AHTR - Earnings call transcript Q2 2024 | American Healthcare REIT, Inc.

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Operator

Hello, and thank you for standing by. At this time, I would like to welcome you to the American Healthcare REIT Q2 2024 Earnings Conference Call. [Operator Instructions]

I would now like to turn the conference over to Alan Peterson, Vice President of Investor Relations and Finance. Please go ahead.

Alan Peterson

morning. Good joining Call. Healthcare for XXXX Second for Conference Earnings us you REIT's American Quarter Thank today Danny Operating me Financial Oh, With are Investment Officer; Peay, CEO; Chief Gabe Chief Brian Willhite, Chief Officer. Officer; Stefan Prosky, and President and

will REIT. Danny, results discussing financial and Brian operations, relating news high-level other commentary On today's recent and to provide call, position Gabe our of American Healthcare

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

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

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

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

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

Danny Prosky

Thank Good and afternoon, morning everyone, today. you good and Alan. thank us you, for joining

XXXX, real the for diversified latter half performance the growth total XX.X% same-store strong enter during care of growth NOI with demand as half second health portfolio year, quarter As NOI the care XX.X% remains first we the health of in of XXXX same-store of evidenced by year-to-date. our the growth estate and

our an Within fiscal year our prompting which our from we X us resulting guidance within property least observe and estimates, will to decade. and demand total surpassing growth the demand aging the extend same-store expect we conservative to both latter part increased earnings internal segments, original continue increase into of NOI our for at This is portfolio population, portfolio XXXX. for

to guidance NOI fully at Our anticipated per has range stands normalized of share. diluted funds XX% Revised now been a XX%. growth $X.XX to from for XXXX operations to $X.XX same-store increased

our operating Brian American will excellent want provide gratitude our the commitment and our for my regional more REIT at later here Healthcare of their regarding to I call. results to stakeholders. entire details team revised the partners delivering in all to guidance for express

hard in team's demonstrated Our quarterly is work results. our

is XX senior positioned are health segments. SHOP real been never company, environment The the to which sector-leading the the and looks space business' for and we growth more Reflecting I over outlook last I believe optimistic includes performance next care within to evaluating care campuses managed our X our our health we promising. for robust least within well When and prospects. at our current delivering continue on our portfolio, months seen years estate, our portfolio, observed, the extremely have X integrated REIT most XX have the within spent working have the over health about years I've strength industry

second of quarter other quarter XXXX, combined assisted the levels. long-term XX the our about quarters. which occupancy excited occupancy assisted has particularly compared rate living and living are for We shows stands living in consecutive sectors growth equals now to second XX% data pre-COVID that from care approximately assisted Industry-wide Industry outperformed exposure. at

exposure the benchmarks. majority living within results we further trend we segments, of industry all although seeing portfolio, of outperformance assisted long-term surpassing While our to care is AL our have within the are and portfolio are units, certain our

SHOP Our the same-store average integrated second senior assisted living quarter occupancies industry occupancy of exceeded in health segment campus and XXXX. the

occupancy the year-over-year to average quality quarter. testament growth in Our second our assets with partners. portfolio quality our operating accelerating the and of are a coupled same-store SHOP above These industry results the RevPOR of

a that the the with interactions both strategic public as While still health outlined earnings last work, sight the as history our real in and pillars we hope call. not our the losing we investment Nevertheless, ourselves all community, are in markets leaders the care of traded REIT, sector. with estate additional we're the early through all in establishing

outcomes cannot management capital in health our I and all properties. our portfolio's and AHR. intrinsic quality to patients enough earnings for is approach And to regional number Number this value, focusing here ensuring how allocation emphasize performance operators. one, two, us residents our and to returns. utilizing three, attractive optimize committing positive hands-on asset best-in-class important at operating on strong care through risk-adjusted Number demonstrating prudent

I results to alongside excited across the operational diversified to achieve further detail. entire I'm our our turn executing to now growth in Gabe continue portfolio. care further health plans it discuss ahead, AHR will to Looking our team over

Gabriel Willhite

Thanks, Danny.

