National Health Investors Inc: Form 10-Q for the period ended Sep 30, 2025

Unless the context otherwise requires, references throughout this Quarterly Report on Form 10-Q to “NHI” or the “Company” include National Health Investors, Inc., and our consolidated subsidiaries. In accordance with the Securities and Exchange Commission’s (“SEC”) “Plain English” guidelines, portions of this Quarterly Report on Form 10-Q have been written in the first person. In this document, the words “we”, “our”, “ours” and “us” refer only to National Health Investors, Inc. and our consolidated subsidiaries and not any other person.

Cautionary Statement Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q and other materials we have filed or may file with the SEC, as well as information included in oral statements made, or to be made, by our senior management contain certain “forward-looking statements” as that term is defined by the Private Securities Litigation Reform Act of 1995. All statements regarding our expected future financial position, results of operations, cash flows, funds from operations, continued performance improvements, ability to service and refinance our debt obligations, ability to finance growth opportunities, and similar statements including, without limitation, those containing words such as “may,” “will,” “should,” “believes,” “anticipates,” “expects,” “intends,” “estimates,” “plans,” “projects,” “target,” “likely” and other similar expressions, are forward-looking statements.

Forward-looking statements involve known and unknown risks and uncertainties that may cause our actual results in future periods to differ materially from those projected or contemplated in forward-looking statements as a result of factors including, but not limited to, the following:

• We depend on the operating success of our tenants, managers and borrowers and if their financial condition or business prospects deteriorate, our financial condition and results of operations could be adversely affected;
• We are exposed to the risk that our tenants, managers and borrowers may become subject to bankruptcy or insolvency proceedings;
• A small number of tenants in our portfolio account for a significant percentage of the rent we expect to generate from our portfolio, and the failure of any of these tenants to meet their obligations to us could materially and adversely affect our business, financial condition and results of operations;
• Actual or perceived risks associated with pandemics, epidemics or outbreaks have had and may in the future have a material adverse effect on our managers’, tenants’ and borrowers’ business and results of operations;
• A member of our board of directors is also the chairperson of the board of directors of National HealthCare Corporation (“NHC”), and his interests may differ from those of our stockholders;
• We are exposed to risks related to governmental regulations and payors, principally Medicare and Medicaid, and the effect of changes in laws, regulations and reimbursement rates on our tenants’ and borrowers’ business;
• We are exposed to the risk that the cash flows of our tenants, managers and borrowers may be adversely affected by increased liability claims and liability insurance costs;
• We are exposed to the risk that we may not be fully indemnified by our tenants, managers and borrowers against future litigation;
• We depend on the success of property development and construction activities, which may fail to achieve the operating results we expect;
• We are exposed to the risk that the illiquidity of real estate investments could impede our ability to respond to adverse changes in the performance of our properties;
• Our investments are concentrated in healthcare properties;
• We are subject to risks related to our investment with Life Care Services for Timber Ridge, an entrance-fee continuing care retirement community (“CCRC”), associated with Type A benefits offered to the residents of the CCRC and the related accounting requirements;
• We are exposed to risks associated with our investment in Timber Ridge OpCo, LLC (“Timber Ridge Opco”), including our lack of sole decision-making authority, our reliance on the financial condition of other interests and related healthcare operations of the entity;
• Inflation and increased interest rates may adversely affect our financial condition and results of operations;
• Adverse developments affecting the financial services industry, including events or concerns involving liquidity, defaults, or non-performance by financial institutions, could adversely affect our business, financial condition, results of operations, or prospects;
• Adverse geopolitical developments could have a material adverse impact on our business;
• We are exposed to operational risks with respect to our Senior Housing Operating Portfolio (“SHOP”) structured communities;
• A cybersecurity incident or other form of data breach involving Company information could cause a loss of confidential consumer and other personal information, give rise to remediation and other expenses, expose us to liability under privacy and security and consumer protection laws, subject us to federal and state governmental inquiries, damage our reputation, and otherwise be disruptive to our business;
• We are exposed to risks related to environmental laws and the costs associated with liabilities related to hazardous substances;
• We are subject to risks of damage from catastrophic weather and other natural or man-made disasters and the physical effects of climate change;
• We depend on the success of our future acquisitions and investments;
• We depend on our ability to reinvest cash in real estate investments in a timely manner and on acceptable terms;
• Competition for acquisitions may result in increased prices for properties;
• We depend on our ability to retain our management team and other personnel and attract suitable replacements should any such personnel leave;
• We are exposed to the risk that our assets may be subject to impairment charges;
• Our ability to raise capital through equity sales is dependent, in part, on the market price of our common stock, and our failure to meet market expectations with respect to our business, or other factors we do not control, could negatively impact such market price and availability of equity capital;
• Settlement provisions contained in any forward sales agreements we may have entered into could result in substantial dilution to our earnings per share or result in substantial cash payment obligations;
• In case of our bankruptcy or insolvency, any forward sales agreements in effect will automatically terminate, and we would not receive the expected proceeds from such forward sales of shares of our common stock;
• The United States (“U.S.”) federal income tax treatment of the cash that we might receive from cash settlement of our forward sales agreements is unclear and could jeopardize our ability to meet the real estate investment trust (“REIT”) qualification requirements;
• We may need to refinance existing debt or incur additional debt in the future, which may not be available on terms acceptable to us;
• We have covenants related to our indebtedness which impose certain operational limitations, and a breach of those covenants could materially adversely affect our financial condition and results of operations;
• Downgrades in our credit ratings could have a material adverse effect on our cost and availability of capital;
• We rely on external sources of capital to fund future capital needs, and if we encounter difficulty in obtaining such capital, we may not be able to make future investments necessary to grow our business or meet maturing commitments;
• We depend on revenues derived mainly from fixed rate investments in real estate assets, while a portion of our debt used to finance those investments bears interest at variable rates, which subjects us to interest rate risk;
• We depend on the ability to continue to qualify for taxation as a REIT for U.S. federal income tax purposes;
• There are no assurances of our ability to pay dividends in the future;
• Complying with REIT requirements may cause us to forego otherwise attractive acquisition opportunities or liquidate otherwise attractive investments, which could materially hinder our performance;
• Our ownership of and relationship with any taxable REIT subsidiary (“TRS”) that we have formed or will form will be limited and a failure to comply with the limits would jeopardize our REIT status and may result in the application of a 100% excise tax;
• Actions of activist investors could be disruptive and potentially costly and the possibility that activist investors may seek changes that conflict with our strategic direction could cause uncertainty about the strategic direction of our business;
• Legislative, regulatory or administrative changes could adversely affect us or our security holders;
• Adverse economic effects from international trade disputes (including threatened or implemented tariffs imposed by the United States and threatened or implemented tariffs imposed by foreign countries in retaliation) or similar events impacting economic activity could have a material adverse effect on our results of operations;
• We have ownership limits in our charter with respect to our common stock and other classes of capital stock which may delay, defer or prevent a transaction or a change of control that might involve a premium price for our common stock or might otherwise be in the best interests of our stockholders; and
• We are subject to certain provisions of Maryland law and our charter and bylaws that could hinder, delay or prevent a change in control transaction, even if the transaction involves a premium price for our common stock or our stockholders believe such transaction to be otherwise in their best interests.

Reference Part I, Item 1, “Business”, Part I, Item 1A, “Risk Factors” and the notes to our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024 and additionally Part II, Item 1A, “Risk Factors” in this Quarterly Report on Form 10-Q for a further discussion of these risks, various governmental regulations and other operating factors relating to the healthcare industry and the risk factors inherent therein. You should carefully consider these risks before making any investment decisions related to us. These risks and uncertainties are not the only ones facing us. There may be additional risks that we do not presently know of and / or that we currently deem immaterial. If any of the risks actually occur, our business, financial condition, results of operations and cash flows could be materially and adversely affected. In that case, the trading price of our common stock could decline, and you may lose part or all of your investment. Given these risks and uncertainties, we can give no assurance that these forward-looking statements will, in fact, occur. We caution readers not to place undue reliance on such forward-looking statements, which speak only as of the dates made. We undertake no obligation to revise or update any of the forward-looking statements to reflect subsequent events or circumstances except to the extent required by applicable law.

Executive Overview

National Health Investors, Inc., established in 1991 as a Maryland corporation, is a self-managed REIT specializing in sale- leaseback, joint venture, mortgage and mezzanine financing of need-driven and discretionary senior housing and medical facility investments. We operate through two reportable segments: Real Estate Investments and SHOP.

