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AHR Reports Q4, Full 2023 Results and Expectations for 2024

AHR Reports Q4, Full 2023 Results and Expectations for 2024. AHR, American Healthcare REIT, REIT, real estate investment trust, NYSE, coverage ratings, senior housing operating properties

American Healthcare REIT Inc. (NYSE: AHR) shared its fourth quarter and full year 2023 results, as well as reported various subsequent-to-quarter-end items.

AHR reported a net loss attributable to stockholders of $0.42 and $1.08 per basic and diluted share for the three and 12 months ended Dec. 31, 2023. It also reported normalized funds from operations attributable to stockholders of $0.38 and $1.40 per basic and diluted share for the same three and 12 months, respectively.

It achieved 5.2% and 7.7% total portfolio same-store revenue growth for the three and 12 months ended Dec. 31, 2023, respectively, compared to the same periods in 2022 largely driven by occupancy gains in the company’s REIT Investment and Diversification Empowerment Act-operated assets. It also achieved year-over-year portfolio same-store net operating income growth of 8.6%, highlighted by 27.2% and 14.0% same-store NOI growth from its senior housing operating properties and integrated senior health campuses, respectively.

As previously reported by The DI Wire, AHR – a self-managed real estate investment trust that acquires, owns, and operates a diversified portfolio of clinical healthcare real estate properties, focusing primarily on medical office buildings, senior housing, skilled nursing facilities, hospitals and other healthcare-related facilities – debuted on the New York Stock Exchange Feb. 7. Legacy investors in the non-traded REITs that formed AHR are eligible to trade their shares on the exchange beginning Aug. 8, 2024.

“We are proud of our 2023 operating results and have begun 2024 with a successful common stock offering and the listing of our common stock on the NYSE. As a publicly listed company, we are committed to being responsible stewards of capital for all our stockholders. The entire team at American Healthcare REIT is working diligently to ensure optimal performance across our entire portfolio,” said Danny Prosky, AHR’s president and chief executive officer.

After pricing its public offering of 64.4 million shares of its common stock at $12 per share, AHR started the trading day at $12.85. At the close of trading, shares finished at $13.22, up 10.17%. At the close of trading March 22, shares finished at $13.93, up 16.08% over the IPO price.

Using the net proceeds from its public offering, AHR paid down approximately $721 million of its outstanding debt obligations carrying a weighted average interest rate of approximately 7.53%. The company said this meaningfully improved leverage metrics and provided it with additional capacity and flexibility.

“Our portfolio continues to recover since the onset of the pandemic, with the trajectory of revenue growth drivers all heading in the right direction. We have continued to see occupancy gains since the end of 2023. Our unique investment in integrated senior health campuses remains the most attractive part of our portfolio with operating performance metrics such as occupancy already surpassing pre-pandemic levels,” said Gabe Willhite, the company’s chief operating officer.

Indeed, at least six institutions initiated coverage and earnings per share estimates for AHR this month, with price targets for the stock ranging from $14 to $17. Each, acknowledging U.S. population demographics and corresponding senior housing needs, hypothesized that AHR will benefit from the long-term trends driving healthcare real estate. Risks identified by one or more of the firms included operational execution, concentration (both tenant and geographical), and elevated dividend coverage.

AHR was formed by the 2021 merger of Griffin-American Healthcare REIT III, Griffin-American Healthcare REIT IV, and American Healthcare Investors. Investors in those non-traded REITs typically paid $10 per share of common stock. The company executed a one-for-four reverse stock split in November 2021, and last March adopted an updated estimated per share net asset value of the company’s common stock of $31.40, calculated as of Dec. 31, 2022.

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