Leaders with American Healthcare REIT (NYSE: AHR) plan to additional spend money on and develop the corporate’s senior housing working portfolios in 2025.
The Irvine, California-based firm is beneath contract to amass two senior residing communities property in 2025 for $70.5 million, with plans so as to add the communities to its SHOP section and assign a present regional working companion to handle them.
The corporate additionally closed on a lease buyout for one among its Trilogy Well being Companies-managed communities and plans to start out on a number of new developments for Trilogy this 12 months, in response to American Healthcare REIT CEO Danny Prosky.
Chief Monetary Officer Stefan Oh mentioned the corporate will proceed to give attention to buying communities so as to add to its SHOP section, which Oh mentioned has the “finest threat adjusted return.”
Whereas future acquisitions will seemingly stay with stabilized property, shopping for potential “average value-add” property isn’t off the desk, he mentioned through the firm’s fourth quarter earnings name with buyers and analysts Friday.
“We’ll additionally think about property that perhaps have some room to enhance, however we are able to purchase these beneath alternative price worth,” Oh mentioned. “We’re most likely extra targeted on the assisted residing and reminiscence care aspect of the SHOP portfolio than the impartial residing aspect.”
American Healthcare REIT additionally has 126 buildings or campuses in its “built-in senior well being campuses” portfolio, which incorporates campuses comprising impartial residing, assisted residing, reminiscence care, expert nursing and different ancillary companies beneath RIDEA administration agreements with Trilogy Well being Companies.
The REIT is in 2025 upsizing the portfolio with new growth initiatives that embrace new campuses, impartial residing villas, and expansions of current communities. The corporate expects to incur development prices of roughly $136.6 million consequently.
Final 12 months, the corporate exercised a purchase order choice to amass the remaining 24% possession stake of Trilogy Well being Companies from NorthStar Healthcare Earnings for $258 million.
Waiting for this 12 months, Chief Monetary Officer Brian Peay famous the approaching pipeline is “very strong.”
“We’ve got been very lively over the previous few months in potential new alternatives, and we’ve got been working very intently with our operators and figuring out the alternatives that might be a finest match for the portfolio,” Peay mentioned. “It’s undoubtedly extra important than it was presently final 12 months.”
American Healthcare REIT’s inventory closed at $29.77 by the point monetary markets closed Friday, down 1.3% from the earlier shut.
American Healthcare REIT has a complete of 86 properties in its SHOP section and a median occupancy of 87.5% throughout its complete senior housing and care portfolio, which is above pre-pandemic totals.
Prosky famous that he’s happy with the corporate’s SHOP efficiency thus far regardless of some slower winter months, with occupancy rising a complete of 600 foundation factors all through 2024.
The actual property funding belief is “fairly robust” charge will increase in 2025, significantly because of the restricted quantity of latest growth occurring and close to report lows of latest provide coming to the market, Prosky mentioned.
The REIT can also be protecting an eye fixed out on how proposed cuts to Medicaid might impression the corporate and its senior housing portfolio. The corporate diminished its publicity to Medicaid when it bought a talented nursing facility in Missouri final 12 months in December, Prosky mentioned.And rather less than 1 / 4 of Trilogy’s portfolio with the REIT has publicity to Medicaid.
“We don’t know what’s going to occur,” Prosky mentioned. “I imagine that if there are changes to Medicaid, it’s more likely to be affecting those that benefited from the Medicaid growth, for instance, perhaps lowering eligibility, work necessities, et cetera. I feel that’s a lot much less prone to see any impact on Medicaid reimbursements for long run care.”
Prosky added: “[Trilogy] has numerous levers they will pull … It’s very straightforward for them to pivot and convert these rooms to assisted residing, reminiscence care, [or] extra Medicare beds.”