Within rata health driving we're mentioned, managed demand operations segments, assisted second same-store the same to reflected all XXXX. XXXX that health living segment of XX% care, NOI cash in and you Services nursing. Health operated managed year-over-year levels within by As can campuses see care of which approximately particularly the the skilled And portfolio of segments, particularly to robust in standard Trilogy performance, NOI. growth in across long-term integrated our continue compared for XX.X% quarter this our period accounts for see our within to senior levels our thrilled Danny set our of pro

and from the continued in reputation drive purpose-built gains a quarter at first continued the the July XX, second strong its continued quarter have climb second of XXXX, sequential demand. results model, the XX-basis-point with of subsequent as and higher XX.X%. in spot with the occupancy XXXX, to quarter of its same-store to end facilities unique occupancy Trilogy's Occupancy increase

Skilled ultimately to areas. nursing in campuses, Trilogy's to foundation return to providing to and unique in across in occupancy enough top lesser particular, remains growth. some see that norms to resources albeit seasonality industry to the also management, a historic growth above well benefits line although margin for expansion gains not allocated our I've a efficiently playing The explained leads moat, with be excited seen and offset other many out model further I'm scale allow we've as NOI segment, past, which of stable in extent the than results. the expense and sustained to continued continued naturally regional average,

with pull-through XXXX, would increasing our a of occupancy care settings balance and grow. within nursing the in result to line. living, skilled be health Over continue the I incremental demand integrated higher all to campuses expect the to bottom expected campus, living senior And for gains occupancy to course, independent assisted of

current occupancy Trilogy's business, we levers growth unique levels. beyond again, actually margin of of expansion But for outside multiple optimization and because see

of to of Trilogy care growth in as provide completely on top independent growth. its the line occupancy and choice For operator for focus markets, can example, opportunities Q-mix value-based

provides allows overtime improving nursing we've management. unnecessary employee Another is the example, which need ago employee for further Trilogy's which weighted turnover. employee industry-leading reduces opportunity agency seen retention, associated expenses eliminate long to steadily, and constantly completely Trilogy the expense improving an experience, them the costs and for with

when a far Trilogy want by known advantage value loved is biggest and their continue for to and Trilogy's believe we is that said, ones people being see wholeheartedly that in high-quality that decision, a care, its Now Trilogy facility. that in making

our as best-in-class work NOI new industry-leading segment, achieving In underperforming with properties a our with of partnering and one, levels regional repositioning by; SHOP product two, operators. operators; we're growth of

SHOP of compared same-store quarter XXXX basis accelerating second compared of ExPOR of the grew XXXX, gains in RevPOR driven in growth growth. also Our second to by above occupancy approximately and to year-over-year XXXX the by and points quarter beyond XXX second quarter NOI XX.X% the

partners segment report to and our more our half pleased prior for quarter segment, hands-on the drive points in Furthermore, XX, and gains these is operating occupancy post by and performance XXXX. Similar SHOP campuses July basis in as available in end XXXX into trending higher XXX a with XX% asset the same-store senior second to of spot investment At from XXXX, margins further quarter XX.X%. NOI management XXXX expanded our exceeded same-store the of to credit and and segment QX beyond. become NOI support to options occupancy at levels, to health to that integrated as SHOP approach, we're our

to team factor gains driving forward expenses pricing be expansion moving believe levels. further our with delivering I addition to to strategy from control The margin for group, and further optimize single senior most the operating to investments. is where important partnering strong operators current power and occupancy successful deliver our the in that housing continue demand dictates will

for that our hand is when and it management that, with the over other grow us opportunities asset approach We be time growth Brian. these appropriate could results regional are confident right successfully I'll upon during expanded to to externally. With

Brian Peay

same-store income across per largely the share In growth diluted operating Gabe. driven portfolio. of our operations, quarter $X.XX normalized earned we XXXX, fully Thanks, from of XX.X% combined second funds by net

expectations NFFO XXXX year to XX%. guidance. of our range per due to midpoint fully combined guidance to representing earnings is revision of of full $X.XX the XXXX the primarily increased a our a increasing growth are upward XX% same-store across increase diluted portfolio $X.XX in We $X.XX between share, to and NOI for This

for health in XXXX to NOI project for are XX%. our segment XX% guidance our to XX% now SHOP same-store year adjusting we We now as and XX% integrated between And growth the segment, full in follows. expect our senior We segments grow various campuses XXXX. also

