# Chiron Real Estate Inc.: Form 10-Q for the period ended Sep 30, 2025

- Company: [Chiron Real Estate Inc.](/companies/xrn.md) (CIK 1533615)
- Form: 10-Q
- Filed: 2025-11-05
- Accepted by EDGAR: Nov 5, 2025, 16:07 ET
- Period: 2025-09-30
- Accession: 0001104659-25-106984
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1533615/000110465925106984/gmre-20250930x10q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1533615/000110465925106984/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-09-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-07-01 to 2025-09-30 | $37.2m | us-gaap:Revenues |
| Revenue | 9 months, 2025-01-01 to 2025-09-30 | $109.8m | us-gaap:Revenues |
| Interest expense | 3 months, 2025-07-01 to 2025-09-30 | $8.2m | us-gaap:InterestExpenseNonoperating |
| Interest expense | 9 months, 2025-01-01 to 2025-09-30 | $23.4m | us-gaap:InterestExpenseNonoperating |
| Net income | 3 months, 2025-07-01 to 2025-09-30 | −$5.1m | us-gaap:ProfitLoss |
| Net income | 9 months, 2025-01-01 to 2025-09-30 | −$736.0k | us-gaap:ProfitLoss |
| Diluted EPS | 3 months, 2025-07-01 to 2025-09-30 | −$0.45 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 9 months, 2025-01-01 to 2025-09-30 | −$0.35 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-07-01 to 2025-09-30 | −$0.45 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 9 months, 2025-01-01 to 2025-09-30 | −$0.35 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-07-01 to 2025-09-30 | 13,393,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 9 months, 2025-01-01 to 2025-09-30 | 13,381,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 9 months, 2025-01-01 to 2025-09-30 | $52.0m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Dividends paid | 9 months, 2025-01-01 to 2025-09-30 | $4.4m | us-gaap:PaymentsOfDividends |
| Cash and equivalents | at 2025-09-30 | $7.1m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Total assets | at 2025-09-30 | $1.27bn | us-gaap:Assets |
| Total liabilities | at 2025-09-30 | $767.4m | us-gaap:Liabilities |
| Long-term debt | at 2025-09-30 | $1.2m | us-gaap:LongTermDebt |
| Shareholders' equity | at 2025-09-30 | $485.3m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 70,859 characters.

*The following discussion should be read in conjunction with our financial statements, including the notes to those financial statements, included elsewhere in this Quarterly Report on Form 10-Q (this “Report”). Some of the statements we make in this section are forward-looking statements within the meaning of the federal securities laws. For a complete discussion of forward-looking statements, see the section below entitled “Special Note Regarding Forward-Looking Statements.” Certain risk factors may cause actual results, performance, or achievements to differ materially from those expressed or implied by the following discussion. For a discussion of such risk factors, see Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2024, that was filed with the U.S. Securities and Exchange Commission (the “SEC” or the “Commission”) on February 28, 2025 and Item 1A. Risk Factors in this Quarterly Report on Form 10-Q. Unless otherwise indicated, all dollar and share amounts in the following discussion are presented in thousands.*

### Special Note Regarding Forward-Looking Statements

This Report contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (set forth in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). In particular, statements pertaining to our trends, liquidity, capital resources, and the healthcare industry and the healthcare real estate markets and opportunity, among others, contain forward-looking statements. You can identify forward-looking statements by the use of forward-looking terminology including, but not limited to, “believes,” “expects,” “may,” “will,” “should,” “seeks,” “approximately,” “intends,” “plans,” “estimates” or “anticipates” or the negative of these words and phrases or similar words or phrases which are predictions of or indicate future events or trends and which do not relate solely to historical matters. You can also identify forward-looking statements by discussions of strategy, plans or intentions.

Forward-looking statements involve numerous risks and uncertainties and you should not rely on them as predictions of future events. Forward-looking statements depend on assumptions, data or methods which may be incorrect or imprecise and we may not be able to realize them. We do not guarantee that the transactions and events described will happen as described (or that they will happen at all). The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements:

- difficulties in identifying healthcare facilities to acquire (due to increased cost of capital, competition or otherwise) and completing such acquisitions;
- defaults on or non-renewal of leases by tenants;
- our ability to collect rents;
- increases in interest rates and increased operating costs;
- macroeconomic and geopolitical factors, including, but not limited to, inflationary pressures, tariffs and international trade policies, elevated interest rates, distress in the banking sector, global supply chain disruptions and ongoing geopolitical conflicts and war;
- changes in current healthcare and healthcare real estate trends and costs, including wage inflation;
- an epidemic or pandemic (such as the COVID-19 epidemic), and the measures that international, federal, state and local governments, agencies, law enforcement and/or health authorities implement to address it;
- our ability to satisfy the covenants in our existing and any future debt agreements;
- our ability to refinance our existing debt when needed or on favorable terms;
- decreased rental rates or increased vacancy rates, including expected rent levels on acquired properties;
- adverse economic or real estate conditions or developments, either nationally or in the markets in which our facilities are located;
- our failure to generate sufficient cash flows to service our outstanding obligations;
- our ability to satisfy our short and long-term liquidity requirements;
- our ability to deploy the debt and equity capital we raise;
- our ability to hedge our interest rate risk;
- our ability to raise additional equity and debt capital on attractive terms or at all;
- our ability to make distributions on shares of our common and preferred stock or to redeem our preferred stock;
- expectations regarding the timing and/or completion of any acquisition;
- expectations regarding the timing and/or completion of dispositions, and the expected use of proceeds therefrom;
- our use of joint ventures may limit our returns on and our flexibility with jointly-owned investments;
- general volatility of the market price of our common and preferred stock;
- changes in our business or our investment or financing strategy;
- our dependence upon key personnel, whose continued service is not guaranteed;
- our ability to identify, hire and retain highly qualified personnel in the future;
- the degree and nature of our competition;
- changes in healthcare laws, governmental regulations, tax laws and similar matters;
- changes in expected trends in Medicare, Medicaid and commercial insurance reimbursement trends, including changes in Medicaid reimbursement rates pursuant to the One Big Beautiful Bill Act (the “OBBBA”);
- competition for investment opportunities;
- our failure to successfully integrate acquired healthcare facilities;
- our expected capital and tenant improvement expenditures;
- changes in accounting policies generally accepted in the United States of America (“GAAP”);
- lack of, or insufficient amounts of, insurance;
- other factors affecting the real estate industry generally;
- changes in the tax treatment of our distributions;
- our failure to maintain our qualification as a real estate investment trust (“REIT”) for U.S. federal income tax purposes;
- our ability to qualify for the safe harbor from the 100% prohibited transactions tax under the REIT rules with respect to our property dispositions; and
- limitations imposed on our business due to, and our ability to satisfy, complex rules relating to REIT qualification for U.S. federal income tax purposes.

See Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2024 and Item 1A. Risk Factors in this Quarterly Report on Form 10-Q for further discussion of these and other risks, as well as the risks, uncertainties and other factors discussed in this Report and identified in other documents we may file with the SEC from time to time. You should carefully consider these risks before making any investment decisions in our company. New risks and uncertainties may also emerge from time to time that could materially and adversely affect us. While forward-looking statements reflect our good faith beliefs, they are not guarantees of future performance. We disclaim any obligation to update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes after the date of this Report, except as required by applicable law. You should not place undue reliance on any forward-looking statements that are based on information currently available to us or the third parties making the forward-looking statements.

### Objective of MD&A

Management’s Discussion and Analysis (“MD&A”) is a narrative explanation of the financial statements and other statistical data that we believe will enhance a reader’s understanding of our financial condition, changes in financial condition and results of operations.

The objectives of MD&A are:

a. To provide a narrative explanation of our financial statements that enables investors to see the Company from management’s perspective;

b. To enhance the overall financial disclosure and provide the context within which financial information should be analyzed; and

c. To provide information about the quality of, and potential variability of, our earnings and cash flow so that investors can ascertain the likelihood that past performance is indicative of future performance.

### Overview

Global Medical REIT Inc. (the “Company,” “us,” “we,” or “our”) is a Maryland corporation and internally managed REIT that acquires healthcare facilities and leases those facilities to physician groups and regional and national healthcare systems. We hold our facilities and conduct our operations through a Delaware limited partnership subsidiary, Global Medical REIT L.P. (the “Operating Partnership”). Our wholly owned subsidiary, Global Medical REIT GP LLC, is the sole general partner of our Operating Partnership and, as of September 30, 2025, we owned 92.14% of the outstanding common operating partnership units (“OP Units”) of our Operating Partnership, with an aggregate of 7.86% of the Operating Partnership owned by holders of long-term incentive plan units (“LTIP Units”) and third-party limited partners who contributed properties or services to the Operating Partnership in exchange for OP Units.

