Sabra Health Care REIT, Inc. (SBRA): BCG Matrix [Dec-2025 Updated]

You're looking at Sabra Health Care REIT, Inc.'s portfolio in late 2025, and the strategy is crystal clear now that the post-pandemic recovery is humming along. We've got the Senior Housing - Managed (SHOP) segment firing as a Star, with same-store Cash NOI jumping 13.3% year-over-year in Q3 2025 and management pushing its concentration target to 40%. Meanwhile, the bedrock remains the Skilled Nursing/Transitional Care facilities, our Cash Cows, which still account for 48.8% of Annualized Cash NOI with healthy coverage of 2.19x. We're actively trimming the low-impact Specialty Hospitals, our Dogs at just 3.7% of NOI, while keeping a close eye on the high-potential Behavioral Health segment, our Question Mark, which shows amazing coverage at 3.77x but whose ultimate scale is still up for grabs; check out the breakdown below to see exactly where the capital is flowing.

Background of Sabra Health Care REIT, Inc. (SBRA)

You're looking at Sabra Health Care REIT, Inc. (SBRA), a real estate investment trust that focuses its capital on healthcare properties across the United States and Canada. The company, headquartered in Tustin, California, operates by owning real estate assets and leasing them to operators or managing them through property management agreements. Its core mission involves providing stable, predictable cash flow through its diverse portfolio of facilities serving the aging population.

As of September 30, 2025, Sabra Health Care REIT, Inc. (SBRA)'s portfolio was concentrated across several key asset classes, as measured by Annualized Cash NOI. The largest segment was Skilled Nursing/Transitional Care, representing 48.9% of the portfolio. Following that, Senior Housing - Managed accounted for 25.9%, and Senior Housing - Leased made up 7.8%. Other categories included Behavioral Health and Specialty Hospitals and Other, showing the company's broad exposure within the healthcare real estate space.

For the third quarter of 2025, the company reported mixed results against analyst expectations, though management emphasized key operational metrics. Sabra Health Care REIT, Inc. (SBRA) posted total revenues of $190.04 million for the quarter, which actually beat some forecasts. On a per-share basis, the reported GAAP Net Income was just $0.09, but the focus for investors was on the $0.36 in Normalized Funds From Operations (FFO) and $0.38 in Normalized Adjusted Funds From Operations (AFFO).

Operationally, the managed senior housing segment showed strong momentum, with same-store Cash Net Operating Income (NOI) increasing 13.3% year-over-year in Q3 2025, or 15.9% when excluding 16 specific properties. Strategically, Sabra Health Care REIT, Inc. (SBRA) is actively shifting its focus, raising its target concentration for Senior Housing Operating Portfolio (SHOP) assets to 40% from a previous target of 30%. This focus on growth is supported by a strengthening balance sheet; as of September 30, 2025, the Net Debt to Adjusted EBITDA stood at 4.96x, which helped prompt Moody's to upgrade the company's senior unsecured notes rating to Baa3 in September 2025.

Sabra Health Care REIT, Inc. (SBRA) - BCG Matrix: Stars

You're looking at the engine driving Sabra Health Care REIT, Inc.'s growth right now, which is definitely the Senior Housing - Managed (SHOP) segment. This is where Sabra Health Care REIT, Inc. is placing its bets for future Cash Cow status, so it consumes a lot of capital to keep that growth rate up.

Senior Housing - Managed (SHOP) is the primary growth engine for Sabra Health Care REIT, Inc. The focus here is on capturing upside from market cycles, which is why management is aggressively shifting the portfolio mix. As of September 30, 2025, the portfolio included 83 senior housing communities operated by third-party property managers under management agreements. This segment's performance is clearly outpacing the rest of the portfolio.

The operational results from the third quarter of 2025 really highlight this strength. Same-store managed senior housing Cash Net Operating Income (NOI) jumped 13.3% year-over-year. If you exclude the 16 properties formerly operated by Holiday that remain in the same-store pool, that growth was even stronger at 15.9% year-over-year. Management is sticking to its forecast for full-year same-store Cash NOI growth in the mid-teens for this segment.

