LTC Properties Inc. (NYSE:LTC) Q4 2018 Earnings Conference Call Transcript

Mar 01, 2019 • 11:00 am ET

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LTC Properties Inc. (NYSE:LTC) Q4 2018 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good day, and welcome to the LTC Properties Fourth Quarter 2018 Analyst and Investor Conference Call. All participants will be in listen-only mode. (Operator Instructions) After today's presentation, there will be an opportunity to ask your questions. (Operator Instructions)

Before management begins its presentation, please know that today's comments, including the question-and-answer session, may include forward-looking statements, subject to risks and uncertainties that may cause actual results and events to differ materially. These risks and uncertainties are detailed in LTC Properties' filings with the Securities and Exchange Commission from time to time, including the Company's most recent 10-K dated December 31st, 2018. LTC undertakes no obligation to revise or update these forward-looking statements to reflect events or circumstances after the date of this presentation. Please note, this event is being recorded.

I would now like to turn the conference over to Wendy Simpson, CEO. Please go ahead.

Executive
Wendy Simpson

Thank you, operator. Welcome to LTC's 2018 year-end investor conference call. Joining me today are Pam Kessler, our CFO; and Clint Malin, our Chief Investment Officer. I'll start with introductory remarks and then turn the call over to Pam, who will discuss our financial results, followed by Clint who will discuss our portfolio, recent activity and operator performance. I'll end with a brief wrap-up before we begin with questions and answers.

The current real estate cycle has been interesting to say the least. The continuing massive influx of private equity and other financing sources has, in our opinion, inflated pricing, resulting in lower investment volumes for us in 2018. At this point in the cycle, however, we're starting to see the formation of a disconnect between certain sellers and buyers. Private equity is looking for large deals in the private pay space and we are beginning to see a decline in their interest in the mid to smaller deal opportunities that we expect will cost sellers to start adjusting their pricing expectations.

On the skilled side, there is still a lot of capital moving around and while we remain interested in investing in SNIPs, we are seeing more opportunities in private pay. We believe LTC is well-positioned to capture opportunities created by a shift to a slightly more favorable investment market. Fortunately, our leadership team has been in this business for a very long time and we've weathered these transitions before. Over the course of many real estate cycles, LTC has succeeded by being patient and this cycle is no different.

To repeat something I've said before, being a patient capital provider does not mean being stagnant. While Q1 tends to be slower in terms of pipeline creation, we are continuing to build ours with strategic assets where we can grow with our current operators, improve the average age of our portfolio, add new strong regional operating partners, and expand our existing geographic footprint.

We are using our time wisely, maintaining a strong and well-capitalized balance sheet proactively managing our portfolio of assets and strengthening industry relationships. We are meeting with operators, both inside