Thank you for standing by. My name is Carly, and I will be your conference operator today. At this time, I would like to welcome everyone to the Sonida Senior Living Q1 2025 Earnings Call. All lines have been placed on-mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] I would now like to turn the call over to Jason Finkelstein, Investor Relations. Please go ahead.

Thank you, operator. All statements made today, May 12, 2025, which are not historical facts may be deemed to be forward-looking statements within the meaning of federal securities laws. The Company expressly disclaims any obligation to update these statements in the future. Actual results and performance may differ materially from forward-looking statements. Certain factors that can cause actual results to differ are detailed in the earnings release that the Company issued earlier today, as well as in the reports that the Company files with the SEC from time-to-time, including the risk factors contained in the annual report on Form 10-K and quarterly reports on Form 10-Q. Please see today's press release for the full safe harbor statement, which may be found in the 8-K filing from this morning at the Company's Investor Relations page sonidaseniorliving.com. Please note that during this call, the Company will present non-GAAP financial measures. The reconciliations of these non-GAAP measures to the most comparable GAAP measure, please see today's earnings release. If you would like to follow along during today's call, you can find Sonida's first quarter 2025 earnings presentation at sonidaseniorliving.com in the Investor Relations section. In addition, we have included supplemental earnings information within our presentation consistent with the prior quarter release. On today's call, I am joined by President and CEO, Brandon Ribar; and Chief Financial Officer, Kevin Detz. At this time, I'd like to turn the call over to Brandon for opening remarks.

Thanks, Jason. Good morning, and thank you all for joining us on our first quarter earnings call. 2025 is off to a strong start, with encouraging momentum across each of our strategic objectives. Our top priority remains driving community performance through tailored operating plans and detailed execution. Growth in our same-store portfolio continued along a strong trajectory, fueled by operational discipline that drove improvements in occupancy, resident rates and margin. Additionally, accelerated operating performance in the acquisition portfolio further demonstrates the benefits of our owner, operator, investor platform. Finally, our strategic inorganic growth plan remains on-track and we are excited to announce two new acquisitions expected to close in the second quarter, both reflecting our focus on deploying capital accretively and strategically. Entering the year, we outlined a plan to deliver year-over-year net operating income growth in line with the high-end of our peers. Slide 5 in the investor presentation summarizes our first quarter performance highlights. Our same-store portfolio NOI grew by 19.3% year-over-year and the acquisition portfolio NOI increased 31.3% sequentially from Q4 2024. Together, this generated a total portfolio NOI growth of 37.6% year-over-year. Our Q1 annualized NOI for the acquisition portfolio implies a 9.1% yield on cost, excluding the one unopened asset acquired at year-end. Additionally, we achieved a portfolio-wide 6.6% average renewal rate increase on March 1st, impacting nearly 70% of our resident base, and directly supported by our excellent resident satisfaction and our team's ability to offer a high value experience to our residents. These rate increases are consistent with the levels we achieved in 2024 and position the business for further NOI growth during the course of the year. Occupancy improved 100 basis points year-over-year in our same-store portfolio and 70 basis points sequentially from Q4 in our acquisition portfolio. Including the communities purchased…

Thanks, Brandon. Before I discuss our first quarter operating results, I wanted to identify a change in the composition of our portfolio categories as seen on Slide 11. Beyond the same-store and acquisition portfolios that we've previously reported on, we will now add a repositioning portfolio for assets that are undergoing significant renovations and/or business model changes. As more fully described later in the presentation, we have identified five such assets for strategic repositioning to capture a higher rate private pay customer base. This repositioning will require tailored operating platform changes and medium range capital reinvestment plans. These communities will be excluded from our same-store until these strategic plans have been fully executed. Starting on Slide 12 with the same-store comparison of year-over-year quarters, the company drove off occupancy 100 basis points to 86.8%. Coupled with a 5.5% RevPOR increase over the same period, annualized same-store revenues increased $60 million or 7.4%. With 65% of the increased revenues flowing through to NOI, the company grew same-store NOI by 19.3% and realized a 27.6% margin, a 280 basis point increase over the 24.8% posted in the first quarter of last year. Moving on to Slide 13. Our 2024 acquisition communities continue to deliver strong sequential growth. Note that, these figures contemplate the at share results of our two joint venture investments and exclude the December 31st acquisition of our Airy Hills community, which is scheduled to open later this year. Comparing to the fourth quarter of 2024, occupancy gained 70 basis points and RevPOR increased by 2.3%. The full impact of the rate profile is temporarily muted by the disparate timing of when the previous operators pushed through their last resident rate increases. We expect the rate increase profile to align more with our same-store rate trajectory once all communities are…

