AHTR - Earnings call transcript Q1 2024 | American Healthcare REIT, Inc.

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Operator

Good morning and afternoon. My name is Aaron, and I will be your conference operator for today. At this time, I would like to welcome everyone to the American Healthcare REIT's First Quarter 2024 Earnings Conference. [Operator Instructions] And with that, I would like to turn our call over to Alan Peterson, Vice President of Investor Relations and Finance with American Healthcare. Alan you may begin.

Alan Peterson

morning. Good joining Call. Healthcare for XXXX First for Conference Earnings us you REIT's American Quarter Thank today Danny Operating recent and me Danny, discussing Financial Healthcare Oh, With our are American Investment news Gabe, Officer; Peay, CEO; Chief results provide REIT. Gabe relating Chief and Brian financial Brian, to Willhite, prepared today's position, other Chief Officer. On Officer; will Stefan Prosky, and call, President remarks and operations, of

analysts. question-and-answer these we research conduct with Following a session remarks, covering will

risks as by a future any statements, the more of impact in you advised financial materially such call call All than only otherwise, as XX, may filings obligation are result speak forward-looking assume could those today, detailed We results, this events be other and a future uncertainties statements you these made new projected subject statements interpreting as law. facts statements. actual to Please for include May on in required forward-looking forward-looking our caution of XXXX, operating discussion Therefore, and prospects. and statements or All of that dates I could them. our condition to are information, that will that except relying cause historical whether SEC numerous that during refer other forward-looking or risks to differ from update statements. as otherwise this or statements specified. to be of exercise revise results should no

with measures performance. this or financial substitute Reconciliations should supplemental are be the During our which company's useful financial prepared GAAP information evaluating and of today we GAAP. measures accordance package. measures, included the measures believe comparable not non-GAAP with to results certain operating calculated our in release discussed in be accordance we earnings on isolation in for financial most directly call in as non-GAAP in call, can the considered a discuss will These

as at documents the of these filings website You well replay can as conference audio www.americanhealthcarereit.com. and find webcast our SEC this on our call

I CEO, Danny Prosky. call will to With our turn over that, the President and

Danny Prosky

Thank Since the of focusing and optimizing Stock we've on been you, for stock the our Alan. thank in on capital you Exchange listing by and York of on I'm operating portfolio staff continually New at morning, busy and Good joining. all February, everyone, allocation. AHR performance efforts and offering common and partners. as of as executing opportunistic of well impressed here proud the our our

providing and our maximizing XXXX start, residents to for estate on remains addition portfolio real focus our diversified all in care to for our four the of value outcomes portfolio our of health across loan high-quality segments performance a our Our trending tenants stockholders. property care great in is positively. and off is

in our year-over-year encouraged up XX% quarter with growth the XXXX senior gains NOI to SHOP this of of are health see rata margin in integrated pro and We drive our expect combined. which will And campuses make approximately NOI we our and XXXX. occupancy strong first segments,

headwinds, team and we faring segment Our hard outpatient year. our work within medical the combating that asset expect are at management well, this during buildings is

is levels. proving improving see profile net continuing tenants triple its portfolio our our to growth Finally, of many coverage lease with steady

to expected U.S. where within the due and of our aggregate up benefit. well XX-plus to the year million beyond, us life a projections grow tees limited of its positive U.S. According make population the growth long-term than buildings. forward and we constrained within to the until in of of this Census the believe see more to businesses new availability that construction and look we environment decade, for rest care is to the from costs individuals. We within As to like sector supply elevated now growing Bureau's expectancies ours stand the trend, longer along capital believe imbalance the population needs X.X with care to end supply/demand census

to transaction Turning the market.

assuming previously properties beds pricing $XX.X out have associated announced, after XXX we with $XXX,XXX debt XX of on we As works the of bed. closed properties million. an This acquisition the to Oregon in of attractive per containing

and expertise. available We cost real at allow will of in the and properties become cognizant we anticipate portfolio. We hands-on to more of Compass our estate have prudent opportunities balance capital. Utilizing indebtedness will face performance lower the remain many initial Senior manage transaction asset could operating is bolster continue Living brought higher our having further sponsors to to sheet us refinance like this Oregon partners to as properties our to rates. Regardless, reality of be our positively. and trending us at undermanaged that and management LTVs These metrics

