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

- Company: [Chiron Real Estate Inc.](/companies/xrn.md) (CIK 1533615)
- Form: 10-Q
- Filed: 2025-08-06
- Accepted by EDGAR: Aug 6, 2025, 16:05 ET
- Period: 2025-06-30
- Accession: 0001558370-25-010515
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1533615/000155837025010515/gmre-20250630x10q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1533615/000155837025010515/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-06-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-04-01 to 2025-06-30 | $38.0m | us-gaap:Revenues |
| Revenue | 6 months, 2025-01-01 to 2025-06-30 | $72.6m | us-gaap:Revenues |
| Interest expense | 3 months, 2025-04-01 to 2025-06-30 | $8.0m | us-gaap:InterestExpenseNonoperating |
| Interest expense | 6 months, 2025-01-01 to 2025-06-30 | $15.2m | us-gaap:InterestExpenseNonoperating |
| Net income | 3 months, 2025-04-01 to 2025-06-30 | $585.0k | us-gaap:ProfitLoss |
| Net income | 6 months, 2025-01-01 to 2025-06-30 | $4.3m | us-gaap:ProfitLoss |
| Diluted EPS | 3 months, 2025-04-01 to 2025-06-30 | −$0.01 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 6 months, 2025-01-01 to 2025-06-30 | $0.02 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-04-01 to 2025-06-30 | −$0.01 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 6 months, 2025-01-01 to 2025-06-30 | $0.02 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-04-01 to 2025-06-30 | 66,879,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 6 months, 2025-01-01 to 2025-06-30 | 66,876,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 6 months, 2025-01-01 to 2025-06-30 | $34.4m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Cash and equivalents | at 2025-06-30 | $6.6m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Total assets | at 2025-06-30 | $1.30bn | us-gaap:Assets |
| Total liabilities | at 2025-06-30 | $771.9m | us-gaap:Liabilities |
| Long-term debt | at 2025-06-30 | $14.2m | us-gaap:LongTermDebt |
| Shareholders' equity | at 2025-06-30 | $503.2m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 62,382 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 June 30, 2025, we owned 91.92% of the outstanding common operating partnership units (“OP Units”) of our Operating Partnership, with an aggregate of 8.08% 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 Second Amended and Restated Credit Facility (the “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 2024, the U.S. Federal Reserve (the “Fed”) began lowering the Federal Funds Rate after many quarters of increasing the target range for the rate to combat inflation. Beginning in September 2024 through December 2024, the Federal Funds Rate dropped from a range of 5.25% – 5.50% to 4.25% - 4.50%. However, U.S. Treasury yields and Secured Overnight Financing Rate (“SOFR”) swap rates have not responded in kind with 10-Year U.S. Treasury yields increasing from 3.79% at September 30, 2024 to 4.23% at June 30, 2025 and the five-year forward SOFR swap rates increasing from 3.21% to 3.38%, during the same period. The difference between the changes in the Federal Funds Rate and U.S. Treasury yields and forward SOFR swap rates reflect market expectations of increased inflationary pressures in the coming months and years as well as the effects of recently enacted global tariffs. Consequently, the Fed may maintain an elevated Federal Funds Rate, or determine to raise the Federal Funds Rate again, in 2025 and beyond if inflation begins to rise.

Currently, interest rate swaps with respect to our $350 million term loan (“Term Loan A”) on our Credit Facility are set to expire on the maturity of Term Loan A in April 2026. If we refinance our Term Loan A and enter into new interest rate swaps, any related interest rate swap would likely be based on the five-year SOFR swap rate at the time of refinancing, which is likely to be much higher than our current SOFR swap rate on our Term Loan A. Additionally, although one-month SOFR, which is the base rate of the unhedged revolver component of our Credit Facility (our “Revolver”), decreased during 2024 in line with the decrease in the Federal Funds Rate, one-month SOFR remains elevated compared to 2021 and there is no assurance that one-month SOFR will continue to decrease in 2025 and beyond.

