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 internalize management functions by the fourth quarter of 2024 in anticipation of a potential stock listing[278]. - The company acquired 11 properties and disposed of 6 properties from January 1, 2023, to June 30, 2024[291]. - The MOB segment had a weighted average remaining lease term of 4.5 years as of June 30, 2024[289]. - The company disposed of one SHOP for $3.3 million during the six months ended June 30, 2024, and subsequently disposed of seven MOBs for $50.5 million[395][396]. - The company anticipates funding the Closing Payments primarily through net proceeds from strategic dispositions before the end of the fourth quarter of 2024[397]. Financial Performance - Net loss attributable to common stockholders increased to $119.9 million for the three months ended June 30, 2024, compared to $20.8 million for the same period in 2023[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]. - 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[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 surged to $189.0 million in Q2 2024, compared to $85.0 million in Q2 2023, marking an increase of $104.0 million[294]. - General and administrative expenses rose to $4.7 million in Q2 2024, up from $4.3 million in Q2 2023, including $3.0 million in expense reimbursements[317]. - 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]. - As of June 30, 2024, outstanding debt obligations were $1.2 billion at a weighted average interest rate of 5.61% per year, compared to the same amount at 5.49% in 2023[322]. Operational Metrics - Occupancy in the SHOP segment improved to 76.4% as of June 30, 2024, up from a low of 72.0% as of March 31, 2021[281]. - The SHOP segment's occupancy has not yet recovered to pre-pandemic levels, affecting overall operational results[285]. - Revenue from tenants in the SHOP segment increased by $2.0 million, primarily due to a $3.0 million increase from Same Store Properties, partially offset by a $1.0 million decrease from Disposed Properties[304]. - Property operating and maintenance expenses in the MOB segment increased by $0.3 million, driven primarily by Same Store Properties[301]. - Property operating and maintenance expenses increased by $1.0 million to $110.2 million for the six months ended June 30, 2024, compared to $109.2 million in 2023[335]. - Property operating and maintenance costs in the MOB segment increased by $1.0 million, driven by inflation impacts on utility and maintenance costs[336]. Impairment and Charges - Impairment charges recorded were $2.4 million in Q2 2024, aimed at reducing the carrying value of a held-for-use MOB[309]. - Impairment charges totaled $2.7 million for the six months ended June 30, 2024, with $2.4 million related to a held-for-use MOB and $0.3 million to a disposed SHOP[343]. - Termination fees to related parties amounted to $98.2 million due to the intent to terminate the Second A&R Advisory Agreement and transition to self-management[315]. - The company recorded a termination fee to related parties of $98.2 million in the three months ended June 30, 2024, impacting net loss[329]. 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 for the same period 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, with property acquisitions totaling $5.6 million[367]. - Net cash used in financing activities was $3.7 million for the six months ended June 30, 2024, compared to a net cash provided of $52.7 million in 2023[368]. - The company has not paid cash dividends on common stock since mid-2020, opting instead for stock dividends until January 2024[411]. - Dividends on Series A Preferred Stock are declared quarterly at $1.84375 per share annually, equivalent to 7.375% of the $25.00 liquidation preference[409]. - Dividends on Series B Preferred Stock are declared quarterly at $1.78125 per share annually, equivalent to 7.125% of the $25.00 liquidation preference[410]. Market and Economic Conditions - As of June 30, 2024, the 12-month CPI increase was 3.0%, impacting leases without indexed escalation provisions[421]. - Leases at SHOPs do not typically 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 or leases cannot be renewed[423]. - Tenants in MOB properties are generally required to pay their pro rata share of property operating and maintenance expenses, which may impact their ability to pay rent if these costs exceed revenue increases[422]. - There has been no material change in the company's exposure to market risk during the six months ended June 30, 2024[425].
HEALTHCARE(HTIBP) - 2024 Q2 - Quarterly Report