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 30, 2024
Healthcare Trust, Inc.
(Exact Name of Registrant as Specified in Charter)
| Maryland | 001-39153 | 38-3888962 |
|---|---|---|
| (State or other jurisdiction <br>of incorporation) | (Commission File Number) | (I.R.S. Employer <br>Identification No.) |
| 222 Bellevue Ave**.<br><br> <br>Newport, RI** 02840 | ||
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| (Address, including zip code,<br> of Principal 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 <br><br>Symbol(s) | Name of each exchange on which <br><br>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<br>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<br>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. ¨ ****
Item 7.01 Regulation FD Disclosure.
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 30, 2024, the Company hosted a conference call to discuss its financial and operating results for the quarter ended March 31, 2024. 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.
The information contained in this Current Report on Form 8-K, including Exhibits 99.1 and 99.2 furnished herewith, is being furnished and shall not 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 and shall not be deemed incorporated by reference into any filing under the Exchange Act or the Securities Act of 1933, as amended, regardless of any general incorporation language in such filing, except to the extent expressly stated 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 within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve risks and uncertainties that could cause actual results or events to be materially different. 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-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 the potential adverse effects of (i) the geopolitical instability due to the ongoing military conflict between Russia and Ukraine and Israel and Hamas, including related sanctions and other penalties imposed by the U.S. and European Union, and the related impact on the Company, the Company’s tenants, the Company’s operators and the global economy and financial markets, and (ii) that any potential future acquisition by the Company 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, 2023 filed on March 15, 2024, as amended by the Form 10-K/A filed on March 22, 2024, and all other filings with the Securities and Exchange Commission after that date, as such risks, uncertainties and other important factors may be updated from time to time in the Company’s subsequent filings with the Securities and Exchange Commission. Further, 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 over time, unless required to do so by law.
Item 9.01. Financial Statements 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 30, 2024 | By: | /s/ Scott M. Lappetito |
| Scott M. Lappetito | ||
| Chief Financial Officer, Secretary and Treasurer |
Exhibit 99.1
| 1<br>Healthcare Trust, Inc.<br>First Quarter 2024 Investor Webcast Presentation |
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| 2<br>Q1’24 Company Overview<br>(1) Based on gross asset value of $2.6 billion, net of gross market lease intangible liabilities of $23.5 million as of March 31, 2024.<br>(2) Percentages are based on NOI for the three months ended March 31, 2024. See appendix for Non-GAAP reconciliations.<br>(3) See Definitions in the Appendix for a full description.<br>(4) Leasing Pipeline data as of May 15, 2024. Assumes executed leases commence and signed LOIs lead to definitive leases on their contemplated terms, which is not assured.<br>(5) Refer to page 6 for additional information.<br>(6) See Definitions in the Appendix for a full description of capitalized term and for Non-GAAP reconciliations<br>(7) As of May 10, 2024. See Definitions in the Appendix for a full description.<br>HTI is a $2.6 billion(1) healthcare REIT with a high-quality portfolio focused on two<br>segments, Medical Office Buildings (“MOB”) and Senior Housing Operating Properties (“SHOP”)<br> High-quality portfolio featuring 208 properties that are 75% MOB and 25% SHOP(2)<br> HTI has a forward Leasing Pipeline(3) of 25,654 SF that, upon commencement, is expected to further increase MOB portfolio<br>Occupancy(3) to 91.0%(4) from 90.5% as of Q1’24<br> Proactive MOB leasing activity with 16 lease renewals completed in Q1’24 totaling over 33,000 SF at a positive Lease Renewal<br>Rental Spread of 11.9% which is expected to be recognized over the weighted-average term of these renewed leases of 6.3 years<br> Geographically diversified portfolio across 33 states with select concentrations in states that management believes to have favorable<br>demographic tailwinds<br>High<br>Quality Portfolio<br> During Q1’24 HTI closed on a four-property medical office portfolio for a total purchase price of $12.6 million at a going-in Cap<br>Rate(3) of 7.6%<br>Diligent<br>Acquisition Program(5)<br> Quarter over quarter, MOB portfolio NOI(6) improved by 3.4% from $24.1 million in Q4’23 to $24.9 million in Q1’24 as a result of<br>accretive acquisitions and favorable leasing<br> Quarter over quarter, SHOP portfolio NOI(6) improved by 23.5% from $6.7 million in Q4’23 to $8.3 million in Q1’24 as a result of<br>increased rental rates and higher occupancy<br> Quarter over quarter, SHOP portfolio Occupancy(3) increased by 1.2%, from 74.1% as of Q4’23 to 75.3% in Q1’24<br> Collected nearly 100% of MOB Cash Rent(7) due in Q1’24<br> HTI’s exposure to MOB, which management believes to have more predictable cash flows than SHOP assets, was 75%(2) as of<br>Q1’24<br> As of Q1’24, HTI maintained Net Leverage(3) of 44.4%<br>Resilient<br>Performance<br> Proven track record with significant public REIT market experience<br> Dedicated SHOP management team that collectively has over 50 years of SHOP operating experience<br>Experienced<br>Management Team |
