8-K
National Healthcare Properties, Inc. (NHP)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): May 26, 2022
Healthcare Trust, Inc.
(Exact Name of Registrant as Specified in Charter)
| Maryland | 001-39153 | 38-3888962 |
|---|---|---|
| (State or other jurisdiction<br><br> <br>of incorporation) | (Commission File Number) | (I.R.S. Employer<br><br> <br>Identification No.) |
| 650 Fifth Avenue, 30th Floor<br><br> <br>New York, New York 10019 | ||
| --- | ||
| (Address, including zip code, of Principal<br> Executive Offices)<br><br> <br><br><br> <br>Registrant’s telephone number, including area code: (212) 415-6500 |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class: | Trading Symbol(s) | Name of each exchange on which registered: |
|---|---|---|
| 7.375% Series A Cumulative Redeemable Perpetual Preferred Stock, $0.01 par value per share | HTIA | The Nasdaq Global Market |
| 7.125% Series B Cumulative Redeemable Perpetual Preferred Stock, $0.01 par value per share | HTIBP | The Nasdaq Global Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
| Emerging growth company ¨ |
|---|
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
**Item7.01.**Regulation FD Disclosure.
Investor Presentationand Transcript
Healthcare Trust, Inc. (the “Company”) prepared an investor presentation containing certain portfolio information and financial highlights. Representatives of the Company intend to present some of or all of this presentation to current investors and their financial advisors at various conferences and meetings, including webinars. A copy of the investor presentation is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
On May 26, 2022, the Company hosted a conference call to discuss its financial and operating results for the quarter ended March 31, 2022. A transcript of the pre-recorded portion of the webcast is furnished as Exhibit 99.2 to this Current Report on Form 8-K. A copy of the presentation and replay of this webcast will be available on the Company’s website at www.healthcaretrustinc.com in the news section.
Neither the investor presentation nor transcript shall be deemed “filed” for any purpose, including for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section. The information in this Item 7.01, as well as Exhibit 99.1 and Exhibit 99.2, shall not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act regardless of any general incorporation language in such filing.
Forward-Looking Statements
The statements in this Current Report on Form 8-K that are not historical facts may be forward-looking statements. These forward-looking statements involve risks and uncertainties that could cause actual results or events to be materially different. The words “may,” “will,” “seeks,” “anticipates,” “believes,” “expects,” “estimates,” “projects,” “plans,” “intends,” “should” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements are subject to a number of risks, uncertainties and other factors, many of which are outside of the Company’s control, which could cause actual results to differ materially from the results contemplated by the forward-looking statements. These risks and uncertainties include (a) the potential adverse effects of (i) the ongoing global COVID-19 pandemic, including actions taken to contain or treat COVID-19, and (ii) the geopolitical instability due to the ongoing military conflict between Russia and Ukraine, including related sanctions and other penalties imposed by the U.S. and European Union, and other countries, as well as other public and private actors and companies, on the Company, the Company’s tenants, and the global economy and financial markets, and (b) that any potential future acquisition is subject to market conditions and capital availability and may not be identified or completed on favorable terms, or at all, as well as those risks and uncertainties set forth in the Risk Factors section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 filed on March 18, 2022 and all other filings with the SEC after that date as such risks, uncertainties and other important factors may be updated from time to time in the Company’s subsequent reports. Forward looking statements speak only as of the date they are made, and the Company undertakes no obligation to update or revise any forward-looking statement to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results, unless required to do so by law.
Item 9.01. FinancialStatements and Exhibits.
(d) Exhibits
| Exhibit No. | Description |
|---|---|
| 99.1 | Investor Presentation |
| 99.2 | Transcript |
| 104 | Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| HEALTHCARE TRUST, INC. | ||
|---|---|---|
| Date: May 26, 2022 | By: | /s/ Scott M. Lappetito |
| Scott M. Lappetito<br><br> <br>Chief Financial Officer, Secretary and Treasurer |
Exhibit 99.1
1 Healthcare Trust, Inc. First Quarter 2022 Investor Webcast Presentation