As growth. we and execute seek types these fund opportunities cash proceeds from primarily organic of and disposition flow on them to free with

of our And one, the to investors commitment a measured of it number are, for Before community Number now capital available turn committed three take number quality approach returns that health focus strong three, delivering is I first. areas Brian, like risk-adjusted proving to year-end to our over are to and market. as attractive in and our performance we the until to main I'd portfolio and emphasize newly our our maximizing advantage two, for our to care REIT, care segments residents further value investment operating our from that comes today's allocation positive Gabe outcomes always, maintaining for listed refine and across health stockholders. our

I that, it our who turn into to dive over will results. With will Gabe, further operational

Gabriel Willhite

Danny. Thanks,

strong of get our momentum portfolio, of our particularly course, of Health consists and to portfolio, remain which, excited operating to Senior SHOP As and Integrated Campuses. Senior and housing growth fundamentals Danny mentioned, we steep trajectory the are continuing are our within clearly see better.

integrated housing nearly over of point of improving historically points XXX our and NOI Same-store for encouraging the very compared by Health and X, solid Trilogy occupancy Focusing sequential occupancy slower grew quarter increase same-store facilities well. a across by the rent of strong to XX.X% first leasing, in and XX.X%. QX these an growth growth steady in XXXX, Senior to senior on to quarter Health basis first is first, occupancy operated as segment XXXX Campuses XX% Senior quarter is driven May quarter-over-quarter XXXX. to Campuses it XXXX with spot at quarter Integrated Early second see as occupancy trends

strong Our to expectation tailwinds drive will is facilities. occupancy continue these that demographic across higher

XXXX reimbursement increases in anticipated skilled and Trilogy's benefit nursing XXXX. the effect level increases to and Medicare will business went from also continue that in into Medicaid

some through SHOP management. brought Challenging we've to of able on the our also active to uncovered tide really went underperforming segment, and out. And transitioning While to active operating operators see the pandemic, meaningful in Health after operators same continues Campuses, to starting pull-through Integrated an meaningfully significant achieve more years, are a gains NOI. from we by optimizing SHOP operational Senior asset our conditions fundamentals and been as higher level importantly, segment growth metaphoric our the most benefit supporting few strong a

transition XX.X% XXX quarter the SHOP occupancy drove average the completing segment our XX.X% at up XXXX, in transition, occupancy XX% in drove to of of an dramatic year-over-year quarter of believe Those a recent over Nebraska for we complete. to in the March Our XXXX roughly the basis quarter gains prior NOI first in occupancy margins in very most basis the operator of portfolio year-over-year. The improvements first our from of portfolio NOI during same-store points resulting the first a the strong basis. After increase a improvement in over went points increase XXXX, the quarter first SHOP XXXX quarter. XX.X%, XXX-bed XXX in transitions beginning a are on

quarter of to winning be that suggest strategy deep weekly that steady operators We gains, mission-driven commitment to we continues be have strategy that XX.X% and occupancy call serve have the We've X, a SHOP prioritized one this May bringing with as communities partners. trends with success they early with to same-store had proud the spot regional working occupancy to can XXXX. second and

of performance. resident operators also quality labor but not is that impacts that overall terms solution, care labor expenses, negatively the and In experience, it expensive and our of understand the thus, overall most only agency

prepandemic glad report labor most our sentiment to there's nothing a through suggest will positive that operational to that point their not normalized and operator to this is portfolio. with This and development, are our continue returned very of across staffing to having nursing agency SHOP has share We focus. eliminate the a expenses XXXX to that us allowed levels from with environment continued agency

of below Danny one of over attractive portfolio transition consisting our As a of results We strategy at basis in costs. early the February, immediately an trusted one replacement acquired XX deeply mentioned, long have circumstances of executed this Oregon operators we work to significantly XXX and multiple are operations in to properties beds opportunities now, of a and strategy incredible to where this a created time expertise confluence execute. promising. moments seen as believe the rare in is those and We've relationships has you the as we times

Of to window course, it's there's be today. predict no how long way open, will open clearly but this

it news nursing Before regulatory around the over skilled to turn talk moment to I'd about recent for Brian, a I like staffing.

