EX-99.1 2 tv528985_ex99-1.htm EXHIBIT 99.1

Exhibit 99.1

 

1 HEALTHCARE TRUST, INC. 2 nd Quarter 2019 Investor Presentation

 

 

2 Executive Summary »HealthcareTrustInc.(“HTI”orthe“Company”)hasa$2.6billion (1) healthcare realestateportfoliofocusedontwostrongandhealthysegments–MedicalOffice Buildings(“MOB”)andSeniorsHousingOperatingProperties(“SHOP”) ▪ Thesetwosegmentsrepresentover90%ofHTI’snetoperatingincome (2)(3) »MedicalOfficecontinuestobeastrongperformerwithintheHTIportfolio,with predictableandstablerentpaymentsalongwithcontractualrentincreases »TheCompany’sSHOPportfolioisbeingaggressivelymanagedbyourAdvisor’s seniorshousingmanagementteamtoenhancethevalueofthisportfoliothrough: ▪ Successfultransitionsofselecttriple-netleasedseniorshousingproperties toanoperationalSHOPstructure ▪ MonitoringanddrivingoccupancyacrosstheSHOPportfolio ▪ Replacingunderperformingoperators ▪ Selectiveacquisitionsanddispositions »HTIacquiredtwosingle-tenant,triplenetleasedMOBsforapproximately$10 millioninQ22019 »Additionally,theCompanytransitionedapropertylocatedinWellington,Florida fromatriple-netleasedhealthcarefacility(“NNN”)toitsSHOPsegmentinQ2 2019(nodisposalsinQ22019) (1) Based on total real estate investments, at cost, assets held for sale at carrying value, net of gross market lease intangibleliabilities as of June 30, 2019. (2) NOI, or net operating income, is a non-GAAP measure. See page 10 of this presentation for a detailed reconciliation schedule of NOI. (3) Based on year-to-date June 30, 2019 net operating income.

 

 

3 48% 44% 8% MOB SHOP NNN PROPERTIES Medical Office Buildings 111 Seniors Housing –Operating (4) 59 SeniorsHousing –NNN 4 Post-Acute Care/Skilled Nursing (4) 8 Hospitals 6 Land 2 Development 1 MOB Seniors Housing – Operating Seniors Housing – NNN (3) Post Acute/ Skilled Nursing (3) Hospitals (3) Percentage Leased 90.6% 85.3% 100.0% 100.0% 90.7% Weighted Avg. Remaining Lease Term 5.1 Years N/A 11.5 Years 8.3 Years 7.6 Years 191 Properties $2.6 Billion Invested 9.1 Million Rentable Square Feet (1) NOI, or net operating income, is a non-GAAP measure. See pages 10 and 11 of this presentation for a detailed reconciliation schedule of NOI. (2) MOB –Medical Office Building; SHOP –Seniors Housing Operating Property; NNN –Triple-Net Lease Property. (3) Revenues for our triple-net leased (“NNN”) healthcare facilities generally consist of fixed rental amounts (subject to annual contractual escalations) received from our tenants in accordance with the applicable lease terms and do not vary based on the underlying operating performance of the properties. (4) One property was transitioned from Post-Acute / Skilled Nursing within the NNN segment to the SHOP segment during the period from January 1, 2019 through June 30, 2019 and is presented within the SHOP segment as of June 30, 2019. Portfolio Snapshot (as of June 30, 2019) NOI Split by Asset Type (1)(2) $73 million

 

 

