Hello, everyone. Thank you for joining us and welcome to the Brookdale Senior Living second quarter 2026 earnings call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star 1 again. I will now hand the conference over to Mike Grant, Brookdale's Vice President of Investor Relations. Mike, please go ahead. Thank you, Operator. Good morning, everyone, and welcome to Brookdale Senior Living's second quarter of 2026 earnings call. Participating on today's call are Nick Stangle, Brookvale's Chief Executive Officer, Don Cusso, our Executive Vice President and Chief Financial Officer, and Chad White, our executive vice president, general counsel, and secretary. On today's call, we will discuss second quarter 2026 results, as well as our financial guidance for the 2026 year. We'll also provide other general business updates. During today's call, our remarks, including our answers to your questions, will include forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act. These statements are made as of today's date, and we expressly disclaim any obligation to update these statements in the future. Actual results and performance may differ materially from forward-looking statements. Certain of the factors that could cause actual results to differ are detailed in the earnings release we issued after market yesterday, as well as in our Securities and Exchange Commission filings, including the risk factors described in our annual report on Form 10-K and quarterly reports on Form10-Q. I direct you to the earnings release for the full Safe Harbor statement. Also, please note that during this call, management will discuss non-GAAP financial measures. For reconciliations of each non-GAP measure to the most comparable GAAP measure, I direct you to the earnings release and to the company's quarterly supplemental financial information, which may be found at brookdaleinvestors.com and was furnished on an 8K yesterday. With that, it is my pleasure to turn the call over to our CEO, Nick Stengel. Thank you, Mike, and good morning, everyone. Thank you for joining us on this morning's call and for your interest in Brookdale Senior Living. The actions we have taken so far through the first half of 2026 and our second quarter results are aligned with our multi-year projection of first, achieving annual mid-teen adjusted EBITDA growth over the next several years, and second, deleveraging our balance sheet to a less than six times leverage ratio by the end of 2028. We also remain on track to deliver on our 2026 annual guidance of 8% to 9% REVPAR growth and adjusted EBITDA in the range of $502 to $516 million. Our results and recent actions also directly reflect and support the five-point strategy we have discussed in previous earnings calls and the investor day we hosted in late January 2026. As a reminder, this five- point strategy is to, number one, improve operating performance. Number two, optimize our real estate portfolio. Number three, reinvest capital into our communities. Number four, reduce leverage. And number five, elevate quality for residents and associates. I would like to take a moment and describe our recent progress on the first three points. On point number one, improve operating performance, our consolidated rev par for the second quarter increased 8.2% over the prior year, which is in line with the anticipated quarterly pacing we discussed last quarter. This meets our 8-9% full-year 2026 REVPAR growth guidance, and we continue to expect an accelerated rate of growth for the 2nd half of this year. Breaking apart the components of REV PAR, our second quarter REV POR revenue per occupied room or pricing remains strong. Our second quarter consolidated REV pour increased 5.2% over last year. As a reminder, we took high single-digit pricing at the start of this year, and we are now beginning to lap the price concessions taken last year On the occupancy side of the equation, second quarter Consolidated Occupancy landed at 82.4%, up 230 basis points year-over-year and a 30 basis point sequential improvement from the first quarter of 2026. Candidly, our occupancy growth thus far in 2026 has not inflected as quickly as anticipated, but with our new operating structure and team in place, as well as the actions we have taken, we see underlying improvement that is beginning to bear fruit, as shown through our July occupancy results, which I will cover in a minute. Additionally, given where occupancy stands through mid-year, we have taking steps to ensure that our cost base is scaling in line with our occupancy levels. During the second quarter, we continued to realize improvement within our occupancy bands. We saw a strong expansion in the number of our communities in our top occupancy band, those with greater than 95% occupancy, which now number 99, an increase of 16 communities since the prior quarter. We experienced some improvement in our lower occupied bands, but we recognize the pace of that improvement is not sufficient. Total communities under 80% occupied improved to 211 in the second quarter from 219 in the first quarter. Year over year we had stronger improvement as 281 communities were below 80% in the 2nd quarter of last year. We are taking targeted actions to drive accelerated improvement in those levels through the second half of the year. We are now entering the heart of the summer selling season and our initiatives are taking hold. As referenced earlier, July occupancy marked a strong acceleration, up 30 basis points sequentially on a same-community basis and up 20 basis points sequentially on a consolidated basis. Our month-end occupancy results were also strong, up 30 basis-points sequentially for same- community and up 40 basis-point sequentially for consolidated. This improvement represents our 57th consecutive month of year-over-year occupancy growth. While we are encouraged by the pace of our move-ins and overall occupancy over the last two months, we recognize that we can do much more and, as a result, are taking further actions to drive improvement. To that end, a key action in the past quarter was the hiring of Margaret Cabell as our new Chief Sales Officer, filling the vacancy we have had in this role since the first quarter of this year. I'm really excited about adding Margaret to our executive leadership team. She brings over 25 years of senior housing experience. While most of this experience has been in sales leadership, she also has meaningful operational and P&L ownership experience, which bolsters our new organizational structure that fully aligns operations with sales. Most recently, she served as Chief Community Relations Officer and Head of Sales for A Place for Mom, which, as many of you know, is the leading senior care referral service in the United States. In the short period Margaret has been with us, we are already seeing measurable changes and key sales-leading indicators to include conversion ratios, sales yields, and improvements across our referral channels. These improvements can be directly attributed to changes in our sales strategy, specific actions we are taking within each community, and an overall