Financial Data and Key Metrics Changes - For Q1 2025, net income per diluted common share was $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 rose 2.7% to $1.15 compared to the prior year [17][18] - FAD for the quarter increased 9.9% to $56 million [18] - 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 - SHOP segment NOI increased 4.9% year over year to $3.1 million, with resident fees up 5.2% driven by occupancy improvement [16][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 [6][11] - The market shows a limited buyer pool, but an increasing number of sellers, leading to a competitive environment for acquisitions [11][78] Company Strategy and Development Direction - The company is focused on growing its SHOP portfolio through internal conversions and optimizing its existing portfolio [8][10] - A significant investment pipeline is being pursued, with a goal to surpass last year's total investments of $237.5 million [10][24] - The company is cautious about pursuing growth for growth's sake, emphasizing quality over quantity in acquisitions [7][56] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the near-term outlook, raising normalized FFO guidance midpoint by $0.08 per share to $4.71, representing a year-over-year growth of 6.1% [6][23] - The company is maintaining its outlook for 12% to 15% NOI growth for the year, despite typical seasonality in the first quarter [9][24] Other Important Information - The company recorded a $1.2 million charge in transaction costs related to a large SHOP portfolio that was ultimately not pursued [7] - The balance sheet remains strong, with a net debt to adjusted EBITDA ratio of 4.1 times, well within the stated leverage policy [21][22] Q&A Session Summary Question: Update on NHC lease process and Medicaid clarity - Management is in dialogue with NHC regarding lease renewal and navigating Medicaid issues, with an independent committee assisting in strategy [31][32] Question: Reasons for low SHOP performance in Q1 - Management noted seasonality and a one-time expense affecting performance, but remains positive about future growth [34][35] Question: Status of SLM mezzanine loans - SLM situation is largely wrapped up, with potential for additional payments as facilities are sold [36] Question: Transition process with Discovery and potential rent impacts - Management anticipates some noise during the transition but is confident in maintaining FAD guidance [41][45] Question: Insights on the large SHOP portfolio that did not close - The decision was based on the portfolio not fitting the company's growth strategy at this time [54][56] Question: Timing for bond market tapping - The company is preparing to tap the bond market later in the year, with a minimum raise of $300 million expected [87][88]

Financial Data and Key Metrics Changes - The company reported normalized FFO of 84¢ per share, representing nearly 8% year-over-year growth [28] - Total same store cash NOI grew by 7%, led by SHOP increasing approximately 14% [29] - The company expects 7% normalized FFO per share growth for 2025 [6][11] Business Line Data and Key Metrics Changes - Senior Housing Operating Portfolio (SHOP) delivered 84¢ of normalized FFO per share in Q1, an increase of approximately 8% [7] - SHOP's same store cash NOI growth was 13.6%, with revenue growth of 7.4% driven by occupancy and rate increases [15] - Outpatient medical and research business reported same store cash NOI growth of 1.3% year-over-year [29] Market Data and Key Metrics Changes - The 80+ population is experiencing its highest growth, with an increase of about half a million people this year and 900,000 annually between 2027 and 2030 [8] - The number of new senior housing units started in Q1 2025 was the lowest on record at only 1,287 units [8] - The company is positioned in markets with over a thousand basis points of expected net absorption in the coming years [9] Company Strategy and Development Direction - The company is focused on delivering superior multiyear growth through internal and external expansion in senior housing [5] - The investment strategy has been increased from $1 billion to $1.5 billion for the year, reflecting a growing pipeline of opportunities [31][26] - The company aims to enhance its portfolio composition through acquisitions, dispositions, and operational improvements [19] Management's Comments on Operating Environment and Future Outlook - Management acknowledges a high degree of macroeconomic uncertainty but believes senior housing remains a top asset class within real estate [87] - The company expects strong demand and occupancy growth, particularly during the key selling season [88] - Management is optimistic about the extended multiyear NOI growth opportunity in senior housing due to favorable demand and supply dynamics [11][88] Other Important Information - The company has improved its credit profile, with a net debt to EBITDA of 5.7 times, representing a 30 basis point improvement from the previous year [32] - The liquidity position is robust, with available liquidity of $3.6 billion as of April 2025 [33] - The company has completed over 250 community redevelopment projects in the past two and a half years [21] Q&A Session Summary Question: Can you provide more details on the dynamics of occupancy and margin expansion? - Management indicated that reaching higher occupancy levels leads to significant margin expansion, with around 50% incremental margin from 80% to 90% occupancy [39] Question: How is the Canadian portfolio performing at high occupancy? - The Canadian portfolio continues to deliver strong NOI growth even at high occupancy levels, demonstrating that occupancy is not the only driver of growth [42] Question: What is the impact of the recent investments on cost per bed? - The cost per bed has increased due to acquiring newer communities in better markets, but the company is still buying below replacement costs [56][60] Question: How are the Brookdale assets expected to perform during the transition? - The Brookdale communities transitioning to new operators are outperforming those remaining in the lease model, and management is optimistic about their future performance [66][71] Question: What are the expectations for pricing power in the upcoming months? - Management expects pricing power to remain strong, with good rent increases anticipated during the key selling season [80] Question: How does the company view the potential changes in NIH funding? - Management believes that any potential changes in NIH funding would have a manageable impact on the research budget due to the strong financial position of their university tenants [113]