revisions mentioned managed for segments which demand segment a increased Danny prompting level guidance earlier, development, pace As care the positive at total XXXX. NOI our to our and portfolio is among the

this never if as only of when. getting to a I'm and I've faster that matter there it mind, would matter often, of a originally glad than we my performance, mentioned we we In And able be are forecasted. of was had achieve level

segments Our triple and leased unchanged. net for guidance remains medical outpatient

slightly properties everyone, to outpatient flat growth XXXX. growth we triple-net to our X% within leased in and declining remind within X% anticipate To medical

managing the medical in of where to re-leasing to outpatient our through expected and is but the anticipated year activity of segment anticipate the healthy leasing those partially leasing with the occupancy end fourth headwinds. new year. from More stability move-outs the XXXX, back actively our move-outs half offset expect occur team of in tenant the We are quarter incremental we of

to quarter coverage most to for in The second levels lease segment our last triple-net rent coverage, ticking nursing total for and our respectively. X.XXx our at EBITDAR sequentially leased currently skilled and EBITDAR quarter see Within senior the tenants, coverage coverage levels leased of we with improving from segments, XXXX. up segment, continue occurred triple-net improvement meaningful X.XXx X.XXx leased in housing X.XXx

received With in some we $X.XX resulting tenants, in as well In same-store $X.X expectations respect earnings. in I our full this is and NFFO subsequent quarter, upside approximately being the million with nonrecurring increase costs. increased to to year changes, than slightly repeat guidance quarters. anticipate the not former from nonrecurring would per ongoing those excess earnings QX to amounts XXXX offset driven share more growth an borrowing year by previous significant in recoveries of quarter full as minor income from

going we as forward Interest expense earnings remains to anticipate from costs several higher factors. a interest headwind

Asset sales the are year. originally until than are which in delayed later means paydowns anticipated, debt longer taking

due expenses financed market fees, costs, below expense, short-term interest the above interest higher expectations Fed, changes revolving lines variable higher few rate as lease to rent adjustments. buyouts rate rate GAAP higher Trilogy write-offs of unamortized at to noncash utilizing related lower We by previously to in facility resulting costs credit to of debt determined but a loan debt fees interest and related extending loan debt, and

these are operations. do they are from affect Although amounts showing not cash and flow earnings, up noncash charges in

XXXX. X.X annualized adjusted compared look balance sheet, our improved of net quarter ratio has by debt to our XXXX QX turn the the earnings of EBITDA end a X.Xx to to internal the end X.Xx as at Taking in organic growth second at of as

our to activity. allocation Turning capital

million. we segment approximately segment, of During options to and us X.X%, the purchase assets. approximately X them campus a out $XX and campuses earnings rent rate enhanced carried operating buying XXXX, our importantly, control real our facility buildings expense, gain integrated of estate reduced health on QX exercised totaling underlying lease our senior These within allowed level

of million proceeds of $XX for with the to approximately $XX maintaining the XXXX We are expectations sales remainder additional disposition our year, bringing to noncore proceeds year million. approximately properties sell guidance full

to to we our the stated, to previously market expose portfolio. recycle further assets within As capital continue

on whether accretion attractive pricing, for deleverages additional we evaluate balance able growth. turn earnings are allows supports dispositions and NAV or not which We attain based to or sheet modest further external in the and

value Our our capital at allocation maximizing measured AHR for remarks. prepared approach to concludes is all aimed stakeholders. remains That and

And operator, ready line are open for that, we to questions. with now the

Operator

Joshua question [Operator from America. comes Dennerlein Instructions] Our first Bank from of

Joshua Dennerlein

to newer on to It's I touch of of base kind maybe just markets. wanted the Trilogy. public kind

insight at Just kind of from guess in moving like different think there's pieces? of how I moving forward like we just about of point? states. growth certainty the different know rate forward the into CMS the kind any all this kind should the rates like go if is going any and I

Danny Prosky

joining I'm Gabe that to us. to one. afternoon it hand Josh. for This Good going over and is to thanks and Thanks, you, Danny, for

Gabriel Willhite

Trilogy, senior down Josh, nursing basically of think XX% predominantly about business, of nursing senior little and it's skilled beds, housing a skilled mix their IL. XX% to with so to AL about which that and is think beds housing bit a I boils and

senior the AL/IL rest the the competitors our much like rest the housing acts rate very business, growth of I the nation. On side and think the of of

