Financial Data and Key Metrics Changes - The company reported a net income per diluted common share of $0.74, up 4.2% from the prior year [17] - Net FFO per diluted common share increased 3.6% to $1.14, while normalized FFO increased 2.7% to $1.15 compared to the prior year [17] - FAD for the quarter increased 9.9% to $56 million [17] - Cash rent from the Real Estate Investment segment increased by $2.6 million, attributed to acquisitions and percentage revenue rents [18] Business Line Data and Key Metrics Changes - The SHOP segment's NOI increased 4.9% year over year to $3.1 million, with resident fees up 5.2% driven by occupancy improvement [15][19] - The discretionary senior housing portfolio had a coverage of 1.67 times, while the SNF portfolio reported solid coverage of 3.06 times [14] Market Data and Key Metrics Changes - The company has an active investment pipeline of approximately $264 million, with a focus on senior housing [5][11] - The balance sheet remains strong, with a net debt to adjusted EBITDA ratio of 4.1 times, well within the stated leverage policy [21] Company Strategy and Development Direction - The company is focused on growing its SHOP portfolio through internal conversions and has made significant investments in acquisitions [5][6] - The company is not pursuing growth for growth's sake and is selective in its investment strategy [6][78] - The company aims to maintain a competitive cost of capital and solid access to debt and equity capital [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about surpassing last year's investment total of $237.5 million due to a strong start in 2025 [10] - The company maintains its outlook for 12% to 15% NOI growth this year, despite typical seasonality in the first quarter [8][16] - Management is closely monitoring the potential impact of Medicaid cuts on the portfolio but believes geographic exposure can mitigate risks [14] Other Important Information - The company declared a $0.90 per share dividend for shareholders of record on June 30, 2025 [23] - The updated full-year guidance for NAREIT FFO and normalized FFO per diluted common share is $4.67 and $4.71, representing increases of 2.6% and 6.1% respectively over 2024 [23][24] Q&A Session Summary Question: Update on NHC and Medicaid clarity - Management is in dialogue with NHC regarding lease renewal and is cautious about discussing land and buildings due to legal monitoring [30] Question: SHOP performance in Q1 - Management acknowledged a one-time expense affecting performance but noted that seasonality was expected [34] Question: Status of SLM mezz loans - Management indicated that SLM is largely wrapped up, with potential for additional payments as facilities are sold [36] Question: Discovery transition and potential disruptions - Management expects some noise during the transition but is confident in maintaining FAD guidance [40][44] Question: Impact of percentage rent on tenant profitability - Management stated that the percentage rent was factored into projections and that tenant performance is improving [46] Question: SHOP occupancy and incentives - Management explained that occupancy challenges are due to a subset of buildings not reaching 90% and the need for incentives to maintain occupancy [62] Question: Large SHOP portfolio that fell out of pipeline - Management decided not to pursue the portfolio due to concerns about its fit and potential returns [53] Question: Unidentified new investments mix - Management indicated a mix of property investments and debt financing, primarily focusing on fee simple arrangements [55] Question: Timing for NOI transition with Discovery - Management is targeting the third quarter for the transition, subject to legal review [57] Question: Drivers of increased deal flow - Management noted that sellers are realizing current market conditions, leading to increased activity [74]