DHC 2026 年第三季財報電話會議：SHOP 淨營運收入大增 50.4%，上調財測指引

重點摘要

• Diversified Healthcare Trust 公布 2026 年第三季常態化 FFO 為 3,070 萬美元，折合每股 0.13 美元，高於去年同期的每股 0.02 美元。調整後 EBITDAre 年增 28.4% 至 7,340 萬美元。
• 綜合同物業現金基礎淨營運收益 (NOI) 成長 25.6% 至 7,790 萬美元。高齡者住宅營運組合 (SHOP) 同物業 NOI 攀升 50.4% 至 4,800 萬美元，主因入住率上升 200 個基點至 84.4%，且平均月租金成長 5.2%。
• DHC 將其 2026 年 SHOP 同物業 NOI 預測中位數調升 500 萬美元，區間來到 1.9 億美元至 2 億美元。此外，亦將經常性資本支出預測中位數調降 1,000 萬美元，至 9,000 萬美元至 1.05 億美元。
• 該公司已將科羅拉多州的七家專業照護設施轉為與 The Ensign Group 簽訂的 15 年三淨租賃契約。第一年合約租金約為 800 萬美元，而過去 12 個月的 NOI 為 510 萬美元。
• 季度末流動資金為 2.61 億美元，其中包括 1.11 億美元現金及 1.5 億美元未提領的擔保循環信貸額度。淨債務對年化調整後 EBITDAre 比率從去年同期的 10.7 倍降至 8.2 倍，若扣除獎勵管理費則為 7.4 倍。
• 管理層預估，隨著營運業者縮小與各自 NIC 市場的差距，SHOP 入住率還有 500 至 600 個基點的潛在上行空間。

關鍵財務數據

自 2026 年第三季起，常態化 FFO 及調整後 EBITDAre 已包含根據 GAAP 應計之預估獎勵管理費。前期數據已按相同基準重編。本季包含 540 萬美元（即每股 0.02 美元）的應計獎勵費；今年迄今累計金額為 2,200 萬美元（即每股 0.09 美元）。管理層表示，此列報變更不影響 GAAP 財務結果或現金流量。

業務與營運表現

SHOP 仍是 DHC 的主要成長驅動力。同物業營收年增 5.8%，而營運費用基本持平。膳食採購舉措使費用較去年同期減少約 130 萬美元。

與上一季相比，SHOP 同物業 NOI 減少 400 萬美元或 7.6%。管理層將此歸因於第二季有 220 萬美元的一性費用效益未再出現、第三季約 100 萬美元的非經常性費用，以及 200 萬美元的季節性公用事業成本。若扣除這些項目，第三季同物業 NOI 將較第二季成長 2.5%。

DHC 已批准 13 個社區的專案，將未充分利用或已關閉的專業照護空間改造為約 356 個獨立生活、協助生活及失智照護單元。管理層預期穩定後的現金報酬率將達到 15% 左右或更高。工程預計於 2027 年動工，部分單元預計於該年下半年交付。

涵蓋由既存營運業者管理的 76 個 SHOP 社區之新管理協議預計於 2027 年 1 月 1 日生效。DHC 預計這些協議初期每年可節省約 200 萬美元成本，同時能使營運業者的獎勵機制與股東利益更緊密結合。

位於科羅拉多州的七家專業照護設施已於 10 月 1 日透過 15 年期三淨租賃契約移交給 The Ensign Group。該租約包含年度 CPI 物價調整機制，並將報銷、勞工及資本風險轉移給承租人。管理層表示，在形式上 (pro forma)，該結構將使第三季綜合 SHOP 利潤率提升約 80 個基點。

在醫療辦公與生命科學投資組合方面，DHC 完成了約 130,000 平方英尺的租賃，租金比先前租金高出 25%，加權平均租期為 9.7 年。因承租約 213,000 平方英尺的兩家租戶於 7 月 1 日退租後，整體投資組合出租率從第二季的 92.2% 降至 88.4%。

DHC 已達成協議，擬以 1,050 萬美元出售一處面積 126,000 平方英尺的閒置物業，並正在評估另外兩處總計約 232,000 平方英尺物業的出價。這三項資產在第三季產生的 NOI 為負 69 萬美元，折合年化約負 280 萬美元。

