Good morning and afternoon. My name is Aaron and I will be your conference operator for today. At this time, I would like to welcome everyone to the American Healthcare REIT's First Quarter 2024 Earnings Conference. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Thank you. And with that, I would like to turn our call over to Alan Peterson, Vice President of Investor Relations and Finance with American Healthcare. Alan, you may begin.

Good morning. Thank you for joining us for American Healthcare REIT's first quarter 2024 earnings conference call. With me today are Danny Prosky, President and CEO; Brian Peay, Chief Financial Officer; Gabe Willhite, Chief Operating Officer; and Stefan Oh, Chief Investment Officer. On today's call, Danny, Gabe, and Brian will provide prepared remarks discussing our financial position, results of operations, and other recent news relating to American Healthcare REIT. Following these remarks, we will conduct a question-and-answer session with covering research analysts. Please be advised that this call will include forward-looking statements. All statements made during this call other than statements of historical facts are forward-looking statements that 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. I 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, May 14th, 2024 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 today to the most directly comparable measures calculated in accordance with GAAP are included in our earnings release and supplemental information package. You can find these documents as well as our SEC filings and the audio webcast replay of this conference call on our website at www.americanhealthcarereit.com. With that, I will turn the call over to our President and CEO, Danny Prosky.

Thank you, Alan. Good morning everyone and thank you for joining. Since the offering and listing of our common stock on the New York Stock Exchange in February, we've been busy focusing on optimizing portfolio performance and executing on opportunistic capital allocation. I'm continually impressed by and proud of the efforts of all of our staff here at AHR as well as in our operating partners. Our focus remains on providing high-quality care and outcomes for our residents and tenants in addition to maximizing the value of our real estate portfolio for our stockholders. 2024 is off to a great start. Property loan performance across our diversified health care portfolio in all four of our segments is trending positively. We are encouraged to see strong year-over-year occupancy and NOI margin gains in the first quarter of 2024 with our integrated senior health campuses and shop segments, which make up approximately 60% of our pro rata NOI combined. And we expect this will drive our growth in 2024. Our outpatient medical buildings are faring well and our asset management team is hard at work, combating the headwinds we expect within that segment during this year. Finally, our triple net lease portfolio is proving its steady growth profile with many of our tenants continuing to see improving coverage levels. As we look forward to the rest of the year and beyond, we believe that the supply/demand imbalance within the long-term care sector puts us in a good position to grow census within our buildings. According to the U.S. Census Bureau's population projections, from now until the end of the decade, the U.S. is expected to see growth within its 80-plus population of more than 4.5 million individuals. We believe this trend, along with longer life expectancies, growing care needs, and limited new supply due to constrained availability of capital and elevated construction costs, creates a positive environment for businesses like ours. Turning to the transaction market. As we have previously announced, we closed on an acquisition of 14 properties containing 856 beds in Oregon after assuming the debt associated with the properties of $94.5 million. This works out to attractive pricing of $110,000 per bed. We have brought in our operating partners at Compass Senior Living to manage the properties, and initial performance is trending positively. Utilizing our hands-on asset management expertise, these under-managed properties could allow us to further bolster our portfolio. We anticipate that more opportunities like this Oregon transaction will become available to us as many real estate sponsors face the reality of having to refinance indebtedness at lower LTVs and higher rates. Regardless, we will remain prudent and continue to be mindful of our balance sheet metrics and cost of capital as we execute on these types of opportunities and seek to fund them primarily with disposition proceeds and free cash flow from organic growth. Before I turn it over to Gabe and Brian, I'd like to emphasize that our three main areas of focus from now until year-end are, number one, as always, quality care for our residents and positive health outcomes comes first. Number two, our commitment to delivering strong operating performance across our portfolio for our investors and proving to the investment community that as a newly listed healthcare REIT, we're committed to maximizing value for our stockholders. And number three, maintaining our measured capital allocation approach to further refine our segments and take advantage of the attractive risk-adjusted returns available in today's market. With that, I will turn it over to Gabe who will further dive into our operational results.