CMS its the our controversial. there clarity the by requirements should largely, skilled rule Regardless, form. current staffing unanimously on its for across nursing care nursing minimum don't hours. and only we ever believe, is the many It's rule say that we requirement reasons, in on by of of form in are lack flexibility new or And current As aware, largely the call finalized given business. facilities skilled to the number fairly are opposed impact I implemented nominal for between a believe be have the will country. providers expect a many nearly

Management operator our we that a are structure the bearer questions issue, on Campuses, a those of Senior Because the Trilogy best-in-class field of industry. the standard this already is with in But like benefit partnering of and questions Integrated they're Health fair. Services, often

retention, addition satisfaction employee their high already industry-leading than patient In peers. staff having a good level scores they higher to outcomes, and resident to

Force. exceeding X.XX their to per an The X.XX to does Flex on-demand the they of massive hardest campuses, is can of today, support Trilogy day level, the to hours minimum versus minimum Trilogy by stands Trilogy the have XX/X Trilogy hour are force majority requirement operational requirement campuses through is employees to As the RN requirement. Not available at hours the labor perhaps and the a higher requirement meeting is already staffed only that the XX% meeting X.XX, RN minimum each internal also Flex the already that essentially of patient it meet but per the patient versus above of advantage vast X.XX hours, Force agency facility. only of Trilogy requirement provide and in requirements a meet needs day well nearly are Trilogy at Trilogy

Trilogy to is that planned are be we years, impact confident advantages, as this minimal. the X these next if Given to over rule will phased X the in

will With turn to to I that, results. our Brian financial discuss it over

Brian Peay

Thanks, XX% Campuses largely earned NOI XX.X%, XXXX, year-over-year Senior net of normalized portfolio, the operations, is funds first segments in diluted by share respectively. which and of Health SHOP same-store combined growth of our fully same-store Gabe. operating led the the income In XX.X% quarter we $X.XX with growth by driven Integrated per and from

strong quarter, over our rate, of from we of of Xx EBITDA improvement approximately the from paid shares, utilizing debt $XXX million. XXXX. net $XXX first debt. These to XX.X with adjusted the paired approximately proceeds offering an gross completed of During in floating down proceeds end raising quarter EBITDA short-term maturity high million annualized an the interest growth resulted to offering, net the paydowns, million we the during turn

$XXX $XXX after It completed Additionally, sheet markets XXXX. matures capacity between with by revolver to on expansion a flexibility and capital was credit. capacity agreement, the liquidity includes increased on revolving $XXX and we cash February hand manage us extension our better our strategies, credit option. end million aggregate, In providing million quarter, our capacity business. The X-year our quarter and have and extension approximately we of on undrawn executing of and to on on unsecured our during and million lines XX, also of first the at balance

Health Senior down in same-store for At growth combined XXXX. Moving X% our XX% X% are medical, for XXXX for To XX% SHOP, X% XXXX triple in in to growth NOI for NOI our potentially our our full-year of maintaining to segments segment. everyone, to time, outlook. the for we X% on for to lease net and outpatient our Integrated each are portfolio full-year to of expectations X% to guidance this XX% slightly flat Campuses, remind

are funds guidance we $X.XX of operation maintaining from Additionally, to per share. full for fully the our of for between $X.XX year diluted normalized XXXX

additional health care which modestly embedded growth driven diversified will expectations. Nonetheless, our than sheet, changes earnings of expected portfolio income operating and are in offset partially a expense by result organic had higher conservative managing to assets, Our we'll net rate guidance in cut the of interest continuously in is higher the we remain the Fed our leverage. as we be clinical our initially by balance approach

Our end that swaps after X% at was less considering of we have than floating-rate in our interest quarter interest debt exposure place. outstanding rate total the

