NHI - Earnings call transcript Q4 2019 | National Health Investors, Inc.

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Operator

Greetings and welcome to the 2019 National Health Investors Conference Call.

During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded Wednesday, February 19, 2020.

I would now like to turn the conference over to Dana Hambly. ahead. go Please

Dana Hambly

welcome call and fourth the Health National of Thank review everyone the conference to the company's Investors XXXX. you to results quarter for

CEO; are On Spaid, John President Financial Mendelsohn, me call Chief Vice Chief today and the President Officer with Executive and Officer. Kevin of and Pascoe, Investment Eric

release on this as over press the basis well the been morning The and listen-only the that's notice results opened accessibility of the were released by a of as this before market conference financial call covered Internet a media.

guarantees remind As let facts that start, cautions this and statements we of in statements. risks not conference forward-looking which me investors future historical you not performance. involve any forward-looking any uncertainties may are statements that NHI call or are are

as risk the reports information date made XX, XXXX. and NHI's the NHI's Securities with this December these carefully are filings All of Commission, other call. of website@www.sec.gov urged periodic ended NHI's on or available represent disclosures and review disclosed Form for Investors website various forward-looking on its year filed Copies statements of in including factors SEC's XX-K the www.nhireit.com. the are to in the Exchange NHI judgment by conference

on other those call to together release information X-K addition, release encouraged provided filed in measures. in which with all In and schedules, are are NHI's the provided that Listeners review related in terms Form provided certain release. Reconciliations the used been with this has earning financial SEC. non-GAAP which are reconciliations tables in earnings and

Mendelsohn. Eric turn now I'll to over call the

Eric Mendelsohn

joining us thanks Dana. you, today. for Thank everyone, and Hello,

started results the end headwinds for quarter which guidance fourth despite usual throughout defensive of for We faced XXXX, momentum XXXX top many at are We were in a to experienced more pleased our year. good as posture we year. much and the and than range NHI, last our we the that full report year

we as shape much in enter We are XXXX. better

new labor We are to But the housing by which and in deliveries of we continues woods as by not the least for improve NIC challenged inventory do next level strong expect slowing demands generally showed to XX which the the any out this XXXX means issues, net of very has the we quarters. senior absorption, by at industry be highest years data. several in growth collecting are been encouraged not since and

that Skilled reimbursement our expect on continues to very And Furthermore, system moderately show that portfolio the strong PDPM Nursing coverage. will improve new we coverage.

partners. in the headwinds in We have XXXX, acquisitions some million primarily $XXX and with despite remained of announced optimistic existing

We also added come. many three new to to for grow partners with excited whom we years are with

LCS In with million CCRC, XXXX, A, $XXX partner already Ridge, we just which million are deal. on details a Kevin will And thrilled have this including $XXX share more to is outside announced Class Seattle. Timber of later. for we

the underlying the more With RIDEA triple back We've mitigates But healthcare volatility toes NHI lease operation an our Timber embedded structures with unlike so dipping with of common done RIDEA net into Opco. REITs. Ridge interest XX% with other are in acquisition, that we shareholders. to a

maintaining such us while We the keep on premier X% for makes This to quarterly continue recently in things. last seven announced triple normalized will XX% net the the financing and track We are increased expect open a have operators dividends, our focus should creative we with our the year dividend LCS, to dividend investors our be achiever marks of X% below solutions which always strategy. that like coverage straight FFO ratio of by if XXth or a more, you years. increase

that worked reflects XXXX. this that our executive form need year. issues demonstrates We in to that proactively manner. we G&A growth attention share And transparent to in per and compensation accountability limited This areas anticipate a of shareholders. the with satisfied the not addressed in We're experienced reduced hard

digit third year. that talked will add our about expect quarter guidance that on that promise mid-single outlook to good return we over we desire I detail. visibility our on to we John we this have our in is will and will deliver. more growth always call, But and As discuss the under

turn John. With call that, I'll the to over

John Spaid

on Thank common you, Beginning as more year basis. morning, Eric. And report NHI share growth. of performance XXXX everyone. to I'm quarter with guidance to three pleased solid FFO end representative XXXX, as historic good and a metrics diluted a our well

increased fourth NAREIT increased to NAREIT and X.X% full share adjusted was FFO the $X.XX, X.X% $X.XX; $X.XX, mentioned December increased basis, $X.XX. which to to increased FFO On normalized quarter a to as FFO per X.X% increased to common For FFO at increased of guidance XXXX, adjusted X.X% and previously X.X% year top normalized ending the X.X% end our to $X.XX; XX, Eric diluted FFO range. $X.XX, FFO

this Reconciliations for release found our pro sec.gov. XX-K can and file morning earnings at performance forma metrics in be our

NOI. straight rent, and excluding about use performance. cash metric NOI to Cash fee amortizations. funds GAAP now from line received our cash excluding want our we revenue escrow lease define commitment the measure as I talk incentive NOI excluding to We is and tenants

For the prior increased cash December year $XXX.X ending million compared the $XXX.X NOI year. to XX, million to X% XXXX, in

XXXX XXXX growth partial increase investments. of NOI year announced lease Our contributions our in our from newly from organic reflective was escalators, cash NOI

