National Health Investors' Q4 2024: Navigating Contradictions in SLM Recovery, SHOP Strategy, and Acquisition Outlook

These are the key contradictions discussed in National Health Investors' latest 2024Q4 earnings call, specifically including: SLM Recovery and NOI Expectations, SHOP Strategy and Conversions, Acquisition Guidance and Pipeline, and Discovery Situation:



Revenue and Investment Activity:
- National Health Investors reported over $150 million in investments during Q4 2024 at an initial yield of 8.5%.
- The company's cash rent increased by nearly 9% year-over-year on solid organic growth and increased investment activity.
- The driver behind this growth was the completion of significant investments and ramp-ups in cash rent from previous COVID era restructurings.

SHOP Portfolio Performance:
- The SHOP portfolio's NOI increased by 12.5% year-over-year in Q4 2024.
- This improvement was due to increased occupancy, which reached 89.4%, and a 90 basis point margin improvement.
- The company expects continued growth in SHOP with guidance considering a 12% to 15% NOI increase for 2025.

Dividend and Financial Guidance:
- A dividend of $0.90 per share was declared for shareholders of record March 31, 2025.
- For 2025, the company guidance includes an increase in NAREIT FFO and normalized FFO, with a 1.8% and 4.3% rise over 2024, respectively.
- This guidance includes new investments of $225 million at an average yield of 8.1%, reflecting confidence in the company's pipeline.

Strategic Capital Allocation:
- The company is considering opportunities to transition triple-net senior housing assets to SHOP structures, citing long-term potential and capital efficiency.
- This strategy aims to improve shareholder value by increasing overall exposure to senior housing operations and enhancing real estate valuations.