In summary, the interest rate on our Revolver, which is based on one-month SOFR, decreased during the fourth quarter of 2024 along with the decrease in the Federal Funds Rate but has been relatively unchanged during 2025. With respect to our Term Loan A and its related interest rate swaps, if we refinance that loan (which we expect to complete during the fourth quarter of 2025) and hedge our prospective interest rate risk by entering into new interest rate swaps, the swap rates at the time of refinancing are expected to be significantly higher than our current interest rate swaps due to (i) the general increase in SOFR since 2021 and (ii) the widening between short-term and long-term rates based on renewed inflationary pressures.

### 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.

### Executive Summary

The following table summarizes the primary changes in our business and operations during the periods presented.

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

| ​ ​ ​ ​ | ​ ​ | ​ ​ Three Months Ended June 30, 2025 | ​ ​ | ​ ​ 2024 | ​ | ​ ​ Six Months Ended June 30, 2025 | ​ | ​ ​ 2024 |
| --- | --- | ---: | --- | ---: | --- | ---: | --- | ---: |
| Rental revenue | ​ | $37,880 | ​ | $34,214 | ​ | $72,475 | ​ | $69,283 |
| Depreciation and amortization expense | ​ | $15,291 | ​ | $13,993 | ​ | $29,118 | ​ | $28,078 |
| Interest expense | ​ | $8,009 | ​ | $6,992 | ​ | $15,176 | ​ | $13,883 |
| General and administrative expense | ​ | $6,025 | ​ | $4,589 | ​ | $9,645 | ​ | $9,035 |
| Gain (loss) on sale of investment properties | ​ | $207 | ​ | $(3,383) | ​ | $1,565 | ​ | $(3,383) |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ |
| Net (loss) income attributable to common stockholders per share | ​ | $(0.01) | ​ | $(0.05) | ​ | $0.02 | ​ | $(0.04) |
| FFO attributable to common stockholders and noncontrolling interest per share and unit(1) | ​ | $0.20 | ​ | $0.20 | ​ | $0.40 | ​ | $0.41 |
| AFFO attributable to common stockholders and noncontrolling interest per share and unit(1) | ​ | $0.23 | ​ | $0.22 | ​ | $0.45 | ​ | $0.46 |
| Dividends per share of common stock(2) | ​ | $0.15 | ​ | $0.21 | ​ | $0.36 | ​ | $0.42 |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ |
| Weighted average common stock outstanding | ​ | ​ 66,879 | ​ | ​ 65,588 | ​ | 66,876 | ​ | 65,580 |
| Weighted average OP Units outstanding | ​ | ​ 2,244 | ​ | ​ 2,244 | ​ | 2,244 | ​ | 2,244 |
| Weighted average LTIP Units outstanding | ​ | ​ 3,528 | ​ | ​ 3,150 | ​ | 3,384 | ​ | 3,020 |
| Total weighted average shares and units outstanding | ​ | ​ 72,651 | ​ | ​ 70,982 | ​ | 72,504 | ​ | 70,844 |

(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 $0.21 per share to $0.15 per share.

*(dollars in thousands)*

| ​ ​ ​ ​ ​ | ​ ​ ​ | ​ ​ ​ As of June 30, ​ 2025 | ​ ​ ​ December 31, 2024 |
| --- | --- | ---: | ---: |
| Investment in real estate, gross | ​ | $1,520,808 ​ | $1,450,916 ​ |
| Total debt, net | ​ | $712,985 ​ | $646,131 ​ |
| Weighted average interest rate | ​ | 4.09% | 3.75% |
| Total equity (including noncontrolling interest) | ​ | $525,021 ​ | $555,916 ​ |
| Net leasable square feet | ​ | 5,212,298 ​ | 4,756,108 ​ |

### Our Properties

As of June 30, 2025, we had gross investments of approximately $1.5 billion in real estate, consisting of 193 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 Six Months Ended June 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 six months ended June 30, 2025, we completed three dispositions that generated aggregate gross proceeds of $9.6 million, resulting in an aggregate gain of $1.6 million.