4 Prior Credit Facility New Credit Facility Revolver $565 million $480 million Term Loan ?? $150 million Total Commitment $565 million $630 million MaturityDate March 2019 March 2024 (1) Weighted-Average Effective Rate per annum (2) 4.6% 4.6% HTI continues to manage its capital structure with the successful upsize and extension of its corporate credit facility in March 2019 (1) Revolving portion of the New Credit Facility matures in March 2023, subject to a one-year extension option, while the term loan portion matures in March 2024. (2) Rates as of the closing date of the New Credit Facility. As of June 30, 2019, the revolving portion and the term loan portionhad an effective interest rate per annum of 4.58% and 4.47%, respectively. Credit Facility Recast »InMarch2019,HTIamendedandrestatedthePriorCreditFacilitybyenteringintotheNewCreditFacility whichfeaturesseveralimprovedtermsincludingincreasedtotalcommitments,extendedmaturityanda lowereffectiveinterestrate NewCreditFacility • Increasedtotalcommitmentsto$630million,representinga$65millionincreaseoverthePrior CreditFacility • Extendedthetermto2024,inclusiveoftherevolver’sone-yearextensionoption (1) • Introduceda$150millionTermLoancomponent

 

 

5 Debt Capitalization ($mm) MOB Loan $242 Multi-PropertyCMBS Loan $119 Other MortgageLoans $84 Total Mortgage Debt $445 Fannie Mae Master Credit Facilities $359 Credit Facility $271 Credit Facilities $630 Total Debt $1,075 KeyCapitalization Metrics ($mm) Total Debt $1,075 Less: Cashand cash equivalents $47 NetDebt (1) $1,028 Gross Asset Value (2) $2,583 NetDebt / Gross Asset Value 39.8% MortgageDebt ▪ Theweighted-averageinterestrateofthetotalmortgagedebtwas4.4%asofJune30,2019 CreditFacilities ▪ The Fannie Mae Master Credit Facilities are made up of two facilities provided by KeyBank and Capital One. The combined facility is secured by mortgages on 22 seniors housing properties ▪ The Credit Facility consists of two components, a revolving credit facility and a term loan which are secured by the interest in the entities that own the pledged pool of 76 properties as of June 30, 2019 ▪ As of June 30, 2019, the unused borrowing capacity under the revolving credit facility was $41 million ▪ The Credit Facilities’ weighted-average interest rate was 4.8% as of June 30, 2019 (1) Net Debt is defined as total gross debt minus cash and cash equivalents. Excludes $18 million of restricted cash as of June 30, 2019. (2) Gross Asset Value represents the total real estate investments, at cost, assets held for sale at carrying value, net of grossmarket lease intangible liabilities. Capital Structure Overview (as of June 30, 2019)

 

 

6 Corporate Initiatives DeployAdditionalCapital ▪ HTIwillcontinuetofocusonthesectorsinhealthcarethatwefindmostattractive, particularlymedicalofficeandseniorshousing,andisactivelypursuingtheacquisition ofhigh-qualitypropertiesinthesesectors ActivelyManageAssetstoOptimizeProfitability Managementcontinuestoactivelymanagetheportfolio,whichincludes: ▪ Incrementalleasingactivity ▪ Transitionselecttriple-netleasedpropertiestoanoperationalSHOPstructure ▪ Replaceunderperformingmanagers ▪ Replacetenantsforimprovedearningsandvalue MaintainStrongBalanceSheet HTIhasaconservativeleverageprofiletosupportitsrealestateportfolio: ▪ Netleverageremainsunder40% (1) ▪ InMarch2019,HTIamendedandrestateditsexistingcreditfacility - Totalcommitmentsupsizedto$630million,a$65million (2) increase - Loan maturity extendedfive years to 2024,subjectto Company’sone-year extensionoptionontherevolverportion (1) Based on net debt divided by gross asset value. See page 5 for additional details. (2) As of June 30, 2019, the unused borrowing capacity under the revolving portion of the Credit Facility was $41 million.

 

 

7 Healthcare Market Overview xMedicalofficefundamentalsremainhealthy. xMedicalofficeremainsanattractivesectorwithstablecaprates,minimaldirect governmentreimbursementexposureandgrowingdemandfromtenantsand investors. xThe Seniors housing sector is expecting some growth in supply, however, accelerationinagingdemographicsshouldprovideastrongtailwindtothis segmentalongwithotherHealthcareREITsectors. xWeremaincautiousonskillednursingfacilitiesasmanyoperatorsarefacing difficultieswithgovernmentreimbursements. xHTIcontinuestofocusonlocalmarketswheresupply/demandfundamentalsare attractive.

