LTC - Earnings call transcript Q4 2024

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Operator

Greetings. Welcome to the LTC Properties, Inc. Fourth Quarter 2024 Earnings Call. [Operator Instructions]

Before management begins its presentation, please note that today's comments, including the question-and-answer session, may include forward-looking statements subject to risks and uncertainties that may cause actual results and events to differ materially. dated are Exchange LTC time, Commission company's recent uncertainties the filings including and most and XXXX. Securities from XX-K, risks detailed Properties' in with the These XX, December time to undertakes reflect or presentation. to obligation forward-looking of the events revise update circumstances or LTC these no statements date after this to this note, recorded. being Please is event

to I like would Simpson. to now turn Wendy the conference over

Wendy L. Simpson

welcome Call. and operator, to you, Fourth Conference LTC's Thank Quarter XXXX

our for Clint, I Financial turn to over call want has co-CEOs; incredible say Officer, for Chief Before support. been CC, to to Pam I honor. years LTC our everyone and and past on your the thank Leading XX an the you today's steadfast call

Executive Chairman, excitement as company my ever. remains the Today, as for as strong

strategy, growth complex navigating I I They very stakeholders X unprecedented our pandemic, our driving have could while our be talented than proven optimistic working RIDEA of cycles, and with had group track fact, delivering have industry. numerous to alongside more and value future. decades. our consistently an real a privilege estate about the of this more not for In record

] the further Senior Additionally, of to Bowden [indiscernible] Vice Vice Asset experienced promotions Management; of [ Mike President, Gibson President, Investments, our talents recognizes and the Executive highly recent to team.

search our in assist is continue to search in the will us growing As quarter. Investment business Officer, platform. new who will anticipate confident a forward. second our a completing fully we our finalize team adding The Chief our for executive drive focus is this seasoned on the We Board RIDEA

last years, achievable half of future. Board that us and a an the growth, fresh year into its in is plan well depth to LTC for with joined but of positioned thrive and perspectives, team's experience, The aggressive members having X this the brings

turn I'll things Pam. over that, to With

Pamela Shelley-Kessler

matched to Wendy. having long-term cash and our leverage Of maturities XXXX, policy well-staggered we continued of our worked for to LTC flow. growth. you, position reduced debt Thank we Throughout note, our projected

For to are for focused further diversifying we to investment on with to a growth respect geography, our catalyst operator, type a importantly, adding XXXX, business. by and portfolio structure balance RIDEA strong unlocking And our we property are ensure a vehicle.

as consultation are platform, RIDEA and now execute with a moving to analysis a out necessary this industry while our actively experts success. extensive to to strategy quickly implementing After we the infrastructure make building strategy

As we selected are balance our cooperatively sheet. we've initial and identified on existing several currently opportunities triple-net to million have gross million into RIDEA $XXX discussed, to assets convert $XXX and structures, leases targeting investment

these quarter. RIDEA from complete We the to expect triple-net during second conversions to

has short, isn't long-term robust for tailored In a remarks. to Currently, the expense we quarter guidance for expect are it that guidance year her unlock strategy, potential offset the just initial will will XXXX. financing X potential us, suite provide conversions conversions platform. of build to a to our When the support Once provide will full be NOI transformative. we during from will success, complete, RIDEA LTC. we with these first operators for growth year CC incurred the solutions combined

turn to things financial over quarter for fourth our a results. I'll Now CC of review

Caroline Chikhale

the All noted. today quarter discussing the in XXXX, period with numbers Pam. you, Thank XXXX, unless of I'll for compared the fourth same be otherwise

by higher and partially $XX.X Net shareholders cash master in to decrease leases increase onetime G&A. an offset to from credit million, sale, gain income on were decrease our provision basis restoring certain rental basis in by losses, straight-line a a common on impairment as available required expense, accrual GAAP. to income interest These by in related and for in increase decrease due a decreased primarily and to losses

construction sales and to revenues to offset mortgage $X.X from previously fair loan income G&A. property portfolios increases market XXXX, rent and funding lower improved items, excluding escalations, from in FFO, lower partially primarily due transitioned was higher transaction interest costs. increase and resets, The in as rent payoffs nonrecurring lower by well loan due million, expense, and interest increase as

basis, year. items, was was FFO Core quarter $X.XX the to per On excludes a XXXX, share quarter. nonrecurring last compared $X.XX which $X.XX per compared FFO, fully $X.XX the Fourth in with XXXX share diluted in share Fourth per

