AHR

Leadership Transition and Governance

• Former CEO Danny Prosky retired from his day-to-day role after a successful heart transplant, and remains an engaged board member and advisor. Founder Jeff Hanson returned to the CEO role six months ago on a mission-driven, time-bound basis to accelerate growth.
• Gabe Willhite was elevated to President while retaining his COO role; Scott Estes, former Welltower CFO, was appointed lead independent director to reinforce strong corporate governance.
• Jeff Hanson's core priorities are: 1) Rapid disciplined scaling of the platform to capitalize on the generational senior housing demographic opportunity; 2) Strengthening the leadership team by adding top industry talent across the organization.

Strategic Differentiation

• AHR's competitive advantage comes from its operator-focused platform: most key leaders are former operators, giving the firm real-time market insight and credibility with partners, leading to more off-market deal flow.
• The company is investing ahead of growth to scale platform capabilities, extending Trilogy's proprietary revenue management, analytics, and best practice sharing tools to more SHOP operating partners, improving partner performance from day one of onboarding.
• The strategy prioritizes quality of assets, operators, and care over growth for growth's sake, with strict underwriting discipline maintained despite higher acquisition volume.

Acquisition and Capital Activity

• Year-to-date 2026, AHR has closed over $1.4 billion in acquisitions, all focused on high-quality infill markets with strong barriers to new supply; $22.3 million in non-core assets were sold to reallocate capital to higher-return opportunities.
• Post-quarter end, AHR closed $1 billion in additional SHOP acquisitions, entering the Northeast at scale with a quality partner and deepening its existing Southeast footprint, and funded an $86.2 million loan with a defined acquisition path for seven properties.
• The acquisition pipeline currently holds over $800 million in committed deals expected to close before year-end 2026, none of which are included in the updated 2026 guidance.

Balance Sheet Performance

• Net debt to EBITDA improved to 2.5x in Q2 2026, down 0.5x from Q1 2026 and 1.2x year-over-year, giving the firm strong financial flexibility to pursue growth.
• AHR raised ~$1.5 billion in equity capital in Q2 2026 via a follow-on offering and ATM program, with $631 million in unsettled forward sale proceeds remaining to fund the current pipeline, plus full availability on its $800 million revolving credit facility.

• Full-year 2026 normalized FFO (NFFO) per diluted share guidance was raised to $2.15–$2.19, up from the prior range of $2.03–$2.09, representing ~26% year-over-year growth over 2025 at the midpoint.
• Total portfolio same store NOI growth guidance was raised to 11–13%, up from the prior 9–12% range.
• Trilogy (Integrated Senior Health Campuses) same store NOI growth guidance was raised to 13–16%, up from 11–15%.
• SHOP same store NOI growth guidance was raised to 18–21%, up from 15–19%.
• Outpatient Medical same store NOI growth guidance was set to flat to 1% year-over-year; triple net leased property guidance remains unchanged at 2–3% growth.
• All guidance only includes transactions closed through the date of the call, and excludes the $800+ million acquisition pipeline expected to close before year-end.

1. Trilogy (Integrated Senior Health Campuses): Same store NOI grew 16.1% year-over-year and 5.4% sequentially. Average same store occupancy hit 90.7%, up 180 bps year-over-year, with senior housing occupancy holding at 91.9% (flat sequentially, up 200 bps year-over-year). Same store operating expenses declined 0.9% sequentially, with controllable costs down 4.6%, pushing same store NOI margin to a post-pandemic high of 21.1% (up 100 bps sequentially). Quality Mix of residents reached 75.5%. Revenue contribution for the segment (based on full-year guidance midpoint) is ~37% of total portfolio same store NOI growth. 2. SHOP (Senior Housing Operator Partnerships): Same store NOI grew 20.5% year-over-year and 9.9% sequentially. REVPOR rose 1.4% sequentially while expenses fell 0.8%, driving same store NOI margin up 242 bps year-over-year to 22.3%. Revenue contribution for the segment (based on full-year guidance midpoint) is ~52% of total portfolio same store NOI growth. 3. Outpatient Medical: Full-year same store NOI growth expected to be flat to 1% year-over-year, contributing ~8% of total portfolio growth at the guidance midpoint. 4. Triple Net Leased Properties: Full-year same store NOI growth guidance remains 2-3% year-over-year, contributing ~3% of total portfolio growth at the guidance midpoint. Overall total portfolio same store NOI grew 13.2% year-over-year in Q2 2026 and 12.7% for the first half of 2026, with 4.9% sequential growth over Q1 2026.

The call notes that all forward-looking statements are subject to inherent risks and uncertainties that could cause actual results to differ materially from projections, including risks related to: seasonal occupancy and expense volatility (e.g., utility cost fluctuations for Trilogy's Midwest-focused portfolio), changes to cap rate and acquisition pricing dynamics, construction and development cost overruns for the Trilogy development pipeline, macroeconomic conditions impacting senior housing demand and pricing power, and competitive pressures for high-quality acquisition opportunities. Additional risks are detailed in AHR's SEC filings, and the company assumes no obligation to update forward-looking statements except as required by law.

Q: What drives the recent slowdown in controllable costs for Trilogy, and is this sustainable? / A: The expense deceleration is primarily the result of a company-wide focus on cost management that the Trilogy team has executed successfully over the past several quarters. Some seasonal factors do impact near-term costs, particularly utility volatility from climate control usage in midwestern markets that will impact Q3 results. The overall expense discipline shown is consistent with the team's historical performance and expected to continue, with cost improvements coming from multiple areas of the business. (312 chars)

Q: What is driving the increased deal flow AHR is seeing this year? / A: Two main factors are driving higher deal volume: broader market activity has increased as sellers brought more assets to market following early 2025 cap rate compression and improving operator performance that lifted asset values. Second, AHR's growing network of operator relationships has generated more off-market deal flow, with roughly half of all recent transactions coming from off-market opportunities directly to AHR. All deals continue to pass the same rigorous underwriting standards AHR has always used. (421 chars)

Q: What are Jeff Hanson's core initiatives as returning CEO, and what is the timeline for his tenure? / A: Jeff's four core priorities are: maintain acquisition velocity while upholding high quality standards for assets, markets, and operators; onboard top industry talent across the organization to support scaling; leverage Trilogy's operating expertise to drive innovation across the entire SHOP platform; and aggressively expand relationships and geographic footprint with existing partners. Jeff describes his tenure as mission-driven rather than indefinite: he is leading the accelerated scaling plan, which will take a period longer than months but shorter than multiple years, as part of a long-planned succession development for the existing leadership team. (478 chars)

Q: How are acquisition returns holding up amid industry cap rate compression? / A: AHR has maintained consistent underwriting yields: current acquisitions deliver initial cash yields in the mid-5% to low-6% range, with stabilized yields of 7% or higher. Cap rate compression that occurred in late 2025 and early 2026 has been static for the past several months. Half of AHR's deals are off-market, reducing the need to compete purely on price, and AHR is buying high-quality assets in constrained infill markets below replacement cost, with meaningful embedded operating upside from value-add improvements. (389 chars)