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Introduction & Market Context
American Healthcare REIT (NYSE:AHR) reported strong second-quarter 2025 results, continuing the momentum seen in Q1. The healthcare REIT, which specializes in senior housing, medical office buildings, and skilled nursing facilities, saw its stock trading near $39.86 as of August 7, 2025, representing a 0.53% increase on the day and continuing its impressive performance that has seen the stock gain 139.54% over the past year.
The company’s diversified healthcare real estate portfolio continues to benefit from favorable demographic trends in the senior housing market and strategic positioning across multiple segments. AHR’s portfolio is concentrated in four main segments: Integrated Senior Health Campuses (ISHC), Outpatient Medical (TASE:BLWV) (OM), Senior Housing (NASDAQ:DHC) Operating Properties (SHOP), and Triple-Net Leased Properties.
As shown in the following portfolio overview chart, ISHC represents the largest segment at 61.3% of consolidated annualized cash NOI, followed by Outpatient Medical at 17.0%, SHOP at 13.6%, and Triple-Net Leased Properties at 7.0%:
Quarterly Performance Highlights
American Healthcare REIT reported impressive financial results for Q2 2025, with Diluted NAREIT FFO per share increasing 28.1% year-over-year from $0.32 to $0.41. Similarly, Diluted Normalized FFO per share grew 27.3% from $0.33 to $0.42.
The company’s same-store NOI performance was particularly strong, with overall growth of 13.9% compared to Q2 2024. This growth was driven primarily by the ISHC segment, which saw an 18.3% increase, and the SHOP segment, which delivered an impressive 23.0% growth. The Outpatient Medical and Triple-Net Leased Properties segments both contributed more modest growth of 1.4% each.
The strong performance in the senior housing segments aligns with comments made during the Q1 earnings call, where CEO Danny Prostke expressed confidence in the company’s ability to navigate higher expenses and inflation, stating, "We are very well positioned for higher expenses and higher inflation."
Detailed Financial Analysis
The Integrated Senior Health Campuses (ISHC) segment, which represents AHR’s largest revenue source, showed strong financial performance in Q2 2025. The segment’s revenue increased by 10.7% year-over-year, while NOI grew by 18.3%, demonstrating effective cost management and pricing strategies.
As shown in the detailed breakdown below, the ISHC segment achieved a cash NOI margin of 15.6% in Q2 2025, up from 14.4% in Q2 2024:
A key driver of the ISHC segment’s performance is its diversified revenue mix across different payor types and bed types. The following chart shows that skilled nursing represents 71.4% of revenue, while senior housing accounts for 24.7%. The quality mix, representing higher-margin private pay and Medicare revenue, improved slightly from 73.8% in Q2 2024 to 74.6% in Q2 2025:
The Senior Housing Operating Properties (SHOP) segment also delivered impressive results, with same-store NOI growth of 23.0% year-over-year in Q2 2025. This performance was driven by occupancy improvements and rate increases, with RevPOR (Revenue Per Occupied Room) reaching $5,189 in Q2 2025.
AHR’s geographic diversification and strategic partnerships with major operators contribute to its strong performance. The company partners with several leading operators, with Trilogy Management Services being the largest with 126 properties/campuses. The following map illustrates AHR’s geographic distribution of ISHC and SHOP properties:
Strategic Initiatives
American Healthcare REIT continues to actively manage its portfolio through strategic acquisitions, dispositions, and development projects. In 2025 year-to-date, the company has acquired 131 beds in the ISHC segment for $16.1 million and 187 beds in the SHOP segment for $65 million.
On the disposition front, AHR has sold 88 SHOP units for $3.3 million, 311 GLA in Outpatient Medical for $24.2 million, and 270 ISHC beds/units for $16 million. These transactions reflect the company’s disciplined approach to portfolio optimization.
The company is also investing in development and expansion projects to drive future growth. As shown in the following chart, AHR has several ongoing projects with a total expected cost of $57.8 million, of which $23.8 million has been spent to date:
This development pipeline aligns with comments made by COO Gabe Wilhite during the Q1 earnings call, where he highlighted the need for industry expansion, noting, "The industry really does need to start building again to meet the demand."
Forward-Looking Statements
Based on its strong performance in the first half of 2025, American Healthcare REIT has provided optimistic guidance for the full year. The company expects NAREIT FFO per diluted share of $1.57-$1.61 and Normalized FFO per diluted share of $1.64-$1.68.
The company also projects same-store NOI growth of 11.0%-14.0% for the full year 2025, with segment-specific guidance as follows:
- ISHC: 15.0%-19.0%
- Outpatient Medical: 1.0%-1.5%
- SHOP: 20.0%-24.0%
- Triple-Net Leased Properties: (0.8%)-(0.3%)
Additional guidance assumptions include general and administrative expenses of $56-$58 million, interest expense of $85-$90 million, and other income of $2-$4 million. The company also expects to spend $80-$100 million on new development starts and ongoing development projects.
As shown in the following guidance summary, AHR has positioned itself for continued strong performance throughout 2025:
This updated guidance represents an improvement from the Q1 earnings call, where the company had projected full-year NFFO guidance of $1.58-$1.64 per share. The increase to $1.64-$1.68 per share reflects continued operational improvements and positive market conditions.
With a market capitalization of approximately $5.1 billion, a strong balance sheet, and a diversified portfolio of healthcare real estate assets, American Healthcare REIT appears well-positioned to continue delivering value to shareholders as it executes its strategic initiatives and capitalizes on favorable demographic trends in the healthcare sector.
Full presentation:
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