American Healthcare Reit, Inc. · NYSE:AHR
American Healthcare Reit — Investor Presentation (September 2024)
53 slides from American Healthcare Reit's investor presentation, Sep 6, 2024
Slide 1: Investor Presentation September 2024
I N V E S T O R P R E S E N T A T I O N S E P T E M B E R 2 0 2 4 EXHIBIT 99.2
Slide 2: Forward-Looking Statements
2 FORWARD-LOOKING STATEMENTS Certain statements contained in this presentation, including statements relating to American Healthcare REIT, Inc.’s (the ”Company,” “its,” “we,” “our,” “us,” or “AHR”) expectations regarding its portfolio growth, interest expense savings, balance sheet, net income (loss
Slide 3: FFO, NFFO and NOI Non-GAAP Measures
3 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
Slide 4: Management Participants
MANAGEMENT PARTICIPANTS Brian Peay CFO Gabe Willhite COO Stefan Oh CIO Alan Peterson VP, Investor Relations & Finance 4
Slide 5: Recent Highlights
RECENT HIGHLIGHTS
Slide 6: Recent Highlights | Q2 2024 Portfolio Performance
$0 $10 $20 $30 $40 $50 $60 $70 ISHC Outpatient Medical SHOP Triple-Net Leased Total Same- Store M ill io ns Q2 2023 Q2 2024 +24.1% 88.5% 1.29x+49.1% +15.7% SAME-STORE Q2 2024 REVENUE GROWTH SAME-STORE Q2 2024 NOI GROWTH SS ISHC / Trilogy NOI GROWTH(1) SS OUTPATIENT MEDICAL OCCUPANCY(2) SS SHOP NOI G
Slide 7: Q2 2024 Earnings Highlights and Occupancy Update
SAME-STORE OCCUPANCY UPDATE BY PROPERTY SEGMENT (1) (2) Reported sector-leading NOI growth, highlighted by results from the Company’s managed segments, comprised of Integrated Senior Health Campuses and SHOP. Increased Full Year 2024 Same-Store NOI growth guidance for the Company’s total portfolio a
Slide 8: Washington Portfolio Acquisition
8 WASHINGTON PORTFOLIO ACQUISITION Portfolio acquired on September 3, 2024, through deed-in-lieu/loan assumption of $36.2M / $149,500 per unit 242 units on 4 properties Existing debt carries 4.54% interest rate and January 2028 maturity Cogir Senior Living and Compass Senior Living installed as new
Slide 9: AHR Overview
AHR OVERVIEW
Slide 10: AHR Key Differentiators
Diversified High-Quality Asset Base Diversified healthcare-focused REIT with attractive mix of tenants and operators, considerable portfolio size, scale, and national footprint Senior Housing Focus with Over Half of Portfolio in Operating Portfolio/RIDEA Positioned well for multiyear senior housing
Slide 11: Experienced Management Team Committed to Excellence
EXPERIENCED MANAGEMENT TEAM COMMITTED TO EXCELLENCE Commitment to High- Quality Care Standards • Focused on high quality outcomes for care received in the Company’s properties • Partner with mission-driven regional operators • Outcomes evidenced by best-in- class CMS Star ratings Healthcare Real Est
Slide 12: Portfolio Composition
Integrated Senior Health Campuses (ISHC), 48.6% Outpatient Medical (OM), 25.2% Senior Housing Operating Properties (SHOP), 12.1% Triple-Net Leased Properties, 11.6% Debt Security Investment, 2.5% 12 PORTFOLIO COMPOSITION (as of 6/30/2024) Q2 2024 PRO-RATA CASH NOI % BY SEGMENT Powerful secular trend
Slide 13: Portfolio Key Stats
2.9% Same-Store NOI Growth 1.29x EBITDAR Coverage 13 126 Campuses 86.4% Same-Store Occupancy (1) 24.1% Same-Store NOI Growth 76.6% Quality Mix as % of Revenue 63% 4- or 5- Star Overall CMS Rating 83 Properties 88.5% Same-Store Occupancy (2) 4.4 million Consolidated GLA (sq ft) ~76% On-Campus, Adjace
Slide 14: Senior Housing & Care Trends
SENIOR HOUSING & CARE TRENDS
Slide 15: Fundamentals Favorable as Demand Increases and Absorption Remains Elevated
-20,000 -15,000 -10,000 -5,000 0 5,000 10,000 15,000 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Inventory Growth Absorption 36% 14% 24% 20% 45% 28% 32% 27% 28% 24% 50% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% California District of Columbia Illinoi