2 Q1’22 Company Overview (1) Based on total real estate investments, at cost of $2.6 billion, net of gross market lease intangible liabilities of $23.5 mi lli on as of March 31, 2022. (2) Percentages are based on NOI for the three months ended March 31, 2022 and for the three months ended March 31, 2021. See app end ix for Non - GAAP reconciliations. (3) See Definitions in the Appendix for a full description. (4) Assuming no expirations or terminations and that non - binding letters of intent will lead to definitive leases that will commence on their contemplated terms, which is not assured. Leases and potential leases in the forward Leasing Pipeline commence at various times throughout 2022. The forward Leasing Pipeline should not be considered an indication of future performance. (5) For the SHOP portfolio, weighted by unit count as of March 31, 2022. As of March 31, 2022, HTI had 4,378 rentable units in ou r S HOP segment. (6) Refer to slide 6 for additional information. HTI is a $2.6 billion (1) healthcare REIT with a high - quality portfolio focused on two segments, Medical Office Buildings (“MOB”) and Senior Housing Operating Properties (“SHOP”) High Quality Portfolio x High - quality portfolio featuring 198 healthcare properties that are 77% MOB and 23% SHOP (2) x High MOB portfolio Occupancy (3) in Q1’22 of 91.3% plus a forward Leasing Pipeline (3) of 41,300 SF that is expected to increase MOB portfolio Occupancy to 92.2% and Annualized Straight - Line Base Rent (3) by $1.0 million (4) x SHOP portfolio Occupancy improved, increasing by 1.8% from 74.1% in Q4'21 to 75.9% (5) in Q1’22, as COVID - 19 - related headwinds have subsided and the operating environment continues to improve x Geographically diversified across 33 states with select concentrations in states that management believes to have favorable demographic tailwinds Diligent Acquisition Program (6) x In 2021, HTI completed $160 million of acquisitions at a 7.7% weighted average Cap Rate (3) which are expected to add $14 million of Annualized Straight - Line Base Rent over a weighted average Lease Term Remaining (3) of approximately eight years (6) x HTI developed a 2022 acquisition pipeline of three properties totaling $18 million at a weighted average Cap Rate of 8.6% x In 2021, and as compared to 2020, HTI increased its acquisition volume by $50 million from $110 million to $160 million and improved its weighted average Cap Rate by 0.7% from 7.0% to 7.7% Resilient Performance x Maintained high MOB Occupancy throughout the COVID - 19 pandemic above 91% and 100% Cash Rent collection x Year - over - year, HTI’s exposure to MOB assets increased from 63% to 77% (2) in part due to high - quality MOB acquisitions, which management believes to have more predictable cash flows than SHOP assets, and strategic SHOP dispositions Experienced Management Team x Year - over - year, HTI improved Net Leverage (3) by 4% to 37% and increased Liquidity by $177 million to $294 million, ensuring financial flexibility and acquisition capacity x Proven track record with significant public REIT market experience x Dedicated SHOP management team led by John Rimbach and his core team that collectively have over 125 years of SHOP operating experience
3 (1) Based on square feet as of March 31, 2022 and excludes the SHOP portfolio. Including the SHOP portfolio, portfolio occupancy wou ld have been 84.6% as of March 31, 2022. (2) Excludes two land assets. (3) Based on total real estate investments, at cost of $2.6 billion, net of gross market lease intangible liabilities of $23.5 mi lli on as of March 31, 2022. (4) See Definitions in the Appendix for a full description. For the SHOP portfolio, weighted by unit count as of March 31, 2022. As of March 31, 2022, HTI had 4,378 rentable units in our SHOP segment. (5) Represents approximately 87% of HTI’s MOB segment. Approximately 84% are fixed - rate, 3% are based on the Consumer Price Index an d 13% do not contain any escalation provisions. Portfolio Snapshot HTI’s dynamic portfolio features an MOB portfolio that is 91% occupied (1) with embedded long - term rent growth and an over 4,300 - unit SHOP portfolio with significant Occupancy upside that is operated by four operators with ($ in millions and SF in thousands) MOB SHOP Rentable Square Feet 5,018 4,030 Properties (2) 146 50 States 28 14 Real Estate assets at cost (3) $1,397 $1,151 Percentage of NOI 77.4% 22.6% Occupancy (4) 91.3% 75.9% Annual Rent Escalations 1.8% (5) Market Rates Weighted Average Remaining Lease Term (4) 5.0 Years N/A
4 77% 23% MOB SHOP PA 16% FL 12% IL 9% GA 9% IA 6% AZ 6% CA 5% MI 5% TX 4% WI 4% Other 24% Dynamic Portfolio Fundamentals HTI is focused on deploying capital into select, high - quality MOB and SHOP assets throughout the United States and increasing portfolio Occupancy Select Geographic Mix (1) Percentages are based on NOI for the three months ended March 31, 2022. See appendix for a reconciliation of aggregate NOI to aggregate GAAP net income. (2) Based on square feet as of March 31, 2022. $ 31 million NOI (1) Diversified Geographic Across 33 States High - Quality Portfolio Top 10 States (2) x MOB portfolio that is diversified across 28 states and features long - term leases to credit - worthy tenants with embedded contractual rental income growth of 1.8% on approximately 87% of leases x Actively managed and resilient SHOP portfolio with substantial Occupancy upside that is operated by four operators x Geographically diversified across 33 states with select state concentrations that management believes to have favorable demographic tailwinds x Complete collection of original Cash Rent due across the MOB portfolio in Q1’2022 Portfolio Highlights MOB SHOP
5 x DaVita (NYSE: DVA) and Fresenius (NYSE: FMS) are industry leading publicly traded companies with a combined market cap of $31 billion (1) x Streamlined SHOP portfolio to only four operators, including two industry leaders, from over 15 operators in 2019 x Developed strong tenant relationships with leading medical institutions such as UPMC, a leading health enterprise with over 92,000 employees and 800 clinical locations x HTI remains committed to developing strong partnerships with leading healthcare brands that we believe benefit patients and other stakeholders Strategic Partners HTI partners with top healthcare brands in well - established markets MOB SHOP (1) Market capitalization data as of March 31, 2022.