### Capital Raising Activity

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 six months ended June 30, 2025.

### Debt Activity

During the six months ended June 30, 2025, we borrowed $94.5 million under the Credit Facility and repaid $28.5 million, for a net amount borrowed of $66.0 million. During the six months ended June 30, 2024, we borrowed $38.5 million under the Credit Facility and repaid $25.9 million, for a net amount borrowed of $12.6 million. As of June 30, 2025, the net outstanding Credit Facility balance was $698.8 million and as of August 4, 2025, we had unutilized borrowing capacity under the Revolver of $177 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.

### 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:

- *Longer-Term Interest rates remain at elevated levels.* During 2024, the Fed began lowering the Federal Funds Rate after many quarters of increasing the target range for the rate to combat inflation. Beginning in September 2024 through December 2024, the Federal Funds Rate dropped from a range of 5.25% – 5.50% to 4.25% - 4.50%. However, U.S. Treasury yields and SOFR swap rates have not responded in kind with 10-Year U.S. Treasury yields increasing from 3.79% at September 30, 2024 to 4.23% at June 30, 2025 and the five-year forward SOFR swap rates increasing from 3.21% to 3.38%, during the same period. The difference between the changes in the Federal Funds Rate and U.S. Treasury yields and forward SOFR swap rates reflect market expectations of increased inflationary pressures in the coming months and years as well as the effects of recently enacted global tariffs. Consequently, the Fed may maintain an elevated Federal Funds Rate, or determine to raise the Federal Funds Rate again, in 2025 and beyond if inflation begins to rise.

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 June 30, 2025 Compared to Three Months Ended June 30, 2024

*(in thousands)*

| ​ ​ ​ ​ Revenue | ​ ​ ​ | ​ ​ Three Months Ended June 30, 2025 ​ | ​ | ​ ​ 2024 ​ ​ | ​ ​ ​ | ​ ​ ​ ​ $ Change ​ ​ ​ |
| --- | --- | ---: | --- | ---: | --- | ---: |
| Rental revenue | ​ | $37,880 | ​ | $34,214 | ​ | $3,666 |
| Other income | ​ | 89 | ​ | 27 | ​ | 62 |
| Total revenue | ​ | 37,969 | ​ | 34,241 | ​ | 3,728 |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ |
| **Expenses** | ​ | ​ ​ | ​ | ​ | ​ | ​ ​ |
| General and administrative | ​ | 6,025 | ​ | 4,589 | ​ | 1,436 |
| Operating expenses | ​ | 8,216 | ​ | 7,236 | ​ | 980 |
| Depreciation expense | ​ | 11,307 | ​ | 10,127 | ​ | 1,180 |
| Amortization expense | ​ | 3,984 | ​ | 3,866 | ​ | 118 |
| Interest expense | ​ | ​ 8,009 | ​ | ​ 6,992 | ​ | ​ 1,017 |
| Total expenses | ​ | 37,541 | ​ | 32,810 | ​ | 4,731 |
| Income before other income (expense) | ​ | ​ 428 | ​ | ​ 1,431 | ​ | ​ (1,003) |
| Gain (loss) on sale of investment properties | ​ | ​ 207 | ​ | ​ (3,383) | ​ | ​ 3,590 |
| Equity loss from unconsolidated joint venture | ​ | ​ (50) | ​ | ​ — | ​ | ​ (50) |
| Net income (loss) | ​ | $585 | ​ | $(1,952) | ​ | $2,537 |