Thanks, Danny. As Danny mentioned, we are excited to see the momentum and steep trajectory of growth within our portfolio, particularly our operating portfolio, which consists of our shop and integrated senior health campuses. Senior housing fundamentals remain strong and clearly are continuing to get better. Focusing on our Trilogy-operated integrated senior health campuses segment first, same-store NOI in the first quarter of 2024 grew by nearly 20% compared to the first quarter of 2023, driven by solid rent growth and an over 160 basis points increase in occupancy to 86.2%. Q1 is historically a slower quarter for senior housing leasing, and it is very encouraging to see strong sequential occupancy growth quarter over quarter as well. Early second quarter 2024 trends point to steady and improving occupancy across these facilities with integrated senior health campuses same-store spot occupancy at 86.6% as of May 3rd, 2024. Our expectation is that strong demographic tailwinds will continue to drive higher occupancy across these facilities. Trilogy's skilled nursing business will also continue to benefit from Medicare and Medicaid reimbursement level increases that went into effect in 2023 and the anticipated increases in 2024. While our shop segment continues to benefit meaningfully from the same strong fundamentals supporting our integrated senior health campuses, we've also been able to achieve a higher level of growth through more active asset management. Challenging operating conditions brought on by the pandemic uncovered some underperforming operators. After an active few years transitioning and optimizing operators in our shop segment, we are starting to see significant operational gains and, most importantly, a meaningful pull-through to NOI. Our shop portfolio went from 78.6% average occupancy in the first quarter of 2023 to 85.7% in the first quarter of 2024, resulting in a very strong 700 basis points improvement in occupancy year-over-year. The dramatic occupancy gains drove NOI margins during the first quarter up to 18.4%, a roughly 360 basis points increase over the prior quarter. Those improvements drove an over 30% increase in same-store NOI for the first quarter of 2024 on a year-over-year basis. After completing our most recent operator transition, the transition of a 220-bed portfolio in Nebraska at the beginning of March 2024, we believe the transitions in our shop segment are now complete. We have prioritized working with mission-driven regional operators that have a deep commitment to the communities they serve and that we can be proud to call partners. We've had success with this strategy, and early second quarter trends suggest that the strategy continues to be a winning one with steady weekly occupancy gains bringing shop same-store spot occupancy to 86.9% as of May 3rd, 2024. In terms of expenses, our operators understand that agency labor is not only the most expensive labor solution, but that it also negatively impacts the quality of care and overall resident experience and that affects overall performance. We share their sentiment and are glad to report that the operational environment has normalized to a point that has allowed us to eliminate most of our agency labor expenses with staffing from agency nursing having returned to pre-pandemic levels across our shop portfolio. This is a very positive development, and there's nothing to suggest that this will not continue through 2024 with continued operator focus. As Danny mentioned, in February we acquired a portfolio of 14 properties in Oregon, consisting of over 850 beds at an attractive basis significantly below replacement costs. We immediately executed a strategy to transition operations to one of our trusted operators, and the early results are promising. We've seen this strategy work multiple times now, and we deeply believe this is one of those rare moments in time where a confluence of circumstances has created incredible opportunities as long as you have the expertise and the relationships to execute. Of course, there's no way to predict how long this window will be open, but it's clearly open today. Before I turn it over to Brian, I'd like to talk for a moment about the recent regulatory news around skilled nursing staffing. As many on the call are aware, CMS finalized minimum staffing requirements for skilled nursing facilities across the country. This rule is fairly controversial. It's largely, and by largely we believe nearly unanimously, opposed by skilled nursing providers in its current form given the lack of clarity or flexibility between care hours. For a number of reasons, many do not believe the rule will ever be implemented in its current form. Regardless we expect the new requirement to have only a nominal impact on our business. Because of the structure of our integrated senior health campuses, we often field questions on this issue and those questions are fair. The benefit of partnering with a best-in-class operator like Trilogy Management Services is that they're already a standard bearer in the industry. In addition to having good patient outcomes, high resident satisfaction scores, and industry-leading employee retention, they already staff to a higher level than their peers. As it stands today, Trilogy is exceeding the minimum hour requirement by nearly 10% at 3.79 hours per patient day versus the requirement of 3.48, and perhaps the hardest requirement to meet—which is minimum RN hours—Trilogy is well above the requirement at 0.87 hours per patient day versus the minimum of 0.55 and the vast majority of Trilogy campuses are already meeting the 24/7 RN requirement. Not only does Trilogy already staff to a higher level, but they also have a massive operational advantage in meeting their requirements through the Trilogy Flex Force. The Flex Force is essentially an internal agency labor force of Trilogy employees who are only available to Trilogy campuses, but that can provide on-demand support to meet the needs of each facility. Given these advantages, we are confident that if this rule is phased in as planned over the next three to five years, the impact to Trilogy will be minimal. With that, I will turn it over to Brian to discuss our financial results.

