Skilled nursing occupancy at American Healthcare REIT’s (NYSE: AHR) Trilogy portfolio was particularly strong despite the typical seasonal slowdown in the third quarter, with executives noting Trilogy’s strong relationships with Medicare Advantage plans, successful expense controls and election results unlikely to impact its operations.
Trilogy’s occupancy levels increased to 90.2%, up 30 basis points sequentially, according to President and COO Gabe Willhite, who highlighted strong performance in Trilogy’s senior housing operating platform (SHOP). Trilogy’s same-store net operating income (NOI) increased 15.7% year over year and 1.6% sequentially in the third quarter, he said. Average same-store occupancy reached 91.2%, approximately 110 basis points above the prior year at Trilogy.
Willhite said the improvement reflected Trilogy’s ability to overcome seasonal pressures and capitalize on strong demand for its services.
Trilogy also continued improving its post-acute care business, with higher-quality payer sources accounting for 75.7% of same-store resident days, an increase of approximately 80 basis points year over year. Willhite attributed the improvement to Trilogy’s growing reputation as a preferred provider among health systems, physicians and Medicare Advantage plans.
Trilogy is increasingly focused on reimbursement and payer mix in skilled nursing, he said, noting Trilogy’s ability to choose Medicare and Medicare Advantage plans that appropriately compensate providers for higher-quality care. AHR has opportunities for continued rate growth, particularly through such Medicare Advantage relationships, Willhite said.
As far as investments, AHR CEO Jeff Hanson said that his company planned to continue expanding with established operators in markets where they already perform well and selectively entering new markets through strategic partnerships.
The company completed more than $800 million in acquisitions with existing operating partners during 2026, Hanson said, reasoning that even strong operators can become overstretched by taking on too many properties too quickly, potentially weakening their culture and operating results. Hence, AHR wants its acquisition pace aligned with the capacity of its operating partners, he said.
The company had the potential to complete more than $2 billion in additional acquisitions by expanding its operator base more aggressively, but chose not to compromise its standards. Instead, AHR increased its senior housing portfolio (SHOP) operator relationships outside Trilogy from eight to 11 during the year.
Chief Investment Officer Stefan Oh said AHR continues to see substantial acquisition activity and is underwriting opportunities that meet its investment and return requirements. Most pipeline properties are in the same metropolitan areas as its existing operating partners.
“Every deal is won on partnership, but not always on price, and that proved to be valuable this quarter,” Oh said.
During the third quarter, AHR closed approximately $1.69 billion dollars of new investments across 17 senior housing communities, bringing the total to $2.1 billion of completed investments year-to-date, he said.
In terms of Clinical strength, the company’s clinical performance was reflected in average Centers for Medicare and Medicaid Services (CMS) ratings of 4.2 stars overall and 4.8 stars for quality measures, which Willhite described as industry-leading among large skilled nursing operators.
AHR’s operating partner, Trilogy Management Services, oversees more than 130 senior living and skilled nursing communities across Ohio, Kentucky, Indiana, Michigan and Wisconsin. Since late 2024, AHR has owned 100% of Trilogy REIT Holdings and Trilogy Health Services since 2024.
During the third quarter, AHR reported funds from operations (FFO) of $0.58 per share, beating Wall Street’s consensus estimate of $0.56 per share, compared with $0.44 per share a year earlier.
On Friday, AHR shares closed at $57.91, up 3.23%, or $1.81.
Fallout from midterm election’s blue wave
Despite the Democrats’ big wins in the midterm elections, the skilled nursing industry needn’t worry about sweeping change, Willhite said, because a divided Congress and White House make the status quo the most likely outcome for regulation and reimbursement. If anything, he said a predictable policy environment would benefit Trilogy,
“It’s business as usual there, and predictability in an environment where Trilogy’s been able to drive out performance,” Willhite said. “We’ll see how things play out [but] at this point, there’s nothing meaningful that’s going to change our strategy.”
Willhite also noted how Trilogy maintained strong expense controls.
Same-store revenue increased 4.8%, while operating expenses rose 2.2% and controllable costs declined 3.7%. Its net operating income (NOI) margin reached 21%, approximately 200 basis points above the prior year.
AHR raised its full-year 2026 same-store NOI growth forecast for Trilogy to 14.5% to 16.5%, an increase of 100 basis points.
Companies featured in this article:
American Healthcare REIT, Trilogy Health Services, Trilogy Management Services
