes KeyBanc Wurschmidt line from Markets.

Austin Wurschmidt

the driver on Or of I triple-net did But curious think this kind a you the activity sole the overall alluded driving the of SHOP guidance just and year's was well? to instability if the impact of increase. any segment as positive guidance investment increase? outlook SHOP have

Michael Costa

Yes. investment the is muted -- given of of I impact say probably pretty this it second the is is most year, the would that year. in for half

to lot numbers XXXX our in a as see uplift So of you're it. full of not result year going a

impact more going of see to the expect that You'd beyond. into and XXXX

really stability with that driving say half of is our the in I our our optimism the back portfolio, our performance year. the for the yes, combined portfolio, So core what's triple-net portfolio, same-store again, that in would

Austin Wurschmidt

previously Got NOI to assets. guidance Managed Senior reluctant growth guys same-store little provide it. for And Housing then were the a - you

guess, mid-teens we incorporate you was initial that teens confidence in think You that about discussed this mid-to-high growth. giving what's the your I the versus how And whatever should more to formally? growth outlook? assumptions into

Rick Matros

pandemic. to it's it. extremely mentioned the that. time all more just the in predictable now. is remarks, as as that And take think It's back business opening we shot but passed business. we've a recovered my has disappeared, as first that, I predictability, I'll an simple pre-pandemic as This really at That was come starting know, as I from

giving time it's really of function confidence. more a us just So

Austin Wurschmidt

So we on bit? a the forward have kind portfolio, that outlook out going you'll willing be the an SHOP things annual of to basis expect should for give given stabilized

Michael Costa

when I predict we'd would think guidance easily easier consider. that a it next could the we predict I we stabilizes, more beyond -- easily mean, And stabilized or to out or put it's the to XXXX our anywhere something that, becomes it, extent for has the portfolio portfolio it that. if if lot predict definitely

Talya Nevo-Hacohen

-- Managed to going cusp our you for many answer SHOP And response. thing the why of in tough a add leverage the is relevant, and little in the give one particularly portfolio I'm to because a assets operating specific we're - in is very and Housing a to narrow more portfolio. operating that's that and of us great hitting the at detailed it's leverage Senior

incredibly to think, In which the I passed U.S., we've that already you're In the strong occupancy Canadian some on why that from the significant in EBITDA of numbers well. it, the growth. outlined. that's incremental portfolio those, we're I is, of driver of going as seeing the be the contribution sort cusp of And

Austin Wurschmidt

That's helpful.

that are one, lines These last along - cap of you're leverage. X% rates kind where seeing on similarly the assets similar Senior side, the Managed for Just the assets those operating you're from Housing is to understand at where in. do stepping trying outsized portfolio margin recovery life and cycle Or to in-place of an Just opportunity? perspective? where occupancy are you the in they the see the

Talya Nevo-Hacohen

They're line. in

as opportunity the mentioned them better significant before, of are over well couple somewhat there as than is, doing a growth years. there Rick of But others. Some next

in underwriting X% to So not underwriting stabilized. upside. an we're an with to X% We're going

Rick Matros

perspective. other thing an with years, out investments post Leo been a Brown The operators. our the both and one doing who's that We've operating point quarter for business development of we is I'd from announced Group, them strongest with

to enter so operator the us think, much into with going to so an I for so and And bodes forward that success, these had well. well investments as is new growth familiar has

Operator

Markets. Juan from Sanabria the next line BMO And Capital question from comes of your

Robin Haneland

This in Haneland sitting is Robin Juan. for

pursue would what more inclined make acquisitions. curious to portfolio you Just

Rick Matros

we we're to create not to just or to anything be disciplined of in work and willing on to we're that going a not do. our and of commitment portfolios lot out not a point, that's and -- this that take At going there, seeing made everything lot noise. a we quality we're predictable rigorous We've are shareholders

and we're do a work. possible those to to require what least more And to on tends there, do digestible seeing at deals small out based portfolio take that, than some happy many of as than we're as on

