LTC Properties Q1 2025 Earnings Call Transcript

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Operator

ladies and gentlemen, and welcome to the LTC Properties Incorporated First Quarter twenty twenty five Earnings Call. At this time, all participants are on a listen only mode and a question and answer session will follow the formal presentation. 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. These risks and uncertainties are detailed in LTC Properties' filings with the Securities and Exchange Commission from time to time, including the company's most recent 10 k dated 12/31/2024. LTC undertakes no obligation to revise or update these forward looking statements to reflect events or circumstances after the date of this presentation.

Operator

Please note, this event is being recorded. I would now like to turn the conference over to your host, Mr. Chris Malin. Sir, the floor is yours.

Clint Malin
Clint Malin
Co-CEO & Co-President at LTC Properties

Hello, and welcome, everyone, to our first quarter twenty twenty five earnings call. With me today are Wendy Simpson, our Executive Chairman Pam Kessler, our Co CEO Cece Chakeyal, our CFO and Gibson Satterwhite, our Executive Vice President of Asset Management. This year is off to a great start. Through our Idea platform, we now have a SHOP portfolio totaling $176,000,000 in gross book value through the cooperative conversion of 13 properties from triple net leases. We completed the conversion with Anthem Memory Care on May 1 and expect to complete a conversion with new perspective senior living within the next thirty days.

Clint Malin
Clint Malin
Co-CEO & Co-President at LTC Properties

What's more, we've added LTC's bench strength with the appointment of our new Chief Investment Officer and demonstrated the depth of talent in our company with the promotions of several executives as discussed last quarter. The implementation of our idea strategy has resulted in an increase in our investment pipeline, giving us a clear pathway to growth by more fully aligning our interest with those of our existing and new operators and unlocking additional opportunities for performance driven upside. Currently, our pipeline stands at $300,000,000 of which RIDEA opportunities represent approximately 50%. We welcomed our new Chief Investment Officer, Dave Boytano, on April 21. Dave adds even deeper expertise to our team.

Clint Malin
Clint Malin
Co-CEO & Co-President at LTC Properties

Spending most of his career in seniors housing at Ventas, he played a pivotal role in sourcing investments and had direct underwriting responsibility for $5,000,000,000 in transactions. As we expand our Idea platform, Dave's experience and substantial industry relationships will contribute to our future growth. You will be hearing directly from Dave on our next quarterly call. We've clearly laid the foundation for transformative expansion and with growth as our focus for 2025, we are moving into the future with momentum and confidence. Next, I'll turn the call over to Cece for a review of our first quarter financial results.

Cece Chikhale
Cece Chikhale
EVP, CFO, Treasurer & Secretary at LTC Properties

Thank you, Clint. All of the numbers I'll be discussing today are for the first quarter of twenty twenty five compared with the same period in 2024, unless otherwise noted. In yesterday's earnings release, we provided a detailed description of our financial results. So this morning, I'll focus my comments on items of note. Fully diluted FFO per share excluding non recurring items or core FFO grew to $0.65 from $0.64 Fully diluted FAD per share excluding non recurring items or core FAD increased $0.70 from $0.67 Core FFO and core FAD increased primarily related to a decrease in interest expense, rent increases from fair market rent resets, escalations and amendments, an increase in income from unconsolidated joint ventures and an increase in interest income from additional loan funding.

Cece Chikhale
Cece Chikhale
EVP, CFO, Treasurer & Secretary at LTC Properties

These were partially offset by lower interest income due to mortgage loan payoffs and principal pay downs, an increase in G and A and lower rental income from properties sold. During and subsequent to the first quarter, we sold shares under our ATM for net proceeds of $9,600,000 These proceeds are being used to fund the initial investment in our IDEA platform, comprised of our purchase of Anthem's leasehold improvement for $1,400,000 which will be capitalized and a $6,500,000 lease termination fee to New Perspective, which will be expensed, as well as one time RIDEA platform transaction costs of approximately 1,100,000.0 to $1,500,000 Our total liquidity is approximately $681,000,000 Our debt to annualized adjusted EBITDA for real estate is 4.3 times and our annualized adjusted fixed charge coverage ratio improved to five point zero times from 4.7 times for the fourth quarter of last year. Today, we are providing full year 2025 guidance for core FFO per share between $2.65 and $2.69 and core FAD per share of between $2.78 and $2.82 Please refer to our supplemental for our assumptions for this guidance. Now I'll turn things over to Gibson.