reaffirmation in expectations across our entire organization. Expense management is the other broad component of our operations optimization strategy. As most in the audience know, labor is our single largest expense. On a same community basis, our labor expense declined to 45.2% of revenue from 46.1% in the second quarter of last year. This improvement was a direct result of heightened vigilance and operational focus at all levels of the organization. In fact, we now see additional opportunities to improve labor productivity in the second half of this year, so we would anticipate increased operational leverage over the significant expense driver looking forward. I would also like to take a moment and discuss strategic objectives number two and number three, which are our portfolio optimization and capital deployment strategy. As we discussed at our investor day, Brookdale is now positioned to take a more offensive posture as it relates to the deployment of capital, given the positive industry environment in Brookdale's significantly improved financial health. Looking at uses of capital, our North Star is to make acquisitions and to invest in projects that bring our shareholders high returns and that correspond to our portfolio strategy, which is to stay within our existing product types and our geographic market footprint. I'll provide more color on both our community and reinvestment as well as recent acquisition activity. During 2026, we are increasing reinvestments in our existing communities through a program we call First Impressions. First Impression projects are significant, targeted CapEx investments with a focus on upgrades to community common spaces, including improved flooring, updated lighting, new furniture, and repositioning various areas to be more active and engaging to residents. These upgrades improve visitors' First Impressions, hence the name, of our communities and help drive occupancy through higher tour-to-move-in conversion ratios. These investments also support higher in-place rate increases and decrease future repairs and maintenance expenses. Overall, we see high ROI paybacks on such projects, and we have described three recent representative community reinvestment examples in our investor deck on slide 19. We expect our first impressions reinvestments to become even more prominent starting in the third quarter of this year, and investment in the second half of 2026 will be roughly double our first half pace. Overall, for 2026, we anticipate completing around 30 first impression projects with budgets of greater than $250,000. The average spend on our significant first impression projects is roughly $500,000 to $600,000 dollars. Aligned with our capital deployment and portfolio strategy, we're excited to have recently announced two separate acquisitions. The first is the acquisition of the Brookdale Galleria Community in Houston for $23.4 million, which closed at the end of June. We're thrilled about this opportunity. We previously managed the Galleria community under a long-term management contract, so we know the property and its occupancy dynamics exceptionally well. The community is in the affluent Galleria sub-market of Houston, adjacent to high-end shopping, so it is well located in a market where Brookdale has meaningful density. At 244 units, it's a large community, and we were able to purchase it substantially below replacement cost. From an operational improvement perspective, the Galleria opportunity is compelling to us. The current occupancy at the Gallerie community is lower than our Brookdale average. We will be investing additional capital, in addition to significant renovations that have recently occurred, to reposition the community. Most importantly, we have already closed the skilled nursing operations at the community community and expect to replace those units with additional community amenities and other configuration improvements designed to take advantage of market demand and drive improved economic performance. Now, as the owner rather than the manager, operating income expansion will accrue to the benefit of Brookdale and our shareholders. The second is the planned acquisition of 17 communities that we currently lease in a triple net arrangement. These 17 communities are in markets where we have meaningful operating density and we know these markets and buildings well. The purchase price of approximately $157 million for 735 units represents a per-unit acquisition cost of $214,000, which is well below replacement cost. The transaction is expected to close in the fourth quarter of this year and, once it closes, it will further increase our mix of owned versus leased communities, reduce our leased payments and bring us down to four remaining lease portfolios, which, in their own right, are producing positive cash flow. Importantly, this transaction is expected to increase our 2027 adjusted EBITDA and cash flow, we plan to fund the acquisition with a mix of non-recourse mortgage financing and cash on hand. Both of these acquisitions further bolster the fact that we are the third largest owner of senior living real estate, after only Welltower and Ventas. As I shared during our investor day, we are an operating company, but we are a company that is built upon a foundation of highly specialized real estate, and this real estate is becoming increasingly scarce with each passing quarter. Pulling all these points together and following our in-line second quarter, we reaffirm our 2026 annual guidance of 8% to 9% REF PAR growth and adjusted EBITDA range of 502 to 516 million dollars. We also reaffirm our multi-year growth outlook of annual adjusted EBitda growth in the mid-teens and achieving a leverage ratio of less than six times by the end of 2028. In summary, the significant changes we've made to our team and structure over the past several quarters are taking hold. I see it in our communities, I hear it from our associates, and it's beginning to show in our results. While we still have work to do, I'm confident that we're building a stronger Brookdale and that we will accelerate our performance in the second half of the year and create long-term value for our residents, our associates, and our shareholders. I am genuinely excited about our direction and our bright future at Brookdale. We remain firmly on track to unlock the intrinsic value of Brookdale's specialized services and real estate assets. I will now turn the call over to Brookdale CFO Don Cusso, for more details on our financial performance and outlook. Don? Thanks, Nick. This morning I'll review four key areas. Brookdale's second quarter financial performance, recent improvements to our balance sheet, progress we're making on our ongoing portfolio transition, and our outlook for the remainder of 2026. Starting with our financial performance. Our second quarter results were consistent with the progression we outlined last quarter. Let me highlight a few key points. Second quarter adjusted EBITDA was $122.1 million up 4.3 percent year over year and in line with our suggested pacing of a low to mid single digit increase and slightly ahead