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    NHP
    Earnings call· Jun 2026(Q2 FY26)

    National Healthcare Properties Q2 FY26 earnings call NHP

    Aug 6, 2026 Source

    Executive summary

    National Healthcare Properties Q2 FY26 — Strong SHOP Growth & Strategic Portfolio Reorientation

    National Healthcare Properties executed strongly on its strategic agenda in Q2 FY26, delivering robust double-digit same-store NOI growth in its core SHOP segment and significantly strengthening its balance sheet post-IPO. The company actively reoriented its portfolio through substantial senior housing acquisitions and the divestiture of non-core medical facilities, positioning for continued growth and improved leverage. Management remains focused on disciplined capital allocation and operational optimization to drive long-term value.

    Highlights

    5

    • SHOP segment delivered 20.1% year-over-year same-store cash NOI growth.

    • Net debt to annualized further adjusted EBITDA declined sharply to 4.6x from 8.6x in Q1.

    • Acquired 19 properties totaling 1,214 units for approximately $280 million YTD at a blended year 1 yield of 7.9%.

    • Increased full-year SHOP same-store cash NOI growth guidance to 15%-18% from 13%-16%.

    • Secured hard contract for the divestiture of 86 outpatient medical facilities for approximately $528 million.

    Concerns

    3

    • OMF segment same-store cash NOI decreased 0.4% year-over-year due to a one-time increase in utility and other non-reimbursable expenses.

    • Normalized FFO per share declined sequentially and year-over-year due to increased shares from the IPO.

    • G&A and equity compensation guidance increased by $1 million each due to anticipated non-cash equity compensation for board refreshment.

    Guidance & targets

    7
    CategoryTargetConfidence
    SHOP same-store cash NOI growth
    15% to 18%
    high materiality
    High
    OMF same-store cash NOI growth
    2.5% to 3.5%
    medium materiality
    High
    Acquisitions
    $375 million to $425 million
    high materiality
    High
    Dispositions
    $570 million
    high materiality
    High
    Total G&A
    $27 million to $28 million
    medium materiality
    Medium
    Equity Compensation
    $6 million to $7 million
    medium materiality
    Medium
    Same-store recurring capital expenditures
    $22 million to $25 million
    medium materiality
    High

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    SHOP
    Delivered strong double-digit growth driven by occupancy, rate, and margin. Occupancy improved 140 basis points YoY. Margin expanded 230 basis points YoY. Full-year same-store cash NOI growth guidance increased to 15%-18%.
    Same-store cash NOI growth: 20.1% YoYSame-store average occupancy: 84.1%Same-store cash NOI margin: 22.4%
    		————
    OMF
    Same-store cash NOI decreased due to a one-time increase in utility and other non-reimbursable expenses. Performance is within full-year guidance range of 2.5%-3.5%.
    Same-store cash NOI: $20.2 millionOccupancy: 97% (retention rate)Occupancy sequential increase: 30 bps QoQ
    		—-0.4%——

    Operational metrics

    11
    Normalized FFO
    $10.9 millionincreased year-over-year
    Q2 FY26

    Increased year-over-year on higher NOI and interest income, lower interest expense, net of higher G&A. Excludes $1.2 million ($0.02 per share) benefit from derivatives.

    Normalized FFO per share
    $0.18declined sequentially and year-over-year
    Q2 FY26

    Declined due to increase in shares from highly deleveraging April IPO.

    Net Debt to Annualized Further Adjusted EBITDA
    4.6xdown from 8.6x in Q1
    Q2 FY26

    Sharp decline due to IPO. Target is low 5s with and without preferred, consistent with investment-grade unsecured issuers.

    Incremental Term Loan
    $150 million
    Q2 FY26

    Part of recast credit facility, at improved spreads and term.

    Delayed Draw Term Loan
    $150 million
    Q2 FY26

    Part of recast credit facility, at improved spreads and term.

