LTC Properties expects its investments in 2025 to reach $460 million, up from $400 million. That’s a 15% increase.
The move is driven by significant growth in the Westlake, CA-based real estate investment trust’s senior housing operating portfolio, or SHOP, the REIT announced Monday.
“We are on track to invest $460 million this year and are continuing to actively expand our investment pipeline. By successfully executing on our strategic investment strategy, LTC is driving a significant business transformation,” co-President and co-CEO Clint Malin said in a statement.
“As a result, we are expanding our opportunity set, reducing our exposure to skilled nursing, and adding newer, stabilized properties to our portfolio, all while driving rapid and meaningful growth. This growth remains front and center as we work to deliver ongoing and increasing value for our stakeholders,” he said.
After increasing its investment pipeline in the first quarter to $300 million, the REIT increased its pipeline to $400 million in the second quarter as it works to more than double the size of its SHOP segment and add new operators. Malin said during LTC’s second-quarter earnings call last month that the company is focused on increasing the size of the SHOP by acquiring newer properties with strong operating partners.
LTC’s investment guidance of $460 million includes approximately:
- $135 million of investments closed to date, including $35 million in SHOP investments;
- $235 million of SHOP investments expected to close in the next 30 days; and
- $90 million of SHOP investments expected to close subsequent to the end of the third quarter.
The company said it plans to fund the new investments through its recently expanded line of credit, proceeds from previously disclosed property sales and loan payoffs occurring in the second half of 2025, and proceeds from sales of common stock under its at-the-market offering.
Since the end of the second quarter, the REIT originated a $58 million, five-year loan secured by two senior living communities in California, at an interest rate of 8.25%.
LTC Properties has been focused on building up a portfolio of newer senior living communities this year as it sheds the older skilled nursing facilities in its portfolio. Driven by the strength of its SHOP activity, the company’s portfolio will shift from a roughly equal balance of private-pay senior living and skilled nursing to a 65% to 35% split in favor of SHOP. The changes will mean that the overall portfolio’s skilled nursing concentration is the lowest in the company’s history.
“We have built significant SHOP traction since its launch less than six months ago with the cooperative conversion of existing triple net leases,” co-CEO Pam Kessler said. “Since that time, we have substantially grown SHOP through accretive acquisitions, while shifting toward newer seniors housing communities, and building relationships with operating partners new to LTC.”