Trilogy because more got so more already the that both in kind little be they're they're option the occupied a better preferred markets higher they've pricing than but important they're power, that, in. than of may bit

side, about in year-over-year to on their X% growth So we saw rate. housing senior X.X%

have there. pricing to power I continue think they'll

nursing a year-over-year. acts in nursing side, X.X% of skilled which a skilled although it's part rate of percentage you've the private at part mix. IL within pay, the private and the that pay like got outsized that skilled AL nursing And growth obviously certain business, lot component, that's On their a in Trilogy the business on

inflation reimbursement seen X.X With compensation steadily had. into takes that last getting really Medicare the and what and years a the part And think the over of especially to we've spot was environment it expenses in is incredible account up Medicaid, it I improving. increases catching to we've rates the where

that So continue be be we -- expect to positive. to

they Medicare, average a the labor said Trilogy's the reflecting be based rule over that In increase increase that national would the for year. on expect out to with little be X.X%. put in the markets, expenses final Specifically better it nursing we skilled bit last

think are the the Trilogy because business quality Medicaid where add-on shifting part On in of of more it to most care operates models, or the in additional rewarded as where be this far interesting be and the rate of more part you're if rate. the terms you care, provide of can I as to might for value-based business, growth go that the states highest an going

of like ulcers, hospitalization the partnering And about all Trilogy Trilogy our they look X-star operators, And are like performs of really of conditions the this. providing appreciate things kind that certain is are the more everyone an perform best quality to way. care. in little level care now the continue doing of bit a the of ahead recognize really to environment of starting people it that reimbursement give highest in, high-quality are really Trilogy. we that one but pressure staffing things rating, rating, that at well and the of that's operators things and things And who in rates incentive to And stands like with

Joshua Dennerlein

sales than delay No, you Is that's are you that on you any mentioned kind of what's longer driving taking Brian, there expected. like provide good could asset color. a color or... bit

Brian Peay

of to on him is actually Stefan Actually, I'd front question. line in. weigh that. the Good Yes. like

Stefan K. Oh

of matter more buyers so on, of to little to want example, tending it think a deals, They for Thanks, about diligence. really what's mean, level. be delaying a -- I going CapEx Brian. understand, yes, their to are is I want the on terms careful in Josh, be what's they

and as they're as just the to concerned. more expecting underwriting is is that bit a digging as of well they're on side think related in far I little that part lenders So the their And on end. what

MOB that of also limited So it the in terms where push I a from supply little you've think got lenders. market amount I what medical are think careful a the being bit outpatient of they're that paying down little there, out for. or what a they in But the very side, assets buying a side they're are I is of just more especially about think today on and

deals And so I delaying done. that's of what's think terms of progress getting in some really the

Brian Peay

pricing. seeing backup Josh, And actually oddly in not a we're enough,

So rates we it's cap deals from not originally done. were are could though where moving as get we thinking

by more really Stefan stringent diligence on due lenders. probably way it's As described, brought

Operator

from question KeyBanc comes Wurschmidt Markets. next from Capital Austin Our

Austin Wurschmidt

Gabe, What So the opportunities of of time? that kind you roll a frame for Can provided that this really occupancy, up these primary. bit? up highlighted, the levers mean margin campuses, the of on and were all us expansion detail does segment kind health some over expense I that and the for management, Q-mix appreciate think all little for you integrated and you just potential and

Gabriel Willhite

Yes.

the pleased we the still pretty margins very below but were pre-COVID, with be at movement. seen good we've a We're we're seems Every there to Trilogy. quarter, So from we're where getting direction that closer.

the expectation margins. my little that or take going pre-COVID bit expectation longer. we'll to a It's Our surpass is

of ticking up. is than -- occupancies, I'm we're think pre-COVID, higher because expecting occupancies part already I to expect and those that but at it's I higher continue

in a that's that for clip. going in, our moving But we've rate from up Trilogy. reimbursement a when a kicks be X, got been to October helpful at mentioned very has Gabe nice perspective. wind very backs good very, Medicaid Medicare new

far us that. too surpass would not Trilogy's mean, XX-ish and that. expect was a kind I margin to off pre-COVID we're range So of I