sold our in by last terminated principal a property $XXX Colorado loan in which million a our we into credit, and million of for feature $X.X a fourth repaid gain, in senior payoff Recapping million on program. program, subsequently senior mortgage $XXX recorded call, forward scheduled the a of quarter housing includes discussed secured our million activities, was and our unsecured some $XX.X quarter's community on of received Georgia, $X.X repaid $XX.X notes, which ATM million unsecured million ATM revolving paydowns $X entered new line under million a closed a

a the our line not of assisted a credit. dividends. as result reduced stock borrowed of XX-unit was lease in ATM $XX.X million common Oklahoma. we We living of under common the for million master quarter, senior unsecured living notes, programs, in revolving master and $XXX,XXX. lease Subsequent the fourth end sold the sell, $XX sold Oklahoma million $XX.X to Upon million XXX,XXX in covering shares of our Repaid was removed in X net property from and under paid a the assisted proceeds these for sale. properties property under Rent $X under

At $XXX XXXX. the total the end end liquidity September the $XXX our of of million million, from at was last up approximately quarter,

improved end of We on third quarter. of $XXX XXXX from have these under cash and available the of credit, line hand, on our ATM. $XXX million of $X.X million million the metrics available our Each

third X.Xx, down to coverage for adjusted charge is and our adjusted X.Xx, annualized to quarter. EBITDA the fixed X.Xx from the to quarter, real is debt estate X.Xx ratio up annualized for for third Our from

$X.XX XXXX sales, for no This financing guidance per issuances. quarter investments, $X.XX additional FFO first assumes between core Our equity guidance share. is and asset or

Clint. over to I'll turn Now the call

Clint B. Malin

with into numerous opportunities outreach productive increasing is of our proactive operators a of both in pipeline, in conversations momentum RIDEA. which our as seeing There that expanding and are inbound CC. you, we've some having memory. had We're is the recent from inquiries, and Thank entrance most result

always been to operators set story. of RIDEA robust need, has flexible part [indiscernible] a want It provide is innovative and is what of with now box. them strategy our growth that solutions. listen to and closely Our external anchoring and

valued RIDEA and opportunity, While financing pipeline net approximately we other leases, Currently, growth like our largest structured transactions. million, mortgage continue our represents including triple to deploy potential is will RIDEA $XXX loans vehicles at finance.

years. one the in best for of are accretive in recent growth We positions

received. fourth still during to should end retroactive we operator through current timely year. have expect they manner, evaluating concession We million financing receive in continuing now time $X ALG full purchase work interest to for the March. and Medicaid a contractual related and security opportunities. are hold February received the payments on quarter updates. don't ALG January towards [ approximately a their allow their of us obligation as same line contractual this prestige few formal with of to paid options, we rent no we deferral the Moving their to combined they $X.X a for is exercising pay, ] at but The with from million, least

basis to this XXX increased January points year. last from of portfolio this in January Occupancy of year,

in and properties resets, in to to of expect $X.X $X.X to million market-based portfolio increase XXXX. in subject our XX that received rent we For XXXX million rent

expect by are end quarter XXXX and the XXXX actively maturities on be We the addressed working to of maturities. all second lease also

$XX of we GAAP to that top our have make $XX is annualized to including year, XX% XX, maturing, about in X up Next million expected renew. operator million. with income rental operators in One

reasons, they renew. The to other strategic has do for not that informed us plan

are we from will this negotiating capital redeploying million replace Based rent believe rates this available to X that portfolio from we the at skilled We fully by sell the make on that $X.X today. buyers, offers portfolio. we're annualized strategically centers sales feedback actively potential receiving the these us of received to GAAP nursing for up

We expect fourth the the transactions to complete year. of quarter this in

positions LTC while. been summarize, has in for it one the than accretive To growth best for a is of

structure up to again a forward progress should new today. next quarter investment our growth. our first us importantly, become We to joining have quarter for shoring made sheet adding tremendous you portfolio, discuss a balance for all We to in results. talking our Thank you diversifying mainstay that and look

now questions. take Operator, to ready we're

Operator

Your from with Instructions] is Wurschmidt KeyBanc first question Austin for today Capital [Operator Markets.