Thanks, Gabe. In the first quarter of 2024, we earned $0.30 per fully diluted share of normalized funds from operations, driven largely by the 13% same-store net operating income growth in the combined portfolio led by our SHOP and integrated Senior Health campuses segments with year-over-year same-store NOI growth of 33.5% and 19.9%, respectively. During the quarter, we completed an offering of 64.4 million shares raising gross proceeds of approximately $773 million. Utilizing the net proceeds from the offering, we paid down approximately $722 million of high-interest floating rate short-term maturity debt. These paydowns, paired with strong EBITDA growth during the first quarter, resulted in an over two-times improvement to our net debt to annualized adjusted EBITDA from the end of 2023. Additionally, during the first quarter, we completed the extension and expansion of our revolving credit agreement, providing us with flexibility and capacity to better manage our business. The capacity on our unsecured revolver was increased by $100 million to $600 million and matures on February 14, 2028. It also includes a one-year extension option. In aggregate, at quarter end and after executing on our capital markets and balance sheet strategies, we have approximately $915 million of liquidity between cash on hand and undrawn capacity on our lines of credit. Moving on to our 2024 outlook. At this time, we are maintaining our full-year guidance for same-store NOI growth in the combined portfolio of 5% to 7% in 2024. To remind everyone, our expectations for full year 2024 NOI growth in each of our segments are 8% to 10% for integrated senior health campuses, 25% to 30% for SHOP, potentially down slightly to flat for outpatient medical, and 1% to 3% for our triple-net lease segment. Additionally, we are maintaining our guidance for normalized funds from operation for the full year of 2024 of between $1.18 to $1.24 per fully diluted share. Our earnings guidance is driven by the organic net operating income growth embedded in our diversified portfolio of clinical healthcare assets, partially offset by higher interest expense, which will be modestly higher than we had initially expected as a result of the changes in the Fed rate cut expectations. Nonetheless, we are continuously managing our balance sheet and will remain conservative in our approach to additional leverage. Our floating rate interest exposure was less than 8% of our total outstanding debt at quarter end after considering the interest rate swaps that we have in place. While we are encouraged by the strong same-store NOI growth and earnings results that we saw during the first quarter of 2024, we have taken a conservative and measured approach with respect to maintaining our guidance at this early point in the year. We will carefully monitor our results and trends as the year progresses, and it is entirely possible that we will revise our guidance at some point during the year if warranted. On the capital allocation front, we paid down a significant amount of debt in February with proceeds from our common stock offering and we remain committed to exploring the selective disposition of non-core assets, provided we are able to attain attractive pricing. The dispositions provide us with an opportunity to further deleverage our balance sheet or to otherwise recycle capital. We closed on the sale of approximately $16 million of non-core assets in the first quarter and we are projecting to sell an additional $45 million to $50 million of non-core assets during the remainder of 2024. We continue to expose assets to the market as potential candidates for disposition. So it is possible that we could sell more than that amount, but any further disposition activity will be heavily dependent on achieving attractive sales prices and cap rates. As to any potential acquisitions, which includes our option to purchase the portion of Trilogy that we don't already own, we are cognizant of our current cost of capital and we will look to acquire properties opportunistically that meet our return requirements in the most leverage-neutral way possible. That concludes our prepared remarks. Operator, at this point, we are prepared to open the line for questions.

Thank you. Our first question comes from the line of Michael Griffin with Citigroup. Your line is live.

Great. Thanks. I wanted to go back to kind of your comments on guidance, Brian. I noticed that there was a large jump in the number of properties in the same-store pool both for Trilogy and SHOP. Should we take it as the guidance that you laid out is based off of that pool? I mean it seems like a large difference from last quarter. So I just want to see if there are any additional kind of puts and takes.

No. I think the guidance we put out just six short weeks ago fully anticipated all of the assets that are in the current pool. So I wouldn't say that that necessarily changed it, other than the fact that more assets will have an impact, but that's not the driving force for the guidance.