Our revenues are derived from the rental and operating expense reimbursement payments we receive from our tenants, and most of our leases are medium to long-term triple net leases with contractual rent escalation provisions. Our primary expenses are depreciation, interest, and general and administrative expenses. We finance our acquisitions with a mixture of debt and equity primarily from our cash from operations, borrowings under our credit facility, and stock issuances.

### Business Overview and Strategy

Our business strategy is to invest in healthcare properties that provide an attractive rate of return relative to our cost of capital and are operated by profitable physician groups, regional or national healthcare systems or combinations thereof. We believe this strategy allows us to attain our goals of providing stockholders with (i) attractive dividends and (ii) stock price appreciation. To implement this strategy, we seek to invest:

- in medical office buildings and other decentralized components of the healthcare delivery system because we believe that healthcare delivery trends in the U.S. are increasingly moving away from centralized hospital locations;
- in small to mid-sized healthcare facilities located in secondary markets and suburbs of primary markets and that provide services needed for an aging population, such as cardiovascular treatment, rehabilitation, eye surgery, gastroenterology, oncology treatment and orthopedics. We believe these facilities and markets are typically overlooked by larger REITs and other healthcare investors but contain tenant credit profiles that are like those of larger, more expensive facilities in primary markets; and
- to a lesser extent, in opportunistic acquisitions, including behavioral and mental health facilities that are operated by national or regional operators and are located in markets that demonstrate a need for such services.

Most of our healthcare facilities are leased to single-tenants under triple-net leases. Our portfolio also contains some multi-tenant properties with gross lease or modified gross lease structures. In addition, we have an interest in an unconsolidated joint venture that owns two healthcare facilities.

### Corporate Sustainability and Social Responsibility

Our business values integrate environmental sustainability, social responsibility, and strong governance practices throughout our Company. Our Board of Directors’ (the “Board”) approach to these practices is viewed through the lens of reducing and controlling the Company’s risk profile.

Our Board continues to lead our sustainability efforts, and our Board has a standing committee focused on such efforts. The primary purpose of this committee is to assist the Board in fulfilling its responsibilities to provide oversight and support of our efforts and goals regarding sustainability matters by overseeing: (1) our general sustainability strategy and policies as set by our management, (2) communications with our employees, investors, and other stakeholders with respect to sustainability matters, (3) developments relating to, and improving our understanding of, sustainability matters, (4) our compliance with certain sustainability-related legal and regulatory requirements, and (5) coordination with our other Board committees on sustainability matters of common import.

In June 2024, we released our third Corporate Social Responsibility Report, which detailed our progress and areas of focus in the sustainability realm. The contents of our Corporate Social Responsibility Report are not incorporated by reference into this Report or in any other report or document we file with the SEC.

Our commitment to employee engagement remains a high-priority, as we continue to make accommodations for health, safety, and work-life balance, including at our headquarters which is LEED platinum certified and includes a fitness center, café and roof-top lounge.

### Climate Change Risk

We take climate change and the risks associated with climate change seriously, including both physical and transitional risks. We utilize software to help us identify and measure the potential climate risk exposure for our properties. The software analysis summarizes the climate change-related risks, groups them by onset potential and identifies opportunities for risk mitigation. We assess energy efficiency and sustainability when evaluating investment opportunities and have begun to monitor our portfolio for climate risk factors. We utilize utility and energy audits that are performed by third-party engineering consultants during the due diligence phase of our acquisitions. The energy consumption data that we collect is used to calculate our facilities’ carbon emission levels. Capturing and tracking this information may help inform future mitigation and remediation efforts when possible. To that end, we continue to explore ways to mitigate climate risk, should it be present, in our acquisition strategy, as well as ways to contribute to the reduction of climate impact through proactive asset management that looks for ways to incorporate renewable energy resources and energy utilization reduction.

We stand with our communities, tenants, and stockholders in supporting meaningful solutions that address this global challenge and contribute to the sustainability of our business objectives.

### Impact of Elevated Interest Rates and Inflation

During 2025, the U.S. Federal Reserve (the “Fed”) continued lowering the Federal Funds Rate with the most recent cut in October 2025 bringing the target range to 3.75% to 4.00%. The 10-Year U.S. Treasury yield and Secured Overnight Financing Rate (“SOFR”) have also trended lower during 2025, with the 10-year U.S. Treasury yield and one-month SOFR at 4.15% and 4.13% as of September 30, 2025, respectively.

Although interest rates have trended lower during 2025, interest rates are significantly higher than in 2021, when we entered into interest rate swaps with respect to our $350 million term loan (“Term Loan A”) on our Second Amended and Restated Credit Facility (the “Credit Facility”). These interest rate swaps fixed the SOFR component of our interest rate on our Term Loan A at 1.36%; however, these swaps are set to expire in April 2026 (the original maturity date of Term Loan A). In connection with the Amended and Restated Credit Facility (defined below), we entered into $350 million of new forward-starting interest rate swaps that will be effective in May 2026 to fully hedge the SOFR component of the three Term Loan A tranches through their respective maturities at rates ranging from 3.24% to 3.32%. The current elevated interest rate environment has already resulted in material increases in our interest expense with respect to our floating-rate indebtedness and, beginning on the effective date of our new interest rate swaps, will materially increase our interest expense with respect to our fixed-rate indebtedness.

In summary, beginning on the effective date of our new interest rate swaps in May 2026, the impact of rising interest rates over the past several years will begin to affect our interest expense on our fixed-rate indebtedness, which is expected to negatively affect the Company’s net income. Additionally, any increase in the U.S. inflation rate may prompt the Fed to pause any future decreases to the Fed Funds Rate or increase the Fed Funds Rate, which may lead to an increase in our interest expense on our floating rate indebtedness.

### Continuing Impact of Healthcare Wage Inflation

The COVID-19 epidemic affected the healthcare industry in many ways. Many stories exist about U.S. healthcare workers, especially nurses, experiencing burnout due to the length and severity of the epidemic, and this has caused many nurses and other medical professionals to switch jobs within the medical profession or quit their professions altogether. This phenomenon has led to material increases in labor costs for healthcare systems, especially hospital systems, as some employers have had to rely on higher cost contract nursing labor to sustain their businesses. Although reliance on contract nursing and overall healthcare wage inflation moderated during 2024, the overall increase in healthcare labor costs remains. Whether enhanced technology and cost-saving measures and increased reimbursements from payors will help offset these costs remains to be seen.

### Reverse Stock Split

In August 2025, the Board approved a reverse stock split of our outstanding shares of common stock at a ratio of one-for-five (the “Reverse Stock Split”). The Reverse Stock Split was completed on September 19, 2025. As a result of the Reverse Stock Split, on September 19, 2025, every five issued and outstanding shares of our common stock was converted into one share of our common stock, with a proportionate reduction in our (i) authorized shares of common stock from 500 million to 100 million, (ii) outstanding equity awards, (iii) number of shares remaining available for issuance under our 2016 Equity Incentive Plan, as amended, and (iv) outstanding common units of the Operating Partnership. The par value of each share of our common stock remained unchanged. Trading in our common stock on a split adjusted basis began at the market open on September 22, 2025. No fractional shares were issued in connection with the Reverse Stock Split. Instead, each stockholder that otherwise would have received fractional shares received, in lieu of such fractional shares, cash in an amount based on the closing price of our common stock on the New York Stock Exchange on September 19, 2025. The Reverse Stock Split resulted in approximately 60 fractional shares, for which cash payments totaling approximately two thousand dollars were paid in lieu of issuing such fractional shares. All common share and per common share amounts in the accompanying condensed consolidated financial statements and notes thereto and applicable disclosures have been retrospectively adjusted for all periods presented to reflect the Reverse Stock Split.

### Executive Summary

The following table summarizes the primary changes in our business and operations during the periods presented. All per share, per share and unit, and weighted average share and unit amounts have been adjusted to reflect the impact of the Reverse Stock Split.

