SBRA Sabra Healthcare REIT

Michael Costa EVP, Finance
Rick Matros Chairman and CEO
Talya Nevo-Hacohen EVP, CIO and Treasurer
Harold Andrews CFO
Trent Trujillo Scotiabank
Nick Joseph Citi Research
Chad Vanacore Stifle, Nicholas & Company
Rich Anderson SMBC Group
Lukas Hartwich Green Street Advisors
Todd Stender Wells Fargo Securities
Call transcript
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Good day, ladies and gentlemen, and welcome to the Sabra Health Care REIT Second Quarter 2019 Earnings Conference Call. This call is being recorded. I would now like to turn the call over to Michael Costa, EVP Finance. Please go ahead, Mr. Costa.

Michael Costa

you. Thank

and and current regarding financial included our actual expectations subject including uncertainties I expectations for statements to you the in XX, results in furnished operations. your Form XX, concerning results risks and Form begin, ended be we XX-K plans response to XXXX, March and are our statements June risks expectations XXXX, disposition as as These year to questions and regarding XX.X could forward-looking release ended XXXX, acquisition, X-K making our are Form XX-Q that yesterday. to plans, the cause our our forward-looking financing the quarter based our differ for expectations of our want we as and in that listed materially, in SEC we in future position remind the on to well the will XX, Exhibit December to our and Before management's investment press our our earnings regarding comments and

to today obligation not the update assume that in forward-looking we reflect subsequent statements no valid. events you or later undertake We quarter comments the should are to still circumstances, make and our

explanation our included GAAP the Investors the website reconciliation will references comparable review the Financials be as of of to addition, the to In results. the these to results made call and at are measures page financial as section well encouraged during measures Investors non-GAAP these in financial of non-GAAP

our in supplement website. be of the section earnings XX-Q, Our release accessed and also Form Investors can

CEO Chairman Care REIT. Sabra call over And with that, Health me let to of Rick Matros, the and turn

Rick Matros

creating first a of us balance everybody, of value sheet, our appreciate number it. high-grade execution a including long-term the productive of for things I context We had our that Mike. thanks, for shareholders our the issuance. quarter particularly in through first Thanks, joining And today. improve

significant delevering fully that and our kicked we're facility balance as on progress credit which venture. Enlivant new committed on a made getting -- for off will to venture also partner joint lower sheet, debt our pursue of We've cost We have joint process new the we've well.

That conclude material for need that equity significant part. process JV, raise our We the expecting pull of by everybody I has year-end. which hope that require will the on mitigate to will any us to check. XXX% been know

So aforementioned that all We'll [indiscernible] case the won't be on sections. we and more items. get the there detail when to provide

We are reaffirming guidance.

senior had enter to currently we've to housings pipeline deals see think, conferences starting and now. acquisition the last on last skilled call addiction, Our couple stands of certainly that about million, primarily been exploring the that we $XXX some are We at mentioned, I the opportunities

got reimbursement. lot. important and a has dependency chemical it states, we tailwinds. support. the to And Similar states. a policy really getting a it's lot It's perspective, It got from strong like behavioral viewed as of

we've there. potential So pursuing been opportunities

here. partner there. space capital us So we'll working material, developing small into deals we're the our allow some that be as it but on other start as We're reputation deal It's to well. and -- not closing get a

the in with that, that and looking operators had handful that we're of be a things like regard. to can couple our to very addition In services facilities the of operating at that repurposing behavioral a converted and been got And active tenants, addiction we've like.

those itself markets limitation currently but services there's of the more that in for that aren't And kinds services some to look So having to there doing that uses of some well. well. a others existing exist. for many as rather -- senior to It's this as pursue avenue housing, other nursing forward there is facilities, we than skilled very those lend perfect

year this development X.X% cap proprietary our coming a this better housing older cap properties in get we're going again, buying options a will Then from be than is point. bit rate assets We from expect senior at X.X% at exercise. to XX-year-old rate. in see we could about about that brand-new pipeline Those to million product $XX quite

that have we and about -- of $XXX after million well. -- for in So left there coming will the that pipeline in end year as this this be

So we that. still to go have a little on bit ways

flat Housing operations, same-store terms our In at X.XX. of triple-net sequentially Senior EBITDA was

XX.X%. Our same-store up was to Senior basis points Housing XXX occupancy

X.XX. was Our and skilled at X.XX sequential stable portfolio coverage with EBITDA versus

Mix points points Skilled and XX.X% and basis Skilled basis Occupancy and XX were -- Our XX XX% to XX% respectively. down on Mix,

what of restructuring our on some beyond we've have disposition tenants no top already and require do additional tenants We to reduction I that coverage. XX in remaining announced. plans want comment no that couple a have

it's is a are contract quarter momentum performance and due very all it exceptionally we that appear current Healthmark Washington that's off to increase was does it down, which is significant good rate that Avamere it. that no saying from the the the is of problem strong And so nice to in of and no McGuire from but State, comp. rate increase with Oregon benefit there. next the benefit some now first really steady. primarily changes quarter has Their so from see year. their going portfolio, first Avamere when going that there. expect NOI. Washington of they materially an also potentially to those XX, a state to State, see improved been erosion a there But new just we'll pharma believe Medicaid operators material came have We But be XXXX a of in fell positive a July and wasn't and trailing

from May X.X mention which trailing show and to current North were The X XX per tenant XX in improvement. up to they is dollar, American, to X drifted want over continue basis. I XXXX, slightly X And that other down of

