LTC Raises Investment Outlook as Senior-Housing Shift Accelerates
The company lifted the midpoint of its 2026 investment outlook 50% to $900 million.
Senior-housing real estate investment trust LTC Properties (LTC) nearly doubled second-quarter profit as its operated-property business expanded. Net income available to common shareholders rose to $29.5 million from $14.9 million a year earlier, while diluted earnings increased to $0.56 from $0.32 a share.
Revenue climbed 64.1% to $98.9 million, though sequential growth slowed to 3.6% after advancing 13.2% in the first quarter and 21.6% in 2024's fourth quarter. The mix continued moving toward operated senior housing: resident fees and services rose to $56.1 million from $12.0 million a year earlier, while rental income fell 13.9% to $26.0 million.
The portfolio shift lifted companywide cash flow in aggregate, while per-share measures softened. Nareit funds from operations rose 46.6% to $34.3 million, though FFO declined sequentially to $0.66 a share from $0.72. Core FFO increased 13.0% to $35.5 million, with the per-share figure holding at $0.68 from a year earlier and slipping from $0.69 in the first quarter.
Total net operating income rose 12.8% to $54.7 million as senior housing operating portfolio, or SHOP, NOI climbed to $13.9 million from $2.5 million. That growth outweighed an 11.4% decline in real-estate-investment-portfolio NOI to $40.6 million. Core SHOP NOI increased 4.7% from the first quarter to $13.3 million.
SHOP represented 32% of total investments at June 30 and 37% at July 31, up from about 20% in 2024's third quarter. LTC now expects SHOP to account for more than 55% of gross investments by year-end, above its previous 45% projection, and nearly 50% of pro forma annualized NOI. The company set a target for the business to provide 75% of pro forma annualized NOI by the end of 2028.
LTC raised its full-year SHOP NOI forecast to between $71.2 million and $79.9 million from a prior range of $65.1 million to $77.2 million. It also expects $529 million of SHOP acquisitions to close in the third quarter after completing $171 million in the second quarter, with $208 million of the subsequent-quarter total already closed.
The expansion is being funded through asset sales, borrowing capacity and equity issuance. LTC increased its credit-facility commitments by $300 million to $1.1 billion and reported $648 million of pro forma liquidity. Its common-share count rose to 53.9 million from 48.5 million at year-end after the company issued $198.1 million of stock during the first half.
LTC expects $730 million of asset sales and loan payoffs during 2025, including $120.3 million completed through July and more than $300 million of anticipated gains. Those dispositions accompany a faster redeployment of capital toward operated senior housing, where the company projected about 14% pro forma NOI growth for its core 27-property portfolio this year.