Sabra Health Care REIT Achieves Record-Breaking Quarter: Strong Momentum Continues into 2025
The latest quarterly earnings call from Sabra Health Care REIT has left investors and analysts excited about the company's continued momentum. In a strong finish to 2024, Sabra delivered what CEO Rick Matros described as 'a succession of great quarters in a row.'
One of the standout performers was the senior housing and skilled portfolio, which saw significant growth. The SHOP same-store occupancy was up 80 basis points sequentially, with margins up 20 basis points. The cash NOI for SHOP was a whopping 17.9% increase for the quarter. Meanwhile, the senior housing triple-net coverage stayed steady at 1.36, while the skilled occupancy was up 60 basis points sequentially with skilled mix up 30 basis points.
The company's EBITDARM coverage hit an all-time high of 2.09, with skilled margins now higher than they have been in years. The top 10 had another strong quarter, and for 2025, Sabra plans to build upon this strategy successfully executed in 2024. As evidenced by the 7% year-over-year normalized AFFO growth.
Looking ahead, Rick Matros emphasized that while the company is expecting a higher volume of deals in 2025, investors should not be deterred by the lack of new announcements in the current quarter. 'The fact that we had nothing new to announce this particular quarter shouldn't reflect on what we think we'll get done this year,' he said.
Matros also touched on the regulatory and political environment, specifically highlighting the threat of Medicaid cuts. While acknowledging that any actions taken by Congress or the states could be unpredictable, he emphasized the existence of 'natural guardrails' that protect the elderly population, particularly those institutionalized folks. He noted that Congress has historically been protective of this vulnerable group, and the governors in both red and blue states will unite to safeguard their Medicaid budgets.
Given Sabra's strong track record and forward-looking statements, investors are likely to remain optimistic about the company's prospects for 2025. As Matros concluded, 'We fully anticipate having a busy year and a year that we'll have higher volumes than we had last year.'
