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LTC Properties (LTC)

Participants
Wendy Simpson Chairman and Chief Executive Officer
Pam Kessler Co-President and Chief Financial Officer
Clint Malin Co-President and Chief Investment Officer
Steven Valiquette Barclays
Arthur Porto Key Capital Markets
Tayo Okusanya Credit Suisse
Mike Carroll RBC Capital Markets
Call transcript
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Operator

Hello and welcome everyone. On today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Before management begin this presentation, please note that today's comments, including the question-and-answer session, may include forward-looking statements subject to risks and uncertainties that may cause actual results and events differ materially. These risks and uncertainties are detailed in LTC Properties' filings with the Securities and Exchange Commission from time to time, including the company's most recent 10-K dated December 31, 2021. LTC undertakes no obligation to revise or update these forward-looking statements to reflect events or circumstances after the date of this presentation. is event this note, being recorded. Please now Wendy Simpson. would like to to over conference the turn I Please go ahead.

Wendy Simpson

operator LTC's conference XXXX you first Thank and quarter call. welcome everybody to

and Clint Joining Financial Investment Kessler, are me Co-President today Officer. Officer; Co-President Malin, and and Chief Pam Chief

is recovery coming Our we seeing together on corner of turning about hopeful the evidence COVID. and the industry slowly are

senior demographics As population. care remains positive industry picture for a our the needs based for on industry, and solid I of needs believe our the long-term fundamental based

majority continued For however, as was skilled the with layer large skilled More industry, the of first Medicare industry. – there nursing trimmed inflation. such nursing some another our of the recently reimbursement in complexity quarter hurdles potential added announcement labor and for distress to felt pressures as of operators deal levels

supply I is hikes occupancy dropping. be have of we are However successfully our pre-pandemic health and operated in offset as their supported pushback markets has market have families. surmounted to that decades appears both higher None implemented increasing agency pay to utilization and from residents our costs. operators challenges. This rent we no have or private toward reported industry Several several is different. moving we of And LTC real through environment. and operators a always environment estate steadily cycles. believe labor

has to with some growth. very strategic recently, inspiring. start been investments time million you. successfully stories have our robust closed for detail in-person with work about in $XX and Stephenville, to I'd Star XXXX, their centers, chosen for to the several but helping patients who with more was our our I'll care our who from been recognized partner Rehabilitation employee capital embodiment will recently at in identified Star recently our they summarize of mission care now will Misty that that have it operators than of car with her HMG virtually, more later, additional put advance and and have both for presented Lone award opportunities in investments at we and spending been far an are we of in a been. approximately them So Award I've was our is pipeline seniority and to the talk Healthcare, our share especially HMG like shareholders senior Clint Misty's XX has What's HMG Texas. former in two employee. Center Griffin, recognition year noteworthy care employees Wellness among as a values for than presented of more decades. Misty taking people. new HMG's of year-to-date and

partner Misty the operating working definitely Atlanta lives are up toured I with reasons to HMG this that our their Builds award senior of community, as Atlanta's that. is Living. and It One most luxurious spectacular. we great Corso is because truly of with recently culture. living exemplify Gallery description. it

generating and Our all operators very investment financing returns. be relationships impressive how allows project a to demonstrates part of expanding with positive excellent mezzanine Corso large LTC while with Atlanta and regional

has scenes of by honored courage, of an navigated book Finally, and are extraordinary Work Heroes pandemic. the Cindy from recent resilience behind we COVID-XX at mentioned hope to titled look Here, story how of provides a the in the Living CEO Senior The written Brookdale be frontlines book a Baer, COVID-XX. Brookdale

into few ourselves. one book LTC to pandemic, things me as make lease. to the which we consolidate we is worked months partner, master with is this four pride flexible interesting A capital that so collaboratively the into something on featured Brookdale One a of that leases