of consensus. REV PAR for the quarter increased 8.2 percent over the prior year, also in line with the pacing we outlined. Although it is not a component of our guidance, I'll also highlight that our adjusted free cash flow was $38.2 million for the quarter, and we are now meaningfully positive for the year. That said, occupancy came in slightly below our expectations during the second quarter. On a consolidated basis, occupency increased 230 basis points year-over-year to 82.4%. On the same community basis, occupancy grew 110 basis points over last year to 82,9%. We now expect full-year consolidated occupancy to come in at roughly 83%, and we continue to expect to deliver on our 8% to 9% REVPAR growth guidance. Our operations team has identified additional efficiencies through our realignment and our continued focus on maintaining an appropriate expense structure to align with our business while continuing to provide high-quality care and service to our residents. We expect those savings, which will begin to be realized in the third quarter, to fully offset the impact of that slightly lower occupancy on our adjusted EBITDA target. As a result, we remain on track to deliver our 2026 adjusted EBITDA guidance of $502 to $516 million. For the second quarter, Brookdale resident fees were $708 million, a decline of 8.7% from the second quarter of last year. The primary drivers of the year-over-year revenue decline were a 15.7 percent reduction in consolidated average units driven by portfolio optimization activities, partially offset by an 8.2% rev par increase. On a same community basis, rev par increased 5.5%. Revenue per occupied unit, or rev por, remained strong and continued to support revenue growth during the quarter. During the second quarter, rev por improved 5.2 percent versus last year on a consolidated basis and 4.1% on a same community basis. While REVPOR typically moderates over the course of the year, we expect year-over-year REVPR performance to become increasingly favorable over the back half of the year as we annualize the concessions embedded in last year's results. Overall, we suspect year-ever-year power growth to accelerate during the second half of the year, driven by improving occupancy, healthy REV pour, and the favorable mix impact of the dispositions. As a reminder, we guided to 8 to 9 percent consolidated REV PAR growth for 2026. Through the first half of the year we've performed within that range and we continue to expect to deliver on this component of our guidance. Now let's turn to expenses. On a consolidated basis, second quarter expense per occupied unit, or ex-poor, increased 3% over the second quarter of 2025, resulting in a positive REVPOR over ex-POR spread of 220 basis points. On a same community basis, ex-POOR increased 4%, generating a 10 basis point positive REvPOR export spread. On a same community basis, our operating margin was flat versus last year at 29.5 percent. On the same community bases, community labor expense performed favorably as our labor as a percentage of revenue improved 90 basis points year over year. While this is a strong improvement, we continue to see meaningful opportunity on the expense side. We continue to evaluate and make sure our expenses are appropriately aligned with our occupancy levels, and we're already expecting a positive impact from the efficiency actions I mentioned earlier. For the third and fourth quarters of the year, we expect labor as a percentage of senior housing revenue to slightly improve sequentially despite those quarters containing an additional day and holiday. Our same community other facility operating expenses were elevated during the second quarter. There is always a level of variability in our other expenses, and we expect other facility operating expenses to follow normal seasonal trends. General and administrative expense, excluding non-cash stock-based compensation expense and transaction, legal, and organizational restructuring costs, declined 6% year-over-year to $38.9 million for the second quarter. The second quarter results reflect that we scaled our G&A cost base to reflect both disposition activity and the reduction of our managed community portfolio. We continued to expect approximately $157 million for the full-year G&H costs. Cash facility operating lease payments during the second quarter of 2026 were $44.8 million, down $12.7 million year-over-year, primarily due to the Ventas lease dispositions, which occurred in the second half of the year, coupled with a contractual step-up on lease payments on the retained Ventas leases. Turning to our balance sheet. Our balance sheet strengthened during the quarter. Our annualized leverage improved to 8.4 times from 8.8 times at the end of the prior quarter. Total liquidity increased to $566 million as of June 30, 2026, up from $369 million at the end of last quarter, reflecting both the expansion of our revolving credit facility and higher cash balances resulting from positive operating cash flow and disposition proceeds during june we completed two financing transactions which addressed a portion of our 2027 debt maturities while also expanding and extending our revolving credit facility as a result of these transactions we repaid 200 million dollars of outstanding mortgage debt with 188 million dollars in new non-recourse first lien mortgages. These new loans are interest only for five years and mature in 2036. Additionally, we expanded our revolving credit agreement to $200 million, an increase of up to $100 million from our prior line. The facility now extends through April 2029 and includes two one-year extension options. More recently, in August, we announced the refinancing of all of our remaining 2027 mortgage maturities. Specifically, we obtained $249 million of fixed-rate financing and used the proceeds to repay $244 million of mortgage debt scheduled to mature in 2027. These transactions demonstrate our continued, proactive approach to managing the balance sheet well ahead of upcoming maturities We appreciate our key lending partners for their support and their confidence in Brookdale's business outlook. We now have no remaining debt maturities until 2028. Adjusted free cash flow for the second quarter was a positive $38 million, reflecting the growth in adjusted EBITDA, lower use of cash for working capital, and a timing-related reduction in non-development capital expenditures. Now turning to the progress we're making on our ongoing portfolio optimization. We continue to execute on our capital recycling strategy, which includes the disposition of non-strategic or underperforming owned and leased communities. Earlier this year, we said that we expect to sell 29 communities, comprising 2,364 units during 2026. through June 30th we sold 13 owned communities comprising 1,108 units for proceeds of 147 million dollars net of transaction costs and we also exited two lease communities with 152 units we've continued to close transactions since the end of the quarter and as of August 10th we have closed the sale of an additional three communities with 228 units for net proceeds of two and