Logo of jester cap with thought bubble.

Image source: The Motley Fool.

Date

Thursday, May 7, 2026 at 11 a.m. ET

Call participants

  • Chief Financial Officer — Pamela J. Shelley-Kessler
  • Co-President and Chief Investment Officer — Clint B. Malin
  • Co-President and Chief Operating Officer — J. Gibson Satterwhite
  • Executive Vice President, Investments — David Boitano
  • Chief Accounting Officer — Caroline L. Chikhale

Need a quote from a Motley Fool analyst? Email [email protected]

Takeaways

  • SHOP portfolio target -- SHOP assets are projected to comprise 45% of total investments and 40% of annualized NOI by year-end, reflecting a decisive portfolio shift.
  • Investment guidance -- LTC Properties (LTC +0.39%) is maintaining a $600 million SHOP acquisition midpoint target, with more than half anticipated to close by the end of the second quarter.
  • Capital recycling -- There is an expectation to reinvest approximately $265 million in planned skilled nursing dispositions and loan repayments, $77 million of which have closed, and $190 million are expected to close in the third quarter.
  • Core SHOP NOI growth guidance -- For the 27-community core SHOP portfolio, pro forma NOI growth guidance is reiterated at 14% at the midpoint.
  • Overall portfolio pro forma growth -- Management projects that moving to a 40% SHOP NOI mix increases the pro forma portfolio growth rate to 5%-7%, compared to the low-2% range associated with triple-net leases.
  • First-quarter investment activity -- Closed approximately $120 million in investments year-to-date, with nearly $250 million scheduled for closing in the second quarter and $90 million of signed LOIs targeted for third quarter closing.
  • Acquisition pipeline -- The pipeline includes over $5 billion of opportunities under consideration, providing visibility for continued investment momentum.
  • SHOP operator expansion -- By the end of the second quarter, LTC Properties expects to have 11 SHOP operators, nine of whom are new relationships established in the past year.
  • Portfolio asset characteristics -- For $460 million worth of pipeline and closed deals through Q3, the average asset age is 10 years; 65% are off-market, 60% span IL, AL, and memory care segments, average size is 100 units, and 70% are located in primary markets.
  • Cap rates -- Recent SHOP acquisitions have been at going-in yields around 7%, consistent across completed and pending deals.
  • Liquidity position -- Including $95 million year-to-date ATM sales, current liquidity is $585 million with pro forma liquidity of $775 million after anticipated $190 million in asset sales and loan payoffs.
  • Leverage -- Pro forma debt to annualized adjusted EBITDA for real estate is 4.4 times; annualized adjusted fixed charge coverage is 4.6 times, both within stated targets.
  • Core FFO and core FAD results -- Core FFO per share increased $0.04 to $0.69, and core FAD per share increased $0.02 to $0.72, driven by SHOP growth and interest income; increases were partially offset by higher interest and G&A expenses and lower rent from asset sales.
  • 2026 earnings guidance -- Core FFO per share projected at $2.75 to $2.79 and core FAD per share at $2.82 to $2.86; guidance incorporates $400 million to $800 million of SHOP acquisitions, total SHOP NOI of $65 million to $77 million, $5 million FAD CapEx, and $265 million in disposition and loan repayment proceeds.
  • RevPOR trend explanation -- The decline in SHOP RevPOR since initial conversions is attributed to portfolio diversification away from standalone memory care into a broader mix of IL, AL, and memory care assets, not to rate pressure.

Summary

LTC Properties (LTC +0.39%) communicated continued rapid execution of its transformation toward a SHOP-focused portfolio, supported by deliberate capital recycling and operator expansion. Management described retention and growth of new operator relationships as a driving force behind record-setting SHOP investment opportunities and highlighted that off-market deal sourcing is central to the strategy. LTC Properties is implementing scalable data and asset management infrastructure to sustain double-digit SHOP NOI growth, with new hires dedicated to analytics and asset management to support ongoing operator alignment. Management explicitly stated cap rates for both SHOP acquisitions and recent skilled nursing sales (7%-8%), emphasizing the financial discipline and attractiveness of transactions completed and under negotiation.