cash update since that quarter reported our able I'd strides solutions experienced a from protected to to from other and renewed Brookdale's focus quarter partnership in both commitment we an Anthem. in quarter, rebuilt has I positive in total occupancy to book, and a have parties learned will in cost difficult that And line increases said the and our we cash pay years case. each approximately midst in million. Anthem described have expected of prior through outcome of declines in QX of additional a variant from anticipate them rapidly with census they decline resulting work ago. recover. full substantial Cindy call, uncertainty. still collaboration, interests Last funds, first on we Cornerstone, make experienced a Anthem of short-term the surge As the occupancy may guidance. rent Since finding achieve second We to brief Anthem for the with XXXX $X.X occupancy it for on variants surges we Omicron believe fourth on their resulting of of that that similar now provide stimulus million rent made receiving Anthem's like receipt challenges several the a $XX.X

up $XX.X rent we to from our in but the monthly $X.X quarter maintained the quarter be make the with will lowering are expect to over shortfall able $X.XX per share of we payout remainder million. However, the We receive the year. they to second million, to them a shareholders dividend anticipate of during the

care target rent on XX% fourth and former the recent payments by XXXX first activity and to Our the decline our our continue our this expect senior the portfolios, the quarter ratio XX% in assumed FAD year. payout FAD Based quarter. approach senior of we and ratio from to payout end of lifestyle during decreased from to investment

from levels. FFO Our excluding be items guidance periods to comparable both will quarter first for quarter the second that anticipates non-recurring

on a address focus both initiatives. having initiatives Not discussing working the over spend are that internal diversity. these only we I the want to Pam, are our to I corporate of focused moment enhanced ESG a turn an level, committee at and issues call ESG to the board and Before formed

successes by can ESG in addressing are We they operations. their achieve to working help our how them with operators issues understand

not partners by their third-party added adopting encouraging stewards changes. will our to best remediation with new better corporate become long-term, our the in interested. on I but and voluntary operators is socially attractive with initiatives facilitate ensuring a establishing providing and these sustainable of which benefit respect are all options An consultation at help on methods operators responsible a financing with costs for begins The We understand to with to our practices focus program in that program only good aimed initiatives practices. an also helping operating three efforts, reduce LTC are oftentimes help these something know expert

Pam. I'll the to Now call hand over

Pam Kessler

capital by the originations due XXXX from million income by compared mezzanine $XXX,XXX increased originations. to Interest increased for first $X.X Wendy. $XXX,XXX loan and loans primarily revenue the of loan payoffs. first increased offset with and quarter quarter Interest income Thanks, to Total partially mortgage other related working XXXX.

transitioned decreased in However, primarily $X.X properties revenue were offset property from as expense, primarily and by year costs partially year-over-year Senior all revenue rental unconsolidated Interest the due ventures. million to from comparable was transaction by transition, write-off. expenses prior straight-line increases tax former Lifestyle portfolio the Care from and joint Senior rent income

receivable. provision loan to under quarter, credit mortgage year's and funding first with notes and mezzanine origination last Our $XXX,XXX compared our losses additional the primarily loans due for increased

offset to expense. common the paid from partially a reserve higher costs sale previously higher first and NAREIT XXX,XXX of to balance. as with the inflationary by G&A FFO to XXX,XXX loan available reminder G&A prior the higher in loan reserve of estimate due incentive on upon first decline X% charges diluted report non-cash the loan real in year's down. pressures. principle quarter. equal XXXX Fully This $X.XX increased amortized estate, due Net shareholders the As year-over-year, loss per rental compensation a revenue by and in increases mainly for XXXX origination, is compensation, is loss $X.XX increased with resulting share the originations we and loan income net overall quarter compared discussed to

loan $X.XX non-recurring net compared G&A with FFO quarter Excluding revenue from revenues first originations. year's and excluding rental offset decline per by partially FFO was last to non-recurring decrease due was $X.XX in higher the previously quarter. share The items in higher items, discussed this

funded term quarter, extension approximately five years X% at XX%. IRR providing with Oregon interest with first expected million and an in options a month secured XX $XX two the loans range a mezzanine of is living we services bears five and loan During The of senior communities by Montana.

capital We HMG $XX.X a properties. the also funded to $X.X HMG, March transitioned $XX working operator at million committed approximately loan care the the of to XXX,XXX quarter, million first whom we secured XX, of leaving million a balance senior previously former paid XXXX. XX in back

in expect an anticipated down quarter. HMG additional the the second with to We $X third pass pay further in million quarter

