American Healthcare REIT (AHR) Earnings Call

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DATE

Feb. 27, 2026

CALL PARTICIPANTS

• Chairman and Interim CEO & President — Jeff Hanson
• Chief Operating Officer — Gabriel M. Willhite
• Chief Investment Officer — Stefan K. Oh
• Chief Financial Officer — Brian S. Peay
• Operator — [Operator (name not provided), included for opening/closing and Q&A facilitation]

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TAKEAWAYS

• Total Portfolio Same-Store NOI Growth -- 11.8% for the fourth quarter; 14.2% for 2025, marking the second consecutive year of double-digit growth.
• Operating Portfolio Mix -- Integrated senior health campuses (Trilogy) and SHOP segments now generate 76.9% of consolidated cash NOI, with margin expansion of 130 basis points in Trilogy and 280 basis points in SHOP during 2025.
• Trilogy Segment Metrics -- Same-store NOI up 18.4% for 2025; Q4 same-store occupancy reached 90.6%, rising 275 basis points; quality mix penetration rose 220 basis points both by resident days and by revenue.
• SHOP Segment Metrics -- Same-store NOI increased 25.2% for 2025; Q4 same-store occupancy averaged 90.6%, up approximately 290 basis points over the prior year.
• Segment Revenue Management -- Dynamic revenue management tools piloted within SHOP and Trilogy are expected to enable sustained above-average NOI growth in coming years.
• 2025 New Investments -- Over $950 million deployed in new acquisitions, chiefly in SHOP, positioning it as the portfolio's second largest segment by cash NOI.
• 2026 Acquisitions -- Closed $117.5 million in SHOP acquisitions to date, with over $230 million of awarded deals in the pipeline, none of which are included in initial 2026 guidance.
• Development Pipeline -- Ongoing focus on Trilogy campus expansions designed to deliver attractive yields and faster cash flow recycling with mitigated market risk.
• Normalized FFO (NFFO) -- $0.46 per diluted share reported for the quarter; $1.72 per diluted share for 2025, representing 22% year-over-year growth.
• 2026 NFFO Guidance -- $1.99 to $2.05 per diluted share, reflecting projected double-digit growth, and incorporates only the $117.5 million of 2026 closed acquisitions.
• 2026 Same-Store NOI Guidance -- 7%-11% total growth, with segment details: Trilogy (8%-12%), SHOP (15%-19%), outpatient medical (0%-2%), triple-net leased (2%-3%).
• Capital Structure -- Net debt to EBITDA improved to 3.4x at year-end, excluding $287 million of unsettled forward agreements from ATM and November 2025 equity offering.
• Acquisition Yields -- Most newly acquired assets were priced in the high-5% to low-6% cap rate range, with stabilization expectations around the 7% level.
• Portfolio Supply Dynamics -- New supply remains under 1% of existing inventory; management expects muted competitive pressure and rapid absorption due to increasing demand.
• Leadership and Strategy -- Interim CEO Jeff Hanson affirmed, "There is no change in strategy. Our investment and capital allocation strategy, risk management framework, balance sheet posture, and long-term value orientation remain unchanged."

SUMMARY

American Healthcare REIT (NYSE:AHR) leadership confirmed organizational and strategic continuity following its CEO’s medical leave, indicating no changes to current management direction. Management signaled continued capital deployment into SHOP and Trilogy assets, underscored by robust acquisition volumes and a strong investment pipeline. Dynamic revenue management and ongoing development initiatives offer levers for future performance as demonstrated by segment-specific guidance for 2026. Portfolio positioning reflects a concentration in high-occupancy, high-acuity care assets with an emphasis on off-market opportunities and demographic-driven demand absorption. Capital markets activity in late 2025 and early 2026 provides ample liquidity and flexibility to pursue emerging investment opportunities in a competitive landscape.

• The company’s improved debt metrics, with a 3.4x net debt to EBITDA ratio excluding unsettled equity from recent offerings, suggest increased financial flexibility for 2026 opportunities.
• Management attributed significant quality mix improvement in the Trilogy segment to more favorable Medicare and Medicare Advantage penetration, which enhanced both revenue and margin profile.
• Leadership disclosed, "Same-store NOI growth in SHOP grew 50% in 2024, 25% in 2025, and now the midpoint of our guidance range is 17%," highlighting anticipated deceleration while remaining above industry averages.
• Piloting of proprietary real-time, unit-level pricing tools is credited with enabling stronger operator performance and is being tested for broader adoption within the SHOP portfolio.
• Approximately half the company’s 2025 acquisitions were off-market, sourced through deep operator relationships, providing a relative advantage in deal flow and pricing.

INDUSTRY GLOSSARY

• SHOP: Senior Housing Operating Portfolio, representing directly operated senior living assets within the REIT.
• Trilogy: Integrated senior health campuses, a key AHR segment with a blend of skilled nursing, assisted living, independent living, and memory care services.
• LTIP: Long-Term Incentive Plan; in this context, an equity-based management incentive tied to AHR stock performance, aligning operator and shareholder interests.
• RevPOR: Revenue per Occupied Room, a key performance metric in healthcare real estate.
• Quality Mix: The share of resident days or revenue derived from higher-paying sources such as Medicare, Medicare Advantage, or private pay, versus Medicaid or lower-rate sources.

Full Conference Call Transcript

Jeff Hanson, Chairman and Interim CEO and President; Gabriel M. Willhite, Chief Operating Officer; Stefan K. Oh, Chief Investment Officer; and Brian S. Peay, Chief Financial Officer. On today's call, Jeff, Gabriel, Stefan, and Brian will provide high-level commentary discussing our operational results, financial position, our 2026 guidance, and other recent news relating to American Healthcare REIT, Inc. Following these remarks, we will conduct a question and answer session. Please be advised that this call will include forward-looking statements. All statements made during this call, other than statements of historical fact, are forward-looking statements and are subject to numerous risks and uncertainties that could cause actual results to differ materially from those projected in these statements.

