Sabra Health Care REIT | research notes

Sabra Health Care REIT: A Leading Healthcare Real Estate Investment Trust

Sabra Health Care REIT, Inc. (NASDAQ: SBRA) is a leading healthcare real estate investment trust (REIT) that owns, invests in, and operates a diversified portfolio of income-producing properties. The company focuses on senior housing and medical office buildings, with a particular emphasis on skilled nursing facilities (SNFs).

Investment Portfolio

Sabra's investment portfolio consists of over 700 properties located throughout the United States, Canada, and the United Kingdom. These properties are leased to a diverse group of operators, including national healthcare providers, regional operators, and individual owners.

• Senior Housing: Sabra owns a portfolio of over 450 senior housing properties, including assisted living facilities, independent living communities, and continuing care retirement communities (CCRCs).
• Medical Office Buildings: The company's medical office building segment comprises over 250 properties leased to various healthcare providers, such as physicians, dentists, and outpatient surgery centers.

Key Attributes

• Scale and Diversification: Sabra's large and diversified portfolio provides stability and reduces risk.
• Strong Tenant Base: The company has long-term leases with a diverse group of operators, ensuring a steady stream of rental income.
• Focus on Senior Care: Sabra's focus on senior care aligns with increasing demand for healthcare services among the aging population.
• Proven Track Record: The company has a long history of delivering consistent financial performance and dividend growth.

Investment Thesis

Investors may consider investing in Sabra Health Care REIT for the following reasons:

• Stable Income: The company generates predictable rental income from its long-term lease agreements.
• Growth Potential: The aging population and rising healthcare costs create demand for senior housing and medical office buildings.
• Dividend Yield: Sabra pays a quarterly dividend with a current yield of approximately 6%.
• Defensive Characteristics: The healthcare real estate sector tends to perform well during economic downturns, providing stability to investors.

Risks

As with any investment, there are risks associated with investing in Sabra Health Care REIT:

• Tenant Default Risk: The company's rental income is dependent on its tenants remaining solvent and meeting their lease obligations.
• Regulatory Changes: Changes in healthcare policies or regulations could impact the demand for senior care facilities and medical office buildings.
• Interest Rate Sensitivity: The company's cost of borrowing is affected by interest rates, which could impact its profitability.

Conclusion

Sabra Health Care REIT is a well-established healthcare REIT that offers investors stable income, growth potential, and defensive characteristics. With a diversified portfolio, a strong tenant base, and a focus on senior care, Sabra is positioned to benefit from the long-term growth trends in the healthcare industry. Investors seeking yield and resilience in their portfolio may consider investing in SBRA shares.

Business Model of Sabra Health Care REIT

Sabra Health Care REIT, Inc. is a healthcare real estate investment trust (REIT) that owns and invests in various healthcare properties, including:

• Skilled nursing facilities
• Senior housing communities
• Medical office buildings
• Behavioral health facilities
• Post-acute care facilities

Sabra's business model involves:

• Acquiring and developing healthcare properties: The company acquires existing healthcare properties or develops new ones through its own development capabilities or joint ventures.
• Leasing properties to operators: It leases these properties long-term to experienced healthcare operators.
• Generating rental income: The operators pay rent to Sabra, providing the company with a steady stream of income.
• Passing on income to shareholders: As a REIT, Sabra is required to distribute at least 90% of its taxable income to its shareholders in the form of dividends.

Advantages over Competitors

Sabra Health Care REIT has several advantages over its competitors, including:

• Large and Diversified Portfolio: Sabra owns one of the largest healthcare property portfolios in the US, giving it significant scale and diversification.
• Strong Operator Relationships: The company has long-standing relationships with leading healthcare operators, providing it with a competitive edge in acquiring and leasing properties.
• Experienced Management Team: Sabra's management team has extensive experience in the healthcare real estate industry, giving it a deep understanding of the market and operational needs.
• Access to Capital: As a publicly traded REIT, Sabra has access to capital through equity and debt financing, allowing it to fund its growth initiatives.
• Strong Financial Performance: The company has a history of consistent dividend growth and strong financial metrics, making it attractive to investors.
• Focus on High-Growth Segments: Sabra targets healthcare property segments that are experiencing high demand and growth, such as behavioral health and post-acute care.
• Commitment to Sustainability: The company is committed to sustainable practices and has implemented initiatives to reduce environmental impact and improve energy efficiency.

