National Healthcare Properties Reports Strong Portfolio Growth
Company expands healthcare real estate footprint while navigating market and regulatory challenges.
February 28, 2025
National Healthcare Properties, Inc. (NHP), a real estate investment trust (REIT) specializing in healthcare properties, has reported significant portfolio expansion and key strategic moves for the fiscal year ending December 31, 2024. The company continues to grow its holdings in outpatient medical facilities (OMFs) and senior housing operating properties (SHOPs) while adapting to shifts in the healthcare sector.
Expanding the Portfolio, Strengthening Operations
As of year-end, NHP owned 193 properties across 31 states, totaling 8.4 million rentable square feet. The portfolio includes 148 outpatient medical facilities valued at $1.38 billion and 44 senior housing properties worth $1.08 billion. The Midwest remains the company’s largest market by square footage and rental income.
In September 2024, NHP took a major step to streamline operations by internalizing its property management and advisory functions. Bringing these services in-house reduced reliance on external advisors, lowered costs, and improved efficiency.
Later in the year, the company executed a reverse stock split, consolidating four shares of common stock into one. The move adjusted NHP’s stock structure with future public listing opportunities in mind.
Investment Focus and Market Positioning
NHP continues to prioritize high-quality, income-generating properties. The focus remains on outpatient medical facilities and senior housing, but the company is also exploring opportunities in hospital-leased properties, diagnostic centers, and specialized healthcare facilities. Investments are structured primarily as fee interests, with leasehold interests and joint ventures also in play.
Healthcare real estate remains a strong investment area, with demand driven by:
- An aging population
- Rising healthcare expenditures
- Increased demand for outpatient services
The Centers for Medicare and Medicaid Services (CMS) projects national health spending to grow at an average of 5.6% annually through 2032. At the same time, the number of Americans over 65 is increasing, reinforcing the need for senior housing and medical facilities.
Despite these tailwinds, challenges persist. Staffing shortages in senior housing, rising operational costs, and evolving regulations require careful navigation. NHP remains focused on long-term growth, positioning its portfolio to capture demand while managing these risks.
Financial Performance and Capital Strategy
NHP finances acquisitions and operations through a mix of debt and equity. As of December 31, 2024, the company had $1.2 billion in outstanding debt, backed by secured and unsecured borrowings. Credit facilities from Capital One, KeyBank, and Fannie Mae provide additional liquidity for future investments.
Revenue primarily comes from:
- Long-term lease agreements with healthcare providers
- Resident fees from senior housing properties
Despite inflationary pressures, net operating income remains stable. To optimize its portfolio, NHP continues to sell non-core assets, reducing debt and reinvesting in properties with stronger income potential.
In 2024, the company released a new estimated per-share net asset value (NAV) of $13.00 ($52.00 post-split), reflecting market conditions and property valuations.
Navigating Regulatory and Market Risks
Healthcare is a highly regulated industry, and NHP closely monitors federal and state-level policies that could impact its tenants. Compliance with Medicare and Medicaid reimbursement policies, fraud prevention laws, and licensing requirements is critical, as any disruptions could affect rental payments.
Potential legislative changes regarding private ownership of assisted living and skilled nursing facilities remain a risk. The transition to value-based payment structures also adds complexity for healthcare providers, influencing their financial stability.
Environmental regulations are another factor in NHP’s long-term planning. While no major capital expenditures have been required for compliance so far, the company continues to evaluate potential impacts across its portfolio.
Looking Ahead
NHP remains focused on strategic acquisitions, operational efficiencies, and disciplined risk management. The company’s investment approach, geographic diversification, and financial stability position it for continued growth.
With demographic trends fueling demand and healthcare services evolving, NHP aims to capture opportunities while staying agile in a shifting market.
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