Slide 16: Multi-Year Tailwind from Limited New Supply
100 105 110 115 120 125 130 135 140 Ja n- 20 A pr -2 0 Ju l- 20 O ct -2 0 Ja n- 21 A pr -2 1 Ju l- 21 O ct -2 1 Ja n- 22 A pr -2 2 Ju l- 22 O ct -2 2 Ja n- 23 A pr -2 3 Ju l- 23 O ct -2 3 Ja n- 24 A pr -2 4 In de xe d to 10 0 at J an ua ry 2 02 0 Construction Index (2) 16 MULTI-YEAR TAILWIND FROM LI
Slide 17: Operating Portfolio: ISHC/Trilogy and SHOP
OPERATING PORTFOLIO I S H C / T R I L O G Y A N D S H O P
Slide 18: Senior Housing RIDEA Focus Through Operating Portfolio
18 SENIOR HOUSING RIDEA FOCUS THROUGH OPERATING PORTFOLIO OPERATING PORTFOLIO STRATEGY (as of 6/30/2024) 60.7% SHOPISHC / Trilogy Pro-Rata Cash NOI as % of Total Portfolio REGIONAL PRESENCE TRACK RECORD OF SUCCESS COMMITMENT TO EXCELLENCE PROPER ALIGNMENT OF GOALS AND INCENTIVES SHARING BEST PRACTIC
Slide 19: Integrated Senior Health Campuses / Trilogy Overview
• ABILITY TO AGE-IN-PLACE WITH FULL CONTINUUM OF CARE o Unique mix of senior housing (AL/IL/MC) units (~43%) and skilled nursing beds (~57%) on same campus • PURPOSE-BUILT FACILITIES o Average age of campuses/facilities of 9.7 years • EFFICIENCIES FROM SIZE AND GEOGRAPHIC CONCENTRATION • HIGH-QUALIT
Slide 20: Defining Integrated Senior Health Campus
Defining Integrated Senior Health Campus SHOP Operators’ Focus SNF Operators’ Focus TRILOGY’S FOCUS (+limited IL) CCRC Operators’ Primary Focus (+limited AL/SNF) Assisted Living Units Skilled Nursing Units • One facility that brings together various levels of senior care (IL/AL/MC/SNF) • Allows for
Slide 21: The Trilogy Moat
building a lasting business THE TRILOGY MOAT REGIONAL SCALE PHYSICAL PLANT Newer, purpose- built facilities with prototype refined for operational efficiency over decades. Modular design allows for expansion to meet demand. OPERATOR OF CHOICE Proven track record of high - quality care, sustained ove
Slide 22: Operator Incentives that Work
Operator Incentives that Work ISHC/Trilogy – A Model of Structuring for Success TRILOGY INVESTORS ORG CHART ALIGNMENT THAT WORKS • Management contract with lower revenue- based fees • Exclusive rights to investment opportunities • Governance by AHR • Long-term incentive plan tied to earnings creates
Slide 23: Senior Housing Operating Properties (SHOP) Overview
• LARGER FOCUS ON NEEDS-BASED CARE VERSUS MORE DISCRETIONARY SENIOR HOUSING o ~79% of total SHOP exposure in Assisted Living and Memory Care Units • HANDS-ON ASSET MANAGEMENT o Asset management personnel that aligns themselves with operating partners to achieve superior operating results • HIGH-QUAL
Slide 24: Regional Focus and Operator Affiliations
TRILOGY MANAGEMENT SERVICES 128 Properties / Campuses 13,174 Beds / Units Headquarters in Louisville, KY REGIONAL FOCUS AND OPERATOR AFFILIATIONS (as of 6/30/2024) Strong Partnerships with High-Quality Regional Operators Improved Market Understanding Driving Further Efficiencies Strong Performance a
Slide 25: Positioned to Capitalize on Organic Growth Opportunities
WITH FAVORABLE AND CONTINUED OPERATING MOMENTUM IN THE SENIOR HOUSING SECTOR WE ARE POSITIONED TO CAPITALIZE ON SEVERAL POTENTIAL ORGANIC GROWTH OPPORTUNITIES Favorable Fundamentals Demographic tailwinds driving continued demand potential for healthcare especially the Company’s senior housing facili
Slide 26: Operating Portfolio Senior Housing Demonstrating Robust Organic Growth
24.1% 49.1% 28.3% 18.2% 0% 10% 20% 30% 40% 50% 60% AHR Trilogy AHR SHOP AHR RIDEA Healthcare REIT Peers 7.8% 11.8% 8.5% 7.8% 0% 2% 4% 6% 8% 10% 12% 14% AHR Trilogy AHR SHOP AHR RIDEA Healthcare REIT Peers 86.4% 86.8% 84.8% 85.5% 79.9% 81.9% AHR Trilogy AHR SHOP Healthcare REIT Peers OPERATING PORTFO
Slide 27: Outpatient Medical
OUTPATIENT MEDICAL
Slide 28: Outpatient Medical Overview, Tenants and Markets
