Financial Data and Key Metrics Changes - The company reported a Core FFO per share improvement of $0.05 to $0.70, representing an 8% increase year-over-year, and Core FAD per share improved by $0.07 to $0.73, reflecting an 11% growth [17] - The debt to annualized adjusted EBITDA for real estate was 4.5x, with an annualized adjusted Fixed Charge Coverage Ratio of 4.4x, well within the stated leverage target of 4-5x [17] Business Line Data and Key Metrics Changes - The SHOP portfolio grew to 25% of the investment portfolio by year-end 2025, with expectations to reach 45% by the end of 2026 [4][19] - The original 13 properties converted to SHOP grew NOI by 22% over pro forma 2024, generating $16.2 million in combined rent and NOI in 2025 [8] - The company anticipates a 14% NOI growth at the midpoint for the 27 properties in 2026 compared to pro forma 2025 [8] Market Data and Key Metrics Changes - The company expects to complete $600 million in acquisitions for 2026, nearly 70% higher than SHOP acquisitions in 2025 [3] - The occupancy rate for the SHOP portfolio was 89.7% in 2025, projected to grow by about 150 basis points in 2026 [9] Company Strategy and Development Direction - The company is transforming from a lower growth triple net REIT into a faster-growing SHOP-focused REIT, emphasizing substantial investments in people, systems, and technology [3] - The strategy includes leveraging a smaller asset base to capture outsized growth opportunities, focusing on newer assets with strong pricing power and high incremental margins [5][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the SHOP transformation, indicating that organic NOI growth is expected to double by the end of 2026 compared to pre-transformation levels [19] - The company is optimistic about maintaining a competitive edge in the senior housing market, with a focus on building strong operator relationships [12][19] Other Important Information - The company has expanded its credit facility to $800 million, anticipating nearly $270 million in asset sales and loan payoffs in 2026 to fund future investments [15][16] - The average age of the SHOP portfolio is projected to be nine years, reflecting a strategy of investing in newer communities [19] Q&A Session Summary Question: What are the greatest threats to SNFs today? - Management noted that private capital driving prices in skilled nursing could pose risks, and emphasized the organic growth potential from investing in newer assets [26] Question: Is the 14% same-store growth sustainable? - Management indicated that the pro forma occupancy of 89.7% is close to stabilized levels, and they are comfortable with the guidance for growth rates [27] Question: Can you provide insights on the SHOP investment pipeline? - The company has $160 million under LOI and is targeting year one yields of about 7% for acquisitions, leveraging its smaller size to pursue attractive transactions [40][41] Question: How is the competitive landscape for seniors housing deals? - Management acknowledged the competitive environment but expressed confidence in their ability to find suitable transactions, maintaining a focus on relationship-driven opportunities [50][52] Question: What is the expected CapEx burden for LTC going forward? - Management stated that the current CapEx guidance is based on a $1,500 per unit assumption, which is deemed sufficient given the age of the assets [75][76] Question: Will SHOP exposure increase beyond 45% after 2026? - Management clarified that while the transformation will complete by the end of 2026, future investments will continue to evolve based on shareholder value, with a focus on SHOP [88]