Austin Wurschmidt

detail Clint, I proceeds share then I was who the just like? the prepared they additional is wondering what and sale operator redeployment And about around, of don't [indiscernible] [indiscernible] remarks. and if that looks noticed some of that time bit provide And you more guess, the renew? could to a intend line little

Clint B. Malin

not problem Sure, Austin. a

where organization this portfolio. to operator and decided the exit properties the in has made downsize to -- they decision strategic a states the So have we the they've

we through enhancements and maturity. is cover, the have they the So secure rent assets to paid credit

assets. private consistent is a reduce skilled on process buyers of and strategically a this to This our of reduce for continue historical strategic to market recycle strong older exposure we we're is It's nursing. capital into through. feel we'll a decision able average age recycling this, portfolio, with we've And of skilled sell doing gone our by our be And going to assets. to older and to capital

the our than similar through they we'll available to recover our more ahead income. recover, that year, transactions. think the to able where to is to be whether ability that to up on today, think line Brookdale re-leasing, case these timing were we'll sale the the something the we the in RIDEA existing able transition under the And intents demonstrated go us replace end maturity previous be Brookdale, to in with we And think or well. or this lease. income the of And of of we rates assets, our by we execute with Brookdale, and sales And and

Austin Wurschmidt

given So correctly? into you you that [indiscernible] hear can today that on neutral can basis? sell Did those think assets redeploy where I you on you

Clint B. Malin

Correct. Yes.

Austin Wurschmidt

to in remarks, the And [indiscernible] neutral share impact $XXX that for And Okay. transition the RIDEA. you expect can taking is that on referenced you That's $XXX CapEx assets? in-place well NOI what then helpful. for million are earnings million [indiscernible] you be initially that to for a the on more those from from accounting guys yield as Is the prepared

Pamela Shelley-Kessler

Austin. expected and all platform it of related database setting a like takes It the does Yes, establishing into up onetime to account that. expenses

yield as far As the X%. about in-place

Operator

with Your next Fargo. question from Kilichowski John is Wells

William John Kilichowski

pipeline. conversion I'll of the start the with

a your or getting of 'XX, What rate is [indiscernible] by to percentage me echos maybe Sorry, portfolio of run little the the end bit.

Clint B. Malin

XX-XX the I are our in spoke [ about currently about we prepared conversion Well, remarks, Pam think with ] right now. that

weighted going see think more I going to continue to to increase shop. towards time, you're that's that over

William John Kilichowski

then preparing about [indiscernible] on maybe just And Okay. [indiscernible] to building platform. you want think

operating shop had we internally [indiscernible]. side discussions ]? the least not at your working the networks on the should For some [ they're G&A here What prepared, on of platform we've we're oh, like, expect [indiscernible]

Pamela Shelley-Kessler

give G&A. After we we'll But on now, in rate prepared NOI remarks, as right expect increase the this we those established the portfolio that platform, our increased a you shop from to expenses the offset we in run year. said

Operator

next Your Sanabria with BMO. is question from Juan

Unknown Analyst

for is This on [indiscernible] Juan. Rob

[indiscernible] Just curious in [indiscernible] you if you elaborate [indiscernible] the could could on share RIDEA

Clint B. Malin

having that companies very the we've in some I in now, discussions robust. right we Well, Sure. to had been recent are regard as prepared remarks, And of with conversations the memory mentioned in RIDEA. operating the has productive most

-- think a platform. for. gravitating this RIDEA see companies are lot And is what had We've looking towards I you the operators of

And so part by up market RIDEA. were not a doing that opened the conversations we previously missing big out with this really has of

last on active the business been most the the side, So this front of in development we've couple probably years.

we're traction evaluating up the and ramping tremendous, opportunities. So is really

Unknown Analyst

And you pipe expect includes RIDEA? simple what ] more pipeline [indiscernible] and you're [ fee of part what's seeing, would split the the the on loan

Clint B. Malin

RIDEA XX% But through just we Sure. We're our on given say LOI. our now of we're loans. majority underwriting, million. transactions. it The pay I'd private -- $XXX going assets. Normally, right about in about number ramp-up that's XX% we pipeline transactions of cut the have under about is for a and

and And with REITs it we're relationship entrance one exciting work is that of smaller the optionality really RIDEA I looking the between our to capital of with operator. the that And interest rightsize gives rightsizing and partners. -- to well capital operators and talking alignment for is different hearing into think things at that timed, to operators

Pamela Shelley-Kessler

and RIDEA. organic You us look triple X%, CPI better increases leases. a stated outlook or in the than long-term net comparing triple net gives at really RIDEA growth --

really So return looking investment. a RIDEA versus triple for provides LTC. future growth an we're really net outsized at

Unknown Analyst

any administration? there's rents the And to [indiscernible] curious leach is that if then on portfolio, ability Medicaid if just cut the under outside new risk sustain DC