Christus Good Shepherd Health System 7.7% A+ Mercy Health 4.6% A+ Prime Healthcare 4.2% B- Montefiore Medical Center 2.5% BBB- Atrius Health, Inc. 2.2% BBB Total 21.2% Texas 13 Georgia 10 Colorado 5 Illinois 5 Alabama 4 Total 37 4.4M GLA 83 Properties 88.5% Same-Store Occupancy ~76% On-Campus, Adjac
Slide 29: Capital Allocation
CAPITAL ALLOCATION
Slide 30: Proven and Measured Capital Allocation Experience
PROVEN AND MEASURED CAPITAL ALLOCATION EXPERIENCE TO NAVIGATE AND IDENTIFY THE BEST RISK-ADJUSTED RETURNS CAPITAL ALLOCATION – STRATEGIC SOURCES AND USES ~$116.8 million of dispositions over the last year at a mid-5% wtd. avg. cap rate(1) Growing cash flow from property operations $772.8 million Pub
Slide 31: Trilogy Purchase Option
Purchase Option Description Payment Optionality Cash Cash + Perpetual Convertible Preferred Shares • Option to acquire 24% minority joint venture partner’s membership interest (equity & net debt) in Trilogy REIT Holdings. If exercised, AHR’s indirect ownership of Trilogy would increase to 100%. • Op
Slide 32: Trilogy Has Robust Development Capabilities
TRILOGY HAS ROBUST DEVELOPMENT CAPABILITIES +37.6% INCREASE IN BEDS/UNITS SINCE 2015 1. The decrease in SNF bed count in 2022 is a result of two property sales. • Trilogy has added 29 new campuses since AHR acquired it in 2015 • Demonstrated ability to develop multiple new facilities each year • His
Slide 33: External Growth Opportunities & Investments
EQUITIZED MEZZANINE DEBT IN OREGON PORTFOLIO (2024) TRILOGY EXTERNAL GROWTH OPPORTUNITIES & INVESTMENTS • Portfolio acquired on February 1, 2024, through deed-in-lieu/loan assumption of $94.5M / $110,000 per unit • 856 beds on 14 properties • Existing debt carries 4.54% interest rate and January 202
Slide 34: Partnered with Existing Operator to Acquire Distressed Portfolio
34 PARTNERED WITH EXISTING OPERATOR TO ACQUIRE DISTRESSED PORTFOLIO SSMG SNAPSHOT • Headquarters: Atlanta, Georgia • 19 properties/1,596 units managed for AHR • 37 total facilities operated • In December 2022, took ownership of a distressed portfolio of seven senior housing assets located in Texas •
Slide 35: Capital Markets & Balance Sheet
CAPITAL MARKETS & BALANCE SHEET
Slide 36: Debt Maturity Schedule and Key Debt Metrics
$0 $100 $200 $300 $400 $500 $600 Fixed Rate Floating Rate 4.92% WEIGHTED AVERAGE INTEREST RATE KEY DEBT METRICS (1) 1. Total AHR debt, debt maturity schedule and debt metrics are shown Pro-Rata. 2. Reflects $750 million of in-place interest rate swaps. 3. Mortgage loans insured with HUD and shown as
Slide 37: Management & Governance
MANAGEMENT & GOVERNANCE
Slide 38: Management Team
Kenny Lin EVP, Deputy Chief Financial Officer and Chief Accounting Officer 18 • Former EVP, Accounting & Finance of Griffin- American Healthcare REIT III and IV • Former CFO of Mobilitie, LLC, the largest private cellular tower company in the US prior to its sale to SBA Communications Corp (NASDAQ:
Slide 39: Experienced Board of Directors with Strong Governance
Marvin O’Quinn (Director since 2023) • Served as President & COO of CommonSpirit Health • Formerly Senior Executive Vice President, COO of Dignity Health Valerie Richardson (Director since 2023) • Currently serves as COO of ICSC • Currently serving on the board of directors of KIMCO Realty (NYSE: KI
Slide 40: Environmental Social Governance
ENVIRONMENTAL SOCIAL GOVERNANCE • Completed Materiality Assessment with independent ESG consultant in October 2022, setting ESG strategy • Improved energy, water and waste management policies and practices in the Company’s offices and properties • LEED-certified corporate headquarters • Energy effic
Slide 41: Appendix
APPENDIX
Slide 42: ISHC/Trilogy Segment Representative Properties
ISHC/TRILOGY SEGMENT REPRESENTATIVE PROPERTIES AVERAGE AGE OF CAMPUSES/FACILITIES9.7 YEARS 42
Slide 43: Definitions