Outlook of Sabra Health Care REIT, Inc.

Financial Performance

• Strong Q4 2022 Results:
  • Revenue increased by 12.9% YoY to $464.8 million
  • Normalized FFO per share rose by 7.1% YoY to $0.56
  • Occupancy remained stable at 89.1%
• Healthy Balance Sheet:
  • $1.8 billion in cash and cash equivalents as of December 31, 2022
  • Debt-to-assets ratio of 38.9%
  • Adequate liquidity to fund operations and growth initiatives

Operational Highlights

• Expansion through Acquisitions: Recently acquired four skilled nursing facilities and two behavioral health hospitals for approximately $150 million
• Portfolio Optimization: Exited or refinanced underperforming assets and acquired high-quality properties in growing markets
• Focus on Value-Based Care: Strategic partnerships to enhance care coordination and improve patient outcomes

Industry Trends

• Aging Population: Rising demand for senior care services due to an aging population
• Shift Towards Post-Acute Care: Increased focus on providing post-hospital care in skilled nursing facilities and rehabilitation centers
• Regulatory Changes: Ongoing regulatory changes aimed at improving quality of care and reducing healthcare costs

Company-Specific Strengths

• Strong Operator Relationships: Long-standing partnerships with leading healthcare operators, including Genesis Healthcare and CareTrust
• Diversified Portfolio: Mix of skilled nursing, senior housing, and behavioral health facilities across various markets
• Proven Management Team: Experienced executives with a track record of driving growth and profitability

Challenges

• Reimbursement Pressures: Government reimbursement rates for skilled nursing services have been declining in recent years
• Competition: Intense competition from other REITs and healthcare providers
• Rising Operating Costs: Inflationary pressures on labor and supplies can impact profitability

Outlook

Despite the challenges, Sabra Health Care REIT is well-positioned for continued growth and value creation in the future. The company's strong financial foundation, operational execution, and alignment with industry trends support its positive outlook.

Analysts' Consensus:

Analysts generally maintain a positive view of Sabra Health Care REIT. Consensus estimates suggest:

• Revenue growth of approximately 5% in 2023
• FFO per share growth of around 6% in 2023
• Continued accretive acquisitions and portfolio optimization
• Dividend yield of approximately 8% in 2023

Disclaimer: The information provided is for informational purposes only and should not be considered investment advice. Investors should always consult with a qualified financial professional before making any investment decisions.

Similar Companies to Sabra Health Care REIT

Welltower Inc.

• Website: https://www.welltower.com/
• Why customers like it: Welltower is a leading healthcare real estate investment trust (REIT) with a diversified portfolio of over 500 skilled nursing facilities, post-acute care facilities, and seniors housing communities. It offers a stable and growing income stream from long-term lease agreements with healthcare providers.

Ventas, Inc.

• Website: https://www.ventasinc.com/
• Why customers like it: Ventas is another healthcare REIT with a well-established reputation and a portfolio of over 1,200 senior living communities, skilled nursing facilities, and medical office buildings. It provides geographic diversification and exposure to a wide range of healthcare sectors.

Healthpeak Properties, Inc.

• Website: https://www.healthpeak.com/
• Why customers like it: Healthpeak is a healthcare REIT that specializes in medical office buildings, ambulatory surgery centers, and life science facilities. Its portfolio offers exposure to the growing outpatient care market and potential for growth in the healthcare industry.

Medical Properties Trust, Inc.

• Website: https://www.medicalpropertiestrust.com/
• Why customers like it: Medical Properties Trust is a healthcare REIT that invests in hospitals and healthcare facilities. It has a global presence with assets in the United States, Europe, and Australia. This diversification provides stability and potential for growth.

ARMOUR Residential REIT, Inc.

• Website: https://www.armourreit.com/
• Why customers like it: ARMOUR Residential REIT is a residential mortgage REIT that invests in residential mortgage-backed securities (MBS). It offers high dividend yields and exposure to the housing market. However, it is subject to interest rate risk and economic conditions that affect the residential mortgage market.

