American Healthcare REIT ("AHR") Announces First Quarter 2025 Results; Increases Full Year 2025 Guidance
PR Newswire
IRVINE, Calif., May 8, 2025
IRVINE, Calif., May 8, 2025 /PRNewswire/ -- American Healthcare REIT, Inc. (the "Company," "we," "our," "management," or "us") (NYSE: AHR) announced today its first quarter 2025 results and is increasing full year 2025 guidance.
Key Highlights:
-- Reported GAAP net loss attributable to controlling interest of $(6.8)
million and GAAP net loss attributable to common stockholders of $(0.04)
per diluted share for the three months ended March 31, 2025.
-- Reported Normalized Funds from Operations attributable to common
stockholders ("NFFO") of $0.38 per diluted share for the three months
ended March 31, 2025.
-- Achieved total portfolio Same-Store Net Operating Income ("NOI") growth
of 15.1% for the three months ended March 31, 2025, compared to the same
period in 2024.
-- Achieved 30.7% and 19.8% Same-Store NOI growth during the three months
ended March 31, 2025, from its senior housing operating properties
("SHOP") and integrated senior health campuses ("ISHC"), respectively,
compared to the same period in 2024.
-- During the three months ended March 31, 2025, the Company completed a
lease buyout in its ISHC segment for approximately $16.1 million.
-- During the three months ended March 31, 2025, the Company issued
1,577,113 shares of common stock through its at-the-market equity
offering program ("ATM program") for gross proceeds of approximately
$47.7 million.
-- Increasing total portfolio Same-Store NOI growth guidance for the year
ending December 31, 2025, by 250 basis points at the midpoint from a
range of 7.0% to 10.0% to a revised range of 9.0% to 13.0%, primarily due
to strong operating results in its ISHC and SHOP segments during the
three months ended March 31, 2025.
-- Increasing NFFO guidance for the year ending December 31, 2025, by $0.03
at the midpoint from a range of $1.56 to $1.60 to a revised range of
$1.58 to $1.64, due to increased expectations for full year 2025 NOI
growth for its Same-Store portfolio and accretive capital markets
activity completed during the first quarter of 2025.
-- Reported Net Debt-to-Annualized Adjusted EBITDA of 4.5x as of March 31,
2025.
"The year is progressing as planned, and we have successfully raised capital at attractive prices to support our anticipated external investments and development initiatives, all while preserving ample capacity to pursue opportunistic growth," said Danny Prosky, the Company's President and Chief Executive Officer. "Despite a challenging winter season, strong demand for long-term care led to great performance for our diversified healthcare portfolio, as demand helped mitigate any previously anticipated occupancy losses during the quarter. Our regional operating partners played a critical role in delivering high-quality care during this period, particularly within our higher-acuity long-term care settings. For the balance of 2025, we expect demand to continue strengthening as we enter the warmer spring and summer selling seasons."
First Quarter 2025 Results
The Company's Same-Store NOI growth results for the three months ended March 31, 2025, are detailed below. Same-Store NOI growth results from its operating portfolio, comprised of ISHC and SHOP segments, led the Company's growth in the first quarter of 2025, compared to the same period in 2024, supported by proactive expense management, incremental occupancy gains, and mid-single-digit RevPOR growth.
Three Months Ended March 31, 2025 Relative to Three Months Ended March 31,
2024
------------------------------------------------------------------------------
Segment Same-Store NOI Growth
------------------------------------------- ---------------------------------
ISHC 19.8 %
Outpatient Medical 2.0 %
SHOP 30.7 %
Triple-Net Leased Properties (1.4) %
Total Portfolio 15.1 %
------------------------------------------- ---------------------------------
"Our operating portfolio segments performed well to start the year, and the benefits of Trilogy catering to various levels of long-term care proved to benefit our first quarter performance, which is usually a period of lower growth," said Gabe Willhite, the Company's Chief Operating Officer. "Demand across our campuses and properties for post-acute care skilled nursing beds helped offset the impacts from the colder winter months that we contemplated during the first quarter. As we continue to execute our strategy throughout the remainder of the year, we remain focused on capturing the growing demand for long-term care and leveraging Trilogy's platform to drive additional efficiencies across our operating portfolio."
