Risk Factors.
−Removed: There were no material changes from the risk factors previously disclosed in our 2023 Annual Report on Form 10-K, as filed with the SEC on March 22, 2024, other than as set forth below.
−Removed: Our high concentrations of properties in particular geographic areas magnify the effects of negative conditions affecting those geographic areas.
−Removed: We have a concentration of properties in particular geographic areas;
−Removed: therefore, any adverse situation that disproportionately effects one of those areas would have a magnified adverse effect on our portfolio.
−Removed: As of September 30, 2024, properties located in Indiana, Ohio and Kentucky accounted for approximately 28.7%, 12.5% and 12.3%, respectively, of our total property portfolio’s annualized base rent or annualized NOI.
−Removed: Accordingly, there is a geographic concentration of risk subject to fluctuations in each such state’s economy, real estate and other market conditions.
−Removed: Compliance with new federal minimum staffing requirements may increase operating costs for our skilled nursing tenants and operators, and failure to comply with such requirements may result in financial or other regulatory penalties or reputational harm.
−Removed: In April 2024, the Centers for Medicare & Medicaid Services of the U.S.
−Removed: Department of Health & Human Services finalized new nursing home staffing rules, including a total nurse staffing standard that requires facilities to provide a minimum number of hours per day of total direct nursing care to residents and a requirement to have a registered nurse onsite 24 hours a day, seven days a week, to provide skilled nursing care.
−Removed: These new requirements have a staggered implementation timeframe based on geographic location.
−Removed: As these new rules are implemented over time, the operating costs of our skilled nursing tenants within our triple-net leased properties segment, as well as our SNF operations within our SHOP and integrated senior health campuses segments, may increase, which will negatively impact the profitability of both our tenants’ businesses and our business.
−Removed: Our skilled nursing tenants and operators may also have difficulty in staffing and maintaining the required staffing at our facilities, and may not qualify for the specified hardship exemptions.
−Removed: If we or our tenants are unable to comply with the new rules, we may face monetary penalties or other regulatory enforcement action as well as reputational harm.
+Added: There were no material changes from the risk factors previously disclosed in our 2024 Annual Report on Form 10-K, as filed with the SEC on February 28, 2025, other than as set forth below.
+Added: The use of, or inability to use, artificial intelligence by us, our operators, our tenants and our vendors presents risks and challenges that may adversely impact our business and operating results or the business and operating results of our operators and tenants or may adversely impact the demand for properties.
+Added: We may use generative artificial intelligence and/or machine learning, or AI, tools in our operations.
+Added: If our peers use AI tools to optimize operations and we fail to utilize AI tools in a comparable manner, we may be competitively disadvantaged.
+Added: However, while AI tools may facilitate optimization and operational efficiencies, they also have the potential for inaccuracy, bias, infringement or misappropriation of intellectual property, and risks related to data privacy and cybersecurity.
+Added: The use of AI tools may introduce errors or inadequacies that are not easily detectable, including deficiencies, inaccuracies or biases in the data used for AI training, or in the content, analyses or recommendations generated by AI applications.
+Added: The results of such errors or inadequacies may adversely affect our business, financial condition and results of operations.
+Added: The legal requirements relating to AI continue to evolve and remain uncertain, including how legal developments could impact our business and ability to enforce our proprietary rights or protect against infringement of those rights.
+Added: Cybersecurity threat actors may utilize AI tools to automate and enhance cybersecurity attacks against us.
+Added: We utilize software and platforms designed to detect such cybersecurity threats, including AI-based tools, but these threats could become more sophisticated and harder to detect and counteract, which may pose significant risks to our data security and systems.
+Added: Such cybersecurity attacks, if successful, could lead to data breaches, loss of confidential or sensitive information and financial or reputational harm.
+Added: Our vendors may use AI tools in their products or services without our knowledge, and the providers of these tools may not meet the evolving regulatory or industry standards for privacy and data protection.
+Added: Consequently, this may inhibit our or our vendors' ability to uphold an appropriate level of service and data privacy.
+Added: If we, our vendors or other third parties with which we conduct business experience an actual or perceived breach of privacy or security incident due to the use of AI, we may be adversely impacted, lose valuable intellectual property or confidential information and incur harm to our reputation and the public perception of the effectiveness of our security measures.
+Added: In addition, investors, analysts and other market participants may use AI tools to process, summarize or interpret our financial information or other data about us.
+Added: The use of AI tools in financial and market analysis may introduce risks similar to those described above, including an inaccurate interpretation of our financial or operational performance or market trends or conditions, which in turn could result in inaccurate conclusions or investment recommendations.
+Added: Changes in federal, state or local laws or regulations may limit our opportunities to participate in the ownership of, or investment in, healthcare real estate.
+Added: Changes in federal, state, or local laws or regulations, including changes limiting REIT investment in the healthcare sector, reducing healthcare-related tax benefits for REITs, or requiring additional approvals for healthcare entities to transact with REITs, could have a material adverse effect on our ability to participate in the ownership of or invest in healthcare providers and healthcare real estate.
+Added: Legislation potentially impacting REIT ownership and investment in the healthcare sector has recently been introduced or is under discussion at the federal and state level.
+Added: Such legislation or similar laws or regulations, if enacted, could have a material adverse impact on our business.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.