  • Clint B. Malin said, "The delay is primarily related to a single off-market follow-on transaction. The seller was focused on a tax-efficient transaction," highlighting the complex structuring and timing of deal flow within the investment pipeline.
  • Caroline L. Chikhale described first-quarter earnings favorability as "a little pickup because of timing differences," indicating management's expectation for normalization in future quarters.
  • J. Gibson Satterwhite explained that even absent occupancy gains, the same-store SHOP portfolio "can get double-digit—around 10%—NOI growth" due to positive spreads between rate and expense trends, reinforcing confidence in organic SHOP earnings power.
  • Operator partnerships yielded numerous off-market investments, with nine new operator relationships established in the last year, representing significant expansion of LTC Properties' relationship-driven sourcing model.
  • Recent skilled nursing asset sales occurred at cap rates of 8% according to Clint B. Malin, supporting management's intention to opportunistically recycle capital from lower-growth to higher-growth assets.
  • LTC Properties has deployed a compensation model for operators based on base fees tied to revenue and bottom-line outcomes, incentive-based arrangements for exceeding budgets, and longer-term alignment via "synthetic promotes."

Industry glossary

  • SHOP (Senior Housing Operating Portfolio): Properties where the REIT directly participates in operating income and expenses, rather than leasing to a third-party operator on a triple-net basis.
  • IL: Independent Living — a type of seniors housing primarily targeting active aging adults, offering residential amenities without extensive healthcare services.
  • AL: Assisted Living — housing for seniors who need assistance with daily activities but do not require full-time skilled nursing care.
  • RevPOR: Revenue Per Occupied Room — a key performance metric in seniors housing and hospitality sectors, indicating average monthly (or annual) revenue generated per occupied unit or room.
  • Cap rate: Capitalization rate, the ratio of a property’s net operating income to its purchase price, used to assess acquisition yield.
  • EBITDAR: Earnings Before Interest, Taxes, Depreciation, Amortization, and Rent — often used to assess healthcare property operator coverage and portfolio health.
  • LOI: Letter of Intent — a preliminary, non-binding agreement outlining the material terms of a potential transaction.
  • ATM (At the Market): A type of equity offering allowing companies to sell shares directly into the open market over time, at prevailing prices.
  • FAD (Funds Available for Distribution): Cash flow measure used by REITs indicating funds available to distribute to shareholders after recurring capital expenditures.

Full Conference Call Transcript

Pamela J. Shelley-Kessler: Good morning, and thank you for joining us. LTC Properties, Inc. is successfully executing our SHOP strategy. Our capabilities, reputation, and culture are resonating with sellers and operators, and these relationships are driving investment opportunities and record external growth.

Clint B. Malin: Allowing us to scale incredibly quickly. We have strong conviction that our strategy is the right one to create a higher growth profile company with better risk-adjusted returns to drive shareholder value. With SHOP currently projected to represent 45% of our total investments and 40% of annualized NOI by year-end, the shift in our portfolio mix is dramatically enhancing LTC Properties, Inc.'s long-term ability to grow FFO and FAD per share above our historical rate. We are on track with our $600 million SHOP acquisition midpoint guidance, and with the expected closing of second quarter transactions, we will be more than halfway to that target.

Additionally, to further increase our SHOP mix, we would consider transactions that capitalize on attractive skilled nursing pricing by recycling capital into higher-growth SHOP assets. Our operator partnerships, our relationship-centric culture, and our significant investment in the SHOP platform are driving our transformation and positioning LTC Properties, Inc. as a competitive force. I will now turn it over to Gibson for more insight on the portfolio.

