LTC PROPERTIES, INC. Stifel 2023 Virtual
Seniors Housing & Healthcare
Real Estate Conference
January 2023
FORWARD LOOKING STATEMENTS
This supplemental information contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, adopted pursuant to the Private Securities Litigation Reform Act of 1995. Statements that are not purely historical may be forward-looking. You can identify some of the forward-looking statements by their use of forward-looking words, such as ''believes,'' ''expects,'' ''may,'' ''will,'' ''should,'' ''seeks,'' ''approximately,'' ''intends,'' ''plans,'' ''estimates'' or ''anticipates,'' or the negative of those words or similar words. Forward- looking statements involve inherent risks and uncertainties regarding events, conditions and financial trends that may affect our future plans of operation, business strategy, results of operations and financial position. A number of important factors could cause actual results to differ materially from those included within or contemplated by such forward-looking statements, including, but not limited to, the status of the economy, the status of capital markets (including prevailing interest rates), and our access to capital; the income and returns available from investments in health care related real estate, the ability of our borrowers and lessees to meet their obligations to us, our reliance on a few major operators; competition faced by our borrowers and lessees within the health care industry, regulation of the health care industry by federal, state and local governments, changes in Medicare and Medicaid reimbursement amounts (including due to federal and state budget constraints), compliance with and changes to regulations and payment policies within the health care industry, debt that we may incur and changes in financing terms, our ability to continue to qualify as a real estate investment trust, the relative illiquidity of our real estate investments, potential limitations on our remedies when mortgage loans default, and risks and liabilities in connection with properties owned through limited liability companies and partnerships. For a discussion of these and other factors that could cause actual results to differ from those contemplated in the forward- looking statements, please see the discussion under ''Risk Factors'' and other information contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 and in our publicly available filings with the Securities and Exchange Commission. We do not undertake any responsibility to update or revise any of these factors or to announce publicly any revisions to forward-looking statements, whether as a result of new information, future events or otherwise.
TABLE OF CONTENTS
COMPANY
Company Overview | 3 |
INVESTMENTS
Real Estate Activities | |
Investments and Capital Recycling | 4 |
Acquisitions, Financing Receivable & Purchase Options | 5 |
Mortgage and Mezzanine Loan Originations | 6 |
Joint Ventures | 7 |
Lease-Up and Renovations & Expansions | 8 |
PORTFOLIO
Overview | 9-10 |
Maturity | 11 |
Diversification | |
Operators | 12-13 |
Geography, MSA, Age of Portfolio | 14-15 |
Real Estate Investments Metrics | 16 |
Update | 17 |
FINANCIAL
Enterprise Value | 18 |
Debt Metrics | 19 |
Debt Maturity | 20 |
Financial Data Summary, Dividends & Total Return | 21-23 |
Consolidated Statements of Income | 24 |
Consolidated Balance Sheets | 25 |
Health Care Trends & Investment Strategy | 26-27 |
Investment Highlights & Leadership | 28-29 |
SEC Reg G Compliance | 30-33 |
ESG (Environmental, Social & Governance) | 34 |
INVESTOR PRESENTATION | JANUARY 2023 | 2 |
COMPANY OVERVIEW
LTC (NYSE: LTC) is a real estate investment trust (REIT) investing in seniors housing and health care properties primarily through sale‐leasebacks, mortgage financing, joint‐ventures and structured finance solutions including preferred equity and mezzanine lending.
ATTRACTIVE YIELD & MONTHLY DIVIDEND
PROFORMA
•Dividend Yield: 6.1% as of January 17, 2023 (Stock price $37.67)
•Monthly dividend is currently $0.19 per month ($2.28 on an annualized basis) •FAD Payout ratio of 87.71% in 3Q 2022
•On January 5, 2023, we invested $117.5M in a $121.3M joint venture (97% ownership) with an affiliate of ALG Senior for the purchase of 11 assisted living/memory care communities and originated a $10.8M senior mortgage loan secured by one memory care community for a total investment of $128.2M. These communities are located in North Carolina. The master lease and mortgage loan are cross‐defaulted and cross‐collateralized. We anticipate recording $9.7M of GAAP interest income from financing receivables and $0.9M of GAAP interest income from mortgage loans in 2023 related to these investments.
•During 4Q22, we sold 757,400 shares of common stock under our At‐The‐Market offering program ("ATM") resulting in net proceeds of $29.2M
PROFORMA
BALANCE SHEET
PROFORMA LIQUIDITY AT
SEPTEMBER 30, 2022
•Investment grade NAIC 2C rating (insurance industry's rating agency for debt investments) •Proforma Enterprise Value: $2.5B at September 30, 2022 using January 17, 2023 closing stock price •Proforma Debt to Enterprise Value: 36.2% at September 30, 2022 using January 17, 2023 closing stock price •Proforma Debt to Annualized Adjusted EBITDAre: 6.1x
•$6.5M in cash and cash equivalents
•$150.0M available for borrowing under our Amended Unsecured Revolving Line of Credit @ 115 bps over Adjusted SOFR and a facility fee of 20 bps, matures in 2025
•$130.6M available under our ATM •Effective Shelf Registration Statement
INVESTOR PRESENTATION | JANUARY 2023 | 3 |
REAL ESTATE ACTIVITIES - INVESTMENTS AND CAPITAL RECYCLING SINCE 2013
(FROM JANUARY 1, 2013 THROUGH JANUARY 5, 2023)
Total Investments (1)Total Sales (2)Total Gains$ 1.5 | $ 386.9 | $ 176.7 |
Billion | Million | Million |
MILLION
$450 $400 $350 $300 $250 $200 $150 $100
$50 $0
2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 YTD 2023 (1) |
Investments | Sales |
- Represents total investments. On January 5, 2023, we invested $128.2 million in 12 assisted living/memory care communities in North Carolina. See page 3 for further discussion.