Transactional Activity
During the three months ended March 31, 2025, the Company:
-- Completed a previously announced lease buyout within its ISHC segment for
approximately $16.1 million.
-- Sold a Non-Core SHOP asset for gross proceeds of approximately $3.3
million, as previously announced.
-- Sold an additional ISHC asset for gross proceeds of approximately $6.7
million.
Subsequent to quarter end, the Company:
-- Closed on a SHOP acquisition that was previously under contract for
approximately $65.0 million. Upon closing, the Company transitioned
operations to one of its regional operating partners, Heritage Senior
Living.
-- Sold three Non-Core Properties for gross proceeds of approximately $29.0
million. Proceeds from these sales will be used to fund future SHOP
acquisitions with better risk-adjusted returns and fund ISHC development
projects that are currently in process.
The Company remains active in pursing new external growth opportunities through various channels. As of May 8, 2025, the Company has developed a pipeline of over $300 million in new potential acquisitions that it has been awarded. These potential acquisitions are in various stages of the transaction process, so the Company cannot guarantee that it will close on all or any of such acquisitions, or provide certainty regarding timing of closing. As such, the Company is not factoring in any awarded acquisitions in its current full year 2025 guidance.
Development Activity
The Company started two new development projects during the three months ended March 31, 2025. The Company's total in-process development pipeline is expected to cost approximately $60.0 million, of which $19.7 million has been spent as of March 31, 2025.
Capital Markets and Balance Sheet Activity
As of March 31, 2025, the Company's total consolidated indebtedness was $1.67 billion, and it had approximately $634.5 million of total liquidity, comprised of cash, restricted cash and undrawn capacity on its line of credit. The Company's Net-Debt-to-Annualized Adjusted EBITDA as of March 31, 2025, was 4.5x.
During the three months ended March 31, 2025, the Company issued 1,577,113 shares of common stock through its ATM program for gross proceeds of approximately $47.7 million, at an average price of $30.22 per share. As of March 31, 2025, the remaining amount available under the ATM program for future sales of common stock was approximately $332.1 million.
"During the first quarter, we took advantage of a favorable cost of capital by continuing to enhance our balance sheet to support our external growth plans," said Brian Peay, the Company's Chief Financial Officer. "In addition, demand within our ISHC segment exceeded the growth expectations we previously contemplated in the first quarter, coupled with the strong foundation we've built in our SHOP segment to capture demand in the busier spring and summer selling seasons, are enabling us to raise our full-year 2025 NOI growth and earnings guidance. These updates reflect both Trilogy's strong operating performance and the accretive capital markets activity we executed early in the year."
Full Year 2025 Guidance
The Company is increasing guidance for the year ending December 31, 2025 to reflect its improved outlook on operations, capital markets activity and capital allocation activity executed during the first quarter of 2025, as well as activity completed subsequent to quarter end. Guidance does not assume additional transaction or capital markets activity beyond the items previously disclosed or items disclosed in this earnings release. Updated guidance ranges are detailed below:
Full Year 2025 Guidance
------------------------ ----------------------------------------------------
Metric Midpoint Current FY 2025 Range Prior FY 2025 Range
------------------------ -------- --------------------- -------------------
Net income per diluted $0.32 $0.29 to $0.35 $0.26 to $0.30
share
NAREIT FFO per diluted $1.52 $1.49 to $1.55 $1.49 to $1.53
share
NFFO per diluted share $1.61 $1.58 to $1.64 $1.56 to $1.60
Total Portfolio SS NOI 11.0 % 9.0% to 13.0% 7.0% to 10.0%
Growth
Segment-Level SS NOI
Growth / (Decline):
ISHC 14.0 % 12.0% to 16.0% 10.0% to 12.0%
Outpatient Medical 0.0 % (1.0%) to 1.0% (1.0%) to 1.0%
SHOP 22.0 % 20.0% to 24.0% 18.0% to 22.0%
Triple-Net Leased (1.0 %) (1.5%) to (0.5%) (1.5%) to (0.5%)
Properties
------------------------ -------- --------------------- -------------------
Certain of the assumptions underlying the Company's 2025 guidance can be found
within the Non-GAAP reconciliations in this earnings release and in the
appendix of the Company's First Quarter 2025 Supplemental Financial
Information ("Supplemental"). A reconciliation of net income (loss) calculated
in accordance with GAAP to NAREIT FFO and NFFO can be found within the
Non-GAAP reconciliations in this earnings release. Non-GAAP financial measures
and other terms, as used in this earnings release, are also defined and
further explained in the Supplemental. The Company is unable to provide
without reasonable effort guidance for the most comparable GAAP financial
measures of total revenues and property operating and maintenance expenses.