*(in thousands, except per share and unit amounts)*

| ​ ​ ​ ​ | ​ ​ | ​ ​ Three Months Ended September 30, 2025 | ​ ​ | ​ ​ 2024 | ​ | ​ ​ Nine Months Ended September 30, 2025 | ​ | ​ ​ 2024 |
| --- | --- | ---: | --- | ---: | --- | ---: | --- | ---: |
| Rental revenue | ​ | $37,036 | ​ | $34,175 | ​ | $109,510 | ​ | $103,458 |
| Depreciation and amortization expense | ​ | $15,008 | ​ | $13,642 | ​ | $44,126 | ​ | $41,720 |
| Interest expense | ​ | $8,175 | ​ | $7,236 | ​ | $23,351 | ​ | $21,119 |
| General and administrative expense | ​ | $4,860 | ​ | $4,381 | ​ | $14,505 | ​ | $13,416 |
| Gain (loss) on sale of investment properties | ​ | $294 | ​ | $1,823 | ​ | $1,859 | ​ | $(1,560) |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ |
| Net (loss) income attributable to common stockholders per share | ​ | $(0.45) | ​ | $0.14 | ​ | $(0.35) | ​ | $(0.04) |
| FFO attributable to common stockholders and noncontrolling interest per share and unit(1) | ​ | $1.00 | ​ | $0.96 | ​ | $3.00 | ​ | $3.00 |
| AFFO attributable to common stockholders and noncontrolling interest per share and unit(1) | ​ | $1.12 | ​ | $1.08 | ​ | $3.37 | ​ | $3.35 |
| Dividends per share of common stock(2) | ​ | $0.75 | ​ | $1.05 | ​ | $2.55 | ​ | $3.15 |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ |
| Weighted average common stock outstanding | ​ | ​ 13,393 | ​ | ​ 13,147 | ​ | 13,381 | ​ | 13,126 |
| Weighted average OP Units outstanding | ​ | ​ 447 | ​ | ​ 449 | ​ | 448 | ​ | 449 |
| Weighted average LTIP Units outstanding | ​ | ​ 714 | ​ | ​ 634 | ​ | 683 | ​ | 611 |
| Total weighted average shares and units outstanding | ​ | ​ 14,554 | ​ | ​ 14,230 | ​ | 14,512 | ​ | 14,186 |

(1) See “—Non-GAAP Financial Measures,” for a description of our non-GAAP financial measures and a reconciliation of our non-GAAP financial measures.

(2) On May 28, 2025, the Board reduced the quarterly dividend on the Company’s common stock from $1.05 per share to $0.75 per share.

*(dollars in thousands)*

| ​ ​ ​ ​ ​ | ​ ​ ​ | ​ ​ ​ As of September 30, ​ 2025 | ​ ​ ​ December 31, 2024 |
| --- | --- | ---: | ---: |
| Investment in real estate, gross | ​ | $1,508,711 ​ | $1,450,916 ​ |
| Total debt, net | ​ | $709,635 ​ | $646,131 ​ |
| Weighted average interest rate | ​ | 4.06% | 3.75% |
| Total equity (including noncontrolling interest) | ​ | $505,828 ​ | $555,916 ​ |
| Net leasable square feet | ​ | 5,178,421 ​ | 4,756,108 ​ |

### Our Properties

As of September 30, 2025, we had gross investments of approximately $1.5 billion in real estate, consisting of 191 buildings with an aggregate of approximately 5.2 million leasable square feet and approximately $118 million of annualized base rent. This data does not include amounts for properties held in our unconsolidated joint venture.

### Completed Acquisitions During the Nine Months Ended September 30, 2025

In October 2024, we entered into a purchase agreement to acquire a five-property portfolio (the “five-property portfolio”) of medical real estate for an aggregate purchase price of $69.6 million. In February 2025, we completed the acquisition of three properties in the five-property portfolio encompassing an aggregate of 188,874 leasable square feet for an aggregate purchase price of $31.5 million with aggregate annualized base rent of $2.7 million. In April 2025, we completed the acquisition of the remaining two properties in the five-property portfolio encompassing an aggregate of 297,724 leasable square feet for an aggregate purchase price of $38.1 million with aggregate annualized base rent of $3.6 million. In total, the five-property portfolio had a purchase price of $69.6 million with 486,598 leasable square feet and annualized base rent of $6.3 million.

### Completed Property Dispositions During the Nine Months Ended September 30, 2025

During the nine months ended September 30, 2025, we completed five dispositions that generated aggregate gross proceeds of $13.4 million, resulting in an aggregate gain of $1.9 million.

### Impairment of Investment Property

During the nine months ended September 30, 2025, we recognized an impairment loss of $6.3 million related to our Aurora, Illinois facility.

### Capital Activity

### Equity Issuances

In January 2024, the Company and the Operating Partnership implemented a $300 million “at-the-market” equity offering program, pursuant to which we may offer and sell (including through forward sales), from time to time, shares of our common stock (the “2024 ATM Program”). No shares were sold under the 2024 ATM Program during the nine months ended September 30, 2025.

### Common Stock Repurchase Program

In August 2025, the Board approved a $50 million common stock repurchase program (the “Stock Repurchase Program”). Under the Stock Repurchase Program, we may purchase up to $50 million of our outstanding shares of common stock from time to time in the open market, including through block purchases, through privately negotiated transactions or pursuant to any Rule 10b5-1 trading plan, in accordance with applicable securities laws. The specific timing, price and size of purchases will depend on prevailing stock prices, general economic and market conditions and other considerations. The Stock Repurchase Program does not obligate us to repurchase any dollar amount or number of shares of our common stock and may be suspended or discontinued at any time. No shares were repurchased during the nine months ended September 30, 2025.

### Debt Activity

During the nine months ended September 30, 2025, we borrowed $115.4 million under the Credit Facility and repaid $40.3 million, for a net amount borrowed of $75.1 million. During the nine months ended September 30, 2024, we borrowed $82.8 million under the Credit Facility and repaid $55.4 million, for a net amount borrowed of $27.4 million. As of September 30, 2025, the net outstanding Credit Facility balance was $708.5 million and as of November 3, 2025, we had unutilized borrowing capacity under the revolver component of the Credit Facility (the “Revolver”) of $171 million.

### Joint Venture

In connection with the formation of the joint venture (the “Joint Venture”) in December 2024, we sold two of our assets to the Joint Venture and received gross proceeds of $35.2 million. We used $2.1 million of the gross proceeds to finance our initial 12.5% capital investment in the Joint Venture. In connection with the acquisition of these properties, the Joint Venture entered into a mortgage loan with a principal amount of $17.6 million. We account for our interest in the Joint Venture using the equity method of accounting.

### Recent Developments

### Closing of the Amended and Restated Credit Facility

On October 8, 2025, the Company, the Operating Partnership, as borrower, and certain subsidiaries of the Operating Partnership entered into a third amended and restated credit agreement (the “Amended and Restated Credit Facility”) with JPMorgan Chase Bank, N.A., as administrative agent, which contains the following material amendments to the Company’s Credit Facility:

- Extends the initial maturity date of the existing $400 million Revolver to October 2029 with two, six-month extension options available at the Company’s election to extend the maturity to October 2030; and
- Extends the maturity of the existing $350 million Term Loan A, dividing it into three term loans structured as follows:
- $100 million term loan maturing in October 2029 (“Term Loan A-1”);
- $100 million term loan maturing in October 2030 (“Term Loan A-2”); and
- $150 million term loan maturing in April 2031 (“Term Loan A-3”); and
- Removes the previous 0.10% (10 basis point) SOFR credit spread adjustment on all credit facility borrowings.

The Credit Facility’s pricing grid, $150 million Term Loan B that matures in February 2028, and $500 million accordion remain unchanged.

In connection with the Amended and Restated Credit Facility, on October 7, 2025, the Company entered into $350 million of new forward starting interest rate swaps to fully hedge the SOFR component of the three Term Loan A tranches through their respective maturities.

The existing $350 million Term Loan A fixed rate SOFR swaps remain in place, resulting in an all-in fixed interest rate of 2.85% on this debt through the swap maturities in April 2026.

### Trends Which May Influence Our Results of Operations

We believe the following trends may positively impact our results of operations:

- *An aging population*. According to the 2020 U.S. Census, the nation’s 65-and-older population has grown rapidly since 2010, driven by the aging of Baby Boomers born between 1946 and 1964. The 65-and-older population grew by over a third during the past decade, and by 3.2% from 2018 to 2019. We believe this segment of the U.S. population will utilize many of the services provided at our healthcare facilities such as orthopedics, cardiac, gastroenterology and rehabilitation.
- *A continuing shift towards outpatient care*. According to the American Hospital Association, patients are demanding more outpatient operations. We believe this shift in patient preference from inpatient to outpatient facilities will benefit our tenants as most of our properties consist of outpatient facilities.
- *Physician practice group and hospital consolidation*. We believe the trend towards physician group consolidation will serve to strengthen the credit quality of our tenants if our tenants merge or are consolidated with larger health systems.

