Sonida Senior Living, Inc.

Thank you for standing by. My name is Novi, and I will be your conference operator today. At this time, I would like to welcome everyone to the Sunita Senior Living Q3 2024 earnings call. Please be aware that all lines have been placed on mute to prevent any background noise. I would now like to turn the call over to Jason Finkelstein, Investor Relations. Please go ahead.

Thank you, operator. All statements made today, November 13, 2024, which are not historical facts, may be deemed to be forward-looking statements within the meaning of federal securities laws. The company expressly disclaims any obligation to update these statements in the future. Actual results or performance may differ materially from forward-looking statements. Certain factors that can cause actual results to differ are detailed in the earnings release that the company issued earlier today. as well as in the reports that the company files with the SEC from time to time, including the risk factors contained in the annual report on Form 10-K and quarterly reports on Form 10-Q. Please see today's press release for the full Safe Harbor Statement, which may be found in the 8-K filing from this morning, at the company's investor relations page found at www.sonitaseniorliving.com. Also, please note that during this call, the company will present non-GAAP financial measures, For reconciliations of these non-GAAP measures to the most comparable GAAP measure, please also see today's earnings release. At this time, I'd like to turn the call over to Sunita Senior Living President and CEO, Brandon Rebar, for opening remarks.

Thank you, Jason. Hello, and welcome to our 2024 Third Quarter Earnings Call. I'm joined today by Kevin Dietz, our Chief Financial Officer. Earlier today, we released our Q3 Earnings and Investor Presentation, which will be referenced throughout this call as we discuss our strategic priorities and operating results in addition to our view on the year ahead in 2025. You can find our latest presentation at sunitaseniorliving.com in the investor relations section if you would like to follow along. In addition, we have included supplemental earnings information within our investor presentation consistent with the prior quarter release. Q3 remained quite busy for Sunita. I'm extremely grateful to our team who continue providing great care and services for our residents. resulting in ongoing growth in occupancy and margins. I'll touch on these points in detail in a moment, but first I'd like to discuss several key capital allocation events that occurred since the end of Q2. First, we completed acquisitions of 14 new communities with more than $160 million in total asset value. We expect to use Sunita's broad operating platform to drive significant value to these assets and have seen initial positive momentum as part of the Sunita operating system. Second, we put in place a new $150 million secured line of credit on advantageous terms. In addition, the company successfully accessed public capital in a broad overnight equity offering, resulting in $130 million of new capital at a price of $27 per share. This is an important milestone for the company as the first registered overnight equity offering in more than a decade. Together with our new credit facility, Sunita has the tools in place to access capital and maintain balance sheet flexibility to take advantage of further acquisition opportunities. Finally, I'm pleased to share that we recently reached agreement with Fannie Mae to extend $220 million of outstanding mortgages covering 18 communities, which currently have a maturity date of 12-31-2026 to a new revised maturity date of January 1st, 2029. This extension, which is subject to completion of definitive documentation with Fannie Mae, allows us to retain attractive fixed rate debt and move all material debt maturities for the company into 2027 and beyond. These capital allocation successes, coupled with the continued improvement in our same store portfolio, serve as critical indicators of the progress we are making across both operational and capital allocation endeavors. We are committed to delivering results to all of our stakeholders, including residents and their families, our employees and our investors. On the growth front, we closed our sixth transaction of the year in early November, increasing the total number of communities added this year to 22, of which 19 are owned outright or through strategic joint ventures, and three of which are capital light management agreements. This growth amounts to nearly 2,000 units added, or a 30% increase to our operating portfolio in just the past six months. The transaction environment remains compelling, and our growing acquisitions team has line of sight on a robust 2025 pipeline of attractive growth opportunities. I am incredibly proud of our operations team for meeting the challenge of quickly incorporating these new communities into the Sanita family. Given our confidence in the depth of the opportunity set and our ability to find outsized return opportunities, we've chosen to invest in both acquisition and integration resources to strengthen the foundation for long-term value creation. From an operating performance perspective, our same store portfolio continues to deliver growth both in occupancy and margin with occupancy achieving a new weighted average quarterly high at 87%, growing 210 basis points against Q3 of last year and 80 basis points from Q2 this year. On the margin front, the same store portfolio continues to generate strong operating results on a year-over-year basis. with our community net operating income increasing more than 18% when removing prior year non-recurring grant income. Kevin will provide further detail on the financial performance in the quarter in his comments. The occupancy and margin gains reflect continued strength across each of our operating regions, with occupancy growth for the quarter concentrated in our independent living care levels. We are seeing continued positive momentum in the second half of the year and are optimistic about the