Therefore, you should exercise caution in interpreting and relying on them. We refer you to our SEC filings for a more detailed discussion of the risks that could impact our future operating results, financial condition, and prospects. All forward-looking statements speak only as of today, 02/27/2026, or such other dates as may otherwise be specified. We assume no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law. During the call, we will discuss certain non-GAAP financial measures, which we believe can be useful in evaluating the company's operating performance.

These measures should not be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP. Reconciliations of non-GAAP financial measures discussed on this call to the most directly comparable measures calculated in accordance with GAAP are included in our earnings release, supplemental information package, and our filings with the SEC. You can find these documents, as well as an audio webcast replay of this conference call, on the Investor Relations section of our website at www.americanhealthcarereit.com. With that, I will turn the call over to our Chairman and Interim CEO and President, Jeff Hanson.

Jeff Hanson: Well, thanks, Alan, and greetings to those of you joining us today. Before the team dives into our results, I want to start by addressing the leadership update that we shared earlier this month. As you know, I have stepped into the role of interim CEO while Danny is on a medical leave of absence. I am pleased to share that he is at home recovering well and is in good spirits. In fact, he remains engaged. He and I speak regularly each week on the business front, and he is participating in all of our board meetings virtually while he is on the mend at home.

He intends to return in the relative near term, but it is too early to have timing visibility at this point. By the way, we appreciate the many well wishes sent from our partners and stakeholders. We passed them along to the Prosky family, and for that, he is grateful. So thank you. Those of you who do not know me well, I served as Chairman since the company's formation and previously led AHR's predecessor companies as both Chairman and CEO.

I am one of the three cofounders of the companies, and I led this platform for roughly 16 of the past 20 years alongside both Danny and Matt Streiff, Matt, of course, being our third founding partner and a current board member. Together, we built this platform over the past two decades with a clear vision to create a disciplined healthcare company focused on providing and facilitating high-quality care and superior health outcomes. Our team here continues to reinforce this internally and externally, as this vision is actually what drives our performance and long-term value creation. And this foundation remains firmly in place today.

Along the way, Dan, Matt, and I have built the executive management team that you know so well today. The rest of the board and I have tremendous confidence in our team's ability to continue to do what they have done exceedingly well over the past decade, which is to drive the growth and the performance of this REIT. I want to be very clear at the outset. This is a seamless continuation of the strategy and execution you have grown to expect from this team. My role as interim CEO is one of continuity, support, and advisory. There is no change in strategy.

Our investment and capital allocation strategy, risk management framework, balance sheet posture, and long-term value orientation remain unchanged. And our executive team continues to work very closely with the board in executing against the established plan. It is also important to note that I have been engaged as the interim CEO full-time since the day after Danny's medical event, and I can tell you that the organization is operating with the same alignment, focus, and clarity of execution as it ever has. One of the company's greatest strengths, by the way, has always been the depth and the commitment of our people, which is particularly evident during times like this.

Importantly, the results you are about to hear reflect the strength of this platform and the depth of our team. With that, I will turn the call back to the team to walk you through the quarter and our outlook. Thank you.

Alan Peterson: Operationally, the fourth quarter capped off another exceptional year of outsized NOI growth for AHR. We delivered total portfolio same-store NOI growth of 11.8% in the fourth quarter and 14.2% for the full year 2025. This marks our second consecutive year of double-digit total portfolio same-store NOI growth and it underscores the value of our hands-on asset management approach. Performance was once again led by our operating portfolio, which is comprised of our integrated senior health campuses, also known as Trilogy, and SHOP segments. These segments now contribute 76.9% of consolidated cash NOI for our business, and where we continue to see the benefits of scale, alignment, and operating leverage.

The growth in our same-store operating portfolio in 2025 was driven by three primary things:

Gabriel M. Willhite: Occupancy gains, disciplined rate management, and continued expense controls. Additionally, as occupancies moved higher throughout 2025, each incremental move-in contributed to NOI growth and NOI margin expansion as we have seen margins expand 130 basis points to 280 basis points in our Trilogy and SHOP segments, respectively, in full year 2025 compared to 2024. That operating leverage combined with pricing discipline and occupancies sitting near 90% positions us very well as we enter into 2026. Focusing on Trilogy, same-store NOI increased 14% in the fourth quarter and 18.4% for the full year. Same-store occupancy reached 90.6% in Q4, up 275 basis points year over year. Revenue growth was supported by both rate and also quality mix improvements.

And quality mix continues to trend favorably. Medicare and Medicare Advantage penetration increased year over year, contributing 220 basis point improvements in both quality mix as a percent of resident days and as a percent of revenue in Q4 2025 compared to Q4 2024. We believe that this continued shift reflects exactly how Trilogy's proactive approach to aligning its care and services with the right payers best serves its residents. This emphasis on high-quality care and health outcomes continues to be recognized and appreciated by the health systems and Medicare Advantage insurers that Trilogy partners with. High-quality operators will continue to garner the most demand for growing care needs of the aging population.

As we enter 2026, Trilogy is operating at historically strong occupancy levels, with embedded pricing tailwinds that give us confidence in delivering another year of double-digit same-store NOI growth in the segment. Turning to SHOP. This segment again delivered the strongest growth across our portfolio. Same-store NOI increased 24.6% in Q4 and 25.2% for 2025, compared to the same period in 2024. Same-store occupancy surpassed 90% in the fourth quarter, averaging 90.6%, up approximately 290 basis points year over year.

Combined with solid RevPOR growth, the resulting NOI growth is a testament to our and our operators' focus on high-quality care and outcomes and our investments in the resident and employee experience providing us additional pricing power in the markets we serve. These operational focus areas and investments, along with the strong supply and demand imbalance within the long-term care sector, have allowed us to not have to meaningfully compromise on any of the levers of revenue growth, such as rate or occupancy, within our pricing strategies. Once again, we expect SHOP to continue to lead our portfolio's organic growth in 2026.

And this growth will be supported by our dynamic revenue management which we are piloting with a number of our operators and properties by leveraging the platform that we continue to invest in with Trilogy. I expect that these developments in revenue management that have really been continuously evolving over time will allow us and our partners to capture sustained levels of above-average NOI growth well into the next decade. Finally, I want to thank our operating partners for their commitment to our mission of providing high-quality care and outcomes for the residents they care for.

