LTC Properties, Inc.

Greetings and welcome to the LTC Properties 3rd Quarter 2026 Earnings Call. At this time, all participants are in a listen-only mode. Joining us on today's call are Pam Kessler, Co-President and Co-Chief Executive Officer, Clint Malin, Co-President and Co-Chief Executive Officer, C.C. Chikhale, Executive Vice President and Chief Financial Officer and Treasurer, Gibson Satterwhite, Executive Vice President of Asset Management, Dave Boitano, Executive Vice President and Chief Investment Officer. Before management begins its presentation, please know that today's comments, including the question and answer session, may include forward-looking statements, subject to risks and uncertainties that may cause actual results and events to differ materially. These risks and uncertainties are detailed in LTC Properties filings with the Securities and Exchange Commission from time to time, including the company's most recent 10-K, dated December 31, 2025. LTC undertakes no obligation to revise or update these forward-looking statements to reflect events or circumstances after the date of this presentation. Please note, this event is being recorded. I would now like to turn the conference over to LTC management.

Good morning, everyone, and thank you for joining us. Our SHOP strategy is delivering from a growth perspective and has fundamentally reshaped LTC's future. We launched SHOP in May of 2025 and are rapidly transforming from a lower growth triple net lease and lending platform into a SHOP-focused REIT with a higher intrinsic growth profile. Last quarter, we increased our 2026 midpoint acquisition guidance by 50% to $900 million and have since surpassed that guidance with approximately $950 million in shop acquisitions closed through October. We expect total acquisitions for the year of approximately $1 billion, at which point shop will have grown from zero communities into a $1.6 billion portfolio over 19 months. Additionally, we have expanded our shop-operator relationships to 14, including one new relationship added last month. 2026 has been a historic year for LTC. As we continue to focus on the tremendous opportunities ahead of us, our sights are set firmly on 2027. To date, we have 200 million of shop acquisitions that are expected to close in the first quarter of next year, which will also add a new shop-operator relationship to our portfolio. At an expected $1 billion of shop acquisitions in 2026, the portfolio will represent 50% of LTC's pro forma annualized NOI at year end. At this level, our pro forma internal growth rate triples, and as shop continues to expand as a larger share of our total portfolio, our expected growth rate increases even further, significantly enhancing our ability to organically grow core FFO and FAD, As we have previously discussed, at our current shop acquisition pace, we see a pathway to generating approximately 75% of our annualized NOI from shop by the end of 2028. This timeline can be accelerated should we identify additional opportunities to recycle capital out of older and lower growth triple net lease assets. We are proud of what we have achieved, but even more excited about what lies ahead. Transformation is no longer a future objective. It is happening now, and LTC is entering a new chapter of growth, scale, and value creation. Now, Gibson will walk us through LTC's operating portfolio.

Thank you, Clint. We are continuing to optimize risk-adjusted returns and increase the intrinsic growth profile of our own portfolio by recycling capital into shop. In the third quarter, we generated about $465 million of gross proceeds by selling triple net assets at an implied cap rate on our rent of approximately 5.5%. And the $180 million prestige loan is currently slated to pay off on November 24. Going into next year, we will continue to capitalize on opportunities to recycle capital as we look to further accelerate our portfolio transformation. We are also taking action on the ten property portfolios subject to market-based rent resets. Of these ten properties, we recently began the sales process for three. Another two of the ten properties have been converted into a long-term lease with initial annualized rent of $2.4 million. The lease contains a shop conversion option that could be exercised as early as the first quarter of 2027. For the remaining five properties, we plan to negotiate a long-term lease in advance of the current lease expiration next year. We expect to recognize rent of $780,000 in the fourth quarter from these five properties. With respect to our core shop portfolio, we are narrowing our 2026 guidance to $53.5 to $55.5 million, half a million dollars below our prior range at the new midpoint of $54.5 million. The reduction is primarily due to a change in care and unit occupancy mix and a Medicaid rate decrease received in Q3 retroactive to July 1, which affects two standalone memory care communities in our portfolio. Excluding these two communities, Medicaid as a percentage of our shop revenue is approximately 3% and is primarily offered as a spend-down option in states with rates on par with private pay rates. For private pay, our operators have been able to implement strong rate increases and we expect that to continue into 2027. The current guidance range for our core shop portfolio represents approximately 11 to 15% pro forma growth for the prior year and 13% at the midpoint. The underlying fundamentals of our business are strong. As we've outlined in prior calls, we believe that our core shop portfolio can achieve high single to low double digit NOI growth with a 200 basis point spread between bread core and export, even at zero occupancy growth. To be clear, we do expect that our operators will continue to drive occupancy growth going forward. We're excited about the new and expanded operator relationships we've cultivated, the quality of the communities in our portfolio, and their markets. We believe that our shop portfolio is well positioned to deliver the growth necessary to transform the intrinsic growth profile of our overall portfolio as we continue to increase our shop mix. Now, Dave will discuss our recent investment activity.