Our prior master the for investments the Holiday transition nine in XXXX restructuring finally due lease by announced offsets homes years impacts properties. continued the of and fulfilment to

prior fourth XX% XX NOI quarter quarter in million. increased full and to of page supplemental. the Including over G&A XXXX entire cash SEC of $XXX,XXX was $XX.X XXXX the expense year XXXX, and reconciliation on filed year Our G&A over our fourth XXXX X.X% quarter year the found QX, expense approximately for for the be can severance. fourth increased

G&A severance over year year's the to quarter compared for the X.X% prior and the Excluding quarter, expense, XXXX. fourth X.X% fourth the in increased full

muted executive As compensation for our the of opening expense remarks, Eric mentioned in performance. reflective year-over-year growth NHI's G&A his XXXX flat is

billion a million little which on debt, balance with was in over the the unsecured. total capacity Turning XX% $XXX had we December to revolver. XXst, sheet, we year At our $X.XX ended million $XXX

of privately million shares entered agreements and $XX.X with convertible negotiated NHI into which fees NHI notes, During under in outstanding our issued payment million senior consideration to redeem of cash principal aggregate certain $XX of holders notes. plus convertible December, common of totaling XXX,XXX stock we X.XX% amount our

convertible April result the NHI's will in redemption of XXXX. a As which at of aggregate balance year-end, $XX mature is million, now of notes

ending net charge average Our debt coverage December our X.Xx, and metrics fixed quarter annualized for X at at X.Xx. debt EBITDA capital debt adjusted were ratio years, to weighted at XXst the maturity

favorable. average X.XX%. XXXX was and calls transformative prior For that mentioned NHI's We've rate the sheet, is debt balance quarter expect cost ended we December XXst, in interest be weighted a to of for currently the our year

ratings Our announced the public to allow debt public consider market. credit us

in Our and shelf expiring weeks. come more This and for to our balance in as coming to make registration issued forthcoming morning, we the revolving we shelf registration Stay we XXXX and current will our growth. look turn tuned future is quarters filing be the the room new off guidance.

to $X.XX of an We be increase the or the $X.XX diluted at per share, to NFFO expect X.X% range midpoint. of in

X.X% $X.XX at AFFO expect or increase We the of $X.XX, the range to to of also in an be midpoint.

and to over guidance promise Our deliver. to reflect continues under management's intent

commitments line from includes of and as joint $XX Ridge unannounced today recently venture, issued detailed Timber our in purchase effects Brookdale guidance announced contributions on Expected continue million. option. LOIs our under of announced from fulfillment totaling recently XX-K investments the approximately Our sight the

views Our guidance reflects properties. our also transition on our

levels. do back year. return the we to for We XXXX properties though the the between way to XXXX transition the levels. expect to We the them properties after XX% straight-line cash between XXXX back do of to XX% to NOI don't rent, levels to the will gap believe transition and way While get expect this XX% and of and to get revenues X XX%

assumes off year Our on guidance make that turning investments for debt, includes this we leveraged revolving additional continue a basis. our to further will assumptions neutral and

to share to performance. that of give also we our you addition many to our evaluate on In use items per guidance, FAD several guidance wanted

of non-cash table In stock this addition which our reconciliation release. earnings in morning's referenced to see as you'll part compensation,

wanted share Ridge OPCO. we the also and routine to fee expenditure flows and provide cash forma you pro in non-refundable entrance attributable Timber XX% our forward, Moving with capital to

also morning, Together quarterly our quarter cents increased to per $X.XXXX five with share. earnings in dividend released in first announced our X% quarter quarter we common dividend. We or our to a this a dollar

The first shareholders dividend is quarter of to made XXst, payable record XXXX. March

opening is shaping Eric remarks, of office his started to As but in for mentioned good be the XXXX NHI. defense and on year back a off year end up we on XXXX

over discuss Pascoe now Kevin Kevin? that, portfolio. to the With I'll our turn call to

Kevin Pascoe

Thank you, John.

earlier for compared period coverage the of quarter. at at the third to quarter, in the X.XXx X.XXx overall year was portfolio Looking the the ratio in end portfolio total X.XXx prior the and EBITDA on the

X.XXx The the decline the SNF June in coverage, to quarter. over comfortable our NHC in June And X.XXx last and from X.XXx very coverage quarter. NHC compare to still to from as is from are sequential expected X.XXx quarter. improved skilled And the which attributable X.XXx coverage declined in but at housing year prior last third non-NHC improved Senior quarter. year portfolio to X.Xx year the decline in we was the with X.XXx year X.XXx the is X.XXx

seen and continues a ample of by to markets. and hard to job their labor operators Our partners and competing class good industry while of SNF respective feel work the housing a meaningful shift we in challenged in testament have trends our a best issues, doing our are is supply not operating coverage the senior in operating be

for age is that tells age that highest to of properties most the an always by newest philosophy and X reported years. with followed of buildings the market the According us to years Interestingly, will performance properties XX occupancy consistent share. lowest properties driven to years. average not average recent average NIC was This of operator guard with with XX our an the with XX have plus an data, XX occupancy age

of September to trailing senior XX. cash on our our coverage operators and the revenue. for ended by months X.XXx Bickford of EBITDA livings have revenue XX% XX- ratio represent Turning

property the to including EBITDARM and roll quarter. fourth same the store The is same calculation on the store which basis, On Bickford coverage respectively. coverage Bickford a in the and is will total X.XXx coverage X.XXx X.XXx development

in the coverage to more provide to to turn transparency, lagging Due an second continued quarter on started of quarter. effort through occupancy positive in Bickford's have we the EBITDARM occupancy. disclose which Bickford's to third and nature continued the

to fourth remains significant and sequential are steady report on Bickford's showed that year-over-year. quarter occupancy basis a pleased improvement We