管理層展望

DHC 將 2026 年 SHOP 同物業 NOI 預測調升至 1.9 億美元至 2 億美元，中位數增加 500 萬美元。修訂後的展望假設條件如下：

• SHOP 營運費用成長 2.3%，低於先前的 2.5%。
• 平均月租金成長 5.6%，高於先前的 5.5%。
• 入住率成長 200 個基點，維持不變。
• 營收成長 6.3%。

更新後的全年展望亦包括：

常態化 FFO 預測包含了 2,930 萬美元（即每股 0.12 美元）的預估獎勵管理費。SHOP NOI 的增加為展望貢獻了約每股 0.02 美元，而獎勵費則使其減少每股 0.12 美元。管理層提醒，最終的獎勵費將取決於截至 12 月 31 日 DHC 相對於基準指數的總股東報酬率，且可能與截至 9 月 30 日所預提的金額有重大差異。

第四季財報預計將包含來自 Ensign 整季租金的約 200 萬美元現金 NOI。管理層表示，交易本身並非調升 SHOP NOI 預測的原因，調升反映的是 SHOP 本身更強勁的基本面表現。

風險與關注焦點

在 7 月租戶搬離後，醫療辦公與生命科學的出租率有所下降。此外，位於加州佛利蒙 (Fremont) 的一家代表 220 萬美元年化租金收入的生命科學租戶預計將於 11 月底搬離。

DHC 下一次債務到期為 2028 年 2 月到期的 5 億美元優先無擔保票據。管理層表示，鑑於擁有 40 億美元的未抵押資產、改善中的 SHOP 現金流以及更強健的信用指標，公司已有能力處理該到期債務。

針對性的入住優惠有助於加速提高 SHOP 入住率，但使平均月租金與上一季持平。管理層預期偏高的優惠不會長期持續，並預計隨著社區趨於穩定，租金成長將變得更加明顯。

預估獎勵管理費的預提金額可能會隨 DHC 的股價及相對總股東報酬率按季波動，進而導致常態化 FFO 與調整後 EBITDAre 出現變動。

分析師問答亮點

管理層指出，經常性資本支出在 2027 年及 2028 年可能會進一步下降，長期目標為接近每單元 3,000 美元。

資本配置仍聚焦於 DHC 的現有投資組合，特別是專業照護側廂的轉型改造。處分資產所得款項可用於再投資或降低負債比率，而併購的優先順序較低。管理層表示，目前的流動性（包含未提領的 1.5 億美元信貸額度）足以支援計畫中的投資。

第三季約 100 萬美元的非經常性費用包括銷售及使用稅結算調整 (true-ups) 以及偏高的呆帳。管理層預期這些項目不會在第四季或之後再次發生。

管理層表示，入住優惠採取選擇性實施，而非全投資組合的永久策略。管理層預計 2027 年租金將持續改善，並將進一步受益於費用削減與營收舉措。

完整法說會逐字稿

完整財報電話會議逐字稿

管理層陳述

Operator

Good morning, and welcome to the Diversified Healthcare Trust Third Quarter 2026 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Matthew Murphy, Manager of Investor Relations. Please go ahead.

Matt Murphy

Good morning. Joining me on today's call are Chris Pilato, President and Chief Executive Officer; and Matt Brown, Chief Financial Officer and Treasurer. Today's call includes a presentation by management followed by a question-and-answer session with sell-side analysts.

Please note that the recording and retransmission of today's conference call is strictly prohibited without the prior written consent of the company. Today's conference call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws.

These forward-looking statements are based upon DHC's beliefs and expectations as of today, Tuesday, November 3, 2026. The company undertakes no obligation to revise or publicly release the results of any revision to the forward-looking statements made in today's conference call. other than through filings with the Securities and Exchange Commission, or SEC.

Actual results may differ materially from those projected in any forward-looking statements. Additional information concerning factors that could cause those differences is contained in our filings with the SEC. Investors are cautioned not to place undue reliance upon any forward-looking statements.

In addition, this call may contain non-GAAP numbers, including normalized funds from operations or normalized FFO, net operating income or NOI, cash basis net operating income or cash basis NOI and adjusted EBITDAre. A reconciliation of these non-GAAP measures to net income is available in our financial results package which can be found on our website at www.dhcreit.com.

Beginning this quarter, our calculation of normalized FFO and adjusted EBITDAre include estimated incentive management fees accrued under GAAP, and prior periods have been recast to conform to this presentation. And finally, we will be providing guidance on this call, including NOI.