XXX,XXX was community in new the transitioned we quarter, XX we During to of of Castle lifestyle lease Colorado. located Tshis senior Rock, quarter community it care own operator can of book of rent new with XXXX. the we unit to operator, sent the first sell The The from during first a intend the of April was closure memory this lease in net generate which to year it. expected was is the XXXX. property two as million value and X, termed of $X.X five-year to

rents senior provide forward. senior lifestyle former portfolios, and our details to on additional Regarding going some expected care like I'd

quarters the XX,XXX in in third six separate assumption. in and fourth with For based we in the XXX,XXX receiving leases, our senior two-year These are the under second market the remaining former the prior quarter, portfolio lifestyle line quarter buildings XXX,XXX two in quarter. amounts anticipate

receiving in is we third now and but and million anticipate to set ahead in cost senior HMG will that The slightly is rent due primarily in approximately of transition former care the benefits to XXXX. expecting periods. projected each higher expectation we Our continue the quarter million third portfolio quarter, the projections, sometime in rents of of in $X.X permanent those more containment fourth the to $X fourth quarters. Accordingly, second are of

move lease, would extending the rents. and be amending permanent through our of we the As more HMG working we include year, will toward remainder which

market communities XXX,XXX quarter. of The agreed the last units call, discussed communities two in five transitioned in totaling during rent care two these term from of is memory our XX which years we first recording lease is with XXX,XXX XXXX, We As cash to quarter. the during recognized last second on half the transition starting rent. approximately mutually current on of a from first LTC operator cash quarter rent unchanged based month anticipate new upon in and fair rent Texas,

to one one quarter, the agreements sold entered quarter, and assisted into the to During skilled first sell living living Subsequent two nursing community. assisted center. we we first communities

exercised First, a million previously gross and has properties living an purchase book a $XX.X for in Accordingly, into California entered The totaling have properties million. agreement units. field million. we discussed, net assisted the $XX.X option $XX of as book to of on sell two senior the communities value XXX living value

we And the so. expect recognizing on We or $XX anticipate sale the next to million within the approximately second in of a close quarter. gain week sale

we rent This XXXX, During price. these sales GAAP cash rent represents million on X.X% implied recognize million of and an communities. of the of yield from $X.X $X.X

Second, agreement recognizing in a matures The July, we XXXX. has sell entered on gain into million XXX-bed sale a $X.X of of under quarter value value book approximately in in an nursing skilled California that center million book $XX.X and of second property for of net gross is $X.X $XX.X lease million. million. XXXX anticipate a the a a to We

of During represents XXXX, the on implied we an XXX,XXX rent rent X.X% GAAP of and This of property. from cash price. this sales yield recognized XXX,XXX

property Virginia a for book the one operator sold $XX.X connection with in the worth XX of living value a which rent. of $XX.X $X.X In quarter, gross termination equates and year’s of lease fee, to has Finally, a us book a current paid million we first net to unit subsequent The value million. million sale, community million. $XX.X the assisted

to-date. in since details with transitional million summary, to second the year, million. additional XXX subsequent recognize price. of first We yield total of a the $XX of private acquired sales expect X.X% shortly. approximately invested represents $X.X care will sale to mostly centers we on in beginning in have Texas an rooms of the end Clint of quarter. This quarter, gain provide a million we the the In on $XX.X implied the beds for four Also

have generating approximately We contracted sell in or $XX proceeds. sold million are to properties,

Moving now to debt our activity.

under million During line $XX credit. of unsecured the XXXX borrowed revolving first quarter, we our

care million million the Subsequent of $XX the borrowed borrowing additional XXXX, an As for Texas March XX, the and using transitional the we $XXX.X centers to million to had fund acquisition March million assisted proceeds with $XX outstanding under $XXX.X unit the living in line. in XX, of four community of sale from we Virginia. XX available repaid

unsecured million notes. under in our principal $X quarter, paid senior regular we payments During the scheduled