We believe the following trends may negatively impact our results of operations:

- *Interest rates remain at elevated levels.* During 2025, the Fed continued lowering the Federal Funds Rate with the most recent cut in October 2025 bringing the target range to 3.75% to 4.00%. The 10-Year U.S. Treasury yield and SOFR have also trended lower during 2025, with the 10-year U.S. Treasury yield and one-month SOFR at 4.15% and 4.13% as of September 30, 2025, respectively. Although interest rates have trended lower during 2025, rates have increased materially over the last several years. Beginning on the effective date of our new interest rate swaps in May 2026, these elevated rates will begin to have a negative effect on the interest expense on our fixed-rate indebtedness, with the swapped SOFR rate on our Term Loan A increasing from 1.36% to a range of 3.24% to 3.32%. Additionally, any increase in the U.S. inflation rate may prompt the Fed to pause any future decreases to the Fed Funds Rate or increase the Fed Funds Rate, which may lead to an increase in our interest expense on our floating rate indebtedness.

Continued elevated interest rates and recent market volatility have contributed to decreases in the common stock prices of many REITs, including the price of the Company’s common stock. A continued low stock price and elevated interest rates have caused the Company’s cost of capital to remain elevated, which, in turn, has significantly reduced the ability to acquire assets that meet the Company’s investment requirements.

- *Healthcare Wage Inflation*. The COVID-19 epidemic affected the healthcare industry in many ways. Many stories exist about U.S. healthcare workers, especially nurses, experiencing burnout due to the length and severity of the epidemic, and this has caused many nurses and other medical professionals to switch jobs within the medical profession or quit their professions altogether. This phenomenon has led to material increases in labor costs for healthcare systems, especially hospital systems, as some employers have had to rely on higher cost contract nursing labor to sustain their businesses. Although reliance on contract nursing and overall healthcare wage inflation moderated during 2024, the overall increase in healthcare labor costs remains. Whether enhanced technology and cost-saving measures and increased reimbursements from payors will help offset these costs remains to be seen.
- *Changes in third party reimbursement methods and policies*. The price of healthcare services has been increasing, and, as a result, we believe that third-party payors, such as Medicare and commercial insurance companies, will continue to scrutinize and reduce the types of healthcare services eligible for, and the amounts of, reimbursement under their health insurance plans. For example, on July 4, 2025, President Trump signed into law the OBBBA. The OBBBA mandates significant cuts to Medicaid funding and tightens eligibility requirements for Medicaid recipients. Additionally, many employer-based insurance plans continue to increase the percentage of insurance premiums for which covered individuals are responsible, which makes healthcare services more expensive for individuals. These trends were exacerbated by the COVID-19 epidemic, as medical expenditures increased significantly during the epidemic and have not yet returned to pre-COVID-19 levels. If these trends continue, our tenants’ businesses will continue to be negatively affected, which may impact their ability to pay rent to us.

### Critical Accounting Estimates

The preparation of financial statements in conformity with GAAP requires our management to use judgment in the application of accounting policies, including making estimates and assumptions. We base estimates on the best information available to us at the time, our experience and on various other assumptions believed to be reasonable under the circumstances. These estimates affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. If our judgment or interpretation of the facts and circumstances relating to various transactions or other matters had been different, it is possible that different accounting would have been applied, resulting in a different presentation of our financial statements. From time to time, we re-evaluate our estimates and assumptions. In the event estimates or assumptions prove to be different from actual results, adjustments are made in subsequent periods to reflect more current estimates and assumptions about matters that are inherently uncertain. Please refer to our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the Commission on February 28, 2025, for further information regarding the critical accounting policies that affect our more significant estimates and judgments used in the preparation of our condensed consolidated financial statements included in Part I, Item 1 of this Report.

### Consolidated Results of Operations

### Three Months Ended September 30, 2025 Compared to Three Months Ended September 30, 2024

*(in thousands)*

| ​ ​ ​ ​ Revenue | ​ ​ ​ | ​ ​ Three Months Ended September 30, 2025 ​ | ​ | ​ ​ 2024 ​ ​ | ​ ​ ​ | ​ ​ ​ ​ $ Change ​ ​ ​ |
| --- | --- | ---: | --- | ---: | --- | ---: |
| Rental revenue | ​ | $37,036 | ​ | $34,175 | ​ | $2,861 |
| Other income | ​ | 193 | ​ | 89 | ​ | 104 |
| Total revenue | ​ | 37,229 | ​ | 34,264 | ​ | 2,965 |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ |
| **Expenses** | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ |
| General and administrative | ​ | 4,860 | ​ | 4,381 | ​ | 479 |
| Operating expenses | ​ | 8,224 | ​ | 7,437 | ​ | 787 |
| Depreciation expense | ​ | 11,213 | ​ | 9,993 | ​ | 1,220 |
| Amortization expense | ​ | 3,795 | ​ | 3,649 | ​ | 146 |
| Interest expense | ​ | ​ 8,175 | ​ | ​ 7,236 | ​ | ​ 939 |
| Total expenses | ​ | 36,267 | ​ | 32,696 | ​ | 3,571 |
| Income before other income (expense) | ​ | ​ 962 | ​ | ​ 1,568 | ​ | ​ (606) |
| Gain on sale of investment properties | ​ | ​ 294 | ​ | ​ 1,823 | ​ | ​ (1,529) |
| Impairment of investment property | ​ | ​ (6,281) | ​ | ​ — | ​ | ​ (6,281) |
| Equity loss from unconsolidated joint venture | ​ | ​ (33) | ​ | ​ — | ​ | ​ (33) |
| Net (loss) income | ​ | $(5,058) | ​ | $3,391 | ​ | $(8,449) |

### Revenue

### Total Revenue

Total revenue for the three months ended September 30, 2025 was $37.2 million, compared to $34.3 million for the same period in 2024, an increase of $2.9 million. The increase primarily resulted from the impact of acquisitions that were completed subsequent to September 30, 2024 and through the three months ended September 30, 2025, partially offset by dispositions during that period. Within that increase, $5.2 million in revenue was recognized from net lease expense recoveries during the three months ended September 30, 2025, compared to $4.8 million for the same period in 2024.

### Expenses

### General and Administrative

General and administrative expenses for the three months ended September 30, 2025 were $4.9 million, compared to $4.4 million for the same period in 2024, an increase of $0.5 million. The increase primarily resulted from an increase in general corporate expenses, including costs related to our Reverse Stock Split, partially offset by a decrease in non-cash LTIP compensation expense, which was $1.2 million for the three months ended September 30, 2025, compared to $1.3 million for the same period in 2024.

### Operating Expenses

Operating expenses for the three months ended September 30, 2025 were $8.2 million, compared to $7.4 million for the same period in 2024, an increase of $0.8 million. The increase primarily resulted from the impact of acquisitions that were completed subsequent to September 30, 2024 and through the three months ended September 30, 2025, partially offset by dispositions during that period and a net reduction in costs at other properties. Included in these amounts were $5.2 million of recoverable property operating expenses incurred during the three months ended September 30, 2025, compared to $4.8 million for the same period in 2024. In addition, our operating expenses included $1.7 million of property operating expenses from gross leases for the three months ended September 30, 2025, compared to $1.6 million for the same period in 2024.

### Depreciation Expense

Depreciation expense for the three months ended September 30, 2025 was $11.2 million, compared to $10.0 million for the same period in 2024, an increase of $1.2 million. The increase primarily resulted from the impact of acquisitions that were completed subsequent to September 30, 2024 and through the three months ended September 30, 2025, partially offset by dispositions during that period.

### Amortization Expense

Amortization expense for the three months ended September 30, 2025 was $3.8 million, compared to $3.6 million for the same period in 2024, an increase of $0.2 million. The increase primarily resulted from the impact of acquisitions that were completed subsequent to September 30, 2024 and through the three months ended September 30, 2025, partially offset by dispositions during that period.

### Interest Expense

Interest expense for the three months ended September 30, 2025 was $8.2 million, compared to $7.2 million for the same period in 2024, an increase of $1.0 million. The increase was primarily due to higher average borrowings and higher interest rates during the three months ended September 30, 2025, compared to the same period in 2024.