a half million dollars today 13 of the planned 29 communities identified for disposition remain we expect most of those to close before the next earnings call in total we now expect proceeds for 2026 community dispositions including completed transactions to generate net proceeds of approximately $190 million. As Nick mentioned, we also completed one acquisition at the end of the second quarter and announced a second acquisition expected to close in the fourth quarter. At the end June, we acquired the 244-unit Brookdale Galleria in Houston, a community we previously managed for approximately $23 million. We close the Galleria transaction using our line of credit and cash on hand. Last week, we announced the acquisition of a 17 community portfolio which we currently lease comprising 735 units for a purchase price of approximately $157 million. We expect to close this second acquisition using a mix of non-recourse mortgage financing and cash-on-hand. We're excited about both of these acquisitions of high-quality communities. Both were purchased below replacement costs and are expected to improve our intermediate and long-term financial results. Now let's turn to our outlook for the remainder of 2026. We remain on track to deliver our 2026 guidance of 8% to 9% REVPAR growth and $502 to $516 million of 2027 adjusted EBITDA. Here is the path to delivering our guidance for the remainder of 2026. And note that the highlights of this are also included on slide 12 of our second quarter investor presentation which we posted to our IR website yesterday. Average units which were 42,820 in the second quarter are expected to decline to approximately $42,200 in the third quarter and $41,500 in the fourth quarter. The decline reflects the tail end of our previously described capital recycling program and the impact of our Galleria acquisition. Remember, the acquisition of the leased assets will not change the expected unit average as those units were already included in the expected average unit count. Consolidated occupancy should be approximately 83% for the full year. We expect stronger growth in the third quarter, including the 30 basis points of sequential same community occupancy improvement achieved in July, followed by continued expansion in the fourth quarter. Both quarters should show stronger sequential expansion than what we reported earlier in the year. REVPOR, or rate, is expected to show greater year-over-year growth in the third and fourth quarters than in the first half of the year. REVPOR or rate is expected to show greater year over year growth in the third- and fourth-quarters than in first half the year as a result of dispositions as well as the comparison against discounting in the prior year. As a result have improved occupancy and rate, the sequential REV-PAR growth for the second half of the year is expected to mark an accelerating trend from the first half of the year labor cost as i mentioned earlier in my remarks should slightly decline as a percentage of revenue in the third quarter and further again in the fourth quarter we project 157 million dollars in annual gna expense we now expect cash lease expense of slightly under 180 million dollars for the year as we realize the initial benefit of the 17 community portfolio acquisition we announced earlier this month. Summing it up, we expect adjusted EBITDA growth to accelerate into the third and fourth quarters of this year. Specifically, we except third quarter year-over-year adjusted EBIDDA growth be in the low double-digit range. For fourth quarter, we anticipate adjusted EBITDA growth to come in above our mid-teens target growth range. In closing, while we delivered on our overall expectations for the second quarter, occupancy growth hasn't moved as quickly as we initially expected. We've taken decisive action to further drive growth in the back half of the year and to identify additional cost efficiencies. We continue to expect to deliver on our 2026 guidance. We're confident in our strategy, in our team's ability to execute, and in our ability to continue creating long-term shareholder value. Operator, we will now open the call for questions. We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from Ben Hendricks with RBC Capital Markets. Please go ahead. Great. Thank you very much. I was wondering if we could talk a little bit more about the guidance to the second half, the, you know, the REVPAR guidance, it seems like, you know, you were expecting about 100 basis points better in 3Q and 4Q. Now we're kind of pushing that inflection a little bit more into 4Q, maybe you can kind of talk about some of the dynamics there. It seems like you put through some really good REVPR growth, but maybe, maybe the move-ins were a little bit still kind of down 5%. Maybe you can talk about kind of receptivity to those rate updates and how that's impacting your RevPAR outlook. Thanks. Thanks, Ben. This is Dawn. Appreciate the question. Yes, our RevPar growth, what we expect for the third quarter, we did tap that down a little bit in that we expect that RevPар growth to be similar to our 2Q growth that we reported, and that's driven by the slower occupancy that we talked about, both Nick and I, in our prepared remarks, and then the disposition timing. So, we had some delay in the dispositions where we would expect to get that accretion. We're expecting to get that accreation now in the fourth quarter. But just to take a step back, reminding you, our REVPAR growth of 8.2% year-over-year is really something that we're proud of. This is the highest REV in the last two years. And so just taking a step back and looking at that. When you think about the fourth quarter, our REvPAR growth there is going to be get the benefit from that the full the full occupancy from our summer summer selling season and then that disposition timing we would expect to get that accretion there where we expect an acceleration in the growth and what i'll also add ben part of the the focus as a team has been truly on res par uh in in tackling both sides of that equation both the occupancy and the rate side of it. So this year, we're taking a far more disciplined, far more deliberate approach to our in-place rate increase for sure, but even our market rate increases as new move-ins come out or new move ins come into our communities and they replace, they move out where naturally we're just really driving to that rev par number. So as you look at occupancy, as you looked at rate, the overall kind of push on rev par, and I think the points that Don made on the acceleration for Q3 and Q4, part of it is also coming from rate in addition to the occupancy growth. Okay, great. So we should expect REV4 to continue to tick up as we get through the back half of the year then. That's right, Ben. If you remember what we talked about at the beginning of theyear in our REV core is you see the benefit of the rate increase in the first quarter. Typically, we see that REV poor stepping down every sequential quarter from acuity and discounting. What we said at the beginning of the year and remains the same is that that rev pour, we