Austin Wurschmidt

of to the to to just grow maybe either time front of the at Oregon the thoughts then the operator you right exploring process alluded you this that existing did segment, kind to base the you've thought in switching opportunities deal around Any with opportunities And year. or lie segment the earlier relationships? over update SHOP of Appreciate some there. similar that new or

Gabriel Willhite

Yes.

on over we've mentioned. pipe, it. had in. ready the disclose in one question. that just when a down is [ you not because with, good and of at that that We've anything to were or pleased portfolio the done Oregon coming it the ] took So very the over one We really If we meds opportunities years, more point. a couple disclose position that in mainly closes, deal which Texas, X.X last we we'll There are of

Brian Peay

I mean tremendous great sort our in And deals. see They're those got We our we've that. market. take fact I the peers peers seeing these us of some of top opportunities. opportunity there's of Austin, -- level, of operator one to think same are able that the regional love We bringing advantage you're relationships.

present We time. we to are we're X.Xx, bit get capital want that. is hard don't our where leverage of a We the to at protective and little it -- constrained to fought very down

the able selective. we're hopefully, some and for being grow rerates extremely point, stock now, be But at to So externally. we'll

Gabriel Willhite

Yes.

the on been risk-adjusted that our deals return within best closed we've as view we've So Trilogy. just Trilogy We discussed. We've growing today.

capital Trilogy been really of our taking we've expansion. kind it putting dollars So towards and limited

Austin Wurschmidt

But you've highlighted to sense. it the is SHOP significant occupancy fund those it one a Yes. opportunity, other NOI pretty guess of growth That this on mean where does makes there's this extent similar guess, materialize? And that more plans what upside? a, to the I are opportunities and I lot I to

Brian Peay

Yes.

going it a so with be the And be the very of new for view no play debt, out a door. dollars upside. we lot taking cost there'll we as over would the of So it opportunistic

Operator

Kamdem Ronald next Our Stanley. from from Morgan question comes

Ronald Kamdem

X ones. Just quick

I think about up you Trilogy, the a following to get have occupancy buyout. getting funding point XXs? of can it. been update And thinking buyout numbers Obviously, on record the also you to questioning, the back sort levels the that to maybe that Could and the well? going I you talked potential think are potentially about how on as sort of quick accelerating, about you're of margins. Maybe just talk just you So think line where at

Gabriel Willhite

Yes.

as very the that skilled side of AL occupancy So skilled coming in X.X mean, we well. grow we skilled nicely. Trilogy's I expect. If go Right room now, roughly ticked back nicely. will and would occupancy at years, same. expect the the the caught out I are has up much as the AL/IL AL/IL has up recovered probably is grow would there this to faster faster side point. COVID,

Average But than stay discharges our Trilogy skilled where less get patients. XX days. there model is a are Hospital we stay. is short

take is to it, to you're to going So XX%. but -- it grow there's there really room not

want AL/IL higher The I go in XXs. always You're beds available side, room to don't wouldn't probably But that new have the business, grow why definitely that any well think to to faster going residents it's is long there in. to for I margin see move into growing run. reason the that.

we've option, of lot the as got flexibility far a As there.

so do We whether regardless we're have transaction. That us value how want opportunity of There well common or it, over as that exercise may under option. is an before stock. do do own We've would that the price of to deadline a that earnings accretion come with that. whether Trilogy. got of we any the creation eager But to love the Trilogy that or There all when obviously exercise X to circumstance year obviously to We that as recognize does it to along increase going with flexibility preferred. January it's is We're want that we after would We look to to option. to fixed. close. at a said, be enures something to cash being we to

opportunity gotten debt back don't comfortable want down very an turn a without we've So to just it way. just again. we're raise as to level Brian in to and our multiple that we with. And we'd it's it -- we're like around an efficient lower And up close mentioned, to -- it

Ronald Kamdem

like how the talked can like nonrecurring. raise second offset you about cost that in seemed just NOI talk Maybe my forward? going upside, what about we was $X.XX And the think flow through. the helpful. interest was guidance, about through That's Maybe a flow pennies and look, you the question that then how of Great. that many was and $X.XX on on

Brian Peay

I each or the for Yes. it broken interest. haven't $X.XX segment mean, we $X.XX down for listen, raise to

entire We of midpoint Obviously, that are guidance at $X.XX, the guidance out guidance. of the year. least the comfortable the is we because range at NFFO as in but for range, comfortable the put today. the we're

lot things may I XX-basis-point becomes a to down happen, from We see little calls been of a think there's then road. interest the of bit the -- Fed heck, were the next for if mean, decrease that a in interest rates And a I month. headwind. less

So comfortable are the range. we with

talked for the We each of haven't increases. pennies really segment individual about

get as we wears we that year As visibility, guidance even can refine on, more the more.