Our investments in real estate properties include independent living facilities (“ILF”), assisted living facilities (“ALF”), entrance-fee communities (“EFC”), senior living campuses (“SLC”), skilled nursing facilities (“SNF”) and hospitals (“HOSPs). We classify ILFs, ALFs, EFCs and SLCs as senior housing investments and classify SNFs and HOSPs as medical facility investments. Senior housing properties (“SHO”) are the combination of ILFs, ALFs, EFCs and SLCs and are also referred to as senior housing communities.

In our Real Estate Investments segment, our revenues primarily relate to triple-net leases with third-party operators at our properties. Additionally, we recognize interest income from financing arrangements we provide to our tenants, operators or other third parties primarily for construction, renovation and expansion projects, funding of working capital or corporate needs and the acquisition of real estate properties. Our SHOP segment is comprised of senior housing communities from which we generate revenues from resident fees and services on each unit. We utilize third-party managers to operate these properties on our behalf and pay a management fee for their services. Our investments are funded primarily through (1) operating cash flows, (2) debt offerings, revolving lines of credit and term loans and (3) sales of equity securities.

Real Estate Investments Portfolio

As of September 30, 2025, our investments in the Real Estate Investments segment included real estate properties and financing arrangements involving 188 properties located in 32 states. We had 118 SHOs, 68 SNFs and two HOSPs representing an aggregate gross carrying value of $2.5 billion leased to 30 tenants. The aggregate gross carrying value of our mortgage and other notes receivable was $224.6 million, excluding $15.4 million of credit loss reserves due from 17 borrowers.

We classify the properties in our Real Estate Investments segment as either senior housing or medical facilities. Because our tenant leases represent different underlying revenue sources and result in differing credit risk profiles, we further classify our senior housing properties as either need-driven or discretionary.

Senior Housing – Need-Driven includes ALFs and SLCs which primarily attract private payment for services from residents who require assistance with activities of daily living. Need-driven properties are subject to regulatory oversight.

Senior Housing – Discretionary includes ILFs and EFCs which primarily attract private payment for services from residents who are making the lifestyle choice of living in an age-restricted, multi-family community that offers social programs, meals, housekeeping, and in some cases, access to healthcare services. Discretionary properties are subject to limited regulatory oversight. There is a correlation between demand for this type of community and the strength of the housing market.

Medical Facilities within our Real Estate Investments segment receive payment for services primarily from Medicare, Medicaid and health insurance. These properties include SNFs and HOSPs that attract patients who have a need for acute or complex medical attention, preventative medicine or rehabilitation services. Medical facilities are subject to federal and state regulatory oversight and, in the case of hospitals, Joint Commission accreditation.

Senior Housing Operating Portfolio

As of September 30, 2025, our investments in the SHOP segment included 17 ILFs, four SLCs, one ALF that are located in 12 states with a combined total of 2,670 residential units representing an aggregate gross carrying value of $551.8 million. We have structured the operations at these senior housing communities to comply with the requirements of the REIT Investment Diversification and Empowerment Act of 2007 (“RIDEA”) and to utilize our TRS for activities that would otherwise be non-qualifying for REIT purposes. The properties are operated by third-party managers in exchange for a management fee from us, and as such, we are not directly exposed to the credit risk of the managers in the same manner or to the same extent as we are related to our triple-net tenant leases. However, we rely on the managers’ personnel, expertise, technical resources and information systems, proprietary information, good faith and judgment to manage our communities efficiently and effectively. We also rely on the managers to set appropriate resident fees and to operate our communities in compliance with the terms of our management agreements and all applicable laws and regulations.

The following tables summarize information related to the investment portfolios of our Real Estate Investments and SHOP segments as of September 30, 2025 and for the nine months ended September 30, 2025 ($ in thousands):

46

1 Amounts exclude non-segment / corporate NOI.

2 Total real estate properties exclude $2.6 million of gross carrying values related to our corporate office and equipment, which are classified as non-segment / corporate assets. Mortgage and other notes receivable exclude total credit loss reserves of $15.4 million.

The following table provides a summary of the impact of the seven transitioned properties on our SHOP segment NOI for the nine months ended September 30, 2025 ($ in thousands):

47

The following table provides a summary of our NOI, excluding non-segment / corporate NOI, based on geographical location ($ in thousands):

The tenants in our Real Estate Investments segment that each provided 3% or more of our total revenues for the nine months ended September 30, 2025 were Bickford Senior Living (“Bickford”), Encore Senior Living, NHC, Senior Living Communities, LLC (“Senior Living”) and The Ensign Group. Collectively, our revenues from these tenants were 46.0% of our total revenues.

As of September 30, 2025, our average effective annualized NOI for leased properties in our Real Estate Investments segment was $19,430 per unit for ALFs, $15,234 per unit for SLCs, $6,495 per unit for ILFs, $21,697 per unit for EFCs, $10,117 per bed for SNFs and $49,434 per bed for HOSPs. As of September 30, 2025, the average effective annualized NOI for our SHOP segment was $8,846 per unit.

Substantially all of our revenues and cash flows from operations are derived from rental income on tenant leases at our real estate properties, service fees on resident agreements at our senior housing communities and interest income earned on our mortgage and other notes receivable. These revenues are the primary sources of liquidity we use to fund our distributions to stockholders, the amounts of which depend on the performance of the operators and managers of our facilities. Any operating difficulties experienced by these parties could have a material adverse effect on their ability to meet financial and other contractual obligations with us and therefore may negatively impact our results of operations. We monitor the performance of our operators and managers through periodic reviews of their operating results and covenant compliance and through property inspections, among other activities.

New Tax Legislation

In connection with the passing of the One Big Beautiful Bill Act on July 4, 2025, certain changes to U.S. tax laws were approved that impact us and our stockholders. Among other changes, this legislation (i) permanently extended the 20% deduction for “qualified REIT dividends” for individuals and other non-corporate taxpayers under Section 199A of the Internal Revenue Code, (ii) increased the percentage limit under the REIT asset test applicable to TRSs from 20% to 25% for taxable years beginning after December 31, 2025, and (iii) increases the base on which the 30% interest deduction limit under Section 163(j) of the Internal Revenue Code applies by excluding depreciation, amortization and depletion from the definition of “adjusted taxable income” (i.e. based on EBITDA rather than EBIT) for taxable years beginning after December 31, 2024.

Recent Investments Activity

Asset Acquisitions

During the nine months ended September 30, 2025, we completed the following real estate acquisitions within our Real Estate Investments segment ($ in thousands):

1 This property was acquired in a deed in lieu of foreclosure transaction initiated by Senior Living Management to satisfy the repayment of its $10.0 million mortgage with us. Reference the “Senior Living Management” section below for additional information.

In January 2025, we acquired a 108-unit SLC in Montrose, Colorado. The acquisition price was $21.2 million, including $0.2 million in closing costs. The property is leased pursuant to a 10-year triple-net lease, which includes two five-year extension options, an initial lease rate of 8.0% and fixed annual escalators of 2.0%.

In March 2025, we acquired a 120-unit ALF and memory care community in Bergen County, New Jersey. The acquisition price was $46.3 million, including $0.3 million in closing costs. The property is leased pursuant to a 15-year triple-net lease, which includes two five-year extension options, an initial lease rate of 8.0% and fixed annual escalators of 2.0%. The lease includes a $0.8 million development commitment which will be added to the respective lease base, if funded.

In April 2025, we acquired a portfolio of six ALF and memory care communities located in Nebraska for a total purchase price of $63.5 million, including $0.3 million in closing costs. The portfolio of properties is leased pursuant to a 15-year triple-net master lease, which includes two five-year extension options and has an initial lease rate of 8.0% with fixed annual escalators of 2.0%.

Discovery Transitions

Effective August 1, 2025, we terminated a triple-net master lease associated with a portfolio of six senior housing properties, consisting of four SLCs, one ILF and one ALF, which were held in a consolidated real estate partnership with Discovery Senior Housing Investor XXIV, LLC (the “Discovery partner”). The tenant of the triple-net master lease was a related party of Discovery Senior Living (“Discovery”). In connection with the lease termination, we received net cash consideration of $3.1 million and other non-cash consideration of $0.6 million from the tenant and wrote off the related straight-line rents receivable of $8.9 million on this lease. Each of these amounts was recognized in rental income in our condensed consolidated statements of income included in this report for the three and nine months ended September 30, 2025. Additionally, on August 1, 2025, we entered into a dissolution agreement with the Discovery partner, which provided for the write-off of the remaining partnership liabilities against the equity in the partnership and the Discovery partner contributing its 2.0% noncontrolling common equity interest to us for nominal consideration.

