Although Sabra Health Care REIT (Nasdaq: SBRA) only made its first investment in the addiction treatment sector in the third quarter of 2019, company leaders are optimistic they’ll dive deeper into the space in the future.

“We’re working on some other opportunities there as well,” Sabra CEO Rick Matros told investors Thursday on the company’s Q3 earnings call. “We’ll see if those things become realized or not, but we feel good about this space.”

The Irvine, California-based real estate investment trust (REIT) entered the space with a $14.8 million investment in two addiction treatment facilities in Q3.

That’s more than 70% of all of Sabra’s investments for the quarter. Across all sectors, Sabra made a total of $20.6 million in investments in Q3. 

Sabra executives first announced their interest in the substance abuse treatment market back in May during the company’s Q1 earnings call. Matros praised the sector’s quick growth and relatively low risk.

Then in Q2, the company officially announced it would enter the space, expressing specific interest in potentially repurposing skilled nursing facilities by turning them into substance abuse treatment facilities.

On the Q3 call, Matros praised the reimbursement opportunities that come with substance abuse treatment and shared his belief that entry into the space would give Sabra a competitive edge.

“None of our peers are in the space at this point,” he said. “It’s very fragmented space [and it’s] not easy to find deals. But hopefully [with] Sabra being the first ones [in the space,] we’ll develop a reputation of being the capital partners to folks.”

While Sabra is new to the addiction treatment sector, the company has long been in the behavioral health space. Most of its hospitals have a behavioral focus, and Sabra will continue to look for such opportunities, Matros said on the call.

In Q3, Sabra reported a total revenue of $149.8 million, which fell short of analysts’ estimates.