LTC is rapidly shifting to a seniors housing operating portfolio (SHOP) model, guiding to roughly $600 million of 2026 acquisitions at the midpoint (nearly all SHOP), with SHOP expected to grow from 25% of investments to about 45% of the portfolio and 40% of NOI by year-end 2026; management already closed $108 million, expects another $160 million to close in Q2, and has a SHOP pipeline of over $500 million.
The company is deliberately reducing skilled nursing and loan exposure, expecting the $180 million Prestige loan to be prepaid around July 1 which would lower loans to under 10% of the portfolio and skilled nursing to under 30% by end-2026, while planning to sell five skilled nursing properties and complete about $90 million of loan payoffs in the next 60 days.
Liquidity and 2026 financial targets were strengthened: the credit facility was expanded to $800 million (including $200M term loans), pro forma liquidity is ~$810 million after ~$270 million of expected asset-sale proceeds, and guidance includes Core FFO/share of $2.75–$2.79 and SHOP NOI of $65–$77 million, with leverage around 4.5x debt/EBITDAre (inside a 4x–5x target).
LTC Properties (NYSE:LTC) executives used the company’s fourth-quarter 2025 earnings call to highlight what management described as a rapid strategic shift toward a seniors housing operating portfolio (SHOP) model, with a goal of increasing growth and reducing exposure to skilled nursing and loans. Leaders emphasized that the company is “almost halfway through” its transformation from a lower-growth triple-net REIT into a faster-growing, SHOP-focused REIT, a transition they said should be largely complete by the end of 2026.
Co-President and Co-CEO Pam Kessler said the company is guiding to $600 million of acquisitions at the midpoint for 2026, which management expects will be entirely in SHOP. Kessler said the midpoint guidance is “nearly 70% higher” than SHOP acquisitions in 2025.
Management said 2026 began with momentum, including $108 million of SHOP acquisitions already completed and another $160 million expected to close in the second quarter. Executives also cited an acquisition pipeline of over $500 million in deals under review, which they said is comprised entirely of SHOP opportunities.
As SHOP scales, Kessler said the portfolio has grown to 25% of total investments by year-end 2025. Based on the 2026 acquisition plan, management expects SHOP to reach 45% of the investment portfolio and 40% of NOI by the end of 2026.
Co-President and Co-CEO Gibson said the SHOP portfolio “outperformed expectations” and provided details on operating trends. The company’s original 13 properties converted to SHOP generated 22% NOI growth versus 2024 pro forma NOI and produced $16.2 million of combined rent and NOI in 2025, compared with $12.3 million of rent in 2024.
Gibson also said the remainder of the SHOP portfolio exceeded fourth-quarter expectations by contributing $5.9 million of NOI, which was about $700,000 above the midpoint of guidance.
For 2026, the company’s SHOP NOI guidance includes 27 properties—the 13 converted assets plus 14 SHOP properties acquired to date. Management’s midpoint assumptions for that group include:
14% NOI growth for full-year 2026 over pro forma 2025
2025 occupancy of 89.7%, projected to increase by about 150 basis points in 2026
RevPAR growth of approximately 5%
FFO growth of 2.5%
In the Q&A, Kessler said management believes occupancy “can climb into the 90s” given what the company views as limited near-term supply, though she noted that upside was not included in 2026 guidance. Executives discussed balancing occupancy and rate growth and said the portfolio’s newer communities were selected for their ability to compete against future development and support pricing power.
When asked about longer-term same-store NOI growth expectations, management avoided setting an out-year target, noting the portfolio is relatively new to LTC and that guidance reflects current visibility. Executives also said prior-year comparisons between NOI under SHOP and rent under a net lease structure are not directly comparable.
Management tied the SHOP strategy to a deliberate reduction in skilled nursing and loan exposure. Kessler said that after the expected prepayment of the $180 million Prestige loan later in 2026, loans should fall to less than 10% of the portfolio, and skilled nursing investments are expected to represent less than 30% by the end of 2026.
Gibson said Prestige Healthcare delivered notice of its intent to prepay the $180 million loan on or about July 1, and described it as a strategic move to reduce operator concentration. He added the company expects to sell five skilled nursing properties and complete certain loan payoffs totaling $90 million in the next 60 days. On dispositions, Gibson said that blended skilled nursing asset sales were occurring at about an 8.2% cap rate, with 2%–2.5% escalators, and characterized the recycling trade as moving from older skilled nursing assets into newer seniors housing.
Executives also discussed remaining exposure to Prestige, noting that after the $180 million payoff, the company expects to have $90 million remaining and described it as a long-term hold with no prepayment option.
Chief Financial Officer Cece said the company expanded its credit facility to $800 million, including $200 million of term loans, to bolster growth capacity. Management expects to receive nearly $270 million in asset sales and loan payoffs in 2026 to help fund investments, and said pro forma liquidity would be $810 million with those proceeds.
Cece also cited leverage metrics at year-end, including:
Management said it is within its 4x–5x leverage target and believes leverage can decline over time, in part through EBITDA growth. In response to a question about funding if acquisitions are toward the high end of guidance, Kessler said deleveraging can occur “naturally” in a higher-growth portfolio, and the company could “over-equitize” acquisitions if pricing is attractive.
Cece reported that compared with the same quarter last year, Core FFO per share increased by $0.05 to $0.70 and Core FAD per share increased by $0.07 to $0.73, representing growth of 8% and 11%, respectively. She said the increases were primarily driven by SHOP acquisitions and triple-net conversions to SHOP, partially offset by higher interest expense and lower rent associated with asset sales.
For 2026, LTC guided to:
Core FFO per share of $2.75–$2.79
Core FAD per share of $2.82–$2.86
First-quarter Core FFO per share of $0.66–$0.68
First-quarter Core FAD per share of $0.68–$0.70
The company’s 2026 framework includes $400 million–$800 million of SHOP acquisitions, SHOP NOI of $65 million–$77 million, and FAD CapEx of approximately $5 million. In discussion of CapEx, executives said guidance reflects an assumption of roughly $1,500 per unit and emphasized the relatively young profile of the SHOP portfolio, which management said will average nine years in age including acquisitions under contract.
In closing remarks, Clint said the company expects 2026 to complete its transformation and that SHOP is expected to exceed $1 billion of assets and reach 45% of the portfolio by year-end. Management also highlighted the expansion of its operator base within SHOP, stating it has eight SHOP operator relationships, six of which are new since launch, with two additional relationships expected to be added in the second quarter.
LTC Properties, Inc (NYSE: LTC) is a real estate investment trust that specializes in financing and investing in long-term health care properties. The company focuses on providing capital to operators of senior housing and health care facilities through sale-leaseback transactions, mortgage financings and structured finance arrangements. Its portfolio primarily comprises skilled nursing facilities, assisted living communities and memory care centers.
Since its founding in 1992, LTC Properties has built a diversified portfolio of properties located across the United States.