History of Sabra Health Care REIT:

1999:

• Sabra Health Care REIT is founded by Arnold Whitman as a subsidiary of Kindred Healthcare, a nursing home operator.
• The company initially invests in skilled nursing facilities.

2003:

• Sabra becomes a publicly traded company through an initial public offering (IPO).

2006:

• Sabra acquires 618 skilled nursing facilities from Kindred Healthcare for $1.8 billion.
• The acquisition makes Sabra the largest owner of skilled nursing facilities in the United States.

2009:

• Sabra acquires Regent Care Centers, a portfolio of 20 skilled nursing facilities, for $150 million.

2010:

• Sabra acquires Emeritus Corporation, a provider of assisted living and memory care services, for $1.2 billion.
• The acquisition diversifies Sabra's portfolio into senior housing.

2013:

• Sabra acquires Arbor Senior Living, a portfolio of 75 retirement communities, for $1.1 billion.
• The acquisition further strengthens Sabra's position in senior housing.

2014:

• Sabra acquires Care Capital Partners, a healthcare property company, for $2.1 billion.
• The acquisition expands Sabra's portfolio into medical office buildings and healthcare campuses.

2016:

• Sabra acquires Holiday Retirement Corporation, a provider of independent living communities, for $1.5 billion.
• The acquisition makes Sabra one of the largest operators of independent living communities in the United States.

2019:

• Sabra acquires CareAllies, a provider of home health and hospice services, for $1 billion.
• The acquisition strengthens Sabra's presence in the home health and hospice sector.

Present:

• Sabra Health Care REIT is a leading provider of real estate to the healthcare industry.
• The company owns and operates a diversified portfolio of over 1,000 properties in 46 states and the District of Columbia.
• Sabra is committed to providing innovative and high-quality healthcare real estate solutions for its tenants and investors.

Last Three Years

2020

• Acquired 17 skilled nursing facilities for $174.8 million
• Raised $200 million through a public offering of common stock
• Declared a quarterly dividend of $0.43 per share

2021

• Acquired 18 skilled nursing facilities for $236.7 million
• Raised $300 million through a public offering of convertible senior notes
• Increased quarterly dividend to $0.45 per share

2022

• Acquired 15 skilled nursing facilities for $135.3 million
• Raised $250 million through a public offering of common stock
• Increased quarterly dividend to $0.47 per share

Recent Timelines

2023

• January 10: Announced the acquisition of 10 skilled nursing facilities for $105.2 million
• February 7: Declared a quarterly dividend of $0.49 per share
• March 2: Announced the closing of the acquisition of 10 skilled nursing facilities

2024

• Currently no significant events scheduled

Exceptional REIT with Outstanding Performance and Value

As a seasoned investor, I am thrilled to recommend Sabra Health Care REIT as an exceptional investment opportunity. This premier healthcare real estate company has consistently outperformed its peers and delivered impressive returns to shareholders.

Strong Portfolio and Diversification

Sabra Health Care REIT boasts a diverse portfolio of over 800 properties across the United States, including skilled nursing facilities, senior housing communities, and medical office buildings. This broad diversification mitigates risk and enhances the company's financial stability.

Exceptional Revenue Growth and Earnings Stability

The company has demonstrated remarkable revenue growth over the past several years, driven by the increasing demand for skilled nursing and senior housing services. Additionally, Sabra Health Care REIT's triple-net lease structure provides a stable and predictable income stream, ensuring consistent earnings.

Shareholder-Oriented Management

Sabra Health Care REIT has a proven track record of rewarding shareholders. The company has consistently increased its dividend, providing a reliable source of income. Management's commitment to transparency and communication has also enhanced investor confidence.

Industry-Leading Occupancy and Rent Coverage

The company's high occupancy rates and strong rent coverage ratios are a testament to the quality of its properties and the strength of its tenant base. This consistent performance provides investors with peace of mind and enhances the long-term value of their investment.

Conclusion

In conclusion, Sabra Health Care REIT is an outstanding investment opportunity for both income-oriented and growth-minded investors. The company's exceptional portfolio, strong financial performance, and shareholder-oriented management make it a compelling choice for any diversified investment portfolio. I highly recommend Sabra Health Care REIT as a top-tier REIT for both short-term and long-term success.

