National Health Investors Inc: Form 10-Q for the period ended Mar 31, 2026

Unless the context otherwise requires, references throughout this document to “NHI” or the “Company” include National Health Investors, Inc., and its consolidated subsidiaries. In accordance with the “Plain English” guidelines of the Securities and Exchange Commission (“SEC”), this Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2026 (“Quarterly Report”) has been written in the first person. In this document, the words “we”, “our”, “ours” and “us” refer only to National Health Investors, Inc. and its consolidated subsidiaries and not any other person.

Cautionary Statement Regarding Forward-Looking Statements

This Quarterly Report 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 business, financial condition and results of operations could be adversely affected;
• 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 rental income 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;
• We may be unable to replace our managers if the management agreements are terminated or not renewed;
• Actual or perceived risks associated with pandemics, epidemics or outbreaks have had, and may in the future have, a material adverse effect on our operators’ businesses 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 government regulations and payors, principally Medicare and Medicaid, and the effect of changes to laws, regulations and reimbursement rates on the businesses of our tenants, managers and borrowers;
• The cash flows of our tenants, managers and borrowers may be adversely affected by increased liability claims and liability insurance costs;
• Significant legal or regulatory proceedings could adversely affect the liquidity, financial condition and results of operations of our tenants, managers and borrowers;
• 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;
• 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;
• Risks related to our joint venture investments could adversely affect our financial condition and results of operations;
• Inflation and increased interest rates may adversely affect our business, 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 our business and its 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 market prices for properties;
• We depend on our ability to retain our management team and other personnel, and our ability to attract suitable replacements should any such personnel leave;
• We are exposed to the risk that our assets may be subject to impairment charges;
• Stockholder activism efforts could cause us to incur substantial costs, divert management’s attention and have an adverse effect on our business;
• 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;
• The United States (“U.S.”) federal income tax treatment of the cash that we might receive from cash settlement of our forward equity sales agreements is unclear and could jeopardize our ability to meet the real estate investment trust (“REIT”) qualification requirements;
• Our use of artificial intelligence could expose us to various risks;
• 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 costs and availability of capital;
• We rely on external sources of capital to fund our 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 subsidiaries (“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;
• Legislative, regulatory or administrative tax changes could adversely affect us or our security holders;
• 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;
• We are subject to certain provisions of Maryland law and in 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;
• Failure to complete the pending sale of the NHC properties could have an adverse effect on our business;
• The market price of our common stock may decline as a result of the sale of the NHC properties; and
• We may not be able to successfully redeploy the net proceeds from the sale of the NHC properties in a manner that generates comparable returns.

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, 2025 (“Annual Report”) and additionally “Part II, Item 1A, Risk Factors” in this Quarterly Report 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 market 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. We own, lease, operate and finance the development of high-quality real estate properties, focusing on senior housing communities and medical facilities. We operate through two reportable segments, Real Estate Investments and SHOP. Our investments in senior housing communities, also referred to as senior housing properties (“SHO”), include independent living facilities (“ILF”), assisted living facilities (“ALF”), entrance fee communities (“EFC”) and senior living campuses (“SLC”). Our investments in medical facilities include skilled nursing facilities (“SNF”) and hospitals (“HOSP”).

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 affiliates of our tenants and operators, and other third parties primarily for construction, renovation and expansion projects, funding of working capital or other corporate needs and the acquisition of real estate properties. In our SHOP segment, we own and operate senior housing communities and generate revenues from resident fees and services. We utilize third-party managers to operate these properties on our behalf and pay a management fee for these services. Our investments across both segments are funded primarily through (i) operating cash flows, (ii) debt offerings, revolving lines of credit and term loans and (iii) sales of equity securities.

NHC Leased Portfolio Disposition

On April 21, 2026, we executed a purchase and sale agreement with NHC/Op, L.P., a wholly owned subsidiary of NHC, and certain of its affiliates (collectively, the “NHC Purchaser”) related to the sale of our entire portfolio of real estate properties leased to NHC, which includes 32 SNFs and three ILFs, for $560.0 million in net cash consideration. We anticipate closing the transaction on July 1, 2026, subject to certain customary closing conditions, including the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The NHC properties are included in our Real Estate Investments segment.

