And welcome to the LTC Properties second quarter, 2026 earnings call. At this time, all participants are in a listen only mode. Joining us today on today's call are Pam Kessler, Co-President and Co-Chief Executive Officer. Clint Mallon, Co-President and Co-Chief Executive Officer. C.C. Chical, Executive Vice President, Chief Financial Officer and Treasurer. Gibson Satterwhite, Executive Vice President of Asset Management. Dave Boitano, Executive Vice President and Chief Investment Officer. Before management begins its presentation, please know that today's comments, including the question and answer session, may include forward-looking statements subject to risk and uncertainties that may cause actual results and events to differ materially. These risks and uncertainties are detailed in LTC Properties Filing with the Security and Exchange Commission from time to time, including the company's most recent 10K, dated December 31, 1st, 2025. LTC undertakes no obligation to revise or update these forward-looking statements to reflect events or circumstances after the date of this presentation. Please note this event is being recorded. I would like to now turn the conference over to LTC management. Please proceed.

Good morning, and thank you for joining us. The excitement and momentum of our SHOP strategy here at LTC continues, and our transformation is well ahead of schedule. We are increasing our 2026 SHOP acquisition guidance by 50% to $900 million at the midpoint, and we'll have closed $700 million in acquisitions by the end of September. Additionally, we expect a meaningful step-up in dispositions and loan payoffs this year well above what we've previously discussed with the majority in skilled nursing. By the end of September, SHOP will represent 40 percent of LTC's pro forma annualized NOI, a full quarter ahead of previous estimates. We expect to drive that to 50 percent by year end through pipeline execution, redeploying proceeds from the prestige loan payoff, and proactively recycling capital on lower growth investments at exceptional pricing. At our current pace, we see a pathway to generating 75% of our annualized NOI from SHOP by the end of 2028. We are encouraged by our core SHOP performance and the momentum we are seeing across the portfolio. Additionally, we have strengthened our balance sheet with a $1.1 billion credit facility supporting our growth trajectory with additional liquidity. At 40% SHOP NOI, our pro forma internal growth rate triples. Combined with external growth opportunities, LTC's projected annual growth rate at 75% of NOI in two years increases meaningfully. Our SHOP strategy has resulted in a substantial shift in our portfolio, dramatically enhancing LTC's long-term ability to organically grow core FFO and FAD per share above historical rates. LTC's transformation from a triple net lease and lending platform into a higher growth shop-focused REIT reflects deliberate planning and efficient execution. What you see this quarter is our transformative shop strategy converting into results. The investments we have made in operator relationships, human capital, and real estate are creating value and long-term growth for our shareholders. I'll now turn it over to Gibson to walk through the operating portfolio.

Thank you, Pam. We are intentionally and rapidly transforming our business to meaningfully increase LTC's long-term intrinsic growth profile. The degree to which we accomplish our objective will be driven by our investment in shop and the long-term growth potential of that segment. With respect to increasing our shop mix, we now expect proceeds of $730 million from dispositions in loan payoffs in 2026, $465 million above prior guidance. We expect to realize a 5.5% cap rate on a rent from the incremental $465 million and a blended rate of 7.3% on total 2026 proceeds. About two-thirds of the incremental sale will be skilled nursing properties, bringing total expected 2026 proceeds from skilled nursing to $570 million at a blended cap rate of 7.5%. The remaining $160 million of triple net senior housing properties is expected to be sold at a 6.5% cap rate on current rent. The total proceeds this year include $180 million from the prestige loan payoff, which we are now modeling to occur on October 1st. Our revision to the anticipated payoff date relates to the HUD process timeline. And, given the progress that has already been made, we do expect that closing to occur this year. The timing of the additional sales and associated rent reductions are outlined in our supplemental package. With respect to shop growth, we remain encouraged by the portfolio's strong characteristics and expect to realize pro forma growth of 14% at the midpoint of guidance in our core shop portfolio when compared with 2025. Our second quarter core shop NOI was $13.3 million, up from $12.9 million pro forma NOI in Q1. We're encouraged by the REVCOR growth relative to our expectations earlier in the year and saw occupancy increases accelerate at the end of the quarter. Given those factors, we believe we are well positioned to achieve guidance with continued improvement throughout the year. Looking forward into 2027, we will continue to evaluate our portfolio for opportunities to accelerate our strategy by recycling capital at attractive risk-adjusted rates. We're excited about the long-term growth potential of the SHOT portfolio that we are assembling. Now I'll turn the call over to Dave to discuss our investment activity.