Robin Haneland

next what's left the asked Medicaid, on down for is significantly? expectation guess now any And there inflation with Okay. differently, catch-up I increases inflation? year coming on

Rick Matros

Yes.

have guess may is my a we high think I year. point hit So this

still inflation. capturing I we'll year, think next be

us. Medicaid next we'll So inflation assuming still But the But years, I those I over ahead well. few think will some next have rates rates still rates year. outsized certainly, we think moderates, of moderate outsized have as

Robin Haneland

about split? the the we from a investment How should And think growth? just what pipeline. And last debt-to-equity on can one expect we funding there

Michael Costa

Yes.

continue remarks, revolver, our we've available and and investments out, funding my in So define viable very so see we that's accretive use source seeing is investments prepared use matter of you the as still capital, where in on I how and cost leverage-neutral basis, equity a given to NAV, ATM, so an whether go match Sabra the our no mentioned forth. to been strength make fund of that on earnings, could accretion, and from

source of laid and other use on could capital sources as as I capital is expect sources and of capital, out. had us fund we yes, that We can some a end, attractive of of So those that. that. should these. that quarter cost lot that But see closed capital, subsequent our a you dispositions capital, pointed have to we you combine to in use equity we make of earnings our with long very release X revolver a accretive are which acknowledge to source that investments out equity cost we of it limited attractive to that with It's

like, out necessarily. go So cap and be really capital the as have investments we to find long of a it we that isn't as to there able on cost

Operator

America. of comes the Joshua question line of Bank next from Dennerlein Your from

Joshua Dennerlein

go to wanted back. I

comment was the behavioral or space the remarks, opening a on EBITDARM there I think coverage. EBITDAR coverage in

then I said but think today? was is prior what X.XX, could you confirm you quarter? what that And it

Rick Matros

X.XX. said I

Joshua Dennerlein

X.XX.

Okay. more All right. sense. That makes

Rick Matros

XX% the these over last predictable But at some. length X And facilities as a business have Senior look it do on Nursing, stated, of residents in it's with you breakeven shorter I a actually. stay you XX%. because have you the but than if you quarters, a as about Skilled X.XX, point occupancy also not move in or around Housing does much to

So it's and that this a to much everybody. new different model, understand economic I is

reflect on But than notes at comments hovering the X.X, I'll yet that coverage Skilled. Housing and Senior it that's that aren't of around you, the think I looking take And tell some folks differently newness right? we'll any

Joshua Dennerlein

Okay. And specialty hospitals out the that X.XX, other? that's stripping and

Michael Costa

it's in there. included in No, we It's Josh. our what disclose supplement,

Joshua Dennerlein

there big variability those Is X categories? between kind of Okay.

Rick Matros

Yes.

hospitals the So we more. much coverage, specialty underwrite addiction Xx at treatment have or but higher investments the

at a level Skilled with than them either underwrite or Nursing Housing. we So do much we Senior higher

occupancy. always to there's room is point the So be given some going where particularly with breathing nice there, breakeven

Joshua Dennerlein

is why much breakeven so point That And XX% the Okay. lower? level?

Talya Nevo-Hacohen

the than are Because addiction have. higher what far rates treatment in you

let higher in everybody, for Your super-high you end. is, or XX structure finish Medicare Nursing. than days. are me you're cost have is The a people it, XX Senior call like but would rate far somewhat stay -- length days, this Average over. It's Skilled Housing of rates turning

So that's one.

staff. clinical less have You

you have costs, which have you You amortize more fixed have tend without similar scale fixed greater but those to over to costs. -- beds

is centralized whole You any on recovery portfolio customer acquisition very company. really which don't costs. your is biggest of the model, a much variable cost And have

assets. on So higher behavioral our so-called we management fee underwrite imputed a much

Rick Matros

to spend time on more with you happy like. off-line, if I'm you'd

Operator

of next from question the your Griffin from line Citigroup. And comes Michael

Michael Griffin

to back the set. want go opportunity kind to I acquisition of

know on of sense capital open acquisitions comments debt cost your of Talya, a could Skilled accretion sort Senior you on Nursing? your spread between give for markets. is And what again If you made lenders lending and and both capital. then Are some I the average weighted us