J. Gibson Satterwhite: Thank you, Clint. Our focus is on optimizing risk-adjusted returns for our shareholders by investing in our SHOP portfolio and opportunistically recycling capital, positioning LTC Properties, Inc. for higher intrinsic growth. As Clint noted, SHOP is expected to account for 40% of our annualized NOI by year-end, with the potential to expand even further. This target incorporates reinvestment of approximately $265 million in planned dispositions and loan repayments from skilled nursing assets this year. Of that amount, $77 million has closed, and $190 million is expected to close in the third quarter. Our guidance projects a July 1 payoff of the Prestige loan, in line with our notice of intent earlier this year.

SHOP performance continues to reinforce conviction in our strategy. First-quarter SHOP NOI was in line with our expectations. For our core SHOP portfolio, which consists of 27 communities at or near stabilization, including those acquired through the first quarter of this year, we are reiterating prior guidance of 14% pro forma growth at the midpoint. You can find more information on this portfolio in our supplemental. To frame the impact of our transformation, the pro forma growth rate for our overall portfolio increases to 5% to 7% at our 40% SHOP NOI target, from the low 2% range embedded in triple-net leases.

That change is driven by increasing exposure to SHOP assets with growth prospects in the low to mid-teens over the foreseeable future. We can further increase our intrinsic growth rate should we choose to take advantage of opportunities to recycle more capital into SHOP, given the strong pricing for skilled nursing assets. Our 2026 guidance includes platform investments, adding the people and data capabilities needed to scale and support double-digit SHOP growth. We expect the core infrastructure to be largely in place by year-end, enabling us to continue to scale rapidly and best support our operators. Now I will turn the call over to Dave to discuss investments.

David Boitano: Thank you, Gibson. LTC Properties, Inc. has spent 18 months building a platform designed to execute with speed and certainty. We are well on track to achieving our $600 million midpoint investment target and believe, given the volume of opportunities we are evaluating, that a comparable level of annual investment is sustainable in 2027 and beyond. So far this year, we have closed around $120 million in investments, with nearly $250 million on course to close in Q2. Additionally, we have signed LOIs for off-market third-quarter acquisitions totaling $90 million. Our pipeline continues to be robust, with well over $5 billion of opportunities under consideration and visibility for continued investment growth. Our relationship-centric approach is working.

By the end of the second quarter, we will have 11 SHOP operators, including nine that are new to LTC Properties, Inc. in the past year, reflecting our success in retaining and growing with existing operators at the communities we have acquired. This strong pool of operating partners has been the source of several follow-on investments and provides great momentum as we continue to build our portfolio. Key to LTC Properties, Inc.'s growth is our legacy of deep industry relationships, which, in combination with our transactional agility, gives us an edge in gaining access and insights to growth opportunities. Several investments have come through partner referrals, underscoring the synergy of our culture and our commitment to relationships.

A number also have been off-market, demonstrating again the benefit of our relationship focus. Our rapid SHOP growth has not happened by chance. It is strategic and deliberate, reflecting an investment philosophy focused on assets 10 years of age or younger with operators who have deep local and regional knowledge. We emphasize asset quality, size, mix, and market dynamics that favor our long-term competitive position. These criteria guide us toward the right balance of opportunities and durable returns. Today, we are seeing a high volume of potential transactions. Here again, our operator alignment is central to identifying the right assets and markets to support solid long-term performance. Experienced senior housing investors know that community performance depends on strong operating partners.

LTC Properties, Inc. is deeply grateful for our operator colleagues and the excellence and commitment they bring every day to the seniors they serve. I will now pass the call to Cece for a review of our financial results.

Caroline L. Chikhale: Thank you, Dave. Including year-to-date ATM sales of $95 million, our current liquidity is $585 million, and with $190 million of proceeds expected from asset sales and loan payoffs, we remain confident in our ability to finance future SHOP acquisitions. Our pro forma liquidity totaled $775 million, providing a long investment runway. At the end of the first quarter, our pro forma debt to annualized adjusted EBITDA for real estate was 4.4x, and our annualized adjusted fixed charge coverage ratio was 4.6x. We remain well within our stated leverage target of 4x to 5x, but believe that we can reduce that further over time as a result of our organic SHOP growth.