### Revenue

### Total Revenue

Total revenue for the three months ended June 30, 2025 was $38.0 million, compared to $34.2 million for the same period in 2024, an increase of $3.8 million. The increase primarily resulted from the impact of acquisitions that were completed subsequent to June 30, 2024 and through the three months ended June 30, 2025, partially offset by dispositions during that period. Within that increase, $5.4 million in revenue was recognized from net lease expense recoveries during the three months ended June 30, 2025, compared to $4.9 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 three months ended June 30, 2025 were $6.0 million, compared to $4.6 million for the same period in 2024, an increase of $1.4 million. The increase primarily resulted from costs incurred during the current period pursuant to the Transition and Separation Agreement and General Release of Claims, dated January 8, 2025, by and among the Company, Inter-American Management LLC and Jeffrey Busch, our former Chief Executive Officer (the “Transition and Separation Agreement”). Additionally, there was an increase in non-cash LTIP compensation expense, which was $1.7 million for the three months ended June 30, 2025, compared to $1.3 million for the same period in 2024.

### Operating Expenses

Operating expenses for the three months ended June 30, 2025 were $8.2 million, compared to $7.2 million for the same period in 2024, an increase of $1.0 million. The increase primarily resulted from the impact of acquisitions that were completed subsequent to June 30, 2024 and through the three months ended June 30, 2025, partially offset by dispositions during that period and a net reduction in costs at other properties. Included in these amounts were $5.4 million of recoverable property operating expenses incurred during the three months ended June 30, 2025, compared to $4.9 million for the same period in 2024. In addition, our operating expenses included $1.8 million of property operating expenses from gross leases for the three months ended June 30, 2025, compared to $0.9 million for the same period in 2024.

### Depreciation Expense

Depreciation expense for the three months ended June 30, 2025 was $11.3 million, compared to $10.1 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 June 30, 2024 and through the three months ended June 30, 2025, partially offset by dispositions during that period.

### Amortization Expense

Amortization expense for the three months ended June 30, 2025 was $4.0 million, compared to $3.9 million for the same period in 2024, an increase of $0.1 million. Although not significant, the increase primarily resulted from the impact of acquisitions that were completed subsequent to June 30, 2024 and through the three months ended June 30, 2025, partially offset by dispositions during that period.

### Interest Expense

Interest expense for the three months ended June 30, 2025 was $8.0 million, compared to $7.0 million for the same period in 2024, an increase of $1.0 million. The increase was primarily due to higher average borrowings and slightly higher interest rates during the three months ended June 30, 2025, compared to the same period in 2024.

The weighted average interest rate of our debt for the three months ended June 30, 2025 was 4.03% compared to 3.93% for the same period in 2024. Additionally, the weighted average interest rate and term of our debt was 4.09% and 1.6 years at June 30, 2025.

### Income Before Other Income (Expense)

Income before other income (expense) for the three months ended June 30, 2025 was $0.4 million, compared to $1.4 million for the same period in 2024, a decrease of $1.0 million.

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

During the three months ended June 30, 2025, we completed one disposition resulting in a gain of $0.2 million. During the three months ended June 30, 2024, we completed one disposition resulting in a loss of $3.4 million.

### Equity Loss from Unconsolidated Joint Venture

During the three months ended June 30, 2025, we recognized a loss from the Joint Venture of $50 thousand, which represented our 12.5% ownership interest in the net loss of the Joint Venture during that period.

### Net Income (Loss)

Net income for the three months ended June 30, 2025 was $0.6 million, compared to net loss of $2.0 million for the same period in 2024, an increase of $2.6 million.

### Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024

*(in thousands)*

| ​ ​ ​ ​ Revenue | ​ ​ ​ ​ | ​ ​ Six Months Ended June 30, 2025 ​ | ​ ​ | ​ ​ 2024 ​ | ​ ​ ​ ​ ​ | ​ ​ ​ ​ $ Change ​ ​ ​ |
| --- | --- | ---: | --- | ---: | --- | ---: |
| Rental revenue | ​ | $72,475 | ​ | $69,283 | ​ | $3,192 |
| Other income | ​ | 112 | ​ | 77 | ​ | 35 |
| Total revenue | ​ | 72,587 | ​ | 69,360 | ​ | 3,227 |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ |
| **Expenses** | ​ |  | ​ | ​ | ​ |  |
| General and administrative | ​ | 9,645 | ​ | 9,035 | ​ | 610 |
| Operating expenses | ​ | 15,800 | ​ | 14,619 | ​ | 1,181 |
| Depreciation expense | ​ | 21,614 | ​ | 20,240 | ​ | 1,374 |
| Amortization expense | ​ | 7,504 | ​ | 7,838 | ​ | (334) |
| Interest expense | ​ | 15,176 | ​ | 13,883 | ​ | 1,293 |
| Total expenses | ​ | 69,739 | ​ | 65,615 | ​ | 4,124 |
| Income before other income (expense) | ​ | ​ 2,848 | ​ | ​ 3,745 | ​ | ​ (897) |
| Gain (loss) on sale of investment properties | ​ | ​ 1,565 | ​ | ​ (3,383) | ​ | ​ ​ |
| Equity loss from unconsolidated joint venture | ​ | ​ (91) | ​ | ​ — | ​ | ​ (91) |
| Net income | ​ | $4,322 | ​ | $362 | ​ | $3,960 |

### Revenue

### Total Revenue

Total revenue for the six months ended June 30, 2025 was $72.6 million, compared to $69.4 million for the same period in 2024, an increase of $3.2 million. The increase primarily resulted from the impact of acquisitions that were completed subsequent to June 30, 2024 and through the six months ended June 30, 2025, partially offset by dispositions during that period. Within that increase, $10.6 million in revenue was recognized from net lease expense recoveries during the six months ended June 30, 2025, compared to $9.9 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 six months ended June 30, 2025 were $9.6 million, compared to $9.0 million for the same period in 2024, an increase of $0.6 million. The increase primarily resulted from costs incurred during the current period pursuant to the Transition and Separation Agreement with Mr. Busch, partially offset by a decrease in non-cash LTIP compensation expense, which was $1.9 million for the six months ended June 30, 2025, compared to $2.6 million for the same period in 2024.

### Operating Expenses

Operating expenses for the six months ended June 30, 2025 were $15.8 million, compared to $14.6 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 June 30, 2024 and through the six months ended June 30, 2025, partially offset by dispositions during that period and a net reduction in costs at other properties. Included in these amounts were $10.6 million of recoverable property operating expenses incurred during the six months ended June 30, 2025, compared to $9.9 million for the same period in 2024. In addition, our operating expenses included $3.2 million of property operating expenses from gross leases for the six months ended June 30, 2025, compared to $2.4 million for the same period in 2024.

### Depreciation Expense

Depreciation expense for the six months ended June 30, 2025 was $21.6 million, compared to $20.2 million for the same period in 2024, an increase of $1.4 million. The increase primarily resulted from the impact of acquisitions that were completed subsequent to June 30, 2024 and through the six months ended June 30, 2025, partially offset by dispositions during that period.

### Amortization Expense

Amortization expense for the six months ended June 30, 2025 was $7.5 million, compared to $7.8 million for the same period in 2024, a decrease of $0.3 million. The decrease primarily resulted from the impact of dispositions that were completed subsequent to June 30, 2024 and through the six months ended June 30, 2025, partially offset by acquisitions that were completed during that period.

### Interest Expense

Interest expense for the six months ended June 30, 2025 was $15.2 million, compared to $13.9 million for the same period in 2024, an increase of $1.3 million. The increase was primarily due to higher average borrowings during the six months ended June 30, 2025, compared to the same period in 2024.

The weighted average interest rate of our debt for the six months ended June 30, 2025 was 3.93% compared to 3.92% for the same period in 2024. Additionally, the weighted average interest rate and term of our debt was 4.09% and 1.6 years at June 30, 2025.

