American Healthcare REIT’s (NYSE: AHR) diversified portfolio helped sustain growth despite a typical seasonal slowdown in the first quarter, with a strong performance from Trilogy’s skilled nursing amid occupancy gains and disciplined expense control, executives said Friday.

“It is our long-term view that the senior housing industry is benefiting, and should continue to benefit from a multi-year tailwind of favorable fundamentals,” President and CEO Danny Prosky said during the company’s conference call to discuss first quarter earnings. “On the capital allocation front, our investment team is actively identifying new growth opportunities with our existing operating partners, as well as identifying new prospective operating partners that will complement our current regional operator base.”

As a result, the real estate investment trust (REIT) based in Irvine, Calif., is revising upwards its guidance for net operating income (NOI) going forward, he said.

“We expect continued growth across the operating portfolio throughout the rest of the year,” Prosky said. “We have already seen a sharp uptick in move-ins since the end of Q1. This occupancy trend, as well as strong improvements in [revenue per occupied room] and margins, allows us to increase full year 2025 guidance for our SHOP segment as well.”

American Healthcare REIT executives touted a pipeline of well over $300 million of acquisitions, which they expect to close before year end – on top of those already closed on so far this year.

“Looking at performance across our diversified healthcare portfolio, we achieved 15.1% same store NOI growth year over year in Q1 2025,” Prosky said.

Executives praised the performance of its Trilogy assets, stating that Trilogy achieved strong financial results during the quarter driven by occupancy gains, revenue optimization, and improved quality mix and skilled nursing rates, extending partnerships with Medicare Advantage plans.

Trilogy’s Five-Star quality ratings now averaging above 4 stars – and considered among the best in the industry– enhance Trilogy’s appeal to Medicare Advantage plans, leading to significantly expanded partnerships at favorable rates, according to COO Gabe Willhite.

“In Q1 we were able to substantially expand our relationships with Medicare Advantage plans at attractive rates, which should provide a powerful tailwind through 2025, and beyond,” he said.

During the first quarter, AHR reported earnings per share of $0.38 for the same period compared to negative $0.04 a year ago. It posted revenue of $540.6 million for the quarter ended March 31. 2025, representing a year-over-year increase of 8.2%.

Meanwhile, NOI growth increased by 19.8% at Trilogy and 30.7% within SHOP.

AHR shares closed Friday at $34.93, up $2.72, or 8.44%.

Reimbursement increases

The Trilogy partnership is significantly expanding access to revenue from Medicare Advantage plans by allowing AHR to contract with new MA plans previously unavailable to them, executives said.

This broader reach allows more residents in Trilogy’s markets to access its facilities, driving census growth for skilled nursing. As Medicare Advantage plans increasingly prioritize quality, Trilogy’s consistently high ratings have strengthened its negotiating position, leading to better reimbursement rates, Willhite said.

Over time, this should improve Trilogy’s quality mix by reducing reliance on lower-paying Medicaid days and increasing higher-margin Medicare and Medicare Advantage stays, contributing to stronger overall financial performance, he said.

“In the last six months, Medicare Advantage plans [are] really leaning into quality … They’re realizing the value, and they’re more willing to work with Trilogy on a rate that works for both,” said Willhite. “Trilogy’s occupancy [is going] up on the skilled nursing side – this all plays into the broader strategy of optimizing Q mix. So you’ll see the Medicaid risk, or the Medicaid days at Trilogy kind of decline over time and Medicare Advantage and Medicare stays increased over time as Trilogy kind of optimizes.”

On state-level Medicaid rates, which typically reset in July, Willhite said he expects Medicaid rate increases roughly in line with inflation. AHR has potential for outperformance through value-based care incentives, particularly in states like Ohio where such programs are more prominent. Trilogy has room to capture more of these bonus payments by improving quality metrics, accurate reporting, and meeting performance thresholds over time.

And while each state has its own requirements, Willhite said that he sees added upside from these VBC programs likely emerging in the second half of the year.

1Q Pipeline: ‘Local market specialists’

American Healthcare REIT’s strong $300 million acquisition pipeline includes projects underwritten in partnership with two new regional operators known for high-quality care, according to Chief Investment Officer Stefan Oh.

“Our current pipeline consists of over $300 million of potential acquisitions that have been awarded to us, all of which are in the operating portfolio segments,” Oh said.

Without naming any organizations behind the transactions, Oh said the acquisitions complemented AHR’s existing portfolio, offering a chance to form new operator relationships with trusted industry partners.

“Among the deals in our pipeline, we have been underwriting a few opportunities in collaboration with two new regional operating partners. Like our existing operating partners, they have all the qualities we look for in our operators. They are local market specialists focusing on delivering high quality care and outcomes for residents,” Oh said.

Overall, the investments and development activity are driven by a disciplined approach to scaling the skilled nursing segment while maintaining geographic focus and return targets, he said.

In the first quarter, AHR also launched two new Trilogy projects and plans for more this year, all on schedule and within budget, he said.

The REIT also sold five of its lower-growth properties for $40 million to reinvest in higher-return opportunities within Trilogy and SHOP segments.

American Healthcare is focused on senior housing, skilled nursing, and outpatient medical properties in the U.S., U.K., and Isle of Man.