American Healthcare REIT(AHR) - 2025 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported normalized funds from operations (NFFO) of $0.38 per fully diluted share, representing an increase of over 26% compared to Q1 2024 [25] - The net debt to annualized adjusted EBITDA stood at 4.5 times at the end of the quarter [11][28] - Full year 2025 same store NOI growth targets were increased to a range of 9% to 13% from a prior range of 7% to 10% [26] Business Line Data and Key Metrics Changes - The company achieved 15.1% same store NOI growth year over year in Q1 2025, driven by the operating portfolio, particularly the Trilogy and SHOP segments [8][12] - Trilogy reported a year-over-year same store NOI growth of 19.8%, while SHOP experienced a growth of 30.7% in Q1 2025 [12] - The Trilogy segment's same store NOI growth guidance was revised upward to a range of 12% to 16% from a previous range of 10% to 12% [27] Market Data and Key Metrics Changes - The company noted a sharp uptick in move-ins since the end of Q1, indicating strong demand in the assisted living market [9][70] - The company is experiencing favorable fundamentals in the senior housing industry, benefiting from a multi-year tailwind [9] Company Strategy and Development Direction - The company is focused on delivering high-quality care and improving health outcomes, which is central to its operational strategy [6][7] - The investments team is actively identifying new growth opportunities and has a pipeline of over$ 300 million in potential acquisitions [20] - The company is prioritizing partnerships with market leaders and expanding its operator base to enhance growth opportunities [10][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued growth across the operating portfolio, particularly as demand for assisted living care increases in warmer months [9] - The company anticipates that the senior housing industry will continue to benefit from favorable demographics and demand trends [9][15] - Management highlighted the importance of quality care and operational efficiency as key drivers for future success [95] Other Important Information - The company successfully closed a lease buyout of a Trilogy campus for approximately $16.1 million and acquired a$ 65 million SHOP community [19] - The company raised approximately $48 million through its ATM program at an average price of$ 30.22 per share [25] Q&A Session Summary Question: Can you provide more detail on the investment pipeline and expected close? - Management indicated that the pipeline is robust, with transactions expected to close mostly in the fourth quarter, depending on regulatory approvals [33][34] Question: How is the company thinking about its MOB and triple net portfolio? - The company has been selling off non-core MOB assets, focusing on higher risk-adjusted returns in long-term care [38][41] Question: Can you share details on the investment pipeline's competitiveness and economics? - The pipeline consists of over $300 million, primarily newer buildings, with attractive pricing and yields [46][47] Question: What is the expected impact of tariffs on the business? - Management believes the company is well-positioned to handle potential impacts from tariffs, with a focus on maintaining pricing power [76][79] Question: Can you elaborate on the recent uptick in move-ins and pricing strategies? - The company has seen a significant increase in move-ins, with a focus on reducing concessions and implementing dynamic pricing strategies [70][72] Question: How does Trilogy support SHOP operational efficiency? - Trilogy provides resources such as revenue management and training to regional operators, enhancing overall operational efficiency [95][96]