 

 

8 Organizational Leadership Katie Kurtz Chief Financial Officer, Secretary, and Treasurer Ms.KurtzcurrentlyservesastheChiefFinancial Officer,TreasurerandSecretaryoftheCompany. Ms.KurtzisalsoSeniorVicePresident,Finance forARGlobalInvestments,LLC(“ARGlobal”),the parent of the Company’s sponsor. She is a certifiedpublicaccountantinNewYorkState, holdsaB.S.inAccountancyandaB.A.inGerman fromWakeForestUniversityandaMasterof Science in Accountancy from Wake Forest University. Leslie D. Michelson Non-Executive Chairman, Audit Committee Chair Mr.Michelsonhasservedasthechairmanand chief executive officer of Private Health Management, a retainer-based primary care medical practice management company since April 2007. Mr. Michelson served as Vice Chairman and Chief Executive Officer of the ProstateCancerFoundation,theworld’slargest private source of prostate cancer research funding,fromApril2002untilDecember2006 andservedonitsboardofdirectorsfromJanuary 2002untilApril2013. David Ruggiero Vice President, Acquisitions Mr.RuggierocurrentlyservesasVicePresidentat theCompany’sadvisorwithaprimaryfocuson acquisitions.Mr.Ruggierohasover20yearsof commercial real estate experience and has advisedonover$3billioninhealthcarereal estatedispositions,acquisitionsandfinancings. He earned an MS in Finance from Kellstadt GraduateSchoolofBusinessatDePaulUniversity andaBAfromDePaulUniversity. Trent Taylor Vice President, Asset Management Mr.TaylorcurrentlyservesasVicePresidentat theCompany’sadvisorwithaprimaryfocuson assetmanagementandleasing.Mr.Taylorhas over12yearsofcommercialrealestateand developmentexperience.HeearnedanMSinReal Estatefrom NewYork UniversityandBA in Accounting&FinancefromtheUniversityof CentralFlorida. Michael Weil Chief ExecutiveOfficer Mr.WeilwasnamedHealthcareTrustInc.’schief executiveofficeronAugust23,2018,whichwent into effect on September 12, 2018. He is a foundingpartnerofARGlobal,andhasservedas aleadingexecutiveandboardmemberonseveral publicly-traded and non-traded real estate companies.Additionally,hepreviouslyservedas theSeniorVPofsalesandleasingforAmerican FinancialRealtyTrust.Mr.Weilalsoservedas presidentoftheBoardofDirectorsoftheReal EstateInvestmentSecuritiesAssociation. John Rimbach President of Healthcare Facilities Mr.Rimbachbringsastrongexpertiseinseniors housingmanagementwhichheestablishedovera 30-yearcareer.PriortojoiningtheCompany’s advisor,Mr.RimbachservedasPresident/CEO and Founder of WESTLiving, LLC, where he provided overall leadership and strategic directionforthislargeseniorshousingportfolio. Priortothat,Mr.RimbachservedasCOOofAF EvansCompanyInc.from1999to2008,andwas theDevelopmentDirectorofNCBDevelopment Corporationfrom1993to1999.

 

 