Pursuant to the terms of the purchase and sale agreement, contemporaneously with the closing of the transaction, we will execute a partial master lease termination and partial assignment and assumption of the master lease agreement which will result in the termination of our master lease agreement with NHC with respect to all properties, except for the four properties located in Florida that are subject to a sublease agreement. We will assign to the NHC Purchaser, and the NHC Purchaser will assume from us, the master lease for the four Florida properties. As of March 31, 2026, the aggregate net carrying amount of the NHC properties was $13.8 million.

Real Estate Investments Portfolio

As of March 31, 2026, our investments comprising the Real Estate Investments segment included real estate properties and financing arrangements involving 188 properties located in 32 states, excluding one property classified as assets held for sale. The aggregate gross carrying value of these owned properties was $2.7 billion, which included 109 SHOs, 65 SNFs and one HOSP leased to 30 tenants. The aggregate gross carrying value of our mortgage and other notes receivable was $221.3 million, excluding $15.3 million of credit loss reserves.

We classify our investments in real estate properties as either SHOs or medical facilities and further classify our SHOs as either need-driven or discretionary properties based on the differing credit risk profiles represented by the underlying revenue sources.

Need-Driven Senior Housing - Need-driven SHOs include 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.

Discretionary Senior Housing - Discretionary SHOs include 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 - Our medical facilities include SNFs and HOSPs that attract patients who have a need for acute or complex medical attention, preventative medicine or rehabilitation services. The operators of our medical facilities are generally paid for their services through a combination of private payor sources and government assistance programs, including Medicare and Medicaid. 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 March 31, 2026, our SHOP segment investments included 35 senior housing communities located in 15 states and comprised of 17 ILFs, 11 SLCs and seven ALFs with a combined total of 3,469 units. The aggregate gross carrying value of these properties was $742.5 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 we utilize our TRS for activities that would otherwise be non-qualifying for REIT purposes.

The properties in our SHOP segment 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 the credit risk exposure we have related to our triple-net tenant leases. However, we rely on the managers’ personnel, expertise, technology resources and information systems, proprietary information, good faith and judgment in operating 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.

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” of our Annual Report.

Investment Portfolio Summary

The following table provides a summary of the investment portfolios of our Real Estate Investments and SHOP segments by property type as of March 31, 2026 and for the three months ended March 31, 2026 ($ in thousands):

1 The total number of properties, as presented in the table above, excludes our corporate office building and one property in the Real Estate Investments segment that was classified as assets held for sale as of March 31, 2026.

2 The total gross carrying amount, as presented in the table above, excludes $2.6 million related to our corporate office and equipment, $4.8 million related to one property in the Real Estate Investments segment that was classified as assets held for sale as of March 31, 2026 and $15.3 million of credit loss reserves related to our mortgage and other notes receivable.

The following table provides a summary of the investment portfolios of our Real Estate Investments and SHOP segments by operator type as of March 31, 2026 and for the three months ended March 31, 2026 ($ in thousands):

1 The total number of properties, as presented in the table above, excludes our corporate office building and one property in the Real Estate Investments segment that was classified as assets held for sale as of March 31, 2026.

2 The total gross carrying amount, as presented in the table above, excludes $2.6 million related to our corporate office and equipment, $4.8 million related to one property in the Real Estate Investments segment that was classified as assets held for sale and $15.3 million of credit loss reserves related to our mortgage and other notes receivable.

The following table provides a summary of the impact of acquired and transitioned properties on our SHOP segment as of March 31, 2026 and for the three months ended March 31, 2026 ($ in thousands):

The following table provides a summary of our NOI based on geographical location ($ in thousands):

As of March 31, 2026, our average effective annualized NOI for leased properties in our Real Estate Investments segment was $20,322 per unit for ALFs, $14,031 per unit for SLCs, $5,935 per unit for ILFs, $21,492 per unit for EFCs, $11,026 per bed for SNFs and $60,574 per bed for HOSPs. As of March 31, 2026, the average effective annualized NOI for our SHOP segment was $11,165 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.

Recent Investments Activity

Acquisitions

During the three months ended March 31, 2026, we completed the following acquisitions of real estate properties ($ in thousands):

Dispositions

During the three months ended March 31, 2026, we completed the following disposition of a real estate property ($ in thousands):

Reference the “NHC Leased Portfolio Disposition” section in Note 3 of our condensed consolidated financial statements included in this Quarterly Report for information on the sale of the NHC properties.