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| 3<br>(1) See Definitions in the Appendix for a full description. For the SHOP portfolio, Occupancy is based on unit count as of March 31, 2024.<br>(2) Based on gross asset value of $2.6 billion, net of gross market lease intangible liabilities of $23.5 million as of March 31, 2024.<br>(3) Annual base rent escalations increase the cash rent payments due in future periods. Approximately 95.8% of HTI’s MOB leases include such provisions, of which approximately 97% of leases are fixed-rate, 3% are based on the Consumer Price Index.<br>Portfolio Snapshot<br>HTI features an MOB portfolio that is approximately 91% occupied with embedded long-term cash<br>rent growth and a SHOP portfolio totaling over 4,100-units with significant Occupancy(1) upside<br>($ in millions and SF in thousands) MOB SHOP<br>Rentable Square Feet / Units (SHOP) 5,194 4,164<br>Properties 160 46<br>States 29 13<br>Gross Asset Value $1,478 $1,135 (2)<br>Percentage of NOI 75.1% 24.9%<br>Occupancy(1) 90.5% 75.3%<br>2.2% Market Rates Average Annual Base Cash Rent Escalations (3)<br>Weighted Average Remaining Lease Term(1) 4.7 Years N/A |
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| 4<br>75%<br>25%<br>MOB<br>SHOP<br>FL<br>20%<br>PA<br>11%<br>GA<br>9%<br>IA<br>8%<br>IL<br>7%<br>CA AR 5% 6%<br>MI 5%<br>WI 4%<br>AZ 3%<br>Other<br>22%<br>Dynamic Portfolio Fundamentals<br>HTI is focused on deploying capital into select, high-quality MOB and<br>SHOP assets throughout the United States and increasing portfolio Occupancy<br>Select Geographic Mix<br>(1) Percentages are based on NOI for the quarter ended March 31, 2024. See appendix for a reconciliation of aggregate NOI to aggregate GAAP net income.<br>(2) Based on annual rent as of March 31, 2024.<br>(3) Annual base rent escalations increase the cash rent payments due in future periods. Approximately 95.8% of HTI’s MOB leases include such provisions, of which approximately 97% of leases are fixed-rate, 3% are based on the Consumer Price Index.<br>$33 million<br>NOI(1)<br>Diversified Geographically Across 33 States<br>High-Quality Portfolio<br>Top 10<br>States(2)<br> MOB portfolio that is diversified across 29 states and features long-term net leases to credit-worthy tenants with an average annual base<br>cash rent escalation of 2.2% on approximately 96% of leases(3)<br> Actively managed and resilient SHOP portfolio with significant<br>Occupancy upside that is operated by four operators<br> Geographically diversified across 33 states with select state<br>concentrations that management believes to have favorable<br>demographic tailwinds<br> Collected nearly 100% of the original Cash Rent due across the<br>MOB portfolio in Q1’24<br>Portfolio Highlights<br>MOB<br>SHOP |
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| 5<br> DaVita (NYSE: DVA) and Fresenius (NYSE: FMS) are industry leading publicly traded companies with a combined<br>market cap of almost $20 billion(1)<br> Streamlined SHOP portfolio to only four operators as compared to over 15 operators in 2019<br> Developed strong tenant relationships with leading medical institutions such as UPMC, a leading health enterprise with<br>over 95,000 employees and 800 clinical locations<br> HTI remains committed to developing strong partnerships with leading healthcare brands which HTI believes benefits<br>patients and other stakeholders<br>Strategic Partners<br>HTI tenants and partners include some of the top healthcare brands in well-established markets<br>MOB SHOP<br>(1) Market capitalization data as of March 31, 2024. |
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| 6<br>HTI completed one MOB acquisition in Q1’24 totaling $12.6 million at a 7.6% weighted average Cap Rate(1)<br>(1) See Definitions in the Appendix for a full description.<br>(2) Represents the contract purchase price and excludes acquisition costs which are capitalized per GAAP. The acquisition costs for acquisitions completed during the quarter ended March 31, 2024, were $0.1 million.<br>(3) Weighted average remaining lease term is based on square feet as of the respective acquisition date for closed transactions.<br>($ in millions, square feet in thousands and lease term remaining in years)<br>Diligent Acquisition Program<br>Closed<br>Wtd. Avg.<br>Lease Term<br>Remaining(3)<br>Going-In<br>Cap Rate(1)<br>Purchase<br>Price(2)<br>Square<br>Feet<br>Number of<br>Properties State Property<br>Type 2024 Closed Transactions<br>IN 4 41 $12.6 14.5 Q1’24 MOB: Single-Tenant CPC 4-Pack<br>Total Closed 2024 4 41 $12.6 7.6% 14.5<br>Total 2024 Closed Transactions 4 41 $12.6 7.6% 14.5<br>HTI continues to evaluate new opportunities with a<br>focus on MOB acquisitions, as management believes<br>these investments provide more predictable and resilient<br>cash flow than SHOP assets |