- Reflects total sales price.
INVESTOR PRESENTATION | JANUARY 2023 | 4 |
REAL ESTATE ACTIVITIES - ACQUISITIONS, FINANCING RECEIVABLES & PURCHASE OPTIONS
(DOLLAR AMOUNTS IN THOUSANDS)
ACQUISITIONS
CO NT RACTUAL | ||||||||||||||||
# OF | PROPERTY | # OF | DATE OF | INITIAL | PURCHASE | |||||||||||
DATE | PROPERTIES | TYPE | BEDS | LOCATION | OPERATOR | CONSTRUCTION | CASH YIELD | PRICE | ||||||||
2022 4/1 | 4 | SNF | 339 beds | Various cities in TX | Ignite Medical Resorts | 2017-2018 | 8.00% | $ 51,534 (1) |
- The lease term is 10 years, with two 5-year renewal options, and contains a purchase option beginning in the sixth lease year through the end of the seventh lease year. The contractual rent for 4Q22 and 2023 is $1,000 and $4,300, respectively. Rent will increase annually beginning on the third anniversary of the lease by 2.0% to 4.0% based on the change in the Medicare Market Basket Rate. Additionally, we provided a 10-year working capital loan for up to $2,000, of which $1,867 has been funded, at 8.00% for first year increasing to 8.25% for the second year then increasing annually with the lease rate.
FINANCING RECEIVABLES
CONTRACTUAL | |||||||||||||||||||
# OF | PROPERTY | # OF | DATE OF | INITIAL | PURCHASE | ||||||||||||||
DATE | PROPERTIES | TYPE | BEDS | LOCATION | OPERATOR | CONSTRUCTION | CASH YIELD | PRICE | |||||||||||
2022 | 9/8 | 3 | SNF | 299 beds | Various cities in FL | PruittHealth | 2018-2021 | 7.25% | $ | 75,825 | (1) | ||||||||
2023 | 1/5 | 11 | ALF/MC | 523 units | Various cities in NC | ALG Senior | 1988-2018 | 7.25% | 121,321 | (2) |
- We entered into a joint venture ("JV") with an affiliate of PruittHealth, Inc. ("PruittHealth") and contributed $61,661 into the JV that purchased three skilled nursing centers from PruittHealth. The JV leased the centers to PruittHealth under a 10-year master lease, with two five-year renewal options and provided PruittHealth with a purchase option, exercisable at the beginning of the fourth year through the end of the fifth year. In accordance with GAAP, the purchased assets are required to be presented as a financing receivable on our Consolidated Balance Sheets, since the JV acquired the centers through a sale-leaseback transaction subject to a lease contract that contains a purchase option. LTC expects to receive net income of approximately $700 during 4Q22, and approximately $4,600 during 2023. See page 7 for Consolidated Joint Ventures.
- On January 5, 2023, we entered into a JV with an affiliate of ALG Senior and contributed $117,490 into the JV that purchased 11 assisted living/memory care communities from an affiliate of ALG Senior. The JV leased the communities to an affiliate of ALG Senior under a 10-year master lease, with two five-year renewal options and provided a purchase option to buy up to 50% of the properties at the beginning of the third lease year and the remaining properties at the beginning of the fourth lease year through the end of the sixth lease year, with an exit IRR of 9.0%. The contractual initial cash yield of 7.25% increases to 7.50% in year three then escalates thereafter based on CPI subject to a floor of 2% and ceiling of 4%. In accordance with GAAP, the purchased assets are required to be presented as a financing receivable on our Consolidated Balance Sheets, since the JV acquired the communities through a sale-leaseback transaction subject to a lease contract that contains a purchase option. LTC expects to record GAAP and cash interest income from financing receivables during 2023 of $9,706 and $8,518, respectively. See page 7 for Consolidated Joint Ventures.
PURCHASE OPTIONS
# OF | PROPERTY | GROSS | ANNUALIZED | OPTION | |||||||||||
STATE | PROPERTIES | TYPE | INVESTMENTS | GAAP REVENUE | WINDOW | (1) During 3Q22, we entered into a JV to purchase three skilled nursing | |||||||||
California | 2 | ALF/MC | $ | 38,895 | $ | 2,876 | 2023-2029 | ||||||||
centers. See Financing Receivable above. | |||||||||||||||
Florida | 1 | MC | 15,201 | 652 | 2029 | ||||||||||
(2) Subject to the properties achieving certain occupancy level. | |||||||||||||||
(1) | |||||||||||||||
Florida | 3 | SNF | 76,267 | 5,645 | 2025-2027 | (3) On January 5, 2023, we entered into a JV to purchase 11 assisted | |||||||||
Nebraska | 3 | ALF | 7,633 | 480 | TBD | (2) | living/memory care communities. See Financing Receivable above. | ||||||||
(4) During 2Q22, we purchased four skilled nursing centers and leased | |||||||||||||||
North Carolina | 11 | ALF/MC | 121,321 | 9,706 | 2025-2028 | (3) | |||||||||
these properties under a 10-year lease with an existing operator. | |||||||||||||||
South Carolina | 1 | ALF/MC | 11,680 | 907 | 2029 | The lease provides the operator to elect either an earn-out payment | |||||||||
Texas | 4 | SNF | 51,816 | 4,364 | 2027-2029 | (4) | or purchase option. If neither option is elected within the timeframe | ||||||||
defined in the lease, both elections are terminated. | |||||||||||||||
Total | 25 | $ | 322,813 | $ | 24,630 | ||||||||||
INVESTOR PRESENTATION | JANUARY 2023 | 5 |
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LTC Properties Inc. published this content on 19 January 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 19 January 2023 16:20:05 UTC.