XXX and Bickford's by leased quarter basis portfolio fourth same the the XXXX quarter in same-store points to points compared improved total XXXX. XXX basis and occupancy in of respectively

has showing occupancy. Importantly, price improved maintained this discipline while Bickford's

and deal option X% quarter during is property replaces This of $XX an yield Shelby loan to Lastly, had its the the place Bickford's on for Bickford journey transaction previously. we the NHI in initial purchase XXXX. exercises that at million first $XX.X of a construction million similar

agreements We coverage believe portfolio. have sales the help improve will which similar relationship on with Bickford and while with additional assets operator. will help port Bickford new properties this our two Bickford we asset with our continue Developing evaluate to upgrading maintaining us and other stabilize

Communities. Moving to Senior Living

Our to X.XXx earlier in revenue, relationship our X.Xx EBITDARM a with SLC for fee represents income XX% X.Xx basis. entry on including the that ratio year was quarter. and cash compares trailing the XX-months June period of the coverage annualized This

are have purchased discussed positive started watching SLC and on fee sales inventory. entry we closely indicators has unit where calls, As leading sales prior additional turn

those of the of to out inventories with roll sales calculation. time some through the fee entry benefit will quarters roll repurchases coverage take the calculation as The

Our which partnership XX% revenue. NHC, annualized with next cash largest our accounts for of is

a As in X.XXx NHC mentioned, corporate previously fixed of coverage quarter. charge had September the

a the EBITDARM both improvement ratio our and which had retirement Recall slight lease revenue X.XXx, represents that XX% year-over-year restructured Holiday is of which to the of coverage and beginning master with goal basis. Holiday which at financially, position time. sequential difficult on XXXX, better a in Lastly, best of cash the the interest some while the always decisions put our Holiday But shareholders. the acting at operationally in and of required was we

we out, the over by story outcome the play are later. just year continues a to While encouraged

at quarter, we XX-unit assisted a relationship fourth Minnesota St. management Moving acquisition yield to of X.XX%. with new community care initial expand our investments. the and million the with memory of Paul, cash on in continue the $X.XX the living In area XX for

purchase rate assisted community a stabilization. NHI is on one loan a at XX% the Bellevue, We options community a This a option in also with million extension and of loan extended year second an mortgage living on Wisconsin. an has $X.XX of upon

XX. purchase effective our option January and to Ridge exercise also venture operate a with million $XXX formed and We XXX the CCRC for unit own joint Timber LCS

of holds NHI under net interest XX% XX% Propco is NHI triple of financing earlier, Eric structure in XX% reduced of Opco. an Opco, with Propco barrier a leasing a the one is and initial to also a entry the As community Seattle yield deal lease mentioned purchase to approximately was a seven this high million of at operators market A and got affluent Class the whereby interest Propco, includes and the or $XX country. year property in outside the the X.XX%. price. This premier in CCRC of

environment acquisition in million the and to We Milwaukee building to Medical with announced pipeline, new forward million. during Regarding and Resorts. announced our $XXX a $XXX in Ignite XXXX deals good off look we XXXX in we're already start acquisitions totaling with opening

through second additional we but quarter. to X.X% a rent and driven million the market, are we commence and Our approach, the portfolio it expect survey very the see opens we relationship the still years. when $XX last dollar yield to adding are competitive few high in Valuations as has in to we operators a have investment continue yields comparable and to quality to communities opportunity done committed of what

that, over With to the hand call I'll back Eric.

Eric Mendelsohn

like this in which in general challenges cannot markets and be into secondary. versus NHI IL invest. categories or The is committed in primary products simply versus industry succeeding the AL Kevin. you, to Thank of we all lumped

unison to reviewing stability and leads always constantly and a it We our identify to structure, preference our portfolio that our is operators a which our to number proactively flow. through of are we can cash financial do do in We through this opportunities address. methods with in

outlook earlier, forward year. the to I visibility mentioned year progress and our this updating we As our have we in good look on you throughout

questions. With that for operator will now line open the

Operator

Instructions] [Operator

Vanacore question proceed comes Chad Stifel. with our with question. Please And first the from

SethCanetto

Hey, Chad. on Canetto good morning. This is for Seth

that remarks that metric? we X% XXXX? strong you mentioned should And cash be in XXXX. on any How So in NOI about his about John opening guys the have do in thinking guidance

JohnSpaid

should that? see. let's John. to answer. about it's going you This How So, So the that's is thinking easy obviously, be show,

So, no, we don't have it. guidance on

best we to the we is back on which roughly shares or the to XXXX. target. diluted is that And way in to then it our our think X% over greater issue grow X% that our growth to NOI need I additional X% $X.XX AFFO range, explain we is cash the get have to after target metrics

And all some and which are our had year through So some outs of and outs a goes lot there ins of includes this that purchase of forecasts. our we've options.