While we of we that encouraged a measured saw by in growth quarter our maintaining to at XXXX the NOI respect we and point are and same-store first with have approach year. the the results this earnings conservative strong during taken early guidance

at our warranted. and progresses, our revise we will year is the and the results monitor if point entirely as year, carefully possible trends will We guidance it that some during

proceeds delever remain our attain with disposition to of with capital first million an sale additional on we of we of noncore otherwise On dispositions The a million during pricing. capital. We committed attractive provided opportunity and allocation selective of remainder of we the offering, February $XX XXXX. are assets in to in we to noncore or the able projecting assets us amount the front, quarter, down paid our assets stock sheet are further common $XX to provide recycle to $XX the noncore and balance of the exploring significant an sell closed from million to approximately debt

to We disposition. assets continue market to potential expose candidates for the as

and heavily that achieving it rates. amount. prices we further on more So will activity disposition But sell is any possible cap sales that than could attractive be dependent

meet our requirements acquisitions, the prepared in don't that possible. cognizant potential are of to own, we our portion which our capital look purchase opportunistically of to acquire the current includes option that we any leverage cost most our Trilogy That will concludes to of As we already remarks. return neutral and properties way

are prepared questions. point, open Operator, at line we the for this to

Operator

of the [Operator Griffin Instructions] Our line Citigroup. comes from Michael first question with

Michael Griffin

was wanted seems in I I the mean laid SHOP. Brian. that noticed to from quarter. I difference off back and jump there Should a based Trilogy to pool? on in take like guidance, of of it properties both pool, of that that number as guidance same-store is the kind we out go last your the it comments large you a for large

just of if I there are So and any to kind want additional puts see takes.

Brian Peay

No.

the anticipated all just the are guidance X short ago, weeks I current we assets think out the that put of fully in pool.

necessarily changed other for will So I have fact not more wouldn't assets than say an the that, that's that driving but it impact, that the force the guidance.

Michael Griffin

of And Got best the kind buy looking outside one at acquisition maybe in looking back the in the SHOP? just you're Kind the February, skilled? is the is then you. That's acquisitions maybe future. But do maybe opportunity it sense point grow out team it at. helpful. us to of Trilogy, of Is of where portfolio? on the a give Is there. in some you're out seeing did transaction to opportunities you Trilogy Obviously, Oregon environment the what

Danny Prosky

This is Danny. I'll take that one.

of perspective then from X we're we risk-adjusted a are for best available call growing from limited the portfolio. with Trilogy, today, the weeks you and kind within purchase looking remember growth talked So existing capital, option for about the what ago, both us and as our our exercising returns

go single ahead So We a is had than those we and our buyouts. us digit. about on three from very that. paying at developers to rate fixed those. Clearly, We for assets options in cost that did a the X.X% example, lease for we April, we lower line purchase borrow talked where price. leased had exercise on lease high some We're

best really are. we're So what the cognizant returns risk-adjusted of

going similar up although in later mostly asking say a year. growing just us, Trilogy. it's portfolio. The is you're SHOP of outside many transaction opportunity, the to sometime on We Now example much But this focus that. because Trilogy, me risk-adjusted Oregon within Trilogy what's would see best smaller of front on coming there's us I if telling of have our I returns may us think so you're great if opportunities you're another

Operator

Our Ronald Kamdem comes next with line the of Morgan from question Stanley.

Ronald Kamdem

for ones me. quick two Just

So the I NOI to same-store guess, going guidance. back

full-year XX% of which guide So in pretty deceleration. like is feels it's sort X%, a you The significant XQ. did

transitions back the else just any the of anything wait should wait of? So of there season selling on your talk sort half sort mindful be the talked of just -- I can it season? of maybe you see how is so what about you the see forth. But and or guide year? selling Is we sort for know about of anticipate and the sort goes Or and

Danny Prosky

the I'll at about thanks X So speaking. quarters and business, We seen very and I'll several within in. expectations the the what the feel next for Brian year years over to our and rest is chime This for are good last for probably least. what metrics question, X this Ron. we've Danny the of our start, very, let

the cetera. looking limited the supply feel new demographic at been that's that's come about years, right? RevPOR, the we population, Just whole good good really the just last seen of And -- story, a last quarters. X over all Occupancy, aging the out growth, et think with with not we've I a the metrics, several over margin, us, industry as but with really

that at we and direction, quarter update to if to year We're good continue X, QX assume about quarters. to we've close going we're see want into the just going that we the but to on I once it we're a that not guidance and the we're only last willing quite the think seen X same revisit we time. feel over trajectory out

for on the months. completed think I just very X to only is "Oh, in to willing we're, bullish, next the we're that say, year continue don't months But we're going but this X

and update Let's go guidance". ahead

want Brian? to you add, Anything

Brian Peay

We would recovered our I ago. fully the said, X/X listen, so to weeks gave guidance would X Danny of a into the today, has that tell to prepandemic we're back only that's way Ronald, what levels. reluctance our factor year. occupancy I things major you, are the only Yes. contributing say