The weighted average interest rate of our debt for the three months ended September 30, 2025 was 4.12% compared to 3.97% for the same period in 2024. Additionally, the weighted average interest rate and term of our debt was 4.06% and 1.3 years at September 30, 2025.

### Income Before Other Income (Expense)

Income before other income (expense) for the three months ended September 30 2025 was $1.0 million, compared to $1.6 million for the same period in 2024, a decrease of $0.6 million.

### Gain on Sale of Investment Properties

During the three months ended September 30, 2025, we completed two dispositions resulting in an aggregate gain of $0.3 million. During the three months ended September 30, 2024, we completed two dispositions resulting in an aggregate gain of $1.8 million.

### Impairment of Investment Property

In August 2025, we entered into an agreement to sell our facility located in Aurora, Illinois. We recognized an impairment loss of $6.3 million during the three months ended September 30, 2025 to reduce the carrying value of the asset to its fair value, which was determined to be the contractual sales price less commissions and fees. The sale of this facility was completed in September 2025.

### Equity Loss from Unconsolidated Joint Venture

During the three months ended September 30, 2025, we recognized a loss from the Joint Venture of $33 thousand, which represented our 12.5% ownership interest in the net loss of the Joint Venture during that period.

### Net (Loss) Income

Net loss for the three months ended September 30, 2025 was $5.1 million, compared to net income of $3.4 million for the same period in 2024, a decrease of $8.5 million.

### Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024

*(in thousands)*

| ​ ​ ​ ​ Revenue | ​ ​ ​ ​ | ​ ​ Nine Months Ended September 30, 2025 ​ | ​ ​ | ​ ​ 2024 ​ | ​ ​ ​ ​ ​ | ​ ​ ​ ​ $ Change ​ ​ ​ |
| --- | --- | ---: | --- | ---: | --- | ---: |
| Rental revenue | ​ | $109,510 | ​ | $103,458 | ​ | $6,052 |
| Other income | ​ | 306 | ​ | 166 | ​ | 140 |
| Total revenue | ​ | 109,816 | ​ | 103,624 | ​ | 6,192 |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ |
| **Expenses** | ​ |  | ​ | ​ | ​ |  |
| General and administrative | ​ | 14,505 | ​ | 13,416 | ​ | 1,089 |
| Operating expenses | ​ | 24,025 | ​ | 22,056 | ​ | 1,969 |
| Depreciation expense | ​ | 32,827 | ​ | 30,233 | ​ | 2,594 |
| Amortization expense | ​ | 11,299 | ​ | 11,487 | ​ | (188) |
| Interest expense | ​ | 23,351 | ​ | 21,119 | ​ | 2,232 |
| Total expenses | ​ | 106,007 | ​ | 98,311 | ​ | 7,696 |
| Income before other income (expense) | ​ | ​ 3,809 | ​ | ​ 5,313 | ​ | ​ (1,504) |
| Gain (loss) on sale of investment properties | ​ | ​ 1,859 | ​ | ​ (1,560) | ​ | ​ 3,419 |
| Impairment of investment property | ​ | ​ (6,281) | ​ | ​ — | ​ | ​ (6,281) |
| Equity loss from unconsolidated joint venture | ​ | ​ (123) | ​ | ​ — | ​ | ​ (123) |
| Net (loss) income | ​ | $(736) | ​ | $3,753 | ​ | $(4,489) |

### Revenue

### Total Revenue

Total revenue for the nine months ended September 30, 2025 was $109.8 million, compared to $103.6 million for the same period in 2024, an increase of $6.2 million. The increase primarily resulted from the impact of acquisitions that were completed subsequent to September 30, 2024 and through the nine months ended September 30, 2025, partially offset by dispositions during that period. Within that increase, $15.8 million in revenue was recognized from net lease expense recoveries during the nine months ended September 30, 2025, compared to $14.7 million for the same period in 2024. Additionally, the prior year period included the recognition of reserves for $0.8 million of rent and the write-off of $0.1 million of deferred rent.

### Expenses

### General and Administrative

General and administrative expenses for the nine months ended September 30, 2025 were $14.5 million, compared to $13.4 million for the same period in 2024, an increase of $1.1 million. The increase primarily resulted from costs incurred during the current period in connection with our CEO transition, partially offset by a decrease in non-cash LTIP compensation expense, which was $3.1 million for the nine months ended September 30, 2025, compared to $3.8 million for the same period in 2024.

### Operating Expenses

Operating expenses for the nine months ended September 30, 2025 were $24.0 million, compared to $22.1 million for the same period in 2024, an increase of $1.9 million. The increase primarily resulted from the impact of acquisitions that were completed subsequent to September 30, 2024 and through the nine months ended September 30, 2025, partially offset by dispositions during that period and a net reduction in costs at other properties. Included in these amounts were $15.8 million of recoverable property operating expenses incurred during the nine months ended September 30, 2025, compared to $14.7 million for the same period in 2024. In addition, our operating expenses included $4.9 million of property operating expenses from gross leases for the nine months ended September 30, 2025, compared to $4.0 million for the same period in 2024.

### Depreciation Expense

Depreciation expense for the nine months ended September 30, 2025 was $32.8 million, compared to $30.2 million for the same period in 2024, an increase of $2.6 million. The increase primarily resulted from the impact of acquisitions that were completed subsequent to September 30, 2024 and through the nine months ended September 30, 2025, partially offset by dispositions during that period.

### Amortization Expense

Amortization expense for the nine months ended September 30, 2025 was $11.3 million, compared to $11.5 million for the same period in 2024, a decrease of $0.2 million. The decrease primarily resulted from the impact of dispositions that were completed subsequent to September 30, 2024 and through the nine months ended September 30, 2025, partially offset by acquisitions that were completed during that period.

### Interest Expense

Interest expense for the nine months ended September 30, 2025 was $23.4 million, compared to $21.1 million for the same period in 2024, an increase of $2.3 million. The increase was primarily due to higher average borrowings and higher interest rates during the nine months ended September 30, 2025, compared to the same period in 2024.

The weighted average interest rate of our debt for the nine months ended September 30, 2025 was 4.00% compared to 3.93% for the same period in 2024. Additionally, the weighted average interest rate and term of our debt was 4.06% and 1.3 years at September 30, 2025.

### Income Before Other Income (Expense)

Income before other income (expense) for the nine months ended September 30, 2025 was $3.8 million, compared to $5.3 million for the same period in 2024, a decrease of $1.5 million.

### Gain (Loss) on Sale of Investment Properties

During the nine months ended September 30, 2025, we completed five dispositions resulting in an aggregate gain of $1.9 million. During the nine months ended September 30, 2024, we completed three dispositions resulting in an aggregate loss of $1.6 million.

### Impairment of Investment Property

In August 2025, we entered into an agreement to sell our facility located in Aurora, Illinois. We recognized an impairment loss of $6.3 million during the nine months ended September 30, 2025 to reduce the carrying value of the asset to its fair value, which was determined to be the contractual sales price less commissions and fees. The sale of this facility was completed in September 2025.

### Equity Loss from Unconsolidated Joint Venture

During the nine months ended September 30, 2025, we recognized a loss from the Joint Venture of $123 thousand, which represented our 12.5% ownership interest in the net loss of the Joint Venture during that period.

### Net (Loss) Income

Net loss for the nine months ended September 30, 2025 was $0.7 million, compared to net income $3.8 million for the same period in 2024, a decrease of $4.5 million.

### Assets and Liabilities

As of September 30, 2025 and December 31, 2024, our principal assets consisted of investments in real estate, net, of $1.2 billion. We completed five acquisitions and five dispositions during the nine months ended September 30, 2025. Our liquid assets consisted primarily of cash and cash equivalents and restricted cash of $9.8 million and $8.9 million, as of September 30, 2025 and December 31, 2024, respectively.

The increase in our cash and cash equivalents and restricted cash balances to $9.8 million as of September 30, 2025, compared to $8.9 million as of December 31, 2024, was primarily due to net borrowings on our Credit Facility, net proceeds received from the sale of investment properties, and net cash provided by operating activities, partially offset by funds used to acquire investment properties, the payment of dividends to common and preferred stockholders as well as holders of OP Units and LTIP Units, funds used to repay notes payable, and funds used for capital expenditures on existing real estate investments and leasing commissions.

The increase in our total liabilities to $767.4 million as of September 30, 2025 compared to $700.6 million as of December 31, 2024, was primarily the result of higher net borrowings outstanding on our Credit Facility, partially offset by a lower notes payable balance.