    Revolver Capacity Increase
    $350 million
    Q2 FY26

    Part of recast credit facility, at improved spreads and term.

    Fannie Mae Loans Repaid
    $332 million
    Q2 FY26

    Repaid at par using recast credit facility. Represented only debt maturity for FY26.

    Blended Acquisition Year 1 Yield
    7.9%
    YTD FY26

    For 19 properties, 1,214 units acquired YTD.

    Blended Acquisition Year 3 Yield
    9.7%
    YTD FY26

    Projected for 19 properties, 1,214 units acquired YTD.

    Non-core SHOP Disposition Cap Rate
    1.7%
    Q2 FY26

    Based on trailing 12-month results for 1 community in California.

    Property Insurance Premiums
    reduced
    Q3 FY26 onwards

    Will begin to benefit from reduced premiums starting in Q3.

    Industry KPIs

    7
    MetricValueDetails
    Exppor growth—
    Revpor growth5.9%%
    Senior housing occupancy84.1%%
    Revpor minus exppor spread—
    Operator tenant concentration3operators
    Same store noi growth by segment20.1%%
    Investment volume and sourcing mix$280 millionUSD

    Orderbook & backlog

    3
    Acquisitions under definitive agreement$120 millionQ2 FY26

    Comprises 3 communities (178 units) for $30M and 2 communities (200 units) for $90M. Expected to close in Q3 FY26, subject to customary conditions.

    Stalking-horse bid for SHOP communities5 communitiesQ2 FY26

    Designated stalking-horse bidder through a bankruptcy proceeding. Subject to auction process. If unsuccessful, entitled to breakup fee and expense reimbursement in excess of $4.8 million.

    OMF Disposition under hard contract$528 millionQ2 FY26

    86 outpatient medical facilities. Due diligence period expired, subject to lender consent for loan assumption. Expected to close Q3/Q4 FY26.

    Deals & partnerships

    8
    Trusted operating partnersAcquisition of 2 senior housing communities (211 units)$98 million

    Acquired in late June, managed by one of NHP's trusted operating partners.

    Discovery Senior LivingAcquisition of 17 communities (1,003 units) across multiple regions, with NHP holding 98.5% interest in the JV.$182 million

    Closed in July. NHP retains right of first refusal and purchase option on an additional 13 Discovery-managed communities.

    Seller not namedAcquisition of 3 communities (178 units) in Illinois.$30 million

    Definitive purchase and sale agreement entered in late June. Senior Lifestyle to be the operator.

    Seller not namedAcquisition of 2 communities (200 units) in Florida.$90 million

    Definitive agreement entered in July.

    Seller not named (bankruptcy proceeding)Stalking-horse bidder for 5 SHOP communities through a bankruptcy proceeding.

    Designated on August 4th. Subject to an auction process. Senior Lifestyle would be the operator.

    Buyer not namedSale of a portfolio of 86 outpatient medical facilities.$528 million

    Agreement is now hard; buyer's due diligence period expired. Subject to lender consent for loan assumption and customary closing conditions.

    Buyer not namedSale of 1 non-core SHOP community in California.$42 million

    Definitive purchase and sale agreement entered in May.

    Al CampbellAppointment to Board of Directors as an independent director.

    Effective August 10th. Brings decades of public company leadership and experience. Company also initiated process to identify another independent director.

    Risks & headwinds

    4
    Impact of IPO on FFO per shareQ2 FY26

    Normalized FFO per share declined sequentially and year-over-year.

    Mitigation: IPO was highly deleveraging, strengthening the balance sheet.

    OMF Segment NOI DeclineQ2 FY26

    OMF same-store cash NOI decreased 0.4% year-over-year.

    Mitigation: Expects normalization of utility expenses and savings on property insurance to contribute positively in H2 FY26.

    Occupancy Lag due to Operator TransitionsQ2 FY26

    Occupancy didn't come along as much as expected in Q2.