Gibson Satterwhite
Gibson Satterwhite
EVP - Asset Management at LTC Properties

Thanks, Cece. We'll start with RIDEA, where we've made meaningful strides since our last update. In close collaboration with our partner Anthem, on May 1, we transitioned 12 memory care properties from triple net leases into our SHOP portfolio. The Anthem portfolio currently is 81% occupied. Additionally, we have agreed to cooperatively convert one independent and assisted living property operated by New Perspective into the portfolio with a target closing date of June 1.

Gibson Satterwhite
Gibson Satterwhite
EVP - Asset Management at LTC Properties

The new prospective property is stabilized, while Anthem offers some upside as that portfolio progresses toward increased occupancy. In 2025, for our current SHOP portfolio, we are projecting SHOP NOI in the range of $9,400,000 to $10,300,000 Note that these figures are reflected in the guidance Cici shared earlier. In addition to the 600 to $800,000 FAD CapEx estimate outlined in our earnings release, we committed $4,000,000 for renovations. Regarding Prestige, we received full contractual cash interest of $5,000,000 through $3,800,000 of cash interest paid and the application of $1,200,000 from their security. Subsequent to March 31, Prestige received $2,300,000 in retroactive Medicaid payments, which were funded into our security deposit, which now equals approximately $6,000,000 When combined with the current cash pay, we expect to receive full contractual interest at least through May 2026.

Gibson Satterwhite
Gibson Satterwhite
EVP - Asset Management at LTC Properties

As a reminder, our loan modification in the fall of twenty twenty three introduced a current pay interest component and a mechanism to increase our security from Prestige's retroactive Medicaid payments. It also included LTC's participation in excess cash generated by the portfolio beginning in 2025. This structure was designed to provide more than a two year runway for Prestige to recover from occupancy challenges experienced during the pandemic. With the level of security we now hold and increased occupancy and performance, our investment is on much stronger footing and is continuing to improve. From our portfolio of 14 properties subject to market based rent resets, we expect to collect $5,100,000 of revenue this year, up from guidance of $4,400,000 last quarter on a same property basis.

Gibson Satterwhite
Gibson Satterwhite
EVP - Asset Management at LTC Properties

Current guidance for this portfolio on a same property basis represents an approximate 50% increase from the $3,400,000 of rent received related to these properties in 2024. Regarding the operator's decision not to renew their lease on seven skilled nursing centers for strategic reasons, we're continuing the sale process and remain committed to replacing at least $8,300,000 of 2025 GAAP rent. We plan to strategically deploy sale proceeds into growth opportunities we have discussed. One property is currently under contract, and we expect the remaining six to be under contract in the second quarter, with all sales expected to close in the fourth quarter of this year. Now I'll hand the call over to Pam.

Pam Kessler
Pam Kessler
Co-CEO & Co-President at LTC Properties

Thank you, Gibson. With momentum building and growth as our key priority, we're actively pursuing and underwriting opportunities to add newer, stabilized assets with prospects for improved performance that enhance portfolio quality and amplify LTC's upside potential. We expect SHOP to represent a growing share of our portfolio as we scale our platform. By complementing our RIDEA strategy with investments in traditional and structured finance transactions that offer compelling initial yields, we're building a resilient, performance driven portfolio structured for long term value creation. We see RIDEA as a game changer for LTC.

Pam Kessler
Pam Kessler
Co-CEO & Co-President at LTC Properties

Backed by a seasoned team, ample access to capital and a growing investment pipeline, we're prepared to execute with discipline and precision to capture new opportunities ahead. Before we open the call to questions, I'll turn things over to Wendy for closing remarks.

