LTC Properties (NYSE: LTC) expects to double the scale of its senior housing working portfolio by the tip of this yr as the corporate seeks to additional increase within the quarters forward.
The Westlake Village, California-based actual property funding belief is all of the whereas making a “robust base” of properties and operators to assist future progress, in accordance with co-CEO Pam Kessler.
LTC plans to speculate $400 million and double its SHOP section by the yr’s finish, up from 13 communities as we speak.
Through the firm’s second-quarter 2025 earnings name Tuesday, Kessler mentioned that LTC is aiming for single-asset, smaller portfolios consisting of newer property fairly than value-add and distressed acquisitions that might be “a little bit messy.”
“For proper now, I feel constructing a really robust base in our SHOP with newer, stabilized property with good money stream. That’s essentially the most prudent approach to construct this platform,” Kessler mentioned.
LTC inventory rose $0.41 on Tuesday to relaxation at $35.15, a rise of 1.18%.
Within the final two months, LTC has acquired a 67-unit assisted residing and reminiscence care property in California that was inbuilt 2019 for $35.2 million and entered into a brand new administration settlement with an affiliate of Discovery Senior Residing and a brand new operator to its bench.
LTC additionally secured a $42 million mortgage mortgage for a 250-unit senior residing group inbuilt Florida in 2021, bringing the corporate’s year-to-date investments in 2025 to almost $80 million, with roughly $320 million extra in investments to shut within the subsequent 60 days.
Of that sum, $260 million is made up of stabilized SHOP investments with a mean property age of six years with an estimated common yield of seven%, in accordance with the corporate’s supplemental data.
LTC’s SHOP section will characterize 20% of the corporate’s whole portfolio post-acquisitions, “cementing our transformation” by means of RIDEA conversions, mentioned Chief Funding Officer Dave Boitano.
On the finish of the second quarter, LTC reported a $400,000 enhance in SHOP web working revenue (NOI) stemming from occupancy positive aspects and expense management efforts by Anthem Reminiscence Care, one other LTC SHOP companion.
On the identical time, LTC additionally continues its effort of “strategically recycling capital” out of older expert nursing property and into newer senior residing properties, Govt Vice President of Asset Administration Gibson Satterwhite mentioned on Tuesday’s earnings name.
Some outcomes of the triple-net lease to RIDEA conversion effort are beginning to present, with LTC producing roughly $780,000 extra in revenue within the second quarter than what was generated below triple-net leases from the identical interval in 2024 as LTC transitioned 13 properties into its SHOP section.
“We don’t have any outsized NOI projections, though we do imagine that margins may be improved, however by and enormous, occupancy is stabilized,” Kessler mentioned throughout the Q&A portion of Tuesday’s earnings name, with SHOP stabilized occupancy at 81% within the second quarter.
There may be potential for “a handful of different buildings” that might be added to the corporate’s SHOP section, co-CEO Clint Malin mentioned, “however actually” the main focus of that is “an exterior progress story,” Malin added.
“We see that almost all of the expansion of the SHOP platform goes to be by means of exterior progress,” Malin mentioned in response to an analyst query. That comes as LTC continues to be “selective” in future acquisitions to tackle with a concentrate on newer, stabilized property described as “newer classic properties.”
“We’re seeing extra alternatives, however we’re in a position to vet by means of these and actually focus in to what we’re making an attempt to develop the platform,” Malin added. “We’re targeted on execution of the remaining investments in our pipeline, however there are nonetheless different alternatives that we’re going to pursue.”
Since its push to transform triple-net leases with Anthem Reminiscence Care and New Perspective into the SHOP section, Malin mentioned LTC is “pre-marketing this SHOP platform” with the brokerage group and homeowners about increasing the corporate’s SHOP section amid a “aggressive” transaction panorama.
