American Healthcare REIT (AHR) Nareit REIT Week: 2024 Investor Conference summary

Company overview and strategy

• Formed in 2021 through a tri-party merger and recently completed an IPO, raising $770 million to pay down short-term floating rate debt.

• Focuses on clinical healthcare real estate, primarily medical outpatient buildings and long-term care, with a diversified asset strategy.

• Portfolio is about $4.5 billion in assets, with a significant portion in managed (RIDEA) assets, especially the Trilogy integrated senior health campuses.

• Trilogy is the largest and best-performing investment, operating in four Midwest states and emphasizing high-acuity, purpose-built facilities.

Market trends and portfolio performance

• Occupancy rates have grown strongly post-COVID, driven by supply-demand imbalance and the aging baby boomer population.

• New construction in the sector has been minimal since 2018 due to lender restrictions, high costs, and COVID, keeping supply tight.

• Margin and RevPOR growth have been robust, with expense growth normalizing to pre-pandemic levels.

• Earnings growth is expected to be primarily organic over the next three to five years, with continued margin and RevPAR improvement.

Trilogy model and operational advantages

• Trilogy’s integrated model offers skilled nursing, assisted living, memory care, and independent living, with efficient shared resources and high-quality outcomes.

• Facilities are newer, highly rated, and attractive to residents due to quality, security, and on-site care options.

• Regional concentration in the Midwest enables operational efficiencies, staff training, and a flexible in-house nursing force.

• Trilogy’s labor retention and training programs have resulted in turnover rates half the industry average and strong compliance with new staffing mandates.