Their standards of care have helped contribute to the great health and the resulting financial performance we have achieved, which we expect to continue this year. I will turn it over to Stefan.

Stefan K. Oh: Thanks, Gabe. 2025 was a highly active investment year for AHR. We closed on over $950,000,000 of new investments across our Trilogy and SHOP segments, all in collaboration with our trusted regional operating partners. Our investment philosophy remains consistent. We are focused on relationship-driven sourcing, disciplined underwriting, and long-term cash flow durability and growth. The majority of our acquisition volume this year was within SHOP, where we added newer assets in attractive submarkets alongside existing regional operators. This has now positioned our SHOP segment as the second largest within our diversified portfolio in terms of cash NOI.

By design, yet without set allocations, we have shifted more of our portfolio into our operating portfolio segments, which is where we continue to see the best risk-adjusted returns. Nonetheless, we will remain nimble and respond appropriately to any changes that occur in the transaction market to take advantage of attractive opportunities as they arise. In many cases, our SHOP acquisitions were relationship-sourced or off-market opportunities where we had deep familiarity with the operator and the local market dynamics. We continue to seek opportunities where we know the operator first and can underwrite performance with conviction. Our goal is not simply near-term accretion, but sustained NOI growth.

This is why we underwrite all our acquisition targets holistically by focusing on market demographics, operator expertise, acuity mix, and age of asset, just to name a few of the many metrics we evaluate to inform our potential risk-adjusted returns. The detail our team emphasizes allows us to be confident in allocating our dollars today to provide for the best possible near-term and long-term performance outcomes. Additionally, with many of our deals in 2025, we bought the newest asset within their respective markets, and we expect those communities to be market leaders for some time.

Data continues to show that new starts and supply growth are at historically low levels, with deliveries of new stock below 1% of existing inventory, giving us conviction in our expectation that competitive pressure in those markets will remain muted. Further, any incremental supply should be absorbed rather quickly by the growing demand, highlighted by the baby boomer generation turning 80 this year. This dynamic should allow us to maintain market position for the next several years and beyond.

In addition to successfully accelerating several previously announced pipeline deals in the third quarter, which enabled us to close approximately $665,000,000 of new acquisitions in the fourth quarter, we have continued to secure and close new acquisitions in the first two months of 2026 that will further complement our portfolio. Year to date, we have closed on approximately $117,500,000 in new acquisitions within our SHOP segment, and we maintain over $230,000,000 of awarded deals in our pipeline. After a busy end to 2025, we continue to see more deal activity and more properties available for acquisition in 2026 through both off- and on-market channels, and we are prepared to competitively deploy capital in pursuit of this increasing volume of opportunities.

With regards to development, our pipeline remains focused primarily on Trilogy expansions and campus growth initiatives. These projects are designed to generate attractive incremental yields with limited market risk, leveraging existing campuses to mitigate any operating losses upon opening, as well as providing faster cash flow to recycle right back into the new development. In summary, capital allocation remains aligned with our long-term strategy. We believe we are well positioned within the industry with available liquidity and a strong operator network that allows us to source and execute on accretive opportunities. With that, I will turn it over to Brian.

Brian S. Peay: Thanks, Stefan. The fourth quarter rounded out a strong year for AHR, as evidenced by the growth we were able to achieve. We reported normalized funds from operations attributable to common stockholders, or NFFO, of $0.46 per diluted share in the fourth quarter of 2025 and $1.72 per diluted share for all of 2025. That represents 22% year-over-year NFFO per share growth in 2025 as compared to 2024. Importantly, this level of growth was achieved while continuing to improve our debt to EBITDA by nearly a full turn in 2025.

Our earnings growth in 2025 was primarily driven by the double-digit total portfolio same-store NOI growth, helped by the accretion from buying out the minority interest in Trilogy back in September 2024 and additional accretion from the $950,000,000 of new acquisitions. Our acquisitions were completed with a combination of retained earnings, accretively priced equity issuances over the course of the year from our ATM program, and the November 2025 follow-on equity offering. I am pleased that all areas of the organization contributed to the growth we delivered to our shareholders in 2025 and expect to carry this momentum into 2026.

Brian S. Peay: We issued 2026 NFFO guidance of $1.99 to $2.05 per diluted share. This implies another year of double-digit NFFO per share growth and only includes the previously consummated 2026 acquisitions that Stefan mentioned earlier of $117,500,000. Our total portfolio same-store NOI growth guidance for 2026 is between 7% and 11%. That range is comprised of the following segment-level same-store NOI growth ranges: 8% to 12% growth in Trilogy; 15% to 19% growth in SHOP; 0% to 2% growth in outpatient medical; and a range of 2% to 3% growth in our triple-net leased property. Moving to our capital markets activity and balance sheet. We continued to execute opportunistically in the equity markets during 2025.

We settled forward equity agreements, raised additional capital via our ATM program, and completed a forward equity follow-on offering in November 2025. We utilized this accretively priced equity to fully fund the approximately $665,000,000 of acquisitions closed in the fourth quarter, the 2026 investments that have only recently closed, and fund our planned 2026 development spend. As a result, we de-risked much of the execution for the growth plan we have in 2026 and maintain ample capacity as highlighted by our 3.4x net debt to EBITDA to capitalize and close on the opportunities Stefan's team continues to evaluate.

Importantly, this debt to EBITDA metric does not account for the approximately $287,000,000 of unsettled forward agreements from our ATM and the November 2025 follow-on offering. We are entering 2026 from a position of strength. We have operating momentum, capital availability, disciplined underwriting, and improving leverage metrics, equipping our team to continue to deliver on our mission of providing and facilitating high-quality care and health outcomes for our residents and creating value for shareholders. With that, operator, we would like to open the line for questions.