expect our rev pour to remain firm in the back half of the year. So we'll expect that little bit of a step up in the third quarter, and then it'll remain firm. When I say remain firm, sequentially, we don't expect that step down. Which is atypical for our company and the industry, really. So it's a little bit of a change this year based on the dispositions and based on this pricing strategy that we've implemented. Great. Thanks a lot, guys. Your next question comes from Rob Simone with Compass Point. Please go ahead. Hey, guys, morning. Thanks for taking the question. I have a high level or big picture question for you. So, I mean, obviously, the company has changed pretty dramatically over the last several years. And I wouldn't use the word tumultuous, but like, there's obviously been lots of changes at the higher level management ranks over the past year or so. I was just wondering if you could maybe elaborate on what changes you guys made at kind like the local and regional operational level like what what has been done behind the scenes to kind of you know get you guys where you need to be and give you the confidence that the next like year or so you'll add you gradually add on to occupancy yeah rob love the question uh and really appreciate it um because it is sort of defined who we are and who we will be for the next year is exactly the kind of the question you're alluding to um and the first point i'll make is the changes that we have made, all very appropriate, a bit disruptive, maybe even tumultuous, that's the word you use. But the cool thing is the table's now set and the pace of change is more or less behind us. And now we're looking forward to the new team, the new structure, the new organizational effectiveness that we Have going forward. So that's kind of the first point. As far as the specifics of the changes That have happened, it really starts with our communities. So I'll start at the bottom of the organ and quickly move on the way up. But at the core of it, we have what we call our key three, and many of our peers use a similar term. It's basically our operations leader, executive director, our sales leader, and our clinical leader. We have truly bolstered what that looks like within communities, the reporting relationships, the authority they have, the empowerment they have and the accountability that they have. In fact, to that point, our key 3 turnover is the lowest it has been since COVID. The number of communities that we have ED openings is the lowest it has been since COVID. So some real performance improvement around the engagement of our leaders across our 500 plus communities. And that's a big part of what I have brought to the table as a new CEO and what the management team has really leaned into is the leadership within the community. Now, stepping up one level right above that, we call it a district is what we call in our company. We have replicated, and that was a meaningful change in the middle of Q1, we have replicated the same organizational model at the district level, and it was not that way. So our sales, operations, and clinical leaders all report up through our district director of operations, which, again, in some ways, some people would say that's not that meaningful of a change. I'll tell you it's a very meaningful change because then it creates clear accountability, clear empowerment, clear authority through the district into the community. So instead of having two, three, four leaders, district leaders reaching into a community and providing guidance and authority and all those things, there's now a single line of accountability, which goes right to the regional level where we did the exact same thing all the way to the COO. So practically what I'm describing is a single-line from me as the CEO down through our executive ranks, the regional ranks, and district ranks into the community. And with that single line, you have a single line of empowerment, enablement, oh, by the way, accountability and reporting that reaches into each of our communities. And another big part of the change, and this happened late last year, is that we now are structured at six regions of about 100 communities or so, 90 communities orso, where we're in effect operating like a regional company of six or basically operating at six companies. but so with the capabilities, the funding that a company of our size has. Got it. Okay. Yeah, no, that's really helpful and interesting as well. It's good color for folks. Maybe just one unrelated question, and it's kind of been hit on, but to the extent you can, And, you know, what gives you the confidence or what points give you the confidence that besides the price that you've already taken and your view into occupancy, like thus far into August, that you're actually going to be able to accelerate RevPAR and maintain or hit your guides as the year goes on? Just any, like, anecdotal data points or qualitative things that could kind of give people more comfort might be helpful. Yeah, Rob, this is Donna. I'll start. And I think when we think about the sequencing of our quarterly adjusted EBITDA, you know, really the July occupancy coming into our summer selling season gives us confidence. The move-ins we saw kind of coming out of the second quarter, that July occupency growth is really something that gives us confident coming into August and September. Now, as you know, our third quarter has an additional day, an additional holiday. We expect kind of that occupancy growth to offset that natural step up in our expense base. But what we said on our prepared remarks was the labor efficiencies that we saw with the structuring that Nick was just talking about, the labor efficiency and the expense savings. With that lower occupancy than expected growth in the second quarter, we expect our labor and have specific actions around making sure that that labor savings is happening in our expense base. In my prepared remarks, I had mentioned that we expect Our labor as a percentage of our revenue to slightly improve in the third and the fourth quarter. That's atypical of our seasonality because of the additional day and holiday in the first quarter. the fourth quarter. So those expense savings, we would expect to see coming through both in the third and the fourth corner. And so that gives us the confidence with the step up in the adjusted EBITDA that we're talking about. Got it. Okay. Thanks, guys. Appreciate it. Be well. Thanks, Rob. Your next question comes from Brian Tanculet with Jefferies. Please go ahead. Good morning. This is Megan Holtown from Bryanstown Coalit. I appreciate the color you guys gave on the two acquisitions, but was hoping you can elaborate a little bit more on maybe the strategic rationale of these communities that you're now going to own in any financial or operational metrics. Yeah, I appreciate the question, Megan. I'll step in first, then Chad will probably provide a few more details. And I guess the first point is the overall strategy that we've articulated during the investor day and even reiterated throughout the earnings calls that we have had since then. And that's