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| 7<br>Debt Capitalization ($mm) Q1’24<br>Mortgage Notes Payable $829<br>Fannie Mae Master Credit Facilities $345<br>Capital One MOB Warehouse Facility $15<br>Total Secured Debt $1,189<br>Total Unsecured Debt $0<br>Total Debt $1,189<br>Economic Interest Rate(1) 5.0%<br>Key Capitalization Metrics ($mm) Q1’24<br>Net Debt $1,160 (1)<br>Cash and Cash Equivalents $29<br>Net Leverage(1) 44.4%<br>Balanced Capital Structure<br>In Q1’24, HTI continued to manage its capital structure to promote financial flexibility<br>and acquisition capacity by maintaining conservative Net Leverage(1) and adequate cash and cash equivalents<br>Note: Metrics as of and for the three months ended March 31, 2024.<br>(1) See Definitions in the Appendix for a full description.<br>(2) Includes mortgages fixed by designated interest rate “pay-fixed” swap agreements.<br>(3) The GAAP weighted average interest rate on HTI’s Fannie Mae Master Credit Facilities, not accounting for the economic impact of all hedging instruments, was 7.9% as of March 31, 2024.<br>(4) HTI renewed an interest rate cap which expired in April 2024, and has no interest rate cap expirations until 2025.<br>(5) Source: Federal Reserve Bank of New York.<br>Capitalization Highlights<br>Mortgage Debt<br> HTI has $828.6 million of fixed-rate(2) mortgages notes<br>payable, secured by 132 MOBs and four SHOPs, with an<br>aggregate gross asset value of $1.4 billion. These mortgages<br>bear interest at a weighted average annual rate of 4.6%, and<br>have varying maturities through 2049, with the earliest being a<br>$12.7 million mortgage note payable due January 2025.<br>Credit Facilities<br> Fannie Mae Master Credit Facilities: Consists of two facilities<br>between KeyBank and Capital One. The credit facilities had an<br>Economic Interest Rate(1) of 5.9%(3) as of March 31, 2024, and<br>mature in 2026<br> Capital One MOB Warehouse Facility: On December 22, 2023,<br>HTI closed on a $50.0 million loan facility with Capital One, of<br>which $14.7 million was drawn, leaving $35.3 million of<br>remaining liquidity on the facility, as of March 31, 2024. The<br>MOB Warehouse Facility is capped at 3.5% SOFR.<br>Borrowings under HTI's Credit Facilities are capped(4) at an<br>attractive 3.5% SOFR rate, which is significantly less than<br>the spot SOFR rate of 5.3%(5) as of May 15, 2024 |
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| 8<br>$6.7 mm<br>$8.3 mm<br>Q4'23 Q1'24<br>Key Operating Highlights<br>Durable and Resilient MOB NOI Performance(3)<br> MOB portfolio NOI(3) improved by 3.4% QoQ to $24.9 million in Q1’24<br>from $24.1 million in Q4’23 as revenues continued to increase as a result of<br>accretive acquisitions and favorable leasing<br> SHOP portfolio NOI(3) improved by 23.5% QoQ to $8.3 million in Q1’24<br>from $6.7 million in Q4’23 as a result of increased rental rates and higher<br>Occupancy(1)<br> In Q1’24, HTI completed 16 renewals over more than 33,000 SF at a<br>positive Lease Renewal Rental Spread(1) of 11.9% which is expected to be<br>recognized over the weighted-average term of these renewed leases of 6.3<br>years, proactively strengthening future NOI growth and maintaining<br>healthy WALT within the portfolio<br> HTI has a forward Leasing Pipeline(1)(2) of 25,654 SF that, upon<br>commencement, is expected to further increase MOB portfolio<br>Occupancy(1) to 91.0%(2) from 90.5%<br>Operating Highlights<br>$2.1 mm<br>$2.4 mm<br>Previous SLR SLR with Q1'24 extensions<br>MOB Lease Renewal Rental Spread(1)on Q4 Transactions<br>(1) See Definitions in the Appendix for a full description.<br>(2) Leasing Pipeline data as of May 15, 2024. Assumes executed leases commence and signed LOIs lead to definitive leases on their contemplated terms, which is not assured.<br>(3) Figures are based on NOI. See appendix for Non-GAAP reconciliations.<br>Strong QoQ SHOP NOI Improvement(3)<br>In Q1’24, HTI continued to lease vacant space, increased both MOB and SHOP NOI, and proactively<br>developed a 25,654 SF forward Leasing Pipeline(1)(2) that is expected to further increase MOB Occupancy(1) to 91.0%(2)<br>$24.1 mm<br>$24.9 mm<br>Q4'23 Q1'24 |
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| 9<br>Company Highlights<br>In the first quarter, HTI continued to focus on increasing MOB NOI, acquiring high-quality MOB assets, improving SHOP NOI, and maintaining a conservative balance sheet<br> High-Quality Portfolio of 208 properties comprised of 75% MOB and 25% SHOP properties(1)<br> Diligent Acquisition Program(2) with total 2024 closed acquisitions of $12.6 million at a weighted average going-in cap<br>rate of 7.6% and a weighted average lease term remaining of 14.5 years<br> Resilient MOB Performance with an increase in MOB NOI(3) to $24.9 million in Q1’24 compared to $24.1 million in<br>Q4’23 and a Q1’24 Lease Renewal Rental Spread(4) of 11.9% across over 33,000 SF which is expected to be recognized<br>over the weighted-average term of these renewed leases of 6.3 years<br> Improving SHOP Performance in Q1’24 with SHOP NOI(3) increasing to $8.3 million from $6.7 million in Q4’23, a<br>23.5% quarter-over-quarter increase as a result of increased rental rates and higher Occupancy(4)<br> Streamlined SHOP Portfolio consisting of only four operators, including two industry leaders<br> Collected nearly 100% of the original Cash Rent due from the MOB portfolio in Q1’24<br> Prudent Debt Capitalization as of Q1’24 with Net Leverage(4) of 44.4%<br> Experienced Management Team with a proven track record and significant public REIT experience<br>(1) Percentages based on NOI for the three months ended March 31, 2024. See appendix for Non-GAAP reconciliations.<br>(2) See page 6 for further details.<br>(3) See Definitions in the Appendix for a full description of capitalized term and for Non-GAAP reconciliations<br>(4) See Definitions in the Appendix for a full description. |