6 In 2021, HTI completed $160 million of acquisitions at a 7.7% weighted average Cap Rate that are expected to add $14 million of Annualized Straight - Line Base Rent over a weighted average Lease Term Remaining of approximately eight years. In Q1’22, HTI developed a three - property acquisition pipeline totaling $18 million at an 8.6% weighted average Cap Rate (1) Represents the contract purchase price and excludes acquisition costs which are capitalized per GAAP. The acquisition costs f or acquisitions completed during the twelve months ended December 31, 2021, were $ 1.7 million. (2) See Definitions in the Appendix for a full description. (3) Weighted average remaining lease term is based on square feet as of the respective acquisition date for closed transactions. (4) Includes pipeline as of May 15, 2022. PSAs are subject to terms. There can be no assurance these pipeline acquisitions will b e c ompleted on their current terms, or at all. ($ in millions, square feet in thousands and lease term remaining in years) Diligent Acquisition Program 2022 Acquisition Pipeline (4) Millennium Eye MOB MOB: Multi - Tenant NJ 1 25 $8.2 9.5 Executed PSA Bone and Joint Specialists MOB MOB: Single - Tenant IN 1 16 $4.1 5.0 Executed PSA Atlanta Gastro MOB MOB: Single - Tenant GA 1 11 $5.3 7.5 Executed PSA 2022 Acquisition Pipeline 3 52 $17.6 8.6% 7.7 2021 Closed Transactions Property Type State Number of Properties Square Feet Purchase Price (1) Wtd . Avg. Cap Rate (2) Wtd . Avg. Lease Term Remaining (3) Status Q1’2021 1 29 $6.6 3.1 Q2’2021 7 151 $36.9 4.7 Q3’2021 6 191 $103.9 14.7 Q4’2021 3 36 $12.8 9.6 Total Closed 2021 17 407 $160.2 7.7% 11.7
7 Mortgage Debt ▪ $379 million mortgage loan with Capital One, at a 3.7 % interest rate fixed by swap, that matures in 2026 ▪ $119 million CMBS loan with KeyBank, at a 4.6% fixed interest rate, that matures in 2028 ▪ In Q4’21 , HTI completed a $43 million CMBS financing with BMO, at a 2.9% fixed interest rate, that matures in 2031 Credit Facilities ▪ Fannie Mae Master Credit Facilities : Consists of two facilities between KeyBank and Capital One. The credit facilities had a weighted average interest of 2.68% as of March 31, 2022 and mature in 2026 ▪ Revolving Credit Facility and Term Loan : The revolving credit facility and term loan mature in 2024, with exercise of HTI’s extension option, and currently have total commitments of $630 million. HTI had $228 million of availability on its revolving credit facility to fund acquisitions and general corporate purposes as of March 31, 2022 Capital Markets ▪ In Q4’21, HTI completed an $ 87 million Series B Preferred Stock Offering that received a BBB - investment grade rating from Egan - Jones Ratings Company, which management believes to reflect the high - quality and diversified nature of HTI’s portfolio ▪ In Q2’21, HTI also completed a $56 million Series A Preferred Stock follow - on offering that provided attractive capital and financial flexibility Debt Capitalization (1) ($mm) Q1’21 Q1’22 Mortgage Notes Payable $550 $589 Fannie Mae Master Revolving Credit Facilities $355 $355 Total Secured Debt $905 $944 Credit Facility – Revolving Credit Facility $174 $0 Credit Facility – Term Loan (1) $150 $150 Total Unsecured Debt (1) $324 $150 Total Debt $1,229 $1,094 Weighted Average Interest Rate (2) 3.6% 3.5% Key Capitalization Metrics ($mm) Q1’21 Q1’22 Net Debt (1) (3) $1,155 $1,028 Liquidity (3) $117 $294 Net Leverage (3) 41.3% 37.3% Balanced Capital Structure HTI continues to manage its capital structure and improved Net Leverage (3) to 37% and increased Liquidity to $294 million, ensuring financial f lexibility and acquisition capacity Note: Metrics as of and for the three months ended March 31 , 2022. As of March 31 , 2022, HTI had $ 66.4 million of cash and equivalents and the current availability under the revolving credit facility was $ 227.5 million. HTI is subject to a covenant requiring it to maintain a combination of cash, cash equivalents and availability for future borrowings under the revolving credit facility t ota ling at least $50.0 million. (1) Excludes the effect of deferred financing costs, net and mortgage premiums/discounts, net. The equity interests and related r igh ts in our wholly owned subsidiaries that directly own or lease the eligible unencumbered real estate assets comprising the borrowing base of HTI’s credit facility are pledged for the benefit of the lenders thereunder. These real estate assets are n ot available to satisfy other debts and obligations, or to serve as collateral for any new indebtedness, unless the existing ind ebt edness secured by these properties is repaid or otherwise refinanced. (2) Weighted average interest rate based on balance outstanding as of March 31 , 2022. (3) See Definitions in the Appendix for a full description. Conservative Leverage Profile
8 Key Operating Highlights Year - over - year, HTI proactively managed the Company’s portfolio and balance sheet and as a result, SHOP occupancy increased by over 3%, MOB NOI increased by 10% and Net Leverage decreased by 4% Durable and Resilient MOB NOI Performance Improved Net Leverage Increasing SHOP Occupancy x Increased SHOP occupancy 3.9% year - over - year and 1.8% quarter - over - quarter as COVID - 19 related headwinds dissipated x Increased NOI derived from MOB assets from $21.5 million to $23.7 million in part due to high - quality MOB acquisitions x Improved Net Leverage by 4% year - over - year as HTI reduced total debt outstanding by repaying all amounts outstanding on HTI’s revolving credit facility Operating Highlights 72.0% 75.9% Q1'2021 Q1'2022 $21.5 $23.7 Q1'2021 Q1'2022 41.3% 37.3% Q1'2021 Q1'2022
9 Company Highlights HTI continues to remain focused on capitalizing on the Company’s leasing upside, acquiring high - quality MOB and SHOP properties, and constructing and maintaining a conservative balance sheet x High - Quality Portfolio of 198 healthcare properties comprised of 77% MOB and 23% SHOP properties (1) x Diligent Acquisition Program (2) of over $160 million in 2021 at a 7.7% weighted average Cap Rate that is expected to add $14 million of Annualized Straight - Line Base Rent over a weighted average Lease Term Remaining of approximately eight years, plus a 2022 acquisition pipeline of three properties totaling $18 million at an 8.6% weighted average Cap Rate x Resilient MOB Performance with year - over - year increases in MOB portfolio exposure (1) plus a forward Leasing Pipeline of 41,300 SF that is expected to increase MOB Occupancy to 92.2% (3) x Increased SHOP Occupancy by 3.9% year - over - year and 1.8% quarter - over - quarter as COVID - 19 related headwinds dissipated x Collected 100% of the Cash Rent due from HTI’s MOB portfolio in 2021 and Q1’2022 x Conservative Balance Sheet with Net Leverage of 37.3%, an improvement of 4% year - over - year, and Liquidity of $294 million (4) as of Q1’22 x Streamlined SHOP Portfolio operators to only four operators, including two industry leaders, from over 15 operators in 2019 x Experienced Management Team with a proven track record and significant public REIT experience (1) Percentages based on NOI for the three months ended March 31, 2022. See appendix for Non - GAAP reconciliations. (2) See slide 6 for further details. (3) Assuming no expirations or terminations and that non - binding letters of intent will lead to definitive leases that will commence on their contemplated terms, or at all, which is not assured. Leases and potential leases in the forward Leasing Pipeline com me nce at various times during 2022. The forward Leasing Pipeline should not be considered an indication of future performance. (4) See slide 7 for further details. HTI is subject to a covenant requiring it to maintain a combination of cash, cash equivalent s a nd availability for future borrowings under the revolving credit facility totaling at least $50.0 million.
