Senior housing remains an important part of American Healthcare REIT’s (NYSE: AHR) overall opportunities to grow, according to the company’s management.
On a call with investors and analysts Tuesday, CEO Danny Prosky noted that the company’s current best risk-adjusted returns are “within Trilogy [Senior Living], both exercising the purchase option and growing the existing portfolio.”
As of the end of March, Trilogy represented the largest operating partner within American Healthcare REIT’s portfolio with 128 properties. The REIT owns 76% of the operator, with an option to purchase the remaining 24% that is owned by a joint-venture partner until 2025.
Outside of expanding with Trilogy through the purchase option or bringing on new communities, Prosky noted that the company has opportunities to expand its senior housing operating portfolio (SHOP), which in the first quarter numbered 78 properties. Earlier in the first quarter of 2024, the company bought a 14-property portfolio managed by Compass Senior Living in Oregon for $94.5 million and converted it to a RIDEA structure.
“We may have another similar opportunity – although much smaller – coming up sometime later on this year,” Prosky told investors and analysts Tuesday. “But I think you’re going to see us focus mostly on Trilogy, because there are just so many opportunities in front of us.”
The California-based real estate investment trust (REIT) launched a public offering in February.
In the first quarter of 2024, American Healthcare posted funds from operations (FFO) of $31.1 million, or 30 cents per share, missing analyst estimates of 31 cents per share.
The REIT presently operates properties encompassing skilled nursing facilities, medical offices, senior housing, and hospitals across 36 states. Its assets hold an approximate value of $4.6 billion.
During the first quarter of 2024, the company successfully completed a public offering, raising substantial funds and listing its common stock on the NYSE. These proceeds were used to significantly reduce outstanding debt, leading to improved leverage by reducing near-term maturities and high-interest rates, executives said.
The company also amended its credit facility, extending its maturity date and increasing its borrowing capacity.