this idea that we are, for the first time in many years, kind of more in an offensive posture. We have the wherewithal. We have capital. We have free cash flow. We have leases that are generating free cashflow. We have freedom now to make decisions like this, and that's exactly what we are doing. And specifically, we're looking for very targeted, deliberate acquisitions. So it's not an opportunistic. We're not looking for portfolios. We are not looking for broad swaths. In fact, to be even more specific, we're currently in 41 states, zero desires to be in 42 states. We were in roughly 125 markets, zero desire to be 126 markets. That is a growth strategy some companies have. That's not our growth strategy. Our growth strategy around acquisitions is to acquire in markets that we already have a meaningful presence where we're looking to create even more density, even more focus, and really leverage the strength of a company of our scale. And that's exactly what these two acquisitions have done. So Galleria in Houston, very affluent, great market. We know the building well. And now as the owner, as opposed to the manager, we have some real freedom. And then similarly with our lease acquisitions. Chad, anything else to add? Sure. I'll start with Galleria. We were very excited to be able to execute that acquisition at an incredible per unit purchase price that's substantially below replacement value. Nick mentioned that it's in an affluent area. We view that real estate as effectively irreplaceable. It's located next door to the Galleria Mall, a great shopping area there in Houston, so very excited about that. From an underwriting standpoint, we know the asset, we know its potential, and we had a unique vantage point as the existing manager of the property. We view this as a very low risk and very high reward transaction. We purchased the community for a purchase price of just over $23 million, which was less than $100,000 per unit. Importantly, Brookdale Galleria had already benefited from tens of millions of dollars of capital expenditures over the last several years that had been funded by the prior owner. Much of that was related to updating major systems and refreshing the aesthetics of the community. Frankly, the community looks great, as you can see in pictures available on our website. but we have plans to further improve it with relatively limited additional capital investment. As the owner of the community, we now have much more flexibility to implement changes we believe will help drive value creation for our shareholders. We didn't have this flexibility as the manager of the Community. For example, we've already shut down the underperforming and negative NOI skilled nursing operations at the Community, and we have planned to reposition the Community as a high-end, hospitality-focused, multi-product-line senior living community. Through modest development capital expenditure investments, we plan to add additional amenities along with additional changes designed to take advantage of demand dynamics in the Houston market. The changes we have implemented since we closed the transaction just over a month ago have already resulted in improved NOI, and we see much more potential in the months and years ahead. We're confident that the acquisition will provide intermediate-term adjusted EBITDA and cash flow accretion that will drive value creation for our shareholders. Now, briefly on the leased acquisition, we were happy to reach a win-win transaction with our landlord to effectuate the purchase of that 17 community portfolio. we were effectively we were able to accelerate our exercise of a purchase option on the portfolio but we did it at an attractive price again with minimal risk and high upside given that we were already the operator of the communities as nick mentioned we know these buildings we know these markets we're confident that we can continue to drive occupancy and noi growth here similar to other lease acquisition transactions we've completed over the last few years this allows our shareholders to capture the full shop equivalent economics of the portfolio and reduce rent exposure. Dawn mentioned earlier this transaction improves our 2027 adjusted EBITDA by about $11 million, but it also will meaningfully improve our annual cash flow as we're replacing high-cost lease financing with lower-cost mortgage debt. Okay, thanks for the color. And then just touching base on the new Chief Sales Officer hire, what are some of the actions she's putting in place to drive occupancy? Yeah, Megan, really appreciate that question. So again, as I shared, very excited to have Margaret join the team. So if you look at our July occupancy, in fact, and again, I hate even kind of going to the second order, but take a look at the month end versus the weighted average, which is indicative of what the following months will look like. Those numbers are not accidental. Obviously, there's a supply-demand component that underpins it. That is the context. But Margaret has come on board and very quickly. She joined us early, about a month and a half ago in June. There's some real activity. There was a very specific campaign, specific initiatives that we launched in the month of July that are more activity-based than outcome-based. So the previous approach had been more around, you know, looking at outcomes, which are very important. But the reality is we're asking 500-plus community sales professionals in those communities to do specific actions with specific accountability. And that's exactly what Margaret brought immediately. And again, in July, our numbers reflect that. So very excited by what this means. If anything, it has brought a new energy, a new pep, a new strength in how we approach our sales process. And it really has kind of the organizational structure of ops, sales, and clinical truly working together every single layer of the organization has been a pretty meaningful change. And again, it's showing up as an early indicator in our July numbers and excited by what August, September, October will bring as we continue selling in the summer season. Your next question comes from Raj Kumar with Stevens. Please go ahead. hey good morning maybe just uh one on um kind of thinking about the operating leverage of the business specifically on the labor component uh one would love to you know get any up-to-date thoughts on kind of hiring trends that you saw in the second quarter and then secondly as you kind of think about the opportunity you had uh across the different portfolio bands it would be kind of helpful to illustrate um kindof you know the operating coverage magnitude especially kind just for example kind of considering you know maybe a 90 occupancy is you know well equipped to you know service a 95 plus occupancy so kind of that type of leverage dynamic just would be kind of curious on any color commentary there yeah raj so from an overall hiring perspective um i i it still feels very much like an employer's type job market uh we have more applicants per open rec than we've ever had for sure since COVID. Oh by the way it's underpinned by the