NHI Earnings Call: Growth Amidst Challenges

National Health Investors ((NHI)) has held its Q3 earnings call. Read on for the main highlights of the call.

National Health Investors (NHI) recently held its third-quarter 2025 earnings call, revealing a generally positive sentiment despite some challenges. The call highlighted significant growth and strategic investments in the SHOP portfolio, reflecting the company’s robust financial health. However, concerns were raised regarding the decline in same-store SHOP NOI and the uncertainty surrounding the NHC lease renewal. The company is actively addressing these operational challenges while leveraging its strong balance sheet.

Strong SHOP Portfolio Growth

The transition of seven properties to the SHOP portfolio has resulted in a remarkable 63% growth in consolidated SHOP NOI compared to the previous year’s quarter. This growth is further bolstered by NHI’s first SHOP acquisition, valued at $74.3 million, which is expected to yield substantial NOI.

Increased Guidance and Investment Activity

NHI has raised its guidance for the third time this year, indicating over 10% NFFO per share growth at the midpoint. The company has announced investments totaling $303.2 million so far this year, with approximately $195 million under signed letters of intent, showcasing its proactive investment strategy.

Strong Balance Sheet

The company’s financial stability is evident with a net debt to adjusted EBITDA ratio of 3.6x, which is below the low end of its target range. With over $1 billion in available liquidity, NHI enjoys a competitive advantage in the market.

Bickford Portfolio Performance

The Bickford portfolio showed positive momentum with a 90 basis point increase in third-quarter occupancy, reaching 86.1%. The trailing 12-month EBITDARM coverage stood at 1.49x, with ongoing deferred rent repayments.

Same-Store SHOP NOI Decline

Despite overall growth, the same-store SHOP NOI for 15 legacy Holiday properties saw a 2.2% decline year-over-year. Occupancy also decreased by 110 basis points from the third quarter of 2024 and 160 basis points sequentially, indicating areas for improvement.

NHC Lease Renewal Uncertainty

There is ongoing uncertainty regarding the NHC lease renewal, with potential default issues and legal complexities surrounding the renewal notice. This situation could potentially lead to arbitration or litigation.

Challenges with SHOP Operations

Operational challenges such as higher move-outs, key personnel changes, and nonrecurring costs have impacted results, leading to adjusted same-store NOI growth for the year.

Forward-Looking Guidance

Looking ahead, NHI has provided strong guidance metrics, projecting a significant increase in consolidated SHOP NOI and more than 10% NFFO per share growth. The company plans to expand its presence in private pay senior housing, with expectations for SHOP NOI to more than double by 2026, reaching at least 20% of total adjusted NOI.

In summary, National Health Investors’ earnings call presented a mixed yet optimistic outlook. While the company is experiencing significant growth and strategic investments, challenges remain in certain areas. The forward-looking guidance suggests a promising future, with expectations of continued growth and expansion in the senior housing sector.