Operator

from Michael question RBC from Capital next comes Markets. Our Carroll

Michael Carroll

you bit get those capital aggressive little I over cost in few specifically using with you're in opportunities price mean, seeing can a the equity capital the you your out externally, pipeline? fund of new and mentioned Danny, the more talk months, stock some that of improvement possibly AHR investment that some know mean about the past I there. investments? seen, deploying good you've I can to really growing

Danny Prosky

sometime that month something we're do I will Obviously, mentioned so to we are that many come or it's want we third opportunities have ahead Right opportunity do to next now, has fruition saying the soon. to market. hopefully of this our I'm now go month. have able not don't that -- to lockup get to back expired, necessarily looking ourselves. the I we

started opportunities We just long probably one-off for there. got be living some We We've I Trilogy we're may developments is a Trilogy announced to see just our capital our deal that are as with independent within the more to to grow as there. partners. -- going limited, X of Trilogy. There wouldn't campus in operating new so do regional new Michigan. focus surprised many something we

to X to starting kind going But to think the we invest a along now, acquisitions. out you of would that's have of mean advantage love is it the to as be out of them, say Trilogy, outside Trilogy. going far -- our right -- expand go be though see primary I acquisitions and to start seeing Trilogy Even to we'd we job are capital. and but we're as rest lot before probably new good us other and into take in of stewards them of going there, I focus I also buy opportunities

Brian Peay

us once where in spoke the process allow they return better, the out external partly of that's Investors equity growth meet opportunities advantage loud leverage. find will and trade to because makes take it clear requirements. see us the during to our IPO our things are to to wanted it we of because Partly future that going

leverage those to the to become so goes extent think I where opportunities multiple continues more we're And is. more that the our the stock multiple rerate, up, and attractive. But very of cognizant

Michael Carroll

first, work And that does recognition I David. color mean, open just some second, then, giving Trilogy? Trilogy Trilogy, can I changes, been past you his stuff good probably or guess, promotion maybe Or President to pretty and congrats then quarters up regard is know -- they years. know more and can CFO, I I results some but over And the changes guess few what I the on within the guess, guess not leadership? they've becoming to a to that with done leadership shift, several to contributed that And Great. expand for has to? and it the David with of provide I he's Okay. David more there I aggressively? their

Danny Prosky

retired been she's her been changes he in the a longtime She's looking X wouldn't Bufford, not the at when X, over that. I in change maybe years CEO this to Randy really much founder, there a too for for years, Leigh has leadership. make into for point. in any XX-some-odd read It's I has been long Yes. not She took mean, Ann COO. Leigh XXXX. life. Ann

big David don't you has results. can are job, of several been the know, both I fantastic We're CFO David as a them by years. years, and Ann. fans the see doing X for Leigh X, Both of

David. business of on for title as He company. ancillary more upgraded the ancillary an just on really is has this of side especially the -- think responsibilities side I the CFO, taken

don't -- into title. I really much So adjustment you read that too shouldn't in

Operator

from next from Our Citi. Michael question Griffin comes

Michael Griffin

to your there. comments of are go just back occupancy within just I want Gabe, where given to kind Trilogy on seasonality expectations and

lot You side, shorter SNF the of a stay sort term called a on rehab the out stay. of

So the few next assume occupancy to fair the kind to increase Or that in to term? is happen still of you going is fluctuate the do expect quarters? sustained it near over