Concurrently with the activities above, we entered into agreements with an affiliate of Sinceri Senior Living (“Sinceri”) to serve as manager of the properties and transitioned the portfolio of six senior housing properties from our Real Estate Investments segment into our SHOP segment. The aggregate net carrying value of this portfolio was $125.3 million as of September 30, 2025. Prior to the transition, we recognized rental income of $0.5 million and $3.2 million during the three and nine months ended September 30, 2025, respectively, and $1.5 million and $4.6 million during the three and nine months ended September 30, 2024, respectively, in our condensed consolidated statements of income included in this report related to the triple-net master lease.

Also, effective August 1, 2025, we terminated a triple-net lease with an affiliate of Discovery for an ILF in Oklahoma. In connection with the lease termination, we received $0.8 million in cash consideration and $0.8 million in other non-cash consideration from the tenant and wrote off the related straight-line rent receivable of $3.2 million on this lease. Each of these amounts was recognized in rental income in our condensed consolidated statements of income included in this report for the three and nine months ended September 30, 2025. Concurrently with the lease termination, we transitioned this property from our Real Estate Investments segment into our SHOP segment by contributing it to an existing consolidated partnership with DSHI NHI Holiday LLC (the “Discovery member”). As of September 30, 2025, the net carrying value of this property was $28.6 million. Prior to the transition, we recognized rental income of $0.2 million and $1.6 million during the three and nine months ended September 30, 2025, respectively, and $0.7 million and $2.1 million during the three and nine months ended September 30, 2024, respectively, in our condensed consolidated statements of income included in this report related to the triple-net lease.

Reference Notes 5 and 15 to the condensed consolidated financial statements included in this report.

Fourth Quarter 2025 Acquisitions

On October 1, 2025, we acquired a portfolio of four senior housing communities located in Oklahoma and Oregon, consisting of two SLCs and two ALFs with a combined total of 344 residential units. The total purchase price of $74.3 million, including $0.5 million in closing costs, was partially funded by the cancellation of a $9.5 million mortgage note with us which had an 8.5% interest rate. This portfolio of properties has been included in our SHOP segment and will continue to be managed by the existing operator, Compass Senior Living.

On October 31, 2025, we acquired a 251-unit CCRC located in South Carolina from Senior Living. The acquisition price of $52.5 million was partially funded by the cancellation of a $32.7 million mortgage note on the property. The property is being leased back to Senior Living pursuant to a 15-year triple-net lease with two five-year extension options, an initial lease rate of 8.25% and fixed annual escalators of 2.0%. Concurrently with the acquisition, we executed a $1.5 million revolving line of credit with Senior Living. Reference the “Senior Living Loans” section in Note 4 to the condensed consolidated financial statements included in this report for additional information on the canceled mortgage note.

Vizion Health Loan Amendment

In March 2025, we amended a mezzanine loan agreement with affiliates of Vizion Health to provide for additional funding of $5.4 million and to extend the maturity date to May 2028. The interest rate on the loan escalates on July 1 of each year. As of September 30, 2025, the principal amount outstanding on the loan was $17.2 million and the interest rate was 9.4%.

Construction Loan

In May 2025, we entered into a construction loan agreement to fund up to $28.0 million for the development of an 84-unit ALF and memory care facility in Michigan which will be operated by Encore Senior Living upon completion. The loan agreement provides for an annual interest rate of 9.0% and a maturity date in April 2030. As of September 30, 2025, the principal amount outstanding on this construction loan was $2.8 million.

Tenant Leases

Our tenant leases are typically structured as triple-net leases and relate to single-tenant properties having an initial lease term of 10 to 15 years with one or more five-year extension options. As such, there may be reporting periods in which we experience few, if any, lease renewals or expirations. During the nine months ended September 30, 2025, we did not have any significant renewing or expiring leases. Most of our existing leases contain annual rent escalators. For financial statement purposes, rental income is recognized on a straight-line basis over the respective term of the lease. Reference the “Discovery Transitions” section in Note 3 to the condensed consolidated financial statements included in this report for information on our lease terminations in the third quarter of 2025.

Tenant Concentrations

The following table presents information related to concentrations of our tenants, or affiliates of tenants, that exceed 10% of total revenues included in our condensed consolidated statements of income included in this report for the periods indicated ($ in thousands):

1 Real estate properties have been stated at their gross carrying values. Total real estate properties, as presented in the table above, exclude $2.6 million related to our corporate office and equipment and exclude $551.8 million related to the properties in our SHOP segment.

2 Mortgages and notes have been stated at their gross carrying values. Mortgages and notes, as presented in the table above, exclude total credit loss reserves of $15.4 million as of September 30, 2025.

3 Revenues, as presented in the table above, include rental income and interest income from assets classified as held for sale, if any.

4 There are no tenant concentrations in revenues from resident fees and services because the residency agreements are between us and the individual residents.

For the nine months ended September 30, 2025 and 2024, we recognized straight-line rent revenue of $(0.5) million and $(0.4) million, respectively, and interest income of $2.6 million and $2.7 million, respectively, related to our Senior Living investments. We recognized straight-line rent revenue of $0.5 million and $0.2 million related to NHC for the nine months ended September 30, 2025 and 2024, respectively. We recognized interest income of $1.9 million and $2.1 million for the nine months ended September 30, 2025 and 2024, respectively, related to our loans with Bickford. Reference Notes 3 and 4 to the condensed consolidated financial statements included in this report.

Senior Living

As of September 30, 2025, we leased 10 senior housing properties to Senior Living. We provided a $15.0 million revolving line of credit to Senior Living which is available for working capital needs and to finance construction projects within Senior Living’s portfolio, including projects to build additional units at existing facilities. The revolving line of credit matures in December 2031 concurrent with the maturity of the Senior Living leases. As of September 30, 2025, the outstanding balance on the Senior Living revolving line of credit was $6.8 million and the interest rate was 8.0%.

As of September 30, 2025, we had a $32.7 million mortgage note due from Senior Living related to a 251-unit CCRC in South Carolina. As previously discussed, in October 2025, the outstanding principal on this mortgage note was applied to the consideration paid when we acquired this property. Concurrently with this acquisition, we executed a triple-net lease with Senior Living and provided a new $1.5 million revolving line of credit which bears an initial annual interest rate of 8.25%. Reference the “Fourth Quarter 2025 Acquisitions” section above for additional information on the acquisition.

Bickford

As of September 30, 2025, we leased 38 facilities to Bickford under four master leases. We have been recognizing revenues from Bickford’s leases on a cash basis since the second quarter of 2022 based upon information we obtained from Bickford regarding its financial condition that raised substantial doubt about its ability to continue as a going concern.

NHC

As of September 30, 2025, we leased 32 SNFs and three ILFs to NHC under a triple-net master lease that expires on December 31, 2026. The lease contains two five-year extension options at a fair market rental value to be negotiated between the parties. We have engaged Blueprint Healthcare Real Estate Advisors, a national advisory firm focused on skilled nursing and senior housing facilities, to assist with underwriting, due diligence, and market analysis with respect to the master lease renewal.

On September 8, 2025, we provided formal written notice to NHC that it is in default of the triple-net master lease as a result of NHC’s failure to remedy its non-compliance with certain non-monetary provisions of the triple-net master lease previously identified by us. NHC had 30 days to cure such default and its failure to do so entitles us to declare an event of default and to pursue any and all remedies available to us under the triple-net master lease. We are currently evaluating potential courses of action.

On October 7, 2025, NHC informed us that it was exercising its option to renew the master lease for one five-year term commencing January 1, 2027. We are currently reviewing the effectiveness and legality of NHC’s notice.

Cash Basis Tenants

We had two tenants, including Bickford, on the cash basis of accounting for revenue recognition during the three and nine months ended September 30, 2025 for their leasing arrangements with us based on our assessment of each tenant’s ability to satisfy its contractual obligations under the terms of the respective leases. During the three and nine months ended September 30, 2024, we had three tenants, including Bickford, on the cash basis of accounting for revenue recognition related to their leasing arrangements with us.