Wendy Simpson
Wendy Simpson
Executive Chairman, CEO & President at LTC Properties

Thank you, Pam. The entire Board and I are energized by the progress LTC has made and even more enthusiastic about the opportunities ahead. Before transitioning to Q and A, I'd like to recognize Doug Corey, who recently retired to focus on his health and family after a remarkable forty year career in the industry.

Wendy Simpson
Wendy Simpson
Executive Chairman, CEO & President at LTC Properties

LTC was fortunate to have him as part of our team for the last decade. Doug was instrumental in broadening our strategy beyond traditional triple net investments, was a champion for innovative and flexible structured finance solutions that expanded our capabilities and deepened our industry connections. We will miss Doug's sharp insight, dry humor, and steady hand, and we wish him and his family all the best in this next chapter. Operator, we're ready for questions from the audience.

Operator

Thank you. At this time, we will be conducting our question and answer session. If you have any questions, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue.

Operator

Our first question is coming from Juan Sanabria with BMO Capital Markets. Your line is live.

Juan Sanabria
Juan Sanabria
Managing Director at BMO Capital Markets

Hi, good morning. I hope you guys are doing well. I'm just curious on ALG, what's assumed in guidance with regards to their option to buy those assets and how's that process going in their ability to secure financing to move that process forward?

Pam Kessler
Pam Kessler
Co-CEO & Co-President at LTC Properties

Thanks Juan, this is Pam. Yeah, they are still working on their financing in this uncertain rate environment with the wild swings in treasuries. You can imagine it's an off and on sort of prospect at this point, but we are hopeful that they will be able to refinance this year. However, our guidance assumes that they don't and that they continue to pay full rent.

Juan Sanabria
Juan Sanabria
Managing Director at BMO Capital Markets

Great. And then just on the new perspective, if you could just give a little bit more color on the lease term payment that you're paying there, the 6,500,000.0 and how that was kind of arrived at and the payback period you guys are thinking about given, I think you said that asset is a bit more stabilized. So just hoping for a little bit more color there.

Clint Malin
Clint Malin
Co-CEO & Co-President at LTC Properties

Sure, Juan. It is stabilized asset and with new perspective, it's a company we've known for many years looking at doing investments with them. We only have the one asset with them. And they do have shop experience with other REITs, so we see them as a growth opportunity for LTC going forward. And really, they've been very successful with this asset we have with them.

Clint Malin
Clint Malin
Co-CEO & Co-President at LTC Properties

Really paying this amount for lease termination was really to reward them for the value creation that they've created and gives us really a runway with them to be able to look at new opportunities and grow our SHOP portfolio. So that was our rationale in doing that with New Perspective. And really for us to launch this platform with these assets we were familiar with, with both Anthem and New Perspective, it was a great starting point for us.

Juan Sanabria
Juan Sanabria
Managing Director at BMO Capital Markets

Thanks. And then just one more for me. Just on the SHOP platform, should we expect other triple net to SHOP conversions? And on the pipeline, what percentage would you say is kind of fee simple SHOP of the 300,000,000?

Clint Malin
Clint Malin
Co-CEO & Co-President at LTC Properties

So of the 300,000,000, I mentioned in my remarks, Juan, that is 50% represents RIDEA for the pipeline. There's going be some opportunity for potential triple net, other triple net conversions, not of scale. We're really looking at SHOP as an external growth story.

Juan Sanabria
Juan Sanabria
Managing Director at BMO Capital Markets

Thank you. Good luck.

Clint Malin
Clint Malin
Co-CEO & Co-President at LTC Properties

Thank you.

Operator

Thank you. Our next question is coming from Austin Wurschmidt with KeyBanc Capital Markets.

Operator

Your line is live.

Austin Wurschmidt
Austin Wurschmidt
Senior Equity Research Analyst at KeyBanc Capital Markets

Thanks. Good morning, everybody. Can you just talk about how you arrived at the NOI range for the SHOP assets over the remaining eight months of the year and kind of what that range implies for either sequential or year over year growth?

Gibson Satterwhite
Gibson Satterwhite
EVP - Asset Management at LTC Properties

Sure, Austin. Hi. This is Gibson. Let me get to it. One second.

