LTC Properties Lifts 2026 Investment Midpoint as SHOP Portfolio Expands

LTC Properties, Inc. (NYSE: LTC) expanded its seniors housing operating portfolio in the third quarter of 2026 and increased the midpoint of its full-year gross investment estimate to $1.0 billion from $900 million, reinforcing a portfolio shift toward owned seniors housing and away from skilled nursing and mortgage loan exposure. The company also reported higher Core FFO and Core FAD, while GAAP earnings were boosted by a substantial gain on real estate sales.

LTC reported third-quarter net income attributable to stockholders of $348.1 million, or $6.39 per diluted share, compared with a net loss of $20.0 million, or $0.44 per share, a year earlier. The latest quarter included a $323.9 million net gain on real estate sales, making the GAAP comparison less reflective of underlying operations.

Core funds from operations available to common stockholders rose to $38.7 million from $32.0 million. Diluted Core FFO increased to $0.71 per share from $0.69. Core funds available for distribution reached $39.5 million, or $0.73 per diluted share, compared with $33.6 million, or $0.72 per share, in the prior-year quarter.

Total revenue increased to $115.2 million from $69.3 million, led by growth in resident fees and services as LTC expanded its Seniors Housing Operating Portfolio, or SHOP. Resident fees and services rose to $70.5 million from $22.2 million. Rental income declined slightly to $27.5 million from $27.8 million, primarily because of property sales and the conversion of 18 communities from triple-net leases to SHOP, partly offset by a one-time lease termination fee, market-based rent resets, contractual escalations and capital improvement funding.

SHOP Expansion Drives Portfolio Transformation

LTC’s total SHOP portfolio ended the quarter with 46 properties and 4,097 units, up from 21 properties and 1,577 units a year earlier. Third-quarter SHOP revenue was $70.5 million, operating expenses were $50.8 million and net operating income was $19.7 million. Average occupancy reached 88.6%, while the NOI margin was 28.0%.

The company’s core SHOP portfolio, which consists of 27 properties and 2,281 units acquired or converted through the first quarter of 2026, generated $14.0 million of NOI in the third quarter, up from $13.3 million in the second quarter. Core portfolio occupancy increased sequentially to 91.0% from 90.0%, and the NOI margin rose to 27.9% from 26.9%.

Management narrowed 2026 core SHOP NOI guidance to $53.5 million to $55.5 million. At the midpoint, the projection represents about 13% growth over 2025 pro forma NOI. The company expects core portfolio occupancy to increase by approximately 70 basis points from the 2025 pro forma average of about 89.7%, with revenue per occupied room projected to rise about 5.1% and expense per occupied room expected to increase about 2.8%.

Total 2026 SHOP NOI guidance, including expected net investments, was narrowed to $73.5 million to $76.4 million from $71.2 million to $79.9 million. The midpoint is $500,000 below the prior midpoint.

LTC’s pro forma portfolio as of September 30, adjusted for third- and fourth-quarter acquisitions and other subsequent activity, included 168 properties with $3.01 billion of gross investment. Seniors housing accounted for 80.5% of pro forma gross investment and 65.8% of trailing-12-month NOI. SHOP alone represented 52.6% of gross investment and 34.3% of NOI.

Under the company’s broader transformation plan, pro forma 2026 annualized NOI from seniors housing is expected to account for 79% of the total, up from 43% in 2024, while skilled nursing’s share is expected to decline to 20% from 57%. Owned investments are expected to generate 90% of annualized NOI, compared with 76% in 2024, while mortgage loans are projected to account for 9%, down from 20%.

Investment and Funding Plans

LTC increased the midpoint of its 2026 gross investment estimate by $100 million to $1.0 billion. The estimate includes transactions already completed and those expected to close during the fourth quarter.

The company expects $730 million of gross proceeds from property sales and loan repayments in 2026. It had received $550.2 million through September, with the remaining $179.8 million expected in the fourth quarter. LTC also reported approximately $296 million of net proceeds from sales under its at-the-market equity program through October. Additional investments are expected to be funded with proceeds from asset sales, loan repayments, equity issuance and borrowings under its revolving credit facility.

Pro forma debt totaled $963.1 million, with debt equal to 28.0% of enterprise value and 4.4 times annualized adjusted EBITDAre. After a post-quarter repayment, LTC had $409.9 million outstanding and $490.1 million available under its unsecured revolving credit line.

Full-Year Outlook and Risks

For 2026, LTC expects diluted earnings of $7.80 to $7.82 per share, diluted Nareit FFO of $2.82 to $2.84, diluted Core FFO of $2.76 to $2.78 and diluted Core FAD of $2.83 to $2.85. General and administrative expense guidance was narrowed to $33.1 million to $33.9 million, while expected transaction costs increased to a range of $3.6 million to $3.8 million.

The outlook depends on the timing and completion of acquisitions, property sales and loan repayments. LTC also identified risks tied to its newer SHOP segment, including reliance on third-party operators, operating and legal liabilities, inflation, regulatory requirements and the availability of replacement operators. Other uncertainties include operator financial difficulties, potential investment impairments, the adequacy of loan collateral and access to capital.