American Healthcare REIT, Inc. Q3 FY2025 earnings call

• Operational Results: Strong same-store NOI growth across the portfolio, achieving seventh consecutive quarter of double-digit same-store NOI growth. Trilogy and SHOP segments driving outsized growth with high occupancies.
• External Growth: Closed over $575 million of acquisitions year-to-date within RIDEA segments, expanded operator relationships, with a pipeline of over $450 million of awarded deals.
• Strategic Initiatives: Leveraging Trilogy's revenue management system across other operating partners, focusing on high-quality care and outcomes, and maintaining disciplined capital allocation.

Trilogy: Same-store NOI grew 21.7% year-over-year. Occupancy averaged 90.2% in Q3, up over 270 basis points from last year, with Medicare Advantage accounting for 7.2% of total resident days in Q3 (up from 5.8% a year ago). SHOP: Same-store NOI increased 25.3% with RevPOR up 5.6% year-over-year and NOI margins expanding nearly 300 basis points to 21.5%. Same-store spot occupancy is above 90%.

• NFFO Guidance: Increased full year 2025 NFFO guidance to a range of $1.69 to $1.72 per fully diluted share from $1.64 to $1.68, implying over 20% growth at the midpoint.
• Same-store NOI Growth: Total portfolio same-store NOI growth guidance increased to 13%-15%, with Trilogy at 17%-20%, SHOP at 24%-26%, Outpatient medical at 2%-2.4%, and Triple-net leased properties at -25 bps to +25 bps.
• Balance Sheet: Net debt to EBITDA ended the quarter at 3.5x, showing improvement from prior periods.

• Market Risks: Supply-demand imbalances in senior housing, potential seasonality impacts, and inflation affecting reimbursement rates.
• Operational Risks: Dependence on regional operating partners, competition in the market, and potential challenges in executing growth strategies.

Q: Congrats on a great quarter. Just one quick one and a follow-up. I think the 90% spot occupancy, I think, was a sort of a key marking point for investors and the thesis was always that there would be operating leverage at this point to continue the growth going. So I just wonder if you could talk about just how much more occupancy upside do you see from here realistically in the portfolio and the pricing strategy as you sort of hit this point to continue to maximize growth.

A: Danny Prosky discussed occupancy upside, maxing at 10%, expecting trends to continue, pricing higher than inflation.

Q: I wanted to touch back on Gabe's earlier comments in his prepared remarks about leveraging Trilogy's revenue management system with your existing SHOP tenants. I mean how much of the portfolio of that traditional SHOP portfolio is currently utilizing Trilogy software here? And can you provide some examples on how that's driving better results?

A: Gabriel Willhite talked about being in pilot phases, leveraging Trilogy's platform for various functions, not fully reflected in current numbers but expected to drive growth.