Financial Data and Key Metrics Changes - In Q4 2024, the total portfolio same-store NOI grew by 21.6% year over year, bringing full year 2024 same-store NOI growth to 17.7% compared to 2023 [22][42] - The net debt to adjusted EBITDA ratio improved significantly from 8.5 times at the end of 2023 to 4.3 times at the end of 2024, providing flexibility for future opportunities [19][48] - Normalized funds from operation (NFFO) for Q4 2024 were reported at 1.41 per diluted share, within the guidance range [41][45] Business Line Data and Key Metrics Changes - The Trilogy segment achieved same-store NOI growth of 28% year over year in Q4 2024, with full year growth at 23.8% [23] - The shop segment saw same-store NOI growth of over 65% year over year in Q4 2024, with full year growth at 52.8% [27] - Same-store NOI margins for the shop segment improved by over 700 basis points in Q4 2024 compared to the same period in 2023 [29] Market Data and Key Metrics Changes - The aging population is expected to grow by over 700,000 individuals annually through 2030, while the senior housing industry has added less than 20,000 units on average each year since 2020, indicating a favorable demand-supply dynamic [12] - The company anticipates that RevPOR growth will continue to outpace expense growth in managed portfolio segments over the next 12 to 18 months [31] Company Strategy and Development Direction - The company remains focused on accretive external growth, primarily through RIDEA structure senior housing and care investments, with over 140 million [38][41] - The company aims to maintain a disciplined approach to capital allocation while pursuing new investments that align with its strategy [36] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term care sector, citing persistent barriers to new supply and favorable demand fundamentals [31][32] - The company expects same-store NOI growth guidance for 2025 to be between 7% and 10%, with specific segment targets including 10% to 12% growth for Trilogy and 18% to 22% growth for the shop segment [43][44] - Management acknowledged potential headwinds from expected tenant move-outs in outpatient medical and lease resets in triple net leased properties [43] Other Important Information - The company has been actively refining its portfolio through opportunistic dispositions, selling approximately 121 million through its ATM program in Q4 2024, which was used to pay down outstanding debt [47] Q&A Session Summary Question: Trends in January and February - Management noted that while Q1 2025 is expected to show flat growth compared to Q4 2024, it will be significantly higher than Q1 2024 due to various seasonal factors [53][55] Question: Acquisition Pipeline - The acquisition pipeline is robust, with a significant number of potential deals being evaluated, indicating a favorable environment for new opportunities [61][62] Question: Occupancy Tipping Point - Management indicated that occupancy levels are above pre-COVID levels, allowing for rate increases and margin expansion [67][68] Question: Medicaid Exposure - The company has low Medicaid exposure, with management expressing confidence in their ability to pivot if necessary, given the limited reliance on Medicaid in their business model [72][75][78] Question: Trilogy Developments and Expansions - Management discussed the number of developments and expansions completed in 2024 and the guidance for 2025, indicating a focus on new campuses and expansions [110][113] Question: Seasonal Considerations in Guidance - Management confirmed that seasonal factors such as fewer days in Q1 and increased utility costs are considered in the guidance for sequential growth [131]
American Healthcare REIT(AHR) - 2024 Q4 - Earnings Call Transcript