tailwind supporting continued NOI growth. Achieving portfolio-wide occupancy of 90% is our next significant milestone. In our Q3 investor presentation, we have provided an illustrative view of the potential value creation from both the same store portfolio as well as the communities purchased this year, the vast majority of which are not in or not meaningful contributors to the third quarter results. Based on our high-quality portfolio, industry-wide supply-demand dynamics, and most importantly, our skilled operating teams, we believe that normalized occupancy can exceed 90% over the next several years. We are poised to deliver further NOI growth and margin expansion as we push the ongoing improvement in our same-store portfolio and accelerated revenue and margin stabilization in our recently acquired communities. We see an opportunity to further compound our growth by capitalizing on our robust pipeline of additional acquisition opportunities, leveraging our operating capabilities and capital availability. I'll spend a few minutes discussing the fundamentals of our business that support our ongoing confidence in the upside across our 93 communities. We continue to prioritize the strength of our local and regional leadership, as well as the development of activities and programming to deliver a differentiated resident experience. The second half of the year has shown favorable trends in retention at both the community leadership and staff level within our communities, and we continue to develop tools to strengthen employee engagement in both our new and existing communities. On the resident programming front, the advancement of our joyful living programs in both independent and assisted living settings have contributed to stability in average resident length of stay and enhanced our overall reputation score as measured by third party reviews. Switching to sales and marketing, continued emphasis on development, incubation, and implementation of technology to drive down resident acquisition costs and improve conversion metrics has led to a higher percentage of organically generated leads and move-ins. Lead volume in the third quarter increased 7.5% year-over-year and 10% sequentially from Q2 in our same store-owned portfolio. Leads generated through organic channels, including the Sunita website, and local referral sources now represent 56% of total lead volume in 2024 versus 52% in 2023 and only 41% in 2022 prior to our substantial investment in our digital platforms. We are especially pleased that move-ins driven by digital marketing enhancements, including website architecture changes, updated paid search strategy, and greater scrutiny over third-party listings have significantly outpaced the change in paid move-ins from third-party aggregators in 2024. We are excited to further leverage the sales and marketing approach that has delivered 14 consecutive quarters of same-store occupancy growth to drive significant near-term performance improvement and value creation in 2025, particularly in our newly acquired communities. Through a combination of occupancy growth, ongoing rate improvement, and effective expense management, Our investments are targeted to stabilize at a double-digit cap rate, delivering significant earnings accretion. We've included a summary of our 2024 year-to-date investments in the investor deck, and each deal reflects a specific approach to finding growth opportunities in the current market. From distressed purchases through banking relationships to strategic joint ventures and recapitalizations, our deep and wide network of relationships continues to deliver accretive investment opportunities. Our investment pipeline remains robust and fluid with clear line of sight to additional opportunities consistent with our targeted transaction profile and propelled by our multifaceted sourcing strategy. While we are starting to see increased competition and pricing for high quality and fully stabilized assets, we continue to see a wider bid-ask spread for value-add situations and believe the industry still suffers from limited capital availability. Moreover, we are accessing off-market transactions by leveraging our industry relationships under the leadership of our CIO, Max Levy, who was appointed earlier this summer. We believe our corporate structure as a pure-play senior housing owner, operator, and investor uniquely positions Sunita to access differentiated acquisitions and to deliver significant benefits to shareholders by fully controlling our operations and reinvesting cash flow into high return investments. The combination of availability on our existing credit facility and our ability to access the equity markets when pricing is supportive allows us to aggressively pursue and complete acquisitions of new communities with significant operational upside at an attractive price per unit. We see meaningful NOI upside in our same-store portfolio and are focused on acquisitions that we believe will be accretive on a stabilized basis due to even more significant NOI upside from stabilization and or wide going-in cap rates. From a capital structure perspective, we intend to manage the balance sheet to deliver through both operational improvement and the funding of our acquisitions with lower leverage. In summary, Tanita's focus on results-driven operational strategies and capital allocation yielded another quarter of strong performance and meaningful portfolio expansion. Same store revenue, community net operating income, resident rates, and occupancy demonstrated continuing gains year over year. The excitement across the entire team is evident as the company aggressively pursues further growth fueled by operational excellence and a commitment to building strong teams and creating a differentiated resident experience and living environment. As the future unfolds, our goal is to continue delivering strong operating results and measured ongoing improvement in the newly acquired communities, further demonstrating the strength of our people and our platform. I'll now turn it over to Kevin for discussion of the financial results.