Sabra Health Care REIT Surges 10% on Strategic Moves

Sabra Health Care REIT (SBRA) saw its stock jump over 10% on Tuesday after the company announced a series of positive operational and financial updates.

The REIT revealed it has entered into letters of intent to retenant 26 properties previously leased to Avamere, a senior living and post-acute care specialist. Once completed, the total annual rent for this portfolio is expected to rise to $53 million, a nearly 30% increase from the previous $41 million.

Additionally, Sabra arranged a deal to retire a $300 million mortgage loan it provided to Recovery Centers of America (RCA). Under the agreement, RCA will pay $200 million in cash, which Sabra plans to use to reduce its revolving line of credit.

These moves are expected to finalize in the second half of 2026, and the company raised its guidance for the full year accordingly.

For investors, the key takeaway is that Sabra is actively improving its portfolio and financial health. The 30% rent increase from the Avamere properties directly boosts future revenue, while the debt restructuring reduces leverage and interest costs.

The raised 2026 AFFO guidance—from $1.55-$1.59 to $1.59-$1.61 per share—is particularly important for REIT investors, as AFFO is a core measure of cash-generating ability. This suggests higher potential dividends and earnings power.

Although net income guidance fell due to one-time costs, the market is focusing on the long-term benefits. These actions position Sabra for sustainable growth and demonstrate management's commitment to strengthening the balance sheet.

Competitors in the healthcare REIT space, like Welltower or Ventas, may also benefit if this signals a broader recovery in senior housing demand.