Discover Stable Growth and Diversification with Sabra Health Care REIT

Are you seeking a secure and rewarding real estate investment? Look no further than Sabra Health Care REIT, a leading provider of healthcare real estate.

Unlock the Power of Healthcare Real Estate

In today's dynamic healthcare industry, Sabra Health Care REIT offers investors a unique opportunity to capitalize on the growing demand for quality healthcare facilities. Our portfolio comprises over 900 properties, including skilled nursing facilities, medical office buildings, and assisted living communities.

Proven Track Record of Success

With a track record spanning over two decades, Sabra Health Care REIT has a proven ability to deliver consistent returns. Our investment strategy focuses on strategic acquisitions, reliable tenants, and efficient operations, ensuring long-term stability for our shareholders.

Diversification and Hedge against Inflation

Investing in healthcare real estate provides inherent diversification and a hedge against inflation. Healthcare facilities are essential services that continue to be in high demand, making this asset class relatively resilient to economic downturns.

Exceptional Management Team

Our experienced management team has a deep understanding of the healthcare sector and a commitment to maximizing investor value. Their expertise and industry knowledge drive our decision-making and ensure the success of our operations.

Transparency and Investor Relations

At Sabra Health Care REIT, transparency and investor engagement are paramount. We maintain robust investor relations through regular communication, earnings calls, and investor events, allowing our shareholders to stay informed and engaged.

Join the Growing Sabra Family

By investing in Sabra Health Care REIT, you join a community of discerning investors who recognize the value and potential of healthcare real estate. Our commitment to delivering stable growth, diversification, and exceptional returns sets us apart as the preferred choice for healthcare real estate investments.

Explore Our Website

To learn more about Sabra Health Care REIT and how you can benefit from our investment offerings, visit our website at https://www.sabrahealth.com. Our website provides comprehensive information about our portfolio, investment strategy, and shareholder services.

Make the investment that positions you for success. Join Sabra Health Care REIT today and unlock the power of healthcare real estate.

Sabra Health Care REIT's Main Suppliers

Sabra Health Care REIT, a real estate investment trust (REIT), primarily invests in healthcare properties such as skilled nursing facilities, senior housing communities, and medical office buildings. The company's main suppliers include:

• Construction and Development Companies:

  • McCarthy Building Companies: https://www.mccarthy.com/
  • Adolfson & Peterson Construction: https://www.adolfson-peterson.com/
  • Mortenson Construction: https://mortenson.com/

• Property Management Companies:

  • Integral Senior Living: https://www.integralseniorliving.com/
  • Blueprint Healthcare Real Estate Advisors: https://www.blueprintadvisors.com/
  • LTC Properties: https://www.ltcproperties.com/

• Healthcare Operators:

  • Genesis HealthCare: https://www.genesishcc.com/
  • Sabra Health Care REIT: https://www.sabrahealth.com/
  • Sun Healthcare Group: https://www.sunhealthcare.net/

• Equipment and Supply Vendors:

  • Medline Industries: https://www.medline.com/
  • Cardinal Health: https://www.cardinalhealth.com/
  • Owens & Minor: https://www.owens-minor.com/

• Insurance Companies:

  • National General Insurance: https://www.nationalgeneral.com/
  • Hartford Financial Services Group: https://www.thehartford.com/
  • Westfield Insurance: https://www.westfieldinsurance.com/

Additional Information

Sabra Health Care REIT also works with various other suppliers and service providers for specific needs, such as legal counsel, accounting services, and technology support. The company conducts thorough due diligence and maintains strong relationships with its suppliers to ensure the quality and reliability of its services and products.

Main Customers (Downstream Companies) of Sabra Health Care REIT

Sabra Health Care REIT (NYSE: SBRA) primarily serves the healthcare real estate market, providing financing and leasing solutions to healthcare providers across various sectors. The company's main downstream customers include:

Skilled Nursing Facilities (SNFs)

• Website: N/A
• Description: Healthcare facilities providing specialized care to patients who need assistance with activities of daily living, such as bathing, dressing, and eating.

Assisted Living Facilities (ALFs)

• Website: N/A
• Description: Residential settings that offer varying levels of support to seniors who require assistance with daily tasks but do not require the intensive medical care provided in a SNF.

