Sabra Healthcare REIT NASDAQ: SBRA executives highlighted accelerating investment activity, improving operating metrics across key portfolios, and a stable reimbursement and regulatory backdrop during the company’s first-quarter 2026 earnings call. Management also reaffirmed full-year 2026 guidance while signaling it may revisit expectations in the second quarter as trends develop.
Investment pipeline expands as deal flow remains “robust”
CEO Rick Matros said Sabra’s deal pipeline “continues to be robust” and that the company “fully expect[s] to materially exceed 2025’s total investments.” He added Sabra has “already closed or been awarded $400 million year to date.”
Darren (a company representative) detailed investment activity, saying Sabra invested $102 million in the first quarter, adding three properties to the managed senior housing portfolio, one skilled nursing community, and a preferred equity investment in a senior housing development.
After quarter end, Darren said Sabra invested another $104.1 million for additional managed senior housing assets and a redevelopment, bringing year-to-date investments to roughly $206 million with an estimated initial cash yield of 8%.
Darren also outlined the near-term pipeline and longer-term funnel:
- $107 million of additional “awarded” managed senior housing investments and $94 million of awarded skilled nursing investments, “most of which should close in the second quarter.”
- An additional $690 million of managed senior housing investments Sabra is “actively pursuing.”
In Q&A, Matros said the $200 million of awarded deals (referencing the awarded pipeline discussed on the call) should close, stating, “We don’t have any doubt or concern about the 200.” Darren cautioned that the larger $690 million pipeline is competitive, but said Sabra would expect to close “a fair number” of those opportunities.
Senior housing operating metrics show occupancy and NOI growth
Management emphasized continued strength in the managed senior housing (“SHOP”) portfolio. Darren said the total managed senior housing portfolio (including non-stabilized communities and joint venture assets) posted sequential revenue growth of 7.2% and cash NOI growth of 9.5%, with 60 basis points of margin expansion.
On a same-store basis, Darren reported:
- Revenue growth of 7.9% year over year (Canada up 9.6%).
- Occupancy up 280 basis points year over year to 88.4% (U.S. up 280 basis points to 85.6%; Canada up 270 basis points to 93.4%).
- RevPAR up 4.6% year over year (Canada up 6.5%).
- Expense per occupied room (ExpPOR) up 1.8% year over year.
- Same-store cash NOI growth of 14.4% year over year.
Matros added that same-store SHOP NOI growth was higher than the prior two quarters. He said overall SHOP occupancy dipped slightly, but attributed the decline to Canada. He described Canada as “almost effectively full” at 93.4% occupancy, while noting the U.S. portfolio was up 10 basis points sequentially.
In response to a question about expense trends, Matros said the modest ExpPOR growth was driven by operating leverage and that he would expect it to “continue at levels that low for the foreseeable future.”
Coverage metrics and portfolio mix shift toward private pay
Matros said Sabra’s rent coverage improved across multiple segments. “Our skilled nursing rent coverages continue to grow, as did our senior housing triple net and behavioral, all of which hit new highs in coverage,” he said, adding that the company’s “top 10 coverage is stronger than it’s ever been.” He also reported occupancy growth in the skilled nursing and senior housing triple-net portfolios.
Matros also highlighted a milestone in portfolio composition: “For the first time in the company’s history, our private pay concentration is now over 50% of the portfolio.”
Quarterly results: FFO and AFFO rise; dividend declared
CFO Michael Costa reported normalized FFO per share of $0.38 and normalized AFFO per share of $0.39 for the first quarter. He said those figures represent a 9% and 5% increase, respectively, over the same period in 2025. In dollars, normalized FFO totaled $96.1 million and normalized AFFO totaled $100.6 million.
Costa said cash NOI from the triple-net portfolio increased $2.2 million from the prior quarter, driven primarily by annual rent escalators and increased collections from certain cash-basis tenants. Managed senior housing cash NOI totaled $39 million versus $35.6 million in the prior quarter, primarily due to investment activity and sequential same-store growth, he said.
