National Healthcare Properties (NYSE: NHP) is exiting the outpatient medical facility business and expanding into senior housing.
Leaders with the New York City-based real estate investment trust (REIT) previously announced the sale of 86 outpatient medical facilities for approximately $528 million. The company sold 30 outpatient medical facilities in September, and leaders expect deals covering the remaining 56 facilities will close and change hands in Q4 2026.
The company’s leaders also have inked purchase agreements for another 40 facilities and signed non-binding letters of intent for the remaining four. The company’s leaders expect the sales will generate $1.1 billion in proceeds, with which they plan to acquire communities to add to the company’s senior housing operating portfolio (SHOP), which as of the third quarter stands at 60 properties.
“All of our net operating income will come from senior housing operating properties, in which approximately 97% of revenue is derived from private payers serving an aging population at a time of severely constrained new supply,” President, CEO and Director Michael Anderson told investors during a Nov. 5 earnings call.
The company reported funds from operation (FFO) of 19 cents per share in the third quarter.
NHP in 2026 has completed 25 senior housing acquisitions, 22 of which done in the third quarter, bringing its total property count to 60. Discovery Senior Living manages half the portfolio, alongside Senior Lifestyle Corporation, AgeWell Senior Living and Priority Life Care. According to Anderson, Sinceri Senior Living is expected to be added as an operator following a near-term acquisition.
Through the remainder of the year, NHP has purchase and sale agreements for $240 million dollars in senior housing acquisitions and $148 million under non-binding letters of intent.
The strategy is to bring in high-quality operators to manage communities in secondary markets. The company could upsize holdings with certain operators, like Priority Life Care, which currently manages three communities for the REIT but could grow to managing 10 by year’s end.
“We’re not investing in assets that have a dated reputation in a given market, because we know that that takes quite some time to turn that from a public perception point of view,” Anderson said.
NHP’s leaders source the majority of the company’s acquisitions off-market and with operators in tow, leading to less public competition for assets, Anderson said.
“With levered buyers kind of taking a seat on the sidelines with interest rates where they’ve moved … we’re running up against local owner-operators, developers and the like in some of these assets,” Anderson said. “We can move with expediency … we have started to build that reputation, and expect that that’ll lead to more momentum throughout ‘27.”
NHP’s senior housing operating partners are using concessions to boost occupancy for their lowest performing communities, bringing the average across the portfolio to 86.7%, indicating a 2.2% increase year-over-year and growing same-store cash net operating income by 13.6% year-over-year. The strategy increased revenue per occupied room (RevPOR) by 30 basis points to $6,454. The use of concessions during the key selling season is meant to be a one-time event, Anderson said.
“We were prepared to probably give up more on the RevPOR side than we essentially had to at the end of the day to get that occupancy,” Babins said. “We’ve had concessions beginning to burn off, and they’ll continue to burn off into the fourth quarter.”
NHP’s stock is priced at $15.21, down 3.7% from the previous close.
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