So end gets capital. capital, and that's bit why little also other eventually to to day, it company a know, you funnels for the NOI, grow to grow the trying of cover tricky. we're the we're able the cash to But pay what our we're which, how all down our trying and through at of dividend our company

So, tricky. bit yes, it's a little

SethCanetto

your with like will looking guys structure there deals All going dipping you be into toe right. that And forward? that? guys you we did at should you Thanks. RIDEA think Do That's more RIDEA just think helpful. Ridge then structured Is Timber that how structure? about acquisition the

EricMendelsohn

Hey, Seth, is Eric. this

will time it's That's I generally and perspective limited that legal a joint exposing that it at structure operating time spent time. a lot a winning with giving so some same guidance as make see is And we it us not in that tax interfere now works the of partner sure lumpy experience we'll And some it's to to works. it a as the obviously our performance venture appealing think how But RIDEA place, upside to with and sense think partner. of joint have which make energy us combination and a have we so. our and advisors in vetting sure advisors it's from well. venture that

SethCanetto

about All when are right, then mentioned and don't But moving not should we There deliveries metric Eric, great. to coverage last And we labor this how new that about deteriorated housing, numbers. industry. think out affecting those But issues Thing lot of think just year are you of we total a XXXX. how we understand the forward? really coverage. should think about are yet. XXX. I senior XXX that And see portfolio from in improvement still woods we is show trailing

EricMendelsohn

reporting Sure. there's lag, on - lag. coverage quarter I'll keep a in mind two is one our quarter

rear think looking always the all And see been what's we're we're we've work on about them. very mirror. going in with we're view of Bickford. So starting with to I benefits transparent of the And doing the that

we've have another to supporting occupancy their still lessen in that up on that publishing years. sell about current building rent Just board year. that coverage immediate their next adjusted to to for rent, year, while store show will Minnesota they in that XX-K. or We've underperforming not coming this two in are developments they're operator. does are improving we're we reiterate, our then buildings, transitioned And And sold underperforming and new same which

think So to the way about coverage. that's one

And then And they're And available Senior on the product Communities. they sale weighs is have for invested heavily community. new was that that coverage. their buying other and in Living

optimistic So trend. improving and seeing is generally, we're an what we're

Operator

And with Please line your of the Capital One. Daniel our from comes Bernstein next proceed question question. with

DanielBernstein

Good Hi. afternoon.

Just responsible structure with the make for are CapEx LCS? wanted sure, to and you JV

JohnSpaid

OPCO of move a OPCO, own, of because might from we're we cash owners So, recognize guidance OPCO understand trying forward. we a get the and flows because we're sort metric on that on the in you might giving to the we're what performance little to bit help we the part you as

decision distributions end make the OPCO. of on at a So about day the

of on help to give report forward. some trying you on take you that. the see items -we'll how see of You profit give moving have will that some to trying to we're other of And earnings loss and statement ourselves won't some sort help distributions. and will sort care loss on the We're going our you make we to we're before also of

performance made but haven't on indicate of really entrance flow you of things I final think decisions you're the to in the actually I to quarter going able OPCO because things we point more you And results. see. finally, the then will refundable cash our is to all metrics these be about portion components fee that of of make of our see the that, might numbers one also We than I sure not to all distribute know, is that, talking ourselves streams out one the we're first to want

liquidity measure. of that's a So, more

So we most Ridge progress as you'll the the venture. talk measures. hear, that try more we Kevin, to on But stay about away from forward of joint Timber

DanielBernstein

seems And it on comments from I we've operators seen have some positive other REITS the as across skilled mean PDPM nursing, like and on they report. you space some positive and comments

So at Do been bit think your you a what on more balanced might housing. really has seniors most pipeline pipeline going your when little seniors? this more focused about skilled point? of shift you seniors between you forward, done you've think Are and

KevinPascoe

it's Dan, Kevin.

I just has seen of and never that market on we nursing. that think we've happen. just in skilled really Felt been want what terms yield. back our away focus transact to the coverage It's like gone letting to from come

active forward. we been that to you'll of nursing. there. so more move us We're think know think So we I I in remain investments at deals the on investment looking I to an Again, go to what some of way after. actively think the more I going make to participant saying skilled We're that. I still think we just just we've skilled see and do selective don't because it speak going changes do But we're do yet. space. trying are in terms reviewing don't

DanielBernstein

versus today you operator Lack be cap I would skilled were Competition whole where you rates? are more you mean get where would about excited or year? and the would last what What nursing be? of quality?

KevinPascoe

I in an we to definitely if always quality first to think is a foremost, capital, got vintage plan invest we've old would investment buildings a be got good decision, on that Operator weighs evaluate how something said Sure. operator good and going a That that. and definitely are. you've heavily

of interesting us be again, have starting that on at coverage up we where were it's deal where interested. held was I we're lease So would feel before more those market but like just levels the not, those assets types to wasn't pricing, more and levels, it the see really flow things at

definitely tuned it's stay there, on radar. So but our

DanielBernstein

you supply if Holiday Okay. coming within seems NIC Within you growth look map And it you're slowing. could, year, don't in the couple going probably in to growth that starts same those say when benefit at to you that get is SLC are one question lease is last markets slow I supply data but down, down, markets, you and improvement supply Bickford next seeing of type that comes it are growth all some trend? years, Maybe of see if the over coverage. this if

So markets supply the what look does in? you're outlook the within that invested

KevinPascoe

that market on depends markets. new some itself and it really, We've so the them within really supply supply, Bickford but hampered general It much. hasn't seen those all by

you I that. mentioned think

I has you been think that a mentioned delivery couple markets there SLC, new there's has there where impacted that been them.

is it varies So widely. mark-to-market very it -

the you absorption deliveries those happening, We are mentioned, as happening. see

the So soak and been, to take where the of and there some SLC inventory, it's rampant the select it's as new a some markets going some there few Bickford but then to get been market. I like inventory -in there's not to across mentioned, there was up time

those like they're be to them buildings look well show good, sales but communities. feel able and So and they're people we those, move well. a we're to watching they part to get still The of want get compete able to maintain in

Operator

line comes question. question with next proceed your John Kim our And Please BMO from with the of Capital.