Operator: We will now open for questions. At this time, I would like to remind everyone, in order to ask a question, please press star then the number one on your telephone keypad. We request that you limit yourself to one question and one follow-up. You are welcome to requeue with additional questions. We will pause for just a moment to compile the Q&A roster. First question comes from the line of Wesley Keith Golladay with Baird. Your line is open.

Wesley Keith Golladay: Hey, everyone. Can you maybe dive in a little bit deeper on the acquisition environment? Are you seeing any, I guess, sub-segment, whether it is higher acuity or a little bit lower acuity, having any cap rate compression, any changes to terms of the management agreements?

Stefan K. Oh: Hey, Wes. Yeah. This is Stefan. Thanks for the question. First, let me just say that, obviously, we are very pleased with what we were able to accomplish in volume and quality of acquisitions this year. And wanted to just publicly acknowledge the teams here at AHR and our operators for allowing us to do what we could do. I think, just kind of directly at your question, you know, we continue to focus on higher acuity SHOP assets. You know, we think that there is a real benefit to focusing on the AL, the memory care side, I think it just allows us to have more confidence in the long-term stability of that asset class.

We do, obviously, have some independent living in our acquisition portfolio that, you know, most of it is part of a continuum of care, but, you know, really, at the end of the day, that is maybe 20% of the total units that we are acquiring. I think there is a little bit of variance in terms of what we will see in pricing when it comes to, you know, a full continuum asset of AL, memory care, and IL versus something that might be strictly independent living. You know, obviously, a little bit lower cap rate on the IL side. But, you know, for the most part, we are sticking with the higher acuity asset class.

So, you know, I think, again, that gives us some advantage.

Wesley Keith Golladay: Okay. Thanks for the time.

Operator: Your next question comes from the line of Ronald Kamdem with Morgan Stanley.

Ronald Kamdem: Hey. Just two quick ones. Just starting with the SHOP. Thinking about sort of the guidance for this year, baking in some deceleration, I was just trying to think through if you can in terms of, you know, RevPAR and occupancy, how maybe you see this year playing out versus 2025? Thanks.

Gabriel M. Willhite: Yeah. Hey, Ron. Morning, afternoon. So, you know, the thought is this. We had over 250 basis points of occupancy increase in our SHOP portfolio just in 2025. And the question becomes, you know, are we going to do another 250-plus basis point increase? It is hard to say. I also think it is important to look at where we came from.

Brian S. Peay: Same-store NOI growth in SHOP grew 50% in 2024, 25% in 2025, and now the midpoint of our guidance range is 17%. So that is a pretty dramatic growth trajectory for that segment. You know, we do know that the more occupied our buildings get, the more pricing power we have. And at 90.6%, I think, is the same-store occupancy. We have more and more pricing power. You will see us push rate for the existing residents, but you will also see us pushing street rates far more aggressively. I think what you are going to see over time is there is going to start to become scarcity in certain markets.

We have tremendous conviction in the business over the next five to ten years and can pretty comfortably say that occupancies are going to be somewhere between 95% and 100% during that time period. Exactly where they end 2026 sort of remains to be seen. That is, I guess, did you say you had another question?

Ronald Kamdem: Yep. I just wanted to hit on sort of Trilogy a little bit as well. Because, like, you know, you guys are 90% occupied. I think you have made some comments about the benefit of quality mix being able to sort of help the business and so forth. I guess just want to get an update on, you know, upside and how much that sort of mix shift you think can help sustain pricing? Thanks.

Gabriel M. Willhite: Yeah. Great question, Ron. This is Gabe. So Trilogy's model, as everybody knows, is unique in the space where they have got the mix of skilled nursing, assisted living, independent living, memory care, all under one roof in an integrated campus, and that creates different drivers for their NOI growth. We are pretty proud, like Brian said, of the numbers that they put up in 2024 and 2025. And we are very appreciative that we have a strong partner at Trilogy there. So I want to thank them for all their efforts on it. The key thing with QMix is going to be shifting to the higher payor sources, which you have seen us do over the last two years.

Having more people in Medicare settings and Medicare Advantage settings helps, and fewer in the Medicaid setting helps. We are also augmenting the existing campuses with more Villa projects, which you can see in the development pipeline there, pushing even more earnings growth through on the senior housing side and shifting the mix to more private pay globally. All those levers are things that Trilogy can use to drive the overall NOI performance, and it is difficult to predict exactly which way they are going to go. I can tell you that we are going to optimize for NOI growth. We are not going to sacrifice rate for occupancy. We are not going to sacrifice occupancy for rate.

And we are going to make sure that Trilogy is pulling every lever that they have to continue to grow the business as they have demonstrated they can do.

Operator: Your next question comes from the line of Austin Todd Wurschmidt with KeyBanc Capital Markets. Your line is open.

Austin Todd Wurschmidt: Yeah. I just want to go back to the same-store NOI growth outlook for Trilogy, recognizing it is a little bit lower than where you started last year, straddling kind of that last two-year starting point. I do recognize the occupancy is higher today, but, Gabe, you did highlight the flow-through benefits at these levels. So I guess what are some of the moving parts to drive that upside versus the initial range that has kind of been a tailwind for you guys the last couple of years?

Gabriel M. Willhite: Yeah. Great question, Austin. I appreciate it. There are a number of different ways that things can break where I think with Trilogy we have got upside potential that is disproportionate to downside risk. I do not see us going backwards in occupancy. But the velocity of occupancy gains could outpace even what we think, especially in the post-acute business, where historically there have been pressures on length of stay from both a Medicare and a Med Advantage plan perspective. Those seem to be normalizing. If that trend holds true, then I think you can expect some upside in our occupancy assumption. The same is true about Med Advantage plans and the rates that we are getting there as well.

2025 was a tremendous year for optimizing rate around Med Advantage plans, and primarily driven by one particular contract. If we get more attention on that front and we have got more partners that are recognizing and leaning into Trilogy's quality of care, I could see outsized growth coming from that lever as well. And then on the private pay side, you know, what Trilogy has going on with revenue management is pretty unique. They have built a proprietary platform within their system, a solution that can price each unit dynamically in real time based on a number of attributes that they load into the program.

