American Healthcare REIT expanded its portfolio, recast its credit facility and filed a registration statement for a proposed common stock offering in 2022, the Irvine, CA, real estate investment trust announced Monday in a fourth-quarter and year-end 2022 investor update.
The REIT expanded its senior housing operating portfolio and integrated senior health campus segments by approximately $254 million last year, primarily through acquisitions and development.
Combined occupancy across its senior housing and skilled nursing properties showed steady improvement throughout 2022, the REIT said, with overall occupancy increasing from 70.1% in the first quarter of 2021 to 78.5% in the first quarter of 2022 to 82.7% in the fourth quarter of 2022. Operators are experiencing headwinds from increasing labor costs, and inflationary pressures on other operating expenses continue to negatively affect margins and net operating income, but management is optimistic that occupancy gains and rental rate increases in 2023 will help offset those expense pressures, the REIT said.
“We are pleased that our property operations continue to demonstrate steady improvement; however, increasing interest expense has put pressure on our overall earnings,” President and CEO Danny Prosky said in a statement.
As of Dec. 31, the senior housing operating portfolio represented 19% of the REIT’s portfolio, skilled nursing facilities represented 6%, and leased senior housing properties represented 4%. American Healthcare REIT has 208 senior living and skilled nursing properties with a total of 11,674 senior housing beds and 9,496 skilled nursing beds.
Net operating income for 2022 showed “strong growth,” totaling $302 million for the year compared with $213 million for 2021, according to the REIT. During the same time period, net losses increased from $53.3 million at the end of 2021 to $73.4 million at the end of 2022.
Funds from operations totaled $94.6 million, or $1.44 per common share, at year-end 2022, compared with $69.7 million, or $1.39 per common share, at year-end 2021. Modified funds from operations equaled $128.4 million, or $1.95 per common share, at the end of 2022 compared with $77.6 million, or $1.55 per common share, at the end of the previous year.
The board of directors last week authorized a reduction in the REIT’s quarterly distribution from $0.40 per common share to $0.25 per share. That’s equal to an annualized distribution rate of $1 per share, the firm said. American Healthcare REIT said that the first-quarter distribution will be paid on or around April 18.