Gibson Satterwhite
Gibson Satterwhite
EVP - Asset Management at LTC Properties

So we looked at the SHOP portfolio. Because these are conversions, we looked at 2024 on a pro form a basis so that we're safe. We have similar accounting treatments. So if you look at 2024, the portfolio is 85% occupied. So we're only assuming 85% occupancy for 2025, and I can get into some detail why later.

Gibson Satterwhite
Gibson Satterwhite
EVP - Asset Management at LTC Properties

Right now, on a full year basis, 2025 over 2024, we've got $15,200,000 versus $14,000,000 So that's 15,200,000.0 in 2025, over $14,000,000 for 2024. A big driver of the growth going forward from where we are now is continued lease up in the Anthem portfolio. They had higher than normal discharges in Q4, and we expect them to get back to occupancy that they had in Q3 last year.

Austin Wurschmidt
Austin Wurschmidt
Senior Equity Research Analyst at KeyBanc Capital Markets

And then beyond occupancy, are there other opportunities on the expense front? Just curious how you're thinking about the growth profile of this portfolio as we think about the next several years.

Gibson Satterwhite
Gibson Satterwhite
EVP - Asset Management at LTC Properties

Well, with respect to the portfolio that we've talked about converting, I think that we do have some upside beyond the end of twenty twenty five. But we end up in 2025 assuming about 87% occupancy occupancy on a unit basis for the portfolio versus 86% in Q3 of twenty four. We try to make realistic budgets. Anthem's made some progress on cost reductions and and efficiencies in their staffing model in q four twenty four. And so we we feel like we have some room and try to give ourselves multiple paths to be able to hit the guidance that we provided.

Austin Wurschmidt
Austin Wurschmidt
Senior Equity Research Analyst at KeyBanc Capital Markets

That's helpful. And then just last one here, I guess for that 50% of the investment pipeline that includes SHOP assets, I mean, how are we thinking about going in cap rates on those deals? And just as you're building out your senior housing portfolio, how are you balancing, I guess, operator and geographic diversification versus trying to kind of build some scale with the assets you already have? Thanks.

Clint Malin
Clint Malin
Co-CEO & Co-President at LTC Properties

Sure. We'll definitely focus on operator concentration. That's a key element for us as we look at having ALG exercise our purchase option to reduce that concentration. So it's something that's very much on the forefront. And primarily in our investment pipeline we're looking at deals that are one or two assets.

Clint Malin
Clint Malin
Co-CEO & Co-President at LTC Properties

There's a couple small portfolios, but our focus really is on one or two assets, being cognizant of that diversification with operators. And we've actually been actively pre marketing RIDEA over the course of the last five, six months, getting traction, and a number of deals in our pipeline are off market, which we're very encouraged by. I would say on the SHOP front, we're looking at probably 7% going in yields, plus or minus, within the forward looking yield going up to 7.5% to 8% as you look at cost reductions, rate growth and occupancy improvement in SHOP. And we're looking at balancing that, as Pam mentioned in her prepared remarks, with leases, loans, and structured finance products that have higher initial yields to offset those initial SHOP yields as we're growing the portfolio.

Austin Wurschmidt
Austin Wurschmidt
Senior Equity Research Analyst at KeyBanc Capital Markets

That's helpful. Thank you.

Clint Malin
Clint Malin
Co-CEO & Co-President at LTC Properties

Thank you.

Operator

Thank you. Our next question is coming from Rich Anderson with Wedbush. Your line is live.

Richard Anderson
Managing Director - Equity Research at Wedbush Securities

Hey, thanks, and good morning. So, this $176,000,000 is roughly using your enterprise value about 7% of the company. Think I have that math right. Just curious if you can sort of share a pipeline of your conversion activity? So we talked about the $300,000,000 pipeline external growth, but what's the pipeline of internal conversions that you see going forward?

Richard Anderson
Managing Director - Equity Research at Wedbush Securities

And what's the pace to get to something like 25% or 30% of the company in the next couple of years?