As our of during ample million quarter, $XXX $XXX credit of outstanding on $XX.X hand, dividends. of mentioned line million available on under $XXX.X available us with Wendy million providing Presently, the have cash ATM, we in million our $XXX.X million. common we approximately over paid also million liquidity and with $X.X

no have over and first of XXXX significant remain We the a of EBITDA charge fixed five times coverage XX%. debt-to-annualize credit maturities estate annualized next of years. the and metrics end ratio real solid with value long-term debt debt-to-enterprise adjusted a X.X X.X quarter, the At adjusted of times our for

our long-term times. debt-to-annualize target higher adjusted EBITDA remains for Although, estate our metric of five real below than

my our metric during from deferrals producing notes. up and senior on senior year asset to senior reductions investments today along on with care abatements. principal and from debt downs principal previously leased the pay rent unsecured And with credit start line revenue of close pay this sales trend from lower expect the comments I'll rent recent We and scheduled to downs with as lifestyle. our increased properties

first for of In have agreed a provided Further, April, of deferrals June million of from have abated $XXX,XXX receiving XXX,XXX provide to operators rent the in and each and XXX,XXX of During XXXX. total that rent us. small up provided assistance been rent XXX,XXX same abatements. of deferred we abatements May we to in and of we subset the $X.X Again rent. to quarter, rent

of detail expected for XXXX. rent, May represents Additionally, some by whose who we our top of agreed each not about rents June like the concentration in the majority Anthem reduce deferred is to to provide XX. operator from additional I’d and $XXX,XXX

and two rent master operator amended as one combined to the XX, combined XX, master agreed During with was rent April due XXXX, through lease our XXXX. master to XXXX. period lease the extend of needed $XXX,XXX leases XXXX operator to consolidated and we this into This and March during abate allow deferred deferral XXXX rent

the $XXX,XXX As such, the quarter first XXXX approximately of deferred of operator rent and million April. $X.X for in

April XXXX, operator from of due million. the this deferred approximately balance As $X.X is

abated recorded have this we have the not We rent. nor as revenue

Our include any guidance this does not portfolio. revenue from

to the address with portfolio. for as rent deferred operator a expect We resolution work the this toward we

like to turn the Clint. call to I’d over Now,

Clint Malin

former last information. start January we with Senior which Pam. portfolio, XXXX occupancy Occupancy communities. from today Thank XX%, XX% which I’ll at you, XX, March the Lifestyle XXXX from at includes quick XX, update on the date was XX provided increasing

market March under XX, communities six the For year from XX% leases, up rent occupancy two at at was separate XX, XX% XXXX, two based January XXXX.

from property XX% of to XX for month the Care For Senior XXXX. portfolio that has at been XXXX was compared XX% transitioned HMG, XX, March the to occupancy January

The Given the from up with year that several Texas just Reflecting our the a operated purchase transition in Resorts, skilled of surge to of primarily the seventh issues, the transitional HMG containment. our LTC of cost $X average their of age on portfolio. two newer helps renewal and Medical comfortable on optimism, guidance in of years our our made the beginning the centers revised four were focus staffing as over that of these leadership Omicron which million the HMG options. Texas anticipated. buildings private buildings, years. lease overall These is is by buildings through rent At nursing the include reduce portfolio. permeated the year we with operating partner. with in the the sixth Ignite a HMG average centers. QX in XXX care This fits industry of of Lease strategy acquiring Ignite how buildings our mentioned, addressing in as issues four HMG current these option month, term well rooms construction, the total Pam being changes we middle this and acquired beds, what well year the is age has Beginning in are end portfolio this to we XX XXXX as lease by newer five have four of previously

fourth each rent regional receive The of strategic expect This XXXX. third the million a $X rent XXXX of X% the operator. lease approximately the X% rate. million increase each during starting the will in changes anniversary of and to to $X.X We on quarters third with market was on in by approximately acquisition Medicare a year basket of based and strong

amended years. from reduced to portfolio pleased the year our master the to the not I’m renewal to by option, options numbers, change under The was to quarter, Brookdale’s moving years Before the which master except did XXXX. first two subsequent new announce three for to maturity first to that of lease one term the the December renewal XX, we of end amended lease extend

two includes Aside year lease option. option a the five XX also year and option, the from a renewal amended year renewal