Talya Nevo-Hacohen

agencies So are up building moving -- open. single meet not to Loan-to-value were are because debt. that ago challenge the challenge just the that is not the cap existing get I there to even stabilized, still nothing are X And been -- rates rates was service could But the it's the years to loans what are your you mean open it's else, I debt in-place X%. coverage. means if a If that's values refinance available. Certainly, biggest when for people somewhat criteria. -- they've it -- of cap today extent

no a be leverage when to cap debt So rate and it's going their lot going at There's -- to lot borrowing X% a just not pickup one's and X.X%, the buy rate's positive right? to not X.X% of there. equity of from a

Michael Costa

terms than we that is based in Yes. on your funding These proceeds, we So date, basis the -- to of that to we've price investments our we are spread at that had. that the we some ATM at there sales and I what all disclosed trading that, sources disclose so able on sourced at use And lower on are on in points the which accretion, right? which to a expect did spread over question announced so XXX filings with ATM, be today, more the there's And we accretive, forth. be to attractive as prices. would better we're

Rick Matros

the businesses as to improve continue And post-pandemic.

Michael Costa

yes, just because good a the basis that XXX XXX ongoing -- yields. point because points was over in points I basis quoted that's Right,

Michael Griffin

on Is guys. other operators expect curious this to there in the a good, I'd your the deliberate then it factors sounds skilled And thoughts there. seasonality to color taken get by just would increasing. to the impacting future? your Really or you appreciate be increase mix are And That this? or action continue

Rick Matros

Yes.

admit. high to as little haven't so increase. happening is our affect who hit occupancy basically, bit. it skilled on still in be So they may But continues expect improve, think are would Seasonality I mix, I more able a selective operators to we to it what's

when operators. that to Medicaid a have you around occupancy, the in portfolio all everybody they filled. really in got little our we get other increase those in are you census may bigger Medicare than wants And operators beds census their high-acuity So -- the do in see But turning you've it way, may circumstances.

high-acuity really others. they the all you them future, which for particularly well value-based is when think But positions focus really than what more on the about reimbursement. model, obviously Some,

recover. able are occupancy So they in to is continuing -- more their selective just to be more becoming admissions because

Michael Costa

Yes.

The other this for months' went to last add effect too, October. put we on that out increase I'll is quarter, thing skilled that have of you into the based revenue. mix is And that worth X that, stat Medicare

that's in benefiting as points all well, out. to Rick addition So the laid that

Operator

Your next question line of comes Securities. from Vikram the Malhotra from Mizuho

Vikram Malhotra

I to of of XXX get you imply mentioned on you point AFFO? capital context cost your spread what us just can some other just Or XXX inverse calculate some wanted methodology maybe use the do clarifications capital? X%. on to basis achieved historically of I'm would is on you deals? to cost take do you an some wondering just -- that give bps And you've how compares

Michael Costa

related So up it's that a in at consensus, basis number those, in there. the what's couple well that we over combination XXX the our in then a come the how I cost, point baked you to quoted, with guidance, estimates as announced we expectation of terms looking will, It our baked and factors of facility. that credit of AFFO dispositions and in of if different and cost the

that, do on it's stand-alone on looking we're leverage-neutral at accretive and earnings market investments on our we share a we're incrementally vis-a-vis produce for the basis and expectation a it very guess, doing I and those or, a basis, what per when And that again, measure. on basis, it

Vikram Malhotra

bps the and can so that 'XX out you historically? how may have to XXX ramp into just what model just we 'XX. then -- compares achieved And Just so

Michael Costa

at it, in time, I to is past, point the in to we've somewhere in NAV trading were the think the in would whenever capital neighborhood. accretion we that a transactions position a about to equity execute way Vikram, best our is was same I of think where and similar at cost expect able that our been on a premium probably

