Occupancy in the Healthcare Trust Inc.’s senior housing operating portfolio, or SHOP, segment of its portfolio grew by 0.8% to 74.1% in the third quarter compared to the prior quarter, CEO Michael Anderson said during Thursday’s presentation to investors.
“NOI [net operating income] for the SHOP segment decreased compared to the same quarter in 2022, primarily due to payments received in 2022 related to the CARES Act which were not replicated this year,” Anderson said.
At the same time, revenue from tenants in the SHOP segment of HTI’s portfolio increased by almost $2 million, or 3.4%, compared with the third quarter of 2022.
“We are encouraged by the year-over-year increase in SHOP portfolio revenue, reflecting the results of the team’s dedication to improving our shop facilities, operations, accessibility and attractiveness to seniors and their families,” Anderson said. He noted that the SHOP team has a combined 80 years of experience in the senior housing space.
As of Sept. 30, the real estate investment trust had four independent contractors operating 46 properties in its SHOP portfolio. According to a filing this week with the Securities and Exchange Commission issued in conjunction with the earnings call, however, the company terminated its relationship with a contractor that managed 20 properties. HTI is in the process of transferring management of those properties to a new independent contractor and expects the transaction to be completed by Dec. 31.
Based on NOI, HTI’s portfolio is comprised of 23% SHOP assets and 77% medical office buildings, Anderson noted. As of Sept. 30, 2023, HTI owned more than 200 properties, totaling more than 9 million rentable square feet in 33 states. The portfolio consisted of 46 senior housing operating properties with more than 4,100 individual units, 56 medical office buildings and two land parcels.
“We’ve diligently constructed a portfolio of MOB and shop assets and continue to deploy capital into select high quality assets throughout the United States,” Anderson said. “We partner with top healthcare brands in well-established markets to maintain a durable portfolio of healthcare real estate.”
According to Chief Financial Officer, Treasurer and Secretary Scott M. Lappetito, the company’s net leverage as of Sept. 30 was 39.4%.
“All of our debt is fixed rate, inclusive of our hedging instruments at a weighted average economic interest rate of 5%,” said Lappetito, adding that the company’s nearest interest rate cap maturity is in April.