They also can take micro market data real time and load that into the system, and they can push that information. They have a way to push that information through to the people that need it the most that are actually in the building. All those things combined, I think, give them strategic advantage, a competitive advantage on the revenue management front. And if we can push that throughout our platform to our other SHOP operators, I think it will benefit AHR as a whole.

Austin Todd Wurschmidt: No. That is really helpful. I mean, are you able to offset the lower rate growth environment from the government reimbursement side of the business with the private pay portion and just through the mix shift opportunities you highlighted to drive that flow-through? You know? Or is it going to take more time, I guess, depending on, you said you kind of cannot predict kind of the demand, but the contracts are in place to set it on the right path, I guess, directionally.

Gabriel M. Willhite: That is a great question, Austin. That is the one that we all wish we had a crystal ball that was perfect to be able to tell where we go from here. There are scenarios where they can make up for it. I think, absolutely. A lot of things would have to break Trilogy's way in order for that to happen, and I think it would be too speculative to be helpful for us to predict that those things would all break our way.

Operator: Your next question comes from the line of Michael Albert Carroll with RBC Capital Markets.

Michael Albert Carroll: Thanks. Gabe, I wanted to circle back on your comment regarding the revenue management system. I know in your prepared remarks, I think you were highlighting some pilot programs of kind of rolling that out to some of your other SHOP-related partners. Can you kind of help us understand where you are at in that process of rolling out that program? And have those partners started to see some type of benefit related to that yet?

Gabriel M. Willhite: Thanks for bringing it up, Mike. I think it is an important differentiator for AHR as a whole, and it really stems from our unique partnership with Trilogy. So let me back up for a minute. With Trilogy, we have got, I think, unparalleled alignment within the space where the management agreement with Trilogy is highly incentivized based on an LTIP, and that LTIP is paid in AHR stock. We were the first people in the space to adopt a management equity plan that fully aligns our company's performance with the currency we are using to pay Trilogy's long-term incentive. What that did was really unlock a financial incentive for the Trilogy platform to help support our other SHOP operators.

So now if they are doing extra work and investing more time and resources into helping our other SHOP operators perform better, they are actually participating in the value creation from that work. That was the catalyst for revenue management and how that could be spread through our SHOP portfolio, but there are other areas where that can work as well. That can work in sales and marketing, search engine optimization. That can work in recruitment and employee engagement. It can work in enrichment for residents.

There are a lot of different things that we are trying to test out to see how we can grow the platform value by partnering with Trilogy and also some of our other operators that have great programs that can be spread throughout our operating platform to others, through means that we can be a conduit for. So where we are at in that process is still too early for us to release the results from it. I think the people that are using it are both ends of a different spectrum.

One is good operators that are very highly occupied, where the strongest lever for NOI growth is going to be revenue management in 2026 and 2027 and 2028 as they kind of pick up the pricing power from that very high occupancy. The other end of the spectrum is people who maybe have rates that are on the lower end of market in the markets that they are in and understanding why that exists. And if we can solve it with the revenue management tool, then we will be, we will just have another, you know, arrow in the quiver to use in these situations throughout our portfolio.

Michael Albert Carroll: Then what operators are finding this most successful? I mean, I am guessing that some of the bigger ones that you have are probably not going to want or need this type of help. But are you starting with a few operators today, and you plan on rolling it out to the majority of your operators down the road if it is successful with these first few?

Gabriel M. Willhite: That is exactly right. We take a view that all of our partnerships with our operators are collaborative. We are not going to force anybody to use anything that they do not find to be helpful. If they are already maximizing their revenue management programs, and they have already tapped into it as far as they can go, great. That is what we fully expect them to do. If they are smaller regional operators that feel like they are resource-constrained, do not have a full IT team to build out a proprietary program like Trilogy has, where we can be helpful, that is where we can help give them the resources they need to outperform the market.

Operator: Your next question comes from the line of Nicholas Philip Yulico with Scotiabank.

Nicholas Philip Yulico: Thanks. Hi. In terms of the acquisitions, the awarded deals, the $230,000,000 in the pipeline, I know those are not in guidance, but can you just give us a sense for the potential timing of those and what is delaying the closing, since I know, I think you said some of those have been in place in the pipeline since the third quarter?

Stefan K. Oh: Hey, this is Stefan. Well, I guess just to address the first thing, you know, it is not a delay of closing. Just to kind of go back to where we were when we last talked about, on this call, about acquisitions. At that time, we had about $580,000,000 that we had closed through the point of the earnings call. Since that time, in the last three and a half months, we have closed on about $500,000,000 of acquisitions and added, and closed on, $500,000,000 acquisitions. And then in addition to that, we have added to our pipeline.

So, you know, if you look at what we said in the third quarter call where we had over $450,000,000 of pipeline, we have actually added, you know, somewhere around $275,000,000 to that today. You know, it is, I mean, I will say that the pipeline is robust. The deal activity is very high. You know, there is always a slowdown that happens in December and through January on the marketed deal side, but even despite that, we have seen a lot of activity happening over the past four or five weeks where new deals have been coming out. And on top of that, we have been working with our operators on off-market deals.

So there is a lot of deal flow. There is a lot of things that we are reviewing right now. And, you know, the pipeline is very dynamic. So I would expect that, you know, we are going to continue to be very busy reviewing deals that we think make sense for us and being, you know, very competitive on the ones that we really want to chase.

Nicholas Philip Yulico: Okay. And then just second question is on, again, going back to Trilogy segment, and when you guys break out the revenue by payer and bed type.

As we think about the different buckets there that are, you know, let us say, tied to the CMS rate that is going to be coming out, you know, in the next month or so, can you just remind us sort of how this is going to work from a rate standpoint, how it plays out this year, like, how much that is going to dictate a portion of the revenue, you know, as you explained on that page versus on the Medicare Advantage side, whether that is sort of in reaction to that rate just as people think about kind of the comfort level and, you know, where rates could be and how they impact Trilogy this year, when we will have more visibility on that?