On expenses and other line items, Costa reported interest and other income of $10 million (down from $10.6 million), cash interest expense of $26 million (down from $26.6 million), and normalized cash G&A of $11 million (up from $10.6 million), with the G&A increase tied to hosting the company’s 2026 operator conference.
The board declared a quarterly cash dividend of $0.30 per share, payable May 29, 2026 to stockholders of record as of May 15, 2026. Costa said the dividend represents a payout of 77% of first-quarter normalized AFFO per share and is “adequately covered.”
Balance sheet positioning, dispositions, and guidance posture
Costa said net debt to adjusted EBITDA was 5.04x as of March 31, 2026, “in line with our targeted leverage.” He reported a 3.92% cost of permanent debt and an average remaining term of about four years, with the next material maturity in 2028. Costa added Sabra has no floating-rate exposure in permanent debt, with floating-rate borrowings limited to the revolver.
On capital markets activity, Costa said Sabra has been using the forward feature of its ATM to help fund its pipeline. During the quarter, the company issued $128 million on a forward basis at an average price of $20.19 per share after commissions. In total, Costa said Sabra had $451 million outstanding under forward contracts at an average price of $19.03 per share after commissions.
Liquidity totaled about $1.2 billion as of March 31, comprised of $117 million of unrestricted cash, $645 million of revolver availability, and the $451 million in outstanding forward sales agreements, Costa said. He added Sabra also had $353 million available under the ATM program.
Subsequent to quarter end, Costa said Sabra completed the sale of three skilled nursing facilities in Maryland leased to CommuniCare for gross proceeds of $79.4 million, equating to a 6.8% lease yield. Matros emphasized the sale was not a broader signal of skilled nursing asset sales, calling it “a very unique situation” driven by CommuniCare’s desire to exit Maryland.
Regarding outlook, Costa said the company reaffirmed 2026 earnings guidance and that first-quarter results were in line with the assumptions underlying that guidance. Matros said Sabra is “affirming guidance,” but would revisit it in the second quarter given operating and investment trends.
In Q&A, management repeatedly pointed to SHOP NOI growth as a key swing factor for results versus the guidance range. A company representative noted that first-quarter results were around the midpoint (or slightly below) and that same-store SHOP NOI growth came in at 14%, consistent with the company’s expectation for “low to mid-teen” SHOP NOI growth.
Management also discussed behavioral health tenant Landmark. Matros said Sabra had been working through Landmark’s exit process in the court system and helped bring in a buyer for a group of assets. Costa said Sabra collected “somewhere around, like, a million and a half” from Landmark in the first quarter and expected that run rate to continue until the assets transact. On a follow-up, Costa said the Landmark income was included in original guidance and that it was not expected to persist for the full year, suggesting it would likely end around the end of the second quarter, though timing could slip.
On reimbursement, Matros said the Medicare market basket proposal “is within our expectations” and that management expects Medicaid rates to be within expectations as well. He added that, after pandemic-era inflation, rates appear to be “revert[ing] back to the historical norm before the pandemic,” noting Medicare and Medicaid rates “peaked in 2024.”
Executives also highlighted ongoing technology investments. Matros said Sabra intends “to be an AI-enabled REIT,” while Costa said AI and automation efforts are focused on speeding back-office workflows and data processing and improving operator insights. Costa said the primary benefit should be slowing G&A growth as Sabra scales, rather than producing significant absolute G&A cuts.
About Sabra Healthcare REIT NASDAQ: SBRA
Sabra Healthcare REIT, Inc NASDAQ: SBRA is a real estate investment trust that acquires, owns and operates net‐lease healthcare properties. Its diversified portfolio spans senior housing communities, skilled nursing and rehabilitation centers, outpatient medical facilities, medical office buildings, hospitals and life science properties. Sabra structures long‐term, triple‐net lease agreements with healthcare operators, providing stable rental income streams while allowing tenants to focus on patient care and operational excellence.
Serving a broad spectrum of care segments, Sabra's tenants include both regional and national providers of assisted living, independent living, memory care, post‐acute rehabilitation and research and development laboratories.
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