Detailed narrative
CEO Transition and Leadership Continuity
Jeff Hanson, Chairman and Interim CEO, provided an update on CEO Dan Prosky's health event, noting his continued recovery and virtual engagement with the Board. Hanson emphasized his deep familiarity with the company's strategy and team, ensuring full momentum and high-level execution across core metrics despite the interim period. He expects clarity on Prosky's reentry timeline soon.
Strategic Operating Partnerships
The company's mission is to deliver high-quality care and be a trusted capital partner for operators, which is described as the core operating logic. This approach, focusing on disciplined underwriting and structuring capital for long-term performance, is credited for the strong financial results. The company highlighted the importance of operator relationships and their consistent execution.
Market Fundamentals and Demand Tailwinds
Long-term care demand is experiencing a significant demographic wave, with the 80-plus population growing at an accelerating rate. Concurrently, new supply growth in senior housing remains near historic lows due to unfavorable construction economics. This combination of surging demand and constrained supply creates a compelling operating environment, leading to occupancy surpassing prior high watermarks and expanding margins.
Accretive Acquisition Strategy and Pipeline
The investment team closed $249.2 million in new SHOP acquisitions year-to-date, with $162.8 million closing in Q1. The strategy prioritizes operator relationships, off-market deals, and disciplined underwriting focused on long-term cash flow durability rather than just initial yield. The company has a pipeline of over $650 million in awarded deals, expected to close primarily by the end of Q2 and Q3 2026.
Development Pipeline and Capital Efficiency
The in-process development pipeline totals approximately $173.9 million in expected cost, with $52.4 million funded to date. These projects are predominantly Trilogy campus expansions and independent living villa projects. Management views these as capital-efficient growth opportunities layered onto existing operational platforms, designed to extend earnings runway at attractive yields with limited market risk.
Strengthened Capital Structure and Liquidity
American Healthcare REIT improved its net debt to annualized EBITDA to 3.0x as of March 31, 2026, down from 3.4x. The unsecured revolving credit facility capacity was increased from $600 million to $800 million, with zero amounts outstanding. The ATM program generated $412.7 million in gross proceeds from 8.1 million shares sold and has $527.4 million in unsettled forward agreements, providing ample liquidity for external growth plans.
Trilogy's Outperformance and Margin Expansion
The ISHC (Trilogy) segment delivered 14.5% same-store NOI growth and averaged 91.2% occupancy, with NOI margins exceeding 20% for the first time since COVID. This performance was driven by continued improvement in quality mix (75.5% of resident days from quality sources) and effective management of Medicare Advantage plans, allowing for selective partnerships and rate growth.
SHOP Portfolio Optimization and Expense Management
The SHOP segment achieved 19.7% same-store NOI growth and 88.6% average occupancy. The company employs dynamic revenue and expense management, including managing street rates and taking a measured approach to in-place pricing. Notably, referral fees in the SHOP portfolio were reduced by over 20% year-over-year, contributing to NOI optimization.