    Mitigation: Believe it was the correct long-term decision for NOI potential; affected communities led occupancy gains in July. Proactively using short-term concessions at properties below 85% occupancy to accelerate lease-up.

    Increased G&A and Equity CompensationFY26

    Total G&A and equity compensation guidance increased by $1 million each to $27M-$28M and $6M-$7M respectively.

    Mitigation: Due to anticipated increase in non-cash equity compensation related to ongoing board refreshment.

    What to watch in Q3 FY26

    5

    SHOP Same-Store NOI Growth

    Q3 FY26
    Current20.1% YoY in Q2 FY26
    TargetContinued double-digit growth, within 15-18% FY26 guidance

    Why it matters

    Core organic growth driver for the investment thesis, especially given the guidance raise and strategic operational adjustments.

    We increased our SHOP same-store cash NOI growth guidance by 2% at both the low and high ends to 15% to 18%, or approximately $51.6 million to $52.9 million.

    Q&A highlights

    6

    How do the preferred redemption and OMF sale impact guidance, pro forma leverage, and the balance sheet, especially considering acquisition guidance?

    The preferred redemption saves on costs as line of credit interest is lower than preferred dividend. It converges leverage ratios (with and without preferred) to the low 5s, which is the target for next year. The non-core SHOP disposition also helps.

    “But it really has the effect of just converging our with and without preferred leverage ratios both to the low 5s, which is a place where we would like to be going into next year and potentially a further rotation towards SHOP.”

    asked by John Kilichowski · answered by Andrew Babin

    2 min read5 chapters

    Detailed Narrative

    01

    SHOP Segment Operational Strength

    The SHOP segment demonstrated robust operational performance in Q2 FY26, achieving 20.1% year-over-year same-store cash NOI growth. This growth was driven by a 140 basis point improvement in average occupancy to 84.1% and a 5.9% increase in RevPOR to $6,390. The segment's cash NOI margin expanded by 230 basis points to 22.4%, indicating maturing growth composition with increasing contributions from rate and operating leverage as the portfolio approaches stabilization.

    02

    Aggressive External Growth and Pipeline

    NHP executed its most active investment period, acquiring 19 senior housing properties totaling 1,214 units for $280 million year-to-date at attractive blended yields. A significant portion of these acquisitions, 13 communities, were through a joint venture with Discovery Senior Living, which also provides a right of first refusal on an additional 13 communities. The company has a defined near-term pipeline of 5 communities under definitive agreement for $120 million, expected to close in Q3, and is a stalking-horse bidder for 5 additional SHOP communities through a bankruptcy proceeding.

    03

    Strategic Capital Recycling

    The company is actively reorienting its portfolio towards senior housing through significant divestitures. An agreement to sell 86 outpatient medical facilities for $528 million is now hard, with closings expected in Q3 and Q4. Additionally, NHP is divesting a non-core SHOP community in California for $42 million at a 1.7% cap rate, further aligning its portfolio with strategic focus markets. These dispositions are intended to fund further growth in the senior housing segment and enhance balance sheet flexibility.

    04

    Balance Sheet Deleveraging and Flexibility

    NHP significantly improved its balance sheet post-IPO, reducing net debt to annualized further adjusted EBITDA to 4.6x from 8.6x in Q1. The company recast its credit facility, increasing its size and improving terms, which was used to repay $332 million of Fannie Mae loans. This move enhances liquidity and supports future acquisitions, with a clear plan to achieve investment-grade unsecured issuer leverage levels as the portfolio shifts towards SHOP.

    05

    Operational Adjustments and Future Outlook

    While overall SHOP performance was strong, the company noted a lag in occupancy within the AL segment due to strategic operator decisions to upgrade key property-level leadership roles at 6 AgeWell communities. These changes, made mid-Q2, are already showing positive results, with affected communities leading occupancy gains in July. Management is also proactively using short-term concessions at properties below 85% occupancy to accelerate lease-up, believing this will maximize long-term NOI.

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