X, We also through the notice XXXX. changed February for XX, to November period first renewal the XXXX

we Additionally, to maturity XXXX. February our capital million million $X $X its increased to to commitment XX, and extended

an We incentive ESG for projects. also included qualified

During quarter new million under approximately $X.X commitment $X million funded with the the we remaining. of capital first XXXX, $XXX,XXX

for usual that a we currently numbers. don’t at this coverage is portfolio a created. Now time, or our and environment challenging performance it indicator the future good With disclaimer my the given believe pandemic

no including clarity, properties, For former our Lifestyle and for Care recently Senior same-store transitioned longer portfolios metrics. qualify Senior the

fee EBITDAR QX reported living excluded these and our XX portfolio. So was respectively using and for X.XXx EBITDARM numbers. trailing month from X% coverage they are X.XXx, as assisted management a

operators Excluding X.XXx, was stimulus funds respectively. X.XXx our by received and coverage

EBITDAR X.XXx nursing respectively. EBITDARM our skilled and was For and coverage portfolio as X.XXx, reported

and X.XXx respectively. X.XXx, was coverage funds stimulus Excluding

XXXX, March are trends, portfolio. now same-store for some recent of occupancy which our Moving to are and as XX,

us Our expedited and have a given data this basis. on voluntary partners to

private of occupancy same-store was March and units, XX, total XX% September nursing includes beds. pay at XX% at So XX% information XX, providing January and XX% same-store skilled XXXX. XXXX approximately our pay XX our the we are Private approximately of and

For was year March pipeline. monthly our of in January skilled of average Finishing XX% with XXXX. up this and portfolio, XX% XX% year, our occupancy September this in in

the opportunities Wendy really slowed down of since last late pipeline and pace said, hasn’t summer. As is robust

an skilled vehicle, valued spans bring and amount into Our includes now the ability ventures One is products such an creative opportunities loan partners. believe opportunities incredible close terms successfully The new needs. relationships. financing five in as joint to competing of portfolio allowed and property for LTC by enhancing ability are mezzanine There new investment LTC’s that are and to current discussed of a the operative financing array in think of buy million our portfolio This the in who $XX and attract the also otherwise to operating our pipeline market structures relationships varied right their partnership existing tailored as capital partners for million private driven needs and mezzanine approximately operators, pay geographically of is to the strongly $XX not is housing of REIT provide owning diverse We mortgage diversified of seniors currently LTC at the move while recapitalization might example offering and we nursing is earlier. including development to was loans. to by equity our fund. portfolio, out financing an well

on existing all. deepens one million size relationship approach advantage. because fit We can of broadens take We made structures example acquisition fits all based the our the needs, competitive operator’s giving offer is and in does Texas, not a never specifically us an a tailored Another which financing Ignite. $XX nimble we with operating size one partner footprint

Wendy call closing I’ll to her Now turn remarks. back the for

Wendy Simpson

Clint. you, and Pam Thank

believe a have today’s as the growth, to is to in partner return Our on continue LTC choice we necessary in of XXXX capital and take to taken steps market. focus I and a position

entire ready our a brave family team over Before I who the of questions, friend. your of send battle questions. was than the we’re away with but LTC to to to LTC advisor call deepest passed would condolences Linda Operator, Goodman, now recently turn like and more investment cancer. the the after Linda, was champion for a an that, a our of industry Linda dear specifically,

Operator

go Please [Operator Valiquette first And our from Barclays. from you. comes Steven ahead. Thank Instructions] question

line open. Your is

Steven Valiquette

Thanks. Hello for taking everyone. Thanks the Great. question.

each I needless say is I the back? change chance updated at to CMS XX industry. years? obviously the your is, guess, from any over Or can over think rates to my the decision the to the you give like to thoughts little just guess, there’s out or back put few claw trade rate them guess, Thanks. past around to spread the year. or a it the this. So, for PDPM the proposed been into question either want very Just And AHCA I for XXXX snip so, you lobby final either reduce others a for years bummer of sides there’s do groups claw to all it get maybe rule that the

Clint Malin

AHCA approach reach active I out first there’s mean, our this by and during period. comment definitely an to comment have

goes. large So, industry of But participating just operating in and detail employees be, to it definitely letters impact that. involved If of regarding we’ll a a people we be there’s space lot to where know in what able But outcome feedback talked a of large are letters, specific do they’re the effort very providing that to this canned positive. pushed companies a years, out and letters be encouraging to I considered the effort would We’ve but over not think don’t there’s but proposal. from and write see in this and underway this. be could number actively it would a

