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    NHI
    Earnings call· Jun 2026(Q2 FY26)

    NATIONAL HEALTH INVESTORS Q2 FY26 earnings call NHI

    Aug 11, 2026 Source

    Executive summary

    National Health Investors Q2 FY26 — Strategic Portfolio Restructuring and SHOP Expansion

    National Health Investors executed on its strategic plan in Q2 FY26, completing the significant NHC portfolio sale and expanding its SHOP platform. The company is investing in infrastructure and leadership to support future growth, aiming for a higher SHOP exposure. While same-store NOI on legacy properties declined, newer SHOP investments performed in line with expectations, and the company maintains a strong balance sheet and liquidity for future acquisitions.

    Highlights

    5

    • Completed sale of NHC portfolio on July 1, strengthening balance sheet and reducing leverage.

    • Year-to-date investments of $237.2 million in private-pay senior housing at an average yield of 7.7%.

    • Total SHOP NOI increased by 188.5% year-over-year.

    • Quarterly dividend increased by $0.02 to $0.94 per share.

    • Net debt to adjusted EBITDA ratio at 4.1x, well within target range.

    Concerns

    5

    • Same-store NOI on 15 legacy Holiday properties declined 6.3% year-over-year.

    • NAREIT FFO and normalized FFO per share were flat and decreased 2.5% respectively, to $1.19 per share.

    • Interest income from mortgages and other notes declined by 16.1%.

    • General and administrative expenses increased 44% to $8.8 million due to SHOP growth and CFO transition costs.

    • One building with units offline causing at least a percentage point of occupancy pressure.

    Guidance & targets

    11
    CategoryTargetConfidence
    Quarterly additional rent from Bickford lease
    $900,000
    medium materiality
    High
    Long-term leverage policy
    3.5x to 4.5x
    high materiality
    High
    Retirement of private placement note
    $100 million note retired
    medium materiality
    High
    SHOP portfolio performance outlook
    Unchanged
    high materiality
    High
    Full year SHOP results expectations
    Unchanged
    high materiality
    High
    Newer SHOP investments NOI growth
    High-single to low-double digit growth
    high materiality
    High
    Same-store portfolio solutions
    Executed
    medium materiality
    High
    SHOP exposure as % of total investment
    40% to 50%
    high materiality
    Medium
    Annual acquisition run rate
    $500 million to $700 million
    high materiality
    Medium
    Cash G&A growth
    Low teens growth
    medium materiality
    High
    Same-store SHOP NOI growth
    8% to 9%
    high materiality
    High

    Segment performance

    4
    SegmentRevenueYoYQoQMargin
    SHOP
    Total SHOP NOI increased significantly year-over-year, driven by the transition and acquisition of 27 properties. Q2 SHOP NOI was in line with forecast.
    NOI: $11 millionNOI growth YoY: 188.5%
    		—188.5%—$11 million NOI
    Legacy Holiday Properties (SHOP)
    Represents less than 5% of total annualized NOI. Same-store NOI declined year-over-year but increased significantly compared to Q1 2026.
    NOI: $3.6 millionNOI growth YoY: -6.3%NOI growth QoQ: 18.9%
    		—-6.3%18.9%$3.6 million NOI
    SHOP (26 properties in portfolio since start of FY26)
    NOI increased sequentially from Q1 2026 to Q2 2026.
    NOI growth sequentially: 7.6%
    		——7.6%—
    Triple-Net
    Provides a solid foundation with stable operating fundamentals, full contractual rent collections, and healthy occupancy/rent coverage. Growth driven by acquisitions and percentage rent/escalators, partially offset by transitions to SHOP and dispositions.
    Cash lease revenue growth YoY: 2.8%EBITDARM coverage (senior housing): 1.62x (TTM Mar 31, 2026)EBITDARM coverage (SNF): 2.66x (TTM Mar 31, 2026)
    		—2.8% cash lease revenue——

    Operational metrics

    31
    Net income per share
    $1.1545.6% increase YoY
    Q2 FY26

    Increase driven largely by a $22 million gain on sale of real estate.

    NAREIT FFO per share
    $1.19Flat YoY
    Q2 FY26
    Normalized FFO per share
    $1.19-2.5% YoY
    Q2 FY26
    FAD
    $61.6 million5.8% increase YoY
    Q2 FY26
    General and administrative expenses
    $8.8 million44% increase YoY
    Q2 FY26

    Due to ramping SHOP growth strategy personnel and one-time CFO transition expenses.

    Net debt to adjusted EBITDA
    4.1x
    As of June 30, 2026

    Well within leverage policy of 3.5x to 4.5x.

    Available liquidity
    $792.4 million
    As of June 30, 2026
    Private placement note due
    $100 million
    January 2027

    Expected to be retired by end of 2026.

    Quarterly dividend per share
    $0.94$0.02 increase QoQ
    Q3 FY26

    Payable November 6, 2026, for stockholders of record on September 30, 2026.

    Bickford base rent (prior)
    $35 million
    Prior to April 1, 2026

    Reset to fair market value on April 1, 2026.