Got you. That's helpful. And then maybe one just on the acquisition environment, kind of opportunities you're seeing out there. Obviously, you did the Oregon transaction back in February, you're looking to do the Trilogy buyout at some point in the future. But maybe outside of Trilogy, where is the best opportunity to grow in the portfolio? Is it shop? Is it skilled? Kind of give us a sense of maybe what the acquisitions team is looking at.

Hi Griff, Good morning. This is Danny. I'll take that one. So, as you remember from our call six weeks ago, we talked about kind of what we're looking for from a growth perspective, with our limited available capital and that today the best risk-adjusted returns for us are within Trilogy, both exercising the purchase option and growing the existing portfolio. For example, we talked about some lease buyouts. We had three assets that we leased from developers where we had purchase options, and we did go ahead and exercise those in April, at a very high single-digit rate. We're paying a 9.2% lease rate on those. Clearly, the cost for us to borrow on our line is lower than that. So we're really cognizant of what the best risk-adjusted returns are. Now, if you're asking me what's the best risk-adjusted returns outside of Trilogy, I would say it's growing our SHOP portfolio. The Oregon transaction is a great example of that. We may have another similar opportunity, although much smaller, coming up sometime later this year, but I think you're going to see us focus mostly on Trilogy because there are just so many opportunities in front of us within Trilogy.

Great. That's it for me. Thanks for the time.

Our next question comes from the line of Ronald Kamdem with Morgan Stanley. Your line is live.

Hey. Just two quick ones for me. So I guess, going back to the same-store NOI guidance. So you did 13% in Q1. The full-year guide is sort of 6%, which feels like it's a pretty significant deceleration. I know you talked about your wait-and-see approach for the selling season and so forth. But maybe just can you talk about sort of what sort of anticipate the guide for the back half of the year? Is there any sort of transitions or anything else we should be mindful of? Or is it just sort of wait and see on the selling season? Thanks.

Thanks. So thanks for the question, Ron. This is Danny speaking. I'll start, and I'll let Brian chime in. We feel very, very good about the metrics within our business, what we've seen over the last several quarters and what our expectations are for the rest of this year and probably for the next two to three years at least. Just looking at the demographic story with the aging of the population, with a limited new supply that's come out over the last six years, we feel really good about all the metrics, right? Occupancy, margin, RevPOR, et cetera. And I think we've seen really good growth, not just with us, but the industry as a whole over the last several quarters. We're only a quarter into the year, and we feel good about the direction, but we think we're not quite willing to just assume that we're going to continue on the same trajectory that we've seen over the last two or three quarters. We're going to revisit it once we close out Q2 and see if we want to update guidance at that time. But we're very bullish, but I don't think we're, only three months completed in the year that we're willing to just say, this is going to continue for the next nine months. Let's go ahead and update guidance. Anything you want to add, Brian?

Ronald, I would say that, Danny is right; we're only a quarter of the way into the year. We only gave guidance six weeks ago. One of the major contributing factors to our reluctance today is that our occupancy has fully recovered back to pre-pandemic levels, and in some cases, it's in excess of pre-pandemic levels, coming off of a 710 basis point increase in our SHOP occupancy over the last 12 months for the same-store pool. Do we think that it's going to grow by another 710 basis points? I can confidently say that I don't think it's going to. After the first quarter, certainly at Trilogy, it becomes a much harder comp. If you dig into the numbers in the supplemental, and you probably haven't had a chance to absorb it yet, you'll notice that Q3 and Q4 were significantly better than Q1, which makes it harder to grow earnings by that much. Listen, we like the business. We like the space that we're in. We like the tailwind that we have right now, and it's entirely feasible that at some point down the road we revisit, but I don't think it makes sense for us today.

Great. And then just following up on the first question on Trilogy, clearly, something you want to own all of. Can you just remind us what the avenues—like what the avenues of funding it would be, right? You talked about sort of preferred, maybe equity issues? Just what your thinking is on funding it, and also on timing, right? Could everything go right and get it done this year or is it 2025? Thanks.