Clint B. Malin

XXX good occupancy, As basis points over last prepared has I remarks, Prestige growing over mentioned the in [ year. ] done the a job

Prestige recover with 'XX able transaction this points basis and structured they've through long at XXX we the to accomplish to from runway when end be occupancy, gave to As -- We that been a them December 'XX. to of able January 'XX. of January

to encouraged we're that. see So

retroactive We to the did us. receive was Medicaid payment that

So improve we're to increase hope operational And occupancy by is performance. they that. encouraged continue our and

Operator

next Your from with Anderson Rich question today Wedbush. is from

Richard Anderson

gone. is echo that hope was It me I giving vertigo.

like RIDEA. is much terms $XXX of -- you What here, go $XXX mentioned, to million in where execute? So that Pam, a from to can transitions there think million larger internal the you number is you

about part the that. reason a influence pie could growth is the why it meaningful terms for I of but in of chart, take I'm dent And a can portfolio its while RIDEA in maybe make in when to ask the profile? wondering wrong a your truly become I'm It

question. the So that's

Pamela Shelley-Kessler

that We call [indiscernible] currently market-based on these leases resets. Will of assets. the transition them have the are lease-up or are assets bucket

to if a that progression RIDEA, natural operators be to would So for some those wanted that. transition of

the our discussed now, we will RIDEA. from that are right But externally investments remarks. only think through of prepared two the come We most targeting from we in growth

Richard Anderson

your Do right you or you'll think you Okay. to XX% the something like mind And from pie. now get vision that level, have like X of that total what's years some in now? X

Pamela Shelley-Kessler

in operators done Senior from housing, volume. operators. from lot haven't because the -- predominantly past yes, seeing what triple with It's interest It's business we we're maybe new customer calls XX%, operators, base got do depending inbound like they XX% the don't net. our on and in We've from sorry. to a of new and that acquisition

area So opened it's a to big entry up into. us -- for really make

Clint B. Malin

as that we and opens look Rich, also, conversations about set And you just we of talked specifically really with the can it deals up at. opportunity

to So really giving it lot more is us explore. a opportunities

Richard Anderson

took the it you just been around about Or the Is the your guess, recently? now, needed structure. that more you after has since that sort portfolio not on something just RIDEA? XXXX. of really mean you've work business, has But the been in of right somewhat why wondering the in nature that corner to there day it's evident, long I'm -- about I for of Okay. go until this I I'm -- law

Clint B. Malin

participate just is hard a the the and upside. One things. on in of net downside it was couple to lessons participated but recover through learned A we triple the and pandemic, in lease,

we cap at can pricing looking just then and And deal flow execute on. rates of where

to the of that invest being is, the to to pandemic, able growth what then culmination to So at cap idea and to just really through went at able we opportunities look where be invest those rates. the and it's

Pamela Shelley-Kessler

the I what demand, requesting. all mean, this sitting meetings so is why meeting our what saying no. a no, and of for no. is said we long, want, meeting undertaking. And we the operators, it well, with they in big no, saying, is is planning mean, they're I And strategic this around because And are we're

company But here at fully path of this efforts the diminish growth. we're evaluate forward in said, platform LTC right. LTC. and to for once future it to to do everyone place We're this we it yes, the and want is it best don't put for I committed a small

Clint B. Malin

be really up And been that happening wouldn't getting able we've business conversations just ramping by wasn't recently, substantially, of experience mean, it's it I Rich, this opportunities. -- development RIDEA. to it's about front and on for meetings, -- having the if

pie looking increase feel at, to really, traction getting a So lot we're we're the we this. the with ability of of what

Richard Anderson

you the that's the associated you there do during million vulnerable Hello? deposits is that X amount just execute And [ XXXX redeployment? and the of $X.X all as for missing you're you, with security property ] Or of sale out any -- quickly Okay. the on has to cover Clint, real the rent portfolio, [indiscernible]

Clint B. Malin

portfolio so we're through operator sale the pay or fully expecting of to the the Rich, on assets. maturity rent

Richard Anderson

does mature? When that

Clint B. Malin

XX. January

Pamela Shelley-Kessler

'XX.