So trend. anticipated would way the we that's trending it

contemplate finally, PDPM. confirmed perspective anything X.X with really X probably this market selling And with October our everybody's that year, and of we'll finally caught for that, rents again, tenants different need see the basket to So doing the no the again, in conjunction CMS or And implementation from covers that attention. assets.

from We our spent Conference had coming both reimbursement a Senior talking good but are in Operators month. lot preparing new across Nursing operators and into just that for XX of every operators there last our PDPM. are had of asset terms Skilled about other to was play productive practices, for perspective opportunities a best it recently progress not very and And We sharing of PDPM classes, time reporting all really for one XX Housing.

time easier full particularly come benefits the savings little within the through new the to reimbursement on those focus just don't revenue that on will We side, of of get as model going cost transition with PDPM, most will and there revenue bit think are we to the but any the calculate, we it, see of expect from it downturn although take sort people behavioral changes a system. PDPM. lot be And from changes along corresponding a

good as as forward a stronger XXXX. a sheet So having well now good we a looking and base solid I much with go good feel that for to growth into about balance and

are And Harold the call go I'll Q&A. after that, Talya? we'll and Talya rather. -- done, to turn with Talya Harold into over And

Talya Nevo-Hacohen

to second Holiday-managed Housing update the second portfolio balance solid small On had our same-store that managed the relates managed XX.X% which XXXX, an operating generated the quarter provide communities X quarter Approximately asset year-over-year quarter on of was relates and cash that includes net and approximately by communities Holiday XX% Sabra's The In U.S. managed portfolio. of our in results of the I'll XX% with by income Enlivant, Rick. you, second community. our of managed the portfolio are a XXXX. Senior in basis, Thank portfolio. the Canadian excludes compared our

reported occupied and excluding up by the that operating X.X%. X.X% non-stabilized occupied net increase increase in assets revenue story income unit. results operating same-store a revenue, was increase with remind last Revenues very per quarter, Cash and increased unit in income a in by revenue X.X%. I'll when X.X% net per similar cash the you X.X% increased X.X%, was we

we spite hear industry Our rate improving all balancing operators in about. successfully versus are profitability the headwinds occupancy of that and

for showed venture XX.X%, improvement. occupancy XXX a on same-store were higher for The as communities is the which was of quarter second the Enlivant properties quarter, portfolio joint steady year-over-year basis. Now sold in X.X% Average which XX%, owns details. some which X Sabra

was during our unit achieved higher highest on period. occupied hold $X,XXX, per X.X% same-store Revenue a REVPOR the is year-over-year This basis.

Importantly, cash a NOI XX% on from was XX.X%, margin basis. up same-store year-over-year

XXXX. XXXX, Enlivant For half than of joint the the the was higher X% venture's in income first half first operating of net cash

an the was TPG, JV in the joint in investment joint bringing control portfolio. minority the to Sabra through first a its initial the TPG either With mind, for buy providing joint or XXXX. venture long-term This in towards option us long January this out investment venture, allows by making partner a own viewed always our to a while step Enlivant or in Sabra's the out interest partner by controlling negotiated exercisable term in partner. the minority buying venture taking in liquidity as

our the TPG joint minimal portfolio We take platform, Sabra identify for a in an would Sabra actively the process. investment would joint and with as Sabra point in interest investor, long-term at venture. who and horizon process have allow preferably own coinvesting appreciation the This partners a of an in controlling are now the with and additional XXX% some strength venture started to capital Both with be in and of future. in involved the of the Enlivant optionality to to retain Enlivant supportive the interested

the of managed results Now owned to portfolio. the wholly

XX nearly at flat outsized a declined some of wholly Occupancy by Enlivant XXXX. of Sabra's move were on that portfolio the volumes. year-over-year prior of communities in in to made X.X%, lower reflective back was XX.X% owned but the gave basis gains quarter

a of first certain was operating $X,XXX, year-over-year expenses But X.X% claims. first the income such Revenue basis, the net XXXX, per for driven was than XXXX. the X.X% in of X.X% rose onetime Cash prior half the down the unit by over and year. over insurance NOI higher as occupied quarter half cash increase on X.X% to prior a

our the portfolio the reporting Holiday that we first net lease our are is the second time so of quarter, portfolio statistics. to transitioned managed community-level this at We from start

communities Portfolio Holiday on maintained than is REVPOR the XX.X% flat than was with a year. worked we occupancy in middle each $X,XXX, XXXX. The distraction operations second XX% of which as believe independent was with living focus quarter, point higher the company negotiating higher its explore type past quarter, quarter was we in year-over-year. slightly -- where the in market, has of to team Since excels. despite even acquisitions prior nearly X landlords the the Holiday over product has its the of transition to completed, a catering have the

operating to REVPOR steady Ontario higher X in was with the showed prior relative XXXX, even year-over-year income Columbia. the Sienna homes slightly properties $X,XXX, and us the quarter. XX.X% results and basis In was which on retirement for X.X% financial by Senior down and cash on a Living basis, occupancy, flat managed with of quarter British X.X% second manages net was X sequentially. and a the up quarter operating prior and Sienna year-over-year

work Canadian partners ensure in markets. and are reinvest our that to portfolio continue We to and communities in their the with competitive our profitable closely

that, now And Financial the Chief Sabra's I turn will Officer. Andrews, with over call Harold to