Additionally, a reconciliation of the forward-looking Non-GAAP financial
measures of Same-Store NOI growth to the comparable GAAP financial measures
cannot be provided without unreasonable effort because the Company is unable
to reasonably predict certain items contained in the GAAP measures, including
non-recurring and infrequent items that are not indicative of the Company's
ongoing operations. Such items include, but are not limited to, impairment on
depreciated real estate assets, net gain or loss on sale of real estate
assets, stock-based compensation, casualty loss, non-Same-Store revenue and
non-Same-Store operating expenses. These items are uncertain, depend on
various factors and could have a material impact on the Company's GAAP results
for the guidance period.
Distributions
As previously announced, the Company's Board of Directors declared a cash distribution for the quarter ended March 31, 2025 of $0.25 per share of its common stock. The first quarter distribution was paid in cash on or about April 17, 2025, to stockholders of record as of March 31, 2025.
Supplemental Information
The Company has disclosed supplemental information regarding its portfolio, financial position and results of operations as of, and for the three months ended, March 31, 2025, and certain other information, which is available on the Investor Relations section of the Company's website at https://ir.americanhealthcarereit.com.
Conference Call and Webcast Information
The Company will host a webcast and conference call at 1:00 p.m. Eastern Time on May 9, 2025. During the conference call, Company executives will review first quarter 2025 results, discuss recent events and conduct a question-and-answer period.
To join via webcast, investors may use the following link: https://events.q4inc.com/attendee/236503465.
To join the live telephone conference call, please dial one of the following numbers at least five minutes prior to the start time:
North America - Toll-Free: (800) 715-9871
International Toll: +1 (646) 307-1963
Conference ID: 2930459
A digital replay of the call will be available on the Investor Relations section of the Company's website at https://ir.americanhealthcarereit.com shortly after the conclusion of the call.
Forward-Looking Statements
Certain statements contained in this press release, including statements relating to the Company's expectations regarding its performance, interest expense savings, balance sheet, net income or loss per diluted share, NAREIT FFO per diluted share, NFFO per diluted share, total portfolio Same-Store NOI growth, segment-level Same-Store NOI growth or decline, occupancy, NOI growth, revenue growth, margin expansion, purchases and sales of assets, development plans, and plans for Trilogy may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The Company intends for all such forward-looking statements to be covered by the applicable safe harbor provisions for forward-looking statements contained in those acts. Such forward-looking statements generally can be identified by the use of forward-looking terminology, such as "may," "will," "can," "expect," "intend," "anticipate," "estimate," "believe," "continue," "possible," "initiatives," "focus," "seek," "objective," "goal," "strategy," "plan," "potential," "potentially," "preparing," "projected, " "future," "long-term," "once," "should," "could," "would," "might," "uncertainty" or other similar words. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Any such forward-looking statements are based on current expectations, estimates and projections about the industry and markets in which the Company operates, and beliefs of, and assumptions made by, the Company's management and involve known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied therein, including, without limitation, risks disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2024, filed on February 28, 2025, and other periodic reports filed with the Securities and Exchange Commission. Except as required by law, the Company does not undertake any obligation to update or revise any forward-looking statements contained in this release.
Non-GAAP Financial Measures
The Company's reported results are presented in accordance with GAAP. The Company also discloses the following non-GAAP financial measures: EBITDA, Adjusted EBITDA, Net Debt-to-Annualized Adjusted EBITDA, NAREIT FFO, NFFO, NOI and Same-Store NOI. The Company believes these non-GAAP financial measures are useful supplemental measures of its operating performance and used by investors and analysts to compare the operating performance of the Company between periods and to other REITs or companies on a consistent basis without having to account for differences caused by unanticipated and/or incalculable items. Definitions of the non-GAAP financial measures used herein and reconciliations to the most directly comparable financial measure calculated in accordance with GAAP can be found at the end of this earnings release. See below and "Definitions" for further information regarding the Company's non-GAAP financial measures.
