American Healthcare REIT, Inc. ((AHR)) has held its Q3 earnings call. Read on for the main highlights of the call.
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The latest earnings call from American Healthcare REIT, Inc. painted a picture of robust performance and strategic growth, despite some anticipated challenges. The company reported significant growth in same-store NOI and highlighted successful acquisition strategies. Improvements in debt metrics and an increased guidance for 2025 were also key takeaways. However, the company acknowledged potential growth headwinds from slower Medicare rate increases and possible seasonal impacts.
Strong Same-Store NOI Growth
American Healthcare REIT reported an impressive 16.4% growth in same-store NOI across its total portfolio, marking the seventh consecutive quarter of double-digit growth. This consistent performance underscores the company’s ability to maintain and enhance its operational efficiency across its properties.
Successful Acquisitions and Partnerships
The company has been active in expanding its portfolio, closing over $575 million in acquisitions within their RIDEA segments year-to-date. Additionally, American Healthcare REIT has introduced two new operator relationships to broaden its geographic diversification, demonstrating a strategic approach to growth and market penetration.
Normalized FFO Growth
American Healthcare REIT is on track to achieve a 20% growth in normalized FFO per fully diluted share over the previous year. This growth trajectory highlights the company’s strong financial performance and effective management strategies.
Debt Reduction
The company has made significant strides in reducing its debt, with the net debt to EBITDA ratio decreasing to 3.5x by the end of the third quarter. This improvement in debt metrics reflects the company’s commitment to maintaining a strong balance sheet and financial health.
Increased 2025 Guidance
American Healthcare REIT has increased and narrowed its full-year 2025 NFFO guidance to a range of $1.69 to $1.72 per fully diluted share. This adjustment reflects the company’s confidence in its continued strong performance and strategic growth initiatives.
Challenges in Medicare Rate Growth
The company noted a slowdown in Medicare national rate growth to 3.2%, compared to over 6% in the previous year. This deceleration presents a potential growth headwind for the fourth quarter, which the company will need to navigate carefully.
Potential Seasonality Impact
Occupancy trends into the fourth quarter suggest that seasonality could be muted, posing potential challenges in maintaining momentum. The company will need to address these seasonal impacts to sustain its growth trajectory.
Forward-Looking Guidance
During the earnings call, American Healthcare REIT provided updated guidance reflecting its strong performance and strategic growth plans. The company expects continued growth in same-store NOI and has a robust acquisition pipeline. With an improved debt position and increased 2025 guidance, the company is well-positioned for future success.
In summary, American Healthcare REIT’s earnings call highlighted a strong performance with strategic growth initiatives and improved financial metrics. While challenges such as slower Medicare rate growth and potential seasonal impacts were acknowledged, the company’s increased guidance and successful acquisition strategies underscore its positive outlook.