Gabriel Willhite

I now senior things kind And project this difficult think to that a right skilled housing question. in is move. of It's and at quickly really good pre-COVID it's hard where to the we're world going are how part about in nursing

were business, the we're continues number least see It's X we is not is years, where especially that coming, than AL Trilogy's that actually could of I at global seat, a pre-COVID to think is, traditional even from what or seasonality increase. little skilled in really there's any of like less said, don't starts. nursing. nursing, the in construction side obviously. -- about rate X lows, I units now, it's run new not in think right from supply, where my of this crisis. So America year, of there's the long-term happening? bit what But a right? So think And I is historic what we question on that we're disrupt And growth could below of I seeing probably in kind during half what on, decline, sure, the stop at see We financial skilled

down demand with lever is the there is by not up, driven picking flu. think, I go kind mainly if side, the little skilled So really only is, And the supply demand. other you a bit on seasonality, see the of

so seasonality in a we And we're seeing this think I of seeing in the that are normal. growth skilled too it's their at of of business. little point that's concerning don't part bit that business the living line accelerating assisted because

profile it's campus, the bit. different And positive the platform, risk is of and them is you've AL business really think AL is X a the part AL including summer these Trilogy, always off by all that's also has and occupancy winter has season a reverse to entire we skilled And because nursing it. months the the and drops the when the an up little in true been right? occupancy in drivers of some IL, skilled picks way, attractive skilled nursing, by at maybe Trilogy selling where So different seasonality why demand got

Danny Prosky

Yes. demand additional they Trilogy long up for the has And if as a SNF also there's they into easily. beds. down as wing can If care, wings If to or it, AL convert a they've transition ability remember, for any demand additional service. for the can convert got SNF need particular they very is licenses beds memory

demand they've got for flexibility there based the So different the on business. lines of

Gabriel Willhite

the the then even be-all And more in seeing sequentially how NOI not on point moves one Q-mix you're Trilogy that's to for grow is in see NOI by this to make not but I order huge design, occupancy. is end-all, quarter, to optimized you occupancy Trilogy's pretty you right? want growth. can substantially, And in

grow focus on world to to growth ways the in well, SHOP to that And occupancy people a as business NOI may in limit. willing happen back the start see I necessarily a the profitable. that going decelerate the pushing you you're more what's rate for exchange more optimize pre-pandemic without help occupancy to in me a to in think can rate right? the You that that's As be get they margin, to can

Danny Prosky

Yes.

the daily much just but less margin be Medicare is can Medicare a Medicare So can care. They little Trilogy more of bit actually higher level acuity take may lower a because lower take rate residents where there's lower, and Advantage. their

things they just the So there's do of needle growing without their to skilled move simply can census. kinds all

Michael Griffin

And improved around be dividend. appreciate color like there. just the ratio payout updated quarterly this basis. Obviously, gave some CapEx maybe a great. looked thoughts kind lumpy That's then all I the it about on the I know guys you can that the of XX% sub quarter.

that XXX% to to But the payout IPO, if the year we kind see maybe a on the come was about expectation I low ratio I changed? full mean anything 'XX. think basis Has ratio of into mid-XXs? of that, And back inside payout for could for

Brian Peay

Yes.

totally I possible. that's think

occupancy If was and back think AFFO CapEx isolate I ratio certainly the noncash at you payout the our a you CapEx QX, interest increased if Ultimately, -- look around XX%. you changed, beneficial we original What there's the spend at expense, frankly, spend you anticipated. if add look has faster year. that mix the was at is lot has left very the Trilogy. had discussion from than to The

there. are the our vacation I on expectations, there assume that growth the I work currently to come earnings can't is And covered. way the would classify as say somewhat We've projecting, aspirational, and do chance just show which these to think we if get we're guidance I we've going a still they given numbers is is that go dividend to to up. through that think got that

will that Now the we be see XXXX. organic want us payout is I at coverage. ratio But XXX% growth much level we probably there year. in going or earnings it's see gave to deeper below that would chance we there XXXX But portfolio not in to it. the we yes, that a that's think get in like to guidance we'll Obviously, possibly embedded be think covered the a this

Operator

comes with next Street. John Green question from Our Pawlowski

John Pawlowski

should from Just X.X% as Or clean down reasonable year-over-year number? in The results quarter, SHOP that RevPOR we of me forward? the X kind the portfolio. that rate a still expect concessions are questions growth run is weighing moving on the

Danny Prosky

Yes.

