LTC Properties, Inc. (NYSE:LTC) Q4 2023 Earnings Conference Call February 16, 2024 11:00 AM ET

Corporate Participants

Wendy Simpson - Chairman and Chief Executive Officer

Pam Kessler - Co-President and Chief Financial Officer

Clint Malin - Co-President and Chief Investment Officer

Conference Call Participants

Austin Wurschmidt - KeyBanc Capital Markets

Rich Anderson - Wedbush

Michael Carroll - RBC

Connor Siversky - Wells Fargo

Operator

Greetings. Welcome to the LTC Properties, Inc. Fourth Quarter 2023 Earnings Call. [Operator Instructions].

Before management begins its presentation, please note that today's comments, including the question-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 the Securities and Exchange Commission from time-to-time, including the company's most recent 10-K dated December 31, 2023. 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 turn the conference over to Wendy Simpson.

Wendy Simpson

Thank you, operator, and welcome everybody to LTC's 2023 fourth quarter conference call. I am joined today by Pam Kessler, Co-President and Chief Financial Officer and Clint Malin, Co-President and Chief Investment Officer.

2023 was a year of solid execution. So I want to begin by recognizing our very talented LTC team. During the year, we completed $262 million in investments and generated $77 million in sales proceeds, the sales resulted in net gains totaling $37 million. Additionally, we received $11.8 million in mezzanine loan payoffs, generating $1.6 million of exit IRR income at a weighted average rate of 12%.

From an operational perspective, we successfully transitioned the Brookdale portfolio resulting in anticipated revenue of $0.5 million more than we generated from the original lease. We received full contractual 2023 interest from Prestige with expectations for full contractual payments through at least 2025. Clint will further discuss this shortly, and importantly, we significantly reduced our leverage ahead of street expectations.

From an industry perspective, demand for seniors housing is strong. Occupancy has increased for 10 consecutive quarters. And according to NIC, seniors housing occupancy rates are now on track to recover to pre-pandemic levels in the second half of this year, especially as new construction remains muted. While we are not in the prediction game, we are encouraged by what we're seeing.