A summary of lease payments received from cash basis tenants were as follows ($ in thousands):

Senior Living Management

Senior Living Management (“SLM”) was a cash basis tenant from 2022 until January 1, 2025 when the remaining two properties leased from us were transitioned to a new operator who had been serving as the interim manager at the properties. Concurrently with this transaction, we executed a 15-year triple-net master lease with a new operator which includes two five-year extension options. This master lease provides for approximately $1.1 million in initial annual contractual lease payments with fixed annual escalators of 2.0%.

In February 2025, we acquired an ALF property in Florida upon the execution of a deed in lieu of foreclosure agreement initiated by SLM to settle its $10.0 million non-performing mortgage note with us. The estimated fair value of the acquired property and the net carrying value of the mortgage note were both $8.6 million at the closing of this transaction. Concurrently, we executed a new lease with the existing operator, Mainstay Healthcare. This lease provides for approximately $0.7 million in annual contractual lease payments.

In May 2025, we received $2.5 million as a partial repayment of the unsecured mezzanine loan due from SLM that is classified as non-performing. This repayment resulted in a $1.3 million reduction of the credit loss reserve on this loan and the related credit loss expense in the second quarter of 2025. As of September 30, 2025, the principal amount outstanding on this loan was $12.0 million, which was fully covered by the related credit loss reserve.

Tenant Purchase and Sale Agreement

We lease a SLC that is subject to an outstanding purchase and sale agreement giving the tenant the option to acquire the property for $39.0 million. The purchase and sale agreement, as amended, expires in November 2025 subject to monthly renewals through March 2026 by the tenant upon payment of a non-refundable fee. The property was included in real estate properties, net, on our condensed consolidated balance sheets included in this report as of September 30, 2025 and December 31, 2024. During the three and nine months ended September 30, 2025, we recognized rental income of $0.6 million and $2.0 million, respectively, related to the existing triple-net lease at this property, which expires in July 2027. The property will be reclassified to assets held for sale when the sale becomes probable, including when the tenant demonstrates its ability to obtain sufficient financing to close on the sale of the property within the terms of the purchase and sale agreement. As of September 30, 2025, the net carrying value of this real estate property was $18.6 million on our condensed consolidated balance sheet included in this report.

Tenant Purchase Options

Certain of our tenant leases contain a purchase option clause allowing the tenant to acquire the leased property at a fixed base price, a fixed base price plus a specified share in any appreciation of the property or a price based on a specified fixed minimum internal rate of return on our investment. As of September 30, 2025, tenants had purchase options on four of our properties, representing an aggregate net carrying value of $75.3 million, which have exercise dates ranging between 2028 and 2031. Rental income from these properties with tenant purchase options totaled $2.5 million and $7.5 million during the three and nine months ended September 30, 2025, respectively, and $2.5 million and $6.3 million during the three and nine months ended September 30, 2024, respectively. As of September 30, 2025, we cannot reasonably estimate at this time the probability that any of these tenant purchase options will be exercised in the future.

Consideration to be received from the exercise of any one or more of these tenant purchase options is expected to exceed our net carrying value of the respective property at the time of sale.

Occupancy

The following table summarizes the average portfolio occupancy for Senior Living, Bickford and SHOP for the periods indicated:

1 Amounts are based on real estate properties in the SHOP portfolio as of December 31, 2024.

Tenant Monitoring

The operators of our properties in the Real Estate Investments segment report to us the results of their operations on a periodic basis, which we in turn subject to further analysis as a means of monitoring potential credit risks within our portfolio. We have identified EBITDARM, which is calculated as earnings before interest, taxes, depreciation, amortization, rent and management fees, as a primary performance measure for our tenants, based on results they have reported to us. We believe EBITDARM is useful in our most fundamental analyses, as it is a property-level measure of an operator’s success, by eliminating the effects of the operator’s method of acquiring the use of its assets (interest and rent), its non-cash expenses (depreciation and amortization), and expenses that are dependent on its level of success (income taxes), and also excluding the effect of the operator’s payment of its management fees, as typically those fees are contractually subordinate to our lease payment. For operators of our EFCs, our calculation of EBITDARM includes other cash flow adjustments typical of the industry which may include, but are not limited to, net cash flows from entrance fees, amortization of deferred entrance fees, adjustments for tenant rent obligations, and management fee true-ups. The eliminations and adjustments reflect covenants in our leases and provide a comparable basis for assessing our various relationships.

We believe that EBITDARM is a useful way to analyze the cash potential of a group of assets. From EBITDARM, we calculate a coverage ratio (EBITDARM / cash rent) measuring the ability of the operator to meet its monthly obligations. In addition to EBITDARM and the coverage ratio, we rely on a careful balance sheet analysis and other analytical procedures to help us identify potential areas of concern relative to our operators’ ability to generate sufficient liquidity to meet their obligations, including their obligation to continue to pay the amount due to us. Typical among our operators is a varying lag in reporting to us the results of their operations. Across our portfolio, however, our operators report their results, typically within either 30 or 45 days and at the latest, within 90 days of month’s end. For computational purposes, we exclude mortgage and other notes receivable, and development and lease-up properties that have been in operation less than 24 months. For stabilized acquisitions in the portfolio less than 24 months and renewing leases with changes in scheduled rent, we include pro forma cash rent. Same-store portfolio coverage, when presented herein, excludes properties that have transitioned operators in the past 24 months or assets subsequently sold except as noted.

The results of our coverage ratio analysis are presented below on a trailing 12-month basis as of June 30, 2025 and 2024 (the most recent periods available):

1 The tables are based on trailing 12-month data, excluding transitioned properties with cash-basis tenant leases, mortgage and other notes and development and lease-up properties operating less than 24 months, and including pro forma cash inflow from lease payments for stabilized acquisitions in the portfolio less than 24 months.

2 NHC Fixed Charge Coverage Ratio and displayed occupancies are shown at a consolidated level. The occupancies for the SNF portfolio are reported only based on data from NHC’s public filings.

3 Bickford’s coverages, including the pro forma impact of coverages at the increased rent, effective April 2024, are 1.69x and 1.61x for the trailing 12 months ended June 30, 2025 and 2024, respectively. Including the April 2024 rent increase and rent deferral repayments, Bickford’s pro forma coverages were 1.49x and 1.41x for the trailing 12 months ended June 30, 2025 and 2024, respectively.

Fluctuations in portfolio coverage are a result of market and economic trends, local market competition, regulatory factors and the operational success of our tenants. We use the results of individual leases to inform our decision making with respect to specific tenants, but trends described above by property type and operator bear analysis. For many of the affected operators, as is typical of our portfolio in general, we have security deposits in place and / or corporate guarantees should actual cash rental shortfalls eventually materialize. In certain instances, our operators may increase their security deposits with us in an amount equal to the coverage shortfall, and, upon subsequent compliance with the required lease coverage ratio, the operator would then be entitled to a full refund. The sufficiency of credit enhancements, such as tenant deposits and guarantees, as a protection against economic downturn are a focus as we monitor economic and financial conditions. The metrics presented in the tables above do not reflect the presence of these security deposits.

Critical Accounting Policies and Estimates

There have been no significant changes to our critical accounting policies and estimates from the information provided in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” included in our Annual Report on Form 10-K for the year ended December 31, 2024.

Impairments and Credit Loss Reserves

In addition to inflation risk and the potential for increased interest rates, our tenants and borrowers experience periods of significant financial pressures and difficulties similar to those encountered by other healthcare operators. We have no significant intangible assets recognized on our condensed consolidated balance sheet included in this report as of September 30, 2025 that would require assessment for impairment.

We believe the net carrying values of our real estate properties are recoverable and our mortgage and other notes receivable, net of credit loss reserves, are realizable and supported by the value of the underlying collateral as of September 30, 2025. However, it is possible that future events or circumstances could require us to make significant adjustments to our carrying amounts. Reference Notes 3 and 4 to the condensed consolidated financial statements included in this report.

During the three and nine months ended September 30, 2025 and the three months ended September 30, 2024, we did not recognize any impairment charges. During the nine months ended September 30, 2024, we recognized an impairment charge of $0.7 million on one property in our Real Estate Investments segment, which was reclassified to assets held for sale in the second quarter of 2024. This property was subsequently sold in the fourth quarter of 2024.