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| 10<br>Experienced Leadership Team (1)<br>Scott Lappetito<br>Chief Financial Officer, Secretary, and<br>Treasurer<br>Mr. Lappetito currently serves as the Chief<br>Financial Officer, Treasurer and Secretary for HTI.<br>Mr. Lappetito previously served as chief accounting<br>officer from April 2019 until December 2021, and<br>was the company’s controller from November 2017<br>through April 2019. Mr. Lappetito is a certified<br>public accountant in the State of New York, holds a<br>B.S. in accounting from The Pennsylvania State<br>University and an M.B.A. from Villanova<br>University.<br>Leslie D. Michelson<br>Non-Executive Chairman, Audit<br>Committee Chair<br>Mr. Michelson has served as the chairman of Private<br>Health Management, a retainer-based primary care<br>medical practice management company from April<br>2007 until February 2020, and executive chairman and a<br>director since March 2020. Mr. Michelson served as<br>Vice Chairman and Chief Executive Officer of the<br>Prostate Cancer Foundation, the world’s largest private<br>source of prostate cancer research funding, from April<br>2002 until December 2006 and served on its board of<br>directors from January 2002 until April 2013.<br>David Ruggiero<br>Vice President, Acquisitions<br>Mr. Ruggiero currently serves as Vice President at<br>the Company’s advisor with a primary focus on<br>acquisitions. Mr. Ruggiero has over 30 years of<br>commercial real estate experience and has advised<br>on over $3 billion in healthcare real estate<br>dispositions, acquisitions and financings. He earned<br>an MS in Finance from Kellstadt Graduate School<br>of Business at DePaul University and a BA from<br>DePaul University.<br>Trent Taylor<br>Senior Vice President, Asset<br>Management<br>Mr. Taylor currently serves as Vice President at the<br>Company’s advisor with a primary focus on asset<br>management and leasing. Mr. Taylor has over 16<br>years of commercial real estate and development<br>experience. He earned an MS in Real Estate from<br>New York University and BA in Accounting &<br>Finance from the University of Central Florida.<br>Michael Anderson<br>Chief Executive Officer<br>Mr. Anderson has served as the Chief Executive<br>Officer since September 2023. Mr. Anderson has<br>served as General Counsel of AR Global<br>Investments, where he advised on both public and<br>private debt and equity transactions, mergers and<br>corporate acquisitions, commercial real estate<br>transactions and operational integration of acquired<br>companies. He earned a J.D. with Summa Cum<br>Laude honors from the University of Mississippi<br>School of Law and a BA from University of<br>Arizona. |
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| 11<br>Dedicated SHOP Team<br>Core team collectively has over 50 years of SHOP experience. This experienced group plays an<br>essential role in managing HTI’s SHOP portfolio<br>Lindsay Gordon<br>Senior Vice President, Senior Housing<br> 27-year career in senior housing in sales & operations at the community and regional level and corporate level<br> Her unique experience within senior housing helps support sales and operations for the portfolio<br>Susan K. Rice, RN<br>Vice President, Clinical Operations<br> 30-year career in the healthcare industry<br> Extensive knowledge in clinical areas and processes to monitor and validate care outcomes, quality and compliance<br>Michelle Stepinksy<br>Vice President, Sales and Marketing<br> 25 years of experience in senior housing<br> Her vast knowledge of senior living supports the sales & marketing efforts for the portfolio |
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| 12<br>Legal Notice |
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| 13<br>Disclaimer<br>References in this presentation to the “Company,” “we,” “us” and “our” refer to Healthcare Trust, Inc. (“HTI”) and its consolidated subsidiaries.