Vikram Malhotra

it. for Rick. then And question maybe or just you a high-level Got for

that how think X starting AFFO issue. grow to growth now tenant clearly differ the that trajectory multiyear in and just much X from there trajectory of next a X% wondering, as would I'm may loosely wondering, we've to longer history. again, And know about past the change past, I'm I talked lower COVID health forward? or growth I no going that is AFFO a is years, we're over just anything period. you're higher an

Michael Costa

managed because absent becomes our investments, prospects, that portfolio it I more that growth X% in will probably additional steady-state of contribute any once investments, course, share any additional and think and stabilizes expectation it, unreasonable that AFFO predictable think absent its I not portfolio. for to a fully growth, of is per terms an

opportunities increase neither But steady-state in keep mind, looking of nor in peers constantly our us are of the We're for portfolios. are business none -- Sabra additional to that.

sit So okay that's going we can't portfolio. it's that. because change think But things are steady-state X% a here assumption to and say going be to I on an

Rick Matros

exceed pre-pandemic Margins pre-pandemic There's point Occupancy supply. is different to other the we're levels. make I'd The no that should exceed already Skilled Nursing that remember, side. is, in these asset classes. going seen levels. a on very inflection We've point new with

addition So to Nursing -- continue we're going to behavioral doing and investments. we're to investments, investments -- Skilled and in SHOP some do

earnings particular is growth. impact continue that going our component disproportionate to a have so on to And our of portfolio

pretty exactly we're fine a without So putting sort point number the about be. it on what of optimistic may

Operator

line question the of John Kilichowski Wells your And from from next Fargo. comes

William John Kilichowski

are the rate structure? curious made deals I percentage much but then what Maybe And to you could of the those you the loan-to-own know for million give us option more there review, if $XXX get strategy, quarter? here. been the of under hasn't this a are those you mentioned of the attractive recently, starting cap under on purchase loan

Talya Nevo-Hacohen

was -- upwards perspective operate closed The sense wanted lease because as -- mentioned. to to anticipate currently the of us X%, that that business of we Cap That operator make a from option operator only we had have who is we've and from well -- is situation the you of making and be We're we that that those. whom that an investment, that not it an purchase is off-market from a the just of strategic with rate a location, situation from state great deal structure in having. came we themselves. both on was They -- the that will expect, one based the with as success the an hard -- say I from the these.

Rick Matros

And the be investments some place. are totally other work capital But loans. us, on putting earnings of a unless is get growth. much a just one, to point of on is, it we peers to And reiterate I'd our to make our in all going so to to we're strategic different just position are all. That's our contributing value why focused

us, point of in only downside at development, really, for it. it's this got there's loans basically short-term to no there. that's our The And growth money stage organization's

So not going money see in to us that work fashion. you're just putting to

William John Kilichowski

G&A Got then And into here. it. maybe jump

I gave think think originally cash in far million happened G&A was $XX for the for the the implies off guide that gave numbers going be so year. it a near a Based first G&A. cash XQ, stock-based I in half comp this million of and you number to year, you what's roughly $XX

is So causing I'm acceleration curious what there. the

Michael Costa

we to that there. compensation in and ties a the we that resulted quarter, had of true-up this in year with an estimated, And increase we guidance, up increased better that right? shape than originally fact had expect expense. performance-based So the We

of to at expense remarks, half We the But quarters run a good end of so on that's increased, that you second of worth, year. you the half the rate first up will, back first focusing, rate of I look noticed if prepared for the that is run in if my X in was year. the why the year quarter. So the trued

Operator

Securities. from of Your Wedbush the line next Rich Anderson question comes from

Richard Anderson

above course component On understand well And the you high in the settle is to to how looking strategy? raise forward that. of have to it stock the this what's on mentioned I forward the the your you you stock But over -- chart these better ATM, did why stock quarter. and at the trading just price what equity? fast move and you a XXs have contracts

Michael Costa

don't think is I this generally, contracts, these So atypical.