Thanks, Gibson. We are winning and growing in a dynamic acquisition market that is fueling LTC's near-term momentum and long-term growth trajectory. By the end of the third quarter, we will surpass the previous midpoint of our investment guidance by $100 million and now expect to reach $900 million in shop acquisitions in 2026. Importantly, we expect this pace of growth to continue into 2027 and beyond. From the start of the year to the end of July, we close approximately $400 million in shop acquisitions. We expect another $300 million by the end of Q3 and roughly $200 million more by year-end, reflecting the depth of our deal flow. A key value underlying LTC's success is our strong commitment to relationships. Our speed, strength, and collaborative execution resonate with operating partners, sellers, and intermediaries. And as a result, we're seeing a robust pipeline of opportunities to support our growth. Our shop acquisitions are targeted, focusing on key characteristics that support the quality of the platform and will drive higher intrinsic growth and better risk-adjusted returns. The average age of the $700 million of acquisitions that Pam referenced earlier is nine years, with 76% located in primary markets as designated by NIC. The average unit size of these communities is around 110, with nearly 60% offering a continuum of care spanning IL, AL, and memory care. These acquisitions represent growth with existing and new operators, as well as repeat and first-time seller relationships. As our shop portfolio grows, we remain focused on identifying opportunities that align with the LTC strategy and pair well with our strong operating partners. Our investment teams focus on asset quality and size, unit mix, and market dynamics, directs our growth to communities that will retain their competitive position and deliver durable long-term performance. We know sellers and operators have options, and we strive to be their trusted partner. We are deeply grateful to everyone's contributions to LTC's shop transformation and believe our people, our platform, our financial strength, and our deep relationships position us for continued growth and success. Now, I'll pass the call to CeCe for a review of our financial results.

Thank you, Dave. We recently expanded our credit facility by $300 million, increasing our unsecured revolving line of credit to $900 million. Additionally, we anticipate entering into a new ATM agreement in the third quarter. During the second quarter, we sold 4.1 million shares of common stock for $155 million in net proceeds under our ATM program to pre-fund our shop acquisitions. Our pro forma liquidity stands at $648 million. This strengthened capital position enhances our financial flexibility, enabling us to accelerate external growth initiatives and capture additional NOI expansion opportunities. At the end of the second quarter, our debt to annualized adjusted EBDA for real estate was 4.2 times, and our annualized adjusted fixed charge coverage ratio was 4.9 times. We continue to operate comfortably within our leveraged target of four to five times debt to EBITDA and will fluctuate within that target depending on the timing of our acquisitions and expected proceeds from sales and payoffs. 4 FFO per share was $0.68 for both 2026 and 2025 second quarters and 4 FAD per share was $0.70 this quarter compared with $0.71 in the 2025 second quarter. The decrease was due to an increase in our weighted average diluted shares outstanding driven by additional shares issued under our ATM program, a decrease in income from SNF sales and loan payoffs, and an increase in interest expense. The decrease was offset by an increase in SHOP NOI and interest income from loan originations and additional loan funding. As we head closer to year end, we are narrowing our guidance range for 2026. We expect core FFO per share in the range of 276 to 278 and core FAD per share between 283 and 285. This guidance includes an increase in shop acquisitions to $900 million at the midpoint, increasing total shop NOI between $71 and $80 million, and decreasing FAD capex to approximately $4 million due to the timing of acquisition. It also includes $730 million of proceeds from asset sales and loan payoffs. Our assumptions underpinning our guidance are detailed in yesterday's earnings press release and our supplemental package, which are posted on the LTC website. Now I'll turn the call over to Clint.