lowest turnover even since before COVID. So earlier I referenced the lowest turnover of our key three leaders best since COVID the overall turnover as a company is even better even than before COVID so I will tell you from an employer perspective we feel like we are an employer of choice we're able to hire the right people who have a real passion for senior living and service and we're able to keep them in a much better pace than we've ever had specifically through 2023 2024 but even as recently as last year so this this year is feeling really really good and we were able to manage our our labor our talent uh more effectively than we ever had so that that feels good from an overall perspective as far as the uh the occupancy bands and i'm glad glad you asked the question so in our investor deck and for those of us who've been with the while i've seen this slide for a while on slide 18 we clearly show that as occupancy goes up the ebitda the noi that's available per unit goes up meaningfully so as an example in the under 70 occupancy band on average we generate three thousand eight hundred dollars of ebit per available unit uh on an annualized basis uh just by jumping up the next band you more than double it and then you jump up to the band of the over 80 percent and now you're just below 21 000. so that fixed cost operating leverage component uh is very very real and in my prepared remarks i i discussed the fact that we have more communities that are above that 90 occupancy band than we've ever had and we've been steadily making progress on the below 70 occupancy ban uh quite meaningfully And just to reiterate a couple points, so in the end of Q2, we just reported 85 total communities that are below 70% occupancy. A year ago, in 2025, we had 129, so a meaningful improvement in those numbers. And to kind of distill that a bit more, within that 85, nine of them are on the disposition list, and that should be no surprise. we are disposing the lower performing communities so very naturally that number will decrease as we effectuate those dispositions this quarter and maybe going early into next quarter but the more interesting part is a meaningful part of those 85 call it around half are just more recent erosion so it's communities that were above it and as the seasonality of our industry kind of took hold they dipped momentarily below that 70 percent in fact almost all of them just need between one and three units to be sold and we'll jump up above that 70 percent which will naturally happen as we continue our sales effort as and as the summer season continues really it's around it's less than half that are i'll say in a more of a consistent nature and we have launched the swat team in fact in some ways relaunched the swat theme under our svp of strategic operations clark jones uh and we will be tackling those that have been more consistently in that under 70 to really make some meaningful changes in that small cohort that are in that position got it and then maybe just to follow up if you kind of think about the free cash flow trajectory for the second half i know you called out some um kind of incremental investments or accelerated investments um kind related to just facility uplifts and whatnot so i guess maybe any framing on the back half here for free cashflow would be helpful thank you Yes. If you look at our second quarter, we were $38 million of adjusted free cash flow. We said that we expect to be significantly adjusted free cash flow positive for the year. Last year, we had $23 million of adjusted free cash flow and our expectation is that we would be much higher than that. And so as we think about this, the second half of the year, you know, we expect that during the quarters, we wouldn't give specific guidance quarter by quarter, you have some level of variability with your working capital. We expect to spend about $175 to $195 million of CapEx, and on top of that, still be significantly adjusted free cash flow positive. Your next question comes from Joanna Gejuk with Bank of America. Please go ahead. Good morning. Thanks so much for taking the question. So maybe coming back to the discussion around the guidance and I appreciate the comments around occupancy a little bit less and, you know, some of the cost efficiencies, but also the other dynamic you mentioned is the delay or I guess, you know, delay of these dispositions, right? So you're holding these underperforming assets a little better longer on your book. So can you help us understand the dynamic like how big of a drag is, you know, the fact that these assets are delayed? And also, you now, is this being also offset by call that $3 million or so from the benefit in Q4 from the purchase of the 17 leased assets? Johanna, that's a very good question. Appreciate the question and the clarification is that that's exactly how we're thinking about the acquisition of the leased asset. we will start to benefit from those leased assets changing from a lease into the own in our cash lease payments, which is why we adjusted our language around the full year guide on those cash lease payment. So how we're thinking about the drag on the dispositions is that lease payment or that buyout of the lease portfolio, that benefit should be offsetting that drag. Okay, that's helpful. If I may, last one. On the move-ins, the slide there that shows the move ins declining year over year, I guess for sometime now. So can you kind of walk us through why is that happening? Yeah, I'll take the first pass at that, Ioana. And then Chad and Dawn may add some more because were here in that time period. So you've got to realize move-in pace and pricing go hand-in-hand. Last year, we made some very deliberate, and I would argue potentially appropriate at that time, discounting to really get things moving in the June-July time period, and this year we're taking a very different approach, both with our in-place rate increase, much more meaningful this year as compared to last year, and then a much more deliberate, disciplined, move-in pricing approach. So at the end of the day, as a team, we are focused on rev par and obviously the constituent components of it, but we can lose set of our rev par, which again, I'll reiterate, 8.2% with an 8% to 9% guide. So we are really threading the needle between balancing rate and balancing move-in pace. And if anything, it's a bit of a two-speed world. In our 90% plus occupied communities, and we're having more and more of those, we can drive rate more meaningfully. And then in the lower occupied communities, I briefly discussed the 70% and less in the previous question, we will do discounting. So we're really trying to balance those two components to drive the overall REF PAR. So as you look at our move-In pace and the comparison, I think it's on slide nine is probably the one you're referencing. There's some real pricing components to that math. I think I'd also look at the recent results that we've seen. Nick mentioned earlier some of the changes we made with bringing a new chief sales officer, et cetera. And so some of those changes are starting to take hold. And you