Our mortgage and other notes receivable are stated net of credit loss reserves of $15.4 million on our condensed consolidated balance sheet included in this report as of September 30, 2025. Additionally, we have credit loss reserves of $0.2 million related to the unfunded portion of our loan commitments outstanding as of September 30, 2025. We evaluate these estimates for credit loss reserves on a quarterly basis and make adjustments based on current circumstances as considered necessary.

Results of Operations

The significant items affecting revenues and expenses are described below for the periods indicated ($ in thousands):

NM - Not meaningful

Financial highlights for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, were as follows:

• Rental income decreased $1.1 million, or 1.8%, primarily due to the concurrent transactions executed on August 1, 2025, which resulted in the transfer of seven properties from the Real Estate Investments segment to the SHOP segment. We recognized an aggregate $6.9 million reduction in rental income, which included $12.1 million in write offs related to straight-line rents receivable. This decrease was partially offset by new investments funded since September 2024, net of real estate properties disposed of since September 2024. Reference Note 3 to the condensed consolidated financial statements included in this report.
• Resident fees and services, less senior housing operating expenses, increased $1.9 million, or 62.6%, due to the operations of the seven properties transitioned into the SHOP segment on August 1, 2025.
• Interest income from mortgage and other notes receivable increased $0.7 million, or 12.4%, primarily due to the collection of interest and fees on note paydowns in the current period.
• Interest expense decreased $1.2 million, or 7.9%, primarily due to a decrease in interest rates on our variable rate debt.
• Loan and realty (gains) losses, net, was a net gain of $2.0 million for the three months ended September 30, 2025 compared to a net loss of $3.4 million for the three months ended September 30, 2024. The net gain in the current year period primarily related to a reduction in our credit loss reserves related to notes paid off during the current period. The net loss in the prior year period primarily related to an increase in the credit loss reserve on a mezzanine loan due from SLM.
• Other expenses increased $1.7 million, or 34.0%, primarily due to higher incentive compensation costs and increases in professional fees and other purchased services.

NM Not meaningful

Financial highlights for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, were as follows:

• Rental income increased $10.0 million, or 5.3%, primarily as a result of new tenant leases on properties acquired since September 2024, partially offset by the $6.9 million reduction in rental income due to the concurrent transactions on August 1, 2025. Rent received from cash basis tenants decreased $4.0 million primarily due to a $2.5 million lump sum payment received in the prior year period. Reference Note 3 to the condensed consolidated financial statements included in this report.
• Resident fees and services, less senior housing operating expenses, increased $2.9 million, or 32.6%, primarily due to the operations of the seven properties transitioned into the SHOP segment on August 1, 2025.
• Interest income from mortgage and other notes receivable increased $1.6 million, or 9.3%, primarily due to the collection of interest and fees on note paydowns in the current period.
• Interest expense decreased $1.6 million, or 3.5%, primarily due to a decrease in interest rates on our variable rate debt.
• Legal expenses increased $2.0 million primarily from fees incurred related to a large SHOP transaction that did not materialize totaling $1.2 million and due to costs incurred in the current period related to the concurrent transactions on August 1, 2025 to terminate leases, transition properties to the SHOP segment and dissolve the Discovery partnership. Reference Note 3 to the condensed consolidated financial statements included in this report.
• Proxy contest and related expenses in the nine months ended September 30, 2025 consisted of advisory costs incurred in our response to a proxy campaign associated with our 2025 annual stockholders meeting. There were no similar costs incurred during the nine months ended September 30, 2024.
• Loan and realty (gains) losses, net, was a net gain of $3.4 million for the nine months ended September 30, 2025 compared to a net loss of $4.6 million in the nine months ended September 30, 2024. The change of $7.9 million was primarily due to a decrease in the credit loss reserve of $7.3 million in the nine months ended September 30, 2025 and a real estate impairment charge of $0.7 million on one property in our Real Estate Investments segment in the prior year period.
• Other expenses increased $4.8 million primarily due to higher incentive compensation costs, including a $1.1 million increase in share-based compensation expense, and increases in professional fees and other purchased services.
• Gains on sales of real estate properties, net, decreased $1.4 million for the nine months ended September 30, 2025 as compared to the same period in the prior year primarily due to the sale of two properties in the prior year period.
• Gains from equity method investment increased $1.6 million due to an increase in the cash distributions received related to our Timber Ridge Opco investment during the nine months ended September 30, 2025 as compared to the same period in the prior year. Reference Note 6 to the condensed consolidated financial statements included in this report.

Liquidity and Capital Resources

As of September 30, 2025, we had $600.0 million available to draw on our $700.0 million revolving credit facility, $81.6 million in unrestricted cash and cash equivalents, the ability to access $90.6 million of undrawn net proceeds through at the market (“ATM”) forward sales agreements and the ability to access $315.8 million through the issuance of common stock under our ATM equity program. In addition, we maintain an effective automatic shelf registration statement through which capital could be raised through the issuance of additional debt and / or equity securities.

Sources and Uses of Funds

Our primary sources of cash include lease payments from tenants, receipts from residents, principal and interest payments on mortgage and other notes receivable, proceeds from the sales of real estate properties, net proceeds from offerings of debt and equity securities and borrowings from our Credit Facility. Our primary uses of cash include principal and interest payments on our debt, investments in new and existing real estate properties, mortgage and other notes, dividend distributions to our stockholders, operating expenses of our SHOP ventures and general corporate overhead expenses.

These sources and uses of cash are reflected in our condensed consolidated statements of cash flows included in this report and have been summarized below for the periods indicated ($ in thousands):

NM Not meaningful

Operating Activities – Net cash provided by operating activities for the nine months ended September 30, 2025 includes new investments completed, the SHOP ventures, lease payment collections arising from rent escalators on existing leases and interest payments on new mortgage and note investments completed during the period.

Investing Activities – Net cash used in investing activities for the nine months ended September 30, 2025 was comprised primarily of $172.1 million of investments in new real estate properties, expansion and renovation projects at existing real estate properties, mortgages and other notes, partially offset by the collection of principal amounts due on mortgage and other notes receivable during the period.

Financing Activities – Net cash used in financing activities for the nine months ended September 30, 2025 differed from the 2024 period primarily due to $346.2 million in proceeds received from the issuance of the 2033 Senior Notes, $134.9 million in proceeds from issuance of common shares, net, a $231.2 million net paydown on our revolving credit facility and a $75.5 million increase in bank term loan repayments in the current period.

Debt Obligations

As of September 30, 2025, we had $1.1 billion of outstanding indebtedness. Reference Note 8 to our condensed consolidated financial statements included in this report. Reference Part I, Item 3 “Quantitative and Qualitative Disclosures About Market Risk” in this report for more details on the impact of interest rate risk on our business.

Revolving Credit Facility and Bank Term Loan - We have a $700.0 million unsecured revolving credit facility (the “Credit Facility”), which matures in October 2028, and may be extended by us pursuant to (i) one or both of the two six-month extension options or (ii) one 12-month extension option. On October 31, 2025, we amended the Credit Facility to remove the 0.10% credit spread adjustment applicable to the Secured Overnight Financing Rate (“SOFR”) interest rates, which will result in an effective decrease of 0.10% in the applicable interest rates with respect to the Credit Facility. Borrowings under the Credit Facility bear interest, at our election, at one of the following (a) Term SOFR plus a margin ranging from 0.725% to 1.40%, (b) Daily SOFR plus a margin ranging from 0.725% to 1.40% or (c) the base rate plus a margin ranging from 0.00% to 0.40%. In each election, the actual margin is determined according to our credit ratings. The base rate means, for any day, a fluctuating rate per annum equal to the highest of (x) the agent’s prime rate, (y) the federal funds rate on such day plus 0.50% or (z) the adjusted Term SOFR for a one-month tenor in effect on such day plus 1.00%. In addition, the Credit Facility requires a facility fee equal to 0.125% to 0.300%, based on our credit rating on the $700.0 million committed capacity without regard to usage.

The Credit Facility requires that we calculate specified financial statement metrics and meet or exceed certain financial ratios, which are usual and customary in nature. These ratios are calculated quarterly and, as of September 30, 2025, we were within the required limits. The calculation of our leverage ratio involves intermediate determinations of our “total indebtedness” and our “total asset value,” as defined in the Credit Facility.