### Income Before Other Income (Expense)

Income before other income (expense) for the six months ended June 30, 2025 was $2.8 million, compared to $3.7 million for the same period in 2024, a decrease of $0.9 million.

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

During the six months ended June 30, 2025, we completed three dispositions resulting in an aggregate gain of $1.6 million. During the six months ended June 30, 2024, we completed one disposition resulting in a loss of $3.4 million.

### Equity Loss from Unconsolidated Joint Venture

During the six months ended June 30, 2025, we recognized a loss from the Joint Venture of $91 thousand, which represented our 12.5% ownership interest in the net loss of the Joint Venture during that period.

### Net Income

Net income for the six months ended June 30, 2025 was $4.3 million, compared to $0.4 million for the same period in 2024, an increase of $3.9 million.

### Assets and Liabilities

As of June 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 three dispositions during the six months ended June 30, 2025. Our liquid assets consisted primarily of cash and cash equivalents and restricted cash of $9.2 million and $8.9 million, as of June 30, 2025 and December 31, 2024, respectively.

The increase in our cash and cash equivalents and restricted cash balances to $9.2 million as of June 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, and funds used for capital expenditures on existing real estate investments and leasing commissions.

The increase in our total liabilities to $772.0 million as of June 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.

### Liquidity and Capital Resources

### General

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

- Interest expense and scheduled principal payments on outstanding indebtedness, including (i) the payment of the approximately $13 million outstanding principal balance on the Rosedale loan that matured in July 2025 and (ii) the payment of the $350 million Term Loan A principal balance that matures in May 2026;
- General and administrative expenses, including cash severance costs owed to Mr. Busch pursuant to the Transition and Separation Agreement;
- 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.

Regarding Term Loan A that matures in May 2026, we are in active discussions with our Credit Facility lenders related to refinancing this obligation. As part of this process, we are also discussing extending the maturity date of the Revolver. Based on various factors, including current market conditions, the performance of our assets, and our lender discussions to date, we are not anticipating any significant adverse changes to the financial terms of the Credit Facility and expect to complete these transactions during the fourth quarter of 2025. Although we expect to complete the refinancing during the fourth quarter of 2025, subject to market and other conditions, there can be no assurance that the refinancing will be completed as expected or at all.

On May 28, 2025, the Board reduced the Company’s quarterly common stock dividend from $0.21 per share to $0.15 per share. 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 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 six months ended June 30, 2025 or from July 1, 2025 through August 4, 2025.

### Debt Financing

*Credit Facility.* Our 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 Credit Facility also contains a $500 million accordion feature. As of August 4, 2025, we had unutilized borrowing capacity under the Credit Facility of $177 million.

The Credit Facility is an unsecured facility with a term of (i) four years (beginning on August 1, 2022) for the Revolver (subject to two, six-month extension options), (ii) five years for Term Loan A (beginning on May 3, 2021), and (iii) five years and six months (beginning on August 1, 2022) for Term Loan B. Interest rates on amounts outstanding under the Credit Facility equal SOFR plus a related spread adjustment of 10 basis points and a borrowing spread based on the current pricing grid in the Credit Facility.

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 June 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 $14.2 million in gross notes payable as of June 30, 2025. This debt is comprised of two instruments.

*Hedging Instruments.* As of June 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%.

*Total Fixed Debt*. Our fixed debt totaled $514.2 million on a gross basis at June 30, 2025, with a weighted average interest rate of 3.33% based on our interest rate swaps and at current leverage. The weighted average maturity of our fixed debt was 1.4 years at June 30, 2025.

### Cash Flow Information

Net cash provided by operating activities for the six months ended June 30, 2025 was $34.4 million, compared to $33.2 million for the same period in 2024. During the 2025 period, net income was higher, partially offset by an aggregate gain on the sale of investment properties.

Net cash used in investing activities for the six months ended June 30, 2025 was $66.4 million, compared to $0.9 million for the same period in 2024. During the 2025 period, we used significant funds to acquire investment properties, partially offset by more net proceeds received from the sale of investment properties and less funds used for capital expenditures on existing real estate investments and leasing commissions.

