8-K: American Healthcare REIT Announces Strong Q4 and Full Year 2024 Results, Issues Positive 2025 Guidance

American Healthcare REIT reports positive Q4 and full year 2024 results driven by strong Same-Store NOI growth, particularly in senior housing, and issues optimistic guidance for 2025.

Summary

• American Healthcare REIT (AHR) announced its fourth quarter and full year 2024 results and issued full year 2025 guidance.
• The company reported a GAAP net loss attributable to controlling interest of $(31.8) million for Q4 2024 and $(37.8) million for the full year.
• Normalized Funds from Operations (NFFO) was $0.40 per diluted share for Q4 and $1.41 per diluted share for the full year.
• Total portfolio Same-Store Net Operating Income (NOI) growth was 21.6% for Q4 and 17.7% for the full year, compared to the same periods in 2023.
• SHOP and ISHC segments drove growth with Same-Store NOI increases of 66.6% and 28.0% in Q4, and 52.8% and 23.8% for the full year, respectively.
• AHR purchased over $650 million of new investments during 2024.
• In November, the company established an at-the-market equity offering program (ATM program) allowing the Company to sell shares of common stock for aggregate gross proceeds of up to $500 million.
• The company issued 4,285,531 shares of common stock from its ATM program during Q4, raising gross proceeds of approximately $120.2 million.
• Total gross proceeds of approximately $1.36 billion were raised through equity offerings and the ATM program during 2024.
• The company is issuing total portfolio Same-Store NOI growth guidance of 7.0% to 10.0% and NFFO per diluted share guidance of $1.56 to $1.60 for the year ending December 31, 2025.
• The company's Net Debt-to-Annualized Adjusted EBITDA improved from 8.5x as of December 31, 2023, to 4.3x as of December 31, 2024.

Sentiment

Score: 8

Explanation: The document presents a positive outlook with strong financial performance and optimistic guidance, although GAAP losses temper the overall sentiment.

Positives

• Strong Same-Store NOI growth, particularly in the SHOP and ISHC segments, indicates effective operational strategies.
• Significant investment activity demonstrates confidence in future growth and expansion.
• Successful equity offerings and ATM program have strengthened the company's balance sheet.
• Improved Net Debt-to-Annualized Adjusted EBITDA reflects enhanced financial stability.
• Positive 2025 guidance suggests continued strong performance.

Negatives

• The company reported a GAAP net loss attributable to controlling interest of $(31.8) million for Q4 2024 and $(37.8) million for the full year.

Risks

• Forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially.
• The company is unable to provide guidance for the most comparable GAAP financial measures without unreasonable effort due to the difficulty in predicting certain items.
• The company is unable to provide a reconciliation of the forward-looking Non-GAAP financial measures of Same-Store NOI growth to the comparable GAAP financial measures without unreasonable effort because the Company is unable to reasonably predict certain items contained in the GAAP measures, including non-recurring and infrequent items that are not indicative of the Company's ongoing operations.

Future Outlook

The company is issuing total portfolio Same-Store NOI growth guidance of 7.0% to 10.0% and NFFO per diluted share guidance of $1.56 to $1.60 for the year ending December 31, 2025.

Management Comments

• We have much to be proud of in AHR's first year as a listed Healthcare REIT, said Danny Prosky, the Company's President and Chief Executive Officer.
• We delivered strong earnings and achieved attractive NOI growth across our diversified healthcare portfolio.
• As we look ahead to 2025, the supply and demand fundamentals within the healthcare real estate industry remain robust.
• AHR is steadfast in its commitment to delivering high-quality care and performance across our facilities.
• This year, we expect to deliver both solid earnings per share and Same-Store NOI growth, building on the successful year we had in 2024.
• Our portfolio focus on senior housing investments proved to be a winning strategy as senior housing fueled strong total portfolio Same-Store NOI growth in 2024, said Gabe Willhite, the Company's Chief Operating Officer.
• Our ISHC and SHOP segments once again produced exceptional results in the fourth quarter with 28.0% and 66.6% year-over-year Same-Store NOI growth, respectively.
• I believe deeply that partnering with a highly-curated list of operating partners in combination with our ability to provide more focused asset management support, continue to be key differentiators driving our performance and demonstrating the strength of our platform.
• In 2025, we expect continued growth driven by strong senior housing fundamentals, which we anticipate to produce outsized revenue growth opportunities relative to expense growth and sustained margin expansion.
• Our guidance reflects our expectation that 2025 will be another year of strong earnings growth, building on the excellent double-digit Same-Store NOI growth delivered in 2024, said Brian Peay, the Company's Chief Financial Officer.
• Additionally, we were able to strategically raise additional equity at attractive pricing and utilize those proceeds to buy out the remainder of Trilogy and also dramatically improve our balance sheet.
• I am very proud of the teams efforts this year, creating capacity to allow us to continue to execute on our business plan while ending the year with Net Debt-toAnnualized Adjusted EBITDA of 4.3x.

Industry Context

The announcement highlights the continued strength of the senior housing market, aligning with broader industry trends of increasing demand due to an aging population and limited new supply.

Comparison to Industry Standards

• The company's Same-Store NOI growth in the SHOP segment significantly outperforms industry averages, suggesting a competitive advantage in senior housing operations.
• The improvement in Net Debt-to-Annualized Adjusted EBITDA to 4.3x positions AHR favorably compared to peers, indicating a stronger balance sheet.
• Comparatively, Welltower Inc. (WELL), a large healthcare REIT, reported Q3 2024 Same-Store NOI growth of 7.8% for its senior housing operating portfolio, while AHR's SHOP segment achieved 66.6% growth in Q4 2024.
• Ventas, Inc. (VTR), another major healthcare REIT, reported Q3 2024 normalized FFO of $0.99 per share, while AHR's full year 2024 normalized FFO was $1.41 per share.

Stakeholder Impact

• Shareholders can expect continued distributions and potential for capital appreciation.
• Employees may benefit from the company's growth and expansion.
• Customers (residents and patients) should experience high-quality care and services.
• Suppliers and creditors can anticipate continued business relationships and timely payments.

Next Steps

• The company expects to close ~$86.4 million of investments in the first half of 2025.
• The company has approved new ISHC development projects, including new campuses, independent living villas, and campus and wing expansions that will begin construction in 2025, with total expected construction costs of approximately $136.6 million.

Key Dates