10 Experienced Leadership Team Scott Lappetito Chief Financial Officer, Secretary, and Treasurer Mr. Lappetito currently serves as the Chief Financial Officer, Treasurer and Secretary for HTI. Mr. Lappetito previously served as chief accounting officer from April 2019 until December 2021, and was the company’s controller from November 2017 through April 2019. Mr. Lappetito is a certified public accountant in the State of New York, holds a B.S. in accounting from The Pennsylvania State University and an M.B.A. from Villanova University. Leslie D. Michelson Non - Executive Chairman, Audit Committee Chair Mr. Michelson has served as the chairman of Private Health Management, a retainer - based primary care medical practice management company from April 2007 until February 2020, and executive chairman and a director since March 2020. Mr. Michelson served as Vice Chairman and Chief Executive Officer of the Prostate Cancer Foundation, the world’s largest private source of prostate cancer research funding, from April 2002 until December 2006 and served on its board of directors from January 2002 until April 2013. David Ruggiero Vice President, Acquisitions Mr. Ruggiero currently serves as Vice President at the Company’s advisor with a primary focus on acquisitions. Mr. Ruggiero has over 20 years of commercial real estate experience and has advised on over $3 billion in healthcare real estate dispositions, acquisitions and financings. He earned an MS in Finance from Kellstadt Graduate School of Business at DePaul University and a BA from DePaul University. Trent Taylor Vice President, Asset Management Mr. Taylor currently serves as Vice President at the Company’s advisor with a primary focus on asset management and leasing. Mr. Taylor has over 12 years of commercial real estate and development experience. He earned an MS in Real Estate from New York University and BA in Accounting & Finance from the University of Central Florida. Michael Weil Chief Executive Officer Mr. Weil was named Healthcare Trust Inc.’s chief executive officer on August 23, 2018, which went into effect on September 12, 2018. He is a founding partner of AR Global and has served as a leading executive and board member on several publicly - traded and non - traded real estate companies. Additionally, he previously served as the Senior VP of sales and leasing for American Financial Realty Trust. Mr. Weil also served as president of the Board of Directors of the Real Estate Investment Securities Association (n/k/a ADISA). John Rimbach President of Healthcare Facilities Mr. Rimbach brings a strong expertise in seniors housing management which he established over a 30 - year career. Prior to joining the Company’s advisor, Mr. Rimbach served as President/CEO and Founder of WESTLiving , LLC, where he provided overall leadership and strategic direction for this large seniors housing portfolio. Prior to that, Mr. Rimbach served as COO of AF Evans Company Inc. from 1999 to 2008, and was the Development Director of NCB Development Corporation from 1993 to 1999.
11 Dedicated SHOP Team Kimberly Holmes: VP – Operational Analytics ▪ 25 year career in senior housing and hospitality ▪ Her work on financial analysis, planning and benchmarking will translate into operational plans and action items for the portfolio Susan K. Rice, RN: VP – Clinical Operations ▪ 30 year career in the healthcare industry ▪ Extensive knowledge in clinical areas and processes to monitor and validate care outcomes, quality and compliance Patrick Collins: Chief Operating Officer ▪ Patrick’s responsibilities are to drive operational performance of HTI's operator/manager partners ▪ His 26 year career touches upon all aspects of operating a senior housing community John Rimbach: President of Healthcare Facilities ▪ Former President, CEO & Founder of WESTLiving ▪ 30 year career in the financing, development, acquisition, ownership and operation of senior housing portfolios Angie Ehlers: VP – Sales & Marketing ▪ Over her 26 year career, Angie has directed sales and marketing efforts at many senior level positions ▪ Her experience allows her to provide unique insight into markets and product positioning for the HTI SHOP portfolio John Rimbach and his core team collectively have over 125 years of SHOP experience and have been with HTI’s Advisor for nearly five years. This experienced group plays an essential role in managing HTI’s SHOP portfolio
12 Board of Directors Lee M. Elman Independent Director Independent director of the Company since August 2015 Founder & President of Elman Investors Inc., an international real - estate investment banking firm 40+ years of real estate investment experience in the US and abroad Mr. Elman holds a J.D. from Yale Law School and a B.A. from Princeton University’s Woodrow Wilson School of Public and Intern ati onal Affairs Leslie Michelson Non - Executive Chairman, Audit Committee Chair Chairman of Private Health Management from April 2007 until February 2020, and executive chairman and a director since March 202 0 Vice Chairman and Chief Executive Officer of the Prostate Cancer Foundation, from April 2002 until December 2006 and served o n i ts board of directors from January 2002 until April 2013 B.J. Penn Independent Director Mr. Penn serves as president of Penn Construction Group, Inc., and as president and chief executive officer of Genesis IV, LL C Mr. Penn is the chairman of the board of directors of Spectra Systems Corporation, is a trustee emeritus at the George Washin gto n University and serves on the boards of the National Trust for the Humanities and the Naval Historic Foundation. Edward Rendell Independent Director Independent director of the Company since December 2015 45th Governor of the Commonwealth of Pennsylvania from 2003 through 2011 Mayor of Philadelphia from 1992 through 2000 Strong Corporate Governance Elizabeth K. Tuppeny Independent Director, Nominating and Corporate Governance Committee Chair Chief Executive Officer and founder of Domus, Inc., since 1993 30 years of experience in the branding and advertising industries, with a focus on Fortune 50 companies Ms. Tuppeny also founded EKT Development, LLC to pursue entertainment projects in publishing, feature film and education vide o g ames Majority Independent Board of Directors, including an audit committee and nominating and corporate governance committee comprised solely of independent directors Michael Weil Director Founding partner of AR Global Previously served as Senior VP of sales and leasing for American Financial Realty Trust Served as president of the Board of Directors of the Real Estate Investment Securities Association (n/k/a ADISA)
13 Legal Notice
