National Healthcare Properties Adds $300M ATM, $100M Buyback as Outpatient Exit Nears
By Staff
National Healthcare Properties Inc. (Nasdaq: NHP), formerly the nontraded Healthcare Trust Inc., set up a $300 million at-the-market equity program on Nov. 10, six days after its board authorized a $100 million share repurchase program, giving the real estate investment trust the ability to either issue or retire stock as it completes its exit from outpatient medical properties.
Under an equity sales agreement with 14 banks, NHP may sell common stock from time to time on Nasdaq or in negotiated transactions, including through forward sale agreements. Agents will earn commissions of up to 2% of gross sales. The company said it intends to use net proceeds for general corporate purposes, including funding property acquisitions and working capital.
The repurchase program, approved Nov. 4, allows NHP to buy back up to $100 million of its common stock through open-market purchases, block trades or other methods. The program does not obligate the company to buy any shares, and the board may modify, suspend or end it at any time, the company said.
NHP shares closed at $15.95 on Nov. 9. At that price, the full $300 million program would equal about 18.8 million shares, or roughly 26% of the 72.9 million common shares outstanding after the October conversion of the company’s Class A stock, and the buyback about 6.3 million shares, or roughly 9%, according to AltsWire calculations. The Nov. 9 price was about 50% below the $32.15-per-share estimated net asset value the board last approved, as of Dec. 31, 2024, as AltsWire reported when the company’s legacy shares began trading. NHP, which committed to annual estimates only while its shares were unlisted, has not published a newer one.
NHP also said its board increased its size from six to eight directors on Nov. 6 and elected Jeffrey S. Olson and Craig S. Smith, effective Nov. 9. Olson is chairman and chief executive officer of Urban Edge Properties (NYSE: UE) and previously served as CEO of Equity One Inc. Smith has been chief executive officer of Aimbridge Hospitality, a third-party hotel management company, since 2024 and previously held senior roles at Marriott International, including group president of its international division. The board cited Olson’s public REIT leadership and experience with portfolio repositioning and capital allocation, and Smith’s experience leading a global lodging business. Olson joins the compensation and corporate governance committee, and Smith joins the audit committee.
The moves follow third-quarter results NHP reported Nov. 4, when it raised its full-year disposition guidance to $1.1 billion from $570 million. The remaining 56 properties in the 86-building outpatient portfolio it agreed to sell for about $528 million in May are expected to close in the fourth quarter for $331 million, subject to a $219 million loan assumption, after the first 30 properties closed in September. That month, NHP also signed a definitive agreement to sell 40 more outpatient medical facilities for about $531 million and a nonbinding letter of intent for its last four, transactions the company said would complete its exit from the segment.
On the acquisition side, NHP has bought 25 senior housing operating communities for about $424 million so far this year and has about $240 million more under signed purchase agreements and $148 million under nonbinding letters of intent, according to the company. Same-store cash net operating income in the senior housing operating segment rose 13.6% year over year in the third quarter, while normalized funds from operations fell 29.6% to $0.19 per diluted share.
Total debt was $851.2 million as of Sept. 30, and net debt to annualized adjusted EBITDA was 5.5x, down from 8.8x a year earlier, the company said. NHP redeemed its Series A preferred stock on Sept. 4 and its Series B preferred stock on Oct. 6, which it said would save about $11 million in annual preferred dividends.
NHP priced its initial public offering at $12 a share in April. Shares held by its original retail investors, who paid the equivalent of $100 a share after a 2024 reverse split, became freely tradable on Oct. 19.
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