Second Quarter of 2026 Acquisitions and Dispositions

In April 2026, we completed the sale of a property located in South Carolina upon the acceleration of an existing purchase option at the tenant’s request. We received $3.2 million in net cash consideration and recognized a gain of $0.8 million related to the sale. As of March 31, 2026, the net carrying amount of the property was $2.3 million. During each of the three months ended March 31, 2026 and 2025, we recognized rental income of $0.1 million related to this property.

In April 2026, we completed the sale of a property located in Ohio that was classified as assets held for sale as of March 31, 2026. We received $4.5 million in net cash consideration and recognized a gain of $0.9 million related to the sale. As of March 31, 2026, the net carrying amount of the property was $3.6 million. During each of the three months ended March 31, 2026 and 2025, we recognized rental income of $0.2 million related to this property.

In May 2026, we completed the sale of a property located in Washington in which we had a purchase and sale agreement outstanding as of March 31, 2026. We received $39.0 million in net cash consideration and will recognize a gain of approximately $20.1 million related to the sale. As of March 31, 2026, the net carrying amount of the property was $18.3 million. During the three months ended March 31, 2026 and 2025, we recognized rental income of $0.6 million and $0.7 million, respectively, related to this property.

In May 2026, we acquired a portfolio of seven SHOs located in Colorado with a combined total of 532 units. The total purchase price was $106.9 million, including closing costs. We acquired the portfolio using a qualified intermediary to facilitate a potential reverse exchange transaction under Section 1031 of the Internal Revenue Code (“Section 1031”). This portfolio of properties has been included in our SHOP segment and is being managed by Generations, LLC pursuant to a management agreement.

Bickford Lease and Loan Modifications

In April 2026, we amended the four master lease agreements with Bickford Senior Living (“Bickford”) increasing the combined base rent for the portfolio of 38 properties to $38.4 million annually. Future base rental income will escalate on an annual basis at a rate ranging between 2.0% and 3.0% in accordance with each amended lease agreement. These amendments also provide for a new contingent rent clause requiring Bickford to pay additional rent based on a percentage of its combined monthly revenues for all properties that are in excess of a base amount. Bickford will continue to be recognized as a cash basis tenant under the amended master lease agreements until the substantial doubt about its ability to continue as a going concern has been alleviated.

Additionally, we have an agreement with Bickford to fund up to $8.0 million of capital improvements on various properties in the Bickford portfolio. Pursuant to the terms of this agreement, rental income increases at an annual lease rate of 8.0% applied to the amount expended. In connection with the master lease amendments discussed above, we also amended this agreement in April 2026 to extend the available funding period through June 2027.

In April 2026, we also modified two of our loan agreements with Bickford to extend the maturities by three years. The maturity of a fully funded construction loan with Bickford was extended to July 2029. As of March 31, 2026, the principal amount outstanding on this construction loan was $14.7 million and the annual interest rate was 9.0%. Additionally, the maturity of a second mortgage note with Bickford was extended to April 2029. As of March 31, 2026, the principal amount outstanding on the second mortgage note was $11.7 million and the annual interest rate was 10.0%. The second mortgage note was not included on our condensed consolidated balance sheet as of March 31, 2026. Reference the “Bickford Construction Loan and Mortgage Notes” section in Note 4 of our condensed consolidated financial statements included in this Quarterly Report for additional information on this note.

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 believe the net carrying amounts 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 March 31, 2026. 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 of our condensed consolidated financial statements included in this Quarterly Report.

During the three months ended March 31, 2026 and 2025, we did not recognize any impairment charges related to our long-lived assets. As of March 31, 2026, we had assets held for sale, net, of $3.6 million related to one property in our Real Estate Investments segment. During each of the three months ended March 31, 2026 and 2025, we recognized rental income of $0.2 million related to this property. In April 2026, we sold this property for $4.5 million in net cash consideration and recognized a gain of $0.9 million related to the sale.

Our mortgage and other notes receivable are stated net of credit loss reserves of $15.3 million on our condensed consolidated balance sheet as of March 31, 2026. Additionally, we have credit loss liabilities of $0.2 million related to the expected credit losses on the unfunded portion of our loan commitments outstanding as of March 31, 2026. We evaluate each of these estimates of credit loss reserves on a quarterly basis and make adjustments based on current circumstances as considered necessary.