Thank you, Cece. When we launched our shop platform just 15 months ago via cooperative triple net conversions, it was seeded with 13 communities with a gross book value of $175 million. At the end of the third quarter, shop gross investments will total over $1.3 billion with an average age of nine years. 80% of this growth has been external, driven in part by our ability to successfully cultivate strong shop operator relationships. We are deliberately building a shop portfolio to To compete effectively today and in the future when new supply eventually comes online, although new construction starts remain near historical lows nationally, we are mindful that this will not always be the case, so we seek to acquire communities with an already strong market presence and with unit and common area configurations designed to fulfill contemporary consumer preferences. I would like to close by thanking our shop operators for choosing LTC and trusting in our relationship and ability to help support them as they care for our nation's seniors. Also, I would like to thank the LTC team for their tremendous efforts in carefully planning and executing our shop strategy in the pursuit of shareholder growth. Our transformation is happening faster than we predicted, with everyone here at LTC working together as a team to build a platform for higher, sustainable, long-term FFO and FAD growth. With that, we are ready to take your questions.

Thank you. We will now conduct the question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Once again, that's star 1 at this time. One moment while we pull for the first question. The first question comes from Juan Sanbria with BMO Capital. Please proceed.

This is Robin sitting in for Juan. I was just curious on the $321 million left to close, if you could discuss cap rates, IRRs, expected timing, and then if you could maybe also discuss if you could do additional deals in addition to the incremental $321 million before year-end.

Sure.

This is Dave.

So that remaining to be closed looks much like what we have closed year-to-date. similar similar cap rates and from a addition mix and quality really we're we're finding a lot of transactions that look like what we've acquired and so we feel very very good about that as far as additional opportunities throughout the year we're always looking and if we find transactions that fit our box we will certainly pursue them.

Then on the shop expectations, could you just help us understand the drivers of the red pour increase and the occupancy moderation?

Sure. Hi, this is Gibson. So before I get into those metrics, just want to back up for a second and just talk about that core portfolio for a minute, just to give some context. So it's 27 properties. When we rolled that guidance out, it was like 97.5% of the NOI that we owned at the time. In that mix, I think everybody knows that we converted standalone memory care, so it's more heavily tilted towards standalone memory care, about 32% of the units in that portfolio. So we're going to see some movement over time from quarter to quarter and performance in our expectations. And it's not exactly analogous to some of the other same-store portfolios of our peers. With respect to the underlying metrics of guidance, the red four is we're taking that up 50 basis points, and that's really based on the pricing strength that we've seen so far year-to-date, and then we've got more price increases coming in the second half of the year. Underlying metrics are good. there's no material difference between our you know the operators asking rates and the rates at which people are moving in we feel like the marketing funnels working and flowing and so we feel pretty good about that I'm on the occupancy front that's really function of the math so year to date we're at about 89.7% occupancy last year was 89.7% so if you think about that to be able to get our initial guide of 150 basis points, you'd have to average 300 basis points over the second half of the year. We felt like because of the cohort of buildings that we see that we would need to really move, make that kind of movement, a lot of that's a standalone memory care. We don't feel like that's an expectation that we're going to anchor. We're not going to anchor our expectations on that kind of movement. Now, we'll say last year, we saw not only in that segment of the portfolio, but the overall portfolio, we saw a really good move in occupancy in Q3. So it's not out of the realm of possibility, but if we get that same kind of move, we're really talking about the high end of the guidance as opposed to hitting the midpoint. The export expectations are really just a function of the occupancy decline, not occupancy decline, but just the moderation and our expectations. And then if you just step back and think about it, overall, all, if our operators are able to deliver 14% growth at the midpoint, and I think Pam mentioned this on a prior call, we will have outperformed our underwriting on those new deals. It's about $460 million worth of new deals in that cohort. We will have outperformed our underwriting and we will have significantly transformed the intrinsic growth profile of our portfolio. So we're really excited about that. It's a low end, which we don't expect to hit and hope not to hit. That's still double-digit growth in that portfolio for the deals that we bought. At the high end, you're at high teams growth. So we're really encouraged. And I think we're thinking of the way we're thinking about it now, I think our expectations are probably normally distributed around that 14% midpoint. We're not trying to sandbag. We feel like that's a good reasonable expectation of our operators. But we feel at that growth rate, we will have, you know, we will go a long way to proving out the thesis behind turning over 730 million dollars of our portfolio this year investing in shop um making the investments in the platform and um we'll be we're really excited about that here at ltc thank you the next question comes from tayo akusanya with dolce bank please proceed your line is live good morning everyone how are you great thanks morning great a couple

of quick ones from me. The core shop portfolio and the 14% NOI growth profile, I'm just curious, as we kind of think of everything else you've bought or just kind of in the lineup, and we kind of think about where you kind of have all that kind of in the portfolio by the end of this year and we start thinking about 2027 and trying to do like a year-over-year comparison type of thing like we're doing with the core shop portfolio. How much confidence do you have at that point that you could still put up kind of similar NOI growth by the end of the year with kind of a redefined core portfolio heading into 2027, if I may use those words?

