Thank you for standing by. My name is Eric, and I will be your conference operator today. At this time, I would like to welcome everyone to the Sonida Senior Living Second Quarter 2025 Earnings Call. [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, August 11, 2025, which are not historical facts may be deemed to be forward- looking statements within the meaning of federal security laws. The company expressly disclaims any obligation to update these statements in the future. Actual results or 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 report 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 founded investors sonidaseniorliving.com. Please note that during this call, the company will present non-GAAP financial measures. For reconciliations of these non-GAAP measures to the most comparable GAAP measure, please see today's earnings release. If you'd like to follow along during today's call. You can find Sonida's second quarter 2025 earnings presentation in the Investor Relations section of the company's website. In addition, we have included supplemental earnings information within our presentation consistent with prior quarter releases. 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.

Thank you, Jason. Good morning, and thank you for joining us on our second quarter earnings call. 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. And as we approach the last third of 2025, we remain on track to achieve these goals. The second quarter of 2025 continued to deliver growth on both a sequential and year-over-year basis. Adjusted EBITDA grew 26.1% year-over-year in the second quarter, reflecting our ability to maintain G&A levels while driving NOI growth and despite a difficult year-over-year comp same-store net operating income grew 1.8% year-over-year and nearly 4% sequentially. On a total portfolio at share basis, NOI improved 5% sequentially. The year-over-year NOI growth was considerably slower than recent quarters driven by the challenging comp of an especially strong NOI margin in Q2 2024 as well as some specific challenges over the past quarter. Kevin will elaborate further on the details of the results, but I want to touch on a few key elements of the past quarter that we do not expect to repeat moving forward. First, our business experienced an unusually high uptick in resident deaths with resident move-outs exceeding Q2 of 2024 by 18% in our same door portfolio, limiting our year-over-year occupancy growth. Our clinical teams implemented an enhanced response process with more targeted efforts test risk in our resident population, especially in those communities with elevated move-ups. These efforts contributed to improvement in the back half of the quarter, and these improved processes will remain in place moving forward. Resident length of stay has slightly increased overall this year and remains an area of intense focus. Combined with a 4% year-over-year increase in quarterly same-store move-ins and strong lead volume, we ended the quarter…

Thanks, Brandon. Before I discuss our second quarter operating results, I wanted to start with Slide 11 and remind participants of our 3 portfolio categories, same-store acquisition and repositioning. In addition to the 20 communities acquired in 2024, the acquisition portfolio also now includes both of our second quarter single community acquisitions. Starting on Slide 12 with the same-store comparisons of sequential and year-over-year quarters. Year-over- year occupancy grew 40 basis points from 86.1% to 86.5% on a same-store basis, coupled with a 5% RevPAR increase over the same period annualized same-store revenues increased $12 million or 5.1%. On the margin side, at 28% flat, the company obtained its second highest quarterly NOI margin post COVID, with only Q2 2024 margin of 28.9% exceeding that. It is important to note that Q2 2024 same-store NOI margin was favorably impacted by approximately 60 basis points of onetime utility refunds recognized in the period and to a lesser extent, not yet having fully realized the run rate cost of the company's staggered implementation of its investments in technology. And sequentially, same-store occupancy decreased 30 basis points from Q1 2025. I will expand more on the company's recent and expected occupancy trends in more detail later in the presentation. Moving on to Slide 13. Our 2024 acquisition communities continued to deliver growth. Note that these figures include the actual results of our 2 joint venture investments from 2024, the December 31, 2024 acquisition of our Aerie Hills community that opened in July and 1 month of June operations for both our Q2 community acquisitions. Our sequential increase in revenues of 8.1% is reflective of a strong annual March 1 rate increase actualized for 1 full quarter as well as a 1-month revenue contribution from the 2 communities acquired in the quarter. Acquisition portfolio…

Thanks, Kevin. Looking ahead to the broader 2025 investment landscape, we remain disciplined deploying capital where we see accretive opportunities that offer compelling risk-adjusted returns and clear strategic value. Despite the increased investor interest in senior housing, we see a significant pipeline of opportunities that for a variety of reasons remain less competitive, especially among nonstabilized assets. . As we continue to refine our operational integration playbook, we believe we are uniquely positioned to capitalize on this opportunity set. The acquisition announced today reflects these trends. The 98-unit community was built less than 10 years ago and is in a high- growth, high income submarket of Dallas-Fort Worth. The community has struggled to stabilize operations in the past couple of years, and we believe a targeted aesthetic refresh along with a renewed operational and sales focus will drive meaningful NOI growth. Our investment team remains very busy as a significant amount of high-quality assets are coming to market, and we look to leverage all of the tools at our disposal as an owner-operator to accretively grow the portfolio. Sonida's focus on results-driven operational strategies, operational excellence and capital allocation yielded another quarter of strong performance. The combination of in-place revenue and NOI growth responsible and attractive investment activity and broader application of our owner-operator platform uniquely positions Sonida as a leader within the senior living and real estate landscape. We have significant occupancy rate and margin growth opportunity in our portfolio today with more than $60 million of annual revenue potential simply from filling up in-place vacancy at current market rates, we are optimistic about the future upside in the business. We believe our sustainable growth outlook remains dependent on our commitment to culture and the development of a best- in-class team across all facets of Sonida. The integration of new communities has succeeded due to the dedication of our existing operating teams and the willingness of our new team members to put in the time and effort required to learn new systems, trust in Sonida's team-focused culture and adjust when challenges inevitably arise. I'm highly confident we have built a business poised to sustain a high pace of growth while operating our communities with the needs and joy of our residents and employees as our foundation. This concludes our prepared remarks Operator, please open the line for any questions.