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 years 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. Most of our tenant leases contain annual rent escalators, which may be fixed or variable. Certain of our tenant leases provide for additional contingent rent based on a percentage of the tenant’s revenues in excess of a specified threshold as defined in the lease agreement. We recognize the contractual amounts of base rental income on a straight-line basis over the initial term of a lease, subject to a collectability assessment.

Tenant Concentrations

The following table provides information on the concentrations of our tenants, or affiliates of our tenants, which exceeded 10% of total revenues ($ in thousands):

1 Real estate properties have been stated at their gross carrying amounts. Total real estate properties, as presented in the table above, excludes $2.6 million related to our corporate office and equipment, $4.8 million related to one property in the Real Estate Investments segment that was classified as assets held for sale and $742.5 million related to the properties in our SHOP segment.

2 Mortgage and other notes receivable have been stated at their gross carrying amounts. Total mortgage and other notes receivable, as presented in the table above, excludes our total credit loss reserves of $15.3 million.

3 Revenues related to assets classified as held for sale are included in other revenues in the table above.

4 There are no concentrations in revenues from resident fees and services because the resident agreements at the senior housing communities in our SHOP segment are between us and the individual residents.

As of March 31, 2026 and December 31, 2025, our real estate properties in South Carolina represented 12.3% and 12.0% of our total real estate properties, net, on our condensed consolidated balance sheets. There were no other states where our geographical concentration in real estate properties was 10% or greater as of March 31, 2026 and December 31, 2025.

Senior Living Leases

As of March 31, 2026, we leased 11 SHOs with a combined total of 2,497 units to Senior Living. During the three months ended March 31, 2026 and 2025, we recognized straight-line rent revenue adjustments of $(0.4) million and $(0.2) million, respectively, related to our leases with Senior Living.

Bickford Leases

As of March 31, 2026, we leased 38 SHOs, including one property classified as assets held for sale, to Bickford under four master leases. In 2022, we began recognizing rental income from Bickford’s leases using the cash basis of accounting for revenue recognition based upon information we obtained from Bickford regarding its financial condition that raised substantial doubt about its ability to continue as a going concern.

Reference the “Bickford Lease and Loan Modifications” section in the “Recent Investments Activity” section above related to the Bickford master lease amendments executed in April 2026.

NHC Lease

As of March 31, 2026, we leased 32 SNFs and three ILFs to NHC, a publicly held company, under a triple-net master lease which expires in December 2026. As previously discussed, on April 21, 2026, we entered into a purchase and sale agreement with a wholly owned subsidiary of NHC to sell our entire portfolio of NHC properties. We anticipate the transaction will close in the third quarter of 2026. Reference the “NHC Leased Portfolio Disposition” section in Note 3 of our condensed consolidated financial statements included in this Quarterly Report for information on the sale of the NHC properties.

Cash Basis Tenants

During each of the three months ended March 31, 2026 and 2025, we had two tenants on the cash basis of accounting for revenue recognition.

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

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 March 31, 2026, tenants had purchase options on four of our properties, representing an aggregate net carrying value of $74.1 million, which have exercise dates ranging between 2026 and 2031. During each of the three months ended March 31, 2026 and 2025, rental income from these properties with tenant purchase options totaled $2.5 million.

Reference the “Second Quarter of 2026 Acquisitions and Dispositions” section in Note 3 of our condensed consolidated financial statements included in this Quarterly Report for information on the exercise of one of these tenant purchase options. As of March 31, 2026, we cannot reasonably estimate the probability that any of the remaining tenant purchase options will be exercised in the future. Consideration to be received from the exercise of any one or more of these remaining tenant purchase options is expected to exceed the net carrying amounts of the respective property at the time of sale.

Tenant Monitoring

The following table provides a summary of the average occupancy rates related to properties leased to Senior Living and Bickford for the periods indicated:

1 The occupancy rates exclude a 251-unit CCRC acquired in October 2025.

2 The number of properties related to Bickford includes one property classified as assets held for sale as of March 31, 2026.