Harold Andrews

Thank you, Talya.

marked quarter to significant by below goal sheet, stated our X.Xx was progress balance year-end. of by towards leverage including improving This lowering our

of Our key other metrics. an and debt in credit cost efforts improvements resulted improved in significant

us with of Care First, bond since that senior million XXXX, of provided. we take issuance merger issuance our first the including merger allowing offering the X.X% proceeds all outstanding were notes of completed due of completion X.X% revolver debt advantage Capital of senior from properties, investment-grade net $XXX of rating the million our our were to together maturities, notes debt. The XXXX, schedule with both our our due that and on cost our redeem borrowings the to used $XXX

joint basis as March in XX debt as reduce takes These XXXX, X.XXx total to XX, XX, were to is Program We from X.XX% of of combine consolidated of sales by real debt points own net $XXX during XXXX. year-end by X.XXx basis $X.X to from of as together billion billion our March under reduction These lower million estate more to million. shares used XX, X.Xx. halfway XX proceeds stock quarter, us consolidated transactions generating also and debt-to-adjusted-EBITDA venture, permanent June $X.X with including to common our to XX, reduce June $XXX leverage of million of below our XXXX, cost of of This the proceeds XX, to of ATM sold as net our from XXXX, XX.X ratio, goal XXXX. proceeds -- June leverage than as our point the

credit our compared improved to XXXX. metrics these addition, of the In activities first quarter

to our X.XXx, value increasing to fixed and improved Our coverage total to interest to X.Xx, our improved X%, X.XXx; increasing decreasing coverage improved debt X.XXx; asset charge XX%.

facility recently extending occur amendment of today Finally, the the relationships as off lending our on of in and commitments we kicked a amendment annual $X.X and improve the our of interest will amount this spread for expect balance. $X.X our rate and amending upcoming few credit revolver over banking we our weeks, received and by billion the XX key amended rating, strong Closing is process and current from current loans on relationships. from using have our basis on expected our to based expense credit facility. of million XX respectively, term participation points, This important revolver interest saving full

term for the of create Along us new with through the our interest Furthermore, using refinancing revolver opportunities swaps These X it our maturity put by with took improve excellent term various an and XXXX. to advantage have going an our laddering growth significant protection by and additional fund dates, and interest this we XXXX rate a in rate years risks. the maturity vast the position of interest a our to recent of debt mix environment forward of interest forward majority to will rate loans collars. amendment, extended loan of maturities and rate laddering August August maturities' a borrowings of due steps eliminating while rate amount future variable extending

performance about quarter. for comments few a now financial And the the

and XX, lease XXXX. NOI million months are of due to $XXX.X $XXX.X first million related a quarter managed recognized $XXX.X to $X.X Senior for communities assets the transition related revenues was For June of and we in and received Holiday the million quarter XXXX, of $XXX.X increases compared recorded cash $XX.X to obtained and Housing current million of ended which respectively, portfolio, million, million net X payment the $XX.X termination transition. primarily million to of was to income the the in the our These

operating fees revenue million addition, to and the expense transition increased In Senior and portfolio. from revenues million, lease triple-net portfolio our managed a $XX structure increased managed services $XX.X due to Housing Holiday primarily

last filings. or in quarter Our increased million increase due and X.X% detailed cash Skilled primarily which portfolio we of same-store This NOI the lease adoption the Nursing is $X.X triple-net to the new accounting over quarter. the first first in discussed quarter standard our

for the standard, due rents first new the under Specifically, revenues to timing saw a on we leases a we reduction In collections. cash began earned basis. quarter, recognizing certain in cash million of of $X.X

these operations transition. notably, the operating cash-basis XXXX portfolio least of strongest variability paid this basis, through continued accounted rents during than of as There are and transitioned some were This partners. Most changes no cash cash in cash the quarter, for to second to quarter, generally tenants one in expect on a for of higher those for quarter resulting a last increase. the there collections some rest phase NMS at tenants our group NOI tenants of in we were same-store

quarter triple $X.XX was with income, lease with $XXX.X to also certain million million $X.XX and per was which $XX.X noncash expenses, our first million per costs was at loss line million the of operating of million or normalized share. of was income, expenses. on $X.X to lease normalized termination million AFFO, unreimbursed of net of extensions compares to million million our operating extinguishment $X.X million and, $XX.X debt normalized extinguishment acquisition expenses. or normalized $XX.X and $XX.X in $XX.X a to of revenues on basis triple merger due expectations for million the and million at the the exclude was on on $XX.X debt was in and of AFFO and in FFO net $XXX.X share. per $X.XX This termination share AFFO expectations and normalized from cash a of basis, FFO loss million unreimbursed $X.X of excludes exclude cash senior $XXX line FFO or XXXX. notes quarter

for For G&A prior of million totaled and $X.XX lease quarter income million million, income net for G&A or compensation quarters. attributable cash cost expense. Holiday of Recurring the costs including per common $X.X the stockholders million share. NOI X.X% quarter, of recorded the line excluding termination quarter, $X.X of to we in with $XX.X the stock-based $X.X or our