And pool. in over Do pretty much we that going I some off can levels. occupancy I of last a increase it's same-store our by think cases, for XX tell to. coming another the basis going don't it's in confidently basis think XXX excess points? in that grow XXX of SHOP point prepandemic it's to months you

XXXX after harder a much the quarter, Trilogy at becomes first certainly, comp.

haven't what supplemental, the were which numbers QX,X, you to As dig see, absorb you better as that it is notice grow harder you'll into that there road, in. But we like to was and probably right have X, if earnings don't QX, yet. can we -- a business. We like for by space point down in you the we and at chance the now, than significantly it's entirely had makes Trilogy makes like the that that it but the much. Listen, today. and We think it us sense some it that tailwind revisit, feasible the we're

Ronald Kamdem

just preferred, us all right? something Great. And equity -- the right? following like XXXX? avenues You then be, the get issues? also what funding sort what talked right want and to maybe you could Just remind clearly, about go just up year? funding that on would of this avenues, Is it of. is timing, first it Or Trilogy, you question what it your on is Can of just the done everything own it, on and thinking on

Danny Prosky

on not lot a timing, Danny. is just right, on methodology. flexibility got of there, this We've but Yes,

We of next have till September year.

cash, We it. So preferred or mix. under to use years can X.X a little do

ago metrics and want few raise there. debt keep the it to hand, this our to very kind -- off work sheet. balance went to We it's through money a and credit pay sheet of all to maintained we we important balance one want months we bring to that On dilution investment-grade --

want So around borrow is last to do to and exercise thing just option. the we that purchase turn

be you'll think are it's conditions or do depend equity which we're see it recognize we we we it, raising year assets. The I on year, it, market successful and continuing potentially doing can think -- I on sooner us would or the new nice. the earnings, this sooner definitely planning sell to whether how next will

to On creation hand, of the the going inert matter what. to value no Trilogy other us is

not to any we're under So so. do intense pressure

more going you're assets. off in think buildings. sell us LOI under see market. that got to more I outpatient continue contract medical sold we're to to exposing the We've We've primarily

be expect things growth, EBITDA over to to I So pace several a continue mix and nice going sales organic those new it's and are strong of to we been think increase potentially equity. which exercise a I last when the option. going purchase that quarters, asset And dictate to at we has very think

Brian Peay

that trading the stock very we we able Trilogy future, prices, recognize it's way price we've here we're shares, means for to a as tremendous as can. the optionality our negotiate, if the Ronald, if in recognize our is we're its that at the to would people current that's associated And create be, we the price with out of that institutional investors the near utilizing decent there goes but and possibly assets us level affect chance those lot that a I that that goal successfully one final been consider certainly attractive up, think a debt. selling consider nowhere value at is proposition at much certainly stock proceeds. Alternatively, that today. And the would buyout preferred issuing to then could

taking can it when building the in and of optionality of too most way not we on mindful we're is that. So doing much But target. [indiscernible] our of sort do it

Operator

line Instructions] Barclays. [Operator Our Anthony Powell with from next the comes of question

Anthony Powell

and X% you growth occupancy. noticed I growth think, in RevPOR. had in in X% SHOP rate guess, you RevPOR I SHOP. on, Obviously, very question close I strong A had, about to a that Trilogy

segment? forward above what's occupancy the in growth SHOP for your So outlook higher rate going XX% given that

Danny Prosky

Yes.

significant going will XX-month to who year be number facility who think individuals. are I our is their to lot those to on into that you're of year. admitted up growth grow people which is We've RevPOR throughout a where were continue the coming for see expectation got anniversary, our going So last

months ago. was much higher is Our now XX than it occupancy

our increased expectation an that at you're the portfolio year. see to on RevPOR is throughout accelerated pace our number So SHOP going

Gabriel Willhite

that, more one point to add like And in. maybe on I'd

So little us in are for that number, that's one part in is of their it. included operator a bit transitions same-store noisy number our

of Danny increase So those higher attached a across year, occupancy you've said, points some of a RevPOR able new them lot in all people have were cases. concessions our successfully when of over number push others. But coming level than as got a to achieve basis course, of and operators portfolio SHOP, to like well of in certain a XXX

our than sequential concession So it our can will on expectation anyway. the it's than really that be normal, through will RevPOR that number higher of was by driven already And XXXX growth aggregate and normal is that or pull in the higher just occupancy that growth you it stabilize X.X%. kind see