To support this focus, management raised the target concentration for SHOP to 40% of the total portfolio, a significant increase from the previous target of 30%. This is based on the fact that the SHOP portfolio already stood at approximately 26% of the total portfolio as of the third quarter of 2025. It's a clear signal of where the capital deployment strategy is headed.

The inorganic growth-acquisitions-is heavily weighted toward this Star segment. In Q3 2025 alone, Sabra Health Care REIT, Inc. acquired six new managed senior housing properties for $217.5 million, carrying an estimated initial cash yield of 7.8%. Plus, they purchased the operations of four other managed senior housing properties for $19.7 million during the quarter. That's a lot of capital moving into the growth area.

Here's a quick look at the investment activity supporting the Star segment:

Occupancy is recovering strongly, which is key for a managed portfolio where Sabra Health Care REIT, Inc. participates directly in the operating results. Occupancy in the total managed portfolio (excluding non-stabilized communities and those held for share) increased 60 basis points sequentially to reach 86.8% in Q3 2025. The same-store portfolio occupancy was up 110 basis points to 86% for the quarter.

The key metrics showing the momentum in this segment are clear:

• Same-store managed senior housing Cash NOI growth year-over-year in Q3 2025: 13.3%.
• Sequential occupancy increase in the total managed portfolio: 60 basis points.
• Sequential occupancy level in the total managed portfolio: 86.8%.
• New management target concentration for SHOP: 40%.
• Previous management target concentration for SHOP: 30%.

This segment is consuming cash to fuel its market share gain, but the strong NOI growth suggests it's building the foundation to become a Cash Cow when the high-growth market eventually matures. Finance: draft the capital allocation plan for the next $120 million awarded deals by next Tuesday.

Sabra Health Care REIT, Inc. (SBRA) - BCG Matrix: Cash Cows

You see the Skilled Nursing/Transitional Care facilities segment as the bedrock of Sabra Health Care REIT, Inc.'s stability. This category represents the largest concentration of the portfolio, accounting for 48.8% of the Annualized Cash Net Operating Income (NOI) as of September 30, 2025. This concentration in a mature, essential service sector is the classic hallmark of a Cash Cow business unit.

The structure here is designed for predictable cash flow. The triple-net lease arrangement means tenants handle most property operating expenses, leading to highly predictable, contractual rent payments flowing to Sabra Health Care REIT, Inc. For instance, looking at the near term, the future minimum rental payments from properties held under non-cancelable operating leases for the period of April 1 through December 31, 2025, totaled $278,000 thousand. This contractual visibility helps you model cash generation with high confidence.

Tenant financial health within this core segment is strong, showing the ability to service that contractual obligation. For the first quarter of 2025, the EBITDARM (Earnings Before Interest, Taxes, Depreciation, Amortization, Rent, and Management Fees) rent coverage for Skilled Nursing/Transitional Care hit a post-pandemic high of 2.19x. This metric shows the operating cash flow relative to the rent due, and this level suggests significant cushion for your operators.

Here's a quick look at the Q1 2025 coverage ratios across the main asset classes, showing where the cash generation strength lies:

The focus for Sabra Health Care REIT, Inc. now is maintaining this productivity, not aggressive growth spending in this mature area. The company's outlook reflects this stability, as shown in the latest guidance:

• Full-year 2025 Normalized AFFO guidance remains stable between $1.495 and $1.505 per share.
• The Q3 2025 EBITDARM coverage for Skilled Nursing/Transitional Care improved further to 2.35x.
• The company's overall Net Debt to Adjusted EBITDA improved to 4.96x as of September 30, 2025.

Finance: draft 13-week cash view by Friday.

Sabra Health Care REIT, Inc. (SBRA) - BCG Matrix: Dogs

The Dogs quadrant represents business units or assets characterized by low market share in slow-growth markets. For Sabra Health Care REIT, Inc., this classification generally applies to assets that are non-core or are actively being recycled to fund higher-growth opportunities, such as the continued expansion in the Managed Senior Housing sector.

Specialty Hospitals and Other facilities, which includes Behavioral Health assets, is positioned as a segment with lower relative impact compared to the core Skilled Nursing and rapidly growing Senior Housing segments. In the third quarter of 2025, the EBITDARM Coverage for the Behavioral Health, Specialty Hospitals and Other category stood at 3.90x. This coverage metric, while healthy, exists within a segment that management is actively managing down to focus capital elsewhere.