G&A average cash quarterly to cost expect We going $X.X approximately forward. million

second expense first bore quarter quarters, interest of for million at million and from XXXX, compared XX, Our for first points quarter of basis in X.XX% Borrowings to a revolving Interest credit and includes interest expense the interest of respectively. noncash the the the the June totaled under million $XX.X of unsecured decrease XXXX. at $X.X XXXX. $XX.X X quarter million $X.X facility first

We X Housing of generating a second net on in facilities sale. million sold XXXX, and Communities $X.X $XXX.X XX during Skilled proceeds of Senior Nursing net quarter recognized million the gain

In part addition, on the were unconsolidated unconsolidated Communities item that from recognized net loss included joint which in and we the venture sold loss venture X Senior is $X.X of Housing million our statement. of a joint income line

compliance We to XXXX, to increased to secured a from of unsecured X% as value I unencumbered covenants all June saw were decline with and XX, to debt of previously, XXX% asset value addition XXX% from asset to mentioned quarter-over-quarter. and in X% the debt we debt our in metrics

million. liquidity equivalents available of of of XX, and $XXX.X facility $XX.X As had credit cash June under our XXXX, $XXX of and million, million unrestricted funds we total consisting cash of

and our a I said, would like items. Rick couple XXXX guidance, we to As highlight previously reaffirm issued of

the termination impacted noncash million lease were FFO by and $X.X income income. Net positively

certain positively was decreasing care impacted impairment As These by such, for guidance end classified of and previously operated charge. by AFFO. transitioning effect were costs measures. be our the the as of XXXX in of disposing expect original the to cash high near have senior AFFO expenses of as an classification for and costs centers facilities these range we guidance the

be near guidance end As of range. our the such, we high the to expect XXXX AFFO --

Normalized and FFO remain normalized unchanged. AFFO ranges

rents expect to certain the be we to reduction that -- revenues normalized to prior accounting quarter million standard FFO above. due rental basis the associated mentioned of the the I discussed with accounting of adopted low first in new near $X that Straight-line for leases range end However, change. the quarter cash under in the to the straight-line converted the and XXXX we were

straight-line reduces cash does by year change not As our rate for such, accordingly, expected impact our not but does for share XXXX impact in properties expected $X.XX the guidance this collections rental per guidance. again approximately normalized our AFFO and,

to guidance Earnings expectations be reducing based X.Xx EBITDA XX, adjusted our of XXXX. below by debt continues to on our to December

XXXX, X, its common quarterly of dividend on August the $X.XX be announced August on of stockholders share. Board Finally, The will company declared paid that record XX, of August XXXX, per a XXXX. Directors XX, on to cash dividend

dividend, the totaling of cash year the and cash notably terms to In funds in of the the represent dividend from related fully for our per cover Holiday portfolio cash payments expect full available operations $X.XX generated we from the future, flows XXXX dividend XXXX funding and from flows payment payments, share.

And open to that, the with over to Q&A. operator turn up it back I'll the


[Operator comes Trent Our with Instructions] Scotiabank. from Trujillo first question

Trent Trujillo

year-over-year spoken in the think on you year. you are cases, Senior comps appreciate we your assumes see about owned it's better X% to regarding XX% unconsolidated range? The your X.X% given the of the can guidance I second but same-store NOI with X% that portfolio, have of the guidance, So you the to about been according the both But how tell and results year. comfortable I in half of should Housing wholly in growth supplemental, for negative, growth portfolio benefits half managed you've back your some

trending suggest the results So the end? you're low did toward

Talya Nevo-Hacohen

numbers, if have You look the -- created ability for year-over-year XXXX last note, relatively flu to the to low year our a bar has at you basically comps.

way. ability we second half have to in a So an XXXX expect to beat material

turned time I in the -- the that around. about, they had -- We of has a XXXX didn't talking lot spend of smaller and as and trends second some also, in downward our operators, half towards in

impact they fairly all will numbers about so are here. also trending material because positive, after we which talking have are And a small

Rick Matros

increase add only thing the have this expect Now a nice shareholder, -- the on that thing well, wholly they rate portfolio the I'll as fourth that we a impact would owned all in to is Enlivant as quarter. the I add

Trent Trujillo


Harold Andrews

well. Yes. Current trends are better as

[indiscernible] about current forgetting even better. So XXXX, in are trends XXXX