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

Just 2 quick ones for me. Just can we dig in a little bit deeper in some of the move-out and specifically move-in activity looks like a nice pickup in July? So you mentioned some personnel changes, just a little bit more detail of what changed, what you did differently to be able to drive that moving activity in July would be helpful.

Into what we saw as the drivers for July. So one, just kind of as we looked at the move-out activity that you referenced for Q2, we did see April on a year-over-year basis. Last year's April move-outs were significantly lower. And this year, we did see a bit of an uptick in deaths, just in that specific month. But clinical teams responded and saw those numbers coming down towards the second half of the quarter and then also saw a nice movement in July. So on the sales and marketing front, we've really invested heavily in our digital marketing capabilities, been very focused on generation of leads and traffic through our own web channels and through our own kind of search -- Google searches that are not related to the third-party aggregators. And that's where we've seen a ton of success. So to see our move-ins in July, really exceed any point previously, but also to see that those move-ins were generated from nonpaid sources gives us a lot of confidence in where we're going for the second half of the year because the move-ins are not coming with additional cost. So it was really what we were able to convert through our own web traffic and leads that were generated by our own community teams and not from the third parties that we saw a really strong uptick in July and continuing to monitor that in August. So the folks that we brought on board with the sales and marketing expertise, they came from other industries, and I think they've brought a really sophisticated approach to how to generate the interest from new potential residents and their family members and look for that to continue.

Helpful. And then my second one, just on the acquisition front. Just hoping you can give a little bit more detail in terms of -- you mentioned the age of the buildings, but just what occupancy, what stabilized yields are, just how you guys are thinking about these opportunities?

Yes. So I'd say generally, the ones that we're seeing have occupancy in ranges that are in kind of like the mid-70s to low 80s-ish, where we've -- they're not broken communities, but they definitely will benefit from bringing in our sales and marketing capabilities. We've also seen really good experience just on the bottom half of the P&L, where their expense control procedures and just those general processes don't have the same level of sophistication as we do. So we've gotten good pickup on the expense side, kind of right out of the gate with our acquisitions and still continue to feel confident in targeting those low double-digit types of stabilization levels on -- from a cap rate perspective. So we see good pickup and accretive deals that are still out there definitely that we're going after as evidenced by the one that we just announced today as well, where it's in a market here in DFW that's growing rapidly. The opportunity to come in very quickly and move on both rate and expense management. We feel really good about this one that we've recently announced.

Your next question comes from the line of Ben Hendrix with RBC Capital Markets.

Just a quick question on your labor environment. I think your press release said $2.2 million increase in labor cost. It seems like that may have outpaced same-store RevPOR growth of 4.4% by 35 or 40 basis, though that might not be an apples-to-apples comparison. Just first of all, is that an accurate read? And then as you talked about some of these incentive and retention investments, as those pan out, how do you think about RevPOR versus [indiscernible] spread going forward over the second half and into next year?

So on the labor front, we've talked about in the past and continue to kind of highlight that we want to make sure that we're paying for good stability in our strong leadership, especially on leadership roles and nursing roles. And over the last year and also as evidenced in Q2, we have increased wages on the nursing front. And so we did a targeted effort on that, making sure that we're at or on the high end of market where appropriate. We don't expect kind of that ongoing consistent increases on a quarterly basis because we did do that on a relatively targeted basis. And what we're really pleased at is that we're seeing a large downturn in overall turnover of our employees. So that stability is going to lead to consistency on the outcomes as well as being able to drive rate to a higher level. So I think what's important from an offsetting of the expense pressure from a wage perspective is that we have gotten our rates to the highest level for any quarter kind of in the company's history. And so being able to have that high rate level continue to push on that, especially in the same-store where occupancy has exceeded 88% at the end of July, we could continue to move on rate to offset what we've invested in the nursing and in the labor structure over the last year. So it's a high point of emphasis for our team. I think it's important for us to note that the increase on the wage front was really wage related and not hours related. So we've been able to add residents without having to add a number of labor hours. So our whole thesis is to continue to invest in really strong talent that will stay with us so that we don't need to add additional FTE as occupancy grows, especially in our higher occupied communities. So our expectation and our internal goals are to see the rate and the top line increases continue to surpass any sort of the inflationary pressures from an expense per occupied day perspective. So it's an area where we see opportunity to expand margin in the second half of the year and beyond.

There are no further questions at this time. Ladies and gentlemen, this concludes the conference for today. Thank you all for joining, and you may now disconnect.