Sabra Health Care REIT, Inc.

What they do

Sabra acquires, finances and owns healthcare properties and generates revenue by leasing them to third-party tenants and by owning properties run by third-party property managers. Its portfolio is primarily skilled nursing/transitional care facilities, senior housing (leased and managed), behavioral health facilities, and specialty hospitals and other facilities, plus joint ventures, loans receivable and preferred equity. It operates through an UPREIT structure, with substantially all properties held by Sabra Health Care Limited Partnership, and has elected REIT tax treatment since 2011.

Revenue drivers

• Skilled nursing/transitional care (triple-net leased) — Leased to third-party operators; EBITDARM coverage of 2.49x in Q2 2026, and the Avamere lease reset raised annualized fixed cash rent to $48 million from $41 million paid in 2025.
• Senior Housing - Managed — Communities operated by third-party managers under property management agreements; same-property managed senior housing Cash NOI rose 13.7% year over year in Q2 2026.
• Senior Housing - Leased — Communities leased to third-party operators; EBITDARM coverage was 1.52x in Q2 2026, with occupancy and coverage dips attributed to converting a high-performing triple-net asset into the managed portfolio.
• Behavioral health, specialty hospitals and other — Leased to third-party operators; EBITDARM coverage of 4.14x in Q2 2026, the highest coverage among reported property categories.

Recent performance

Second quarter 2026 per diluted share results were net loss $(0.10), FFO $(0.02), Normalized FFO $0.38, AFFO $0.39 and Normalized AFFO $0.40. Quarterly revenue rose from $92.0M in 2025-09-30 to $128.8M in 2026-06-30. Net Debt to Adjusted EBITDA was 4.61x as of June 30, 2026, down from 4.8x cited in the July 21, 2026 business update. Sabra closed Q2 2026 investments totaling $274.1 million at an average initial cash yield of 8.1%, and after quarter end closed seven additional managed senior housing properties for $223.0 million.

Strategy

Sabra aims to grow and diversify its portfolio by tenant, facility type and geography within healthcare, mainly through direct and indirect healthcare real estate investments including purpose-built developments with select developers. It also uses select asset sales and tenant arrangements to reposition the portfolio; in 2025 it sold 14 skilled nursing/transitional care facilities and one behavioral health facility for $88.5 million net, a $3.5 million net loss. In 2025 it acquired 11 Senior Housing - Managed communities and 24 units at a leased community for $434.5 million, and in the first half of 2026 it acquired seven managed senior housing communities, two skilled nursing facilities and exercised an option on one skilled nursing facility for $287.6 million. It funds growth with balance-sheet liquidity, an ATM program established August 5, 2025 for up to $750.0 million, and a July 30, 2025 term loan credit facility.

Risks

• Tenant and borrower defaults — If tenants, borrowers or the managed portfolio deteriorate, they may not meet obligations and the full investment amounts may be unrecoverable, potentially causing impairment charges.
• Interest rate exposure — Higher market rates would raise costs on revolver borrowings and future debt, make new investments costlier, and could limit refinancing or asset-sale pricing.
• Inflation and operating expenses — Inflation raises Sabra's capital improvement costs and tenant/managed-community operating costs, and managed senior housing may be unable to pass cost increases to residents.
• Managed portfolio cost exposure — For Senior Housing - Managed communities Sabra bears increases in labor, goods and services costs, so margin pressure there directly affects its results.

Outlook

Sabra reiterated full-year 2026 guidance as included in its July 21, 2026 business update. Investments closed year to date total $599.0 million at an estimated initial cash yield of 7.5%, with an additional $100 million of managed senior housing and skilled nursing investments awarded at about a 7.7% estimated initial cash yield, expected to close by year end. Management expects to fund those investments, if consummated, with available liquidity including ATM forward sale proceeds. CEO Rick Matros said the investment pipeline remains robust and consists almost entirely of senior housing opportunities.