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, representing 63% growth, respectively. Increases were due to SHOP acquisitions and conversions to SHOP from triple net, increases in interest income from loan originations and additional loan funding, and higher rent from market-based rent resets. The increases were partially offset by an increase in interest and G&A expenses, primarily to support our growing SHOP portfolio, as well as a decrease in rent due to asset sales.

We are reiterating our 2026 guidance for core FFO per share projected in the range of $2.75 to $2.79 and core FAD per share in the $2.82 to $2.86 range. As a reminder, our 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. It also includes $265 million of proceeds from asset sales and loan payoffs. Other assumptions underpinning our guidance are detailed in yesterday's earnings press release and supplemental, which are posted on our website. Now I will turn the call over to Pam for closing comments.

Pamela J. Shelley-Kessler: Thanks, Cece. LTC Properties, Inc.'s transformation continues. What began last year through the combination of acquisition and conversions of seniors housing communities ramps up this year with an additional $600 million of SHOP acquisitions projected at the midpoint of guidance, more than half of which will be completed by the end of the second quarter. We are deliberately curating a SHOP portfolio designed to compete effectively today and in the future when new supply eventually comes online. Although new construction starts remain near historical lows nationally, we are accelerating LTC Properties, Inc.'s organic growth profile and reducing our exposure to lower-growth triple-net lease investments while expanding our roster of strong operators to support our mutual growth.

In 2027 and beyond, our strategy will focus on tactical growth in SHOP, adding additional high-quality assets and driving outsized NOI growth. As a premier seniors housing capital partner, LTC Properties, Inc. is well positioned to drive substantial growth through SHOP. Our smaller size creates agility, allowing us to drive accretive change faster than our larger peers and move the needle through single-asset and small-portfolio acquisitions. Our SHOP focus over the past 18 months has enabled a successful transformation and created a clear execution advantage.

From our cooperative conversions of $175 million of triple-net leased communities into SHOP a year ago, we will have grown our SHOP portfolio to nearly $1 billion by the end of the second quarter and significantly increased our ability to drive future earnings growth. The consistency of our execution and performance is driving results and reinforces the conviction in our SHOP strategy. Our goals remain clear: support our operators who care for our nation's seniors and deliver superior long-term shareholder returns. With that, we are ready to take your questions.

Operator: Thank you. We will now be conducting a question and answer session. We will pause for a moment to poll for questions. Our first question today will come from Austin Todd Wurschmidt with KeyBanc Capital Markets.

Austin Todd Wurschmidt: Hey, good morning, everybody. 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? Thank you.

J. Gibson Satterwhite: Hey, Austin. This is Gibson. First, to give you some context around the disclosure: when we gave the pro forma 2025 for the 27 core SHOP portfolio, it was to help give an indication of the growth characteristics in that portfolio to the market and to our shareholders. But we decided against giving that on a very detailed quarterly basis going forward. What we will do is roll that core SHOP performance forward on a quarterly basis so you can track that with the metrics that we have realized during our ownership. For color behind what is going on in Q1 in that core portfolio, it came in line with our expectations for EBITDAR. Rates were a little higher.

When we set guidance, we anticipated a little seasonal softness in Q1, which we realized. Directionally, occupancy turned around mid-quarter. If we look at it year over year, the occupancy troughed at a higher level, meaning the occupancy at the trough in Q1 of this year was higher than occupancy at the trough in Q1 last year. We are seeing some green shoots in terms of occupancy increasing since it troughed in February. Looking at the sales pipeline, our leads and tour volume going into the spring and summer selling season, we feel really confident, given what we know right now, in reiterating our guidance.