9 Supplemental Information ShareRepurchaseProgram(“SRP”): ▪ Under the Company's SRP, as amended from time to time, qualifying stockholders are able to sell their shares to the Company in limited circumstances. The SRP permits investors to sell their shares back to the Company after they have held them for at least one year, subject to significant conditions and limitations. Repurchases of shares of the Company's common stock, when requested, are at the sole discretion of the Board. ▪ Under the SRP, subject to certain conditions, only repurchase requests made following the death or qualifying disability of stockholders that purchased shares of the Company's common stock or received their shares from the Company (directly or indirectly) through oneormore non-cash transactions are considered for repurchase. Additionally, pursuant to the SRP, the repurchase price per share equals 100% of the Estimated Per-Share NAV in effect on the last day of the fiscal semester, or the six-month period ending June 30 or December 31. ▪ On January 29, 2019, the Company announced that the Board approved an amendment to the SRP changing the date on which any repurchases are to be made in respect of requests made during the period commencing March 13, 2018 up to and including December 31, 2018 to no later than March 31, 2019, rather than on or before the 31st day following December 31, 2018. This SRP amendment became effective on January 30, 2019. Additionally, on March 27, 2019, the Company announced that the Board approved an amendment tothe SRP further extending the date on which any repurchases are to be made in respect of requests made during the period commencing March 13, 2018 up to and including December 31, 2018 to no later than April 30, 2019. This SRP amendment became effective on March 28, 2019. The Company completed the repurchases in April 2019. ▪ On July 23, 2019, the Company announced that the Board approved a third amendment to the SRP, effective July 24, 2019, extendingthe date on which repurchases are able to be made in respect of requests made during the period commencing January 1, 2019 up to and including June 30, 2019 to no later than August 31, 2019, rather than on or before July 31, 2019. ▪ On August 21, 2019, the Company announced that the Board approved a fourth amendment to the SRP, effective August 22, 2019, extending the date on which repurchases are able to be made in respect of requests made during the period commencing January 1, 2019 up to and including June 30, 2019 to no later than October 31, 2019, rather than on or before August 31, 2019.

 

 

10 Reconciliation of Non-GAAP Metrics: NOI Three Months Ended June30, 2019 (In thousands) Medical Office Buildings Triple-Net Leased Healthcare Facilities Seniors Housing — Operating Properties Consolidated Revenue from tenants $ 25,067 $ 3,461 $ 67,759 $ 96,287 Property operating and maintenance (8,021) (428) (50,355) (58,804) NOI $ 17,046 $ 3,033 $ 17,404 37,483 Impairment charges (19) Operating fees to related parties (5,826) Acquisition and transaction related (31) General and administrative (4,314) Depreciation and amortization (20,299) Interest expense (12,806) Loss on derivatives instruments (5) Income tax expense (297) Net incomeattributable to non-controlling interests 60 Net loss attributable to stockholders $ (6,054) Three Months Ended June30, 2018 (In thousands) Medical Office Buildings Triple-Net Leased Healthcare Facilities Seniors Housing — Operating Properties Consolidated Revenue from tenants $ 25,207 $ 4,918 $ 60,832 $ 90,957 Property operating and maintenance (8,127) (638) (44,992) (53,757) NOI $ 17,080 $ 4,280 $ 15,840 37,200 Operating fees to related parties (5,763) Acquisition and transaction related (120) General and administrative (4,612) Depreciation and amortization (20,864) Interest expense (12,208) Interest and other income 2 Loss on derivative instruments (150) Income tax expense (446) Net loss attributable to non-controlling interests 31 Net loss attributable to stockholders $ (6,950) Net Operating Income (NOI) Reconciliation Schedule

 

 

11 Reconciliation of Segment NOI Net Operating Income (NOI) Reconciliation Schedule Six Months Ended June30, 2019 (In thousands) Medical Office Buildings Triple-Net Leased Healthcare Facilities Seniors Housing — Operating Properties Consolidated Revenue from tenants $ 50,325 $ 6,997 $ 127,683 $ 185,005 Property operating and maintenance (14,968) (839) (95,796) (111,603) NOI $ 35,357 $ 6,158 $ 31,887 73,402 Impairment charges (19) Operating fees to related parties (11,594) Acquisition and transaction related (49) General and administrative (10,612) Depreciation and amortization (40,984) Interest expense (26,794) Interest and other income 4 Loss on derivatives instruments (48) Gain on sale of real estate investment 6,078 Income tax expense (635) Net incomeattributable to non-controlling interests 41 Net loss attributable to stockholders $ (11,165) Six Months Ended June30, 2018 (In thousands) Medical Office Buildings Triple-Net Leased Healthcare Facilities Seniors Housing — Operating Properties Consolidated Revenue from tenants $ 49,197 $ 9,943 $ 121,255 $ 180,395 Property operating and maintenance (15,342) (358) (91,163) (106,863) NOI $ 33,855 $ 9,585 $ 30,092 73,532 Impairment charges (733) Operating fees to related parties (11,490) Acquisition and transaction related (293) General and administrative (8,264) Depreciation and amortization (41,633) Interest expense (23,365) Interest and other income 5 Gain on derivative instruments 28 Income tax expense (775) Net loss attributable to non-controlling interests 47 Net loss attributable to stockholders $ (12,941)