We have an unsecured bank term loan (the “Bank Term Loan”) that bears interest at a variable rate which is SOFR-based with a margin determined according to our credit ratings. Concurrently with the amendment of the Credit Facility on October 31, 2025, we also amended the Bank Term Loan to remove the 0.10% credit spread adjustment applicable to the SOFR interest rates. In April 2025, we exercised the first of two six-month options to extend the maturity date to December 2025. In September 2025, we repaid $75.0 million on the Bank Term Loan. In October 2025, we exercised the remaining six-month option to extend the maturity date on the Bank Term Loan to June 2026.

As of September 30, 2025, the Credit Facility and Bank Term Loan each bore interest at Daily SOFR (plus a 10 basis points (“bps”) credit spread adjustment), plus 105 bps and 125 bps, based on our debt ratings, or 5.27% on the Credit Facility and 5.47% on the Bank Term Loan. The facility fee was 25 bps per annum. As noted above, on October 31, 2025, we amended each of the Credit Facility and the Bank Term Loan to remove the 0.10% credit spread adjustment applicable to the SOFR interest rates, which will result in an effective decrease of 0.10% of the applicable interest rates with respect to the Credit Facility and Bank Term Loan.

We have provided summary information in the table below on the current SOFR credit spread adjustments and facility fee for our Credit Facility and the Bank Term Loan reflecting our ratings compliance based on the applicable margin for SOFR loans with a debt rating of BBB-/Baa3:

If our credit rating from at least two credit rating agencies is downgraded below BBB-/Baa3, our Credit Facility and Bank Term Loan will be subject to defined increases in interest rates and fees.

2031 Senior Notes - In January 2021, we issued $400.0 million in aggregate principal amount of 3.00% unsecured senior notes that mature in February 2031 (the “2031 Senior Notes”) and require semi-annual interest payments. The 2031 Senior Notes are subject to affirmative and negative covenants, including financial covenants, with which we were in compliance as of September 30, 2025.

2033 Senior Notes - On September 22, 2025, we issued $350.0 million in aggregate principal amount of 5.35% unsecured senior notes that mature in February 2033 (the ”2033 Senior Notes”). The 2033 Senior Notes were sold at an issue price of 98.903% of face value, before the underwriters’ discount. Our net proceeds from the 2033 Senior Notes offering, after deducting underwriting discounts and expenses, were $342.5 million. We used the net proceeds to repay existing indebtedness. Interest on the 2033 Senior Notes is due semi-annually beginning in February 2026. The 2033 Senior Notes are subject to affirmative and negative covenants, including financial covenants. As of September 30, 2025 we were in compliance with these covenants.

Private Placement Notes - As of September 30, 2025, we had $150.0 million of principal amounts outstanding on our unsecured private placement notes. On November 3, 2025, we repaid $50.0 million of these notes upon maturity. The remainder of the private placement notes mature in January 2027 and have an annual interest rate of 4.51%.

Fannie Mae Term Loans - In the second quarter of 2025, we repaid all of the Fannie Mae term loans, including accrued interest, which totaled $75.7 million.

Debt Maturities - Reference Note 8 to the condensed consolidated financial statements included in this report.

Credit Ratings - Moody’s Investors Services reaffirmed its credit rating and a senior unsecured debt rating of Baa3 and “Stable” outlook on NHI on September 21, 2025. Fitch Ratings reaffirmed its public issuer credit rating of BBB- and “Stable” outlook on NHI on April 16, 2025 and S&P Global reaffirmed its BBB- rating and “Stable” outlook on NHI on October 6, 2025. Our unsecured private placement notes agreements include a rate increase provision that is effective if any rating agency lowers our credit rating below investment grade and our compliance leverage increases to 50% or more. Any reduction in outlook or downgrade in our credit ratings from the rating agencies could negatively impact our costs of borrowings.

Debt Metrics - We believe that our fixed charge coverage ratio, which is the ratio of Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization, excluding impairments of real estate properties and gains on dispositions) to fixed charges (interest expense at contractual rates, net of capitalized interest and principal payments on debt), and the ratio of consolidated net debt (debt less cash and cash equivalents) to Adjusted EBITDA are meaningful measures of our ability to service our debt. We use these two measures as a useful basis to compare the strength of our consolidated balance sheet with those of our peer group. We also believe our consolidated balance sheet gives us a competitive advantage when accessing debt markets.

Our fixed charge ratio was 5.2x for the nine months ended September 30, 2025. See the calculation in the table under the heading “Adjusted EBITDA.” Giving effect to significant acquisitions, financings, dispositions and note payoffs on an annualized basis, our consolidated net debt to annualized Adjusted EBITDA ratio for the three months ended September 30, 2025 was as follows ($ in thousands):

63

Supplemental Guarantor Financial Information

The principal amounts due on each of our debt instruments outstanding as of September 30, 2025 are fully and unconditionally guaranteed on a senior unsecured basis by each of our subsidiaries, except for certain excluded subsidiaries (the “Guarantors”). The Guarantors are either owned or controlled by, or are affiliates of, us.

The following tables present summarized financial information NHI and the Guarantors, on a combined basis after eliminating (i) intercompany transactions and balances among the Guarantors and (ii) equity in earnings from, and any investments in, any subsidiary that is a non-guarantor ($ in thousands):

Equity and Dividends

As of September 30, 2025, we had 47,638,502 shares of common stock outstanding with a market value of $3.8 billion. Total equity on our condensed consolidated balance sheet included in this report was $1.5 billion as of September 30, 2025.

Dividends - Our board of directors approves a regular quarterly dividend which is reflective of expected taxable income on a recurring basis. Taxable income is determined in accordance with the Internal Revenue Code and differs from net income for financial statements purposes that has been determined in accordance with U.S. generally accepted accounting principles (“GAAP”). Our board of directors has historically directed us towards maintaining a strong consolidated balance sheet. Therefore, we consider the competing interests of short-term and long-term debt interest rates, maturities and other terms versus the higher cost of new equity, and we accept some level of risk associated with leveraging our investments. We intend to continue to make new investments that meet our underwriting criteria and where the credit spread over our costs of equity and debt capital on a leverage neutral basis will generate sufficient returns to our stockholders. We do not expect to utilize borrowings to satisfy the payment of dividends and project that cash flows from operations will be adequate to fund dividends at the current rate.

We intend to comply with REIT dividend requirements that require us to distribute at least 90% of our annual taxable income for the year ended December 31, 2025 and thereafter. Historically, we have distributed at least 100% of our annual taxable income. Dividends declared for the fourth quarter of each fiscal year are paid by the end of the following January and are, with some exceptions, treated for tax purposes as having been paid in the fiscal year just ended as provided in Section 857(b)(9) of the Internal Revenue Code.

The following table summarizes dividends declared by our board of directors or paid by us for the periods indicated:

Nine Months Ended September 30, 2025

Nine Months Ended September 30, 2024

On November 5, 2025, our board of directors declared a $0.92 per common share dividend payable on January 30, 2026 to common stockholders of record as of December 31, 2025.

Forward Equity Sales Agreements - In the first quarter of 2025, we settled the remaining 1.0 million shares of common stock subject to our August 2024 forward equity sales agreements at a forward price of $68.21 per common share for proceeds of $65.5 million.

Shelf Registration Statement - We have an automatic shelf registration statement on file with the SEC that allows us to offer and sell to the public an unspecified amount of common stock, preferred stock, debt securities, warrants and/or units at prices and on terms to be announced when and if such securities are offered. The details of any future offerings, along with the use of proceeds from any securities offered, will be described in a prospectus supplement or other offering materials, at the time of offering. Our shelf registration statement expires in March 2026.

ATM Equity Program - We maintain an ATM equity program which allows us to sell our common stock directly into the market. This program is governed by an ATM equity offering sales agreement which includes a forward sales provision that allows us to sell shares of our common stock to forward purchasers at a predetermined price at a future date. Pursuant to this agreement, we may sell up to an aggregate sales price of $500.0 million of our common stock.

In March 2025, we entered into ATM forward sales agreements with a financial institution to sell shares of our common stock which mature in the first quarter of 2026. Pursuant to these agreements, we sold 0.2 million shares on a forward basis at a weighted average price of $74.39 per common share, net of sales agent fees, which totaled $15.5 million. We did not receive any proceeds from the sale of shares of our common stock to the forward purchasers at the time of the sale.

