What LTC Properties (LTC) Said on Its Q3 Earnings Call

Key Points

• LTC is accelerating its shift to seniors housing operations: It had closed about $950 million in SHOP acquisitions through October and expects roughly $1 billion in 2026 acquisitions. SHOP could represent 50% of pro forma annualized NOI by year-end and about 75% by the end of 2028.
• Core SHOP NOI guidance was trimmed: The 2026 midpoint fell by $500,000 to $54.5 million, mainly due to changes in resident and unit mix and a Medicaid rate cut affecting two memory care communities. Management still sees potential for high-single-digit to low-double-digit NOI growth.
• Earnings guidance was maintained: Third-quarter core FFO rose to $0.71 per share from $0.69 a year earlier, and full-year core FFO guidance remains $2.76–$2.78 per share. Asset sales and a planned loan payoff will affect earnings comparisons as the SHOP business grows.

LTC Properties NYSE: LTC expects to complete approximately $1 billion in seniors housing operating portfolio acquisitions in 2026, as the real estate investment trust shifts away from a business centered on triple-net leases and lending.

On its third-quarter earnings call, management said the company had closed approximately $950 million in SHOP acquisitions through October, surpassing its previous $900 million acquisition guidance midpoint. Co-President and Co-CEO Clint Malin said the portfolio would reach $1.6 billion by year-end if acquisitions meet the new expectation.

The company reported higher third-quarter per-share earnings measures and maintained its full-year outlook, though it lowered the midpoint of its core SHOP net operating income guidance by $500,000, citing a Medicaid rate reduction and changes in resident and unit mix.

SHOP expansion and acquisition pipeline

LTC launched its SHOP strategy in May 2025. At the expected 2026 acquisition level, the business is projected to account for 50% of the company’s pro forma annualized net operating income, or NOI, at year-end, Malin said. He added that LTC sees a path to approximately 75% by the end of 2028 at its current acquisition pace.

Malin said the shift would triple the company’s pro forma internal growth rate at the expected year-end portfolio mix. LTC also has $200 million in SHOP acquisitions expected to close in the first quarter of 2027, including a new operator relationship. The company currently has 14 SHOP operator relationships.

Co-President and Co-CEO Pam Kessler said capital markets were not constraining acquisitions and that LTC was optimistic about transacting at a similar volume in 2027. Chief Investment Officer Dave Boitano said the acquisitions closed in 2026 represented less than 5% of the deal volume the company screened.

Asked about acquisition pricing, Malin said projected first-year capitalization rates on recent deals had compressed to roughly 6.5%. Kessler said the company was underwriting acquisitions with a funding mix of 70% equity and 30% debt, with returns expected to be roughly flat in the first year. “What we are buying is future growth,” she said.

Core portfolio outlook trimmed

Executive Vice President of Asset Management Gibson Satterwhite said LTC narrowed its 2026 core SHOP NOI guidance to $53.5 million to $55.5 million. The new midpoint of $54.5 million is $500,000 below the prior midpoint and represents approximately 13% pro forma growth from the prior year, he said.

Satterwhite attributed the reduction primarily to changes in care and unit occupancy mix and a Medicaid rate decrease affecting two standalone memory care communities. The rate change was received in the third quarter and applied retroactively to July 1. Excluding those two communities, Medicaid accounts for approximately 3% of SHOP revenue, he said.

Management said it believes the core portfolio can generate high-single-digit to low-double-digit NOI growth with a 200-basis-point spread between revenue and expenses per occupied room, even without occupancy growth. Satterwhite said operators had implemented strong private-pay rate increases and that he expected those conditions to continue into 2027. He declined to commit to an occupancy growth assumption before the budgeting process was complete.

Earnings guidance and capital recycling

Chief Financial Officer Cece Chikhale said third-quarter core funds from operations rose to $0.71 per share from $0.69 a year earlier. Core funds available for distribution increased to $0.73 per share from $0.72.

Chikhale attributed the core FFO increase primarily to additional SHOP NOI from acquisitions and conversions and higher interest income, partly offset by property sales, loan payoffs and higher interest expense. LTC maintained its full-year guidance of $2.76 to $2.78 per share for core FFO and $2.83 to $2.85 per share for core FAD.

The company generated approximately $465 million in gross proceeds from third-quarter sales of triple-net assets, at an implied capitalization rate on rent of about 5.5%. An additional $180 million Prestige loan payoff is scheduled for Nov. 24, Satterwhite said.

Chikhale put pro forma liquidity at more than $900 million and pro forma debt to annualized adjusted EBITDAre for real estate at 4.4 times, within LTC’s target range of four to five times. The liquidity figure included proceeds from asset sales and the sale of 2.3 million common shares for $97 million in net proceeds during the third quarter and fourth quarter to date.

During the question-and-answer session, Kessler cautioned that capital recycling and the Prestige payoff would affect earnings comparisons. She said SHOP growth would flow through in 2027, but the loan payoff would counterbalance some of that effect.

About LTC Properties (NYSE:LTC)

LTC Properties, Inc is a real estate investment trust (REIT) that invests in healthcare-related real estate. The company focuses primarily on properties serving older adults, including skilled nursing facilities, assisted living communities, memory care facilities and independent living properties.

LTC Properties generally generates revenue through long-term leases, mortgage loans and other investments involving healthcare operators and property owners. Its investment activities may include property acquisitions, sale-leaseback transactions, joint ventures and financing arrangements.

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