Pam Kessler
Pam Kessler
Co-CEO & Co-President at LTC Properties

Hi Rich, we currently don't have plans to convert anything that's in our triple net portfolio at this point, though we always hold that option open. And then it's really going to be the organic growth that Clint talked about, acquiring, doing investments through the RIDEA platform, and also blending that with more traditional triple net and loans. And as occupancy improves in our portfolio, those operators that have triple net leases probably become less inclined to want to transition to the SHOP platform. But if they have created value in their portfolios and they would like to be rewarded for that, we would entertain doing something similar to what we did with New Perspective.

Richard Anderson
Managing Director - Equity Research at Wedbush Securities

Okay, great. Thanks for that color, Pam. The other thing is you're converting to SHOP a memory care portfolio with Anthem, higher acuity assets and so on. Is that do you think you'll kind of be looking down stream a little bit in terms of lower acuity for future SHOP transactions in your external growth strategy? Or do you like the memory care sort of thesis in a SHOP wrapper?

Pam Kessler
Pam Kessler
Co-CEO & Co-President at LTC Properties

Well, like memory care. Obviously, we were one of the first entrants into the standalone memory care. And we developed these properties with Anthem. But we're, as being a very aware of concentration and the fluctuations that memory care experiences and the shorter average length of stay, we're not looking at that property type to grow in. I'm not excluding that, but it's not a focus of ours.

Pam Kessler
Pam Kessler
Co-CEO & Co-President at LTC Properties

We're really looking at larger properties that are more of a continuum of care, IL, AL, with some memory care, but not to stand alone.

Richard Anderson
Managing Director - Equity Research at Wedbush Securities

Okay. Last question for me is Omega had a little minor issue with Genesis this quarter. Perhaps not much of a deal according to them, but Genesis makes your top 10. Any issues that you're having with them at this point that you can share? Or if the answer is no, then that's fine as well.

Clint Malin
Clint Malin
Co-CEO & Co-President at LTC Properties

We have received the May rent bridge and we have no request from Genesis for any assistance. Our portfolio has strong coverage and located in core markets that Genesis operates in.

Richard Anderson
Managing Director - Equity Research at Wedbush Securities

Okay, fair enough. Thanks very much.

Clint Malin
Clint Malin
Co-CEO & Co-President at LTC Properties

Thank you.

Operator

Thank you. Our next question is coming from Michael Carroll with RBC Capital Markets. Your line is live.

Michael Carroll
Michael Carroll
Managing Director & Head of US Real Estate Research at RBC Capital Markets

Yes, thanks. Quint, I know I appreciate some of the comments on your projections for the Anthem portfolio and to the general SHOP portfolio. Can you maybe spend some time and talk about how those assets have performed over the past few years? I know that they've been struggling and I was a little surprised where the SHOP NOI is coming out at versus where the triple net lease rate is for Anthem. So did Anthem have a pullback in their operations?

Michael Carroll
Michael Carroll
Managing Director & Head of US Real Estate Research at RBC Capital Markets

Or how should we think about that portfolio and maybe the longer term outlook of it?

Clint Malin
Clint Malin
Co-CEO & Co-President at LTC Properties

Well, Mike, as Gibson mentioned in the Q and A portion earlier that they did have a dip in occupancy in Q4 relating to some clinical discharges. I mean, that's something that, as it's an earnings season, we've seen other REITs have similar dips in occupancy, so that wasn't unexpected. But we're going into the key selling season that started in May. We think there'll be upside for improvement in occupancy. There's not a lot of new supply being delivered.

Clint Malin
Clint Malin
Co-CEO & Co-President at LTC Properties

So we think that's beneficial to occupancy growth. So we're looking at the key selling season to be upside opportunity for Anthem.

Michael Carroll
Michael Carroll
Managing Director & Head of US Real Estate Research at RBC Capital Markets

Was that, I guess, how can you maybe provide some comments on how Anthem has performed in past few years? I mean, have they been recovering as you originally would have expected and they just had this blip in the fourth quarter that kind of took them lower? I mean, I guess, how meaningful is that blip? And how have they performed in the past few years?

Clint Malin
Clint Malin
Co-CEO & Co-President at LTC Properties

There has been a few dips on a quarter by quarter basis, but they have recovered previously. So we don't expect I mean, we expect similar here.