Thanks, Kevin. Starting on Slide 21 with capital allocation in our existing portfolio, I will expand on the repositioning communities Kevin referenced in his comments. Within this repositioning category, we identified an opportunity to design an offering consistent with the private paid landscape in these markets, while reducing our exposure to government reimbursement. In late 2024, the Indiana Medicaid program converted to a Managed Medicaid model, creating significant disruption by limiting both the timing and authorization for residents to access the benefit for assisted living and memory care services. As a result, we intentionally reduced the number of Medicaid admissions, thereby decreasing overall occupancy in these communities. We are now removing units from service, converting the product type to a different unit mix and investing capital to upgrade the physical plant, where the demographic income profile supports a private pay model. We are projecting capital spend of $4 million to $5 million in total across the five communities. Completion of these projects will meaningfully reduce the company's Medicaid percentage of total revenue currently at 9%, and we expect the return on investment to exceed 30%. Shifting gears, capital markets today continue to be shaped by liquidity seeking and debt motivated sellers. This backdrop is generating a steady pipeline of investment opportunities with attractive risk adjusted returns for Sonida. We remain focused on acquiring high-quality assets at a discount to replacement costs, where we can unlock value through operational improvement. In these situations, we benefit from owning well-located real estate at a favorable basis with upside from market improvement combined with the unique alpha, generated by our operating platform and leadership. On Page 24 of our investor presentation, we highlight one of our initial 2024 investments, the Stone joint venture, which closed in May. We acquired four recent vintage high quality…

[Operator Instructions] Your first question comes from Ronald Kamdem with Morgan Stanley.

Just two quick ones. First is on the repositioning portfolio. So the five assets are removed out of the pool into the portfolio. It sounded like from your opening comments, there was a sounds like a Medicaid change in Indiana, if I heard correctly. Just a little bit more color there. I know you talked about the dollar spent for those assets, but just what kind of timeline, any occupancy targets that you're thinking through, just would love to hear a little bit more about sort of the repositioning assets.

Thanks Ron and good morning. Good to speak with you. So I think the repositioning portfolio for us is a story around opportunity within our portfolio to invest some dollars to fully align those communities with our long-term business model. So, we are, as you know, heavily private pay and the opportunity to continue to reduce our exposure to the Medicaid program presented itself, when there was a change in the program that ultimately made it a little bit more difficult for people to access the Medicaid benefits in the state of Indiana. And in order to get ahead of any kind of long-term detriment to it, we looked at these five communities, which have the heaviest exposure to the Medicaid program and they're in good markets, where they do support a private pay model, but we felt the assets needed to be positioned with capital investment, to make sure that, we could really appeal to the private pay individuals. And so that meant, in order to get the investments completed, and to make sure that, we were appropriately managing the margin in those communities that we were taking units out of service, continue to take units out of service in the first and second quarter here, so that we can get that capital invested and ultimately shift the business model in those communities to a far more heavily-focused private pay reimbursement model, that matches with the long-term vision for our company as a whole. So, we thought it was a really good opportunity to use some of our dry powder, to deliver what we think is going to be a strong return profile for those internal capital investments.

Great. And then, my second question would just be, what about the remaining private pay, any other sort of assets that could potentially be on that repositioning bucket? And then, if you could also talk about just the two acquisitions that you guys have tied up and sort of any color on those in the pipeline?

Yes. Happy to do so. I think that within our portfolio, the repositioning bucket, these five are the most immediate opportunities there. We have done quite a bit of investment over the last couple of years across the portfolio. So I wouldn't say that, there's an expectation around a large-scale kind of transition of communities into that repositioning bucket or need there. So I think, we'll continue to evaluate that, just as our portfolio grows just shy of 100 assets now. There may be opportunities down the road, where we want to use that same concept where the business model does need an adjustment, or we're going to make a major capital investment that would change the trajectory of the business, but would create near-term disruption. So, we'll continue to monitor that, but nothing on the immediate horizon within the portfolio. So we'll continue to show the results of this repositioning effort and feel confident that, the results will really show the benefit from a capital investment and repositioning of these assets. And then, just on the two additional acquisitions that we've mentioned. These are strong Southern markets in Florida and Georgia, where we have a couple of individual acquisitions that are very, very consistent with what we purchased in kind of the latter part of 2024, where these are communities that will benefit from our operational overhaul. They're very nice kind of new vintage communities. And again, kind of the return expectations are consistent with what we bought towards the end of last year, where we feel like, these can stabilize with low double-digits yields. And so, we think, this is representative of an ongoing opportunity to use our platform to identify strong, very high-quality assets that just need some operational kind of capabilities and transitions and then can stabilize with really solid operating metrics in the very near future.

[Operator Instructions] There are no further questions at this time. I will now turn the call back over to Mr. Brandon Ribar for closing remarks.

Thank you all for participating this morning, and this concludes today's conference call.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.