we the pipeline us that it's a for pretty have on those those huge it's just been that's year, In of to fact, year you those Because again, potential that proceeds I proceeds foresee I amount dollars contracts. we've about. given unsettled. settle talking not don't a have think standard or holding a to

think I the $XX under million. somewhere neighborhood it's just of in

think at we of investment be a unwound us I don't So we a ever being deal in in is we it of to to be stock want I in don't terms -- place as that trading where see through. position short I that any really relatively want like order find flow make could our sense. and come ever doesn't an But strategy, somewhat see where

really that and to we look to in into transact like. that because just a day it I position on market. a don't in some in then ability the something that have to we do find and can't ability cost the want deploy ways and be ultimately -- that today, lock if sense of of if have to we'll lock makes have capital, I within If the but cost at we ability find to that bad price something we obviously, to capital picked -- a reason, the of in

Richard Anderson

still Okay. you ATM and I so to in about of something I maybe you're deploy a making strategy it. it raising be mean, about? but way interest bit little better that you'll equity that It's that's What way price an still like dilutive, think while into equity. income putting lock it a would imagine waiting to account? approach to interest-bearing regular Is

Michael Costa

Yes.

where like I just probably to today, have But to position, given dividend trade-off trades maybe about Rich. NAV at that trade We that us. for the that X%. know it some be in think make in stock trade-off it. I'd best I think done percent and love premiums isn't I something we If doesn't their the place, just our for our yield's of because us. have they we're consider. sense peers XX-plus thought

Richard Anderson

rate Okay. did mentioned paid But a on good Michael, in you a tenants rest quarter, the some year. and of events getting cash-based think you. you you us sort the mentioned job nonrecurring for of I second run the also

quarter. You collected the in second it

much so the things? hit be the How line quarter. collected the skewed that that? really quarter, second second it rents first item during not based, quarter, happened, you where it first specifically cash of and it's of sort that should for adjusting we How quarter that because So

Michael Costa

Yes.

million timing. that because somewhere and $X.X of of laid was I range increase timing. $X.X out account was million, Well, in number around the for somewhere that to was think that, triple-net I that cash rent, in the the

to Rich, should forward run going a I expect. think best $XX the rate way quarter about it, the is think you million is

tenants, be at bit. to look so you volatility if it we of that noise that's always roughly -- always blends with basis little some sales And mess year, the there number had also we cash there's first of that. But half in a the course. too, the had going out to because to going There's

run laid $XX So our that's million rate half as the out why year. quarter the of for back per the I

Richard Anderson

single every absent quarter staffing. has Okay. been call Maybe, this Rick, conference minimum from

here. to record want get Just on

Chevron ruling, say this essentially over we the Can that with? officially is almost? With

Rick Matros

recall I the said that over before with you'll was Well, ruling. it Chevron

Richard Anderson

do side? with the a more So that. And the need get to don't in hire Or I'm thinking on G&A you to people? you answer line. people investing then finally, again, have you I fair execution do guess the that's SHOP, to and SHOP a the need meaningfully SHOP if scale about And more on amount you more larger do

Rick Matros

basic would pretty from be nicely. And can pretty scale point. of in that infrastructure all incremental up shape because the to place, would at going anything are people an good systems need in forward, we we so the add pretty and infrastructure terms perspective, We're in

Operator

from of from Michael Stroyeck next comes Advisors, the line Street Your question Green LLC.

Michael Stroyeck

the that essentially bed NOI coverage. behavioral in appreciate forward but count, a health since change saw no property one quarter. unchanged comments and real quarter NOI occupancy But despite sizable maybe or during is from surrounding decline the I the last on

we can guess so and that driving delta Just So cadence volatility the NOI better business. I of what's understand just in the there?

Michael Costa

Yes.

quarters, look the I the the quarter-to-quarter. the has the around same, jumps that think if in couple last been of NOI you over -- even property count though segment

anomaly. into So kinds quarter there's all there's factors that of percentage I There's lease necessarily go There's for that. think reasons this an rents, up, various is don't it.

