Invesque Inc.

For the 3 months ended June 30, FFO and AFFO were each $0.10 per share. The company completed the SymCare portfolio sale for $121 million, sold Metro West Medical Center for $6.4 million, and paid down its corporate credit facility by over $122 million between March 31 and June 30; after an additional $19.4 million repayment post-quarter, total paydown exceeded $141 million. On operations, stabilized portfolio EBITDARM coverage remained just below 1.0x for the period ended March 31, 2023; trailing 12-month occupancy as of March 31 was 76% for stabilized triple net assets and 81% for stabilized SHOP. SHOP occupancy increased 80 basis points sequentially and NOI increased 5.5% sequentially. Guidance/commentary: management expects the remaining two medical office buildings to be sold within the next 12 months, expects more muted quarter-over-quarter occupancy growth after the recent rebound, and said the KeyBank facility extension term sheet contemplates maturity moving to March 31, 2025.

Scott White framed the quarter as continued execution on a simplification strategy, emphasizing portfolio pruning, reduced skilled nursing exposure, and a shift toward a predominantly private pay seniors housing platform. He sounded constructive on the operating backdrop, pointing to Commonwealth and Heritage reaching pre-pandemic occupancy and improving staffing trends, while noting future occupancy gains will likely be more modest from here. He also said the company remains focused on selective asset sales and reducing operator relationships where appropriate.

Adlai Chester said FFO and AFFO were both $0.10 per share and highlighted balance-sheet improvement from the SymCare sale, which enabled more than $122 million of corporate credit facility paydown in the quarter and another $19.4 million afterward. He said the company is working with KeyBank and the bank group to extend the facility, which matures at the end of 2023, and disclosed that a nonbinding term sheet now contemplates extension to March 31, 2025. He also noted an amendment limiting September 30, 2023 convertible debenture repayment to no more than 10% of principal, calling the concession necessary to secure the lender extension.

Analysts focused on the credit-facility extension, asking about the likely outstanding amount, interest rate, and whether the company could later resume or expand debenture buybacks beyond the current 10% limit. Management said the facility amount should be in the roughly $200 million range, but rates are still under negotiation, and any further debenture repayment beyond the agreed 10% would require going back to KeyBank. Questions also covered run-rate NOI, with management saying it has internal cash and NOI projections but does not historically disclose forward-rated NOI, and whether more operator transitions are coming; management said big operator changes are not expected, though selective pruning remains possible.