    Bickford base rent (new)
    $38.4 million
    As of April 1, 2026

    Reset from $35 million to fair market value.

    Bickford additional rent received
    $1.3 million
    Q2 FY26

    Included partial payments calculated prior to April rent reset.

    Gain on sale of real estate
    $22 million
    Q2 FY26

    Related to disposition of 5 properties.

    Noncash deferred income tax expenses
    $700,000
    Q2 FY26

    Included in NAREIT FFO and normalized FFO.

    Cash expenses related to CFO transition
    $500,000
    Q2 FY26

    Included in FAD.

    NHC portfolio sale proceeds
    $560 million
    July 2026 (Q3 FY26)

    Cash consideration for the sale of the NHC portfolio.

    Gain on NHC portfolio sale
    $541.6 million
    Q3 FY26

    Expected to be recognized during Q3.

    NHC proceeds used for replacement properties (1031)
    $221 million
    July 2026 (Q3 FY26)

    Used to complete previously acquired replacement properties under reverse Section 1031 exchanges.

    NHC proceeds held for future reinvestment (1031)
    $334 million
    July 2026 (Q3 FY26)

    Remaining proceeds held for future tax deferred reinvestment under Section 1031.

    SHOP investment increase
    137%
    Past year

    Increased to approximately $850 million.

    SHOP investment total
    $850 million
    Current

    Represents 24% of the company's total investment.

    Year-to-date investments in private-pay senior housing
    $237.2 million
    YTD FY26
    Properties disposed
    7
    FY26

    Net proceeds of $117.4 million.

    Net proceeds from disposition of 7 properties
    $117.4 million
    FY26

    From the disposition of 7 properties with 6 operators.

    Net proceeds from disposition of 5 properties
    $98.5 million
    Q2 FY26

    Resulted in a $22 million gain on sale of real estate.

    Cash lease revenue contribution from acquisitions
    $2.4 million
    Q2 FY26

    Contributed to 2.8% YoY cash lease revenue increase.

    Cash lease revenue contribution from percentage rent and escalators
    $2.3 million
    Q2 FY26

    Contributed to 2.8% YoY cash lease revenue increase.

    Cash lease revenue offset from transitions and dispositions
    $2.9 million
    Q2 FY26

    Partially offset cash lease revenue increase due to transition of 7 properties to SHOP and property dispositions.

    EBITDARM coverage (senior housing)
    1.62xvs 1.52x prior year
    TTM March 31, 2026

    NHC assets and other assets held for sale removed from calculation.

    EBITDARM coverage (SNF)
    2.66xvs 2.26x prior year
    TTM March 31, 2026

    NHC assets and other assets held for sale removed from calculation.

    CFO transition expenses
    $1.1 million
    Q2 FY26

    Included in NAREIT FFO and normalized FFO.

    Industry KPIs

    7
    MetricValueDetails
    Revpor growthdirectional
    Coverage ratios1.62x (senior housing); 2.66x (SNF)x
    Senior housing occupancy—
    Revpor minus exppor spreaddiscussed_not_quantified
    Operator tenant concentration—
    Same store noi growth by segment-6.3%%
    Investment volume and sourcing mix$237.2 millionUSD

    Orderbook & backlog

    3
    Signed letters of intent (LOIs)$127.3 millionQ2 FY26

    Primarily in SHOP, estimated initial yield of 6.8% (6.5% after maintenance CapEx).

    Deals under evaluation (excluding larger portfolios)$420 millionQ2 FY26

    Additional deals being evaluated beyond signed LOIs.

    Future pipeline (analyst reference)$440 millionQ2 FY26

    Analyst reference to future pipeline, likely a combination of LOIs and deals under evaluation.

    Deals & partnerships

    4
    NHCSale of NHC portfolio$560 million cash consideration

    Completed on July 1, 2026. Marks a significant corporate action increasing private-pay senior housing focus and strengthening the balance sheet.

    Multiple (6 operators)Disposition of 7 properties$117.4 million net proceeds

    Completed in 2026 as part of ongoing asset management and disciplined capital allocation.

    MultipleInvestments in private-pay senior housing$237.2 million

    Year-to-date investments in private-pay senior housing.

    MultipleDisposition of 5 properties$98.5 million net proceeds

    Completed during Q2 FY26.

    Risks & headwinds

    6
    Legacy Holiday properties underperformanceQ2 FY26

    Same-store NOI declined 6.3% YoY

    Mitigation: Evaluating strategic alternatives for a subset of same-store properties; working with operating partners to improve occupancy and lead conversion; one building with units offline expected to be finished by year-end.

    Occupancy pressure from units offlineCurrent, expected to finish by year-end

    At least a percentage point of occupancy pressure

    Mitigation: Project underway, expected to be finished by the end of the year.

    Increased G&A expensesQ2 FY26

    G&A increased 44% to $8.8 million YoY

    Mitigation: Partially due to one-time CFO transition expenses (which will not recur) and investments in personnel for SHOP growth (expected to normalize in future budgets).