So I for would that just say like the lumpiness you're seeing atypical is segment. not

Rick Matros

an I think as trends it in something do deep we're accustomed and is lumpiness to. sure what it doing been doing we're and life this not dives quite that. that worth, We it's time just concerning, to operator, gotten make for for enough -- any are was before I the seeing my that we've we've there that because aren't some

lumpiness other of a is something So is in lot that's the the lines. more business normal than some it

Michael Stroyeck

That's of seem you recent then REVPOR is that know. declining, traction, with just you'd equal, seen in be street growth driving Okay. do doesn't be seeing the maybe And for What quarters but good Housing market rents Just sector? one the business. the case. think on the to slowdown we've greater think else - Managed Senior vacancy should to all

Talya Nevo-Hacohen

year-over-year willingness increases. pay XX% Customer to

the justification, a for was and you're I past an you in so really And to period occupancy and because your think a particularly doing -- much REVPOR not -- a going you're and probably it to and part trying fuller, the labor using, long of labor to are growth was too at living really was growth. if are it In high fill Senior it's some higher building underlying want much equation. Housing of that's memory versus to operators even assisted ask means years, there up increases couple manage so point, have increases. -- care that care taking I'm

stabilized have harder increases Frankly, labor not it that while to levels some rising throughout before. the justify XX%-plus were has be year-over-year it's it economy, might was there much the up still being and the to stabilized general, rates demanded. and overall As extent, at pricing, is going in

I -- residents. we what seeing we is think a annual for going to that that X% even And we're, our fact, to were saying are I in-place be was seeing that expectations were year X% increases. ago, -- in

Nursing residents euphemism, such. and people passed What moving want The out. you in to I losing reasons. also getting in guess, Right more to is of than move to they because Skilled -- out either they're or who having facilities, now, stay. want you to they're maximize move have trying moving because situation residents because and make That's i.e., residents are higher-acuity operators of to to as grow are financial come point a XX% -- length is avoid continue where a balancing occupancy. to That's of

And so that's the balancing act.

Operator

question Equity next the from Feygin comes of from Baird Research. Your Alec line

Alec Feygin

stabilized one for not disposition much the Sabra does left generating how me NOI? First for have property candidates, is where is

Michael Costa

don't I mean I $XX-ish know. million maybe.

Something like that?

Rick Matros

there. something million, $XX-plus

Talya Nevo-Hacohen

value. Of asset

Rick Matros

value. Of Right. asset

Alec Feygin

the drove in segment what is this #X impairment Behavioral the And Health quarter?

Michael Costa

Yes.

during some were on to planning those facilities. made we as They were end, quarter where quarter properties behavioral. to point There's sales well. a subsequent So the as announced, we we some at shuttered few converting

and plans going decided those we were make properties them those to based it fashion. the Based out Our on behavioral. on initial convert in locations, wasn't work in to market, that

selling are it. buildings. we what those That's So to effectively led

buildings convert. it was facilities we're were So it or wasn't to operating that shuttered These looking like open sold. were that

Alec Feygin

on is color. any to thirdly capturing That's the or Avamere XX portfolio months? has upside And Okay. helpful now is the options Sabra the next company over expect to it, the related and

Michael Costa

reset to to I referring Is think to? that option our you're lease. you're that what referring

Alec Feygin

Yes.

Michael Costa

Yes.

And to That portfolio beginning a I in, been that performing X-year think, reset. to has early that option window, I there's say, want kicks year. next So well. like do really

ago. lease years we anticipated that of recognized as there percentage on We we rents a have restructured couple when had

portfolio we we get makes been evaluate the stream we're So your X-year year them to back. help that to some going percentage it rents cut reset in see when But into looking years gave that window, earnings we sense question, rent. where is that answer like and that of receiving to the several next to recoup where rent have for

Operator

questions time. over back the [Operator Instructions] further this turn I'll no are call to Matros. Rick at There

Rick Matros

And to as appreciate today, conversations. time a And we you and Thank Thanks. support. your the great all offline always, available day. all for of you we're for have

Operator

Thank you. This does conclude conference today's call.

may Have great a You day. disconnect. now

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