14 Disclaimer References in this presentation to the “Company,” “we,” “us” and “our” refer to Healthcare Trust, Inc. (“ HTI”) and its consolidated subsidiaries. The statements in this presentation that are not historical facts may be forward - looking statements. These forward - looking state ments involve risks and uncertainties that could cause actual results or events to be materially different. Forward - looking statements may include, but are not limited to, statements regarding stockholder liquidity and investment value and returns. The words “anticipates,” “believes,” “expects,” “estimates, ” “ projects,” “plans,” “intends,” “may,” “will,” “would” and similar expressions are intended to identify forward - looking statements, although not all forward - loo king statements contain these identifying words. Actual results may differ materially from those contemplated by such forward - looking statements, including th ose set forth in the section titled Risk Factors of HTI’s Annual Report on Form 10 - K for the year ended December 31, 2021 filed on March 18, 2022 and all other filings with the SEC after that date, as such risks, uncertainties and other important factors may be updated from time to time in HTI’s subsequen t r eports. Please see slide s 16 and 17 for further information. Further, forward - looking statements speak only as of the date they are made, and HTI undertakes no o bligation to update or revise any forward - looking statement to reflect changed assumptions, the occurrence of unanticipated events or changes to future operat ing results, unless required to do so by law. This presentation includes estimated projections of future operating results. These projections were not prepared in accordan ce with published guidelines of the SEC or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of financial projections. This information is not fact and should not be relied upon as being necessarily indicative of future results; the projections were pr epared in good faith by management and are based on numerous assumptions that may prove to be wrong. Important factors that may affect actual results an d cause the projections to not be achieved include, but are not limited to, risks and uncertainties relating to the company and other factors described in the section titled Risk Factors of HTI’s Annual Report on Form 10 - K for the year ended December 31, 2021 filed on March 18, 2022 and all other filings with the SEC after that date. The projections also reflect assumptions as to certain business decisions that are subject to change. As a result, actual results ma y differ materially from those contained in the estimates. Accordingly, there can be no assurance that the estimates will be realized. This presentation includes certain non - GAAP financial measures, including net operating income (“NOI”). NOI is a non - GAAP measur e of our financial performance and should not be considered as an alternative to net income as a measure of financial performance, or any other per formance measure derived in accordance with GAAP and it should not be construed as an inference that our future results will be unaffected by unusual or non - recurring items. The reconciliation of net income to NOI for the applicable period is set forth on slide 20 to this presentation. Securities Ratings A securities rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at a ny time. Each rating agency has its own methodology for assigning ratings and, accordingly, each rating should be evaluated independently of any other rating.
15 Forward Looking Statements Certain statements made in this presentation are “forward - looking statements” (as defined in Section 21E of the Exchange Act), w hich reflect the expectations of the Company regarding future events. The forward - looking statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those contained in the forward - looking statements. Such forward - looking statements include, but are not limited to, market and other expectations, objectives, and intentions, as well as any other statements that are not historical facts. Our potential risks and uncertainties are presented in the section titled “Item 1A - Risk Factors” disclosed in our Annual Report on Form 10 - K for the year ended December 31, 2021 filed with the SEC on March 18, 2022 and all other filings with the SEC after that date. We disclaim any ob lig ation to update and revise statements contained in these materials to reflect changed assumptions, the occurrence of unanticipated events or changes to fut ure operating results over time, unless required by law. The following are some of the risks and uncertainties relating to us, although not all risks and unce rta inties, that could cause our actual results to differ materially from those presented in our forward - looking statements: • Our operating results are affected by economic and regulatory changes that have an adverse impact on the real estate market i n g eneral. • Our property portfolio has a high concentration of properties located in Florida. Our properties may be adversely affected by ec onomic cycles and risks inherent to those states. • Our Credit Facility restricts us from paying cash distributions on or repurchasing our common stock until we satisfy certain con ditions and there can be no assurance we will be able to resume paying distributions on our common stock, and at what rate, or continue paying dividends on our 7.375% Series A Cumulative Redeemable Perpetual Preferred Stock, $0.01 par value per share (the “Series A Preferred Stock”) and our 7.125% Se rie s B Cumulative Redeemable Perpetual Preferred Stock, par value $0.01 par value per share (the “Series B Preferred Stock”). • Our Credit Facility restricts our ability to use cash that would otherwise be available to us, and there can be no assurance our available liquidity will be sufficient to meet our capital needs. • We are subject to risks associated with a pandemic, epidemic or outbreak of a contagious disease, such as the ongoing global COV ID - 19 pandemic, including negative impacts on our tenants and operators and their respective businesses. • Starting in March 2020, the COVID - 19 pandemic and measures to prevent its spread began to affect us in a number of ways. Occupan cy in our SHOP portfolio has trended lower since the second half of March 2020 to a low of 72.0% as of March 31, 2021 and has subsequently begun to re cov er, reaching 75.9% as of March 31, 2022, as government policies and implementation of infection control best practices and prospective residents’ conc ern s about communal - setting COVID - 19 spread limited resident move - ins. We have also continued to experience lower inquiry volumes and reduced in - person tour s. These and other impacts of the COVID - 19 pandemic have affected and could continue to affect our ability to fill vacancies. • Inflation and continuing increases in the inflation rate will have an adverse effect on our investments and results of operat ion s. • Geopolitical instability due to the ongoing military conflict between Russia and Ukraine may adversely impact the U.S. and gl oba l economies. • No public market currently exists, or may ever exist, for shares of our common stock and our shares are, and may continue to be, illiquid. • In owning properties we may experience, among other things, unforeseen costs associated with complying with laws and regulati ons and other costs, potential difficulties selling properties and potential damages or losses resulting from climate change.