Wendy Simpson

these getting reduction good people Congress hope the and They out basket this net we they’re the their so. or because calls, X.X% all very can ASHA operator hoping year of our over of is active for each that are very, can it. there reduction CMS least letters of changes to And do have three of the X% in from phased states. The we years get but is that in a really increases, at all market

in about they that costs sort with panicked thing. they’re of there’s but situations, even it. on increase But possibility, nursing unhappy So as operators, the about a not our and weren’t we’ve presenting with fire reduction, skilled it talked that to hair

Steven Valiquette

Okay.

sounds in. So primary like it right it just to have now, stands the is phased the rebuttal it way

definitely to hear So I helpful guess just it’s that.

Okay. Thanks. I appreciate the color.

Wendy Simpson

you. Thank

Clint Malin

Thank you.

Operator

your question. Perfect. you so much Thank for

comes from next Our BMO. go from ahead. question Please Juan Sanabria

Unidentified Analyst

Hi. This Juan. Hilary on for is

So earnings? have talk and levels? support last your pop list watch outlook with that up first updated with going confidence and Especially What no question abatements how to you that new tenant going trending government level tenants issues is after to this are relative deferrals on would increase forward? or

Clint Malin

the is, has deferred encouraging see Well, item to Anthem and abated about rent been spoke small a providing really in we remarks. subset of We operators. prepared our

As we’ve going pay and COVID growth served decrease with cases is into QX rate the side private seen on encouraging.

So as going And optimistic. we right think forward. we’re I in now, indicated cautiously prepared remarks, our optimistic

Wendy Simpson

one operators of And our are flow cash for management rents positive fee. abated assets after actually a the our

not is It in a flow change or attention cash just cash the the So from constrained. operator like operator. it’s is

not we’re having operator. to concerned abated about So give rent additional from that

Unidentified Analyst

following that, either. additional on And transitions Okay. no up

Wendy Simpson

No additional what?

Unidentified Analyst

Transitions.

Wendy Simpson

Transitions.

Clint Malin

that provided Pam is mentioned of her prepared additional and operators with resolution small on we’re debated we transition working one remarks, a to subset that. the only potential deferred in the the Well, rent,

on framework that facilitate So, to with operator are working with we that a transition. a

something is to abated deferred be that. expected with got resolution to there’s as a that having rent, or So that

flow our guidance top revenue So the from is as mentioned, the of that portfolio. That and encouraging as works. The cash positive. include XX operators, that in the something portfolio not any our Pam that’s doesn’t is this points indicated Wendy

that. toward contributing we’re the portfolio year end the of to will hopeful be So this

Pam Kessler

the about updated. not clarification, Yes. talking was And Wendy deferred, for

Clint Malin

Correct.

Unidentified Analyst

Got you. makes That right. All sense.

topic Moving to that of of are, fee that versus mean, where push that any maybe there you skilled cap kind sign stuff moving rates would housing – do you is higher? loan different of simple acquisition this too? senior And more I with traditional the move to, Is rates doing? the and could been for a a see have nursing pricing strategy that they kind guys shifting

Clint Malin

hopeful evaluating that obviously were it's be interim… But love be we'd able would that see say point. right this at in, I'd in to point. is able We that. not the that a to actively market but that to get participate to we're there We environment now,

Wendy Simpson

We've that's of on been still thinking what's NOI. not They're prices and artificially there's trading keeping just just trading lot – thinking, They're a hoping a the the out based – on for there's think that high. a I future. there while, current money

hope So that's that's call note what and we a it.

Unidentified Analyst

Got you.

Operator

Thanks.