You mean the growth? Are you specifically referencing the growth that we're projecting in what we're buying, the recent acquisitions? Like our underwriting?

Exactly. That's a great way to kind of think about it. Like, how do we think through the growth of that stuff?

So, Tal, this is Dave. Sort of like I commented earlier, right? So, what we're looking to acquire in terms of the acquisitions that are coming in and what we're pursuing, we expect similar dynamics in terms of low to mid-teens IRRs and that kind of growth. So, we really see it as sort of adding quality to quality as we continue to grow. So, that is our expectations as these roll into our portfolio and be in March step with the rest of the assets.

We haven't bought any value-add, Tyler, if that's what you're asking, where you would expect, you know, our size growth.

And that's like how my comments are made. You know, we're expecting to have the $700 million completed by the end of Q3. That'll put us at $1.3 billion, the average age of nine years. We've targeted larger campuses, newer assets that are occupancy stabilized that then have the ability to push revenue growth. And it's something that we have conversations with our operating partners about this and looking at the budgeting process and where to focus on. And we do think there's going to be room to push rates, especially with just supply constraints that exist today. And that's why we have targeted the asset profile that we have to acquire to build the shop platform. We think that's going to be very advantageous to us going forward.

Okay, that's helpful. So then with a mid-teens IRR and you're buying, let's kind of call it high six to about a seven cap, so you're kind of thinking it gives you like 8%, 7%, 8% type growth?

Yes.

Okay, that's great. And then just a quick second question. With further growth in shock, this idea of being 75% by 2028, as we're kind of thinking about additional acquisitions, how should we think through funding that? I think, again, this year is a little bit different because, again, some of the funding is some of the high-yield paper that's kind of from the loan payoffs and things like that. So just kind of think about your actual cost of capital relative to where you're buying assets. But she was kind of thinking about that stuff as being kind of accretive from day one or more neutral from day one, and then we kind of get to growth in outer years.

Yeah, more neutral from day one and the growth in the following year. We do have some more potential capital recycling we can do in our portfolio. The bulk of it done this year, I mean, over $700 million, that's pretty incredible, As Gibson alluded to, turning over a third of our portfolio in less than 18 months is taking a lot of work here. But it's been, you know, the SNF asset sales have unlocked a lot of trapped value that's created a currency for us for growth-oriented investments. And we'll continue to look within our portfolio to do that. But next year, I would anticipate it more than normal course, 70% equity, 30% debt. So you'll see more growth in the bottom line asset, gross asset value of LTC this year. It was more recycling and replacing low-growth investments with high-growth investments. Next year, you'll see more bottom line growth.

That is very helpful. You guys are grinding hard.

Thank you. We're working hard over here. Our team, we've got a great team, and everybody's – we're all in the same boat rowing together in the same direction and feel like we're firing on all cylinders. As Gibson said, we're really excited about what's happening here at LTC, and, you know, a lot of our investors are certainly thrilled by it as well and looking forward to next year.

That's a lot to track the operating partners that we have into the shop portfolio. I mean, going from May of last year to now having 12 operating partners and adding one more, I think that energy has resonated and has really helped us catapult this growth.

The next question comes from John Kilchowski with Wells Fargo. Please proceed.

Hey, good morning. This is Jesus Unford-John. Thanks for taking the question. So to start here, you guys raised the investment midpoint here by $300 million to $900 million and increased shop and OI guidance, but kept the midpoint per share guidance unchanged. I guess, what is offsetting the incremental earnings contribution from those acquisitions?

Well, a lot of it is easy here. A lot of it is the timing of acquisitions of when they're coming on board. That's the primary cause of keeping it where it was initially coming out of the model. We typically modeled Radley throughout the year, but it's been pushed back.