Trent Trujillo


But follow had or for a you sense. I maybe I guess, on Elivant on comps there makes to, up the that But That was flat specifically, about was like if can I third in theoretically JV year, at second hit little And not quarter. first you think rate Okay. a call, lot and it discussion last was second quarter that despite quarter-over-quarter. run bit the the mentioned, guidance. easy the just being quarter the more, your you of for the situationally in the NOI then strong X.X%, NOI

so with in So favorable in comp even a the more can decline, margin much third accelerate? that how quarter,

Harold Andrews

it similar in because fourth the XXXX. in were quarter, rate fourth Well, X% the increases we in certainly was upwards expecting what quarter dramatically to turned of again

Rick Matros

we are Right. trends stronger third so anyway, over the currently growth have it completely accounting control much question have in second of -- And rule portfolio expect to noted, outsized no quarter as the growth now be it the is we quarter X% is you pretty really as offset the And can was. that strong. over. than how in then managed the just to sort And we better change

current to increase that so trends those just will completely. And referred the where and the need not going be for year. we're us to Harold But get again, to that we mitigate rate

Trent Trujillo


At the million. a -- about effectively Okay. and reduced $XXX another guidance, you in source portfolio that's and you to year, of of topic. viewing turning to to beginning been the million respect are -- How different management I had both $XXX with the to capital? dispositions guess reduce

$XXX now noncore? is at equity pruning like So being And you've from into you million get additional Or looking from be that are offset seems that portfolio funding the your retained? perspective, that been is issuing. XXXX? whatever could pushed do how a quality, But

Harold Andrews

pushed to hang I'll and that of this to from portfolio to of pushed and well, being purchase question wanted hence handful sold. -- portfolio right we are one we There's sales us being what's particular to, be who our about, were a being to answer retained. that not what's there's negotiate to we And being disposition with So that a that property then were the properties handful next particularly year, able expectations. going to that. year, the the on why hang able buyer feel to on had We're

And as slightly it these therefore It's bit we're in relates equity. a -- in as see the us If delevering. it a to -- on to leverage, some levels right. more we funding, you're slight of less little raise hanging requiring increase drop, exactly to to portfolios results going a bit we're of disposition saw

being maybe to little why you that's to NOA we -- on that able to if a we're these higher So hang NOI hang on facilities.

to have leverage little our issue equity more a targets. hit to We

place, you kind they of kind each other of end up the if -- you where same of kind all will. offset in it So

Rick Matros

that's baked all obviously. And into the numbers

mentioned pruning to intents as terms call. early want I we all portfolio we're and than In much But here be. the be we're other the to It to that building for doesn't going there what's announced, that pretty in we're stronger dispose. more, or where there want much a been of won't pretty purposes, mean

different a will services provide -- a than they services behavioral have services. be -- one dipositions, that with few but existing But skilled operator that for primarily kind see other they to repurposing of to and some assets. like upside existing those We some nursing should that facilities really upside

Trent Trujillo

more one maybe me. for And Great. Okay.

would How thinking Was near-term that? normalize? you might Holiday spend moving since pieces. be guidance the about the other inflate on are of So kind CapEx increased. messaged -- for But this much case deferred following and responsible CapEx that the properties, as how rate those But evaluate there should we the think maintenance for recurring or you'd that I about a and CapEx be basis? think you maintenance transition or you run then

Talya Nevo-Hacohen

market expect has we XXXX CapEx. in at deferred portfolio did hands is since Since an associated the I are the more with maintain annual any acquisition, projects budget. that's we to of asset that gain been -- extensive of our Whether part really with the and don't our undertake choose and teams there that share, offensive to that'll the management time review and be review defensive


comes question from next with Citi our Joseph Nick And Research.

Nick Joseph

equity. to Maybe just sticking the

the beginning XXXX? $X.XX the of dilution you've $X.XX this to of But Obviously, wondering about talked leverage that amount to equity raise of done at and I'm that's in from for think the year year, you're you of your issuance. I if some maintained expecting equity target. still

Harold Andrews

Harold. it's Yes,

from I is that think the dilution equity impact on raising within still range.

Nick Joseph

have Okay. initially maybe the color And more to JV? versus overall the ideally then there. now new I'm did think you when little partner? with maybe you of about then -- would just a on you like what wondering percent Enlivant. JV What valuation ownership And how do

Talya Nevo-Hacohen

really a of percentage it investors. have of at want but we we so XX%. the think number, a terms ownership, be suggest to I That's that controlling discussions like in not with a So would fixed of we'd be function have stakes, to will

may the a in at controlling say. have replace of for to -- If see come to what amount small or interest interested have and a with in interest not and is may long-term preferences put -- equity the balance XX%, there's We'll gauge in We'll partner. we to additional be Our that. what that. an some investors another that

Harold Andrews

the to desire equity But get a own through for we XXX% I'd of down. addition some how you to us portfolio whole to of in of do a the chapter now commentary end because view of that in us our bit time. point changed the the that. take to And additional write has getting and in a it's right terms which that no in give is you at thing big for raising ATM nothing rush portfolio The But we're box to we're through obviously. there's

that's So where the it's the accretive. do the the stock if it getting created stock. a from something overhang overhang on a prevents you point there's And to on stock, significant can

can should interests. a the to whole not So of more think controlling just mature. partner, material alleviate to downside little raise us time the pursuing a a to equity, limits portfolio pulling going JV we I give and I'm we're down, us long-term risk bit amount thing the overhang It the right? have bring because our and give it have

why percent, be I going how be to So shareholders, And go that's now. pursuing of relative our in where to a beneficial is are but in all we that big likelihood change it's we'll possible are the to all from it's that think negotiations that light. see to the going it and not we