We are not providing a reconciliation of these non-GAAP measures as part of our guidance because certain information required for such reconciliation is not available without unreasonable efforts or at all. such as gains and losses or impairment charges related to the disposition of real estate. With that, I would now like to turn the call over to Chris.

Michael Kodesch

Thank you, Matt. Good morning, everyone, and thank you for joining our call today. Our third quarter results reflect continued execution on the strategy we have laid out for the year. That strategy shows up across stronger operating results in our SHOP portfolio, active optimization of how we own and operate individual assets and a steadily improving financial profile.

Following the market close yesterday, DHC reported normalized FFO of $30.7 million or $0.13 per share and adjusted EBITDAre of $73.4 million, an increase of 28.4% year-over-year. Same property cash basis NOI increased 25.6% to $77.9 million and consolidated NOI increased 27.5% to $80.8 million.

Before going further, I want to note a change in our presentation Beginning this quarter, adjusted EBITDA and normalized FFO include incentive management fees as recognized under GAAP and prior periods have been recast on the same basis.

On a comparable basis, normalized FFO increased from $0.12 per share in the second quarter and from $0.02 per share a year ago and adjusted EBITDA increased both sequentially and year-over-year. The momentum in our portfolio is also reflected in our outlook. Today, we are raising our same-property shop NOI guidance by $5 million at the midpoint and lowering our expected SHOP recurring capital expenditures by $10 million.

Matt will walk through the full guidance update, including the effect of the incentive management fee change. Let me start with our shop segment. Same property NOI increased 50.4% year-over-year to $48 million, this growth was driven by a 200 basis point increase in occupancy to 84.4% and a 5.2% increase in average monthly rate which together expand same-property NOI margin by 470 basis points to 15.8%.

We used targeted move in incentives this quarter to accelerate occupancy which kept average monthly rate flat sequentially. As communities stabilize, we expect to reduce these concessions and allow rate growth to flow through more fully. Expense discipline also continues with our dietary procurement initiatives contributing to an expense reduction by approximately $1.3 million compared with the prior year.

Importantly, we believe significant embedded upside remains with same-property occupancy at 84.4%, we estimate 500 to 600 basis points of occupancy upside as our operators close the occupancy gaps between our communities and their respective NIC markets. Beyond occupancy, we continue to reposition underutilized and close skilled nursing weeks into independent living, assisted living and memory care units.

We have now approved projects across 13 communities that we expect will add approximately 356 units. We expect these investments to generate stabilized cash returns in the mid-teens or better while converting vacant space into revenue-generating units.

Finally, we are putting new management agreements in place across 76 shop communities that are managed by our legacy operators. Implementation is expected on January 1, 2027. These agreements extend the operator framework we initiated across our transition communities in 2025, including more closely aligned incentive structures and appropriately sized base management fees.

We expect them to initially generate approximately $2 million of annual cost savings while further aligning operator incentives with shareholder interests. Turning to our portfolio optimization strategy. Over the past 2 years, DHC has repositioned its portfolio through asset sales, operator transitions and targeted capital investment.

With much of that foundation in place, we are increasingly focused on optimizing individual assets. The clearest example this quarter is our transition of 7 skilled nursing facilities in Colorado to a 15-year triple-net lease with the Ensign Group effective on October 1.

This transition does 2 primary things for us. First, it increases cash flow. First year contractual rent is approximately $8 million with CPI annual escalators, which compares with $5.1 million of NOI over the prior 12 months or about $3.5 million after capital expenditures. Second, it sharpens our SHOP portfolio.

Skilled nursing relies primarily on government reimbursement and is a more labor-intensive which is why these facilities generated only about a 5.8% margin for the quarter. Skilled nursing is also more commonly under triple net leases with specialized operators. The new structure shifts reimbursement, labor and capital exposure to the tenant leads our shop portfolio more focused on private pay senior housing and on a pro forma basis, would have lifted our third quarter consolidated shop margin by about 80 basis points.

We are applying the same asset-by-asset approach to operator alignment. In September, we provided notice to transition 6 shop communities in Georgia, representing 486 units to a new manager, which we expect to begin as early as the fourth quarter. This consolidates these communities with an operator that has deep regional expertise and fits the operator framework we have built across our transition portfolio. We look forward to working closely with them to ensure a seamless transition.