Net cash provided by financing activities for the six months ended June 30, 2025 was $32.3 million, compared to net cash used in financing activities of $31.2 million for the same period in 2024. During the 2025 period, we had higher net borrowings on our Credit Facility and lower repayment of our 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, 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 six months ended June 30, 2025 and 2024 is as follows:

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

| ​ ​ ​ ​ | ​ ​ ​ | ​ ​ Three Months Ended June 30, 2025 | ​ | ​ ​ 2024 | ​ | ​ ​ Six Months Ended June 30, 2025 | ​ | ​ ​ 2024 | ​ ​ ​ |
| --- | --- | ---: | --- | --- | --- | --- | --- | --- | --- |
| **Net income (loss)** | **​** | **$585** | **​** | **$(1,952)** | **​** | **$4,322** | **​** | **$362** | **​** |
| Less: Preferred stock dividends | ​ | (1,455) | ​ | (1,455) | ​ | (2,911) | ​ | (2,911) | ​ |
| Depreciation and amortization expense | ​ | ​ 15,266 | ​ | ​ 13,969 | ​ | ​ 29,072 | ​ | ​ 27,992 | ​ |
| Depreciation and amortization expense from unconsolidated joint venture | ​ | ​ 73 | ​ | ​ — | ​ | ​ 122 | ​ | ​ — | ​ |
| (Gain) loss on sale of investment properties | ​ | ​ (207) | ​ | ​ 3,383 | ​ | ​ (1,565) | ​ | ​ 3,383 | ​ |
| **FFO attributable to common stockholders and noncontrolling interest** | **​** | **$14,262** | ​ | **$13,945** | ​ | **$29,040** | ​ | **$28,826** | ​ |
| Amortization of (below) above market leases, net | ​ | (60) | ​ | ​ 249 | ​ | ​ 392 | ​ | ​ 500 | ​ |
| Straight line deferred rental revenue | ​ | (479) | ​ | ​ (363) | ​ | ​ (536) | ​ | ​ (763) | ​ |
| Stock-based compensation expense | ​ | 1,728 | ​ | ​ 1,319 | ​ | ​ 1,879 | ​ | ​ 2,552 | ​ |
| Amortization of debt issuance costs and other | ​ | 559 | ​ | ​ 563 | ​ | ​ 1,118 | ​ | ​ 1,125 | ​ |
| Severance and transition related expense | ​ | ​ 567 | ​ | ​ — | ​ | ​ 671 | ​ | ​ — | ​ |
| Other adjustments from unconsolidated joint venture | ​ | ​ 20 | ​ | ​ — | ​ | ​ 51 | ​ | ​ — | ​ |
| **AFFO attributable to common stockholders and noncontrolling interest** | **​** | **$16,597** | **​** | **$15,713** | **​** | **$32,615** | **​** | **$32,240** | **​** |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ |
| **Net (loss) income attributable to common stockholders per share – basic and diluted** | **​** | **$(0.01)** | **​** | **$(0.05)** | **​** | **$0.02** | **​** | **$(0.04)** | **​** |
| **FFO attributable to common stockholders and noncontrolling interest per share and unit** | **​** | **$0.20** | **​** | **$0.20** | **​** | **$0.40** | **​** | **$0.41** | **​** |
| **AFFO attributable to common stockholders and noncontrolling interest per share and unit** | **​** | **$0.23** | **​** | **$0.22** | **​** | **$0.45** | **​** | **$0.46** | **​** |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ |
| Weighted Average Shares and Units Outstanding – basic and diluted | ​ | 72,651 | ​ | 70,982 | ​ | 72,504 | ​ | 70,844 | ​ |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ |
| **Weighted Average Shares and Units Outstanding:** | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ |
| Weighted Average Common Shares | ​ | 66,879 | ​ | ​ 65,588 | ​ | ​ 66,876 | ​ | ​ 65,580 | ​ |
| Weighted Average OP Units | ​ | 2,244 | ​ | ​ 2,244 | ​ | ​ 2,244 | ​ | ​ 2,244 | ​ |
| Weighted Average LTIP Units | ​ | 3,528 | ​ | ​ 3,150 | ​ | ​ 3,384 | ​ | ​ 3,020 | ​ |
| Weighted Average Shares and Units Outstanding – basic and diluted | ​ | 72,651 | ​ | 70,982 | ​ | 72,504 | ​ | 70,844 | ​ |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ |
| **AFFO attributable to common stockholders and noncontrolling interest** | ​ | **$16,597** | **​** | **$15,713** | **​** | **$32,615** | **​** | **$32,240** | ​ |
| Tenant improvements | ​ | ​ (878) | ​ | ​ (1,626) | ​ | ​ (1,582) | ​ | ​ (2,864) | ​ |
| Leasing commissions | ​ | ​ (558) | ​ | ​ (2,003) | ​ | ​ (673) | ​ | ​ (2,545) | ​ |
| Building capital | ​ | ​ (1,087) | ​ | ​ (1,576) | ​ | ​ (2,994) | ​ | ​ (2,342) | ​ |
| **FAD attributable to common stockholders and noncontrolling interest** | ​ | **$14,074** | ​ | **$10,508** | ​ | **$27,366** | ​ | **$24,489** | ​ |