The following table provides a summary of the average occupancy rates related to properties in our SHOP segment for the periods indicated:

1 The occupancy rates relate to the 15 real estate properties in the SHOP segment since January 1, 2025.

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 the operating 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 payments. 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 tenant 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 obligations to continue to pay the amounts 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 operating results, typically within either 30 days or 45 days and at the latest, within 90 days of month 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 our portfolio less than 24 months and renewing leases with changes in scheduled rent, we include pro forma cash rent.

The following tables provides a summary of our portfolio coverage and occupancy ratios related to our Real Estate Investments segment by property type on a trailing 12-month basis as of December 31, 2025 and 2024, the most recent periods available, excluding mortgage and other notes receivable and development and lease-up properties operating less than 24 months. The tables include pro forma cash inflows from lease payments related to acquired properties that have stabilized operations and that have been in the portfolio less than 24 months.

1 Bickford’s coverage ratio on a pro forma basis, which includes the impact of the April 2024 base rent increase, was 1.66x for the trailing 12 months ended December 31, 2024. Bickford’s coverage ratios on a pro forma basis, which includes the impact of the April 2026 base rent increase, were 1.55x and 1.50x for the trailing 12 months ended December 31, 2025 and 2024, respectively.

2 NHC’s coverage ratios have been reported in the table above at a consolidated level for NHC. The occupancy ratios for SNFs have been reported in the table above using data available in NHC’s public filings with the SEC.

Fluctuations in our portfolio coverage and occupancy ratios primarily result from market and economic trends, local market competition, new or changing regulatory factors and the operational success of our tenants. In addition to the analysis above, we also evaluate and make decisions with respect to our tenants at an individual lease level. Generally, we have security deposits and/or corporate guarantees in place with many of our tenants if lease payment shortfalls materialize. In some instances, we may require a tenant to increase their security deposit with us in an amount equal to the lease payment shortfall until the required tenant lease coverage ratio is met. We monitor economic and financial conditions and also use credit enhancements, such as requiring our tenants to maintain security deposits and corporate guarantees with us, to mitigate the impact of an economic downturn on our business. The metrics presented in the tables above do not reflect the presence of these security deposits.

Results of Operations

A summary of our operating results follows ($ in thousands):

NM - Not meaningful

Financial highlights for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, were as follows:

• Rental income increased $4.3 million, or 6.2%, primarily due to $4.0 million of increased rental income from real estate properties in our Real Estate Investments segment that were acquired since January 1, 2025, partially offset by $2.1 million of rental income in the prior year period related to seven properties transitioned into the SHOP segment on August 1, 2025 from the Real Estate Investments segment.
• Resident fees and services, less senior housing operating expenses, increased $5.8 million, consisting of a $2.9 million increase related to the transitioned properties discussed above and a $3.0 million increase due to acquisitions in our SHOP segment since January 1, 2025.
• Interest income from mortgage and other notes receivable decreased $1.5 million, or 23.8%, primarily due to a net reduction in the principal amounts of mortgage and other notes receivable outstanding in the current period compared to the prior year period.
• Depreciation and amortization increased $4.5 million, or 23.7%, which primarily related to the $4.0 million increase as a result of acquisitions since January 1, 2025.
• Interest expense increased $0.7 million, or 4.9%, primarily due to interest expense associated with our 2033 Senior Notes, which were issued in September 2025, partially offset by a decrease in the amounts outstanding under our revolving credit facility and bank term loan in the current period compared to the prior year period.
• Legal expense decreased $1.1 million, or 78.6%. Legal expense for the three months ended March 31, 2025 included $1.2 million of costs related to a large SHOP transaction that did not materialize.
• General and administrative expenses increased $1.0 million, or 15.0%, primarily due to higher compensation costs.
• Proxy contest and related expenses of $0.3 million for the three months ended March 31, 2025 consisted of proxy advisory costs related to our response to a proxy campaign associated with our 2025 annual meeting of stockholders.
• Gains on dispositions of real estate properties, net, of $2.6 million for the three months ended March 31, 2026 primarily related to the sale of a SLC located in Michigan. This property was part of our Real Estate Investments segment.
• Gains from equity method investment of $0.4 million for the three months ended March 31, 2025 related to cash distributions received from this investment with no comparable amount in the current period.