Yes. This is Danny. We've got a lot of flexibility there, right, not just on timing but on methodology. We have till September of next year, a little under a year and a half to do it, and we can use cash or preferred or a mix. On one hand, it's very important to us to maintain the balance sheet metrics we developed. We went through all this work and dilution a few months ago to raise money to pay off debt and bring our balance sheet metrics to kind of an investment-grade credit balance sheet. We want to keep it there. So the last thing we want to do is just turn around and borrow to exercise that purchase option. I think you'll see us— we're definitely planning on doing it. Whether it's this year or next year, will depend on market conditions and how successful we are potentially raising new equity or continuing to sell assets. The sooner we do it, the sooner we can recognize the earnings, which would be nice. On the other hand, the value creation of Trilogy will be realized by us no matter what. So we're not under any intense pressure to do so. I think you're going to see us continue to sell off assets. We've sold primarily outpatient medical buildings. We've got more under contract in NOI, more that we're exposing to the market. So I think it's going to be a mix of asset sales, organic EBITDA growth, which has been very strong over the past several quarters and we expect to continue to increase at a nice pace, and opening to potential new equity. I think those things are going to dictate when we exercise that purchase option.

Ronald, I think the goal here is for us to create as much optionality as we possibly can. If that means that we're successfully selling assets at decent prices, that's one way to certainly affect the Trilogy buyout utilizing those proceeds. Alternatively, if institutional investors recognize the tremendous value proposition associated with our stock at its current price and our stock price goes up, there is a chance that in the future we could consider issuing shares but certainly nowhere near the level that we're trading at today. The final option would be on a very attractive preferred we’ve been able to negotiate. We recognize that a lot of people would consider that debt. So we're mindful of not taking on too much of that. But building optionality and doing it when we can do it in the most leveraged way is our target.

Okay. Excellent. That’s it for me. Thank you.

Thanks for your questions. Our next question comes from the line of Anthony Powell with Barclays. Your line is live.

Hi. Good morning. A question on, I guess, REIT and RevPAR. I noticed that you had close to 5% RevPAR growth in Trilogy and about 2% in SHOP. Obviously, you had a very strong growth in SHOP occupancy. What's the outlook for higher SHOP rate growth going forward given your above 80% occupancy in that segment?

Yes. Our expectation is that number will continue to grow throughout the year. We've got a lot of people who were admitted into our facility last year who are going to be coming up on their 12-month anniversary, which is where you're going to see significant RevPAR growth for those individuals. Our occupancy is much higher now than it was 12 months ago. So our expectation is you're going to see that RevPAR number on our SHOP portfolio increase at an accelerated pace throughout the year.

And maybe one more point on that I'd like to add in. One part of that number that's a little bit noisy for us is in our same-store number, their operator transitions are included in it. Of course, across our portfolio of SHOP, some operators were able to push RevPOR and successfully achieve a higher number than others. But like Danny said, when you've got 700 basis points of occupancy increase over a year, all those new people coming in have a certain level of concessions attached to them as well in a lot of cases. So our aggregate concession number is higher than normal, driven by the higher occupancy growth than normal, and that will stabilize in 2024 or it's our expectation that it will anyway. You can already see that kind of pull through just on the sequential RevPOR growth that was 3.7%.

Yes. Thanks. And maybe one more on the transaction environment. I mean you talked about maybe selling more assets than I guess is kind of the baseline. What's the overall appetite for assets in this segment? What are the cap rates? I guess what are you seeing out there in terms of interest in your portfolio?

Yes. Keep in mind the majority of what we've sold has been kind of smaller off-campus and non-core outpatient medical buildings, those that we're not necessarily looking to hold long-term. We've mostly capped the buildings that we like the most, kind of the larger ones. So it's a mix of cap rates. I think our average cap rate is in the mid-6s. However, I'd say, the ones that we've exposed to the market more recently, the ones that we have under contract or LOI are probably more likely to be in the low 7s. I believe one is in the 6s where we're selling it to the hospital. But there's still an appetite for outpatient medical, certainly not where it was a couple of years ago, but there are buyers out there. If we don't get a price we like, we don't sell it.

Hey, I wanted to circle back on Gabe's comments regarding Trilogy staffing levels. I know employees within Trilogy generally can work within both the seniors housing and SNF segments. Is the staffing higher on the SNF side because you're able to allocate more of the seniors housing hours to SNF hours to kind of get to those minimum staffing? So having that seniors housing component is kind of a benefit to trying to meet that rule. Am I thinking about that correctly?

