Yahoo Finance

Q & A Highlights

Q: Could you share some details of what the investment pipeline looks like today in terms of size fee simple acquisitions versus loans and maybe opportunities in the U.K. since we've seen some more deals there by you recently? A: (Daniel J. Booth - Secretary & COO) The pipeline today is as active as we've seen it in many years, spread across SNFs, senior housing, the U.S., and the U.K. We don't assign a dollar amount to the number of deals, but it's substantial with a lot of deals flowing in at the moment.

Q: On the operator transitions, have you found it more challenging recently to find replacement operators given some of the uncertainty facing skilled nursing on the regulatory and labor availability front? A: (Daniel J. Booth - Secretary & COO) It depends. Guardian was a restructure that took place in three parts over several years. For the most part, what we've restructured over the last several years hasn't been really challenging. We're not in big restructure mode currently, except for the remaining portfolio, so we're not seeing a lot of challenges.

Q: What's the timeline for the Guardian rent increase potential? A: (Daniel J. Booth - Secretary & COO) The increase could happen this year. It's a revenue-based kicker, so it's too early to predict where they're going to come out in terms of increasing revenues. We do expect there to be some increase in the number over 2024.

Q: Could you clarify how we should think about the trajectory of FAD or FFO over this year, especially trying to understand if the current Guardian rent was baked into the guide? A: (Robert O. Stephenson - CFO, Treasurer & Assistant Secretary) From a guidance standpoint, we gave a range of $270 million to $280 million. At the low end, you would have the one aspect of Guardian at the higher end. We have a number of operators on a cash basis. The impact of the $55 million of first quarter acquisitions and the $165 million of acquisitions announced in the second quarter should flow from there.

Q: Are the acquisitions done so far this year immediately accretive to earnings? A: (Robert O. Stephenson - CFO, Treasurer & Assistant Secretary) Yes, we would expect them to be immediately accretive. We're quoting 10% yield numbers as the starting point, and that's what you'll see going forward. The lion's share of our deals in our pipeline are our normal bread and butter, which is acquisitions of fee simple properties.

Q: What are the main drivers of the abnormally large staffing issues in Texas? Are these staffing issues primarily responsible for the lagging occupancy gains relative to other markets? A: (Megan M. Krull - SVP of Operations) Texas has a lot of very rural areas, so you have very small towns where it's not easy to go pick up staff from the neighboring town, you're really relying on your local market. That plays into a very wide and vast area.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.