Turning to our medical office and life science portfolio. Leasing activity remained healthy during the quarter. We completed approximately 130,000 square feet of leasing at rental rates 25% above prior rents with a weighted average lease term of 9.7 years. As discussed on our second quarter earnings call, 2 tenants representing approximately 213,000 square feet vacated on July 1, and and total occupancy declined to 88.4% from 92.2% in the prior quarter.

Near-term expirations are limited. Through year-end, $3.3 million of annualized rental income or 2.1% of the total is scheduled to expire. This includes $2.2 million from a life science tenant in Fremont, California that we expect to vacate at the end of November and we are actively marketing that space for lease.

The portfolio's weighted average remaining lease term was approximately 5.1 years at quarter end. As part of our capital recycling efforts, we are actively pursuing disposition opportunities. As of yesterday, we were under agreement to sell 1 vacant property consisting 126,000 square feet for $10.5 million, and we are valuing offers on 2 additional properties totaling approximately 232,000 square feet.

Together, these 3 properties generated negative NOI of $690,000 during the quarter or nearly $2.8 million annually, selling them eliminate that drag and provides capital for reinvestment. Looking ahead, our path to earnings growth is embedded in our existing portfolio. Several drivers are already in motion for 2027, a full year rent from the Ensign lease approximately $2 million of annual savings from our new shop legacy management agreements effective January 1, skilled nursing ROI conversion projects, adding approximately 350 units and the sale of nonearning medical office properties.

Most significant is the continued improvement in shop occupancy and rate on rate concessions normalize. Our third quarter results show this strategy is working with stronger shop operations, active optimization of individual assets and improving financial profile and a higher shot NOI outlook for the year.

These results are clearly resonating with investors at DHC has been the top-performing REIT in the U.S. over the past 3 years, with a total shareholder return in excess of 277% and we remain confident in our trajectory and in our ability to deliver sustainable earnings growth and long-term value for our shareholders. With that, I'll turn the call over to Matt.

Matthew Brown

Thanks, Chris, and good morning, everyone. Before I review our results, I would like to walk through a change to how we present our non-GAAP financial measures. The SEC recently provided its interpretation that incentive management fees accrued under GAAP should be included in normalized FFO and adjusted EBITDAre.

Historically, we excluded the incentive fee in these measures. While we believe our prior approach was appropriate and supported period-to-period comparability, we have adopted the SEC's interpretation and changed our presentation. Beginning this quarter, normalized FFO, adjusted EBITDAre and CAD include estimated incentive management fees as they are accrued under GAAP, and we have recast prior periods to conform.

To be clear, this is a change in presentation only. It does not affect our GAAP results or our cash flows, and it does not change how the incentive fee is calculated or the amount, if any, that would ultimately be payable to RMR because the fee is based on DHC's total shareholder return relative to a benchmark index over a 3-year period ending December 31, the accrual will fluctuate from quarter-to-quarter with our share price.

For the third quarter, normalized FFO and adjusted EBITDA include $5.4 million or $0.02 per share of accrued incentive fees, and year-to-date, we have accrued $22 million or $0.09 per share. Page 8 of our earnings presentation includes a bridge to previously issued guidance. We believe this bridge will assist our investors with comparability between our revised normalized FFO and adjusted EBITDA calculations from prior guidance.

During the third quarter, our normalized FFO was $30.7 million or $0.13 per share, and our adjusted EBITDA was $73.4 million, representing a 28.4% increase year-over-year. Our third quarter results continue to show the earnings power of our SHOP assets, the cash-generating ability of our business and a significantly stronger balance sheet than a year ago.

During the third quarter, consolidated same-property cash basis NOI was $77.9 million, a 25.6% increase year-over-year, Shop continues to drive this growth with same-property NOI increasing 50.4% year-over-year to $48 million and same-property NOI margin expanding 470 basis points to 15.8%. This improvement came from both the top line and expense side.

Same property shop revenue increased 5.8% year-over-year, driven by a 200 basis point increase in occupancy to 84.4% and and 5.2% growth in average monthly rate. At the same time, same property operating expenses were essentially flat year-over-year and expense core declined 30 basis points as our operators continue to capture the dietary maintenance and labor savings we discussed last quarter.

Sequentially, Shop Same property NOI decreased $4 million or 7.6%, driven by second quarter results that included approximately $2.2 million of onetime expense benefits that did not recur. Additionally, the third quarter includes approximately $1 million of nonrecurring expenses and $2 million of higher utility costs due to typical seasonality.