16 Forward Looking Statements (Continued) • We focus on acquiring and owning a diversified portfolio of healthcare - related assets located in the United States and are subje ct to risks inherent in concentrating investments in the healthcare industry. • The healthcare industry is heavily regulated, and we and our tenants may be impacted by new laws or regulations, including th e C ARES Act and the auditing and reporting requirements instituted by the CARES Act, changes to existing laws or regulations. • Loss of licensure or failure to obtain licensure could result in the inability of tenants to make lease payments to us. • We depend on tenants for our rental revenue and, accordingly, our rental revenue is dependent upon the success and economic v iab ility of our tenants. Lease terminations, tenant default and bankruptcy have adversely affected and could in the future adversely affect our income and c ash flow. • We assume additional operating risks and are subject to additional regulation and liability because we depend on eligible ind epe ndent contractors to manage some of our facilities. • We have substantial indebtedness and may be unable to repay, refinance, restructure or extend our indebtedness as it becomes due . Increases in interest rates could increase the amount of our debt payments. We will likely incur additional indebtedness in the future. • We depend on our Advisor and our Property Manager to provide us with executive officers, key personnel and all services requi red for us to conduct our operations and our operating performance may be impacted by an adverse changes in the financial health or reputation of our Advisor and our Property Manager. • All of our executive officers face conflicts of interest, such as conflicts created by the terms of our agreements with the A dvi sor and compensation payable thereunder, conflicts allocating investment opportunities to us, and conflicts in allocating their time and attention to our mat ters. Conflicts that arise may not be resolved in our favor and could result in actions that are adverse to us. • We have long - term agreements with our Advisor and its affiliates that may be terminated only in limited circumstances and may re quire us to pay a termination fee in some cases. • Estimated Per - Share NAV may not accurately reflect the value of our assets and may not represent what a stockholder may receive on a sale of the shares, what they may receive upon a liquidation of our assets and distribution of the net proceeds or what a third party may pay to acquire us . • The stockholder rights plan adopted by our board of directors, our classified board and other aspects of our corporate struct ure and Maryland law may discourage a third party from acquiring us in a manner that might result in a premium price to our stockholders. • Restrictions on share ownership contained in our charter may inhibit market activity in shares of our stock and restrict our bus iness combination opportunities. • We may fail to continue to qualify as a REIT.
17 Appendix
18 Definitions Annualized Straight - Line Base Rent : Represents the total contractual base rents on a straight - line basis to be received throughout the duration of the lease currently in place expressed as a per annum value . Includes adjustments for non - cash portions of rent . Cap Rate : Capitalization rate is a rate of return on a real estate investment property based on the expected, annualized straight - lined rental income that the property will generate under its existing lease during its first year of ownership . Capitalization rate is calculated by dividing the annualized straight - lined rental income the property will generate (before debt service and depreciation and after fixed costs and variable costs) and the purchase price of the property . The weighted average capitalization rate is based upon square feet . Cash Rent : Represents total of all contractual rents on a cash basis due from tenants as stipulated in the originally executed lease agreements at inception or any lease amendments thereafter prior to a rent deferral agreement (see slide 3 for further information) . We calculate “original Cash Rent collections” by comparing the total amount of rent collected during the period to the original Cash Rent due . Total rent collected during the period includes both original Cash Rent due and payments made by tenants pursuant to rent deferral agreements . Leasing Pipeline : Includes ( i ) all leases fully executed by both parties as of May 15 , 2022 , but after March 31 , 2022 and (ii) all leases under negotiation with an executed LOI by both parties as of May 15 , 2022 . This represents six executed new leases totaling approximately 22 , 200 square feet and five LOIs totaling approximately 22 , 100 square feet . Includes one lease expiration totaling approximately 3 , 000 square feet that occurred during this period . There can be no assurance that the LOIs will lead to definitive leases or will commence on their current terms, or at all . Leasing pipeline should not be considered an indication of future performance . Lease Term Remaining : Current portfolio calculated from March 31 , 2022 . Weighted based on square feet . Liquidity : As of March 31 , 2022 , HTI had $ 66 . 4 million in cash and cash equivalents, and $ 227 . 5 million available for future borrowings under the HTI's credit facility . As of March 31 , 2021 , HTI had $ 74 . 1 million in cash and cash equivalents, and $ 42 . 8 million available for future borrowings under HTI's credit facility . Net Debt : Total gross debt of $ 1 . 1 billion per slide 7 less cash and cash equivalents of $ 66 . 4 million as of March 31 , 2022 . NOI : Defined as a non - GAAP financial measure used by us to evaluate the operating performance of our real estate . NOI is equal to revenue from tenants, less property operating and maintenance . NOI excludes all other items of expense and income included in the financial statements in calculating net income (loss) . Net Leverage : Represents “Net Debt” as defined above as debt less cash and cash equivalents divided by total assets of $ 2 . 2 billion (which includes cash and cash equivalents) plus accumulated depreciation and amortization of $ 563 . 7 million as of March 31 , 2022 . Occupancy : For MOB properties, occupancy represents percentage of square footage of which the tenant has taken possession of divided by the respective total rentable square feet as of the date or period end indicated . For SHOP, occupancy represents total units occupied divided by total units available as of the date or period end indicated .
