LTC Properties, Inc.

Greetings, and welcome to the LTC Properties, Inc. Fourth Quarter 2025 Earnings Conference Call and Webcast. At this time, all participants are in listen-only mode. A question and answer session will follow the formal presentation. You may be placed into question queue at any time by pressing star 1 on your telephone keypad. As a reminder, this conference is being recorded. If anyone should require operator assistance, please press star 0. It's now my pleasure to introduce Pam Kessler, co-president and co-CEO. Pam, please go ahead.

Good morning, and thank you for joining us. Eight months after launching our shop initiative, we are almost halfway through our transformation from a lower-growth triple net REIT into a faster-growing shop-focused REIT, a transformation that will lead to higher multi-year internal and external shop and earnings growth and to superior shareholder returns. This transformation has included substantial investment in people, systems, and technology, which will continue to be a focus to support our aggressive growth plans. We have made great progress growing our seniors housing portfolio through SHOP, reflecting successful execution across every aspect of the business. Today, we are guiding to 600 million in acquisitions at the midpoint for 2026, all of which we anticipate will be in SHOP. This acquisition guidance is nearly 70% higher than shop acquisitions in 2025. 2026 started off strong with $108 million in shop acquisitions already completed and another $160 million on schedule to close in the second quarter, which takes us nearly halfway to our $600 million midpoint investment guidance for the year. Throughout our transformation, We have continued to maintain a strong balance sheet with well-laddered debt maturities and a fad payout ratio below 80%. Since launching SHOP last May, we grew it to 25% of our investment portfolio by year-end. Based on our 2026 acquisition guidance, we expect to end this year with SHOP growing to 45% of our investment portfolio and 40% of our NOI. capitalizing on LTC's ability to accelerate our growth through acquisitions. By launching SHOP as a small-cap REIT, we are leveraging the denominator effect to our advantage. LTC's smaller initial footprint provides the power to capture outsized growth, where even modest investments have a meaningful and visible impact. Additionally, after the prepayment of the $180 million prestige loan expected later this year, Loans should be reduced to less than 10% of our portfolio and skilled nursing investments will represent less than 30% by the end of 2026. This strategic portfolio transformation reflects our shop launch and rapid growth within a targeted 18 month period. With our transformation complete at the end of 2026, we see the opportunity for continued accelerated internal and external growth powered by shop in 2027. Now I'll turn the call over to Gibson to discuss our portfolio and strong shop performance.

Thank you, Pam. We've undertaken the transformation to increase the organic growth and new investment growth profile of our portfolio and maximize risk-adjusted returns for our shareholders. To that end, we have focused over the last year and a half to develop and enhance our platform to position LTC and our operators for success. and will continue to make further investments going forward to position LTC for profitable growth. In addition to adding accounting, FP&A, and data analytics resources, we recently welcomed two vice presidents to our asset management team, both with extensive experience in systems development and seniors housing asset management. Our SHOP portfolio results support our 2025 strategy by outperforming expectations. The original 13 properties converted to SHOP grew NOI over 2024 pro forma NOI by 22% and produced $16.2 million of combined rent and NOI in 2025, compared to $12.3 million of rent in 2024. The remainder of the SHOP portfolio outperformed expectations in the fourth quarter by contributing $5.9 million of NOI, about $700,000 above the midpoint of guidance. Our 2026 SHOP NOI guidance includes 13 properties we originally converted and 14 properties acquired to date. Our guidance for these 27 properties assumes 14% NOI growth at the midpoint for a full year of 2026 over pro forma 2025. This subset of properties realize occupancy of 89.7% in 2025, which we are projecting will grow by about 150 basis points in 2026. We further project that REV4 will grow by approximately 5% and that EX4 will grow by 2.5%. We do want to note that the 2025 results for the 14 properties we have acquired include occupancy and performances reported by the prior owners, adjusted for the current management fee structure. We will continue changing the mix of our portfolio in 2026. Prestige Healthcare has delivered notice of their intent to prepay, on or about July 1st, the $180 million loan, which is currently yielding approximately 11%. Additionally, we expect to sell five skilled nursing properties and have certain loan payoffs totaling $90 million in the next 60 days. These transactions, together with our external growth through SHOP, will meaningfully reduce our skilled nursing and loan exposure. With that, I'll turn things over today for an update on our growth strategy.