Austin Todd Wurschmidt: A lot of helpful detail, and appreciate the context. With respect to investments, you had $157 million I think you said last quarter that you had 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? Thank you.

Clint B. Malin: Sure. Austin, this is Clint. The delay is primarily related to a single off-market follow-on transaction. The seller was focused on a tax-efficient transaction, and to accommodate that we are working with them on structuring a downREIT. The seller needs some additional time to address some tax questions on their side. In working on this off-market transaction, that aspect is what led to a little bit of delay. We are very excited about this deal and about growing with this existing operator. This deal will add two newer and two larger communities to our portfolio, with a continuum of care spanning IL, AL, and memory care.

In the meantime, while that was slightly delayed, as Dave mentioned in his prepared remarks, we have added another $200 million expected to close in Q2 and Q3. Dave can talk about rates.

David Boitano: Yeah. So cap rates, going-in yields, have been right around 7%. We have been able to maintain that well. We are very pleased with that. It ebbs and flows a little bit from deal to deal, but generally speaking, that is where we have been coming in, Austin.

Clint B. Malin: And, Austin, I would like to add some color. As we have increased the pipeline, we are seeing a lot of opportunities. Right now, at the $460 million mark—which includes what we have closed to date and what Dave spoke about regarding investments by quarter—that will get us by 3Q to 75% of our $600 million midpoint guidance. We feel very confident about where our investments are right now. We have eight transactions in total for 12 communities. The average age of that $460 million—again, including what we already closed in Q1—is 10 years, which has been very consistent with what we have talked about. Sixty-five percent of these deals in the pipeline are sourced off-market.

With the Q3 closings that Dave spoke about under LOI, that is going to add two more operators—four new operators this year—and get Q3 up to 13 operators. We have two follow-on transactions. Sixty percent of the communities of this $460 million span a continuum of IL, AL, and memory care. The average size of the community is 100 units. Seventy percent of these deals are in primary markets. We feel very confident in our ability to source transactions, and, as Pam mentioned in her comments, we are buying assets that are going to be able to compete effectively against newer assets when those eventually come online.

Austin Todd Wurschmidt: A lot of helpful detail, Clint. Just to clarify one thing before I yield the floor. You said you added another $200 million. Is that specific to the operator that is focused on the tax-efficient transaction? Because the $157 million is now $250 million closing in Q2, and then there is $90 million of signed LOIs set to close in Q3. So closer to $300 million. Can you reconcile the adding $200 million versus what I am getting to on the $300 million? Thanks.

Pamela J. Shelley-Kessler: Austin, it is Pam. It was $90 million that is under LOI, expected to close probably in the third quarter.

Austin Todd Wurschmidt: That is the difference. Alright. Thank you.

Clint B. Malin: Thank you.

Operator: Our next question will come from Juan Sanabria with BMO Capital Markets.

Juan Sanabria: Hi, good morning. Hope you can hear me okay. I wanted to ask about the earnings guidance for the year. There is an implied deceleration from the first-quarter run rate, so 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?

Caroline L. Chikhale: Juan, it is Cece. In the first quarter, there was a little pickup because of timing differences. For the most part, we think we are going to be in line. There is going to be a ramp-up for SHOP NOI, as Gibson has talked about in the past, and we still think it is in line. There is some uncertainty out there in the market with interest rates. We are not sure which direction it will go with the new Fed chair, but we will give you an update next quarter.

Juan Sanabria: Great. And second, you mentioned potential monetization of some skilled nursing assets. Curious on the potential scope and where you see market pricing for in-place rents.

Clint B. Malin: Thanks, Juan. We are supportive of the skilled nursing industry, and we do not see any immediate near-term headwinds. What we have recycled to date going back to 2025 has been for specific reasons. Prestige, as Gibson mentioned on our last call, was about reducing concentration to an operator and state, and reducing our loan book. Other sales were related to lease maturities and some purchase options. Those were at attractive 8% caps, which we felt very good about. Going forward, we would look to capitalize on the attractive pricing we are seeing in the market. Anything we do would be opportunistic—recycling from lower-growth triple-net leases into higher-growth SHOP assets—and we would look to limit, if anything, and avoid dilution.