Excluding these items, third quarter same property NOI would have been 2.5% higher than the second quarter. Importantly, same property occupancy increased 130 basis points sequentially, our largest quarterly gain this year, which supports our view that the occupancy ramp on our transition communities is well underway. In our medical office and life science portfolio, same-property cash basis NOI was $22.9 million, a 1.6% decrease year-over-year.

This primarily reflects the previously disclosed tenant who vacated effective July 1 and which also drove the 120 basis point sequential decline in same-property occupancy to 94.5%. Third quarter G&A expense of $14.6 million includes $5.4 million of estimated incentive management fees, as I've discussed, and $2.2 million of noncash share-based compensation.

Excluding these items, G&A was $7 million, consistent with the second quarter. During the quarter, we invested $28.9 million of capital, including $22.6 million into our shop communities and $6.3 million into our medical office and life science portfolio. Year-to-date spending of $76.5 million is $32.1 million or approximately 30% lower than the same period in 2025.

We are reducing our 2026 recurring CapEx guidance by $10 million at the midpoint to $90 million to $105 million. At quarter end, we had total liquidity of $261 million, including $111 million of cash our undrawn $150 million secured revolving credit facility. Net debt to annualized adjusted EBITDAre was 8.2x, a 2.5x reduction from a year ago. This calculation now includes incentive fees, which added 0.8x, excluding them, leverage was 7.4x, within our 6.5 to 7.5x target range.

Adjusted EBITDAre to interest expense improved to 2x from 1.2x a year ago, and we remain comfortably in compliance with all of our bond covenants. Our next debt maturity is our $500 million of senior unsecured notes due February 2028 with $4 billion of unencumbered assets representing over 64% of our portfolio, growing SHOP cash flow and steadily improving credit metrics we believe we are well positioned to address this maturity.

Turning to full year 2026 guidance. Excluding the presentation change regarding estimated incentive fees, we are raising our SHOP same-property NOI guidance by $5 million at the midpoint to $190 million to $200 million, and that increase flows through to adjusted EBITDA and normalized FFO.

The increase reflects lower expected operating expense growth of 2.3% compared with 2.5% previously an average monthly rate growth of 5.6%, up from 5.5% and with occupancy growth unchanged at 200 basis points and revenue growth of 6.3%. It should also be noted that for the 9 months ended September 30, same-property shop NOI was $144.3 million.

Separately, adjusted EBITDAre and normalized FFO guidance now includes estimated incentive management fees of $29.3 million or $0.12 per share. Netting the 2, normalized FFO guidance moves to $0.46 to $0.52 per share from $0.56 to $0.62, up $0.02 from the SHOP NOI increase and down $0.12 for the estimated incentive fee.

The final amount, if any, will be based on our total return relative to the benchmark index through December 31 and could differ materially from the amount accrued as of September 30. Updated guidance ranges are as follows: $2 million to $328 million of same-property NOI, adjusted EBITDAre of $276 million to $291 million, normalized FFO of $111 million to $126 million or $0.46 to $0.52 per share and recurring capital expenditures of $90 million to $105 million which is a reduction of $10 million at the midpoint, as I previously discussed.

Fourth quarter results will also include a full quarter of Ensign Rent for the 7 skilled nursing facilities, which will contribute approximately $2 million of cash NOI. We are confident in our updated full year guidance, and we are building momentum into 2027. We will share our 2027 guidance on our next earnings call which will include changes to our shop segment, mainly driven by the 7 skilled nursing facilities now leased to Ensign being presented in our -- all Other segment. That concludes our prepared remarks. Operator, please open the line for questions.

Operator

[Operator Instructions] Our first question today is from Henry Newell with RBC Capital Markets.

分析師問答

Unknown Analyst

Just hoping you could touch on the updated CapEx outlook briefly. Should we expect really this updated outlook to be a run rate moving forward into '27 and '28. Or is there any reason why we should expect recurring CapEx to decrease in '27 and '28.

Unknown Executive

Yes, it's a good question. I could see it decreasing a little bit into 2027 and 2028. We've been targeting closer to 3,000 per unit as we look forward. So we do expect that to continue to kind of come down as it has been over the last few years.

Michael Kodesch

Wonderful. And then just more generally, how are you viewing your different sources of capital at the moment? Is the current leverage profile and ongoing concern? And do you think you'll continue to finance CapEx or maybe any acquisitions with dispositions or something else moving forward? .