<br>The statements in this presentation that are not historical facts may be forward-looking statements. These forward-looking statements involve risks and<br>uncertainties that could cause actual results or events to be materially different. Forward-looking statements may include, but are not limited to, statements<br>regarding stockholder liquidity and investment value and returns. The words “anticipates,” “believes,” “expects,” “estimates,” “projects,” “plans,” “intends,”<br>“may,” “will,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these<br>identifying words. Actual results may differ materially from those contemplated by such forward-looking statements, including those set forth in the section<br>titled Risk Factors of HTI’s Annual Report on Form 10-K for the year ended December 31, 2023 filed on March 15, 2024, as amended by the Form 10-K/A<br>filed on March 22, 2024, and in the section titled Risk Factors of HTI’s Quarterly Report on Form 10-Q for the three months ended March 31, 2024 filed on<br>May 10, 2024, and all other filings with the Securities and Exchange Commission (the “SEC”) after that date, as such risks, uncertainties and other important<br>factors may be updated from time to time in HTI’s subsequent reports. Please see slides 14 and 15 for further information. Further, forward-looking statements<br>speak only as of the date they are made, and HTI undertakes no obligation to update or revise any forward-looking statement to reflect changed assumptions,<br>the occurrence of unanticipated events or changes to future operating results, unless required to do so by law.<br>This presentation includes estimated projections of future operating results. These projections were not prepared in accordance with published guidelines of the<br>SEC or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of financial projections. This<br>information is not fact and should not be relied upon as being necessarily indicative of future results; the projections were prepared in good faith by<br>management and are based on numerous assumptions that may prove to be wrong. Important factors that may affect actual results and cause the projections to<br>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<br>HTI’s Annual Report on Form 10-K for the year ended December 31, 2023 filed on March 15, 2024, as amended by the Form 10-K/A filed on March 22,<br>2024, and in the section titled Risk Factors of HTI’s Quarterly Report on Form 10-Q for the three months ended March 31, 2024 filed on May 10, 2024, and all<br>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<br>results may differ materially from those contained in the estimates. Accordingly, there can be no assurance that the estimates will be realized.<br>Non-GAAP Financial Measure<br>This presentation includes certain non-GAAP financial measures, including net operating income (“NOI”). NOI is a non-GAAP measure of our financial<br>performance and should not be considered as an alternative to net income as a measure of financial performance, or any other performance measure derived in<br>accordance with generally accepted accounting principles in the U.S. (“GAAP”) and it should not be construed as an inference that our future results will be<br>unaffected by unusual or non-recurring items. The reconciliation of net income to NOI for the applicable periods is set forth on page 18 to this presentation. |
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| 14<br>Forward-Looking Statements<br>Certain statements made in this presentation are “forward-looking statements” (as defined in Section 21E of the Securities Exchange Act of 1934, as amended),<br>which reflect the expectations of the Company regarding future events. The forward-looking statements involve a number of risks, uncertainties and other factors<br>that could cause actual results to differ materially from those contained in the forward-looking statements. Such forward-looking statements include, but are not<br>limited to, market and other expectations, objectives, and intentions, as well as any other statements that are not historical facts.<br>Our potential risks and uncertainties are presented in the section titled “Item 1A-Risk Factors” disclosed in our Quarterly Report on Form 10-Q for the three months<br>ended March 31, 2024, filed with the SEC on May 10, 2024, and all other filings with the SEC after that date. We disclaim any obligation to update and revise<br>statements contained in these materials to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time,<br>unless required by law. The following are some of the risks and uncertainties relating to us, although not all risks and uncertainties, that could cause our actual results<br>to differ materially from those presented in our forward-looking statements:<br>• Our operating results are affected by economic and regulatory changes that have an adverse impact on the real estate market.<br>• Our property portfolio has a high concentration of properties located in Florida and Pennsylvania. Our properties may be adversely affected by economic cycles<br>and risks inherent to those states.<br>• We have not paid our distributions on our common stock in cash since 2020, and there can be no assurance we will pay distributions on our common stock in<br>cash in the future.<br>• Inflation will have an adverse effect on our investments and results of operations.<br>• The healthcare industry is heavily regulated, and new laws or regulations, changes to existing laws or regulations, loss of licensure or failure to obtain licensure<br>could result in the inability of our tenants to make rent payments to us.<br>• If a tenant or lease guarantor declares bankruptcy or becomes insolvent, we may be unable to collect balances due under relevant leases.<br>• We assume additional operating risks and are subject to additional regulation and liability because we depend on eligible independent contractors to manage<br>some of our facilities.