Independent Living Facilities (ILFs)

• Website: N/A
• Description: Communities that provide seniors with housing, amenities, and social activities, while allowing them to maintain their independence.

Behavioral Health Facilities

• Website: N/A
• Description: Healthcare facilities specializing in the treatment of mental health disorders, including addiction, anxiety, and depression.

Hospitals

• Website: N/A
• Description: Medical facilities that provide comprehensive inpatient and outpatient care to patients with various illnesses and injuries.

Medical Office Buildings (MOBs)

• Website: N/A
• Description: Buildings that house medical practices, including physician offices, clinics, and diagnostic centers.

Outpatient Surgery Centers

• Website: N/A
• Description: Facilities that perform surgeries that do not require overnight hospitalization.

Long-Term Acute Care Hospitals (LTACHs)

• Website: N/A
• Description: Hospitals that provide specialized care to patients who require extended periods of intensive medical treatment after an acute illness or injury.

Specialty Hospitals

• Website: N/A
• Description: Hospitals that focus on specific medical specialties, such as cancer treatment, orthopedics, or women's health.

Other Healthcare Providers

• Website: N/A
• Description: Various healthcare organizations, including home health agencies, hospice providers, and rehabilitation centers.

Sabra Health Care REIT (NASDAQ: SBRA) is a real estate investment trust (REIT) that invests in healthcare properties, including skilled nursing facilities, assisted living facilities, and hospitals.

Key Revenue Stream

The company's key revenue stream is rental income from its tenants, which are typically healthcare providers. As of December 31, 2022, Sabra had ownership interests in 975 properties, which were leased to 692 tenants.

Estimated Annual Revenue

For the year ended December 31, 2022, Sabra reported total revenue of $1.2 billion. Of this amount, $1.1 billion was from rental income.

Breakdown of Rental Revenue

The breakdown of Sabra's rental revenue by property type is as follows:

• Skilled nursing facilities: $712.9 million
• Senior housing (assisted living and memory care): $292.2 million
• Hospitals: $89.6 million
• Other: $21.5 million

Other Revenue Sources

In addition to rental income, Sabra also generates revenue from other sources, such as:

• Management fees: $43.7 million
• Development fees: $10.8 million
• Other income: $13.5 million

Total Revenue

Combining rental income and other revenue sources, Sabra's total revenue for the year ended December 31, 2022 was $1.2 billion.

Key Partners of Sabra Health Care REIT:

Sabra Health Care REIT collaborates with a network of key partners to support its operations and enhance its portfolio. These partners include:

1. Healthcare Operators:

• Genesis HealthCare: https://www.genesishcc.com/
• Ensign Group: https://www.ensigngroup.net/
• HCR ManorCare: https://www.hcr-manorcare.com/
• Sabra Hospitality: https://www.sabrahealth.com/hospitality/

2. Real Estate Developers and Owners:

• Healthcare Realty Trust: https://hcr-trust.com/
• Welltower: https://www.welltower.com/
• Ventas, Inc.: https://www.ventasreit.com/

3. Financial Institutions:

• Wells Fargo: https://www.wellsfargo.com/
• J.P. Morgan: https://www.jpmorgan.com/
• Goldman Sachs: https://www.goldmansachs.com/

4. Healthcare Service Providers:

• CVS Health: https://www.cvshealth.com/
• Walgreens Boots Alliance: https://www.walgreensbootsalliance.com/
• Centene Corporation: https://www.centene.com/

5. Government Agencies:

• Centers for Medicare & Medicaid Services (CMS): https://www.cms.gov/
• Department of Housing and Urban Development (HUD): https://www.hud.gov/

6. Industry Associations:

• National Investment Center for Seniors Housing & Care (NIC): https://www.nic.org/
• American Health Care Association (AHCA): https://www.ahcancal.org/
• National Association for the Support of Long Term Care (NASL): https://www.nasl.org/

These key partners play a crucial role in supporting Sabra's operations, including property acquisitions and developments, tenant relationships, financial services, regulatory compliance, and industry advocacy. Through these partnerships, Sabra is able to maintain a strong and diversified portfolio of healthcare properties and deliver value to its shareholders.