Brian S. Peay: Sure. So the main drivers off of the Medicare rate that is coming out in April are going to, obviously, they are going to be Medicare and Medicare Advantage. So everybody can figure that part out about it. What is more nuanced and probably more helpful, Nick, is that within that Medicare rate, there is a mix shift even within the resident that comes in through Medicare. And Trilogy will optimize even within that payor source to find people with acuities that they feel like they can take care of well.

So that is why you see a rate on the Medicare rate on that page in our supplemental that is 5.2% when the national average increase was closer to 3%. So that is the acuity shift. And that can be helpful for revenue growth, that can be helpful for NOI growth, that can be helpful for margin expansion. On the Med Advantage side, those contracts typically price off of a percentage of Medicare as well. So the Medicare rate increase will flow through to Medicare Advantage. The dynamic part of that payor source, though, is that there are individual contracts with different Med Advantage plans throughout the Trilogy portfolio, and there are a lot of them.

All those contracts are negotiated separately as a discount to the Medicare rate. And that is what you are seeing when you see the Medicare Advantage per patient day rate increase relative to the Medicare rate. We are basically shrinking the discount that is being applied from Medicare Advantage plans. And that is Med Advantage plans leaning into the quality at Trilogy. So Trilogy's five-star rating is over four for its entire portfolio on an overall, and over 4.8 for quality measures. Those numbers are far higher than other national providers, probably industry-leading on both counts.

Those are the numbers that the Med Advantage plans are looking for when they are leaning into quality and trying to figure out who could really manage the cost of this resident's care the best and deliver the best quality of care for them.

Operator: Your next question comes from the line of Juan Sanabria with BMO Capital Markets.

Juan Sanabria: Hi. Good morning. Hoping you could talk a little bit more about the investment pipeline and what year-one yields you expect given what you are seeing with kind of already launched and loaded and what is being marketed. And is part of the acquisition strategy or goals if you are trying to move up quote, unquote, quality spectrum to higher demographic-type seniors that can afford higher rent increases, or how you are thinking about affluence and importance there?

Stefan K. Oh: Yeah. Thanks for the question, Juan. So I think to the first part of your question, you know, I would say that we have seen, on an aggregate basis, if you look at what we have been buying right now, pricing that is in, you know, around the high-5%, low-6% number, stabilizing in the 7%s. You know, I think it is fair to say that there has been some cap rate compression that has occurred over the past few months. But I think that is still a pretty accurate reflection of where things are. In terms of, you know, how we are looking at our acquisitions and what we are trying to achieve, our strategy has not changed.

We are focusing on newer, higher-quality properties. You know, we are continuing to focus on higher acuity communities. And, you know, of course, there is always going to be a component that is related to the demographics and the ability for those markets to have the ability to continue to pay higher rents as they move up. But I think that is also just a reflection of what kind of assets we are buying in terms of that higher quality. It certainly are buildings and communities that, you know, are much younger, much newer, fresher buildings. You know, residents are looking for something in that model.

And I think as this population of future residents comes to fruition, there is an expectation that they are going to have a high-quality experience. So I would fully expect that is a population base that, you know, we will continue to be focused on just based on the type of assets that we are acquiring.

Brian S. Peay: Hey, Juan. This is Brian. I would add to that. We are in a really advantageous position with our cost of capital. It allows us to buy buildings that are, you know, we are calling them value-add. But it is not value-add in the traditional sense that it is an old building that is falling down that you have to spend a bunch of capital on. Instead, it is more likely a new vintage 2017, 2018 construction. You know, maybe the developer still owns it. They were finally able to get out whole, and we are able to buy those. They are undermanaged. It could be in the 70% occupancy range.

It is in a market that we know, and we have a trusted operator that we feel very confident that is going to be able to fill those things up. So we do not need to buy stabilized assets in order to get the returns that we want over time. They can come in a little lower, but we have full expectation that they are going to be in the 7%s, if not maybe even better than that.

Juan Sanabria: Great. And then just my follow-up. Curious on both the SHOP and the Trilogy segments on the NOI flow-through of incremental revenue with both segments kind of just over 90%, how we should be thinking about that going forward. Thanks.

Gabriel M. Willhite: Yeah. It is a range, Juan. This is Gabe. Depending on how occupied you are. So at the high end of occupancy rates, you can maybe get 70% to 80% flow-through to NOI on incremental occupancy in SHOP. Same thing is true, really, in Trilogy's assisted living, memory care, and independent living. On the post-acute care at Trilogy and the skilled side of the business, there is obviously lower pull-through because every patient needs a certain amount of hours of care per day.

There is still, do not get me wrong, there is still margin expansion that can come from that incremental occupancy that should be escalating as you get to the higher occupancy levels because you are probably fully staffed as you get higher and higher up. But it will not be to the same extent as the SHOP portfolio because of the component of care.

Brian S. Peay: Yeah. And similarly on the SHOP side, as you can imagine, the margins on the additional resident that moves in once you are above 90% to 95% occupancy, the pull-through is dramatic, and Gabe sort of even referred to some of those numbers. In the AL side, you know, it could be between 40% to 70% depending on your occupancy, because at some point you become fully staffed. You probably do not need to buy too much more incremental food for residents. Certainly, your insurance costs did not go anywhere. Your property taxes did not go anywhere. So the pull-through is dramatic.

And then on the IL side, which is definitely a much smaller component of our portfolio, I mean, you are north of 70% pull-through on those.

Operator: Your next question comes from the line of Michael Goldsmith with UBS. Your line is open.

Michael Goldsmith: Good afternoon. Thanks a lot for taking my questions. Maybe just on some of the unstabilized or undermanaged properties that you are purchasing. You know, provide color into what goes into turning around a SHOP asset that has been disadvantaged. What makes your incoming operator different than the prior operator? And, yeah, what are your operators going to do differently that the prior operators could not accomplish?

Stefan K. Oh: What in many cases, it is experience. Right? It is being, having a presence in that market, having the experience of operating in those markets on scale, knowing what the demand levers are, how to market properly, you know, how to hire the right staff, the right regionals, to oversee those communities. You know, building in the processes that they might have in place, adding to the resident and the employee experiences. I mean, there are a lot of different ways that I think someone with experience and the values that we see in our operators can change how those assets and communities are being managed. And the bottom line is you want great care.