Our coverage on an EBITDAR basis is almost 2.0x, which is historically extremely strong. We are very comfortable with our skilled nursing portfolio and reduced concentration. Any actions would be opportunistic.

Juan Sanabria: Great. So, just to summarize, given the high rent coverage, the yields could be closer to what you are buying SHOP at—around the 7s—given the rent coverage?

Clint B. Malin: Thank you.

Operator: Next, we will move on to Richard Anderson with Cantor Fitzgerald.

Richard Anderson: Thanks. Good morning. I am looking at Slide 12 and the guidance you provided for SHOP. I appreciate you are in growth mode, so it is hard to get a real sense of any same-store organic growth picture. 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?

J. Gibson Satterwhite: Hey, Rich, it is Gibson. Good question, and I think you have asked similar questions on previous calls. In my prepared remarks, I gave the math of how the higher growth rate in SHOP moves the needle for our overall portfolio, and cited that if you assume low to mid-teens SHOP NOI growth, that was the driver behind that math. What has changed from our prior calls is that now we have some experience with the portfolio. We are really confident in what we are assembling and what the deal team is buying.

If you think about the math embedded in that same-store portfolio, we think you can get double-digit—around 10%—NOI growth even without occupancy increases, with a 170 to 200 basis point spread between RevPOR and expense growth. Our guidance includes 140 basis points of occupancy increase and 14% growth at the midpoint; if you strip out occupancy to be conservative, we are still comfortable with around 10% NOI growth assuming about a 5% RevPOR increase. We have seen recent history sustain that. Step back and look at overall supply-demand dynamics—baby boomers turning 80, lack of new supply—and we feel more confident in a higher growth profile going forward.

Richard Anderson: You mentioned platform investments being made that you expect to be largely completed and scalable by the end of this year. You and others are growing SHOP through external sources, but then you have to operate it, and you are married to it. How do you stress test the future of your SHOP portfolio? Things can get complicated in this business. What types of people are you bringing in, and what are you doing to manage through tougher environments?

Pamela J. Shelley-Kessler: Rich, no one thinks it is a layup. We fully understand and appreciate the intensity with which you build the SHOP portfolio and operations. As we have discussed, we seek out the best managers that are the best in their markets, with strong track records. We supplement that with the data and analytics that Gibson has talked about to help arrive at better decision-making. Our value-add to operators is helping them with aggregating data. That is an expensive task, and that is what we have undertaken. We have hired people to help with data analytics, and we have hired strong asset managers with historical track records managing SHOP portfolios.

If you are going to do SHOP, you have to go all in. We have fundamentally changed the way this company thinks and operates, and the way we acquire properties. We are not managers; we are hiring the best managers and helping them create the best outcomes for our portfolio.

Clint B. Malin: One thing we have done on top of that is be very strategic with the portfolio we are acquiring—newer assets. We have retained the managers on the majority of all but one community we have closed to date. We have done this by design to curate a stabilized portfolio with the ability to drive continued improvement that Gibson spoke about. We are building larger, newer assets that can compete. We have the combination of the people and the assets to be successful. We have been in the business a long time, and we know this takes a lot of work.

J. Gibson Satterwhite: Rich, I will add: the structure is relatively new to LTC Properties, Inc. in terms of our implementation, but we have been hard at work over the last 18 to 20 months, very deliberate about forming a plan, working through the issues with the initial conversions, and executing on that plan. Zooming out, we have had exposure to private-pay senior housing, and we have all been in the business for a long time. We are acutely aware of the challenges operators face. It is a tough business. We feel we have aligned with good operators and hired experienced people on the team, and we want to be there to support them.