And and a to potential in out large us has comments, really happen. think mentioned lot active fact it's universe a an I team of as pretty with partnerships that the the prepared partner is make to this TPG partners to to that. and helping Tayla Enlivant these us her of in there, actually our We well, that appreciation express want on past as explored the


And comes question our with Company. next from Nicholas Stifle, & Vanacore Chad

Chad Vanacore

on a impact details there? if you mentioned but your And some Can moving basis. $X.XX release, about what's you I us leases to going I recognize press cash from on this, more missed apologize in those give

Harold Andrews

Chad. Sure,

going under we at a us are those and going certain threshold you're cash on over level very a required to virtually quarter of take a -- that a of basis. transition and that all high leases a ones the accounting all requires rents look take rules So REITs, back collect worth the of that very, determine last the to XX-year life put them leases hitting confidence the the when new to to at lease. which high look It

associated straight-line that we a identified of had did with second $X in them that did we the about properties quarter, and we million quarter. rents So --

you're our straight-line saw. annualized is the of that out $X.XX And was that for $X number expectations that now so million original seeing basically in $X.XX why range what guidance FFO we number. guidance our of decline we for account that in number to our our that's And updated rents within is that

Chad Vanacore

many Harold, All are talking operators about many right. there? how properties, we how

Harold Andrews

total the operators. others. NMS one, portfolio XX of probably So then couple handful XX of -- there's there's a It's and a to old is

Rick Matros

We the the -- strong take rest kept those about half, to operators. are recall, team operators be those Those we way, took really as both and And operators. operators, NMS pretty are that operators the Two Cadia -- X both by over X you has the consider portfolio. negligible.

Chad Vanacore

just then do health, capital you expand about are thinking Skilled transitioning going to properties improvements are somewhere I'm in need what behavioral to need some to about I your -- talking you of the that? to partnership going are And And kind were else? -- was these properties. Maybe Okay. those Nursing and

Rick Matros

really require It capital doesn't all. at improvement much

anticipate nursing any through skilled right? a you accommodate, clients example, not going than wouldn't within in plant them, there. services. a for ran if can notice pretty of physical you partner licenses historically a required it there's capital we programs return that's can days, happens and facility don't operators, business kind because of So behavioral are, operators for those for me the usually our -- much old that into under facilities behavioral it. to skilled any necessarily And some with be walk capital, in difference I So segue we amount don't operator really capital the who other To when material to my the understand typically we new some create have that And those be in there rents. do we times to that fix needing additional that we'll get that extent and partnerships is and increased through we

It's still with a history. a tried in have do a and few going we but not be still the It's could big the operators huge entire space between. it's to the very as portfolio. opportunities in of expand that said before, And space, number fragmented to space. true of and our context want a But their are we that a move just presence far

So it's behavioral I'd make we a by say little but that it's on bit tough similar it. in to except comments find things, a long And even the to shot younger space, space. addiction to the working are

we it's offers [indiscernible] the part actually it us space. addiction go. around It's So bit our arms for on taken will teams right time investment on that good mature our quite operating and to and ANC to way -- and a making a of for find


with next our Anderson from Group. question comes Rich SMBC And

Rick Anderson

venture be existing a Enlivant joint how into work? into into fund of where and Back will the investor going like a as investment a investor makes this to you fund be Could almost is structured TPG and with Or situation. joint that more to Enlivant? get you an venture joint the with to direct venture? it's it what already Is that and existing an

Talya Nevo-Hacohen


new So which investor, replaces one and and it, I'll for it Sabra I'm investor some that going -- comes replaces Imagine TPG think about as in clarify to explain it Sabra. the way you. I maybe

the Sabra So XX% owner. is new

the else's new is TPG owner. Somebody XX%

Rick Matros

simultaneous... take happens to so have really for TPG whole the You out, thing

Talya Nevo-Hacohen

to... They Right. want

Rick Anderson

great. Okay. That's

Got Okay. you.

sort standpoint does entirety have gone. And the guess TPG because date no so the of this line I exercisable And right, be would, it? of from buy time so it specific XXXX then poof happens? you go of to out once January would -- the

Rick Matros

the time long -- and well. be is, to But that as That agreement, there'll all remains be new Yes. period be within there a by will agreement right. and wayside, however that will That negotiated. go windows that

Talya Nevo-Hacohen

to a yes. exercise of of TPG completely, And the have by date, first new have investor, option offer cover also I wants But right we the something. in in And -- just yes. question don't purchase sure we a also if our still to to case we make context do -- that --

So by done we're we don't if not it XXXX. get January stuck

Rick Anderson

what's also you Okay. ramp appetite more I magic mean question today bigger Very, where number? have just up increasing of there way? or than I'm mentioned A XX.X%? Talya, portfolio that some your helpful. Is to more issue. transitions do including curious it to shop that acquisition to Is activity very a other the for structured land -- XX.X% you as RIDEA exposure your being to maybe anybody. on the that Holiday.