On the latter part of the question, I think right now, most of the investment we plan to make is within the existing portfolio. We've talked about the conversion of closed skilled nursing wings and that being kind of a priority given the returns that come from that profile. So that will be kind of top priority.

We are selling some assets, which we highlighted. I don't think the overall proceeds are overly material, but nonetheless, that will provide optionality for reinvestment to either delever or again, that's part of the flow skilled nursing wing strategy and then maybe in kind of small select cases considering whether or not acquisition makes sense, but I think that's kind of last aligned. So right now, it's really focused on the existing portfolio and kind of the embedded upside opportunities that we see and then Matt.

Yes. Just to add to that on leverage, leverage has been on a nice decline as we've seen the SHOP performance significantly improve over the last 15 to 18 months, and our trajectory should prove that, that will further decline as we move beyond 2026.

And as it relates to just kind of capital and liquidity for the things that we're focused on, which, as Chris mentioned, is mostly in our existing portfolio. We have adequate liquidity to continue making those investments. We have the $150 million credit facility. We have not drawn on that. So that produces us with sufficient liquidity for us.

Operator

[Operator Instructions] The next question is from John Massoca with B. Riley.

Unknown Analyst

Maybe just a quick clarification. With regards to the FLIR 26 guidance, does that include the positive impact you're expecting to NOI from the Ensign transaction?

Michael Kodesch

Yes. I mean it's factored in that we're going to receive $2 million in the fourth quarter. For the 9 months ended September, we've received a little bit over $4 million of NOI there. So there's some moving pieces as it relates to the change, but it is included. Is that part of where the increased shop NOI expectations are coming? Or is that something that was maybe kind of previously contemplated in the guide?

No, it's unrelated to that change in structure. -- on those skilled nursing facilities. But we've been trending towards the higher end of our SHOP NOI guidance for the first several quarters. And we're just shy of $145 million year-to-date through 9 months. So we really have added conviction in our SHOP results, and that's really the driver of the $5 million increase to the guide on this call. .

Unknown Executive

And John, I would just add that going back to the enzyme. The proceeds from the lease we get for the quarter in Q4 is more or less equivalent to what we would have gotten under the RIDEA. So as Matt alluded to, that's a wash. And again, the upside is more just performance base, which is driving the guidance.

Alexander Kubicek

Okay. In terms of the one-timers in 3Q, can you just provide a little more color on what those were? And are those things that we should expect to occur seasonally in 3Q going forward? Or was it just kind of really onetime events?

Unknown Executive

No, they were largely onetime events. It was about $1 million in total. We had some sales and use tax true-ups and a little bit of elevated bad debt. But we don't expect those to recur into Q4 or beyond.

Unknown Analyst

Okay. And then as you think about occupancy versus rate. I mean, should we expect some of these strategies using concessions to kind of promote occupancy before you push rate to continue going forward? Is that something that we can see kind of the next couple of quarters? Or is this kind of really a onetime situation based on an opportunity operator saw or something else in the market?

Unknown Executive

Yes, it's a mix. I mean, look, the concession piece is more hand-to-hand combat on certain assets to drive strategy. It's just -- it's more pronounced now as we think about where we see the opportunity. I don't envision this being something that continues long term. I think this is kind of incremental, and we will continue to see rate lift across the portfolio.

And so I think, generally speaking, we would expect to see at least the same lift we got in 2026. And again, we've also talked about a variety of different strategies we're finding with respect to expense reduction levels of care on the revenue side. So there's kind of a whole suite of different initiatives that we continue to work through, which will be more pronounced as we go into 2027.

Unknown Analyst

Okay. And then last 1 for me. In terms of some of the redevelopment potential within the portfolio, has any of that started? I mean, has there been any spend yet on that? I guess that wouldn't show up in the recurring CapEx guide, right? So are you in process on any of those projects? Or are those still primarily kind of 27 starts?

Unknown Executive

They are all '27 starts. Any spend this year is really soft costs related to design and consultants, but kind of the swinging of hammers will commence next year, and then we'll start to see delivery of some of those towards the back half of the year.

Operator

[Operator Instructions] It is showing no further questions. This concludes our question-and-answer session. I would like to turn the conference back over to Chris Bilotto for any closing remarks.

Christopher Bilotto

Well, thank you for joining our call today. We look forward to seeing many of you at the NAREIT conference in Atlanta this November. That concludes our call.

Operator

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.