American Healthcare REIT(US:AHR)2025-11-07 21:16Property Ownership and Operations - As of September 30, 2025, American Healthcare REIT owned and/or operated 315 buildings with a total gross leasable area of approximately 20,132,000 square feet, representing an aggregate contract purchase price of $4,778,477,000[178]. - The company owned 133 ISHC properties with a contract purchase price of $2,245,378,000 and a leased percentage of 90.2%[190]. - The company’s triple-net leased properties totaled 19 buildings with a contract purchase price of $368,665,000, maintaining a 100% leased percentage[190]. - As of September 30, 2025, properties were 89.3% leased, with 4.0% of the leased GLA scheduled to expire during the remainder of 2025[186]. - The company’s operating partnership owned 98.8% of the OP units as of September 30, 2025[177]. Financial Performance - Total revenues for the three months ended September 30, 2025, were $572,937,000, an increase of 9.4% compared to $523,814,000 for the same period in 2024[192]. - Net income for the three months ended September 30, 2025, was $56,639,000, compared to a loss of $3,093,000 for the same period in 2024[230]. - Normalized FFO attributable to controlling interest for the three months ended September 30, 2025, was $75,530,000, up from $47,688,000 in 2024, representing a 58.5% increase[230]. - Net operating income (NOI) for the three months ended September 30, 2025, was $105,815,000, compared to $93,536,000 in 2024, reflecting a 13.1% increase[234]. - Total revenues for the nine months ended September 30, 2025, reached $1,656,043,000, a 8.4% increase from $1,527,928,000 for the same period in 2024[192]. Revenue Sources - Resident fees and services revenue for the ISHC segment increased by $40,093,000 (9.8%) for the three months ended September 30, 2025, compared to the same period in 2024, primarily due to increased occupancy and higher billing rates[193]. - SHOP segment resident fees and services revenue rose by $15,131,000 (22.5%) for the three months ended September 30, 2025, compared to the same period in 2024, driven by acquisitions and increased occupancy[194]. - The company anticipates future revenue growth from increased occupancies and resident fees in its RIDEA properties[188]. Expenses and Costs - Total property operating expenses for the ISHC segment increased by $27,172,000 (7.5%) for the three months ended September 30, 2025, compared to the same period in 2024, mainly due to increased occupancy and acquisitions[197]. - General and administrative expenses for the three months ended September 30, 2025, were $14,108,000, an increase of $2,187,000 (18.3%) compared to $11,921,000 for the same period in 2024[199]. - Depreciation and amortization related to consolidated properties for the three months ended September 30, 2025, was $49,115,000, compared to $44,208,000 in 2024, indicating a rise in property-related expenses[230]. Debt and Financing - The total contractual obligations as of September 30, 2025, amounted to $2,286,762,000, including $991,012,000 in fixed-rate mortgage loans payable and $550,000,000 in variable-rate debt[208]. - The company had $1,150,000,000 available under its 2024 Credit Facility as of September 30, 2025, with $550,000,000 borrowed and $600,000,000 remaining available[210]. - The weighted average effective interest rate on outstanding debt was 4.34% per annum as of September 30, 2025[222]. - Total interest expense decreased to $20,226,000 for the three months ended September 30, 2025, down $19,136,000 (48.6%) from $39,362,000 for the same period in 2024, primarily due to reduced debt balances[200]. Cash Flow - Cash flows from operating activities increased to $239,276,000 for the nine months ended September 30, 2025, compared to $116,578,000 for the same period in 2024, driven by improved occupancy and expense management[213]. - The net cash used in investing activities increased by $288,294,000 for real estate acquisitions and $18,173,000 for developments and capital expenditures for the nine months ended September 30, 2025, compared to the same period in 2024[214]. - The company reported a net cash provided by financing activities of $195,039,000 for the nine months ended September 30, 2025, compared to $5,239,000 for the same period in 2024, primarily due to reduced net payments on lines of credit[215]. Tax and Impairment - The company recognized a change from income tax expense to income tax benefit for the three and nine months ended September 30, 2025, primarily due to the reversal of valuation allowances against net deferred tax assets[205]. - An impairment charge of $3,768,000 was recognized for the three months ended September 30, 2025, related to one OM building[203]. - Impairment of real estate investments for the nine months ended September 30, 2025, totaled $38,133,000, with no impairments recorded in the same period of 2024[230]. Market Conditions - The annual inflation rate in the United States was 3.0% in September 2025, impacting operational costs such as labor, services, energy, and supplies[183]. - The company has implemented higher than average annual rent and care fee increases to offset inflationary pressures on costs[183]. - The increase in operating results was primarily driven by higher resident occupancies and billing rates, despite inflationary pressures on labor and service costs[188]. Distribution and Shareholder Returns - The board authorized a quarterly distribution of $0.25 per share, equating to an annualized distribution rate of $1.00 per share, dependent on various financial factors[216]. - The company is required to distribute a minimum of 90.0% of its REIT taxable income to maintain its REIT status[220].