Liquidity and Capital Resources

As of March 31, 2026, we had $391.0 million available to draw on our $700.0 million revolving credit facility (the “Credit Facility”), $24.9 million in unrestricted cash and cash equivalents, the ability to access $44.2 million of undrawn net proceeds through at-the-market (“ATM”) forward equity sales agreements and the ability to access $500.0 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 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 dispositions 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, mortgages and other notes, dividend distributions to our stockholders, operating expenses of our SHOP segment and general corporate overhead expenses.

A summary of our sources and uses of cash, cash equivalents and restricted cash follows ($ in thousands):

Operating Activities – Net cash provided by operating activities for the three months ended March 31, 2026 included the impact of new tenant leases from acquisitions completed since January 1, 2025, our SHOP segment operations and acquisitions, increased rental income due to rent escalators and interest payments on new loan investments completed since January 1, 2025.

Investing Activities – Net cash used in investing activities for the three months ended March 31, 2026 was comprised primarily of $114.4 million of investments in new real estate properties, development projects at existing properties, mortgages and other notes, partially offset by proceeds from the sale of a property in our Real Estate Investments segment and principal amounts received on mortgage and other notes receivable during the period.

Financing Activities – Net cash provided by financing activities for the three months ended March 31, 2026 included an $11.0 million decrease in the net borrowings on our Credit Facility compared to the prior year period. In addition, we had $65.5 million in net proceeds from the issuance of common shares in the prior year period with no comparable amount in the current period.

Debt Obligations

As of March 31, 2026, we had $1.3 billion of outstanding indebtedness. Reference “Part I, Item 3. Quantitative and Qualitative Disclosures About Market Risk” in this Quarterly Report for information on the impact of interest rate risk on our business.

Revolving Credit Facility and Bank Term Loan - We have a $700.0 million Credit Facility which matures in October 2028 and may be extended by us pursuant to (i) one or both of the six-month extension options or (ii) one 12-month extension option. We most recently amended the Credit Facility in October 2025 to remove the 0.10% credit spread adjustment applicable to the Secured Overnight Financing Rate (“SOFR”) interest rates. 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 1.400%; (b) Daily SOFR plus a margin ranging from 0.725% to 1.400%; or (c) the base rate plus a margin ranging from 0.000% to 0.400%. 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.

As of March 31, 2026, we had $391.0 million available to draw on the Credit Facility, subject to usual and customary covenants. Among other stipulations, our Credit Facility requires that we maintain certain financial ratios within limits set by our creditors. As of March 31, 2026, we were in compliance with these covenants.

We have a $200.0 million unsecured bank term loan (the “Bank Term Loan”), which was most recently amended in October 2025 to remove the 0.10% credit spread adjustment applicable to the SOFR interest rates. The Bank Term Loan bears interest at a variable rate, which is SOFR-based with a margin determined according to our credit ratings, and matures in June 2026. As of March 31, 2026, we had $125.0 million of principal amount outstanding on the Bank Term Loan.

Pinnacle Bank is a participating member of our banking group. A member of our board of directors is also the chief banking officer and vice chairman of the board of directors of Pinnacle Financial Partners, Inc., the holding company for Pinnacle Bank. Our corporate banking transactions are conducted primarily through Pinnacle Bank.

We have provided summary information in the table below on the current SOFR credit spread adjustments and facility fee for our Credit Facility and 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”, the debt under our debt agreements 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”). The 2031 Senior Notes were sold at an issue price of 99.196% of face value, before the underwriters’ discount. Interest on the 2031 Senior Notes is due semi-annually. The 2031 Senior Notes are subject to affirmative and negative covenants, including financial covenants. As of March 31, 2026, we were in compliance with these covenants.

2033 Senior Notes - In September 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. Interest on the 2033 Senior Notes began accruing in February 2026 and is due semi-annually. The 2033 Senior Notes are subject to affirmative and negative covenants, including financial covenants. As of March 31, 2026, we were in compliance with these covenants.

Private Placement Notes - As of March 31, 2026, we had $100.0 million of principal amounts outstanding on our private placement notes which bear interest at 4.51% and mature in January 2027.

