Ltc Properties Co-ceo Sees ‘transformative’ Potential In Plan To Ramp Up Senior Living Ridea Conversions

LTC Properties, Inc. (NYSE: LTC) is seeking to scale up its senior housing operating portfolio in 2025 by converting some of its triple-net lease properties to RIDEA management structures.

The company is looking to convert between $150 million and $200 million of gross investment assets currently on triple-net leases into RIDEA, with an expectation to complete those conversions in the second quarter of 2025, LTC Co-CEO and Co-President Pam Kessler said Tuesday during the company’s fourth-quarter 2024 earnings call.

“In short, for us, RIDEA isn’t just a strategy. It has the potential to be transformative,” Kessler told investors and analysts during the call. “When combined with a robust suite of tailored financing solutions to support operators’ success, we will unlock long term growth potential for LTC.”

With the move, the Westlake, California-based real estate investment trust (REIT) is continuing with the RIDEA-centered growth strategy it announced last year. On Tuesday, Kessler said the company is “now moving quickly” to execute its RIDEA strategy “while actively building out the infrastructure necessary to make this strategy a success.”

According to Kessler, LTC Properties management expects to offset the costs of building the platform with the segment’s first year of net operating income (NOI).

To prepare itself for its RIDEA growth footing, LTC has reduced its overall leverage and continued its policy of having “well-staggered debt maturities matched to our projected cash flow,” Kessler noted. As of the end of 2024, the company’s total liquidity was $680.4 million, including $9.4 million of cash on hand.

LTC has thus far “raised a modest amount of equity to position itself to invest” despite not completing new investments in 4Q24, according to a Feb. 24 analyst note from BMO Capital Markets analysts John Kim and Juan Sanabria.

LTC Properties has 190 properties in its senior housing and care portfolio, including 113 senior living communities.

LTC’s stock closed at $34.60, down 0.7% from its previous close.

Ramping up RIDEA growth strategy

One cornerstone of the company’s plan to grow its SHOP segment is data. Like other REITs in senior living, the company is collecting property-level data such as leads and tour-to-move-in ratios along with accounting and staffing info to help its operating partners make better decisions.

“We view this as a partnership,” she said. “Strategic decisions, capital improvements and future investments – that would be made together with the operator,” she added.

According to Kessler, LTC believes its SHOP segment could comprise as much as a quarter or a half of the company’s total holdings within a few years’ time.

Clint Malin, co-CEO, co-president and chief investment officer for LTC, said that adopting a more RIDEA-forward growth strategy has thus far led to conversations with operators that are some of the “most productive conversations in recent memory.”

“You see a lot of companies gravitating towards the RIDEA platform,” Malin said during the call Tuesday. “This has really opened up conversations with a big part of the market that we were missing out previously by not doing RIDEAs.”

As former-CEO-turned-Chairperson Wendy Simpson outlined in the past the REIT sees growth via SHOP as among its best opportunities ahead. Malin also noted that the REIT is informed by “lessons learned” years ago, when the Covid-19 pandemic was at its peak.

“We participated on the downside in a triple net lease, but it was hard to recover and participate in the upside,” he said.

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