Perfect. And just as you've scaled the shop portfolio and just added several new operator relationships, I guess, what have you guys learned so far about what distinguishes operators, you know, best position to grow with you guys?

So, this is Dave. The operators who are best positioned to grow or that we've had the most interaction with have been regional operators that know their states well, know their markets well, and really got that level of knowledge about the locality and the market dynamics and probably have other communities in that sort of general region to draw upon. So I think that gives you a lot of strength in terms of having an operator who certainly is operating in your community, but they have a broader tapestry of regional resources and other things they can draw upon that are resources that we will benefit from by engaging them.

That's great.

Thank you. The next question comes from Michael Carroll with RBC. Please proceed.

Yeah, thanks. I wanted to dig into the updated disposition guidance a little bit more. What really drove the increase on those expected sales and loan payoffs this past quarter? Is there just one larger portfolio deal included in that, or is it comprised of several smaller transactions?

It's small. There's a number of transactions, Mike, that's involved in this. And this just goes to what we've mentioned on our previous call is that we're going to look at our portfolio and given, you know, attractive pricing for skilled nursing, looking at being able to, you know, take advantage of that. So, it's something we've been managing and monitoring. Operators and buyers listen to our earnings call. They know that we have guided that our strategic focus is moving into shop. So, we do receive a lot of inbound phone calls from that as well. So it's responding to people, but then also just being proactive in managing our portfolio and seeing where best risk-adjusted returns are and where we can raise capital.

Okay. And then some of the cap rates achieved on those sales looks like you're getting some pretty attractive valuations. Is that just like the higher coverage ratios on those deals that allows you to kind of get it to that sub-6%, 5% type range?

Yes. and assets we've had on the books for a long time as well. And then, Clint, is there any – Gibson, you had a comment?

It was just, you know, as you approach – when you get daylight on some of these lease terms to an opportunity to either reset rent or, you know, retent it as you move towards the end of the lease, then you're able to look to that coverage as an opportunity to unlock value. You know, most of these transactions will be with the operators, and it works. We feel like it's really just a win-win for both sides. They're able to control their destiny with the assets, and we're able to realize really good attractive value for our shareholders and redeploy into higher-growth assets. So it's not that we don't like the assets. It's just, you know, part of it's a function of structure. You know, we've been very clear about what our goals are in terms of where we're going as a company. They're, you know, the counterparties have their own goals. Good businesses have been good assets. But we just, you know, we've been looking opportunistically throughout the portfolio, reacting quickly when we get inbounds and proactively doing some outreach where we see opportunities. We'll continue to do that. But as Pam alluded to, we don't expect to do anything like that at this scale next year.

And that also helps us be able to move the needle forward as far as getting to a higher percentage of shop concentration, which that is a stated goal that we have had.

Even though you don't expect to have a similar level next year, I mean, what type of activity still could exist? I mean, does this, I forget the exact number, was it 730 that's included in guidance this year? is could you do a couple hundred million of these types of sales in 2027 too? And is that contemplated at all, Clint, in that 75% goal that you put out there, or is that purely new investments that gets you to that 75% goal?

That's more new investments. But there is a likelihood of, I mean, a couple hundred million possibly that could happen next year. You're not going to see the magnitude of what we have this year most likely, but you could see I think a couple hundred million is possible.

Okay. And then just last question for me on the prestige loan repayment that's included in guidance on October 1st. I mean, how confident are you that that will happen in October? I mean, is there any big list that they need to achieve to get the HUD loans to be able to get that done?

Yeah, not now. We feel confident, Mike. I mean, the timing may be a few weeks or a month or something like that, but the final commitments from HUD, are in to prestige on most of those properties. And, you know, there are a couple more outstanding, but no concerns, performance is really strong. They meet the HUD underwriting metrics comfortably. And so now it's just a matter of kind of pulling all those together and marching them toward close. So we feel confident now. We have more certainty, you know, now given those commitments, the HUD commitments that have come in to prestige than we did, you know, when we had our last call. Okay, great. Thank you.

The next question comes from Rich Anderson with Cantor Fitzgerald. Please proceed.