Sabra is actively engaged in capital recycling, a clear indication of minimizing exposure to these lower-growth or non-core areas. In the six months ended June 30, 2025, Sabra Health Care REIT, Inc. completed the sale of five skilled nursing/transitional care facilities and one behavioral health facility for aggregate consideration, net of closing costs, of $37.1 million. These dispositions align with the strategy to divest assets with low relative market share and minimal expected growth contribution, freeing up capital for reinvestment.

The decision to sell these assets, rather than invest in an expensive turnaround, reflects the Dogs strategy: divestiture. This action allows Sabra to maintain balance sheet strength and focus liquidity on higher-yielding investments. For context on the portfolio's current health, here is a comparison of the Q3 2025 coverage ratios:

These assets, when categorized as Dogs, are units where the capital tied up yields little return relative to the company's strategic goals. The focus is on minimizing cash consumption and maximizing capital redeployment.

The strategic rationale for treating certain assets as Dogs involves several key considerations for Sabra Health Care REIT, Inc.:

• The segment is considered non-core relative to the growth focus on Managed Senior Housing.
• Capital recycling is an active strategy, evidenced by recent asset sales.
• Proceeds from dispositions, such as the $37.1 million net consideration from the six facilities sold in the first half of 2025, are redeployed.
• The company is prioritizing assets that drive stronger earnings, such as the Managed Senior Housing portfolio, which now contributes nearly 26% of total annualized cash NOI.

The company's overall liquidity as of September 30, 2025, was approximately $1.1 billion, which includes $200.6 million in unrestricted cash and cash equivalents, supporting the ability to execute these divestitures without straining operations. Finance: draft 13-week cash view by Friday.

Sabra Health Care REIT, Inc. (SBRA) - BCG Matrix: Question Marks

You're looking at the segment of Sabra Health Care REIT, Inc. (SBRA) that demands capital for growth but hasn't yet secured a dominant market position. These are the Question Marks, and for Sabra, the Behavioral Health facilities fit this profile perfectly, representing a high-demand area where scale is still being determined.

The segment is characterized by robust financial health metrics, suggesting strong underlying operational performance despite its smaller relative size. The EBITDARM coverage ratio for the Behavioral Health, Specialty Hospitals and Other category has shown consistent strength across the year:

This upward trend in coverage indicates that the cash flow generated by these assets is growing faster than the associated debt service, which is a positive sign for any investment consuming cash for expansion. However, the segment's overall contribution to the portfolio's cash flow remains a smaller slice compared to the core Senior Housing Operating Portfolio (SHOP) and Skilled Nursing (SNF) assets. Based on Q2 2025 data, the Triple-Net (NNN) portion, which includes Behavioral Health, accounted for 79.1% of total NOI, while the SHOP segment was 20.9%. The uncertainty lies in how aggressively Sabra Health Care REIT, Inc. will invest to grow this NNN sub-segment relative to the SHOP expansion.

The marketing strategy here is pure investment-getting markets to adopt these facilities through acquisition. Sabra Health Care REIT, Inc. is actively deploying capital, though the search results detail yields primarily for the broader Senior Housing acquisitions, which serve as a proxy for the investment appetite in this growth sector:

• Acquisitions closed subsequent to Q2 2025 carried initial cash yields of 7.7%.
• Q3 2025 acquisitions of managed senior housing properties had estimated initial cash yields of 7.8% and 7.0%.
• Approximately $120 million of additional senior housing investments were awarded in Q3 2025 with a yield of nearly 8%.

These Question Marks consume cash with the potential to become Stars. The company's overall financial footing supports this investment posture. As of September 30, 2025, Net Debt to Adjusted EBITDA improved to 4.96x, and liquidity stood at $1.2 billion as of June 30, 2025. This strong balance sheet allows Sabra Health Care REIT, Inc. to invest heavily to gain market share in this growing area, or divest if the path to scale proves too costly. For context on the cash flow environment during this investment period, Q3 2025 saw Normalized FFO per share of $0.36 and Net Income of $0.09 per diluted share.