You want the employees to have a good experience, and you want the residents to also have a good experience. And I think our operators are primed to do that. They, you know, they have got the ability to implement those at all the communities that we are acquiring.

Gabriel M. Willhite: Mhmm. And I would add to that, Stefan. I would echo everything you just said. When we are partnering with operators on this, we are looking for experienced people that know how to run the business, know how to manage labor and expenses, and in addition to all the things that Stefan is talking about. And what we are seeing is that the outsized demand growth is actually having an impact on the transition time.

So because you have got this pent-up demand for, or maybe not pent-up demand is the right word, but surging demand for the product, if you can bring in a new operator and show people that are coming in for tours, seeing the building, that you have got a great resident experience, you can fill the building up fast and you can turn it around quicker than you have been able to in the past. And that is a very compelling investment opportunity for us.

Michael Goldsmith: Got it. And as a follow-up, many of the SHOP players have been talking about slight increase in competition for transactions. Can you talk a little bit about what you are seeing and then, you know, in addition, does your relationship with Trilogy insulate you a little bit given you are able to deploy $370,000,000 into Trilogy assets in 2025? And how should we think about Trilogy investment trends going forward?

Stefan K. Oh: Well, let me start with just your question about competition. You know, I think it is fair to say that there has been an increase in those that are pursuing SHOP. You know, both from the other healthcare REITs and also from private equity. You know, I think where our advantage lies is in the fact that, you know, about half of our acquisitions are being done on an off-market basis. We are working very closely with our operators, and they are bringing us potential transactions that they only know about because they have capital partners on the other end that are maybe looking to exit.

Maybe they have assets themselves that they are at a point where they would like to recapitalize. So we have been able to, through our relationships, really grow our pipeline through those off-market assets that are available.

Brian S. Peay: On the Trilogy front, I will take that one, Stefan. So it was an atypical year that we cannot promise will happen again. So we had a lot of deals that we did with Trilogy that Trilogy was already managing for different capital that we had the opportunity to go out and recap, with an operator that we completely trust 100%, sometimes in situations where the assets were not even stabilized yet so that we were confident in the growth profile from developments that we were doing through the pandemic. That is probably not repeatable. A lot of those opportunities we have already taken advantage of.

What is repeatable and what we do have an advantage on is the development capabilities of Trilogy. So like Brian mentioned earlier, there is $150,000,000 to $200,000,000 a year of development with Trilogy that we are essentially not competing with other capital partners for. So you can strip out the developer economics. In some cases, you can strip out the general contractor economics, and those flow through directly to AHR and to the Trilogy management team that has an LTIP that is aligned with AHR's stock price. So they participate in the value creation for the work there as well.

Operator: Your next question comes from the line of Farrell Granath with Bank of America. Your line is open.

Farrell Granath: Thank you. I guess my first question was really just about the bridge between your normalized FFO growth and then your total same-store NOI growth, and potentially, on the other side of it, the total NOI growth that we could potentially expect, especially in the SHOP segment, thinking about the acquisitions that you performed in 2025?

Brian S. Peay: Yes. So, listen, stopping short of giving you precise numbers, I can just give you a couple of things to keep in mind. On the SHOP side, because we only adjust our same-store pool once a year at the beginning of the year, there is a tremendous amount of SHOP assets that were sourced and purchased in 2025 that are not going to be in the same-store pool this year. And, by the way, if you look in the supplemental at page 10, you can see that the total portfolio is less occupied than the same-store portfolio. And that is really sort of tied in with what I described earlier, which was we are bringing in buildings that were undermanaged.

They were under-occupied. And now we have an operator that we trust that we are very confident they are going to be able to fill those buildings. So I feel good about the non-same-store, their ability to grow, and all of those dollars and all that growth is going to inure to the benefit of the shareholders. They are just not going to show up in the same-store ratios. On the SHOP side, it is approximately 60% of the portfolio that is in same-store. On Trilogy side, I think it is 81% to 83%, something like that. So there is less non-same-store assets.

And as you can imagine, those non-same-store assets were buildings that we took out of service because we wanted to add a wing, or we took it out of service because we are adding patio homes. And that happens quite quickly. And, by the way, the returns on those are dramatic and very beneficial to the bottom line. So, you know, generally speaking, I think that the non-same-store assets are going to perform well this year. You might even argue they are going to perform better than the same-store.

But the good news for us, in that the fact that we do not adjust the same-store pool except for the beginning of the year, is that everything we bought in 2025 is going to be in the 2027 same-store growth. And so I would anticipate those numbers to be very positive as well. So we are talking about multiyear growth, bottom line.

Farrell Granath: Great. Thank you. And I believe you have been addressing this throughout the call, but just really wanted to nail it down. When thinking about the investment opportunity and especially with the pacing that you are able to be deploying your capital into these IDEA-type structures, either through adding investments into Trilogy or into SHOP, how is it comparing to what you are able to do in 2025, especially since now it seems other peers have actually been increasing potential investment volume for 2026. Just trying to get a sense about where things could potentially shake out.

Stefan K. Oh: I feel like you are trying to roundabout the question for me to give you guidance. But I will say this, so, you know, obviously, if you look at how we acquired our portfolio or how our acquisitions laid out last year, it was a little lumpy. Obviously, a lot of it came in the back end. I think you are going to see something that is a little more even over the course of this year. And I think I would just add, you know, we are going to be looking at a lot of opportunities. We are going to be finding those that make sense for us.

We are going to continue to be underwriting in a disciplined way that will provide us with high-quality assets and long-term performance. And, you know, we have the capital. We can compete. And I think we also have a great reputation as a buyer. So I think, you know, that along with the fact that we are seeing more product available in the market so far this year will lead to some very good things for us.