<br>• Joint venture investments could be adversely affected by our lack of sole decision-making authority, our reliance on the financial condition of co-venturers and<br>disputes between us and our co-venturers.<br>• We may be unable to renew leases or re-lease space as leases expire.<br>• Our level of indebtedness may increase our business risks.<br>• Our financing arrangements have restrictive covenants, which may limit our ability to pursue strategic alternatives and react to changes in our business and<br>industry or pay dividends.<br>• We depend on our Advisor and Property Manager to provide us with executive officers, key personnel and all services required for us to conduct our operations<br>and our operating performance may be impacted by any adverse changes in the financial health or reputation of our Advisor and Property Manager.<br>• All of our executive officers, some of our directors and the key real estate and other professionals assembled by our Advisor and Property Manager face conflicts<br>of interest related to their positions or interests in entities related to AR Global, which could hinder our ability to implement our business strategy. |
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| 15<br>Forward-Looking Statements (Continued)<br>• We may terminate our advisory agreement in only limited circumstances, which may require payment of a termination fee.<br>• The Estimated Per-Share NAV of our common stock is based upon subjective judgments, assumptions and opinions about future events, and may not reflect the<br>amount that our stockholders might receive for their shares.<br>• Maryland law prohibits certain business combinations, which may make it more difficult for us to be acquired and may discourage a third-party from acquiring us in<br>a manner that might result in a premium price to our stockholders.<br>• The share ownership restrictions for REITs and the 9.8% share ownership limit in our charter may inhibit market activity in shares of our stock and restrict our<br>business combination opportunities.<br>• Our failure to remain qualified as a REIT would subject us to U.S. federal income tax and potentially state and local tax.<br>• Complying with REIT requirements may force us to forgo or liquidate otherwise attractive investment opportunities. |
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| 16<br>Appendix |
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| 17<br>Definitions<br>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<br>as a per annum value. Includes adjustments for non-cash portions of rent.<br>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<br>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<br>and depreciation and after fixed costs and variable costs) by the purchase price of the property. The weighted average capitalization rate is based upon square feet.<br>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<br>thereafter. 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<br>period includes both original Cash Rent due and payments made by tenants pursuant to rent deferral agreements.<br>Economic Interest Rate: Includes the economic impact of all hedging instruments. As of March 31, 2024, HTI had a weighted average interest rate of 5.6% on its total borrowings,<br>which does not include the impact of non-designated derivatives.<br>Lease Renewal Rental Spread: Percentage change from prior lease annualized SLR to renewal lease annualized SLR.<br>Lease Term Remaining: Current portfolio calculated from March 31, 2024. Weighted based on square feet.<br>Leasing Pipeline: Includes (i) all leases fully executed by both parties as of May 3, 2024, but after March 31, 2024, and (ii) all leases under negotiation with an executed LOI by both<br>parties as of May 15, 2024. This represents four LOIs totaling 15,261 square feet and three fully executed leases totaling 10,393 square feet. There can be no assurance that the LOIs will<br>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.<br>Net Debt: Total gross debt of $1.2 billion less cash and cash equivalents of $28.7 million as of March 31, 2024.<br>Net Leverage: Equal to “Net Debt” as defined above divided by the total real estate investments, at cost of $2.6 billion net of gross market lease intangibles of $23.5 million as of March<br>31, 2024.<br>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<br>maintenance expenses. NOI excludes all other items of expense and income included in the financial statements in calculating net income (loss).<br>Occupancy: For MOB properties, occupancy represents percentage of leased square feet divided by the respective total rentable square feet as of the date or period end indicated. For<br>SHOP properties, occupancy represents total units occupied divided by total units available as of the date or period end indicated. |