#### 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, 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 six months ended June 30, 2025 and 2024 is as follows:

*(unaudited and in thousands)*

| ​ ​ ​ ​ | ​ ​ Three Months Ended June 30, 2025 | ​ | ​ ​ 2024 | ​ ​ ​ | ​ ​ Six Months Ended June 30, 2025 | ​ | ​ ​ 2024 |
| --- | ---: | --- | ---: | --- | --- | --- | --- |
| **Net income (loss)** | **$585** | **​** | **$(1,952)** | **​** | **$4,322** | **​** | **$362** |
| Interest expense | 8,009 | ​ | 6,992 | ​ | ​ 15,176 | ​ | ​ 13,883 |
| Depreciation and amortization expense | ​ 15,291 | ​ | ​ 13,993 | ​ | ​ 29,118 | ​ | ​ 28,078 |
| Unconsolidated joint venture EBITDAre adjustments (1) | ​ 114 | ​ | ​ — | ​ | ​ 199 | ​ | ​ — |
| (Gain) loss on sale of investment properties | ​ (207) | ​ | ​ 3,383 | ​ | ​ (1,565) | ​ | ​ 3,383 |
| **EBITDAre** | **$23,792** | ​ | **$22,416** | **​** | **$47,250** | ​ | **$45,706** |
| Stock-based compensation expense | 1,728 | ​ | 1,319 | ​ | ​ 1,879 | ​ | ​ 2,552 |
| Amortization of (below) above market leases, net | (60) | ​ | 249 | ​ | ​ 392 | ​ | ​ 500 |
| Severance and transition related expense | ​ 567 | ​ | ​ — | ​ | ​ 671 | ​ | ​ — |
| Interest rate swap mark-to-market at unconsolidated joint venture | ​ 19 | ​ | ​ — | ​ | ​ 55 | ​ | ​ — |
| **Adjusted EBITDAre** | **$26,046** | ​ | **$23,984** | **​** | **$50,247** | ​ | **$48,758** |

(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, 2,540 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 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 June 30, 2025, we had $202.6 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 Credit Facility. At June 30, 2025, SOFR on our outstanding floating-rate borrowings was 4.33%. 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 $2.0 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 $2.0 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, 2,284 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 June 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 Aug 6, 2025.
Source: SEC EDGAR, the filing index for accession 0001558370-25-010515. Last ingested by Listed: Nov 6, 2026, 17:47 ET. No prices; not investment advice.