Brian S. Peay: Certainly aware of expectations for acquisition volume this year. You know, I would tell you that we want to make certain we are not making bad deals. And, you know, if you think about the evolution of the underwriting, I think it may be evolving slightly. And what I mean by that is it is not as though Stefan's team has immediately switched from being very conservative to overly aggressive. It is more a factor of, you know, when we were buying things in 2024 and 2025, we put in there some level of growth, immediate growth in those. And what has happened is exactly that. We have seen that growth already in 2026.

We have seen the growth in late 2025. So what that means is that they can continue to evolve their underwriting and be slightly less conservative. You know, I think the other thing that he has mentioned a number of times is that there is going to be enough volume out there, and there are going to be deals that are going to match up with our underwriting, with our needs, with our cost of capital, with our operator base, and especially when we are bringing in such a huge chunk of those off-market directly through our operating partners. I give ourselves a pretty good shot at doing well this year on the acquisition.

Operator: Your next question comes from the line of Seth Eugene Bergey with Citigroup. Your line is open.

Seth Eugene Bergey: Hey. Thanks for taking my question. And good to hear that Danny is at home and doing better. I guess just to start off, you know, you kind of mentioned some of the real estate that you are targeting, wanting kind of maybe newer vintage assets and good locations. And that all makes sense, I guess. You know, you touched on this a little bit, you know, with wanting to partner with operators that have experience.

But just kind of given the alignment that you have with Trilogy and some of the revenue management tools that you have kind of discussed on the call, you know, would you kind of look for, you know, maybe less experienced operators to partner with, where you can really kind of, you know, use that know-how that Trilogy has to kind of improve results and kind of drive higher returns on kind of, you know, lower-quality operators.

Stefan K. Oh: That is a very interesting question. I think, you know, I think what I would say to that is we do not necessarily want to go into a situation where we are basically developing the operator. You know, we want to go forward and build with operators that have a proven track record. You know, that is certainly the more sure and safer play for us. Obviously, there are probably a lot of great smaller operators out there that, you know, given the right resources, they could do some great things. But for us, I think we really want to focus on those that have the history and have proven themselves out.

Gabriel M. Willhite: Yeah. And I would add to that, Seth. I think the question is really getting at what is the value that we can derive from Trilogy's platform to help support people. And that is coming in kind of a different angle than what you are talking about. It is not newer operators that are new to the game that have to build out their platforms and get good at what they do. It is taking smaller regional operators who maybe do not have the scale and resources that a 150-facility Trilogy platform does and saying, hey. We are picking the winners and losers. You are obviously a winner. You know how to deliver great experience for employees and for residents.

How can we help you scale and grow with you? How can we be your preferred capital partner for those best operators who want to grow because we know that the industry is going to demand growth from the best operators, and we are here for it.

Seth Eugene Bergey: And then just as a kind of a follow-up, you know, you kind of talked on the revenue management tools that Trilogy has. You talked on, you know, the operating leverage and, you know, on kind of the skilled side, some of the revenue from the different payer sources. You know? When you kind of think about kind of the margin expansion, it has been about 300 basis points in SHOP. How much of that kind of do you attribute to kind of just the natural inherent operating leverage in the business, and how much of it, you know, is kind of that, you know, the operating platform that you guys have with Trilogy.

Gabriel M. Willhite: Great, great question. I think that, you know, what you are seeing so far is great operators that we have selected that are doing exactly what we want them to do, which is perform at a high level. We, for years, had operator summits and more recently created quarterly touch points with our operator groups to get together to share best practices just for their own benefit. So they can start to build their platforms out and make sure that they are cutting-edge because this is a very innovative business that is always changing and you can always get better at. I think some of that is picked up in the performance.

But the Trilogy platform value is not fully realized and not fully baked. I think we are in early stages of where we can go with that platform. And, hopefully, we will have more to talk about in the next, you know, several quarters.

Operator: Your next question comes from the line of Ostrovik with Green Street. Your line is open.

Ostrovik: Thanks, and good morning. Within SHOP, what are you seeing in terms of seasonality so far in the quarter? And how much of an impact on occupancy from seasonality is currently baked in the guidance?

Gabriel M. Willhite: Yeah. Good question. Last year, the flu had a meaningful impact on the portfolio. And although our move-in volume was as high as it had ever been, the move-outs were disproportionately high, and that was pulling overall occupancy down. So far, through early 2026, we are seeing much less of a flu impact. I do not think any of us in this room feel comfortable calling it that we are all the way past all the risk associated with the flu season. But so far, we are getting through it better than we did last year. And occupancy is not deeply impacted at least through February.

Ostrovik: Great. And then maybe one on the triple-net portfolio. There is a pretty steep decline in hospital coverage during the quarter. I know it is a small part of the portfolio, and one of the tenants has had pretty thin coverage for some time. But can you maybe just provide some color on what drove that sequential step down? If there are any concerns with rent payment there?

Brian S. Peay: Sure. Yeah. Look. That hospital that we own in Southlake, Texas, it is a suburb of Dallas, the tenant is Methodist of Dallas, which is a AA- rated credit-rated hospital system. They guarantee the lease. They vote with their dollars. They actually own, along with the doctors, 9% of the hospital. They have personally invested upwards of $25,000,000 of their own money into our building, which is really nice when people are willing to do that. So they are quite committed to this asset. The volatility is tied to the fact that these guys are really shifting this hospital from a surgical hospital to a community hospital. They have added an emergency room, emergency medicine.

They have added a stroke unit more recently. They have added nuclear medicine, and I think the next phase is orthopedics. And so from any given month to quarter to the next, it is going to move around quite a lot. They are very committed to the building, and the lease is guaranteed. So I feel quite comfortable with the risk profile on this one. They have a purchase option. It triggers in 2030. I would find it hard to imagine they would not wind up buying.

Operator: I will turn the call back over to Jeff Hanson, Chairman and CEO, for closing remarks.

Jeff Hanson: Well, thank you, operator, and thank you, everyone, for investing the time to join today and for your continued support and confidence. It is much appreciated. I know that Danny is on the call as well, so we are looking forward to his return at the appropriate time. And, in the meantime, the team remains focused on executing our strategy and creating long-term value for our shareholders. With that, thank you.

Operator: Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.

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