LTC Properties (NYSE:LTC) said it is accelerating its transition toward a seniors housing operating portfolio, raising its 2026 SHOP acquisition guidance by 50% to $900 million at the midpoint while planning substantially higher asset dispositions and loan payoffs.
Co-President and Co-Chief Executive Officer Pam Kessler said the company expects to have closed $700 million of SHOP, or seniors housing operating portfolio, acquisitions by the end of September. By that point, SHOP is expected to account for 40% of pro forma annualized net operating income, ahead of LTC’s prior timetable. The company expects SHOP to reach 50% of annualized NOI by year-end through its acquisition pipeline, redeployment of proceeds from the Prestige loan payoff, and sales of lower-growth investments.
Expanded acquisitions and portfolio recycling
Chief Investment Officer Dave Boitano said LTC had closed about $400 million of SHOP acquisitions from the beginning of the year through the end of July. It expects to close another $300 million by the end of the third quarter and roughly $200 million more before year-end.
The $700 million in acquisitions expected to close by the end of September have an average age of nine years, with 76% in primary markets as designated by the National Investment Center for Seniors Housing & Care. The communities average about 110 units, and nearly 60% offer a continuum of care across independent living, assisted living and memory care, according to Boitano.
Boitano said the company is targeting communities with characteristics that support durable performance, including asset quality, size, unit mix and market dynamics. He added that LTC has focused on relationships with operating partners, sellers and intermediaries to support its acquisition pipeline.
Co-President and Co-CEO Clint Malin said SHOP gross investments are expected to exceed $1.3 billion by the end of the third quarter, compared with a starting platform of 13 communities with a $175 million gross book value when the company launched SHOP 15 months ago. About 80% of the segment’s growth has been external, he said.
During the question-and-answer session, management said it expects acquisitions to generate low- to mid-teens internal rates of return and described the assets as stabilized rather than value-add investments. Malin said the portfolio has been designed around newer, larger campuses with the ability to grow revenue through pricing, particularly amid current supply constraints.
Dispositions and Prestige payoff
LTC increased its 2026 expectation for dispositions and loan payoffs to $730 million, or $465 million above its previous guidance. Executive Vice President of Asset Management Gibson Satterwhite said the company expects a 5.5% cap rate on rent from the incremental $465 million of sales and a 7.3% blended rate on total proceeds for the year.
About two-thirds of the incremental sales are expected to involve skilled nursing properties, bringing anticipated skilled nursing proceeds to $570 million at a blended 7.5% rate. LTC also expects to sell $160 million of triple-net seniors housing assets at a 6.5% cap rate on current rent.
The total includes $180 million from the expected payoff of the Prestige loan, which LTC now models for Oct. 1. Satterwhite said the revised timing reflects the HUD process, but management expects the transaction to close this year. He said HUD had provided final commitments to Prestige for most properties, with a few remaining, and that the borrower’s performance remained strong relative to HUD underwriting metrics.
Management said many skilled nursing transactions involve existing operators or their affiliates. Satterwhite said the sales can allow operators to control the assets’ future upside while enabling LTC to monetize value and redeploy capital into higher-growth SHOP investments. Malin said skilled nursing NOI is expected to fall to the low-20% range of the portfolio by year-end, down sharply from more than 50% a year earlier.
SHOP operating trends
LTC’s core SHOP portfolio produced $13.3 million in second-quarter NOI, compared with $12.9 million of pro forma NOI in the first quarter. The company continues to expect midpoint pro forma growth of 14% in the core SHOP portfolio compared with 2025.
Satterwhite said LTC raised its RevPAR assumption by 50 basis points because of pricing strength during the first half and additional rate increases planned for the second half. Occupancy was about 89.7% year to date, matching the year-earlier level and running about 90 basis points below the company’s internal expectations, though it was about 145 basis points above last year’s level on a year-over-year basis.
The portfolio includes 27 properties and has a relatively high concentration of standalone memory care communities, which accounted for about 32% of units. Satterwhite said this composition can lead to more quarter-to-quarter variability. Management said occupancy accelerated late in the second quarter and that it was encouraged by the start of the third quarter, while not assuming the same sharp second-half occupancy ramp seen last year.
Financial position and guidance
Chief Financial Officer and Treasurer Cece Chikhale said LTC expanded its credit facility by $300 million, bringing its unsecured revolving credit line to $900 million. The company also expects to enter a new at-the-market equity agreement in the third quarter.
During the second quarter, LTC sold 4.1 million common shares through its ATM program, generating $155 million in net proceeds to pre-fund SHOP acquisitions. Pro forma liquidity was $648 million at quarter-end. Debt to annualized adjusted EBITDA for real estate was 4.2 times, while annualized adjusted fixed-charge coverage was 4.9 times.
Core FFO per share was $0.68 in the second quarter, unchanged from the same period of 2025. Core FAD per share was $0.70, down from $0.71 a year earlier. Chikhale attributed the FAD decline to a higher weighted average diluted share count, reduced income from skilled nursing sales and loan payoffs, and higher interest expense, partly offset by higher SHOP NOI and interest income from loans.
LTC narrowed its 2026 outlook, projecting core FFO per share of $2.76 to $2.78 and core FAD per share of $2.83 to $2.85. The forecast incorporates the $900 million SHOP acquisition midpoint, expected total SHOP NOI of $71 million to $80 million, approximately $4 million of FAD capital expenditures, and $730 million of asset-sale and loan-payoff proceeds.
About LTC Properties (NYSE:LTC)
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.