In the second quarter of 2025, we issued 0.8 million shares of common stock, representing full settlement of the December 2024 ATM forward sales agreements and partial settlement of the March 2025 ATM forward sales agreements at a weighted average forward price of $74.71 per common share for aggregate proceeds of $58.0 million.

In June 2025, we entered into ATM forward sales agreements with a financial institution to sell shares of our common stock which mature in the second quarter of 2026. Pursuant to these agreements, we sold 1.3 million shares on a forward basis at a weighted average price of $71.41 per common share, net of sales agent fees, which totaled $91.8 million. We did not receive any proceeds from the sale of shares of our common stock to the forward purchasers at the time of the sale.

In the third quarter of 2025, we issued 0.2 million shares of common stock, representing full settlement of the remaining March 2025 ATM forward sales agreements at a weighted average forward price of $73.96 per common share for proceeds of $11.4 million.

As of September 30, 2025, we had 1.3 million remaining shares of common stock available under ATM forward sales agreements representing proceeds of $90.6 million at a weighted average price of $70.47 per common share.

We use ATM equity program proceeds to rebalance our leverage in response to our acquisitions activity which keeps our options flexible for further growth of our business. We have historically used proceeds from the ATM equity program for general corporate purposes, which may include future acquisitions and repayment of indebtedness, including borrowings under our Credit Facility. We view our ATM equity program as an effective way to match-fund our smaller acquisitions by exercising control over the timing and size of transactions and achieving a more favorable cost of capital as compared to larger follow-on offerings.

Material Cash Requirements

As of October 31, 2025, we had $29.7 million in cash and cash equivalents on hand and $541.0 million of availability under our Credit Facility. Our expected material cash requirements for the twelve months ended September 30, 2026 and thereafter consist of long-term debt maturities, interest payments on our debt and contractually obligated expenditures. We expect to meet our short-term liquidity needs largely through cash generated from operations, borrowings under our Credit Facility, settlements of ATM forward sales agreements and proceeds from the sale of real estate properties, although we may choose to seek alternative sources of liquidity. Should we have additional liquidity needs, we believe that we could access long-term financing in the debt and equity capital markets.

Contractual Obligations and Contingent Liabilities

A summary of our contractual obligations as of September 30, 2025 follows ($ in thousands):

1 Interest was calculated based on the weighted average interest rate on the principal amounts outstanding on our debt as of September 30, 2025. The calculation also includes a facility fee of 0.25%.

A summary of our outstanding loan commitments as of September 30, 2025 follows ($ in thousands):

1 Funding is contingent upon the operating performance of the respective facility.

2 This operator was formerly referred to as Watermark Retirement.

As of September 30, 2025, the total credit loss liabilities established for our unfunded loan commitments were $0.2 million. We estimate the amounts we expect to fund using the same methodology as the one applied to provide for credit loss reserves on our mortgages and other notes.

A summary of our outstanding development commitments as of September 30, 2025 follows ($ in thousands):

A summary of our outstanding contingencies related to lease inducements as of September 30, 2025 follows ($ in thousands):

67

Litigation

From time to time, we are party to various lawsuits, investigations, claims and other legal and regulatory proceedings arising in connection with our business. Such claims may include, among other things, professional and general liability claims, as well as regulatory proceedings related to our SHOP segment. Further, from time to time, we are party to certain legal proceedings for which third parties, such as our tenants, managers and borrowers, are contractually obligated to indemnify us from and against various claims, litigation and liabilities arising in connection with their respective businesses. Management believes that the ultimate resolution of all such pending proceedings will have no material adverse effect on our financial condition, results of operations or cash flows.

FFO and FAD

The supplemental performance measures described below may not be comparable to similarly titled measures used by other REITs. Consequently, our funds from operations (“FFO”), Normalized FFO and Normalized Funds Available for Distribution (“FAD”) may not provide a meaningful measure of our performance as compared to that of other REITs. Since other REITs may not use our definition of these performance measures, caution should be exercised when comparing our FFO, Normalized FFO and Normalized FAD to that of other REITs. These performance measures do not represent cash generated from operating activities in accordance with GAAP as they exclude the changes in operating assets and liabilities, and therefore should not be considered an alternative to net income as an indication of our performance or an alternative to net cash flows from operating activities, as determined in accordance with GAAP as a measure of liquidity, and are not necessarily indicative of cash available to fund cash needs.

Funds From Operations - FFO

Our FFO per diluted share for the nine months ended September 30, 2025 increased $0.11 per share, or 3.2%, as compared to the nine months ended September 30, 2024 primarily due to new investments completed since the end of the third quarter of 2024, partially offset by dispositions of real estate properties and the write-offs of straight-line rents receivable totaling $12.1 million associated with the Discovery lease terminations. FFO, as defined by the National Association of Real Estate Investment Trusts (“NAREIT”) and applied by us, is calculated using the two-class method with net income allocated to common stockholders and holders of unvested restricted stock awards by applying the respective weighted-average shares outstanding during each period. The calculation of FFO begins with net income attributable to common stockholders (computed in accordance with GAAP) and excludes gains or losses on sales of real estate properties, impairments of real estate properties, and real estate depreciation and amortization after adjusting for unconsolidated partnerships and joint ventures, if any. FFO per diluted common share attributable to common stockholders assumes the exercise of stock options and other potentially dilutive securities.

Our Normalized FFO per diluted share for the nine months ended September 30, 2025 increased $0.36 per share, or 10.7%, over the same period in 2024. Normalized FFO excludes from FFO certain items which, due to their infrequent or unpredictable nature, may create some difficulty in comparing FFO for the current period to similar prior periods, and may include, but are not limited to including, impairments of non-real estate assets, gains or losses attributable to the acquisition and disposition of non-real estate assets and liabilities, and recoveries of previous write-downs.

FFO and Normalized FFO are important supplemental measures of operating performance for a REIT. Because the historical cost accounting convention used for real estate assets requires depreciation (except on land), such accounting presentation implies that the realizable value of real estate assets diminishes predictably over time. Since real estate asset values instead have historically risen and fallen with market conditions, presentations of operating results for a REIT that uses historical cost accounting for depreciation could be less informative and should be supplemented with a measure such as FFO. The term FFO was designed by the REIT industry to address this issue.

Funds Available for Distribution - FAD

Our Normalized FAD for the nine months ended September 30, 2025 increased $22.1 million, or 14.5%, over the same period in 2024. In addition to the adjustments made to net income attributable to common stockholders that are included in the calculation of Normalized FFO, Normalized FAD excludes the impact of straight-line rent revenue adjustments, amortization of the original issue discount on our unsecured senior notes and amortization of debt issuance costs. We also adjust Normalized FAD for the net change in our credit loss reserves, non-cash share-based compensation expense, senior housing portfolio capital expenditures, as well as certain non-cash items related to our equity method investment, such as straight-line lease expense and amortization of purchase accounting adjustments. Normalized FAD for the nine months ended September 30, 2025 includes an adjustment for transaction costs incurred related to a large SHOP transaction that did not materialize. Approximately $0.6 million of this adjustment related to amounts that were capitalized in other assets, net, on our condensed consolidated balance sheet included in this report as of December 31, 2024. Normalized FAD for the nine months ended September 30, 2024 had no equivalent costs.

Normalized FAD is an important supplemental performance measure for a REIT and a useful measure of liquidity as an indicator of our ability to distribute dividends to our stockholders. GAAP requires a lessor to recognize contractual lease payments as income on a straight-line basis over the expected term of the lease. This straight-line rent adjustment has the effect of reporting rental income that is significantly more or less than the contractual cash flows received pursuant to the terms of our lease agreements. GAAP also requires any discount or premium related to indebtedness and debt issuance costs to be amortized as non-cash adjustments to earnings.

The following table reconciles our net income attributable to common stockholders, the most directly comparable GAAP financial measure, to NAREIT FFO, Normalized FFO and Normalized FAD and provides supplemental information on basic and diluted earnings per share using these metrics (in thousands, except share and per share amounts):

70

Adjusted EBITDA

We consider Adjusted EBITDA to be an important supplemental financial measure because it provides information which we use to evaluate our performance and serves as an indication of our ability to service debt. We define Adjusted EBITDA as consolidated earnings before interest, taxes, depreciation and amortization, excluding impairments of real estate properties, and gains on dispositions and certain items which, due to their infrequent or unpredictable nature, may create some difficulty in comparing Adjusted EBITDA for the current period to similar prior periods. These items include, but are not limited to, impairments of non-real estate assets, gains or losses on disposition of assets and liabilities, and recoveries of previous write-downs on mortgages and notes. Adjusted EBITDA also includes our proportionate share of an unconsolidated equity method investment presented on a similar basis. Since others may not use our definition of Adjusted EBITDA, caution should be exercised when comparing our Adjusted EBITDA to that of other companies. EBITDA and Adjusted EBITDA reflect GAAP interest expense, which excludes amounts capitalized during the period.

