American Healthcare Reit continues ‘next Level Of Growth’ With Shop Deals 

American Healthcare REIT (NYSE: AHR) is on a path to continue its “next level of growth beyond” where the company is today as senior housing acquisition and redevelopment options remain plentiful.

Company leadership announced an increased future investment pipeline to a projected $800 million, up from $650 million projected in May. In the second quarter, the company completed $126.9 million in new senior housing operating portfolio (SHOP) investments, bringing the yearly total to $1.4 billion in new investments.

The average age of the acquired properties is also dropping the company’s average SHOP property age from 29 years to 21 years.

Hanson said the company’s continued growth, including adding new leadership talent paired with acquisitions, is “in the support of rapidly scaling SHOP” across “four primary initiatives” for AHR. Those include increased acquisition velocity, onboarding new talent able to help the business grow, being aggressive to expand relationships with existing and new operators, while also further tapping into Trilogy Health Services’ operating platform and innovation to other operating partners to drive performance.

“The overarching theme is measured aggression because this is the time to do it, with again, a generational opportunity before us,” Hanson said.

Also underway, AHR is undertaking development projects with its operating partners, including expansion projects along with new campus projects to meet incoming senior living demand.

For example, Trilogy is in development on five new campuses in active construction as part of a multi-year development strategy, with 30 Trilogy communities with excess land or a “clear path to land ownership” that could support villa expansion projects with a pace of five to six villa projects annually, according to AHR President and Chief Operating Officer Gabe Willhite.

The company also highlighted Trilogy’s memory care center of excellence that is currently under development at a community in Warsaw, Indiana later this year. The aim is to advance dementia support through neuroscience-informed memory care practices and serve as a guiding model for memory support, as reported by Senior Housing News earlier this year. The effort “will be the hallmark” of Trilogy CEO Leigh Ann Barney’s tenure at the company, Willhite opined.

“It’s something that highlights what we believe deeply about operating in this space: that we should continue to innovate, continue to get better, and invest to help make the experience for the seniors in our buildings better,” Willhite said. “It’s something that we hope to, in the future, not only utilize at Trilogy, but throughout our platform.”

According to the company’s second quarter supplemental, AHR’s total in-process development and expansion pipeline is expected to cost roughly $197.5 million, of which $72 million has been funded as of the end of June.

The company reported same-store net operating income (NOI) growth of 20.5% in the company’s SHOP segment during the second quarter compared to the same time period last year. In June, AHR acquired five new SHOP assets for roughly $126.9 million. To start the third quarter, AHR has acquired 10 new SHOP assets for approximately $1.0 billion, according to the company’s second quarter earnings news release.

“What we’re buying now is high quality, institutional grade assets that are in infill markets or dense suburban areas and newer assets,” said AHR Chief Investment Officer Stefan Oh.

AHR is doing “50%” of its recent deals from off-market opportunities, meaning that AHR gets the “first bite of the apple” on reviewing and transacting on a given acquisition opportunity, Oh said.

As of June 30, AHR has 327 properties across various segments, including 148 “integrated senior health campuses,” 92 SHOP communities, 70 outpatient medical properties and 17 triple-net lease properties, according to the company’s second quarter supplemental.

In July, AHR named Hanson as CEO following Danny Prosky’s retirement due to a medical incident. On Friday’s earnings call, Prosky shared that his heart stopped beating following his “usual morning run” in February of this year. This resulted in Prosky receiving a heart transplant, he said, with his recovery being “optimal.”

“I truly have a new lease on life,” Prosky said. “Such a profound experience gives one perspective, and it gave me the reason to think hard about what I want the next chapter of my life to look like, particularly after what my family has been through this year.”

Hanson, who was formerly the chairman of the AHR board, retired nearly five years ago from the company, but he was part of an “emergency succession plan” that’s been in place over the last decade, he said.

When asked about his potential tenure as CEO, Hanson said “the way you should view this CEOship isn’t the typical into perpetuity CEOship,” leaving the door open for a potential leadership change in the future. But he noted that the board is not creating “arbitrary timelines.”

“I’m here to do a job with this team attached to my hip, and we’re going to do it very quickly,” Hanson said. “We’re going to do it very effectively. Will it be measured in a period of months or a few quarters? No, but you shouldn’t expect it to be measured in years either.”

On Friday, AHR stock rose 3.71%, an increase of $2.03 in value to rest at $56.74.

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