    Interest income declineQ2 FY26

    Interest income from mortgages and other notes declined 16.1%

    Mitigation: Due to reduction in principal amount of notes receivable balance (implies a strategic reduction in this asset class).

    Competitive acquisition marketLast 6 months

    Pricing differential between large and small deals has closed from 100 bps to 25-50 bps; year 1 yields for high quality stuff now 6-6.5%, B-type in 7s.

    Mitigation: Maintaining disciplined underwriting, focusing on building relationships with operators, and having enhanced liquidity and business development resources.

    Potential for special dividendUntil 1031 proceeds are fully reinvested

    $334 million of NHC proceeds held for future 1031 reinvestment

    Mitigation: Management committed to doing everything possible to avoid a special dividend, including reinvesting 1031 proceeds and potentially using "throwback dividends."

    What to watch in Q3 FY26

    5

    Same-store portfolio solutions

    This year (FY26)
    CurrentUnder evaluation, negotiations ongoing for a subset of properties.
    TargetFinalized plans and execution.

    Why it matters

    Will impact capital allocation, portfolio composition, and potentially FFO accretion.

    As the negotiations are ongoing, we will provide more details as plans are finalized. And our goal as good stewards of capital is to make the transaction accretive or as close to accretive as possible... And the timing is really this year. I want to get it done this year.

    Q&A highlights

    6

    Seeking color on the size and timeline for strategic alternatives being evaluated for the same-store portfolio, given it's a "subset."

    Eric Mendelsohn stated they are careful due to competitive and employee sensitivities but confirmed the goal is to prune underperforming assets and develop others. The aim is for transactions to be accretive, considering return on invested capital, debt reduction, and reinvestment. He wants to get it done this year.

    “And our goal as good stewards of capital is to make the transaction accretive or as close to accretive as possible. And the way we think about that is we look at the return of invested capital on the asset. And if it is lower than we want, then we compare it to, well, gee, if we sold something, could we pay off some debt.”

    asked by William John Kilichowski · answered by D. Mendelsohn

    2 min read7 chapters

    Detailed Narrative

    01

    Strategic Portfolio Transformation

    NHI completed the sale of the NHC portfolio on July 1, a significant corporate action that strengthens the balance sheet and reduces leverage. This move increases the company's focus on private-pay senior housing and provides substantial liquidity for future investments, creating a competitive advantage in an active acquisition environment. Management is evaluating strategic alternatives for a subset of its same-store portfolio, aiming for accretive transactions to be completed this year.

    02

    SHOP Platform Expansion

    The company has aggressively expanded its SHOP investment, increasing it by 137% in the past year to approximately $850 million, now representing 24% of total investments. Management aims to grow SHOP exposure to 40-50% over a three-year plan, investing in people, technology, and processes to support this growth and ensure disciplined execution. The outlook for newer SHOP investments includes high-single to low-double digit NOI growth.

    03

    Leadership and Organizational Enhancements

    NHI welcomed Chris Maingot as Chief Operating Officer to strengthen oversight of the growing SHOP portfolio and asset management. This appointment allows Kevin Pascoe, Chief Investment Officer, to focus more intensely on expanding operator relationships, sourcing investment opportunities, and driving the acquisition strategy, aiming to increase the annual acquisition run rate from $200-$400 million to $500-$700 million.

    04

    Capital Deployment and Investment Pipeline

    NHI completed $237.2 million in year-to-date private-pay senior housing investments at an average yield of 7.7%, with over $212 million in SHOP. The company has $127.3 million under signed LOIs at an estimated initial yield of 6.8% and is evaluating an additional $420 million in deals, excluding larger portfolio transactions. The pricing differential between large and small deals has narrowed significantly.

    05

    Balance Sheet and Liquidity

    The company's net debt to adjusted EBITDA ratio was 4.1x at June 30, within its 3.5x to 4.5x policy. Available liquidity stood at $792.4 million, including $262 million in excess revolver capacity and $500 million from a refreshed ATM. Proceeds from the NHC sale ($560 million) were used for replacement properties ($221 million) and $334 million held for future tax-deferred reinvestment, with management committed to avoiding a special dividend.

    06

    Dividend Increase and Shareholder Returns

    The Board of Directors declared a $0.02 per share increase to the quarterly dividend, bringing it to $0.94 per share. Management emphasized its commitment to avoiding a special dividend by reinvesting 1031 proceeds and achieving accretive acquisitions to drive FAD growth. The company also expects to retire a $100 million private placement note due January 2027 by the end of 2026.

    07

    Same-Store SHOP Performance and Outlook

    While same-store NOI on legacy Holiday properties declined 6.3% year-over-year, it increased 18.9% quarter-over-quarter. For 26 properties in the portfolio since the beginning of the year, NOI increased sequentially by 7.6%. The company maintains its full-year outlook, implying 8-9% same-store NOI growth in H2 FY26, driven by occupancy gains and moderate rate increases, despite some current occupancy pressure from offline units.

    AI-generated summary of the company’s earnings call. Not investment advice.