Anthony Powell

maybe in you And then, out portfolio? assets your is kind are cap assets What's are the I what kind transaction more about the for segment? maybe you in I talked there the mean of the of guess, seeing rates? I more overall environment. appetite of terms one guess, on this selling interest baseline. in What

Danny Prosky

Yes.

in the majority most that kind of not we looking mostly mind, So smaller of of that been the has buildings off-campus like long Those buildings. what were of term. capped necessarily outpatient kind kind keep ones. the hold the medical to larger noncore We've we've sold

rates. So mix a it's of cap

mid-Xs. is I in think our cap rate the average

selling are certainly hospital. of don't don't to in where be get I exposed we sell the it there's a one is like, still appetite outpatient we've But And we low out was the we contract Xs. there I'd a to to the in under more couple more likely where we're the it recently, an Xs not buyers or but medical, market we years if ones price ago, we have ones that is that LOI are -- it. the However, for believe the probably say there.

Operator

the Our Carroll next Capital with RBC question Michael of Markets. is line from

Michael Carroll

size get kind can to comments circle the higher on housing staffing SNF to hours housing within staffing both able generally employees Trilogy within segments. minimum staffing. the you're back, seniors SNF allocate to the levels. know I hours those seniors more I SNF work and of on to wanted to Gabe's Is because Trilogy the of regarding

seniors Am So of trying that I rule. thinking a housing is to kind benefit about meet having that that component correctly? to

Gabriel Willhite

That federal true. minimum staffing it I could way And quarters look That's X at staffing on side be not that's little I staff the can in well. the can above level. and really could about, requirement rate Trilogy's or of requirement It's easier see a you And allocating that a true, that from they Trilogy one rental X-star that that that them. makes last But differently without independent with minimum has for think deal that talked the been to historic Mike. bit is living business as of staff their just AL really side the higher business. ratings a the basis, you number

Brian Peay

staffing side At the very from some point, side. SNF high it is AL of the the might levels on be the inverse is Mike, benefiting which

bit little inverse a what described. it's So you

Michael Carroll

investments term. Trilogy. then guys makes to are lot the about you No, be know want kind talking have that I remain focused in that a pragmatic been And deploying capital near sense. of those on here to going you of

ground-up the can mean that near-term the on potentially I of ground? a investments. many could similar the you next to we months how Trilogy number are So do developments, to of that you developments working expansions on ground much breaking about how that are XX on there plan over on how think or you think investment related so? And mean should strategy, break pursue you Trilogy? that ground-up I you

Danny Prosky

Yes.

and buyouts the easiest, mentioned asset. already I Danny. are So the kind that We of there. the Those operate April. in this right? already did we is underwrite lease own There's nothing

it's transaction. is really exactly -- doing is You rent you're know just all what a payment you're really financing just

So March. we to prior did end we than own campuses now three the more of

pillars. already think got it's campuses I mentioned We've where already entitled the go. and independent own I and the five to land, ready living we

to on embarking those. there XX projects. almost are take being our construction kind those double-digit of like really They're low profile, short typically on periods prior projects rate the months, about always risk Those and those It's for single-digit, or time they're high And -- reasons. We time we leased no lease-up construction matches several much right? return. completed. There's lower a

of starting five we're work to So on those.

probably it's when they to campus aren't returns than little probably to risk. bit little a those them fill independent living, The up, higher huge are all still you on sizable. On like Now higher take pretty longer They bit add projects, but those take longer but up. development, opportunities. we build, a

see of the think campus than a development, do or over pace continue but X year. X last I think slower a us you'll seen I to done few we've kind we've new at years. Typically,

I living on several to focus as more be the to campuses. going got on down got X the slow see a think going for brand kind I as of you're those capital opportunities, bill we've but more being, a you're long us pipeline, that see as bit think as than long likely I little those in we're independent the probably We've think to is year. new time constrained.

