Property Portfolio and Management - As of June 30, 2024, the company owned 207 properties across 32 states, totaling 9.0 million rentable square feet[272]. - The company plans to transition to self-management and internalize management functions by the fourth quarter of 2024[278]. - The company intends to transition to self-management, with an internalization agreement executed in August 2024, which includes a self-management termination fee[406]. - The company expects to internalize management by Q4 2024, which will eliminate asset management fees previously paid, totaling $5.5 million for the three months ended June 30, 2024[372][373]. Financial Performance - Net loss attributable to common stockholders increased to $119.9 million for the three months ended June 30, 2024, compared to a loss of $20.8 million in the same period of 2023, representing an increase of 476%[294]. - For the six months ended June 30, 2024, net loss attributable to common stockholders was $138.9 million, compared to $38.3 million for the same period in 2023, representing an increase of $100.6 million[331]. - Funds From Operations (FFO) attributable to stockholders for the three months ended June 30, 2024, was $(96.499) million, a significant decrease from $(646) thousand in the prior year[405]. - Adjusted Funds From Operations (AFFO) attributable to stockholders for the three months ended June 30, 2024, was $4.357 million, compared to $3.830 million in the same period of 2023, reflecting a year-over-year increase of 13.7%[405]. Revenue and Expenses - Revenue from tenants rose to $88.8 million in Q2 2024, up from $86.1 million in Q2 2023, reflecting an increase of $2.7 million or 3.1%[294]. - Total expenses surged to $189.0 million in Q2 2024, compared to $85.0 million in Q2 2023, marking an increase of $104.0 million or 122.4%[294]. - Revenue from tenants for the six months ended June 30, 2024, was $177.1 million, an increase of $3.7 million from $173.5 million in 2023[331]. - Total expenses for the six months ended June 30, 2024, were $278.5 million, up from $170.5 million in 2023, reflecting an increase of $107.9 million[331]. Occupancy and Leasing - The SHOP segment's occupancy rate improved to 76.4% as of June 30, 2024, up from a low of 72.0% as of March 31, 2021[281]. - The MOB segment had a leased percentage of 90.3% as of June 30, 2024, with a gross asset value of $1.48 billion[289]. - The Seniors Housing Operating Properties (SHOP) segment saw revenue from tenants increase by $2.0 million to $54.1 million in Q2 2024, compared to $52.2 million in Q2 2023, driven by higher leasing rates[304]. - Revenue from tenants in the MOB segment increased by $1.7 million for the six months ended June 30, 2024, primarily due to $1.2 million from Acquired Properties and $0.6 million from Same Store Properties[333]. Costs and Expenses - The company experienced a decrease in contract labor costs in the SHOP segment from $0.6 million in Q2 2023 to $0.3 million in Q2 2024[284]. - Direct employee wage costs in the SHOP segment increased by $1.0 million in Q2 2024 compared to Q2 2023[285]. - General and administrative expenses increased to $4.7 million in Q2 2024 from $4.3 million in Q2 2023, reflecting an increase of $0.4 million or 9.3%[317]. - Depreciation and amortization expenses rose to $21.9 million in Q2 2024, up from $20.6 million in Q2 2023, an increase of $1.3 million or 6.3%[318]. Debt and Interest - As of June 30, 2024, outstanding debt obligations were $1.2 billion at a weighted average interest rate of 5.61%, compared to the same amount at 5.49% in 2023[322]. - Interest expense decreased by $1.0 million to $17.8 million for the three months ended June 30, 2024, from $18.7 million in 2023[321]. - Interest expense decreased by $0.4 million to $34.1 million, with outstanding debt obligations at $1.2 billion and a weighted average interest rate of 5.61%[356][357]. Cash Flow and Dividends - Net cash provided by operating activities was $8.9 million for the six months ended June 30, 2024, compared to $10.7 million in 2023[366]. - Cash used in investing activities was $15.6 million for the six months ended June 30, 2024, down from $34.4 million in 2023[368]. - Cash flows provided by operations for the six months ended June 30, 2024, were $8.9 million, indicating a need for improved cash generation to support dividend payments[417]. - The company has not paid cash dividends on common stock since mid-2020, opting instead for stock dividends until January 2024[411]. Market and Economic Conditions - As of June 30, 2024, the 12-month Consumer Price Index (CPI) increase was 3.0%, impacting lease agreements without indexed escalation provisions[421]. - Tenants in MOB leases are responsible for property operating and maintenance expenses, which may impact their ability to pay rent if costs exceed revenue increases[422]. - SHOP leases typically do not have rent escalations, but can be renewed at market rates; increased labor costs due to inflation may affect operational results if new residents cannot be admitted[423]. - There has been no material change in the company's exposure to market risk during the six months ended June 30, 2024[425].
HEALTHCARE(HTIA) - 2024 Q2 - Quarterly Report