19 Reconciliation of Non - GAAP Metrics: NOI Three Months Ended March 31, 2022 (In thousands) Medical Office Buildings Seniors Housing — Operating Properties Consolidated Revenue from tenants $ 32,348 $ 51,302 $ 83,650 Property operating and maintenance 8,689 44,401 53,090 NOI $ 23,659 $ 6,901 30,560 Impairment charges (10,644) Operating fees to related parties (6,318) Acquisition and transaction related (579) General and administrative (4,899) Depreciation and amortization (20,420) Interest expense (11,764) Interest and other income 12 Loss on sale of real estate investments (303) Gain on non - designated derivatives 994 Income tax expense (39) Net loss attributable to non - controlling interests 49 Allocation for preferred stock (3,450) Net loss attributable to stockholders $ (26,801) Three Months Ended March 31, 2021 (In thousands) Medical Office Buildings Seniors Housing — Operating Properties Consolidated Revenue from tenants $ 30,339 $ 53,097 $ 83,436 Property operating and maintenance 8,843 40,512 49,355 NOI $ 21,496 $ 12,585 34,081 Impairment charges (878) Operating fees to related parties (5,883) Acquisition and transaction related (132) General and administrative (6,052) Depreciation and amortization (20,102) Interest expense (12,322) Interest and other income 52 Loss on sale of real estate investments (172) Gain on non - designated derivatives 14 Income tax benefit (expense) (48) Net income attributable to non - controlling interests (46) Allocation for preferred stock (742) Net loss attributable to stockholders $ (12,230)
20 HealthcareTrustInc.com ▪ For account information, including balances and the status of submitted paperwork, please call us at (866) 902 - 0063 ▪ Financial Advisors may view client accounts at www.computershare.com/advisorportal ▪ Shareholders may access their accounts at www.computershare.com/hti
Exhibit 99.2
Healthcare Trust, Inc. (NASDAQ:HTIA/HTIBP)Q1 2022 Earnings Webcast
Opening – Louisa Quarto
Welcome to the first quarter 2022 Healthcare Trust, Inc., or HTI, webcast. All participants will be in listen-only mode.
Please note, this event is being recorded. Also note that certain statements and assumptions in this webcast presentation which are not historical facts will be forward-looking and are being made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements are subject to certain assumptions and risk factors which could cause the Company’s actual results to differ materially from the forward-looking statements. We refer all of you to our SEC filings including the Form 10-K for the year ended December 31, 2021, filed on March 18, 2022, and all other SEC filings after that date for a more detailed discussion of the risk factors that could cause these differences and impact our business.
During today's call, we will discuss non-GAAP financial measures of HTI. These measures should not be considered in isolation or as a substitute for the financial results prepared in accordance with GAAP. The Company has provided a reconciliation of these measures to the most directly comparable GAAP measure as part of the first quarter 2022 investor presentation for HTI and as part of the Quarterly Report on Form 10-Q for HTI for the quarter ended March 31, 2022 (both available on HTI’s website at www.healthcaretrustinc.com).
You may submit questions during today’s webcast by typing them in the box in the lower right of the screen and a member of our investor relations group will follow-up to answer questions directly after the presentation. Also, please note that later today a copy of the presentation and replay of the webcast will be available on the company’s website.
I would now like to turn the call over to Michael Weil, Chief Executive Officer. Please go ahead Mike.
Opening Script
HTI Webinar Script
Slide 2: Company Overview – (Mike Weil)
Thanks Louisa and thank you all for joining us today. HTI is off to a strong start in 2022, extending some of the trends that began to materialize last year. We reported a 3.4% increase in our estimated per-share net asset value, year-over-year growth of over 3% in SHOP occupancy, and a 4% year-over-year improvement in net leverage while maintaining 100% rent collection in our MOB portfolio.
As you recall, last year we completed $160 million of medical office building acquisitions at a weighted-average cap rate of 7.7%. This year we have already built a pipeline that would add another $18 million of MOB assets at an 8.6% cap rate. We continue to evaluate additional accretive transactions that meet our criteria and diligent underwriting. Our growth through acquisitions is supplemented by our leasing efforts, where we had a Medical Office Building forward leasing pipeline of over 40,000 square feet as of May 15th. If these agreements commence, we expect MOB occupancy to increase to 92.2% and annualized straight-line rent to increase by $1 million.
Occupancy in the SHOP portfolio continues to recover and was 75.9% at quarter end. That is almost a 2% improvement from the fourth quarter and a 3.9% increase from a year ago. We believe that SHOP occupancy will continue to rebound as long as the effects of COVID continue to abate. To capitalize on this rebound, we continue to invest in capital expenditures that enhance and improve the marketability of our SHOP assets and to utilize enhanced lead generation activities and website enhancements to be visible, attractive, and competitive to seniors and their families who are in the market for housing options.
The continued execution of our corporate initiatives this year, including external accretive acquisitions and dispositions, internal growth from leasing available space to high-quality tenants, first-class property level operations and financial flexibility continues to position HTI for a liquidity event when our board determines the time is right.
Slide 3: Portfolio Snapshot
As of March 31, 2022, HTI owned 196 properties, totaling over 9 million rentable square feet in 33 states. The portfolio consisted of 146 medical office buildings, 50 seniors housing operating properties with over 4,000 individual units, and two land parcels. Based on NOI, the portfolio was composed of 77% MOB and 23% SHOP assets.
At quarter end, our medical office building portfolio was 91.3% occupied with a weighted-average remaining lease term of 5.0 years and featured annual rent escalations that averaged 1.8% on approximately 87% of leases.
Slide 4: Dynamic Portfolio Fundamentals
We have diligently constructed a portfolio of MOB and SHOP assets that continue to deploy capital into select, high-quality assets throughout the US.
We have elected to focus on Medical Office Buildings due to growing demand from tenants as the healthcare system in the US encourages medical professionals to consolidate practices and locate near hospital campuses. We believe that the steady occupancy rates, long-term net leases with embedded rental income growth, and NOI growth in this segment of our portfolio, as well as our success collecting rent, validates continued investment in this portfolio segment.
Our focus on SHOP assets is supported by our belief in long-term demographic trends, which we believe will result in consistent demand for seniors housing, particularly as COVID related restrictions are lifted. With Baby Boomers beginning to approach their 80’s, we believe that demand for high-quality, service-focused, and strategically located seniors housing facilities will continue to increase. Our dedicated SHOP team collaborates with our aligned operators to manage our assets with the goal of maximizing benefits to residents, operators, and HTI.
We’ve worked diligently to construct a high-quality portfolio that is geographically well diversified across 33 states with only two states representing more than 10% of the total portfolio by square feet: Pennsylvania where we have a strong relationship with The University of Pittsburgh Medical Center, and Florida, where MOBs and seniors housing serve a large retired population.