Michael Carroll

is then cottages. size to said the roughly like add just that size? up decent And last what one five all that on How projects there's a you

Brian Peay

million, $XX around yes. Right

Operator

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

Unknown Analyst

versus the on Trilogy just of This rest cadence the Yes, any is QX? was wanted of the of year Josh. what growth [ seen Farol ] I the in to comments for on behalf have

Danny Prosky

opening had up we've campuses and year new of a year. last Well, lot late this

down. got to two I this to I slow year. more left open up expect we've that think or three

at a to As least I the for going going doing forward, time be probably mentioned, year X being. we're

start up living got open those up I villas, will year. year. underway next expansions that independent this we'll to We've opening that be year next and The mentioned,

of little up X this going to new to year a see -- I campuses a or be X I the well It's slowdown. bit last year next maybe this buyouts a as the to think with going mentioned. think years I think the lease X comparing I years, the big you're as opening that

including I year campus at kind in the a next million next it think probably I totality $XX for think number It's expansion. of look independent $XX of couple you'd -- the years. probably villas and living good million to

Brian Peay

increase off to QX you occupancy certainly number, Trilogy, same mind the last on if of Farol, your months. that's a you in -- at Trilogy's points want good thinking a over know about and keep XXX And basis the prepandemic don't end same-store was a I And number. that's question, about XX the it's coming really think you're context that store the but XX.X%. I of

XX% growth this XX%, quarter. So

X QX, numbers of at QX higher and look X than of those are XXXX, XXXX. you If

comparisons to get range. It's So XX% trend to XX%. know of the that down be closer I going more X% don't our definitely back guidance that necessarily to difficult, to and in XX% we'll

Unknown Analyst

do some terms rates That expenses Okay. or sense. when you know the forward comments going any And in commentary thinking expense. that? on makes had you year, have also in of on made I about interest

Brian Peay

our pleased with insurance property that. Anecdotally, insurance Gallagher, I that in of ultimately, Listen, it in at I that job. been has than in a can think we we're up tell slight a our We're you did compensation the And expenses, lower costs, friends welcome. coverage. arrange moderating which in property wound decrease rate a Certainly, with who increases great quite time. costs our the some is seeing payroll is

that's versus last more expense few informative the of of somewhat is. where definitely It's growth moderating quarters/years. So sort

Operator

the comes line from of Michael Lewis question with Next Securities. Truist

Michael Lewis

a occupancy or think known SHOP. there month, the this spot then XX%. earlier there ended And more been Has It occupancy MOB expect maybe how in the move-outs bottom said if recover? quarter in any are about I there you there you and to XX.X% Trilogy, the occupancy talk portfolio? the of as around XX.X% change earlier

Danny Prosky

few have We do think bottom. potentially in at we that renew. QX I expiring either to expect we Yes, particular, near leases the not in or a

probably I vast leasing, upside almost lots leases north lots of expectation We're around have XX. Lots of every less a we'll same tours. the year, But are to end XX% cases, close activity, year is going new think of as some We've well. the our going run renewal to have a in to Of that of move-outs. some some course, occupancy renew. commence more or we are to We're going today. new the majority

Michael Lewis

more the is don't to now doesn't do but portfolio, whether do help to the be -- that you to reasonable back ask as why an Mike says is can't and it be And a or a had goes through they we thesis seem you staffing to to far as experience the and why the have else to and going us do earlier, So the I more have know than like come now you it it ask but to right? is rule, everybody and but we've that able it. the triple-net going I'm that bluntly. ever this gave I about they're got staffing, with that The this risk Trilogy question, talking big everybody profitable? Well, other second operators. it how? seem seems Carroll thesis seems I'm my smaller mean, to the be then answer. line numbers, have a not, issue you bottom covering can't it's And

Danny Prosky

is pretty acuity. and I that higher easy, answer is think the main

So resident. look And higher but nursing, if many three of at even tenants, have of that two don't of kind really so portfolio, serve our a in those you particular, portfolios. have also Trilogy most we acuity skilled our

you to right? going you've care. higher have if So means got higher more staffing, got acuity, it You're