Michael Carroll
Michael Carroll
Managing Director & Head of US Real Estate Research at RBC Capital Markets

Okay. And then I guess on the SHOP NOI, if that included both the Anthem and the new perspective tenants, I mean, you break out how much of that projected NOI is new perspective and how much of that is Anthem?

Pam Kessler
Pam Kessler
Co-CEO & Co-President at LTC Properties

Yeah, sure. Mike, at the midpoint, Anthem is 1,200,000 of the increase. And new perspective is 1.6. So it's total of 2,800,000 over if you were looking at the combined lease rates. So it is a substantial pickup from converting to RIDEA.

Michael Carroll
Michael Carroll
Managing Director & Head of US Real Estate Research at RBC Capital Markets

Okay. And then is the plan to grow with new perspective? Are they going to be one of your core operators? Were you going to add assets within that SHOP structure over the next, I guess, several quarters or maybe execute this current investment pipeline with them?

Clint Malin
Clint Malin
Co-CEO & Co-President at LTC Properties

Absolutely. I mean, they're an ideal company for us to work with. I mean, they have the ability to develop. They have a strong culture, a long tenured family business. They have their SOX compliant.

Clint Malin
Clint Malin
Co-CEO & Co-President at LTC Properties

They are familiar with RIDEA. So we see them as an excellent opportunity and a great partner to grow with. And that was part of the catalyst for us looking at this opportunity to put them into the initial round of our SHOP portfolio.

Pam Kessler
Pam Kessler
Co-CEO & Co-President at LTC Properties

Yeah, they demonstrated through our triple net lease with them incredible ability to increase value.

Michael Carroll
Michael Carroll
Managing Director & Head of US Real Estate Research at RBC Capital Markets

Okay, great. Well, thank you very much.

Clint Malin
Clint Malin
Co-CEO & Co-President at LTC Properties

Thank you.

Operator

Thank you. Our next question is coming from Omotayo Okusanya from Deutsche Bank. Your line is live. Mateo, I think you might be on mute.

Omotayo Okusanya
Omotayo Okusanya
Managing Director at Deutsche Bank

Hello?

Operator

We can

Operator

hear you now, sir.

Omotayo Okusanya
Omotayo Okusanya
Managing Director at Deutsche Bank

Okay. Perfect. So good morning, everyone. Nice to see all this progress on the shop front. Just curious again, you bought a couple of assets.

Omotayo Okusanya
Omotayo Okusanya
Managing Director at Deutsche Bank

You've hired Dave. Anything else from institutionalizing the platform that still needs to happen at this point? Is there still a need to hire data scientists? Just kind of curious of kind of making sure everything is kind of really you've dotted your i's and crossed your t's. What else still needs to happen?

Pam Kessler
Pam Kessler
Co-CEO & Co-President at LTC Properties

Hi, Tayo, it's Pam. Yes, we will continue to build out the platform as we add investments into it. Yes, still will need analysts, FP and A. I mean, as the platform grows, you obviously have to scale up. But we're confident with what we have right now supports the conversion platform.

Omotayo Okusanya
Omotayo Okusanya
Managing Director at Deutsche Bank

That's helpful. And then ALG, it didn't look like in this quarter you gave any rent deferral. Is that correct? And if that's the case, could you just kind of help us understand what's happening with the overall financial performance of ELG?

Pam Kessler
Pam Kessler
Co-CEO & Co-President at LTC Properties

Yeah, that is correct. We did not give a deferral this quarter and their occupancy has increased 150 basis points from year end with increased lead generations and conversion rates. And in North Carolina, there has been a perspective change in reimbursement. A bill has passed the House and the Senate there that would allow or that gives higher it increases the eligibility threshold for Medicaid. And if you recall, this portfolio has Medicaid in it.

Pam Kessler
Pam Kessler
Co-CEO & Co-President at LTC Properties

And what happened during the pandemic and inflation was the eligibility requirements for Medicaid were not increased in North Carolina. And with increases in people's social security and other forms of income, many residents in North Carolina were essentially no longer eligible or not eligible for Medicaid, which depressed the census in this portfolio. But with the new eligibility, I keep wanting to say reimbursement, it's not a change reimbursement rate. It's a change in the eligibility. With the new eligibility requirements and the increased pool of potential residents, we expect their occupancy to continue to increase.