### Liquidity and Capital Resources

### General

Our short-term (up to 12 months) liquidity requirements include:

- Interest expense and scheduled principal payments on outstanding indebtedness;
- General and administrative expenses, including cash severance costs owed to Mr. Busch pursuant to the Transition and Separation Agreement and General Release of Claims, dated January 8, 2025;
- Property operating expenses;
- Property acquisitions;
- Distributions on our common and preferred stock and OP Units and LTIP Units; and
- Capital and tenant improvements and leasing costs.

On May 28, 2025, the Board reduced the Company’s quarterly common stock dividend from $1.05 per share to $0.75 per share (on a split-adjusted basis). We believe the reduction to the dividend best positions the Company for future growth, strengthens the balance sheet, and provides investors with an attractively yielding, well-covered dividend.

In 2025, we are contractually obligated to pay, or have capital commitments for, principal and interest payments on our outstanding debt and ground and operating lease expenses. In addition, if we decide to redeem our preferred stock in full, we would have to pay the liquidation preference of $77.6 million plus accrued dividends, fees and expenses.

Our long-term (beyond 12 months) liquidity requirements consist primarily of funds necessary to pay for acquisitions, capital and tenant improvements and leasing costs at our properties, scheduled debt maturities, general and administrative expenses, including cash severance costs owed to Mr. Busch pursuant to the Transition and Separation Agreement, operating expenses, and distributions. Beyond 2025, we are contractually obligated to pay, or have capital commitments for, principal and interest payments on our outstanding debt and ground and operating lease expenses.

We expect to satisfy our short and long-term liquidity needs through various internal and external sources, including cash flow from operations, debt financing, sales of additional equity securities, the issuance of OP Units in connection with acquisitions of additional properties, proceeds from select property dispositions and recapitalization transactions.

### Internal Sources of Liquidity

Our primary internal sources of liquidity include cash flow from operations and proceeds from select property dispositions and recapitalization transactions.

### External Sources of Liquidity

Our primary external sources of liquidity include net proceeds received from equity issuances, including the issuance of OP Units in connection with acquisitions of additional properties, and debt financing, including borrowings under our Amended and Restated Credit Facility and secured term loans.

### Equity Issuances

In January 2024, the Company and the Operating Partnership implemented the 2024 ATM Program, pursuant to which we may offer and sell (including through forward sales), from time to time, shares of our common stock. No shares were sold under the 2024 ATM Program during the nine months ended September 30, 2025 or from October 1, 2025 through November 3, 2025.

### Common Stock Repurchase Program

As described in “Capital Activity – *Common Stock Repurchase Program,”* in August 2025, the Board approved the Stock Repurchase Program. Under the Stock Repurchase Program, we may purchase up to $50 million of our outstanding shares of common stock from time to time in the open market, including through block purchases, through privately negotiated transactions or pursuant to any Rule 10b5-1 trading plan, in accordance with applicable securities laws. The specific timing, price and size of purchases will depend on prevailing stock prices, general economic and market conditions and other considerations. The Stock Repurchase Program does not obligate us to repurchase any dollar amount or number of shares of our common stock and may be suspended or discontinued at any time. No shares were repurchased during the nine months ended September 30, 2025 or from October 1, 2025 through November 3, 2025.

### Debt Financing

*Amended and Restated Credit Facility.* As described in “Recent Developments – *Closing of the Amended and Restated Credit Facility,”* the Company entered into an Amended and Restated Credit Facility on October 8, 2025. The Amended and Restated Credit Facility consists of (i) the $350 million Term Loan A, (ii) the $150 million Term Loan B, and (iii) the $400 million Revolver. The Amended and Restated Credit Facility also contains a $500 million accordion feature. As of November 3, 2025, we had unutilized borrowing capacity under the Amended and Restated Credit Facility of $171 million.

The Amended and Restated Credit Facility is an unsecured facility and contains the following material amendments to the Company’s previous Credit Facility:

- Extends the initial maturity date of the existing $400 million Revolver component of the credit facility to October 2029 with two, six-month extension options available at the Company’s election to extend the maturity to October 2030; and
- Extends the maturity of the existing $350 million Term Loan A, dividing it into three term loans structured as follows:
- $100 million term loan maturing in October 2029 (“Term Loan A-1”);
- $100 million term loan maturing in October 2030 (“Term Loan A-2”); and
- $150 million term loan maturing in April 2031 (“Term Loan A-3”); and
- Removes the previous 0.10% (10 basis point) SOFR credit spread adjustment on all credit facility borrowings.

The Credit Facility’s pricing grid, $150 million Term Loan B that matures in February 2028, and $500 million accordion remain unchanged.

In connection with the Amended and Restated Credit Facility, on October 7, 2025, the Company entered into $350 million of new forward starting interest rate swaps to fully hedge the SOFR component of the three Term Loan A tranches through their respective maturities.

The existing $350 million Term Loan A fixed rate SOFR swaps remain in place, resulting in an all-in fixed interest rate of 2.85% on this debt through the swap maturities in April 2026.

At closing of the Amended and Restated Credit Facility, the weighted average term of the Company’s debt, including the drawn Revolver component, was 4.4 years.

We are subject to a number of financial covenants under the Credit Facility, including, among other things, the following as of the end of each fiscal quarter, (i) a maximum consolidated unsecured leverage ratio of less than 60%, (ii) a maximum consolidated secured leverage ratio of less than 30%, (iii) a maximum consolidated secured recourse leverage ratio of less than 10%, (iv) a minimum fixed charge coverage ratio of 1.50:1.00, (v) a minimum unsecured interest coverage ratio of 1.50:1.00, (vi) a maximum consolidated leverage ratio of less than 60%, (vii) a maximum cash investment in joint ventures of 10% of total asset value and (viii) a minimum net worth of $573 million plus 75% of all net proceeds raised through equity offerings subsequent to March 31, 2022. As of September 30, 2025, management believed it complied with all of the financial and non-financial covenants contained in the Credit Facility.

*Other Fixed Debt.* We have $1.2 million in gross notes payable as of September 30, 2025. This debt is comprised of one instrument.

*Hedging Instruments.* As of September 30, 2025, we had nine interest rate swaps that are used to manage our interest rate risk. Five of our interest rate swaps related to Term Loan A with a combined notional value of $350 million that fix the SOFR component on Term Loan A through April 2026 at 1.36%. Four of our interest rate swaps related to Term Loan B with a combined notional value of $150 million that fix the SOFR component on Term Loan B through January 2028 at 2.54%.

As described in “Recent Developments – *Closing of the Amended and Restated Credit Facility,”* in connection with the Amended and Restated Credit Facility, the Company entered into $350 million of forward starting interest rate swaps (seven swaps in total) to fully hedge the SOFR component of the three Term Loan A tranches through their respective maturities as follows:

| ​ Term Loan A Tranches | ​ ​ | ​ Interest Rate Swap Term | ​ ​ | ​ Fixed Base Rate | ​ ​ | ​ Effective Interest Rate(1) |
| --- | --- | --- | --- | ---: | --- | ---: |
| $100 million Term Loan A-1 | ​ | May 2026 through October 2029 | ​ | 3.24% | ​ | 4.75% |
| $100 million Term Loan A-2 | ​ | May 2026 through October 2030 | ​ | 3.28% | ​ | 4.80% |
| $150 million Term Loan A-3 | ​ | May 2026 through April 2031 | ​ | 3.32% | ​ | 4.84% |

(1) Rates consist of the fixed SOFR base rate plus a borrowing spread of 1.45% based on a leverage ratio of between 45% and 50% and is calculated using 365/360 method.

*Total Fixed Debt*. Our fixed debt totaled $501.2 million on a gross basis at September 30, 2025, with a weighted average interest rate of 3.31% based on our interest rate swaps and at current leverage. The weighted average maturity of our fixed debt was 1.1 years at September 30, 2025.

### Cash Flow Information

Net cash provided by operating activities for the nine months ended September 30, 2025 was $52.0 million, compared to $49.5 million for the same period in 2024. During the 2025 period, there was an increase in depreciation expense and the changes in operating asset and liability accounts offset each other.

Net cash used in investing activities for the nine months ended September 30, 2025 was $67.2 million, compared to $26.4 million for the same period in 2024. During the 2025 period, we used more funds to acquire investment properties and received less net proceeds from the sale of investment properties, partially offset by less funds used for capital expenditures on existing real estate investments and leasing commissions.

