What National Healthcare Properties (NHP) Said on Its Q3 Earnings Call

Key Points

• Senior housing performance strengthened: Same-store cash NOI rose 13.6% year over year, and NHP raised its 2026 growth outlook to 16.5%–18.5%. Occupancy reached 86.7%, while revenue per occupied room increased 4%.
• NHP is shifting its portfolio toward senior housing: It has sold or agreed to sell 126 outpatient medical properties for about $1.1 billion, and is pursuing a further sale of its final four. It bought 25 senior housing properties for about $424 million year to date, with another $388 million in potential acquisitions in its pipeline.
• Balance-sheet improvement is a priority: Leverage was slightly above six times, and the company expects outpatient sales to help bring it below five times. Management cautioned that the timing of sales and reinvestment may create near-term earnings volatility.

National Healthcare Properties NASDAQ: NHP reported stronger senior housing operating results in the third quarter of 2026 and raised its full-year growth outlook as it moves to sell its outpatient medical portfolio and reinvest in senior housing.

The real estate investment trust reported normalized funds from operations of $13.6 million, or $0.19 per share, up sequentially despite the dilutive effect of shares issued in its initial public offering and the first tranche of outpatient medical property sales. Chief Financial Officer Drew Babin attributed the increase to higher cash net operating income and lower fixed charges.

Same-store cash net operating income, or NOI, in the senior housing operating portfolio rose 13.6% from a year earlier. The company increased its 2026 guidance for that measure to a range of 16.5% to 18.5%.

Occupancy Gains Follow Concessions

Same-store average occupancy reached 86.7% in the quarter, up 190 basis points from the second quarter and 220 basis points from a year earlier. Babin said the increase reflected the company’s focus on occupancy as well as the removal of a lower-occupancy property from same-store reporting ahead of its planned sale.

Revenue per occupied room rose 4% year over year to $6,454. Same-store cash NOI margin expanded 150 basis points to 24.3%, helped by pricing and the operating leverage of adding residents without a proportional increase in staffing, Babin said.

The results included the cost of short-term concessions offered at certain lower-occupancy communities. They also reflected a comparison with a one-time insurance recovery that reduced expenses by approximately $150,000 in the third quarter of 2025. Without that prior-year recovery, Babin said, same-store cash NOI would have risen 15.1%.

CEO Michael Anderson said the broad use of concessions was largely a one-time measure, although individual communities may continue to use them. The company is now more focused on rate and margin growth, he said, adding that expected renewal rate increases for 2027 would average around 5% to 6% across the portfolio.

Babin said occupancy would be in the low 90% range excluding properties on the company’s focus list. Those communities had improved sequentially, he said, but the company could consider selling assets it does not believe can reach its operating goals.

Outpatient Exit and Acquisition Pipeline

National Healthcare Properties is working to exit outpatient medical properties and become a senior housing operating REIT. Anderson said the company has sold, placed under definitive agreement or signed a nonbinding letter of intent for every outpatient medical facility it owns.

In September, the company closed the sale of 30 properties for approximately $198 million. Another 56 properties are under agreement for approximately $331 million, with the buyer assuming about $219 million in secured debt. A separate agreement covers 40 properties for approximately $531 million. Anderson said the two pending transactions are expected to close in the fourth quarter, subject to closing conditions.

The 126 properties sold or under definitive agreement represent approximately $1.1 billion in gross proceeds, Anderson said. The company also has a nonbinding letter of intent for its final four outpatient properties. Anderson initially said that sale was expected to close in the fourth quarter, while Babin later described those properties as slated to close in early 2027.

On the acquisition side, the company bought 22 senior housing communities with 1,381 units during the third quarter for approximately $300 million. It acquired another community after quarter-end for approximately $26 million, bringing 2026 year-to-date purchases to 25 properties for approximately $424 million.

The company has approximately $240 million of additional senior housing acquisitions under purchase and sale agreements and another $148 million under nonbinding letters of intent. Together, the pipeline includes 1,385 units expected to close in the fourth quarter or early 2027, subject to due diligence and other conditions. Babin said the $388 million pipeline figure covers purchase prices and could require approximately $10 million in additional capital spending, primarily on revenue-enhancing projects.

Balance Sheet and Outlook

Babin said net debt and preferred equity to EBITDA was slightly above six times in the quarter. The company expects leverage to fall as it reduces secured debt through the outpatient sales; it has also repaid its Series A and Series B preferred equity. Over the near term, he said, the company wants a leverage ratio below five times and consistent with investment-grade peers.

National Healthcare Properties set 2026 acquisition guidance at $425 million to $645 million. Its $1.1 billion disposition outlook includes all but four outpatient properties and two noncore senior housing communities.

Babin cautioned that the timing of sales, reinvestment and balance-sheet changes could cause near-term earnings volatility. The company plans to issue its first FFO-per-share guidance with fourth-quarter results in early 2027, when it expects the portfolio and balance sheet to be substantially stabilized.

About National Healthcare Properties (NASDAQ:NHP)

National Health Properties, Inc was a real estate investment trust that owned and leased healthcare-related properties in the United States. Its portfolio included healthcare facilities such as skilled nursing centers, assisted living communities, medical office buildings and other properties used by healthcare providers.

The company generally generated rental income through long-term leases with healthcare operators. Its business model focused on acquiring and managing income-producing healthcare real estate rather than directly providing medical or senior-care services.

National Health Properties was acquired by Ventas, Inc in 2015 and no longer operates as an independent publicly traded company.

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