Richard Anderson: My last question: when you think about structurally how you are compensating your managers, what is the mindset? Percentage of revenues, NOI, incentive-based? Is there a specific model, or is it case by case?

Clint B. Malin: It is a general model we are following. We look at base fees calculated on revenues as well as the bottom line—we think that helps align interests in the current 12-month period. We set budgets together, and if budgets are exceeded, we look to reward our operating partners with incentive fees. We are also aligning interests long term with synthetic promotes over time, so that when operators make decisions today between growing occupancy or rate, it is with a mindset of how it can benefit the communities long term and allow them to achieve financial awards through a synthetic promote structure a couple of years down the road.

So, current 12 months, the ability to beat the budget, and a long-term horizon on overall performance—we think that is a good alignment of interests for both parties.

Richard Anderson: Great. Thanks, Clint. Thanks, everyone.

Clint B. Malin: Thank you.

Operator: Next, we will move to Michael Albert Carroll with RBC.

Michael Albert Carroll: Yes, thanks. Looking at your SHOP operator list, it looks like you have a number of operators within your portfolio. 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?

Clint B. Malin: This is Clint. We started this investment platform mid-year last year through the initial conversions. We would look to grow with all of the operators with whom we have built relationships, and we will be adding three more relationships following this. This is a testament to the effort we put in back in 2024 when we first announced we were going in this direction. We took the time to go out and market what we were doing and let operators know, and this is the result of that intentional effort. Yes, we would look to grow with each one of these operators.

Michael Albert Carroll: Is it harder if there are more operators within the SHOP portfolio? Is there a limit—are you fine with what you have now since you are adding three more? Is there a number you want to cap to make sure you can track each relationship?

Pamela J. Shelley-Kessler: We have not set any limit. It really comes down to the investment opportunities. As Clint mentioned in his remarks and follow-up Q&A, the majority of our investment opportunities are coming from our operators off-market. To the extent that this is the source of deal flow for us, we would not limit that. We are targeting the best operators in the geographic regions in which we have properties and where we are looking to grow. We would not limit it, though there is a law of diminishing returns. We would not have something like 50 operators, but where we are now and adding operators in the next year or two is very manageable by our asset management team.

J. Gibson Satterwhite: We have built into our staffing plan additional resources. The core platform Rich was just asking about—we feel all the major pieces will be in place to allow us to scale, and we have a staffing plan aligned with our growth strategy.

Michael Albert Carroll: Switching gears back to the SNF sales. Have you started marketing some of these portfolios, or is it something you would consider if something came up?

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

Michael Albert Carroll: Is there a specific size we should think about for potential sales? Could it be $100-plus million, or is it too early?

Clint B. Malin: It would be situational depending on what comes up. It could be larger or smaller.

Michael Albert Carroll: Okay, great. Thanks. Appreciate it.

Clint B. Malin: Thank you.

Operator: Our next question will come from Omotayo Tejumade Okusanya with Deutsche Bank.

Omotayo Tejumade Okusanya: Yes, good morning, everyone. 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? Are you targeting different market segments, or how should we think about what is being bought relative to the initial 13?

Pamela J. Shelley-Kessler: Thanks, Tayo. It is a very simple explanation. Go back to the original 13 properties in February: 12 of those were memory care. Memory care has a much higher RevPOR. As you see us adding more traditional seniors housing properties into our SHOP portfolio—a mix of IL, AL, and memory care—you see that gradually go down. There is nothing to read into that other than the mix of the portfolio changing as we diversify away from standalone memory care.

Operator: There are no further questions at this time. I would like to turn the floor back to Clint B. Malin for any closing remarks.

Clint B. Malin: Thank you. Thanks to everyone on today's call for your ongoing support. We look forward to updating you on our progress next quarter, as well as seeing some of you at upcoming investor conferences.

Operator: Thank you. This does conclude today's teleconference. You may disconnect your lines at this time.