I sure. for think there's less -- there's that's concessions, still

it year. rest my to certainly but of is If RevPOR you the seen continue we throughout last earnings expectation throughout And I We've QX QX. the we'll to see to is call, hate acceleration go accelerate back forward-looking provide year. see the will we our that said growth expectation the statements, to from

Brian Peay

it the of is. that's where occupancy, benefit And

out. be them on point, more I you not that and can think little a at concessions handing strict bit

And of certainly can where on that's having occupancy push the is. street You benefit rates. it up

to If a got same mass can the now and you critical occupancy, RevPOR build much at on you've you're occupancy difficult. rate. of push And raise more trying time, becomes that it

John Pawlowski

didn't let an we there's year-over-year want COVID? lumpy, how CapEx deferred -- basically Okay. get you figure CapEx to how your you it's up should but and for to it's spend go back SHOP you massively in to your during in maybe I Can seasonality And CapEx just know I above-trend comments. portfolio. that know then expect as CapEx some versus us QX long 'XX of

Brian Peay

-- we on John. or see And have sounds snow lot cold seasonality weather question, which it's the are do or very difficult weird, we resurfacing replacement when fair a spend, there's CapEx on a snow reality but And in The to our number roof that a in a the ground is states. do we're roof. parking of that it's assets

And the in is QX spend it so higher was than QX.

on, we've frankly, I trailing CapEx, But quarters back you of almost X guidance are our segments and go what that if Trilogy of we've a where gave happens trailing mean those basis, is the look $XXX by the at we And about on numbers given for exactly spend, X-quarter bed. each to guidance. CapEx a given $X,XXX guidance It to $X,XXX. that be

indicated. So it's we right where had

bed, On side, between where about thought quarters the it's guidance. We $X,XXX. gave SHOP trailing is X the $X,XXX and $X,XXX a precisely that's we and

situations One, to that were replacing -- spend to we the or with CapEx want going not more there's that were we of even did that about number tied where a say weather; two, lease So is those a we the spend an triple-net fact necessarily with swap-outs, couple operator to convert. operator we would things. I were the talked potentially

want for deployed. that's way we the need deploy they when be been or once it to to new So they've a little got while, now in operators capital expect we the in and

the is CapEx that's be. deferred of much I where right step-up. say little expecting So pretty we're there's maintenance. wouldn't it bit a to

John Pawlowski

comments. Maybe spend but missing disclosure. that's I something ago, QX. lower, seasonality QX but for from X I'm versus not is a might I I'm SHOP $X,XXX my unit something, the the and controlling comments, be $XXX year in so know in following -- missing your trailing quarter in I'm so... per

Brian Peay

that's what It's not pre-IPO. of seeing true what, I the have it's true. know were and numbers true. benefit You our

can And in That's QX $XXX I XXXX, $X,XXX, in in $XXX so was you, is was CapEx bed. and disclosed. CapEx in QX it QX QX, a spend you're bed. a right, tell CapEx bed. publicly $XXX public but a spend spend was

you if that. quarters that's seeing exactly bed. X of put pre-IPO, Now $X,XXX benefit a you and But those have together, take the them don't and it's

Danny Prosky

Yes. when to wait then going what And in see doing we're had needs going We're to difference get the think -- done. this when be to lot transitions to spending the last not new a to lot operator operator we're this last see year year QX on CapEx. I year And of of time. a is we that, be at and between QX kind

is in I quarter we few if kind in catch-up QX. correct number lot that of I where and So I'm the of the but -- Brian, were spend of spending XXXX going kind QX to a way while wrong, we again over repeat had operators. itself quarters had And last I low transitioning wouldn't a think we forward. expect over

Brian Peay

can the a It's Yes. closer bed a thing it to spend. for I going to be to our guarantee, It's wouldn't wouldn't $X,XXX -- be now that I bed. to weather-related, to be are directing CapEx And operators But XXXX. it's $X,XXX I one -- also expect it's new right? going $X,XXX not

Operator

I'll to further over no turn are questions. There you. the Prosky, Danny call back

Danny Prosky

and thank time continued I forward appreciate to your portfolio to I in the And your Jack. on IPO. since X our been great we Healthcare Thanks, call, a looking you It's want American here months concluded for it. our improvement And at REIT. everybody interest. we're

soon. a everybody, So week, rest talk great we'll have the you of to and

Operator

The meeting has now concluded.

now disconnect. may You

American Healthcare REIT (AHR) 6 Aug 242024 Q2 Earnings call transcript