Slide 5: Strategic Partners
One of the most important aspects of a well-run healthcare real estate portfolio is the quality of the underlying tenants who occupy and operate the properties. Procuring well-respected brands and developing strong partnerships with them is a core focus of our asset management strategy in order to deliver superior long-term benefits for not only HTI, but for the residents and practitioners who live and work at our properties.
In HTI’s MOB portfolio, we have tenants such as The University of Pittsburgh Medical Center, DaVita, Sentara, and Ascension. HTI’s SHOP operators have been consolidated from over 15 operating brands in 2019 to four operators, including Jaybird Senior Living and Senior Lifestyle Corporation.
As we grow our portfolio, we continue to look for opportunities to add high-quality tenants to HTI’s MOB portfolio and to develop strong relationships with our current SHOP operators, who we trust to provide the best care for residents at our facilities.
Slide 6: Diligent Acquisitions
Last year was very active in terms of acquisitions and we are starting this year with $18 million in our pipeline. After completing more than $160 million of acquisitions last year at a weighted-average cap rate of 7.7%, our forward pipeline of three medical office buildings in New Jersey, Indiana and Georgia have a weighted-average cap rate of 8.6% and a weighted-average remaining lease term of 7.7 years.
We believe we have a strong cash and liquidity position to continue diligently seeking accretive acquisitions at opportunistic cap rates.
Scott, will you please take us through the financial results?
Slide 7: Conservative Leverage Profile–(Scott Lappetito)
Thank you, Mike.
Year-over-year, we have made several improvements to HTI’s capital structure including de-levering the portfolio by 4%, which decreased net leverage from 41.3% in first quarter 2021 to 37.3% in the first quarter 2022. This was achieved primarily through repayments to our outstanding borrowings on the revolving credit facility and the repayment of a single property mortgage.
During the same period, liquidity also increased by $177 million to $294 million at the end of the first quarter 2022, which we believe provides ample flexibility for both acquisitions as well as for general corporate purposes.
Lastly, during 2021 we were active capital market participants, highlighted by a $56 million Series A Preferred Stock follow-on offering and our inaugural $87 million Series B Preferred Stock offering. We continually evaluate means to enhance our capital structure and will pursue opportunities similar to these if we determine that they are favorable for HTI.
Slide 8 Key Operating Highlights
Last quarter, HTI executed on our operational initiatives by growing SHOP occupancy, increasing MOB NOI, and improving Net leverage year-over-year.
As Mike mentioned earlier, SHOP occupancy has grown by 3.9% year-over-year, and 1.8% quarter-over-quarter, to 75.9% in the first quarter of 2022. We believe that this trend will continue over the coming quarters so long as headwinds from COVID continue to subside.
Quarterly NOI in the MOB segment increased 10% year over year to $23.7 million, driven by our strong acquisitions and leasing efforts. This, along with our strategic SHOP dispositions, continue to contribute to a change in our total portfolio NOI mix. In the first quarter of 2022, MOB NOI comprised over 75% of our total portfolio NOI.
I would now like to turn the call back to Mike for some color on the HTI team and some closing remarks.
Slide 9: Company Highlights – (Mike Weil)
Thanks Scott.
We continue to position HTI for a liquidity event and long-term earnings growth by capitalizing on our leasing upside potential, acquiring high-quality MOB and SHOP properties and maintaining a conservative balance sheet. Our portfolio of almost 200 properties continues to demonstrate its resilience, as we collected all of the cash rent due in our MOB portfolio in the first quarter, built leasing and acquisition pipelines, and grew occupancy in the SHOP portfolio. We have a conservative balance sheet and an experienced management team that we believe is well positioned to maximize the opportunities created by demographic trends that favor long-term investment in healthcare real estate.
Slide 10: Experienced Leadership Team
We believe we have the right team in place to execute our strategy to drive long-term value for HTI shareholders.
On the MOB real estate side, David Ruggiero and his team bring over 25 years of experience to HTI’s advisor, evaluating and negotiating hundreds of potential transactions per year while adhering to our strict investment guidelines and underwriting standards. Trent Taylor is our portfolio asset manager and ensures that our existing properties are leased, performing as expected and that our tenants’ needs are being met by local property managers.
Slide 11: Dedicated SHOP Team
Supplementing HTI’s leadership team, John Rimbach and his team bring over 125 years of experience to our SHOP Portfolio.
John’s team has extensive experience in the Seniors Housing space and has made significant improvements to this segment of our portfolio, both operationally and through advising on potential real estate acquisitions and dispositions. We were fortunate to have made a significant commitment to the SHOP portfolio in 2018, giving John’s team time to streamline our portfolio and build relationships with our best-in-class operators who run our seniors housing properties. The team has been working tirelessly to create a safe environment for our residents over the last two years and to lay the foundation for a strong post-COVID recovery.
Slide 11: Strong Corporate Governance
HTI has an engaged board of directors, led by non-exec chair Leslie Michelson. Also serving on HTI’s board are Lee Elman, former Governor of Pennsylvania Ed Rendell, Elizabeth Tuppeny and B.J. Penn. The board is comprised of a majority of independent directors, including an audit committee and a nominating and corporate governance committee made up of only independent directors. In addition to their distinguished careers, several of our board members currently or formerly have served on boards of publicly traded REITs.
Closing Statements – (Mike Weil)
We continue to see strong, dependable performance in our MOB portfolio and have approximately $18 million of accretive MOB acquisitions in our pipeline. We believe that increasing occupancy in the SHOP portfolio reflects not only the ongoing recovery of this segment from the impacts of COVID, but also the result of our team’s dedication to improving our SHOP facilities, operations, accessibility and attractiveness to seniors and their families. Our focus remains on the future, and positioning HTI for an eventual liquidity event. Thank you for joining us today and thank you for your continued support of HTI.
Operator Closes the Call
The conference has now concluded. If you have submitted questions during today’s webcast, a member of our investor relations group will follow-up to answer your questions. Also, please note that a copy of the presentation and replay of this webcast will be available on the company’s website at www.healthcaretrustinc.com. Thank you for attending today’s presentation. You may now disconnect.