Thanks. Good morning. So, you know, I think, Pam, you alluded to this, but just to put some numbers around it, the normalized FFO growth rate for this year is just, you know, 1.5%, but, of course, we recognize why that's happening and that it transitions to more bottom-line growth as you go forward. But if the landing point of this business is, let's just use a round number, 10% core same-store shop growth, what would hold the company back from producing bottom-line normalized FFO growth at that level, if not greater, when you think about the endgame here? Or is there any reason why it will be – the FFO growth line will be something less than the same-store growth line?

No, and thank you for that question, Rich, because it is the math of it, right? At 75% in 2028, that's what you're achieving. And so the only thing that would hold us back from that is not being able to execute acquisitions at the level we are currently. So that assumption, getting to 75% in 2028, is predicated on our current run rate for acquisitions. And right now, what we're seeing in the market, there's no reason to believe that we wouldn't get there. So it's really just the math all falling to the bottom line. You know, this has been a heavy lift transformation year, turning over the portfolio like we did. And the price we paid for it, as you noted, with one and a half percent growth, was growth this year. But it was an investment we were willing to make consciously as a management team, knowing that in two years, the company that emerges is stronger, higher growth, and just a lot more exciting, frankly.

And actually being able to recycle the capital within the portfolio, I mean, that's a triple net, older assets. I mean, it's just de-risking the portfolio as you go along. So that's actually strategically helpful to minimize the potential disruptions in the future.

So I think in past conversations, and I don't think I have this wrong, but, you know, you were thinking after, you know, sort of a bulky SNF sales that you would more grow, keep that steady and then just grow the shop business and grow your percentage of shop that way. But you've obviously had an epiphany about selling more SNFs, which is fine. But I am curious about who's the buyer at a 7.5 cap rate for SNFs. That's a very attractive yield for you. But, you know, what does the buyer see in that?

So the 7.5 includes and maybe cap rate, let's call it implied yield, because that's the prestige is structured as a loan. So that's prestige. As I mentioned before, oh, hey, it's Gibson. As I mentioned before, the incremental sales that we're talking about, most of those are back to operators or affiliates of the operators. And, you know, they're arising from different situations, each unique. But generally speaking, as you get to, again, daylight toward the end of lease term, you're not just like swapping lease yields, right? You're able to, for our shareholders, look more to the overall cash flow of the underlying operations to monetize that. And it works for the operators too. Again, they're able to, they control all the upside going forward. And they have certainty and they can plan their business and they get to control their own destiny for the asset. So we feel like it really, it's really attractive yields for us. We're really happy to redeploy that in the shop, but we think it works for the operators as well. And it's, you know, just practically speaking, it's a much easier transaction to do.

Yeah, so they just have a different agenda. So it's, you know, you're looking at different things and different opportunities from both sides. So I get that.

I mean, your alternative is to rebase your rent, right, and wait now and wait until the end of the lease term and hope that margins hold up and hope that occupancy holds up and hope that reimbursement holds up and that you can be in the same spot in a couple years where you are now. And so we just think that it's much more accessible for us, given our goals, to act on that now.

And generally speaking, operators that are in leases that have good coverage, I think their objective just generally is to own the asset as opposed to lease it.

Yeah. Okay. And then last question for me. Um, so 75% by the end of 2028, I mean, why not just go to a hundred percent, right? I mean, like, let's, you know, and you guys have, you guys have, you know, exceeded expectations about that number so far in the 18 months you've been doing this. I mean, let's, let's just rip the bandaid off and go for it if we're going to do it, I mean, is that a possibility?

I think Rich, we would look at the portfolio and it's really a function of looking at you know, what pricing is, cap rates, you know, what's the best, what's the most attractive capital we have available to us. And so I think we would continue to look at that between now and then. It could accelerate because that really getting to that 75 is really just a function of the pacing of our existing deal flow. And if we do decide to sell assets in the portfolio to further that growth, it would just increase, get to 75 sooner and maybe surpass that.

It feels to us, Rich, like the Band-Aid has been ripped. It's been a lot of work getting here, but we have a platform in place to really, if that's what we decide to do later, we feel like we have a platform in place to scale to be able to do that. But the Band-Aid's been ripped.

And the good thing right now, too, Rich, you look at just coverage in the triple net side as far as AL and skilled, I mean, we've got historic coverage on the skilled nursing side, so it's strong, so we don't have to do anything. but if pricing is opportunistic, but we feel that within the portfolio, there's strong coverage, and you never know what could happen, but we feel that there is room in that coverage to absorb any challenges if things come up from different areas as far as reimbursement regulatory or things that are unexpected.