Harold Andrews

XX.X% and magic really of Enlivant outside to it's minuscule. going is to ownership. now. pulled JV Holiday, case going of increase had But XX%. really, operators to our we senior number. not to of structured the that's XXX%, our is of There's going on from I the But If out be not Part the us housing pop a think terms in Sienna, all are rest be the dependent how

the then we stay find. going And opportunities you happens shop do So any acquisition that of is the if the shop to on what depend with JV deals. additional got in you want growth outside senior space, to housing to on

You're there attractive not at. deals we going rate, -- look great a cap but was example, it only deals. love deals, that almost do don't that so don't it only level. took a The haven't and tripe-net it's that been we And if was rate us, you have a to and we facility XX% to certainly seen was that's triple-net a that at Medicaid. waiver. great that cap are Medicaid And love And we for that

asset. bidding on we kind So of chose pass on that to

if pricing yet. So or you turn kinds those improved carve of things out of sort around, much hasn't

Rick Anderson

agree of XX lot terms time as Rick, do what like in not a the being you're as portfolio joint your is. Enlivant. to frame Last the today. the rush, rush happening get good on with imagine it's obviously What that is to I you'd But said Okay. significantly there write a question. to of stepping-stone a venture you check the not perhaps you potential big think on watch possible. I have to to big that a not much relative in from is underoccupied Enlivant? XX-ish

Rick Matros

to still There's needs there. absorption happen. think that oversupply years I still going for that take several some it's There's to happen. to

there so to we've a we've get been that talking takes happen, long Enlivant average. it's think got it to obviously, to for -- industry I and long speculative, So how pretty about window

of be given the because hitting and kind By you've industry a the average gets 'XX, window, of starts industry it all right, And again should even X-year time, if construction that be and theoretically, or stuff. development up up 'XX in you'll to average, absorption. lease-up moving ticking got sort

think paying I like again, probably have off should don't where you absorption good even they window gets pretty and development learning you the XXXX. start be learn don't do before they new So a if development people that will that to lessons and

Talya Nevo-Hacohen

is The with other you middle-market portfolio it's Enlivant has we that the portfolio and have advantage Enlivant a the Enlivant -- that with have product.

middle-market cost today's for in it's and build product. structure a development, So impossible construction to

Rick Matros

properties, top labor is because in make of out another growth the same are secondary senior point I'd our from we most expense properties, of not And our but MSAs, actually seeing in growth aren't that MSAs. Yes. housing you and pressures the top of some And just the markets. of most see

an that bit little stable property although us live a they A provides for it not be right? So community, I may it's properties, A community, you if in environment. that think more


Street Advisors. And our comes Hartwich with next Green Lukas question from

Lukas Hartwich

addiction similarities Nursing treatment Can Skilled and the you about business and the talk versus bit of differences Housing? a Senior

Rick Matros

So yes.

the a Senior question, [indiscernible] [indiscernible]. now all, medical on of a model and good on -- sort and Housing psychological weeds things it's individuals. into the there's provided be on a And programming aspect of is try emphasis model, to long-term never focus stronger to and to become social certainly I'll and that the with on Senior programming It's So it's Where the than involved all programming much is on of it's it it. it. a the component successful care But medication that -- and is more as stuff. first without that's in programming needs really management pieces appropriate side social those Skilled medication to care. medical that things. Housing management, of and Nursing, care But social within Obviously, here, and care social/psychological a there's it's completely the lot basic supplemental of

Lukas Hartwich

up about But Got are and a looking occupancy at the about a Page portfolio. then I it. And X%. up question. supplement, X up revenues was Enlivant X%. of follow-up, X%, is have only housekeeping just REVPOR of kind On the

-- but how out I'm that gap? So do to I trying I'm missing maybe something figure there, bridge

Rick Matros

us get you that. back Let to offline on

Lukas Hartwich



Fargo [Operator Instructions] Todd with Our Securities. next from Stender question Wells comes

Todd Stender

the back to going to quarter. just I So issuance in ATM the

it it quicker, demand? How was was by But of investor pull wanting for relative big was driven just maybe that you played can of that out? kind you basis, just to of guys. kind a much guys Just on delever if how maybe that and you push describe much how

Rick Matros

coming reverse Sure. in you bit [indiscernible] Quite a depth] demand. And kind very investor we ATM inquiries of when to of -- at settle I us that But it was were blocks. larger able strong do for was [in just market sense, sense to made program. able the some a mix we will those then on tell that. it that mix were made price a a and of of to it's there some

some being felt just and up of was we when is like price taking days a there advantage And well demand. holding of that -- strong the

was appropriately say the really -- as nothing far ATM were to I out aggressive just So outside We any raise would did. for too program. much that norm as we

Harold Andrews

it. done easily, obviously, we have manage lot to more -- but could we a try We

Todd Stender

restriction outstanding, right? So on no shares just can there it. ability, you of is have It's quarterly you tap if a on a basis, percentage

Rick Matros

correct. is That

Harold Andrews

XX% of really There's stock not daily It's sort Right. XX%, a really rule of to impact it noticeable. that thumb, price. that your so doesn't

So go] that's little And below it. [you day that kind good a of thumb. on daily bit a of go rule little or above the a you

So -- but single evaluated day. it's every

are Decisions like made run a with of things basis. don't daily a sort banks So the for on week.