EBITDA and Adjusted EBITDA
Management uses earnings before interest, taxes, depreciation and amortization ("EBITDA") and Adjusted EBITDA to facilitate internal and external comparisons to our historical operating results and in making operating decisions. EBITDA and Adjusted EBITDA are widely used by investors, lenders, credit and equity analysts in the valuation, comparison, and investment recommendations of companies. Additionally, EBITDA and Adjusted EBITDA are utilized by our Board of Directors to evaluate management. Neither EBITDA nor Adjusted EBITDA represents net income (loss) or cash flows provided by operating activities as determined in accordance with GAAP and should not be considered as alternative measures of profitability or liquidity. Finally, the EBITDA and Adjusted EBITDA may not be comparable to similarly entitled items reported by other REITs or other companies. In addition, management uses Net Debt-to-Annualized Adjusted EBITDA as a measure of our ability to service our debt.
NAREIT Funds from Operations (FFO) and Normalized Funds from Operations (NFFO)
We believe that the use of FFO, which excludes the impact of real estate-related depreciation and amortization and impairments, provides a further understanding of our operating performance to investors, industry analysts and our management, and when compared year over year, reflects the impact on our operations from trends in occupancy rates, rental rates, operating costs, general and administrative expenses and interest costs, which may not be immediately apparent from net income (loss) as determined in accordance with GAAP. However, FFO and NFFO should not be construed to be (i) more relevant or accurate than the current GAAP methodology in calculating net income (loss) as an indicator of our operating performance, (ii) more relevant or accurate than GAAP cash flows from operations as an indicator of our liquidity or (iii) indicative of funds available to fund our cash needs, including our ability to make distributions to our stockholders. The method utilized to evaluate the value and performance of real estate under GAAP should be construed as a more relevant measure of operational performance and considered more prominently than the Non-GAAP FFO and NFFO measures and the adjustments to GAAP in calculating FFO and NFFO. Presentation of this information is intended to provide useful information to investors, industry analysts and management as they compare the operating performance metrics used by the REIT industry, although it should be noted that some REITs may use different methods of calculating funds from operations and normalized funds from operations, so comparisons with such REITs may not be meaningful.
Net Operating Income
We believe that NOI, Cash NOI, Pro-Rata Cash NOI and Same-Store NOI are appropriate supplemental performance measures to reflect the performance of our operating assets because NOI, Cash NOI, Pro-Rata Cash NOI and Same-Store NOI exclude certain items that are not associated with the operations of the properties. We believe that NOI, Cash NOI, Pro-Rata Cash NOI and Same-Store NOI are widely accepted measures of comparative operating performance in the real estate community and is useful to investors in understanding the profitability and operating performance of our property portfolio. However, our use of the terms NOI, Cash NOI, Pro-Rata Cash NOI and Same-Store NOI may not be comparable to that of other real estate companies as they may have different methodologies for computing these amounts.
NOI, Cash NOI, Pro-Rata Cash NOI and Same-Store NOI are not equivalent to our net income (loss) as determined under GAAP and may not be a useful measure in measuring operational income or cash flows. Furthermore, NOI, Cash NOI, Pro-Rata Cash NOI and Same-Store NOI should not be considered as alternatives to net income (loss) as an indication of our operating performance or as an alternative to cash flows from operations as an indication of our liquidity. NOI, Cash NOI, Pro-Rata Cash NOI and Same-Store NOI should not be construed to be more relevant or accurate than the GAAP methodology in calculating net income (loss). NOI, Cash NOI, Pro-Rata Cash NOI and Same-Store NOI should be reviewed in conjunction with other measurements as an indication of our performance.
About American Healthcare REIT, Inc.
American Healthcare REIT, Inc. (NYSE: AHR) is a real estate investment trust that acquires, owns and operates a diversified portfolio of clinical healthcare real estate, focusing primarily on senior housing communities, skilled nursing, and outpatient medical buildings across the United States, and in the United Kingdom and the Isle of Man.
