John Masoka

John Masoka with B. Riley asked about the cadence of NOI growth for 2026, specifically whether it would be back-half weighted due to new operator transitions. He sought clarification on the 300 basis points of occupancy growth guidance, the drivers of sequential decline in Q4 SHOP rental revenue, and the implied margin expansion for 2026. Additionally, he inquired about the prospects for leases expiring in 2026 within the MOB and life science portfolio and the potential weighting of future opportunistic dispositions towards the MOB/life science segment.

Answer

President and CEO Christopher Bilotto explained that NOI growth in 2026 would be a blend, with occupancy growth more back-half weighted due to sales season, while RevPOR growth would see an early-year push from rate increases. He confirmed the 300 basis points occupancy growth guidance refers to full-year average occupancy compared to the prior full-year average. Christopher Bilotto attributed the Q4 sequential decline in SHOP rental revenue to asset sales and a slight slowdown during operational transfers, noting this "noise is now behind us." He projected close to 200 basis points of same-store margin improvement for 2026. Regarding MOB and life science, he detailed two significant known vacates in Minnesota and Fremont, California, expressing more optimism for re-leasing the Fremont property due to its strong R&D market. Christopher Bilotto also indicated that future opportunistic dispositions, while not specifically identified, would likely lean more towards the MOB and life science portfolio, given the extensive SHOP sales already completed.