Key Cost Structure of Sabra Health Care REIT

1. Property Operating Costs (Estimated annual cost: $1.2 billion)

• Property taxes
• Insurance
• Repairs and maintenance
• Utilities
• Other operating expenses

2. Interest Expense (Estimated annual cost: $800 million)

• Interest on mortgage debt
• Interest on other debt

3. G&A Expenses (Estimated annual cost: $150 million)

• Salaries and benefits
• Office rent
• Marketing and advertising
• Professional fees
• Other administrative expenses

4. Provision for Bad Debts (Estimated annual cost: $50 million)

• Estimated losses on unpaid rent and other receivables

5. Depreciation and Amortization (Estimated annual cost: $200 million)

• Depreciation on real estate and improvements
• Amortization of intangible assets

6. Other Expenses (Estimated annual cost: $50 million)

• Legal fees
• Loan origination fees
• Asset impairment charges

Total Estimated Annual Cost: $2.5 billion

Note: These estimates are based on Sabra Health Care REIT's financial statements for the year ended December 31, 2022. Actual costs may vary.

Sales Channels

Sabra Health Care REIT (SBRA) primarily generates revenue through the following sales channels:

• Property Lease Income: The majority of SBRA's revenue is derived from rental payments received from lease agreements with healthcare operators. SBRA leases its properties to skilled nursing facilities (SNFs), senior housing facilities, other healthcare facilities, and related businesses.

• Triple-Net Lease Income: SBRA's triple-net leases require tenants to pay all property-related expenses, including insurance, property taxes, and maintenance costs. This structure provides SBRA with stable, predictable rental income with minimal operating expenses.

• Acquisition and Disposition Income: SBRA may generate revenue from the acquisition and disposition of healthcare properties. When the company acquires new properties, it can collect rent and add to its portfolio. Conversely, when SBRA sells properties, it can realize gains on the sale.

• Other Income Sources: SBRA also generates revenue from ancillary sources, such as interest income on loans to tenants, management fees, and other real estate-related services.

Estimated Annual Sales

According to the company's latest financial statements, Sabra Health Care REIT's estimated annual sales for the fiscal year ending December 31, 2022, were approximately $1.72 billion. This figure represents a combination of the aforementioned sales channels.

Additional Information

• Tenant Base: As of December 31, 2022, SBRA had approximately 960 tenants operating in 42 states. The top 10 tenants accounted for approximately 34% of the company's total rental revenue.
• Portfolio Size: As of December 31, 2022, SBRA's portfolio consisted of approximately 950 properties, including SNFs, senior housing facilities, and other healthcare properties.
• Geographic Concentration: The majority of SBRA's properties are located in the United States. As of December 31, 2022, approximately 75% of the company's portfolio was located in the Southeast and Midwest regions.

Customer Segments of Sabra Health Care REIT

Sabra Health Care REIT (Sabra) is a healthcare real estate investment trust (REIT) that invests in and finances healthcare properties such as skilled nursing facilities, senior living communities, and medical office buildings. Its customer segments include:

1. Skilled Nursing Facility (SNF) Operators:

• Operators of long-term care facilities that provide 24-hour nursing care to patients recovering from illness or injury.
• Estimated annual sales: $1.5 billion

2. Senior Housing Operators:

• Operators of retirement communities, assisted living facilities, and independent living communities.
• Estimated annual sales: $1.2 billion

3. Medical Office Building (MOB) Tenants:

• Healthcare providers, such as physicians, dentists, and other medical professionals, who lease space in medical office buildings.
• Estimated annual sales: $600 million

4. Behavioral Health Providers:

• Operators of facilities that provide mental health and substance abuse treatment services.
• Estimated annual sales: $300 million

5. Long-Term Acute Care Hospital (LTACH) Operators:

• Operators of hospitals that provide specialized care for critically ill patients who require extended hospitalization.
• Estimated annual sales: $200 million

6. Specialty Hospitals:

• Operators of hospitals that specialize in specific medical conditions, such as orthopedics, cardiology, or women's health.
• Estimated annual sales: $100 million

7. Other Healthcare Providers:

• Operators of various other healthcare facilities, such as outpatient surgery centers, rehabilitation centers, and hospice care.
• Estimated annual sales: $50 million

Total Estimated Annual Sales:

Approximately $4.0 billion

Value Proposition of Sabra Health Care REIT

Sabra Health Care REIT, Inc. (NASDAQ: SBRA) is a self-administered, publicly traded real estate investment trust (REIT) that invests in the healthcare real estate industry. The company's portfolio includes approximately 975 buildings and facilities leased to a diverse group of healthcare providers across the United States.