JohnKim

fees in could CCRCs at Thank underwriting or either your what insight existing seeing Ridge? Timber on you. the portfolio the and of the you non-refundable- your as refundable long as as average portion some I was provide far wondering range as what entrance of you're if

JohnSpaid

non-refundable. He about asking is

KevinPascoe

to the entrance based is what fees. Ridge, or on Yes, changes so, entry instance again, of the varies the Timber was fee is component quality this of In asset it is able community. one that they're larger charge the much in widely because

that or be say be bigger then communities, proportion south fees like income would entry the Senior of where the in fee Living at receipts entry lower. a with we is are areas fee, entry least some they in it So, would

is question? terms that of not refundable. The fee? your That of percentage, percentage entry is In

JohnKim

I choose? could different right options mean, Yes, residents they on have what

KevinPascoe

talking there's contract. one Ridge return If Timber only It's we're an contract. about really XX% capital

the that value the is of what turnover be non-refundable time in unit increase plus over would portion. the XX% So

JohnKim

And is pretty CCRC that typical existing with your portfolio?

KevinPascoe

bit. actually varies a it No, quite

Some have -so return XX, capital XX SLC a X. XX% has or and

So and communities, couple there's XX-XX terms choose, there, several between the different more then so, of plan our and the and Connecticut even say, XX%. would going XXs say of options different a almost I there's within selections to probably be would in average, that, on split would resident I it's in that XXs SLC, you're the the

So that types a different available. but are contract bit number different little

just between return there's capital components of and that nuance types the nuance between building there's also So of the then it is.

is Ridge C rate. community market Timber or the a Type SLC, So type community, A

line service things those will what what they of they're service fees for getting. of of charge; can each the -some some that drive are that So

So go their into be. there's how a is that lot it and entry fee, ultimately, return what will of calculated components

JohnKim

counting or you remind as are on as the the us that cash And FFO this can non-refundable you are how you portion? impact normalized amortizing far base for

JohnSpaid

a use look at the purposes. deem FFO will the let And we is of FAD function you you give of for expected have line to irregularity the some And there appropriate. and information recognition of entrance move respect the average what with the a the resonance AFFO so, you're in the picture you So that as below non-refundable that the of the talking a line from about won't non-cash you depending amortizations income we the piece will that in as talking and is see intend actual out you're we on what fees. line, adjust community. flows flows cash flow entrance but I'll fees refundable to like stay net what from Timber forward to line Ridge non-refundable only, choose about, the see will cash cash you'll that

JohnKim

that The normalized adjustment AFFO it but is remain made correct? will is the in to FFO,

JohnSpaid

Yes.

the to So flow amortization you this just normalized straight-line on out component. it FFO of we'll this a closer NFFO non-refundable cash. the actual line get of the And to of entrance revenue in entrance those the line contains sort at rent the the AFFO the non-refundable it'll then back items little cash of give like and at fee sort but is fees contain all case

JohnKim

Right.

you in and the remarks triple like a CapEx lease just the structure. that of given the It mentioned for rent. seems working Eric remain lot Okay. prepared you your a that not net increasingly to operators committed structure rising

anything So is far to that be operators? done your I'm more know leases with I in operator Opco, net wondering is the venture on there LCS you've but as you're doing as altering there leases anything joint friendly? to this doing with resonate else triple you're the

EricMendelsohn

Yes.

escalators our made things based. have We CPI done like

get resident increases. far of rent ahead don't too they So

paid them buildings We of have lease like basis. to renovations added done things the and for

careful money coverage and to that. contributing is you've allows that. Bickford of is we coverage are for a, make the and not So works. and left their attention close that And have the making dollars efforts that investment tenant that underwriting would that to over our generally CapEx example that's investments return to us and a when even And point and though that we an to we an buildings there and about think as we there do we very and John, are out then those finally, I are noticed sure are formula getting constantly b, make I on pay CapEx enough profit a

Operator

Please Okusanya proceed the with next your with line Mizuho. of Our question. Omotayo comes question from

OmotayoOkusanya

Yes. afternoon, Good everyone.

two just For had number, clarifying questions. the guidance I

$XXX also in million that of you about mentioned sight, / year-to-date you've into to kind confirm million XX-K. there for $XX investment just to that line is done the that loan then you regards commitments lay in also that built which still all, and of guidance. First correct? I The wanted activity out built have is in here out deals just that are the acquisition in of that's

JohnSpaid

that transitioned Bickford lease, million mortgage lease new recycling are That's those items, aren't to you sort a correct. as we the sort capital. dollars a of And it don't We to forget of so think loan totally though might of transitioned LCS a $XXX yes. event out, subsequent of going and

OmotayoOkusanya

Yes. Got you.

that into then, those much so, investment guidance. you how all-in-all of just up kind all And built of when total dollars add

JohnSpaid

So, new that is out, talking your going you question? are about dollars

OmotayoOkusanya

Yes.