 

 

12 Important Information RiskFactors Foradiscussionoftheriskswhichshouldbeconsideredinconnectionwithour company,seethesectionentitled“RiskFactors”inourmostrecentAnnualReporton Form10-KfiledwiththeSEConMarch14,2019. Forward-LookingStatements Thispresentationmaycontainforward-lookingstatements.Youcanidentifyforward- lookingstatementsbytheuseofforwardlookingterminologysuchas“believes,” “expects,” “may,” “will,” “would,” “could,” “should,” “seeks,” “intends,” “plans,” “projects,”“estimates,”“anticipates,”“predicts,”or“potential”orthenegativeofthese wordsandphrasesorsimilarwordsorphrases. PleasereviewtheendofthispresentationandtheCompany’sAnnualReporton Form10-KandQuarterlyReportsonForm10-Qforamorecompletelistofrisk factors,aswellasadiscussionofforward-lookingstatements.

 

 

13 Risk Factors Ourpotentialrisksanduncertaintiesarepresentedinthesectiontitled“Item1A.RiskFactors”disclosedinourAnnual ReportonForm10-KfortheyearendedDecember31,2018andupdatedinourQuarterlyReportsonForm10-Qfrom timetotime.Thefollowingaresomeoftherisksanduncertainties,althoughnotallrisksanduncertainties,thatcould causeouractualresultstodiffermateriallyfromthosepresentedinourforwardlookingstatements: • Certainofourexecutiveofficersanddirectorsarealsoofficers,managers,employeesorholdersofadirectorindirectcontrollinginterestin HealthcareTrustAdvisors,LLC(our"Advisor")andotherentitiesaffiliatedwithARGlobalInvestments,LLC(thesuccessorbusinesstoAR Capital,LLC,"ARGlobal"),theparentofoursponsor.Asaresult,certainofourexecutiveofficersanddirectors,ourAdvisoranditsaffiliatesface conflictsofinterest,includingsignificantconflictscreatedbyourAdvisor'scompensationarrangementswithusandotherinvestment programsadvisedbyaffiliatesofARGlobalandconflictsinallocatingtimeamongtheseinvestmentprogramsandus.Theseconflictscould resultinunanticipatedactionsthatadverselyaffectus. • Duetoadisputewiththedeveloper,wehavefundedexcessdevelopmentcostsatourdevelopmentpropertyinJupiter,Floridaandhavenotyet receivedanyrentalincomefromtheproperty.Therecanbenoassuranceastowhenwewillbegintogeneratecashfromthisinvestment,ifat all. • BecauseinvestmentopportunitiesthataresuitableforusmayalsobesuitableforotherinvestmentprogramsadvisedbyaffiliatesofARGlobal, ourAdvisoranditsaffiliatesfaceconflictsofinterestrelatingtothepurchaseofpropertiesandotherinvestmentsandsuchconflictsmaynot beresolvedinourfavor,meaningthatwecouldinvestinlessattractiveassets,whichcouldreducetheinvestmentreturntoourstockholders. • Althoughweintendtoseekalistingofoursharesofcommonstockonanationalstockexchangewhenwebelievemarketconditionsare favorabletodoso,thereisnoassurancethatoursharesofcommonstockwillbelisted.Nopublicmarketcurrentlyexists,ormayeverexist,for sharesofourcommonstockandoursharesare,andmaycontinuetobe,illiquid. • Wefocusonacquiringandowningadiversifiedportfolioofhealthcare-relatedassetslocatedintheUnitedStatesandaresubjecttorisks inherentinconcentratinginvestmentsinthehealthcareindustry. • IfourAdvisorlosesorisunabletoobtainqualifiedpersonnel,ourabilitytocontinuetoachieveourinvestmentstrategiescouldbedelayedor hindered. • Thehealthcareindustryisheavilyregulated,andnewlawsorregulations,changestoexistinglawsorregulations,lossoflicensureorfailureto obtainlicensurecouldresultintheinabilityoftenantstomakeleasepaymentstous. • WearedependingonourAdvisortoselectinvestmentsandconductouroperations.AdversechangesinthefinancialconditionofourAdvisor anditsaffiliatesorourrelationshipwithourAdvisorcouldadverselyaffectus. • Weareobligatedtopayfees,whichmaybesubstantial,toourAdvisoranditsaffiliates.