That could be true, Mike. And I think that's one way that Trilogy could deal with minimum staffing requirements that makes it a little bit easier for them. But in the number that I talked about – that is not true. That's really Trilogy's last six quarters run rate has been above the federal minimum staffing requirement without allocating staff differently from their AL side of the business or independent living side of the business. It's really just that they staff to a higher level. And you can look at the 5-star ratings on a historic basis and you can see that as well.

At some point, it might be the inverse, Mike, which is the AL side is benefiting from the very high levels of staffing on the SNF side. So it's a little bit inverse to what you described.

I think the main answer is pretty easy, and that is higher acuity. If you look at our portfolio, Trilogy in particular, but even most of our tenants really have three portfolios. Two of those also serve a kind of a higher acuity resident. So if you got higher acuity, it means you've got higher staffing, right? You're going to have more care. You're also going to have more Medicare, more private insurance, probably less Medicaid. The problem with this rule is it's one size fits all, so far. It doesn't account for those that have lower acuity, longer-stay residents who don't need as much care. That's right. That's the main reason Trilogy is able to survive this rule with little if any impact, and most of the rest of our tenants are as well as they service a higher acuity resident. They have higher hours already, just because of the nature of their business. We have one tenant, that serves a lower acuity resident. They do a lot of kind of behavioral health. They're going to have some catching up to do if they're required to meet that mandate. Fortunately for us, they've got very, very strong rent coverage. They are mostly rural facilities. They'd have a much longer time to adapt. But it's just the nature of our business. If you serve kind of a lower-acuity resident and you're forced—and particularly if it's a Medicaid resident—you’re forced to adapt to this level of staffing, you're going to have a problem.

And I'd add just one more thing on to that. Trilogy's model is unique, where they have this mix of skilled nursing and AL and memory care and IL on one campus. There are operational efficiencies that come from that setup. You've got one admin team, a dining team, and maintenance staff that's shared across all of those beds. Spreading the cost around makes the business more efficient and more profitable. That's why the model is exciting to us and one that we want to continue to invest in, because we see it working over and over again in ever-expanding markets while Trilogy continues to capture more market share.

Perfect. Thanks. Thanks for that differentiated view.

Thanks for your question. Our next question is from the line of Michael Stroyeck with Green Street. Your line is live.

Hey. Maybe one on the triple-net business, so NOI growth it's been running between 3.5% to 4.5% the last two quarters, what factors are driving the expected deceleration to call it, mid-1% range that's implied by the midpoint of 2024 guidance?

Well, I think, maybe I should go back. But I think we talked about 1% to 3% for the triple-net leased business. And I can tell you that we're a little bit of an anomaly this quarter. There were a few factors that really kind of benefited us. One of our tenants, we had put some CapEx into some properties in the U.K. And as a result that carries additional rent associated with it. In addition to that, we had some benefit from some currency fluctuations, actually the dollar moved such that it added to our same-store increase. I don't see these as long-term sustainable. I'm certainly not in the business of projecting what's going to happen to currency rates, so I still believe that our same-store is going to be in the 1% to 3% range.

Okay. That makes sense. And I just meant by the falling 1Q performance, the rest of the year as implied mid-1%, but I totally understood. And then, maybe second question that Oregon shop portfolio, acquired during the quarter. Is there any deferred CapEx within those assets that the company will need to fund in the future? And then, just for clarification, were you guys an original lender on that asset? Or just got involved once the primary lender defaulted?

Yeah. So we were the original lender going back to 2015, I believe. We were the best lender on that. Surprisingly, you think there will be a bunch of deferred maintenance, but there wasn't. We were pleasantly surprised by the condition of these assets. In a lot of cases, there are actually impounds with the lender.

Yeah.

And so the operator and the owner are not—it’s disincentives not to spend up on the property. So there's not much in the way of deferred there at all, if any.

Great. Thanks for the time.

Thank you for your question. And ladies and gentlemen, that will conclude our Q&A session here for today. I would like to turn the call back over to Mr. Prosky, President and CEO for closing comments.

Thank you, operator and thank you, everyone who joined the call. It feels like we just did one of these, not that long ago which is the case. We are looking forward to a successful remainder of the year and very optimistic that we'll continue to see things move in the right direction for our facilities. So with that, everybody have a great rest of the week and a great summer. We'll talk to you again in August.