JohnSpaid

roughly the $XXX It's in range. million

OmotayoOkusanya

Okay.

$XXX about million, So that's okay.

So that's helpful.

JohnSpaid

Yes.

fulfilling year. them get completely loan right. fulfilling this to commitments, like all that's and that's but not our you filled So said We're development not going

it's So roughly to being fulfilled year. XX% XX% of this those

OmotayoOkusanya

Okay.

JohnSpaid

of is big course to get a our a into we part so year function forecast. right, -how numbers going timing of of the of those as many much basically that built are is get how And timing

OmotayoOkusanya

Okay.

So the also kind around portfolio that's one, this clarify is Then itself. second transition helpful. of one

You discussed built you just you NOI XXXX. this from on into clarify of get guidance? to of XX% ago was assumption. two Could kind into back of again idea kind built that's exactly about of much based how guidance the NOI years from that Then

JohnSpaid

range two So you I and gave cash for components GAAP. right a

and million we GAAP in So revenues. $X.X in cash had approximately million $XX.X in recognized XXXX,

Communities. of they some and longer-term then than of cash those XX% So signed components the come XXXX. and that reason in to Discovery with of for about Senior we're Living leases saying in XXXX more XX% XX% to is really The XX% cash we've GAAP. do And

OmotayoOkusanya

Got you.

Okay.

So that's perspective. from that helpful

option tenant one new that kind a That disclosure just then in earlier me. of hospital that your about On you therefore may, XXXX. could exercised could indulge most options. And purchase be NHI recent Okay. purchase owned of more, if

And because curious, disclosures. sprung is just this this prior of purchase wasn't in Just option kind like- a like kind of this is seems there quarter. it it's in new

KevinPascoe

Yes.

is this So Kevin.

to option. operator So option first of we part have is it's XXXX. What the the with extend into there the a agreement not it new

exercise are going year. to So just they option their this not

exercised, its these capital and add to can the where change which the make and able any So operators that's have just in do to we'll that. options more we to and relationships feel changes we've hopefully do we be able feel -we we with that but to like like event, done of of have improve to been that back do through kind talking each of get yet be like get redeploy. some on the Nothing's we working ability things we these like we're scenarios options good some in with feel

so have trying able hospitals, that are around but if high recognize do these focused things returns, some and the we we in can like where to them time, yielding are be possible. all those definitely overcome move So those this we're on we do and ones like at -we'll of to

Operator

line next Connor Berenberg. proceed. question of the comes Our with Please Siversky from

ConnorSiversky

these loan the and having to looking development Hi, commitments. you Tao's today. as of all. me timing color projects? some completion quick follow-up the some And maybe on for any first commitments bigger of A call to of provide Can these question at thanks of the

JohnSpaid

right. be will So projects bigger the Sagewood

by that to obviously the end else -it's year. the expect controlled it towards open there that's of do this we So developer and

So this the most of not the be funded - will LCS Sagewood not will commitments all year. but all most

of open heavy maybe and then see and a is between you there; the other a to get quarter. Ignite the then heavy of to end construction they the little they little kind back and something Resources we the of Does second bit that's bit funded and soon see Medical in sort other something items little expect pretty help? mitigate for of that fully towards here bit and that now be so do commitments. a should You'll some tend end front-end sort be

ConnorSiversky

you are looking seeing kind there the you're stable? pressures at any relatively being or out developed And pricing a could is be pushed given for Thanks little are Yes. maybe external any bit strong deals question, performance competitive environment pipeline considered your mean portfolio I more of the a pretty that. or high-level of secondary just of acquisition of markets. looking then meaningful at you

KevinPascoe

those the a of Kevin. bread find definitely environment either find and are I good deals is good That of business feel last competitive. also years. done said, still markets over of where new our repeat we is butter This is we've really been secondary operators the kind built growing find to lot which few new a up job which able can and been a good- like have we've where relationships or

we before competitive if of stands, us to like it there for and to well. broker the And get goes is a those be able the as it So seeing I We're feel key can for really. to market pretty we're continue some we're mean be like and to roads that's good I competitive I really, there make stay have those in like of that make relationships feel and really I to investments. out And kind going process, said to successful. of continue we can

ConnorSiversky

ILS And ALS? different of would classes? asset for CCRCs or kind that the Okay. how then I I mean versus vary mean

KevinPascoe

side, so exposure monitor just closely from on standpoint. down the lot something going we an a that's to took CCRC very we're Well,

to us. for additional in it skilled or on the a have continue and always the up the time for we place if been yes, earlier classes doing love question on a various the same nursing. some find to came do the that's the think about I opportunity. We'd got relative right we- that right I good we asset That's basis operator at invest table proportional to we us. mean

asset I we're really So operator and all mean right has business as open well that's right as been think just opportunistic. fun been what for I opportunity classes. on It's fit. really NHI really in the

So we'll said that's a housing, skilled behavioral we senior table. at look continue on still for looking We've at to while were the nursing.

and build continue a So make those of to can just where it's we them. matter relationships