 

 

14 Risk Factors (Continued) • Ourrevenueisdependentuponthesuccessandeconomicviabilityofourtenants,aswellasourabilitytocollectrentfromdefaultingtenants, whichhasandmaycontinuetoadverselyimpactourresultsofoperations,andreplacethemwithnewtenants,whichwemaynotbeabletodo onatimelybasis,oratall. • Wemaynotbeabletoachieveourrentalrateobjectivesonnewandrenewalleasesandourexpensescouldbegreaterthanweanticipate,which mayimpactourresultsofoperations. • Increasesininterestratescouldincreasetheamountofourdebtpaymentsandlimitourabilitytopaydistributions. • Provisionsinourrevolvingcreditfacility(our"RevolvingCreditFacility")andtherelatedtermloanfacility(our"TermLoan"),whichtogether compriseourseniorsecuredcreditfacility(our"CreditFacility"),currentlyrestrictusfromincreasingtheratewepaydistributionstoour stockholders,andcontainsotherrestrictionsthatlimitourabilitytopaydistributionsinthefuture.Therecanbenoassurancethatwewillbe abletocontinuepayingdistributionsatthecurrentrate,oratall. • Wehavenotgenerated,andinthefuturemaynotgenerate,operatingcashflowssufficienttofundallofthedistributionswepaytoour stockholders,and,assuch,wemaybeforcedtofunddistributionsfromothersources,includingborrowings,whichmaynotbeavailableon favorableterms,oratall. • Anydistributions,especiallythosenotcoveredbyourcashflowsfromoperations,mayreducetheamountofcapitalavailableforotherpurposes, includinginvestmentinpropertiesandotherpermittedinvestmentsandmaynegativelyimpactthevalueofourstockholders'investment. • WearesubjecttorisksassociatedwithanydislocationsorliquiditydisruptionsthatmayexistoroccurinthecreditmarketsoftheUnitedStates fromtimetotime. • Wearesubjecttorisksassociatedwithchangesingeneraleconomic,businessandpoliticalconditionsincludingthepossibilityofintensified internationalhostilities,actsofterrorism,andchangesinconditionsofUnitedStatesorinternationallending,capitalandfinancingmarkets. • WemayfailtocontinuetoqualifytobetreatedasarealestateinvestmenttrustforU.S.federalincometaxpurposes("REIT"),whichwouldresult inhighertaxes,mayadverselyaffectouroperationsandwouldreducethevalueofaninvestmentinourcommonstockandthecashavailablefor distributions. • Theofferingpriceandrepurchasepriceforoursharesunderourdistributionreinvestmentplan("DRIP")andoursharerepurchaseprogram(as amended,the"SRP")maynot,amongotherthings,accuratelyreflectthevalueofourassetsandmaynotrepresentwhatastockholdermay receiveonasaleoftheshares,whattheymayreceiveuponaliquidationofourassetsanddistributionofthenetproceedsorwhatathirdparty maypaytoacquireus.

 

 

15 HealthcareTrustInc.com ▪For account information, including balances and the status of submitted paperwork, please call us at (866) 902-0063 ▪Financial Advisors may view client accounts, statements and tax forms at www.dstvision.com ▪Shareholders may access their accounts at www.ar-global.com