LTC PROPERTIES INC Q1 FY2025 earnings call

• RIDEA platform progress: Transitioned 12 Memory Care properties from triple net leases to SHOP portfolio on May 1st, Anthem portfolio 81% occupied; target closing June 1st for conversion with New Perspective. • Appointed new Chief Investment Officer Dave Boitano, with his expertise from Ventas. • Core FFO and core FAD increased due to lower interest expense, rent increases, etc., partially offset by lower interest income, etc. • Liquidity ~$681 million, debt to annualized adjusted EBITDA 4.3x, annualized adjusted fixed charge coverage ratio 5.0x. • SHOP NOI projected in range of $9.4 million to $10.3 million for 2025; committed $4 million for renovations. • Prestige received retroactive Medicaid payments, security deposit ~$6 million, interest expected through May 2026. • Sold shares under ATM for net proceeds of $9.6 million, used for RIDEA platform investments.

Core FFO per share excluding non-recurring items grew to $0.65 in Q1 2025 from $0.64 in Q1 2024. Core FAD per share excluding non-recurring items increased to $0.7 from $0.67. The RIDEA platform has a SHOP portfolio totaling $176 million in gross book value from cooperative conversion of 13 properties. The pipeline stands at $300 million, with RIDEA opportunities representing approximately 50%.

• Full year 2025 guidance for core FFO per share between $2.65 and $2.69. • Full year 2025 guidance for core FAD per share between $2.78 and $2.82.

• Uncertainty in ALG's ability to refinance affecting guidance. • Market fluctuations impacting financing for conversions. • Occupancy fluctuations in the SHOP portfolio.

Q: What's assumed in guidance with regards to ALG's option to buy those assets and how is that process going?

A: Pam Kessler said ALG is working on financing in uncertain rate environment, guidance assumes they don't refinance and continue to pay full rent.

Q: Color on the $6.5 million lease term payment to New Perspective and payback period?

A: Clint Malin said New Perspective is a stabilized asset, $6.5 million lease termination fee was to reward value creation and provide runway for new opportunities.

Q: Should we expect other triple net to SHOP conversions and percentage of fee simple SHOP in pipeline?

A: Wendy Simpson said 50% of pipeline is RIDEA, some potential for other triple net conversions but not of scale.

Q: How arrived at NOI range for SHOP assets over remaining 8 months and growth implications?

A: Gibson Satterwhite said looked at 2024 pro forma, assuming 85% occupancy, growth driven by lease up in Anthem portfolio and cost reductions.

Q: How arrived at cap rates on SHOP deals and balancing diversification?

A: Clint Malin said focus on operator concentration, looking at deals with one or two assets, SHOP going in yields plus or minus within 7% to 8% range.

Q: Pipeline of conversion activity and focus on property types for SHOP?

A: Pam Kessler said no current plans to convert triple net in portfolio, focus on organic growth; Clint Boitano said not focusing on memory care property type as a growth focus.

Q: Institutionalizing the SHOP platform and needs?

A: Pam Kessler said will continue to build out platform, need to scale up with analysts, FP&A as platform grows.

Q: ALG financial performance and rent deferral?

A: Pam Kessler said no rent deferral this quarter, ALG occupancy increased 150 basis points, change in Medicaid eligibility in North Carolina expected to help occupancy.