Operator

question The KeyBanc. of from next the with comes question. proceed your Sadler Please line Jordan with

JordanSadler

Thank you.

million on at somewhat mix pipeline were looking clarifying Just John, eyes the is yellow pricing there? the the $XX you and mentioned, we

JohnSpaid

pricing. Yes. Mix and

is help? average. helped? would it's that I that guess our I what say How So is Does above

JordanSadler

Better than cap rates. average

JohnSpaid

look page. if investments. at our Better prior our I on you on than average commitments our mean lease I'm rates history sorry

JordanSadler

a mix? -? that function average. of Is Better Okay. that than Is

JohnSpaid

of and Just yes types variety make yes. things, some

JordanSadler

So development or is more SNF it like deals what? or

KevinPascoe

still in about bit it's a say be it's like we Again might housing, up of it's it leasing some senior things the higher might just it would yield. where still it where proportion be that secondary majority that but talked little or deserves it varies. where I where market it's

are track they good at in have or where already build kinds So rapport but of looking things we're markets. establish that good a the that have -those to records and those continued our

JordanSadler

that while purchase I've option to, you mean to opens year this but don't either Okay. And you this not one talked year. got I going - I we guidance the options the that John, on I the actually the could guide back the I are the But or open you your or in exercise be MOB speak MOB assuming assume both. the it's hospital purchase to mean come about expectation is then of guess, purchased. there

JohnSpaid

hospital so that In words is there. yes, forecast. either but impactful way we're our expecting it in either not It's exercised other the be Yes. to in

EricMendelsohn

And, deal plug up option Kevin's we if a had remember, huge ended XXXX that a for with Jordan, into I could turn Ensign. purchase new Legend in being and to lemonade, transformed ability that a make lemons with into

So we- and maturities purchase options the on of are said and we on on. before hyper I've focused working things lease here that time spend a are that lot

you closer So opportunities or color but as them a end of we'll conversation view more as we give starters transaction a necessarily not get we the and and relationship.

JordanSadler

That's Okay. helpful.

John's it's you're with assuming, that being exercised? that how So fit comment does

EricMendelsohn

we have to - be well, We - realistic

JohnSpaid

promise. And we like under to

EricMendelsohn

to promise under like deliver. We over and

you we'll and the So you let a have moment we're we assuming different the update know. worst for

JohnSpaid

it would it doesn't us, opposite be would of not assume be sudden a I and That all for right? away away. a then go yes. goes good worse, outcome The

JordanSadler

in this quarter the expect had can't one fourth that and you wouldn't because that remember had the opening? guys Is we And I you there. two hospitals the

EricMendelsohn

fourth has pushed the one X/X/XXXX. that quarter time been One now. And for that March was got there to in some in the

I mentioned I It's with have we it would get there them. good relationships right a we why that mean optioned. assumed dialogue. moment still is which There's As an ago, open

JordanSadler

say- XX% the only refundable? Okay. is mean XX% you and And just one other rest. say so then I Did clarification on Ridge Timber did you

EricMendelsohn

Non-refundable, is refundable. No. XX% yes.

JordanSadler

it. Got okay. Thank refundable, XX% you.

Operator

the question SMBC. line next from with Anderson question. of the with Rich proceed comes Please Our

RichAnderson

Thanks. magnitude, doing? the can of not put for a or and level and purchase day order of provide So willing on these are guess you're you Good color? How you of like give just ten sort I we that coverage or XXXX just to XXXX options an afternoon. call should cap

JohnSpaid

Yes. cautious because And we we're still-

EricMendelsohn

yes, negotiations, pricing are that. things on like There and

RichAnderson

of a about DARM but basis argue talked so development of that I and wondering talk with I be went one. Okay. pretty ever on on there relationships there about yes, Holiday running not to really to you but adjustments coverage and could an all lead restructuring should if I've you Oh, so lost part in so DAR thinking which time. of I'm line becomes it Bickford put Bickford still thought train here. you close with, terms your know should are parity a way and Kevin, more into thought matter get we at individual number about another rest. my all, would your of through did basis gets comfortable can this yourselves of some the have you zone on, a you the with coverage. a It almost larger kind

KevinPascoe

cultivated as With sitting of millions is relationship we you Holiday, Bickford scenario think a don't of time Well, than I owner This Bickford. a financial have a have different Holiday. around. think frankly over and they

think, just think we over see relationship active in with our this in discussions and very actually, talked that I we've time You I approach. How different terms We've That them. optimize we've about Bickford been with said, numbers. very can a already. their it's of

We done the continue pieces with edges -we've rent. do some things sell it's we've have the the worked worked the them on with around We've of on development; some a them whether with on couple buildings, smaller escalators.

the have side. So their put the it's the that has to year. to fixed but that than each make in that factor of entire as effort. we're in making over as continue edges seeing course in we'd They whole company -the they a time; on we something plus plays the they like running them the business. do- They're the going around company, can be, to They're - to time. be put over what out to we rise. on can And that occupancy strides you continue improving a thinner than improved charge They're quarter adjustments

this So think something right the we on eye business very all are I that things. they're they're but close dedicated a doing and keeping they're to

total, the I about just apply his comments would the this in as So NHI well. of think said Bickford kind Eric as to but in

different doing a it's way to We feel hard going very They're like woods working of the progress, a get a lot but scenario. are making not there of like be We're out to Holiday than yet. work. we're