Net cash provided by financing activities for the nine months ended September 30, 2025 was $16.1 million, compared to net cash used in financing activities of $22.0 million for the same period in 2024. During the 2025 period, we had higher net borrowings on our Credit Facility and lower payment of dividends to common and preferred stockholders as well as holders of OP Units and LTIP Units, partially offset by no proceeds received from common equity offerings and more funds used to repay notes payable.

### Non-GAAP Financial Measures

Management considers certain non-GAAP financial measures to be useful supplemental measures of the Company's operating performance. A non-GAAP financial measure is generally defined as one that purports to measure financial performance, financial position or cash flows, but excludes or includes amounts that would not be so adjusted in the most comparable measure determined in accordance with GAAP. The Company reports non-GAAP financial measures because these measures are observed by management to also be among the most predominant measures used by the REIT industry and by industry analysts to evaluate REITs. For these reasons, management deems it appropriate to disclose and discuss these non-GAAP financial measures. Set forth below are descriptions of the non-GAAP financial measures management considers relevant to the Company's business and useful to investors, as well as reconciliations of those measures to the most directly comparable GAAP financial measure.

The non-GAAP financial measures presented herein are not necessarily identical to those presented by other real estate companies due to the fact that not all real estate companies use the same definitions. These measures should not be considered as alternatives to net income, as indicators of the Company's financial performance, or as alternatives to cash flow from operating activities as measures of the Company's liquidity, nor are these measures necessarily indicative of sufficient cash flow to fund all of the Company's needs. Management believes that in order to facilitate a clear understanding of the Company's historical consolidated operating results, these measures should be examined in conjunction with net income and cash flows from operations as presented in the Condensed Consolidated Financial Statements and other financial data included elsewhere in this Report.

#### Funds from Operations and Adjusted Funds from Operations and Funds Available for Distribution

Funds from operations attributable to common stockholders and noncontrolling interest (“FFO”) and adjusted funds from operations attributable to common stockholders and noncontrolling interest (“AFFO”) and funds available for distribution attributable to common stockholders and noncontrolling interest (“FAD”) are non-GAAP financial measures within the meaning of the rules of the SEC. The Company considers FFO and AFFO and FAD to be important supplemental measures of its operating performance and believes FFO is frequently used by securities analysts, investors, and other interested parties in the evaluation of REITs, many of which present FFO when reporting their results.

In accordance with the National Association of Real Estate Investment Trusts’ (“NAREIT”) definition, FFO means net income or loss computed in accordance with GAAP before noncontrolling interests of holders of OP Units and LTIP Units, excluding gains (or losses) from sales of property and extraordinary items, property impairment losses, less preferred stock dividends, plus real estate-related depreciation and amortization (excluding amortization of debt issuance costs and the amortization of above and below market leases), and after adjustments for unconsolidated partnerships and joint ventures calculated to reflect FFO on the same basis. Because FFO excludes real estate-related depreciation and amortization (other than amortization of debt issuance costs and above and below market lease amortization expense), the Company believes that FFO provides a performance measure that, when compared period-over-period, reflects the impact to operations from trends in occupancy rates, rental rates, operating costs, development activities and interest costs, providing perspective not immediately apparent from the closest GAAP measurement, net income or loss.

AFFO is a non-GAAP measure used by many investors and analysts to measure a real estate company’s operating performance by removing the effect of items that do not reflect ongoing property operations. Management calculates AFFO by modifying the NAREIT computation of FFO by adjusting it for certain cash and non-cash items and certain recurring and non-recurring items. For the Company these items include recurring acquisition and disposition costs, loss on the extinguishment of debt, recurring straight line deferred rental revenue, recurring stock-based compensation expense, recurring amortization of above and below market leases, recurring amortization of debt issuance costs, severance and transition related expense, costs related to our reverse stock split, and other items related to unconsolidated partnerships and joint ventures.

We calculate FAD by subtracting from AFFO capital expenditures, including tenant improvements, and leasing commissions. Management believes FAD is useful in analyzing the portion of cash flow that is available for distribution to stockholders and unitholders. Investors, analysts and the Company utilize FAD as an indicator of common dividend potential.

Management believes that reporting AFFO in addition to FFO and FAD is a useful supplemental measure for the investment community to use when evaluating the operating performance of the Company on a comparative basis.

A reconciliation of net income to FFO and AFFO and FAD for the three and nine months ended September 30, 2025 and 2024 is as follows. All per share, per share and unit, and weighted average share and unit amounts have been adjusted to reflect the impact of the Reverse Stock Split.

*(unaudited, in thousands except per share and unit amounts)*

| ​ ​ ​ ​ | ​ ​ ​ | ​ ​ Three Months Ended September 30, 2025 | ​ | ​ ​ 2024 | ​ | ​ ​ Nine Months Ended September 30, 2025 | ​ | ​ ​ 2024 | ​ ​ ​ |
| --- | --- | ---: | --- | --- | --- | --- | --- | --- | --- |
| **Net (loss) income** | **​** | **$(5,058)** | **​** | **$3,391** | **​** | **$(736)** | **​** | **$3,753** | **​** |
| Less: Preferred stock dividends | ​ | (1,455) | ​ | (1,455) | ​ | (4,366) | ​ | (4,366) | ​ |
| Depreciation and amortization expense | ​ | ​ 14,983 | ​ | ​ 13,618 | ​ | ​ 44,055 | ​ | ​ 41,611 | ​ |
| Depreciation and amortization expense from unconsolidated joint venture | ​ | ​ 73 | ​ | ​ — | ​ | ​ 195 | ​ | ​ — | ​ |
| (Gain) loss on sale of investment properties | ​ | ​ (294) | ​ | ​ (1,823) | ​ | ​ (1,859) | ​ | ​ 1,560 | ​ |
| Impairment of investment property | ​ | ​ 6,281 | ​ | ​ — | ​ | ​ 6,281 | ​ | ​ — | ​ |
| **FFO attributable to common stockholders and noncontrolling interest** | **​** | **$14,530** | ​ | **$13,731** | ​ | **$43,570** | ​ | **$42,558** | ​ |
| Amortization of above market leases, net | ​ | 113 | ​ | ​ 282 | ​ | ​ 505 | ​ | ​ 782 | ​ |
| Straight line deferred rental revenue | ​ | (332) | ​ | ​ (501) | ​ | ​ (868) | ​ | ​ (1,264) | ​ |
| Stock-based compensation expense | ​ | 1,207 | ​ | ​ 1,274 | ​ | ​ 3,086 | ​ | ​ 3,826 | ​ |
| Amortization of debt issuance costs and other | ​ | 554 | ​ | ​ 559 | ​ | ​ 1,672 | ​ | ​ 1,684 | ​ |
| Severance and transition related expense | ​ | ​ — | ​ | ​ — | ​ | ​ 671 | ​ | ​ — | ​ |
| Reverse stock split expense | ​ | ​ 170 | ​ | ​ — | ​ | ​ 170 | ​ | ​ — | ​ |
| Other adjustments from unconsolidated joint venture | ​ | ​ — | ​ | ​ — | ​ | ​ 51 | ​ | ​ — | ​ |
| **AFFO attributable to common stockholders and noncontrolling interest** | **​** | **$16,242** | **​** | **$15,345** | **​** | **$48,857** | **​** | **$47,586** | **​** |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ |
| **Net (loss) income attributable to common stockholders per share – basic and diluted** | **​** | **$(0.45)** | **​** | **$0.14** | **​** | **$(0.35)** | **​** | **$(0.04)** | **​** |
| **FFO attributable to common stockholders and noncontrolling interest per share and unit** | **​** | **$1.00** | **​** | **$0.96** | **​** | **$3.00** | **​** | **$3.00** | **​** |
| **AFFO attributable to common stockholders and noncontrolling interest per share and unit** | **​** | **$1.12** | **​** | **$1.08** | **​** | **$3.37** | **​** | **$3.35** | **​** |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ |
| Weighted Average Shares and Units Outstanding – basic and diluted | ​ | 14,554 | ​ | ​ 14,230 | ​ | ​ 14,512 | ​ | ​ 14,186 | ​ |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ |
| **Weighted Average Shares and Units Outstanding:** | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ |
| Weighted Average Common Shares | ​ | 13,393 | ​ | ​ 13,147 | ​ | ​ 13,381 | ​ | ​ 13,126 | ​ |
| Weighted Average OP Units | ​ | 447 | ​ | ​ 449 | ​ | ​ 448 | ​ | ​ 449 | ​ |
| Weighted Average LTIP Units | ​ | 714 | ​ | ​ 634 | ​ | ​ 683 | ​ | ​ 611 | ​ |
| Weighted Average Shares and Units Outstanding – basic and diluted | ​ | 14,554 | ​ | 14,230 | ​ | 14,512 | ​ | 14,186 | ​ |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ |
| **AFFO attributable to common stockholders and noncontrolling interest** | ​ | **$16,242** | **​** | **$15,345** | **​** | **$48,857** | **​** | **$47,586** | ​ |
| Tenant improvements | ​ | ​ (1,601) | ​ | ​ (1,375) | ​ | ​ (3,183) | ​ | ​ (4,183) | ​ |
| Leasing commissions | ​ | ​ (1,136) | ​ | ​ (390) | ​ | ​ (1,809) | ​ | ​ (2,935) | ​ |
| Building capital | ​ | ​ (1,683) | ​ | ​ (3,447) | ​ | ​ (4,677) | ​ | ​ (5,789) | ​ |
| **FAD attributable to common stockholders and noncontrolling interest** | ​ | **$11,822** | ​ | **$10,133** | ​ | **$39,188** | ​ | **$34,679** | ​ |

#### Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate (EBITDAre and Adjusted EBITDAre)

The Company calculates EBITDA*re* in accordance with standards established by NAREIT and defines EBITDA*re* as net income or loss computed in accordance with GAAP plus depreciation and amortization, interest expense, gain or loss on the sale of investment properties, property impairment losses, and adjustments for unconsolidated partnerships and joint ventures to reflect EBITDAre on the same basis, as applicable. The Company defines Adjusted EBITDA*re* as EBITDA*re* plus loss on extinguishment of debt, non-cash stock compensation expense, non-cash intangible amortization related to above and below market leases, severance and transition related expense, expenses related to our reverse stock split, transaction expense, adjustments related to our investments in unconsolidated joint ventures, and other normalizing items. Management considers EBITDA*re* and Adjusted EBITDA*re* important measures because they provide additional information to allow management, investors, and our current and potential creditors to evaluate and compare our core operating results and our ability to service debt.

A reconciliation of net income to EBITDA*re* and Adjusted EBITDA*re* for the three and nine months ended September 30, 2025 and 2024 is as follows:

*(unaudited and in thousands)*

| ​ ​ ​ ​ | ​ ​ Three Months Ended September 30, 2025 | ​ | ​ ​ 2024 | ​ ​ ​ | ​ ​ Nine Months Ended September 30, 2025 | ​ | ​ ​ 2024 |
| --- | --- | --- | --- | --- | --- | --- | --- |
| **Net (loss) income** | **$(5,058)** | **​** | **$3,391** | **​** | **$(736)** | **​** | **$3,753** |
| Interest expense | 8,175 | ​ | 7,236 | ​ | ​ 23,351 | ​ | ​ 21,119 |
| Depreciation and amortization expense | ​ 15,008 | ​ | ​ 13,642 | ​ | ​ 44,126 | ​ | ​ 41,720 |
| Unconsolidated joint venture EBITDAre adjustments (1) | ​ 112 | ​ | ​ — | ​ | ​ 311 | ​ | ​ — |
| (Gain) loss on sale of investment properties | ​ (294) | ​ | ​ (1,823) | ​ | ​ (1,859) | ​ | ​ 1,560 |
| Impairment of investment property | ​ 6,281 | ​ | ​ — | ​ | ​ 6,281 | ​ | ​ — |
| **EBITDAre** | **$24,224** | ​ | **$22,446** | **​** | **$71,474** | ​ | **$68,152** |
| Stock-based compensation expense | 1,207 | ​ | 1,274 | ​ | ​ 3,086 | ​ | ​ 3,826 |
| Amortization of above market leases, net | 113 | ​ | 282 | ​ | ​ 505 | ​ | ​ 782 |
| Severance and transition related expense | ​ — | ​ | ​ — | ​ | ​ 671 | ​ | ​ — |
| Reverse stock split expense | ​ 170 | ​ | ​ — | ​ | ​ 170 | ​ | ​ — |
| Interest rate swap mark-to-market at unconsolidated joint venture | ​ — | ​ | ​ — | ​ | ​ 55 | ​ | ​ — |
| **Adjusted EBITDAre** | **$25,714** | ​ | **$24,002** | **​** | **$75,961** | ​ | **$72,760** |

(1) Includes joint venture interest, depreciation and amortization, and gain on sale of investment properties, if applicable, included in joint venture net income or loss.

## Market risk

As filed, 2,592 characters.

Market risk includes risks that arise from changes in interest rates, foreign currency exchange rates, commodity prices, equity prices and other market changes that affect market sensitive instruments. In pursuing our business and investment objectives, we expect that the primary market risk to which we will be exposed is interest rate risk.

We may be exposed to the effects of interest rate changes primarily as a result of debt used to acquire healthcare facilities, including borrowings under the Amended and Restated Credit Facility. The analysis below presents the sensitivity of the value of our variable rate financial obligations to selected changes in market interest rates. The range of changes chosen reflects our view of changes which are reasonably possible over a one-year period.

As of September 30, 2025, we had $211.7 million of unhedged borrowings outstanding under the Revolver (before the netting of unamortized debt issuance costs) that bears interest at a variable rate. See “*Management’s Discussion and Analysis of Financial Condition and Results of Operation—Liquidity and Capital Resources,”* for a detailed discussion of our Amended and Restated Credit Facility. At September 30, 2025, SOFR on our outstanding floating-rate borrowings was 4.16%. Assuming no increase in the amount of our variable interest rate debt, if SOFR increased 100 basis points, our cash flow would decrease by approximately $2.1 million annually. Assuming no increase in the amount of our variable rate debt, if SOFR were reduced 100 basis points, our cash flow would increase by approximately $2.1 million annually.

Our interest rate risk management objectives are to limit the impact of interest rate changes on earnings and cash flows and to lower overall borrowing costs. To achieve our objectives, we may borrow at fixed rates or floating rates. See “*Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Hedging Instruments,”* for a description of our interest rate swaps.

We may enter into additional derivative financial instruments, including interest rate swaps and caps, in order to mitigate our interest rate risk on our future borrowings. We will not enter into derivative transactions for speculative purposes.

In addition to changes in interest rates, the value of our investments is subject to fluctuations based on changes in local and regional economic conditions and changes in the creditworthiness of tenants/operators and borrowers, which may affect our ability to refinance our debt if necessary.

## Controls and procedures

As filed, 2,289 characters.

### Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act that are designed to ensure that information required to be disclosed in our reports filed or submitted to the SEC under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms, and that information is accumulated and communicated to management, including the principal executive and financial officer as appropriate, to allow timely decisions regarding required disclosures. Our principal executive officer and principal financial officer evaluated the effectiveness of disclosure controls and procedures as of September 30, 2025 pursuant to Rule 13a-15(b) under the Exchange Act. Based on that evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered by this Report, the Company’s disclosure controls and procedures were effective to ensure that information required to be included in our periodic SEC filings is recorded, processed, summarized, and reported within the time periods specified in the SEC rules and forms.

Our management, including our principal executive officer and principal financial officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected.

### Changes in Internal Control over Financial Reporting

No changes were made to our internal control over financial reporting during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 1,435 characters.

The following supplements and updates the risk factors in Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2024. Some statements in this Quarterly Report on Form 10-Q, including statements in the following risk factor, constitute forward-looking statements. Please refer to Part I, Item 2 of this Quarterly Report on Form 10-Q entitled “Special Note Regarding Forward-Looking Statements.”

***Global trade disruption, significant introductions of trade barriers and bilateral trade frictions, together with any future downturns in the global economy resulting therefrom, could adversely affect our performance.***

The U.S. government has recently announced significant changes in its approach to international trade policy and has announced efforts to renegotiate certain existing trade agreements with foreign countries. In addition, the U.S. government has recently imposed tariffs on certain foreign goods and has indicated a willingness to impose tariffs on imports of other products. Some foreign governments, including China, have instituted retaliatory tariffs on certain U.S. goods and have indicated a willingness to impose additional tariffs on U.S. products. Global trade disruption, significant introductions of trade barriers and bilateral trade frictions, together with any future downturns in the global economy resulting therefrom, could adversely affect our performance.

Filed Nov 5, 2025.
Source: SEC EDGAR, the filing index for accession 0001104659-25-106984. Last ingested by Listed: Oct 30, 2026, 13:40 ET. No prices; not investment advice.