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LTC Properties Gears Up for Active Investment Year as Market Continues to ‘Favor REITs’

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A wall of debt maturities this year and other market conditions has leaders at LTC Properties (NYSE: LTC) feeling good about the year ahead with regard to new investments.

“Market fundamentals currently favor REITs, with billions of dollars of financing maturities coming due, interest rates in flux and banks being more selective about their investments,” LTC CEO Wendy Simpson said during the company’s fourth-quarter earnings call Friday.

She added that LTC has “prepared for this environment” by building more creative financing structures, “including those with shorter maturities.” And the company is starting the year with a “stronger, more diversified portfolio.”

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“We believe LTC creativity and flexibility makes it easier for us to act quickly by providing customized financing solutions based on an operators’ needs,” Simpson said

Last year, the company executed investments totaling $262 million and generated $77 million in sales proceeds, according to Simpson.

Highlights in the year included re-leasing the company’s 35-community master lease with Brookdale (NYSE: BKD), which management noted through new leases and pre-investing sales proceeds “more than fully” replaces income generated from the original lease.

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“We successfully transitioned the Brookdale portfolio, resulting in anticipated revenue of half a million dollars more than we generated from the original lease,” Simpson said.

During the fourth quarter, LTC also made progress transitioning the 12-property portfolio it temporarily gave to operator ALG Senior in 2022. LTC sold two communities last year and entered into an agreement to sell five other properties.

Two communities are being managed by a new LTC Properties partner, Legacy Senior Living.

For the year ahead, the company is working to rebuild its pipeline with “creative and strategic investments, with the majority of the company’s investments in 2024 “expected to be back-end loaded,” according to Co-President and Chief Investment Officer Clint Malin.

“Maturities will likely be in the billions of dollars this year, and in many cases, banks are highly selective and only will work with existing customers that are willing and able to put up higher reserves,” Malin added. “The bottom line for LTC is that we believe we are in a good position to grow and further diversify our portfolio.”

LTC Properties share price was relatively flat Friday, landing at $31.51 when the financial markets closed.

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