RichAnderson

situation this All I right. suppose And RIDEA get back want Timber but structure Ridge. quasi calls the off I'm band-aid ripping every to a with I the different believer then to approaches. in also

So and of this? So real a RIDEA would you the the pay estate the you operations economics in describe -how a you a would and you to own conventional fee manager.

makes it Is is or in going towards it you guys. in areas of like of more more net - think to case? something that triple you it's will leaning XX/XX play or Here half all. like is economically? estate, any you for are sense splitting the in XX% XX% think or and RIDEA the sort that Are a triple of it out? of it the If between split of you structure kind of gray structure real Do like operations numbers sort a the RIDEA towards net at way this

KevinPascoe

that getting me rent. go, and is where if think you the Propco clearly to let want like to but share structure. in pay bring a I in Yes. more answer me triple a and that side, try back from net not rent Well, just They I'm they

in day-to-day them. On their position is bring We're help think our important is with anyway opportunity them. that really and we're that's really have a We to partner. been and what one take and not not But this speak are that I and that's RIDEA owners we our so of to for feel partner them. like happy risk That operators. Opco have solutions capital. is on the in premier We do operating business a the their to with the to circumstances date financial we partner operator it to side, said feel this is they're real very certain in like with we're be willing

operators We're disproportionate don't that and day-to-day risk. should have feel not the we like we

partner there property net case in to you've work for and a up what themselves. are. is through that from look And our then lot make it a us just what just the have only party them, every an best So care does that's being like be certain in but not of come the it really a but share each with it return day side will that's aligning opco level they to lease some set to was the opportunity to not because we this - better triple willing past. where in to seen we've We'll a where and a on who

RichAnderson

Yes.

you maximum invest can So operator? XX% to it's in an

JohnSpaid

So this is John. No, it not. is

in liabilities are to I balance book it to that placement them of reflect how know of kind planning doesn't though our we fee consolidating fully though those the of effects having that don't on, share opco bank private we're of not this lenders certificates not now this because entrance is we're mean the think the - case, compliance in we sheet, of don't refundable yet, on the even ownership. our rata lenders it - our on we and nature show pro it we're right liabilities for don't going with even planning we is our but sure

that's sort REIT operator. we low could in we other of the situation example different So just this for Bickford little case. cases, in to levered higher. in want a go did In be a We

Operator

the with question. from Daniel with comes the line question next Our Please Bernstein proceed Capital One.

DanielBernstein

Is changes something purchase? all Bridge on to real did provider but answered, some that I'll Timber the you you come was CCRCs is Really taxes. the quick underwrite altering the everything I had follow-up that how at on into just perhaps there's CCRCs which underwrite and ask

KevinPascoe

So, monitoring think we're information say that. have enough - impact. today how it to don't it's I we It'll Kevin. would

rest wasn't compared That in So particular components model Timber anything building. of at this. the into time small the Ridge skilled to said there the in in are frankly these- to the

are there going So be about. skilled we units it's something thinking we'll it's like that be feel overly definitely where impactful, don't to larger but

Operator

your question. with Mizuho. the with The next question of Omotayo from Okusanya proceed comes Please line

OmotayoOkusanya

Hi.

focus expires? happen of on bit you of this the is debt then capital credit, on of to I quick forward. the talked of think bit little use We remaining Just that kind and it when wanted to that intend and line a just one terminate kind unsecured a do before idea about offering? uses follow-up. capital could balance going What's likely you of And quite on of ATM the sources that

JohnSpaid

So this now. our say in I stands February. expires good is, is John, pretty again. The leverage it would as right shelf shape in

December. of had kind shelf way capacity. equity. our So the debt in sheet of have bond we We left of transaction took did in $XX a I in a using really a million say, did capacity current this way don't $XX but it redemption leveraging we of view convertible And no, our would we the million of balance we care on because lot was a lot

shelf on filed at here we new point you'll more number there new see and have we'll So kind forward of a the that and moving to that. say get about

them in you I my thinking I prepared moving a mentioned leveraged when think think remarks neutral basis. on about we're our investments forward, about

back So investments. this we'll equity the markets make we into as later new be year

want the going have liquidity free do in on without off capacity terms We year. our to target that. some growth try to really like done up to here to to and We to average. like of too don't We're terming loan of XX% In do for free of of mid-year, using term revolver about liquidity. much that this al we get revolver, something

what of we're kind thinking. So that's

Operator

back And any for Hambly, call over turn the to Mr. I remarks. will closing

Dana Hambly

you at And All NAREIT. forward we'll right. Thank to you, look everyone. seeing

Operator

does participation. your for the you Have a disconnect you. great Thank day. lines. please your conclude ask call today. you for And We that That thank

Dana Hambly	Director, IR
Eric Mendelsohn	President and Chief Executive Officer
John Spaid	Chief Financial Officer
Kevin Pascoe	Chief Investment Officer
Seth Canetto	Stifel, Nicolaus & Company
Daniel Bernstein	Capital One
John Kim	BMO Capital Markets
Omotayo Okusanya	Mizuho Securities USA
Connor Siversky	Berenberg
Jordan Sadler	KeyBanc Capital Markets
Rich Anderson	SMBC

National Health Investors (NHI) 19 Feb 202019 Q4 Earnings call transcript