Fair enough. Thanks very much for the color. Thank you. Thanks, Rich.

The next question comes from Austin Schwarzschmidt with KeyBank Capital. Please proceed.

Great. Thanks. Good morning. Kind of going back to that last point, Clint, I guess, how much exposure will you have to the SNF investments by year end? And do you think that, you know, coverage across those remaining assets supports similar pricing as you're achieving on the SNF sales this year?

I would think so, yes. I mean, right now, we're probably – our NOI on skills goes down to low 20s. It's a pretty dramatic shift from what it was in 2024. At the end of 2024, it's like 50 – almost 60 percent.

Just a year ago, if you check our Q2 supplemental, it's over 50 percent.

A dramatic shift.

Helpful. And Gibson appreciated all the detail on the core shop pool of assets. Was the occupancy, you know, shortfall or change to the guidance this year entirely from the memory care units or those assets, or were some of the more traditional shop assets also impacted from some of just maybe the, I don't want to say occupancy softness, but maybe decel and the pace of improvement that many had anticipated into the early part of the summer leasing season?

Yeah, it's a fair question, Austin, and I don't think I was clear enough when I started out my initial answer. I think part of it is really due to the way we have it modeled, where as we started out in the beginning of the year, it was kind of a more smooth and gradual build. I think I mentioned in response to your question last time in Q1, we saw more seasonality than we expected. So, really, for the first half of the year, we're probably 90 bifths behind on occupancy of our own internal projections, but having said that, year over year, we're about 145 basis points over last year, and so the question is, okay, well, why don't you just raise your guidance? Well, I mentioned earlier that last year we saw a really steep ramp in occupancy in the second part of the year, and as we look at the cohort of buildings that would be required to do that at this point. A lot of that is in the more higher QE, standalone memory care. We saw that in that segment last year. We've seen it to different degrees in prior years. So it's really us with this portfolio, these characteristics, you can have a lot of volatility and we don't want to hang our hat on last year's, on one year's results. So we're not discouraged by what, you know, what's transpired so far are actually pretty encouraged. We're behind our own expectations, a little bit on occupancy. We're, of course, higher. If you had to pick between the two, that's where you'd want to be right now. And you're seeing some of those buildings that have higher occupancy. You're seeing them start to dry break a little bit more and charge for the care that they're providing the residents. So it's not, last year, you were able to get that 300 basis point improvement, you know, second half over first half. This year, we're just not modeling that same kind of growth. If we get to that growth, then we're probably at the top end of our range. But again, we're really pleased with our operator base. The business development team's done a fantastic job bringing new operators. They're great. And we feel like if we can get the midpoint in this range, it's a tremendous success for our shareholders.

Let me ask you, when you see these periods where maybe occupancy's not improving through the quarter as quickly as you might have anticipated or underwrote. How quickly or seamlessly can you transition to push rate, you know, like you're kind of assuming in guidance to offset that softer occupancy build?

Yeah. So those things are really decoupled in the way that you're thinking about it. So if we were sitting on a 600 property, same store portfolio, we can make a top level assumption and say, hey, occupancy is down here. We're going to tweak the whole portfolio by 50 pips, pricing 50 pips over there, and Bob's your uncle. But here, we're going asset. The operators look at asset by asset. They're already on the assets, on the communities that were higher occupancy. They're already working on rates. And that's independent of what our total shop goals are. We're not going back to the operators and saying, hey, we're a little behind in our our projections year-to-date and go back and increase rates. So they're really – they're two separate considerations. I understand why you're linking them, and that makes sense. And I want to make one thing clear. We're really – in my earlier comments, we're really encouraged by the strong start to Q3. So we saw occupancy accelerate at the end of Q2. We're just not banking on the same kind of increase that we saw last year. that's helpful detail.

Thanks for the time. Thanks, Austin.

Thank you. At this time, I would like to turn a call back over to Clint Malin for closing comments.

Thank you for your time, Dave. We really do appreciate the interest in following LTC, and we look forward to seeing you on our hearing and talking with you on our next call. Thank you.

Thank you. This does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a great day.