National Health Investors, Inc. Q1 FY2026 earnings call

• CEO Eric Mendelsohn mentioned NHI had a solid start in 2026, updated full-year guidance because of the NHC portfolio sale. The shop portfolio is scaling rapidly, with invested capital in the first quarter up over 100% from the past year. An acquisition of seven properties in Colorado for $107 million was announced. - Kevin Pascoe discussed business development, with $212.4 million year-to-date shop investments, $20.3 million under signed letters of intent, and an active pipeline valued at $560 million. Completed the disposition of four properties and had three others under contract for disposition. - John Spade talked about financial results, with net income per share up, NAVRED FFO and normalized FFO increasing, FAD rising, and the balance sheet in good shape.

NHI delivered a solid start to 2026, with first quarter results exceeding internal expectations across NAREIT FFO, normalized FFO, and FAD. The shop portfolio has seen rapid scaling, with invested capital in the first quarter increasing over 100% compared to the past year. The total shop NOI increased by 188.1% compared to the first quarter of 2025 due to the transition and acquisition of 20 properties. However, same-store NOI on the 15 legacy holiday properties declined 2.4% year-over-year. The non-same store portfolio, including the Colorado acquisition, has an estimated annualized NOI of approximately $33 million, representing 73% of total shop NOI. The triple net portfolio showed stable performance with cash lease revenue increasing approximately 7.7% year-over-year.

• The primary driver of guidance change is the NHC portfolio sale, which creates near-term earnings pressure. GAAP net income is expected at the midpoint to be $14.37 per share. NAREIT FFO and normalized FFO per share at the midpoints are $4.77 per share, up 2.6% and down 2.9% compared to 2025 respectively. Total FAD is expected to grow 4.1% to $242.2 million. The full-year 2026 guidance includes $180 million in additional future investments and an average NOI yield of 7.8% (approximately 60% in shop investments).

• Forward-looking statements involve risks and uncertainties. The timing of the NHC portfolio sale and capital redeployment causes near-term earnings pressure. Legacy holiday same store performance is below expectations, impacting growth. Pricing has tightened in the market, which may affect deal volume and execution.

Q: Farrell Granath inquired about the 560 incremental pipeline, the percentage breakdown of shop vs leased within it, and the progress on deals.

A: Kevin stated the pipeline is robust, predominantly senior housing, with an emphasis on shop and flexibility in structure.

Q: Farrell Granath asked about the driver of underperformance of legacy holiday assets.

A: Kevin said there is some modest seasonality, with an issue related to a handful of properties having census loss and some CapEx delays.

Q: Juan Sanabria asked about the decrease in FAD per share due to the NHC sale and if third parties had reached out to top the NHC bid to repurchase assets.

A: John mentioned the NHC transaction in various ways pulled down guidance but some investment outperformance offset it; Eric said no third parties had reached out with a higher bid.

Q: Austin Wierschmidt asked about the $200 million+ LOIs for larger portfolios, their progress, and underwriting changes.

A: Kevin said the pipeline is solid, underwriting has evolved, and the market is competitive.

Q: Rich Anderson asked about the 24% shop being pro forma for the NHC sale and why it's 15% of NOI.

A: Kevin said it's pro forma after the NHC sale and the holiday impact is causing the lower NOI percentage.

Q: Rich Anderson asked about the success measure for the NHC sale strategy.

A: Eric said success is meeting or exceeding the original guidance and redeploying $360 million in the next six months.

Q: Omotayu Akusana asked about the proceeds from the NHC possibly being a special dividend and about the Bigford lease structure.

A: John said they are looking at the possibility of a special dividend, and the Bigford new lease structure has a base rent increase and conditional rent.

Q: Juan Sanabria asked about SHOP pipeline yields and lessons learned from the holiday portfolio.

A: Kevin said year one yields are in the ~7% range; Eric said the new product is newer, with a healthcare component and better marketing practices.

Q: Juan Sanabria asked about Florida assets tied to the NHC.

A: Kevin said it's a sublease due to Florida licensing technicalities