Medicare, going also to You're Medicaid. private have more less probably more insurance,

with problem the one far. rule so account residents acuity, lower it need much all have size who Is as care. stay for longer doesn't So that it's is this those don't fits

is with because That's able reason most just right. as higher of of any, have business. the to role nature higher if survive our the main They of the already little, as that's acuity their resident. are hours and Trilogy So a service tenants impact, of well they rest this

if up a of they're mandate. a serves have of behavioral kind some They that We have that They to lot tenant do lower going resident. required to meet acuity one health. catching do to are

much business. it's got the are us, very, our strong a coverage. rural for they've just But to have very nature facilities. They time mostly longer rent They'd adapt. of Fortunately,

resident a If to you're to and you're kind going adapt level of you're if problem. a you lower-acuity serve forced staffing, this of resident forced, a Medicaid to particularly it's have and in,

Gabriel Willhite

just to add more that. on I'd And one thing

is memory and and of from AL And nursing are campus. unique, model come skilled where mix they this setup. operational have that efficiencies Trilogy's think there I one care, and that on IL

admin team. You've got one

You've got team. dining one

You've the and staff business of efficient across profitable. all makes spreading those and more shared got cost maintenance around more that's the beds

to ever-expanding and that in we we in over, one markets, want And and exciting because continues see over market continue to again and is more that's Trilogy why capture while to it to over, us invest the working model share.

Operator

Stroyeck [Operator Instructions] Street. Michael Our from of next line is the with Green question

Michael Stroyeck

business. Maybe the one triple-net on

implied midpoint factors So it's mid-X% the guidance? call XXXX to, X.X% range what driving of NOI X.X% quarters. by between deceleration it, the been growth, X the to last expected are that's running

Brian Peay

can that I back. then, to talked a we benefited business. and us. were anomaly I that of little Well, kind really a I of an go triple few we're think, maybe X% think should There X% this lease I bit And the tell you But for about quarter. net factors

certainly see projecting to sustainable, I'm fluctuations, not actually, to tenants, our addition added our the rates. that properties don't the that associated currency U.K. into of happen was. I had in increase And a as and with as then moved in rent what's carries same-store benefit it long-term put some And from it. we that, business One to CapEx in we to of result, had it the going these some currency such additional some dollar where some

X% to X% that So to our is the in going same-store range. I still believe be

Michael Stroyeck

sense. falling the rest the mid-X%, XQ makes implied the That year Okay. but I by performance, of as just And I meant totally understood.

Brian Peay

Yes. it. got I No, Yes.

Michael Stroyeck

there those got during that future? And you fund then or in SHOP that company deferred an the the any for portfolio just And primary Oregon question, the then clarification, Is assets just Were defaulted? lender lender need the acquired maybe original on will guys that CapEx once second asset involved within to quarter.

Danny Prosky

Yes.

there'll the surprised that. be the going on In We there's with of a Surprisingly, bunch of lender by cases, the deferred were we assets. of to original back lot but condition So best maintenance, wasn't. we XXXX, impounds lender there the of pleasantly believe, these were I actually were up you a think lender.

operator And owner up not to -- on so property. the the and they're are spend the not disincentivized

way of not much there's in at all. So the there deferred

Operator

Truist is -- question question next Michael from Lewis Our the line we from line the a have of Securities. of with follow-up

Michael Lewis

And is you there this of one for had more also quarter? kind quick just one. from fixed a it? value fair market insight into Or guys you did bought price? the I that What that interest that any was Trilogy of pay negotiated

Danny Prosky

Yes.

ago. for going it's feel we've a We XXXX that from when good did Trilogy had all that that that a So the actually original the the the last of deal piece that value and prenegotiated that those back we we them of Trilogy has bought kind out the million, paid for years. was price, to couple was especially bought years in proceeds a -- to growth and interest was in over total out employees the Trilogy company. ownership Trilogy, price pretty considering The the few But as $XX Trilogy.

Gabriel Willhite

with And I'd was the since founder add to retired. who that, of Trilogy [indiscernible] former that

Operator

And and and our over closing Prosky, session the turn like to back CEO, to ladies And gentlemen, call Mr. Q&A would for that I conclude comments. will today. President here for

Danny Prosky

call. long that not the Thank operator which is who thank like ago, you It everyone, case. did and joined you, these feels of we the one just

optimistic right remainder things for continue we'll forward looking the move year successful of a to direction that see to very are the our We facilities. and in

and the rest summer, a August. that, a of talk in with we'll everybody, have week So you great to again great and

American Healthcare REIT (AHR) 14 May 242024 Q1 Earnings call transcript