Operator

Michael next is from Your RBC question with Carroll Markets. Capital

Michael Carroll

this what been and mean you're means? you this infrastructure some kind make you've of going for talking your And mean building that investments in know your you Q&A kind investments? provide I to need you what of what to tracking build can Pam, sure do on I mentioned you are do platform. your to make of the RIDEA in infrastructure? about prepared how I about type you remarks, RIDEA color

make know, helping going are operators you from types of I of are And much don't you without your letting these advice be this your decisions? to you? Or operators to be kind going run

Pamela Shelley-Kessler

level a information the to as accounting a partnership. operational database the really property systems It's some the and at partnership, collect personnel. all view strategic We and this

of how manager would working be future decisions, be the we're charge be strategic the investments our But capital we'll with So would together operators. obviously, That's But day-to-day operator. and the -- made works. in operations. improvements RIDEA with that

Michael Carroll

of operators it of Is that and tour indicators are and it type So what how long you to other from take financial you build and you? activity are types leading them? information to getting type like Like does information? your database requesting of both operational give

Pamela Shelley-Kessler

The the conversion And Yes. That is operators. that. will be ratios, type of tours, we lease ] of collecting that information crucial. from to all yes, [ our

that's industry -- what's they're more decisions. better the and our It in We talk information provide really of happening pretty not people, information them marketplace RIDEA help peers. collecting to the That's in informed does to and our standard operators information So and helping. helps the portfolio, but type information. just experts better

Michael Carroll

are and it related can at you averages the what then January us guys that how XXXX to coverage or And of the mean the you least idea quote I on to properties supplemental? ratios -- pertains the give Okay. an expiration. in those

Clint B. Malin

cover coverage these strong given specific we haven't we have assets credit assets, enhancements I it. would say by right and on now, but

a concern collect of to not the ability lease us. this rent for for the is duration So

Michael Carroll

you prepared Austin's that earlier, that like correctly? or I these investments right, kind can million debt of you when know NOI? Okay. the what of question Clint, Or kind I proceeds into were then, not RIDEA it's mean, assets, highlighted your I And of you reinvestment mentioned anything you you remarks. do of about think investments, Did hear RIDEA $XX-plus that? this regain for

Clint B. Malin

That be But of net to leases. that RIDEA And on it's really well far recover RIDEA. be a in the other will available combination the as us as recapture that the and same of portfolio. retain look, loans, see what But at market a it we then goes investments as we back we'd timing can rates just probably Primarily, to to to as make, we the which of deploying sales now could going triple right timing timing. today, executing -- think yield that be in investments income the capital. redeploy

Michael Carroll

if last with Great. then looks short-term tenant one X-year only small was that are renewal, that just any you Can like it a you on working X-year risk bigger a a There them renewal. describe And there's was for now? why a Or tenant? to you had me. renewal

Clint B. Malin

larger The adding operator properties two into these financing is financing. at that doing larger and a looking

an be increased to value. as So time floor able the consideration And extension, But to for this purchase the have more that. accomplish on this accommodation based is was that. we've market them give to they fair for option

a portfolio that long really, accomplish to [indiscernible] a we've this larger help them So financing. is combination had in to and a tenure our

Operator

Deutsche for Bank. Your with next is Okusanya Omotayo today from question

Unknown Analyst

the of could restoring if on just bid Tayo. wondering leases? some circumstance leading I accrual to Sam for provide you the accounting X was is around details This guys the master for

Pamela Shelley-Kessler

with contractual these quarterly sustained accounting. leases cash the least confidence We on have a level we we rent through we at Sure. had operational evaluate as would maturity. a higher in strong And portfolios, performance, basis receive that on of a our basis,

Unknown Analyst

this in you what tenants you. maybe Got -- again if guys [indiscernible] the you were XXXX? will And occur think

Pamela Shelley-Kessler

basis, We our we're is basis. on individual the many typically -- evaluating have is talk portfolio do that XX% more tenants But on about we haven't question don't we our more about and have if of disclosed a tenants your we cash quarterly. on an basis, cash -- a how

on that are level could a that closer put there's maturity especially of right now, require looking but high basis. at and get confidence XXXX we it XXXX, possibly we it, that us to have would But the So to -- as leases cash in them that what really able accrual. have them level none you of cash higher back a basis accrual. that and putting you a and be basis insight I'm to Taking on That's you project, them confidence pay cash them on they'll -- the into maturity. through sorry, of off crux putting and back

Operator

I We closing over have the of turn and for now the session, remarks. end call to reached the Wendy question-and-answer will

Wendy L. Simpson

all thank us today. Again, for joining you

quarter excited, to short Have hear can talking for as We you just a and few our to in LTC, the day. relative are look a future very results we forward first you great of to months.

Operator

your This your concludes lines you this Thank today's at time. conference, participation. you and disconnect for may

LTC Properties (LTC) 25 Feb 252024 Q4 Earnings call transcript