AMERICAN HEALTHCARE REIT, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
As of March 31, 2025 and December 31, 2024
(In thousands, except share and per share amounts) (Unaudited)
March 31, December 31,
2025 2024
--------------------- ----------------------
ASSETS
Real estate investments, net $ 3,337,008 $ 3,366,648
Debt security investment, net 91,698 91,264
Cash and cash equivalents 86,064 76,702
Restricted cash 41,389 46,599
Accounts and other receivables,
net 222,657 211,104
Identified intangible assets,
net 156,426 161,473
Goodwill 234,942 234,942
Operating lease right-of-use
assets, net 153,349 163,987
Other assets, net 140,518 135,338
--------------------- ----------------------
Total assets $ 4,464,051 $ 4,488,057
===================== ======================
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
Liabilities:
Mortgage loans payable, net $ 1,000,489 $ 982,071
Lines of credit and term
loan, net 642,567 688,534
Accounts payable and accrued
liabilities 272,274 258,324
Identified intangible
liabilities, net 2,810 3,001
Financing obligations 34,599 34,870
Operating lease liabilities 153,585 165,239
Security deposits, prepaid
rent and other liabilities 53,019 51,856
--------------------- ----------------------
Total liabilities 2,159,343 2,183,895
Commitments and contingencies
Redeemable noncontrolling
interests 220 220
Equity:
Stockholders' equity:
Preferred stock,
$0.01 par value per
share; 200,000,000 shares
authorized; none issued
and outstanding -- --
Common Stock, $0.01 par
value per share;
700,000,000 shares
authorized; 159,065,005
and 157,446,697
shares issued and
outstanding as of March
31, 2025 and December
31, 2024,
respectively 1,583 1,564
Additional paid-in
capital 3,768,030 3,720,268
Accumulated deficit (1,504,861) (1,458,089)
Accumulated other
comprehensive loss (2,336) (2,512)
--------------------- ----------------------
Total stockholders'
equity 2,262,416 2,261,231
Noncontrolling interests 42,072 42,711
--------------------- ----------------------
Total equity 2,304,488 2,303,942
--------------------- ----------------------
Total
liabilities,
redeemable
noncontrolling
interests and
equity $ 4,464,051 $ 4,488,057
===================== ======================
AMERICAN HEALTHCARE REIT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
For the Three Months Ended March 31, 2025 and 2024
(In thousands, except share and per share amounts) (Unaudited)
Three Months Ended March 31,
--------------------------------------------
2025 2024
--------------------- ---------------------
Revenues:
Resident fees and services $ 497,176 $ 452,118
Real estate revenue 43,427 47,415
Total revenues 540,603 499,533
Expenses:
Property operating expenses 432,423 403,629
Rental expenses 13,643 13,727
General and administrative 13,155 11,828
Business acquisition
expenses 1,837 2,782
Depreciation and
amortization 41,114 42,767
--------------------- ---------------------
Total expenses 502,172 474,733
Other income (expense):
Interest expense:
Interest expense (22,945) (36,438)
(Loss) gain in fair
value of derivative
financial instruments (750) 6,417
(Loss) gain on dispositions
of real estate
investments, net (359) 2,263
Impairment of real estate
investment (21,706) --
Loss from unconsolidated
entities -- --
Foreign currency gain
(loss) 1,416 (426)
Other income, net 1,525 1,863
--------------------- ---------------------
Total net other expense (44,667) (27,526)
--------------------- ---------------------
Loss before income taxes (6,236) (2,726)
Income tax expense (604) (278)
--------------------- ---------------------
Net loss (6,840) (3,004)
Net loss (income)
attributable to
noncontrolling interests 36 (888)
--------------------- ---------------------
Net loss attributable to
controlling interest $ (6,804) $ (3,892)
===================== =====================
Net loss per share of Common
Stock, Class T common stock
and Class I common stock
attributable to controlling
interest:
Basic $ (0.04) $ (0.04)
===================== =====================
Diluted $ (0.04) $ (0.04)
===================== =====================
Weighted average number of
shares of Common Stock, Class
T common stock and Class I
common stock outstanding:
Basic 156,922,819 104,295,142
===================== =====================
Diluted 156,922,819 104,295,142
===================== =====================
Net loss $ (6,840) $ (3,004)
Other comprehensive income
(loss):
Foreign currency
translation
adjustments 176 (43)
--------------------- ---------------------
Total other
comprehensive
income (loss) 176 (43)
--------------------- ---------------------
Comprehensive loss (6,664) (3,047)
Comprehensive loss (income)
attributable to
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