• Adjusted EBITDA: EBITDA excluding the impact of gain or loss from unconsolidated entities, straight line rent and amortization of above/below market leases, non-cash stock-based compensation expense, business acquisition expenses, gain or loss on sales of real estate investments, unrealized foreig
Slide 44: Definitions (continued)
• NAREIT FFO or FFO: Funds from operations attributable to controlling interest; a non-GAAP financial measure, consistent with the standards established by the White Paper on FFO approved by the Board of Governors of NAREIT (the “White Paper”). The White Paper defines FFO as net income (loss) comput
Slide 45: Definitions (continued)
entities and the properties these entities own, as of the applicable date, and not on a consolidated basis. In such instances, information is noted as being presented on a “Pro-Rata share” basis. • Quality Mix: Total number of Medicare, Managed Care, Medicare Advantage and private days of revenue di
Slide 46: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS 461. All quarters based upon ownership percentage as of most recent quarter end. NOTE: Dollars shown in thousands, except per share amounts within all Non-GAAP Reconciliations. Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 YTD 6/30/23 YTD 6/30/24 Net (loss) income $ (11,867) $ (6,
Slide 47: Non-GAAP Reconciliations: NOI and Same-Store NOI
NON-GAAP RECONCILIATIONS The following is a reconciliation of NOI (excluding Grant Income) to Cash NOI and Same-Store NOI (relating to Same-Store properties) for the quarterly and year-to-date periods shown below: 471. All quarters based upon ownership percentage as of most recent quarter end. 2. Pr
Slide 48: Non-GAAP Reconciliations: NOI and Same-Store NOI
NON-GAAP RECONCILIATIONS The following is a reconciliation of NOI (excluding Grant Income) to Cash NOI and Same-Store NOI (relating to Same-Store properties) for the quarterly and year-to-date periods shown below: 481. All quarters based upon ownership percentage as of most recent quarter end. 2. Pr
Slide 49: Non-GAAP Reconciliations: Revenue
NON-GAAP RECONCILIATIONS The following is a reconciliation of GAAP revenue to Cash revenue and Same-Store revenue (relating to Same-Store properties) for the quarterly and year-to-date periods shown below: 491. All quarters based upon ownership percentage as of most recent quarter end. 2. Prior quar
Slide 50: Non-GAAP Reconciliations: Revenue
NON-GAAP RECONCILIATIONS The following is a reconciliation of GAAP revenue to Cash revenue and Same-Store revenue (relating to Same-Store properties) for the quarterly and year-to-date periods shown below : 501. All quarters based upon ownership percentage as of most recent quarter end. 2. Prior qua
Slide 51: Non-GAAP Reconciliations: FFO and Normalized FFO
NON-GAAP RECONCILIATIONS (1) The following is a reconciliation of Net income (loss) to FFO and Normalized FFO for the three months and six months ended June 30, 2024 and 2023: 511. Totals may not add due to rounding. QTD YTD Q2 2024 Q2 2023 2024 2023 Net income (loss) $ 2,926 $ (11,867) $ (78) $ (39
Slide 52: Non-GAAP Reconciliations: Net Income to Adjusted EBITDA
NON-GAAP RECONCILIATIONS The following is a reconciliation of Net Income to Adjusted EBITDA for the three months ended June 30, 2024: 52 Q2 2024 Net Income $ 2,926 Adjustments: Interest expense (including amortization of deferred financing costs, debt discount/premium and loss on debt extinguishment
Slide 53: Non-GAAP Reconciliations: Interest Coverage Ratios and Net Debt
NON-GAAP RECONCILIATIONS (1) The following is a reconciliation of Interest Coverage Ratios and Net Debt for the three months ended June 30, 2024: 53 1. The details of the Adjusted EBITDA calculation can be found on the previous page. 2. Non-cash interest expense includes amortization of loan fees an
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