National Health Investors is starting to see more “actionable activity” in its investment pipeline, Chief Investment Officer Kevin Pascoe told investors and analysts Wednesday during a fourth-quarter and end-of-year 2023 earnings call.
“We’re hopeful that we’re seeing the tip of the iceberg, as the volume of new inquiries has significantly increased in the last several months,” he said.
The Murfreesboro, TN-based real estate investment trust finished 2023 on a positive note, with better-than-expected fourth-quarter results, CEO Eric Mendelsohn said.
“We believe our portfolio is in much better shape and positions NHI for strong organic growth in the foreseeable future. We’re also positioned for external growth with our fortress-like balance sheet,” he said.
As of Dec. 31, the company had $1.1 billion in net debt, including $245 million outstanding on its $700 million revolving credit facility. As of Jan. 31, NHI had $273 million outstanding under the facility and approximately $18.8 million in cash and cash equivalents. The company has $500 million available under the at-the-market program.
The REIT’s fourth-quarter results, he said, were driven by more than $2 million in deferral repayments, no unexpected rent concessions and 24.4% sequential senior housing operating portfolio, or SHOP, net operating income growth compared to the third quarter.
“While SHOP is still a relatively small piece of our overall business, we’re excited by improving trends and continue to believe in the significant upside potential that can drive our organic growth profile,” Mendelsohn said.
Specifically, he said, NHI expects SHOP net operating income to grow by 25% to 30% this year.
During the quarter, NHI restructured leases with Discovery Senior Living that were in negotiations in November.
“We’re making good progress on the Bickford rent reset, with an expected increase in cash
rent this year, and our other cash basis tenants are current on their monthly base rent,” Mendelsohn said.
Bickford repaid approximately $1 million of its deferral balance in the third quarter, according to Pascoe.
“This was their highest quarterly repayment, which reflects the portfolio’s strong underlying operating results, as repayments are tied to revenue thresholds,” he said.
During the fourth quarter, NHI sold three properties with a net book value of approximately $5.9 million for net proceeds of approximately $7 million. In 2023 overall, NHI sold 12 properties with a net book value of approximately $45.1 million for net proceeds of approximately $59.1 million.
“In sum, NHI is poised to capitalize on opportunities and what we expect to be many years of exceptional growth,” Mendelsohn said.
The REIT on Tuesday announced that it will pay its first quarter dividend of $0.90 per common share on May 3 to stockholders of record as of March 28.
