LTC Properties, Inc. (NYSE:LTC) Q1 2023 Earnings Conference Call April 28, 2023 11:00 AM ET

Company Participants

Wendy Simpson - Chairman & CEO

Pam Kessler - CFO, Co-President & Corporate Secretary

Clint Malin - CIO & Co-President

Conference Call Participants

Austin Wurschmidt - KeyBanc Capital Markets

Connor Siversky - Wells Fargo Securities

Operator

Before management begins its presentation, please note that today's comments, including the questions and answer session, may include forward-looking statements subject to risks and uncertainties that may cause actual results and events to differ materially.

These risks and uncertainties are detailed in LTC Properties' filings with Securities and Exchange Commission from time to time, including the company's most recent 10-K dated December 31, 2022. LTC undertakes no obligation to revise or update these forward-looking statements to reflect events or circumstances after the date of this presentation. Please note this event is being recorded.

I would now like to pass the conference over to Wendy Simpson.

Wendy Simpson

Thank you, operator, and welcome, everyone to LTC's First Quarter 2023 Conference Call. I am joined by Pam Kessler, Co-President and Chief Financial Officer; and Clint Malin, Co-President and Chief Investment Officer. So far in 2023, we have put nearly $180 million to work through new investments. We have already eclipsed last year's total, which before now, was our strongest investment year since 2015. Additionally, we have generated $32 million in proceeds for property sales year-to-date, generating net gains of $15 million and reducing the average age of our portfolio.

Going forward, while there are several opportunities we are reviewing, we are cognizant of current market conditions and are prioritizing judicious capital allocation and disciplined portfolio management to identify the most appropriate opportunities. We will continue to diversify our operator base and recycle capital. Our strategy for dispositions remains unchanged, with focus on methodically divesting noncore assets and recycling capital at or around annual historical levels of $35 million to $40 million. This year, however, we may exceed that amount due to the anticipated sale of certain Brookdale portfolio properties toward the end of this year, which Clint will discuss later.

Regarding industry reimbursement, we were happy to see the proposed CMS rule for fiscal 2024 which included a net market basket increase of 3.7% for SNFs beginning October 1, 2023. At the same time, given the substantial challenges the skilled sector has been navigating through for more than 3 years, it's likely not enough to result in a much faster recovery.