Omotayo Okusanya
Omotayo Okusanya
Managing Director at Deutsche Bank

Gotcha. That's helpful. One more, if you don't mind. So again, Anthem now goes to SHOP. You have kind of redone the NCORE lease.

Omotayo Okusanya
Omotayo Okusanya
Managing Director at Deutsche Bank

Any other leases out there that still have quarterly market based resets that we should be aware of at this point?

Pam Kessler
Pam Kessler
Co-CEO & Co-President at LTC Properties

Just the 14 that Gibson talked about in his prepared remarks. And the Encore lease, just to remind you, it's not been redone. It's just it has set market based resets on is it quarterly or Quarterly. It's quarterly. So they're quarterly.

Pam Kessler
Pam Kessler
Co-CEO & Co-President at LTC Properties

So you're going to see this on a quarterly basis. We have some that are on six month basis and some that are on quarterly basis in that portfolio. And you should see over the next year, we're hoping those continue to increase as occupancy and performance improves in that portfolio. And those were And were properties that were with other operators that during COVID we transitioned to these new operators. And that's the part of our portfolio outside of RIDEA that has upside.

Pam Kessler
Pam Kessler
Co-CEO & Co-President at LTC Properties

We didn't defer rents and report receivable like some of our peers, so we don't have any receivable sitting on our balance sheet. So all the increases that come from improved performance in that portfolio will hit the financial statements. It will be shown through income versus hitting a repayment.

Clint Malin
Clint Malin
Co-CEO & Co-President at LTC Properties

And we're very much encouraged by the trending of increasing guidance in that portfolio.

Pam Kessler
Pam Kessler
Co-CEO & Co-President at LTC Properties

Sounds Thank very So it drops straight to the bottom line, Tayo.

Omotayo Okusanya
Omotayo Okusanya
Managing Director at Deutsche Bank

Yep. Awesome. Good luck.

Pam Kessler
Pam Kessler
Co-CEO & Co-President at LTC Properties

Thanks.

Operator

Thank you. As we have reached the end of our question and answer session, I would like to turn the call back over to Wendy Simpson for closing remarks.

Wendy Simpson
Wendy Simpson
Executive Chairman, CEO & President at LTC Properties

As you can see, we're committed to growth and are successfully executing our strategy. We appreciate you all for joining us on today's call and look forward to talking to you again next quarter.

Operator

Thank you, ladies and gentlemen. This does conclude today's call. You may disconnect your lines at this time, and we thank you for your participation.

Executives
    • Clint Malin
      Clint Malin
      Co-CEO & Co-President
    • Cece Chikhale
      Cece Chikhale
      EVP, CFO, Treasurer & Secretary
    • Gibson Satterwhite
      Gibson Satterwhite
      EVP - Asset Management
    • Pam Kessler
      Pam Kessler
      Co-CEO & Co-President
    • Wendy Simpson
      Wendy Simpson
      Executive Chairman, CEO & President
Analysts

Key Takeaways

  • RIDEA platform expansion: Converted 13 triple‐net‐leased properties into a $176 million SHOP portfolio and built a $300 million investment pipeline, of which roughly 50% represents further RIDEA opportunities.
  • Q1 financial performance: Core FFO per share rose to $0.65 (from $0.64) and core FAD per share to $0.70 (from $0.67), driven by lower interest expense, fair‐market rent resets, JV income increases, and higher loan interest income.
  • 2025 guidance: Full‐year core FFO per share is forecast at $2.65–$2.69 and core FAD per share at $2.78–$2.82.
  • Balance sheet strength: Total liquidity stands at approximately $681 million, debt to adjusted EBITDA is 4.3×, and fixed‐charge coverage improved to 5.0×.
  • Organic rent growth: Market‐based rent resets on 14 properties are expected to generate $5.1 million in revenue in 2025, a roughly 50% increase from $3.4 million in 2024.
AI Generated. May Contain Errors.
Earnings Conference Call
LTC Properties Q1 2025
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