The following table reconciles our net income, the most directly comparable GAAP financial measure, to Adjusted EBITDA ($ in thousands):

71

Net Operating Income

NOI is a non-GAAP supplemental financial measure used to evaluate the operating performance of real estate. We define NOI as total revenues, less tenant reimbursements and property operating expenses. We believe NOI provides investors relevant and useful information as it measures the operating performance of our real estate assets at the property level on an unleveraged basis. We use NOI to make decisions about resource allocations and to assess the property level performance of our investment portfolios.

The following table reconciles our net income, the most directly comparable GAAP financial measure, to NOI ($ in thousands):

72

Interest Rate Risk

We are exposed to risks related to fluctuations in market interest rates that affect our indebtedness and our mortgage and other notes receivable. As of September 30, 2025, we had $225.0 million of principal amounts outstanding on indebtedness and $600.0 million of availability under our Credit Facility that are subject to variable interest rates.

We have historically used derivative financial instruments in the normal course of our business to mitigate interest rate risk. We do not use derivative financial instruments for speculative or trading purposes. We currently have no derivative financial instruments but may engage in hedging strategies to manage our exposure to interest rate risk in the future depending on our analysis of the interest rate environment and the costs and risks of such strategies.

Interest rate fluctuations generally will not affect our future results of operations or cash flows associated with our fixed rate debt, mortgages and notes unless these financial instruments mature or are otherwise terminated and we are seeking new borrowings or to refinance these borrowings. However, interest rate fluctuations will affect the fair values of our fixed rate financial instruments from period to period. Conversely, changes in interest rates related to our variable rate debt, mortgages and notes will impact our future results of operations and cash flows but will not significantly affect the fair values of those financial instruments from period to period. Assuming a 50 bps increase or decrease in the interest rates on the principal amounts due on our variable rate debt outstanding as of September 30, 2025 and assuming the amounts outstanding did not change during the period, interest expense would increase or decrease annually by approximately $1.1 million.

The following table provides a summary of the interest rates on our debt ($ in thousands):

73

The following table provides a summary of the sensitivity of our fixed rate debt as of September 30, 2025 to changes in market interest rates ($ in thousands):

Substantially all of our investments in mortgages and other notes are negotiated at fixed interest rates. As of September 30, 2025, the principal amounts outstanding on these investments totaled $224.6 million and the estimated fair values, discounted for the change in the risk-free interest rate, totaled $207.2 million. A 50 bps increase in market interest rates as of September 30, 2025 would decrease the total estimated fair values of our mortgages and other notes by approximately $0.6 million and a 50 bps decrease in market interest rates would increase the estimated fair values of our mortgages and other notes by approximately $1.3 million.

Inflation Risk

Our tenant leases generally provide for annual escalators in contractual rent due to us based on fixed annual escalators or a variable index, such as the consumer price index (“CPI”). Tenant leases with increases based on CPI may contain a minimum or maximum cap on the annual increase. Substantially all of our leases require the tenant to pay all operating expenses for the property, whether paid directly by the tenant or reimbursed to us. We believe that inflationary increases experienced by us will be at least partially offset by the contractual rent increases and operating expense reimbursements described above.

Evaluation of Disclosure Control and Procedures

As of September 30, 2025, an evaluation was performed under the supervision and with the participation of our management, including the Chief Executive Officer (“CEO”) and the Chief Financial Officer (“CFO”), of the effectiveness of our disclosure controls and procedures (as defined in rules 13a-15(e) and 15d-15(e) under the Exchange Act) to ensure information required to be disclosed in our filings is (i) recorded, processed, summarized, and reported within the time periods specified in the SEC rules and forms; and (ii) accumulated and communicated to our management, including our CEO and our CFO, as appropriate, to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can only provide reasonable assurance of achieving desired control objectives, and management is necessarily required to apply its judgment when evaluating the cost-benefit relationship of potential controls and procedures. Based upon the evaluation, the CEO and CFO concluded that the design and operation of these disclosure controls and procedures were effective as of September 30, 2025.

There were no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting identified in management’s evaluation during the three months ended September 30, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

There have been no material changes from the risk factors previously disclosed in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024 except as noted below.

Stockholder activism efforts could cause us to incur substantial costs, divert management’s attention and have an adverse effect on our business.

Activist investors have engaged, and may in the future engage, in proxy solicitations, advance shareholder proposals or may otherwise attempt to affect changes or acquire control over us. Responding to such investor activism can be costly and time-consuming, and can divert the attention of our Board and management from the management of our business and the pursuit of our business strategies. In addition to incurring costs, perceived uncertainties as to our future direction may result in the loss of potential business opportunities, damage to our reputation and may make it more difficult to attract and retain qualified directors, personnel and business partners. These actions could also cause our stock price to experience periods of volatility.

A small number of tenants in our investments portfolio account for a significant percentage of the rental income we expect to generate from the portfolio, and the failure of any of our tenants to meet their obligations to us could materially and adversely affect our business, financial condition, results of operations and our ability to make distributions to our stockholders.

The successful performance of our real estate investments is materially dependent on the financial stability of our tenants and operators. For the year ended December 31, 2024, approximately 40% of our total revenues was generated from three tenants, including 16% from Senior Living, 12% from NHC and 12% from Bickford. As previously discussed in this report, Bickford has been on the cash basis of revenue recognition since the second quarter of 2022 based upon information obtained from Bickford regarding its financial condition. In addition, NHI provided formal written notice to NHC on September 8, 2025 that NHC is in default under its master lease with us as a result of NHC’s failure to remedy its non-compliance with certain non-monetary provisions of the master lease previously identified by NHI.

Payment or other tenant defaults, the failure of tenants to meet their other obligations to us or a decline in the operating performance by any of these tenants or our other tenants and operators could materially and adversely affect our business, financial condition and results of operations and also affect our ability to pay expected dividends to our stockholders. In the event of a tenant default, we may experience delays in enforcing our rights as landlord and may incur substantial costs in protecting our investment and re-leasing of the related property. Further, we may not be able to re-lease the property for a similar rental rate, or at all, or lease terminations may cause us to sell the property at a loss. The realization of any of the foregoing risks could have a material adverse effect on our business and financial condition.

Significant legal or regulatory proceedings could adversely affect our or our managers’, tenants’ or borrowers’ liquidity, financial condition and results of operations.

From time to time, we or our tenants, managers or borrowers may be subject to lawsuits, investigations, claims and other legal or regulatory proceedings arising out of our or their alleged actions or inactions. These claims may include, among other things, professional liability and general liability claims, commercial liability claims, unfair business practices claims, class action claims, employment-related claims, as well as regulatory proceedings, including proceedings related to our SHOP segment, where we are typically the holder of the applicable healthcare license.

In our SHOP segment, we are generally responsible for all liabilities of the properties, other than those arising out of certain limited actions by our managers, such as those caused by gross negligence, fraud or willful misconduct. As a result, we are exposed to professional and general liability claims, employment-related claims, and the costs of defending and resolving such matters, some of which may not be insured or may only be partially insured due to limited coverage or cost constraints. If a manager within our SHOP segment fails to comply with applicable laws or regulations, we could be held responsible, which could subject us to civil, criminal and administrative penalties.

In our Real Estate Investments segment, our tenants and borrowers generally operate the facilities and are responsible for all related liabilities, including those arising from professional, general, or employment-related claims. Under the terms of our leases and loan agreements, these tenants and borrowers are obligated to indemnify and defend us against liabilities related to their operations.

We cannot assure you that any contractual obligations to indemnify, defend and hold us harmless from the liabilities described above will be satisfied by third parties, or that any amounts held in escrow for such purpose will be sufficient.

An unfavorable resolution of any such lawsuit, investigation, claim or other legal or regulatory proceeding could materially and adversely affect our or our managers’, tenants’ or borrowers’ liquidity, financial condition and results of operations, and may not be protected by sufficient or any insurance coverage.