Debt Maturities - Reference Note 8 of our condensed consolidated financial statements included in this Quarterly 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 of real estate properties) 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 coverage ratio was 5.4x for the three months ended March 31, 2026. Reference the “Adjusted EBITDA” section in the “Non-GAAP Financial Measures” section below for a table showing the fixed charge coverage ratio calculation. Giving effect to significant acquisitions, financing arrangements, dispositions and note payoffs on an annualized basis, our consolidated net debt to annualized Adjusted EBITDA ratio for the three months ended March 31, 2026 was as follows ($ in thousands):

Supplemental Guarantor Financial Information

The principal amounts outstanding on each of our debt instruments as of March 31, 2026 were 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 as of March 31, 2026 and for the three months ended March 31, 2026 for 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):

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Equity and Dividends

As of March 31, 2026, we had 48,459,369 shares of common stock outstanding with a market value of $3.9 billion. Total equity on our condensed consolidated balance sheet included in this Quarterly Report was $1.5 billion as of March 31, 2026.

Shelf Registration Statement - In March 2026, we renewed our automatic shelf registration statement, on file with the SEC, which 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 the offering.

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 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. Concurrently with the renewal of our shelf registration statement, we entered into a new equity distribution agreement whereby we can sell up to $500.0 million in common stock under our ATM equity program.

During the three months ended March 31, 2026, we did not enter into any new ATM forward equity sales agreements or settle any of our outstanding ATM forward equity sales agreements. As of March 31, 2026, we had the ability to access 0.6 million shares of our common stock at a weighted average price of $68.81 per share, net of sales agent fees, under remaining active ATM forward equity sales agreements which mature in the second quarter of 2026 and represent $44.2 million of undrawn net proceeds.

We use ATM equity program proceeds to rebalance our leverage in response to our acquisitions activity which keeps our alternatives flexible for financing 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.

Dividends - Our board of directors approves a 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 statement reporting 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 our 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, 2026 and thereafter. Historically, we have distributed at least 100% of our annual taxable income. Dividends declared for the fourth quarter of each fiscal year that are paid by the end of the following January are treated for federal income tax purposes, with some exceptions, as having been paid in the fiscal year just ended as provided in Section 857(b)(9) of the Internal Revenue Code. To the extent a portion, or all of such dividend, exceeds our current year earnings and profits, the excess is treated as having been received in the year paid for federal income tax purposes.

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

On May 1 , 2026, our board of directors declared a $0.92 per share dividend payable on August 7, 2026 to common stockholders of record as of June 30, 2026.

Material Cash Requirements

As of April 30, 2026, we had $33.5 million of cash and cash equivalents and $247.0 million of availability under our Credit Facility. Our expected material cash requirements for the 12-months ending March 31, 2027 and thereafter consist of long-term debt maturities, interest payments on our debt and other 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 equity sales agreements and proceeds from dispositions 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.

We believe our current liquidity position, supplemented by our ability to generate positive cash flows from operations in the future, and our low net leverage will be sufficient to meet all of our short-term and long-term financial commitments.

Contractual Obligations and Contingent Liabilities

A summary of our contractual obligations as of March 31, 2026 follows ($ in thousands):

1 Interest was calculated based on the weighted average interest rate applied to the principal amounts outstanding of our debt as of March 31, 2026. The calculation also includes a facility fee of 0.25% on the Credit Facility.

A summary of our outstanding loan commitments as of March 31, 2026 follows ($ in thousands):

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

As of March 31, 2026, 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 receivable.

A summary of our outstanding development commitments as of March 31, 2026 follows ($ in thousands):

A summary of our outstanding contingency commitments as of March 31, 2026 follows ($ in thousands):

Litigation

From time to time, we are a 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 a 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.

Non-GAAP Financial Measures

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 three months ended March 31, 2026 increased $0.09 per share, or 7.9%, as compared to the three months ended March 31, 2025 primarily due to new investments completed since January 1, 2025, partially offset by dispositions of real estate properties since January 1, 2025. 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 participating securities 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 on dispositions 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 share attributable to common stockholders assumes the exercise of stock options and other potentially dilutive securities.

