SBRA · Sabra Health Care REIT, Inc.

Sabra Health Care REIT issued a business update on July 21, 2026, detailing significant portfolio actions and raising full-year 2026 guidance. The update centers on three key developments: the planned re-tenanting of all 26 Avamere properties, the settlement of the RCA mortgage, and upward revisions to earnings guidance.

The Avamere transition is the most impactful. Sabra has signed letters of intent to transfer 22 facilities to subsidiaries of Cascadia Healthcare, a Pacific Northwest operator with ~80 facilities, and the remaining four to an existing national tenant. Upon completion in H2 2026, annualized cash rent is expected to rise to $53 million from $41 million—a 30% increase. Additionally, smaller portfolio initiatives have closed or are under agreement, adding over $9 million in annual cash NOI on a run-rate basis. CEO Rick Matros noted that the transition has been well-planned with cooperation from Avamere's founder, ensuring continuity of clinical outcomes.

On the balance sheet front, Sabra agreed to a reduced cash repayment of $200 million to settle the $300 million RCA mortgage, which was scheduled to mature on November 1, 2026. The transaction closed on June 30, 2026, and proceeds were used to reduce the revolving credit facility. Pro forma, Net Debt to EBITDA improved from 5.0x to 4.8x, and behavioral health concentration decreased from 13% to 9% of Annualized Cash NOI. Management emphasized that the exit strengthens the portfolio and balance sheet, allowing focus on core senior housing and skilled nursing segments.

Incorporating these events and year-to-date performance, Sabra raised its full-year 2026 guidance. At the midpoint, Normalized FFO per share is now expected to be $1.54 (range $1.53-$1.55), up 7% over 2025, and Normalized AFFO per share is $1.60 (range $1.59-$1.61), up 8%. Other guided metrics include Net Income of $0.37-$0.39, FFO of $1.12-$1.14, and AFFO of $1.58-$1.60. Assumptions include low-single-digit Cash NOI growth for the triple-net portfolio, low-to-mid teens growth for same-store managed senior housing, general and administrative expenses of $61 million (including $13 million stock compensation), cash interest of $104 million, and weighted average share counts of 258-259 million. The guidance only reflects transactions completed as of July 21, 2026.

Overall, this update signals improving portfolio quality, reduced leverage, and enhanced earnings visibility, making the company more concentrated in its core segments while opportunistically managing non-core assets.