Sabra Health Care REIT's value proposition can be summarized as follows:

• High-quality portfolio: Sabra Health Care REIT's portfolio is primarily comprised of mission-critical healthcare properties, including skilled nursing facilities, senior housing communities, and medical office buildings. These properties are leased to a diverse group of tenants with a strong track record of financial performance.
• Strong cash flow: Sabra Health Care REIT generates a significant amount of cash flow from its portfolio of healthcare properties. This cash flow is used to fund the company's operations and growth initiatives.
• Experienced management team: Sabra Health Care REIT's management team has a proven track record of success in the healthcare real estate industry. The team has a deep understanding of the healthcare sector and is well-positioned to identify and acquire high-quality healthcare properties.
• Commitment to sustainability: Sabra Health Care REIT is committed to environmental and social responsibility. The company has implemented a number of sustainability initiatives, including energy efficiency programs and the use of renewable energy sources.

Benefits of Investing in Sabra Health Care REIT

Investors who invest in Sabra Health Care REIT can benefit from the following:

• Stable income: Sabra Health Care REIT pays a regular dividend to its shareholders. The company's dividend yield is currently approximately 6%.
• Long-term growth potential: The healthcare real estate industry is expected to continue to grow in the years to come. This growth will be driven by the aging population and the increasing demand for healthcare services.
• Diversification: Sabra Health Care REIT's portfolio is well-diversified by property type, tenant, and geographic region. This diversification helps to reduce the risk of any one investment underperforming.

Conclusion

Sabra Health Care REIT is a well-respected healthcare real estate REIT with a strong track record of success. The company's high-quality portfolio, strong cash flow, experienced management team, and commitment to sustainability make it a solid investment for investors seeking stable income and long-term growth potential.

Risks Associated with Sabra Health Care REIT

1. Tenant Concentration Risk: Sabra Health Care REIT's portfolio is heavily concentrated in skilled nursing facilities (SNFs), which account for approximately 80% of its total revenue. This concentration increases the company's exposure to the risks associated with the SNF industry, such as changes in reimbursement rates, competition, and regulatory changes.

2. Lease Expiration Risk: Sabra Health Care REIT's leases have an average weighted lease term of approximately 10 years. The expiration of these leases could lead to a significant loss of revenue if the company is unable to renew or replace them on favorable terms.

3. Interest Rate Risk: Sabra Health Care REIT's debt portfolio is primarily comprised of fixed-rate loans. An increase in interest rates could increase the company's borrowing costs, which could have a negative impact on its profitability.

4. Construction and Development Risk: Sabra Health Care REIT engages in development and redevelopment projects. These projects involve a number of risks, including delays, cost overruns, and potential construction defects.

5. Regulatory Risk: Sabra Health Care REIT operates in a heavily regulated industry. Changes in healthcare laws and regulations could have a material impact on the company's operations and financial performance.

6. Environmental, Social, and Governance (ESG) Risk: Sabra Health Care REIT's operations are subject to a variety of ESG risks, such as climate change, patient safety concerns, and employee relations. Failure to effectively manage these risks could damage the company's reputation and financial performance.

7. Litigation Risk: Sabra Health Care REIT is involved in various legal proceedings, including lawsuits and regulatory investigations. The outcome of these proceedings could have a material impact on the company's financial condition and reputation.

8. Market Risk: Sabra Health Care REIT's stock price is subject to fluctuations in the overall market. Economic downturns, interest rate changes, and other factors could negatively impact the company's stock price.

9. Competition Risk: Sabra Health Care REIT faces competition from other REITs, private equity firms, and healthcare providers. Increasing competition could make it more difficult for the company to acquire and retain tenants, and could pressure its rental rates.

10. Foreign Currency Risk: Sabra Health Care REIT has operations in Canada and the United Kingdom. Fluctuations in foreign currency exchange rates could impact the company's financial results.

Overall, Sabra Health Care REIT faces a number of risks that investors should be aware of. However, the company's diversified portfolio, long-term leases, and experienced management team provide some mitigation of these risks.