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| 18<br>Reconciliation of Non-GAAP Metrics: NOI<br>Three Months Ended<br>December 31,<br>Three Months Ended<br>March 31,<br>(In thousands) 2024 2023<br>MOBs:<br>Revenue from tenants $ 34,599 $ 34,262<br>Less: Property operating and maintenance (9,700) (10,182)<br>Segment income (NOI) $ 24,899 $ 24,080<br>SHOPs:<br>Revenue from tenants $ 53,700 $ 52,518<br>Less: Property operating and maintenance (45,445) (45,832)<br>Segment income (NOI) $ 8,255 $ 6,686<br>Three Months Ended<br>December 31,<br>Three Months Ended<br>March 31,<br>(In thousands) 2024 2023<br>Revenue from tenants:<br>MOBs $ 34,599 $ 34,262<br>SHOPs 53,700 52,518<br>Total consolidated revenue from tenants $ 88,299 $ 86,780<br>Net loss attributable to common stockholders (in accordance with GAAP):<br>Segment income (NOI):<br>MOBs $ 24,899 $ 24,080<br>SHOPs 8,255 6,686<br>Total segment income (NOI) $ 33,154 $ 30,766<br>Impairment charges (260) (4,676)<br>Operating fees to related parties (6,366) (6,374)<br>Acquisition and transaction related (142) (161)<br>General and administrative (6,768) (4,823)<br>Depreciation and amortization (20,738) (21,353)<br>Gain (loss) on sale of real estate investment - 42<br>Interest expense (16,383) (15,870)<br>Interest and other income 72 158<br>Gain (loss) on non-designated derivatives 1,951 (2,505)<br>Income tax (expense) benefit (70) (59)<br>Net loss attributable to non-controlling interests - 37<br>Preferred stock dividends (3,450) (3,450)<br>Net loss attributable to common stockholders (in accordance with GAAP) $ (19,000) $ (28,268) |
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| 19<br>HealthcareTrustInc.com<br> For account information, including<br>balances and the status of submitted<br>paperwork, please call us at<br>(866) 902-0063<br> Financial Advisors may view client<br>accounts at<br>www.computershare.com/advisorportal<br> Shareholders may access their accounts<br>at www.computershare.com/hti |
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Exhibit 99.2
Opening – Curtis Parker
Welcome to the first quarter 2024 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 HTI’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, 2023, filed on March 15, 2024, as amended by the Form 10-K/A filed on March 22, 2024, 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 substitution for the financial results prepared in accordance with GAAP. HTI has provided a reconciliation of these measures to the most directly comparable GAAP measure as part of the first quarter 2024 investor presentation available on HTI’s website at www.healthcaretrustinc.com.
You may submit questions during today’s webcast by typing them in the box on the screen and a member of our investor relations group will follow-up to answer questions directly after this presentation. Also, please note that later today a copy of this presentation and replay of the webcast will be available on HTI’s website.
I would now like to turn the call over to Michael Anderson, our Chief Executive Officer. Please go-ahead Michael.
HTI Webinar Script
Slide 2: Company Overview – (MichaelAnderson)
Thanks Curtis and thank you all for joining us today.
I’m happy to report that, compared to last quarter, Net Operating Income in our Senior Housing portfolio increased by 23.5% to $8.3 million, driven in part by a 1.2% increase in occupancy to 75.3%. We also achieved 3.4% NOI growth in our Medical Office Building segment on the strength of accretive acquisitions and favorable leasing in our portfolio. Total revenue from tenants also increased by approximately $1.5 million compared to fourth quarter, 2023.
In the first quarter we signed sixteen lease renewals totaling over 33,000 square feet at a positive Lease Renewal Rental Spread of 11.9% which is expected to be recognized over the weighted-average term of these renewed leases of 6.3 years. We have a forward leasing pipeline of over 25,000 square feet that is expected to grow occupancy in the MOB portfolio to 91% from the current 90.5% occupancy rate upon commencement, assuming all the leases commence on their current terms and signed LOIs lead to definitive agreements.
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During the quarter we acquired a four-property MOB portfolio for $12.6 million at a 7.6% going-in cap rate. We will continue to pursue accretive acquisitions and strategic dispositions that we believe strengthen our portfolio as we continue to better position the company for a future liquidity event for common shareholders.
Slide 3: Portfolio Snapshot
As of March 31, 2024, HTI owned over 200 properties, totaling over 9 million rentable square feet in 33 states. The portfolio consisted of 160 medical office buildings, 46 seniors housing operating properties with over 4,100 individual units, and two land parcels. Based on NOI, the portfolio was comprised of approximately 75% MOB and 25% SHOP assets.
Additionally, as of March 31, 2024, our medical office building portfolio was 90.5% occupied, with a weighted-average remaining lease term of 4.7 years and featured annual cash rent escalations that averaged 2.2% on approximately 96% of leases, which increase the cash rental payments in future periods.
Slide 4: Dynamic Portfolio Fundamentals
We have diligently constructed a portfolio of MOB and SHOP assets and continue to deploy capital into select high-quality assets throughout the U.S. Our portfolio is well-diversified geographically across 33 states with only two states representing more than 10% of the total portfolio by straight-line rent. Quarterly NOI for the portfolio was approximately $33 million, 75% of which was generated by the medical office building segment.
