LTC Properties, Inc. (LTC) Earnings

Management highlights

- LTC Properties, Inc. is successfully executing the SHOP strategy, with capabilities, reputation, and culture resonating with sellers and operators, driving investment opportunities and record external growth. - SHOP is projected to represent 45% of total investments and 40% of annualized NOI by year-end, with the $600 million SHOP acquisition midpoint guidance on track, and expected closing of second quarter transactions to be more than halfway to the target. - Focus on optimizing risk-adjusted returns by investing in SHOP portfolio and opportunistically recycling capital. - Operator partnerships, relationship-centric culture, and investment in SHOP platform are driving transformation. - Spent 18 months building platform to execute with speed and certainty, with strong pipeline of opportunities and robust operator relationships. - Current liquidity is $585 million, with pro forma liquidity totaling $775 million, and well within leverage target.

Guidance

- Reiterating 2026 guidance for core FFO per share in the range of $2.75 to $2.79 and core FAD per share in the $2.82 to $2.86 range. - 2026 guidance includes $400 million to $800 million of SHOP acquisitions, with SHOP NOI in the range of $65 million to $77 million, and FAD CapEx of approximately $5 million, and $265 million of proceeds from asset sales and loan payoffs. - On track with $600 million SHOP acquisition midpoint guidance, with expected closing of second quarter transactions to be more than halfway to the target.

Segment performance

SHOP is currently projected to represent 45% of total investments and 40% of annualized NOI by year-end. First-quarter SHOP NOI was in line with expectations. Core SHOP portfolio consists of 27 communities at or near stabilization. Compared with last year's first quarter, core FFO per share improved by $0.04 to $0.69, and core FAD per share improved by $0.02 to $0.72.

Analyst Q&A

• Q: Could you provide some additional details around pro forma NOI growth for the 27 SHOP assets in the first quarter? And then maybe give us a sense of how occupancy trended sequentially and year over year within that NOI figure?

  A: Gibson Satterwhite said first-quarter pro forma NOI for the 27 core SHOP portfolio came in line with expectations, with rates a bit higher, anticipated seasonal softness in Q1 realized, occupancy turned around mid-quarter, occupancy at trough in Q1 this year higher than last year, and seeing green shoots in occupancy increasing since February.

• Q: With respect to investments, you had $157 million expected to close by April. I am just wondering what drove the delay, and did a subset of that or all of those move within the $250 million? Or were there changes in the investment pool? Any details you can provide on that, as well as expected pricing for those assets?

  A: Clint Malin said delay was primarily related to a single off-market follow-on transaction due to seller focusing on tax-efficient transaction, working on structuring a downREIT, and David Boitano said cap rates, going-in yields, have been right around 7%.

• Q: There is an implied deceleration from the first-quarter run rate in the earnings guidance. I am curious on the drivers there. Is there any triple-net softening in some of the rents versus the conversion to SHOP, any temporary cash flow degradation, or any one-timers in the first quarter that will not repeat?

  A: Caroline Chikhale said in first quarter there was a little pickup because of timing differences, for the most part think they are going to be in line, and there is a ramp-up for SHOP NOI.

• Q: I am looking at Slide 12 and the guidance provided for SHOP. If you were to do a hypothetical stress test of your portfolio, would it be high single-digit NOI growth, putting aside additional acquisitions—the type of growth we should expect when the time comes that you are able to disclose a same-store perspective?

  A: Gibson Satterwhite said if assume low to mid-teens SHOP NOI growth, that is the driver behind math, and if strip out occupancy to be conservative, still comfortable with around 10% NOI growth assuming about a 5% RevPOR increase.

• Q: Looking at your SHOP operator list, are there a handful that you have closer relationships with that you want to continue to expand? For some with maybe one or two assets, is the plan for that to grow? How hard is it to have one operator managing one asset—does it make sense to have fewer operators managing bigger portfolios?

  A: Clint Malin said would look to grow with all of the operators with whom they have built relationships, Pamela Shelley-Kessler said have not set any limit, it comes down to investment opportunities, and J. Gibson Satterwhite said have built into staffing plan additional resources.

• Q: Have you started marketing some of these SNF sales, or is it something you would consider if something came up?

  A: Clint Malin said are not marketing at this point, but have received a lot of inbound phone calls, engaging, but it has to be opportunistic pricing that works for recycling into higher-growth SHOP assets.

• Q: I also wanted to focus on Slide 12, the SHOP performance. When you look at the quarterly results disclosed on the page, RevPOR in Q2 2025, when we just had the SHOP conversion portfolio, was almost $10,000. In March, it was around $9,500. It has gradually dropped to about $7,850 by Q1 2026 with all the additional acquisitions. Can you talk about the post-conversion acquisitions—the characteristics of that portfolio that may be driving down RevPOR from the original 13 conversions?

  A: Pamela Shelley-Kessler said it is a simple explanation, original 13 properties in February: 12 of those were memory care, memory care has a much higher RevPOR, as adding more traditional seniors housing properties into SHOP portfolio, mix of IL, AL, and memory care, so RevPOR gradually goes down as portfolio mix changes