Todd Stender

baked periods it can. maybe you windows take black-out the there, when right? in you with quite So volume, And the be that's why can short,

Rick Matros

to period nonpublic we have it of material correct. down. information, you shut -- Yes, is That a during

our week or So open quarter each then back will after end, the and a window typically after closes an call. X up typically window earnings

out months So ATM. a of you year actually on X.X it X, is can be active between an -- somewhere that's which the

Todd Stender

how big? for or large are size yield SNF portfolios, evaluating see SNF kind under at too particularly literally pipeline, you that's that's though too million Rick, has a Omega, then your are is portfolio once, the at high? skilled. we with your too that Whether When Senior much something Housing, so looking And you at example, but contract, you looking it's described that predominantly of Okay. investment big for $XXX

Rick Matros

becomes that and years. big us. being that And back stock portfolio. very it I to nice lot it's the or to we that's think, a couple complicated that intimately. a And But deal for Yes, portfolio, commitment the of on a months, on had in it about harder know, the skilled really a information. portfolio We've We're price interest of are in do know X.X is to -- you noise road no a deal a last we require that anything size, we harder made come And that going as us I've of had to over REIT. not that. doing because it puts

merger, as I It's long more And we the got in multiples. we'll being stock said the run the we I asset before again, mean benefit saw everybody to love to prior do announcement CCP and with from nothing of the -- class. But think that we pricing knows REIT that. diversified reflected a in

balance is to So you is. sentiment there upon have however of sentiment investor a and that want more because dependent we just or get then right whatever even wrong more

that So we make a move. just big prefer not to

Todd Stender

revenues, PDPM the to their Got some it. at are post-NAREIT. And I anything the costs, to optimism Conference. particularly SNF how is then adding maybe looking world, labor anything, then the just from finally, imagine supply? folks. can it you was new the Sabra share hosted Operator And you Anything share -- operators

Rick Matros


introduction force think some well, the was on of some with cool the labor and on opportunity. there speaking, some reimbursement a focus products. generally I presentations There focus the the have all was and as pretty -- we lot

of a that there instance, For has sort there's company Lyft network staffing. applied the out Uber taken model and it the to --

on go you they've and app, the So app in way concept to access is of of you brand-new their the and which thousands you got tens the their temporary go up space. of signed people that can employees and app

cost it's doesn't same staff, typically a about higher XX% your through virtual network staffing traditional cost going a you cost. as your as in-house the it own you having amount agency because may opposed than And it than more company, though to even traditional which is basically a

on a out sort on amazing Medicare a opportunities some fantastic housing. was new there in had and some housing that of it's on things that to companies. some So so Advantage up lot reimbursement some really ancillary senior opportunity, and the that. the embraced services we -- lot side, of and with there But the was senior a think partner We opportunity like on of about are speakers the discussion was different that with focus

focused the meets, everybody real well its with special just allows other off gain particularly is which of insurer as table but that the momentum. for look off become be, with they comes the insurer. you the to that the to managed Advantage -- when the the as the And opportunities industry, at particularly profitability-wise on PDPM back it's On provider starting -- essentially skilled is And should a the ICE Medicare nursing facility. much game-changer how own skilled, program, are there needs takes

This allows with and up been We the a doing that's and control time that product quite control running know exceptionally private is them profitability. to that fully well. and operator for some

Alliance Lynne out to member, are time involved Katzmann, it the well in enough initial risk operators lot to because the takes. a effort a Board called is get as large company newest Our of take that going that the with there and

they'll be so able number of do And to to partner with any providers that.

lot that a well, So conversation of there's payments. about value-based as

operators get really, So of had. after was few our practices done other. that it because follow I many each a conference. very We've -- competitors. best thought that conference operators do to each would really best They it know view the up we we've other don't these. as as always, They have was the And

they So about they're pretty other all open do what and free sharing with each best.

PointRight on -- predictive trying do modeling operators constant there and has on had We also also we'll opportunities And take we a do of regulatory for to to focus that our data and side. some the continue, the that things. costs turnout, to was productive. really to great obviously, advantage provide it's So and PointRight a these our things with we're

So areas those are cover. we some that of the main


would not this Rick I'm to remarks. now like questions turn for back you. I call any Thank Matros showing closing over to the time. at further any

Rick Matros

joining for Thanks, us. everybody,

As to Thanks great you follow-ups want to as you have support and a Talk do. day. again as all soon. always, we're much available for your for


program, This gentlemen, you today's participating have for disconnect. and Everyone, thank and conclude Ladies wonderful does in you all conference. today's day. may a