Slide 5: Strategic Partners
We partner with top healthcare brands in well-established markets to maintain a durable portfolio of healthcare real estate. We believe that the quality of our tenants is essential to our long-term success and that developing strong relationships with well-respected brands gives our portfolio stability and focus. We believe our partnerships with tenants such as DaVita, Fresenius and UPMC in the MOB portfolio benefit not only HTI’s shareholders, but patients and other stakeholders as well.
As we grow our portfolio, we continue to seek high-quality tenants to add to HTI’s MOB portfolio and to maintain strong relationships with our SHOP operators.
Slide 6: Diligent Acquisition Program
For the quarter, we acquired four additional medical office buildings for $12.6 million at a 7.6% cap rate. These properties have 14.5 years of weighted-average lease term remaining. We believe we are well-positioned to continue diligently seeking accretive acquisitions at opportunistic cap rates.
Scott, will you please take us through the financials?
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Slide 7: Capitalization Highlights –(Scott Lappetito)
Thank you, Michael.
We are continuing to actively manage our capital structure.
As of March 31, 2024, our Net Leverage was 44.4%. All our debt is fixed-rate, inclusive of our hedging instruments, at a weighted-average economic interest rate of 5.0%. Our debt is comprised of $828.6 million of fixed-rate mortgages secured by 132 MOBs and four SHOPs, with an aggregate gross asset value of $1.4 billion. In addition, we have $345 million that is drawn on our Fannie Mae Master Credit Facilities and $15 million drawn on the $50 million Capital One MOB Warehouse facility that we closed on in December 2023.
Slide 8: Key Operating Highlights
HTI continues to execute on our operational initiatives by increasing NOI through accretive acquisitions and strong leasing activity in the MOB portfolio as well as revenue growth and effective expense management in the SHOP segment of our portfolio.
As Michael mentioned earlier, NOI in our SHOP portfolio grew by 23.5% in the first quarter compared the previous quarter because of increased occupancy and rental rates. Similarly, NOI improved by 3.4% in the MOB portfolio during the same period as revenues continued to increase as a result of accretive acquisitions and favorable leasing.
We continue to successfully lease available space in our medical office building portfolio. We have a forward leasing pipeline of over 25,000 square feet, assuming all the leases commence on their current terms and signed LOIs lead to definitive leases. During the first quarter we also completed 16 lease renewals across more than 33,000 square feet at a positive Lease Renewal Rental Spread of 11.9% which will be recognized over the weighted-average remaining term of these renewed leases of 6.3 years, growing future revenue and extending the weighted-average remaining lease term across our portfolio.
I would now like to turn the call back to Michael for some color on the HTI team and some closing remarks.
Slide 9: Company Highlights – (MichaelAnderson)
Thanks Scott.
We believe we will position HTI for long-term earnings growth by, among other things, capitalizing on leasing available space and acquiring high-quality MOB properties. Our portfolio continues to demonstrate its resilience, as we captured a positive spread on lease renewals in the MOB portfolio, completed accretive acquisitions and grew NOI compared to last quarter. We have an experienced management team that we believe is well positioned to maximize the opportunities created by demographic trends which favor long-term investment in healthcare real estate.
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Slide 10: Experienced Leadership Team
We believe we have the right team in place to execute our strategy to drive long-term value.
Trent Taylor is our Senior Vice President of asset management and ensures that our existing properties are leased, performing as expected, and that our tenants’ needs are being met by local property managers. David Ruggiero is responsible for MOB acquisitions, applying over 30 years of experience and a $3 billion acquisitions track record to our strict investment guidelines and underwriting standards.
Slide 11: Dedicated SHOP Team
Our dedicated SHOP team has over 50 years of collective experience in the Seniors Housing space. Lindsay Gordon and Michelle Stepinsky bring vast knowledge and experience to the operations and sales groups at our properties and Susan Rice, our VP of Clinical Operations, has been part of our SHOP team for over five years, helping guide this segment through COVID with her extensive clinical expertise.
Closing Statements – (Michael Anderson)
We are pleased with the ongoing improvement in the performance of our SHOP portfolio. The 23.9% quarter over quarter increase in Net Operating Income and 1.2% increase in occupancy we reported in the SHOP segment this quarter extend the momentum we are beginning to see in this portfolio. At the same time, our MOB portfolio continued its strong, dependable performance, growing NOI 3.4% compared to the prior quarter. As we disclosed last quarter, the Company did not declare a stock dividend to be paid in April as the board continues to consider a potential listing or another liquidity event for the Company and its shareholders. As always, we look forward to continuing to provide updates on HTI’s performance, results, and path to liquidity with all our stakeholders through our periodic filings, press releases, and subsequent webcasts like today’s. Thank you very much for joining us.
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.
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