can see that with the July results in particular. And so in my mind, a lot of the work that has been done this year has set the stage for a successful summer selling season as we move forward. And if I may, last one, sorry, on the summer season comment there, so appreciate you gave us the July data point there, because honestly, the 30 basis points, I know, you know, it's a solid number, but I guess when we think about last year, it was, you know, the growth sequential in July versus June was much stronger, so I understand, you know, because you just answered a question around the, you know, what was happening here, but sort of like, where do you stand right now, you in terms of your selling season and incremental color you might have already you know on the early i guess uh activity in in august thank you yeah uh johanna take a look at the month end and compare to the weighted average for the month and again i i hate going to the second order and third order type math but we we do provide it we do publicly disclose it so if you look at that gap this year and compare it to previous years you can see it's fairly healthy and that's a fairly good indicator of what the follow-on month looks like and again i'm going to go back to all the changes we have made in our sales organization our structure our leadership and that's not accidental that that number is there you know by the way again it's underpinned by a real contextual thing that's happening in the senior living industry and we're taking full advantage of that so we feel really good about what what august september will look like just based on all the indicators that we have available and what you can see yourself with that july number Great. Thank you. Thanks. Your next question comes from Andrew Moak with Barclays. Please go ahead. Hi. Good morning. It's still not clear to me exactly what's driving the occupancy shortfall in the quarter, and you noted some of the issues with the year-over-year comparisons shown in slide nine. So I guess very simply, was the shortfall against expectations more of a move-in issue or move out issue and we'd love to just hear more color on uh the drivers of the variance thanks yeah i'll i'll chime in first and again don and chad may may fill in some some gaps um and it's a great question andrew so obviously occupancy is derived by both move-in and move-out metrics so it's both sides of the coin uh move outs uh we we have controlled and uncontrolled uncontrolled being more obviously things that we don't necessarily control directly based on the the status of the the resident uh i will tell you and again we don t specifically tease this out especially on the month to month because then it just gets you know now we're talking third and fourth order type uh insight uh that can get a little muddy uh but i i've actually we've been actually very happy with our move in pace uh the move out has vacillated but it also does there's a lot of cyclicality and again i i this is an industry-wide thing where you will have several months of good move outs, but only for a month or two of poor move outs. Again, most of them usually on the uncontrolled side, residents that need a higher skill level residents that just are no longer appropriate for senior living. And that's been a little bit of our occupancy story where our move in pace actually very strong. In fact, with some of our results, we've actually articulated that it's kind of a record level highest in the month type numbers through the summer months. But then you counterbalance that with move outs that did not maybe go as well as we had hoped, but out of our control. I will tell you all that has seemed to stabilize. Again, it's one month, July. You know, by no means is that a trend other than to say that the move out pace is sometimes quite cyclical. Yeah, and I just add that, you know, I would just add that, as Nick and Chad both just alluded to, is that the new sales leader not having a sales leader in since middle of the first quarter, bringing that sales leader in, you know, and Margaret's been great, a different energy, very actionable, where she's very interactive, strategic on driving sales within the organization at the community level. You can feel it in the company, you can feel in the organization, and that certainly has made a difference. And I think that that void also contributed partially to what we thought was just a little bit of volatility in the occupancy from a month-to-month basis. Great. And maybe just a follow-up on the expense side. Same community, other facility operating expenses. I think we're up high single digits in the quarter. Can you provide more color on what drove that pressure specifically and elaborate on the initiatives you're pursuing on labor productivity to help offset the occupency pressure? Thanks. Sure. It's a great question. I'll start with the non-labor expense. We did see a little bit more in a way of headwinds around our repairs and maintenance expense, some of our insurance expense, and some of bad debt expense. We talk about that in our public documents, in the press release, in The Q. What I would say there is we expect our non- labor expense to follow the normal seasonality. There's always a level of variability on that expense line item, but the expectation for the year is that it would follow our normal seasonal trends. On the labor side, in my prepared remarks, we said that our labor would slightly improve as a percentage of revenue in the third and the fourth quarter. That's not traditional, that we have an extra day in holiday, which is a labor headwind when you think about sequential second quarter to third quarter. But what we would say there is we've looked at under the new operating structure, looked at our labor productivity, looked at the labor at the community level and taken specific actions around kind of what that expectation is given the variability, the variable labor as it relates to our occupancy levels. And, you know, we've been very specific about the actions that we've been looking at there in the back half of the year and expect that those expense savings to come through, which is why we consolidated labor as a percentage of revenue to slightly improve in the back half of the year. Great. Thank you. Thanks, Andrew. There are no further questions at this time. I will now turn the call back to CEO Nick Stangle for closing remarks. Excellent. Thank You, Rebecca. I'll just close it out the same way I started it. First, by thanking our associates every day. They care for our residents, they care for each other. And at the end of the day, that's fundamentally what we provide against the backdrop of the real estate that we own, that we've talked about so much. I'd like to thank our family members and our residents who put their trust in us for their care and for the service that we provide. I'd to thank are shareholders for their continued trust in this management team and their continued interest in Brookdale. With that, I recommend we shut down the call. Thanks, Rebecca. This concludes today's call. Thank you for attending. You may now disconnect.