National Healthcare Properties: Preferred Dividend Coverage Improves After Management Internalization

2025-04-20 12:05:28 ET

Summary

• National Healthcare Properties is a healthcare REIT focused on outpatient medical facilities and senior housing operating properties.
• The REIT's preferred dividends represented 47% of AFFO before preferred distributions.
• Following management internalization, the preferred dividends only accounted for 26% of Q4 2024 AFFO before preferred distributions.
• The preferred shares are a Buy thanks to the REIT's solid operating performance and a 45% discount to par value.
• Key risks to consider include no established public market for the common shares and high indebtedness.

Introduction

So far in 2025, National Healthcare Properties ' Series A 7.375% ( NHPAP ) and Series B 7.125% ( NHPBP ) preferred shares have marginally outperformed the iShares Preferred and Income Securities ETF ( PFF ), delivering a loss of ~2%:

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