Our Normalized FFO per diluted share for the three months ended March 31, 2026 increased $0.08 per share, or 7.0%, as compared to the three months ended March 31, 2025. 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 acquisitions and dispositions 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 three months ended March 31, 2026 increased $6.5 million, or 11.6%, as compared to the three months ended March 31, 2025. 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 debt issuance costs and discounts. We also adjust Normalized FAD for the net change in our credit loss reserves, non-cash share-based compensation expense, SHOP 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 three months ended March 31, 2025 included an adjustment for transaction costs incurred related to a large SHOP transaction that did not materialize. Normalized FAD for the three months ended March 31, 2026 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 per share amounts):

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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 other 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. Adjusted EBITDA reflects 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):

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Net Operating Income

NOI is a non-GAAP supplemental financial measure used to evaluate the operating performance of real estate assets. 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 real estate assets at the property level on an unleveraged basis. We use NOI to make decisions about resource allocations to our segments 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):

The following table provides a summary of our NOI by segment ($ in thousands):

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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 March 31, 2026, we had $434.0 million of principal amounts outstanding on indebtedness and $391.0 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 other 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 other 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 basis point (“bps”) increase or decrease in the interest rates on the principal amounts outstanding on our variable rate debt as of March 31, 2026 and assuming the amounts outstanding did not change during the period, interest expense would increase or decrease annually by approximately $2.2 million.

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

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The following table provides a summary of the sensitivity of our fixed rate debt as of March 31, 2026 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 March 31, 2026, the principal amounts outstanding on these investments totaled $221.3 million and the estimated fair values, discounted for the change in the risk-free interest rate, totaled $203.4 million. A 50 bps increase in market interest rates as of March 31, 2026 would decrease the total estimated fair values of our mortgages and other notes by approximately $8.6 million and a 50 bps decrease in market interest rates would increase the estimated fair values of our mortgages and other notes by approximately $1.7 million.

Inflation Risk

Our tenant leases generally provide for annual escalators in contractual rent due to us based on a fixed rate of increase or a variable index, such as the consumer price index (“CPI”). Our tenant leases which are subject to an annual rent escalator based on CPI may also contain a minimum or maximum cap on the annual increase. Substantially all of our leases include a provision that requires the tenant to pay the operating expenses of the respective 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.

In addition, inflation, both real and anticipated, as well as any resulting government policies have affected, and could continue to adversely affect, the costs of labor, goods and services experienced by our managers in the SHOP segment. In periods of inflation, the increases in operating costs experienced by our operators could exceed the corresponding increases in revenues which may adversely affect our operators’ and borrowers’ ability to make rent and loan payments to us under the terms of the agreements. Additionally, our financial condition and results of operations may be adversely affected by any shortfall experienced by our operators during periods of inflation.

Evaluation of Disclosure Control and Procedures

As of March 31, 2026, 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 disclosures. 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 March 31, 2026.

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 March 31, 2026, 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, except as noted below.

Failure to complete the pending sale of the NHC properties could have an adverse effect on our business.

The consummation of the sale of our entire portfolio of real estate properties leased to NHC is subject to the satisfaction or waiver of a number of conditions, including, but not limited to, the expiration or termination of the applicable waiting period and any extensions thereof under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. There can be no assurance that the conditions to closing will be satisfied or waived in a timely manner or at all. If any of the conditions to closing are not satisfied or waived, the sale may not be consummated or may be delayed. In the event the sale is not completed, we will have incurred significant transaction costs, including legal, accounting and advisory fees, without realizing the anticipated benefits of the sale. A failure to consummate the sale could also result in negative perceptions among tenants, operators, investors and other market participants, which could adversely affect the trading price of our common stock.

The market price of our common stock may decline as a result of the sale of the NHC properties.

The announcement and pendency of the sale of the NHC properties may cause disruptions to our business and operations. The sale, if consummated, will result in the disposition of a significant portion of our investment portfolio, which could adversely affect our financial condition, results of operations and ability to make distributions to our stockholders. Moreover, the market price of our common stock may fluctuate significantly in response to market perceptions regarding the sale, including perceptions regarding the likelihood of completion, the terms of the sale and the impact on our business going forward. There can be no assurance that the market price of our common stock will not decline as a result of the announcement, pendency or consummation of the sale.

We may not be able to successfully redeploy the net proceeds from the sale of the NHC properties in a manner that generates comparable returns.

Our ability to effectively redeploy the proceeds received in the sale of the NHC properties will depend on a number of factors, including the availability of suitable investment opportunities, prevailing market conditions, competition from other investors and our cost of capital at the time of reinvestment. There can be no assurance that we will be able to identify and acquire assets or make investments that generate returns comparable to the returns generated by the properties being sold, which may impact our results of operations.