Austin ahead. move Wurschmidt on Markets. go to from Please Key now The next from will question. Capital next comes We question

Arthur Porto

This good for Hi, is Arthur Porto on morning. Austin.

am the of if for the to of deals could me. of a And of comprised – I one the CMS potentially sort ruling? if understand might Just or your hold, is elsewhere put investment on trying pipeline SNPs. a ruling the how recent big percentage of shift pipeline you as result

Clint Malin

Sure.

with on of land a We provided our right – is now in acquire which is Missouri. we working which have piece have only one project SNP, development to opportunity a Ignite, a in loan supplemental. We them a

be would development a that And project. so

in one that now the skilled would that be our currently we're working on. that opportunity right we're asset So investment –

Arthur Porto

of Okay. what And sort of… CMS depending future opportunities could change ruling the that on SNP sort ruling,

Clint Malin

we opportunity transaction looked of this a assets where job on capital newer assets, done Ignite traditional In be their to feel the care on private to in in indicated tremendous that skilled very choice. and skilled nursing invest opportunity on the operator, partner unique rooms, we've As type – strong us Ignite model. executing Ignite of that their space, regional we've really has brought we the fortunate had in side, newer

So those in. are hope much participate we very opportunities to get

Arthur Porto

thanks. Great,

Clint Malin

you. Thank

Operator

Thank your question. for Perfect. you

at Credit go Please ahead. Tayo Our Okusanya next from comes Suisse. question

Tayo Okusanya

wrong, and doing are with you About everyone. Are may am get that I'm things Senior correct drill to the a correctly? morning more Coast. than well were portfolios, if you West understanding me – a that initially transition like can you Care. Senior you Senior Hope wanted in HMG, Care little Good I Yes. actually you it's on going there. the all anticipating? Is expecting million rents Lifestyle are bit sound on I well

Clint Malin

correct. is that Yes,

Tayo Okusanya

Okay.

So that's days got additional quarter. you've revenue over and fourth custom beyond the cash out

Clint Malin

of we It's provided guidance last quarter. in the excess

Clint Malin

Yes.

Clint Malin

our effectively increases it from… So guidance

Tayo Okusanya

that say again. sorry I'm

Clint Malin

that to upping that from million a for Effectively increases gave XXXX. we now million quarter, total guidance our of $X $X last

Tayo Okusanya

Great.

what's started those terminated the a And about one that into little assets you could then It's bit with assets? for Okay. lease was where Lifestyle, like those just talk you happening on transition the Senior operator. earlier new the of for

Clint Malin

those. based So annual buildings properties – a we rent Senior of Senior on total the a under are of Life with total on – buildings so of various former the increases we in other resets. XX based Lifestyle portfolio, couple And the market six renewals different fixed have have have quarterly

in right encouraged now there properties. we're the information that been those portfolio an to across of has So very I We're portfolio. gave in see XX growth seeing regarding that that uptick occupancy occupancy

Wendy Simpson

guidance remained We're rent what's unchanged this the… quarter. And reaffirming

Tayo Okusanya

your one to Fair – selling the transitional commentary lease there you ended But your – had enough. was terminating the asset asset that and – where instead. you from comment up one

Clint Malin

transitioned Senior in Sure. had Colorado. one There property was that to we from Lifestyle an operator

to in Colorado try a Castle invested make building we operator local Rock, to freestanding Care to Memory was operations improvements. dollars that support Community. a So they transitioned to And and equity

standpoint the looking to was challenged has unfortunately, And to to fund and property operations. didn't they to this able not of be get able for have been traction operator depth from a that over years. the think were reputational equity I regional the continue

to close So at book million. is where really the… better was that sell point $X for it at mentioned and use we'll to it approximately selling Pam it move property asset. for and to value we're look was with highest And net a juncture, that best our going the forward

Pam Kessler

revenue. no And

Clint Malin

our no Yes. we for right in have now model revenue And that.

Tayo Okusanya

said, I why that the forward. change going So revenue like asset, assumptions that's

very Okay. much. Thank you

Clint Malin

you. right. All Thank

Operator

from question comes RBC Capital Thank you. Carroll from go And [Operator Instructions] next our Please Markets. Mike ahead.

Mike Carroll

I a what know this collection guess, increase. prepared just little been assuming previously more the little that? that about to Clint, seamlessly HMG drill drove mean, wanted improved I rent assumptions. into rent I to bit I'm talk I Can that bit. of remarks, that into their you I integrate platform portfolio talked thanks. about in a kind your we Yes, than they've specifically, you able expected. guess,

Clint Malin

a – They there's over buildings, high amount usage. Sure. of when they have the agency took

disruption operational imagine, can a care had in been senior of you As there days. lot

and in usage in these going the just buildings. There of was buildings. finding So leadership in a appropriate lot agency the it's really

they've perspective these basis far it's in and for felt And sense of by in Wendy got as upping made we prepared as time So cost a takes point, remarks. to on this based progress to million based where that it continue revisit at, we guided their spoke made were HMG million and performance point And the to containment. HMG That's with aspect. guidance on culture bringing to a the last her all on is that time. we in to understand occupancy put HMG's able at coming $X we sell, we'll to mix, the on $X worked we've HMG's time place into be and quarterly from where at is buildings XXXX really transition the to to where culture

Mike Carroll

we stuff. you assume And when a I rent? are really happen they've cash half I in of care second that have your little senior that's included you by I mean, should assuming in know a been this guidance HMG mean, paying XQ? is I that type do to think? the or going backlogged some start can

Pam Kessler

We've and included quarter the in each second quarters. and guidance $X fourth in third $X.X million of the million in then

Mike Carroll

about guess, more those mean, or you should thought starting I learn how going? I rent a facilities. then about And we of great. what's think I those Okay, also you’re behind are next establishing discussions the kind process that? to about at more this talked quarter mean, permanent Clint,

Clint Malin

one did now quarter, we flow Yes, right through lease I cash would transition. the say HMG in year with fourth a

to we with HMG. and rents so And be on lease more permanent that working extend will working

guidance more the of so be XXXX? through probably year, towards look more on the end go it'll for but as we that And

Mike Carroll

that that that resolve deferral kind you the implied they tenant kind bigger behind related the do has that, what And you living or of when expect with that assisted restructure you then remarks, thought that that tenant something about what's the trying tenant, there, that a little with Are to process prepared in deferral. sometime and you mean? to larger the relationship, to the bit rent what's kind second to mean, your can going I you of on expected quarter? I guess, the that Okay. know in pay tenant? or Are talk I does supplement release in of

Clint Malin

in previous work this this we to operator towards and a transition. spoke I a Q&A, have So to so framework with

we from rent earlier. we the that on portfolio as end the have we're get contributing keep we transition with like but I do And we we existing before year, is want I other of revenue. are evaluate a portfolio expect what but think do to on and which evolve any work the thing into flow this And that's transition buildings we're through trying to operator the hopeful new cash the in about rent year spoke towards we buildings I guidance, and or would our positive. mentioned, towards sense that it long-term, from not to So – of make to capital. any not facilitate which this hopeful operator transition the could the to recycle the July. we the go And end

as some from on but in advocate will there this capital we've resulting recycling be So portfolio, of the likely assets. been sales the we've demonstrated asset past,

any there asset the of guidance we be the portfolio. again, to sales don't likely year this would have of for will portfolio, in out XXXX. later probably our occur of But quarter this in So revenue model first which

Mike Carroll

just to then kind deferred, is with opportunity that's something this going Or rent that close that collect And written of that's you to Okay. currently is there off? any that as be – down?

Clint Malin

as that We transition through revenue. recorded into right we now, but not the are Pam mentioned, working have

I resolution And so we through I We're going actively right – that. count on haven't wouldn't the it. now, but wouldn't actually debated

Pam Kessler

the a recorded, receivable balance And on been was to for operator's not cash on no sheet basis. that there's this clarify, it

Clint Malin

a the a sheet. but receivable contractual So it's obligation, not balance on

Mike Carroll

two sense. this understand just Okay. transition make for the That then last I makes correctly. me, I And memory want to just assets. sure care

they the then put don't I going the anything think – year. And the the be release second the that of quarter. quarter. in expect And half think second is press I pay Is collect the correct? in first it amount in you you rent in to the So that XXX,XXX the remaining

Pam Kessler

correct. that's Yes,

Mike Carroll

Okay, you. great. Thank

Pam Kessler

Thanks.

Operator

are for I back no Michael, And Wendy any to there over like final further your this Thank for would questions. At you, so much pass remarks. time, to question.

Wendy Simpson

to with I Thank we'll us talk little you much. summer. you impact, today. wish you all joining you a for spring very COVID in happy Thank very the and

Operator

Thank you everybody for joining today's conference call.