What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-06 compared with 2025-05-01 · 218 added, 157 removed, 241 unchanged (61% of the section changed)

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Factors which could have a material adverse effect on our operations and future prospects or which could cause actual results to differ materially from our expectations include, but are not limited to:

(i) the possibility of an offer or firm intention to make an offer for Care REIT plc by any third party;

(ii) our ability to complete the acquisition of Care REIT, integrate its operations and achieve the benefits expected to result from the acquisition;

(iii) the ability and willingness of our tenants and borrowers to meet and/or perform their obligations under the agreements we have entered into with them, including without limitation, their respective obligations to indemnify, defend and hold us harmless from and against various claims, litigation and liabilities;

(iv) the risk that we may have to incur additional impairment charges related to our assets held for sale if we are unable to sell such assets at the prices we expect;

(v) the impact of healthcare reform legislation, including minimum staffing level requirements, on the operating results and financial conditions of our tenants and borrowers;

(vi) the ability of our tenants and borrowers to comply with applicable laws, rules and regulations in the operation of the properties we lease to them or finance;

(vii) the ability and willingness of our tenants to renew their leases with us upon their expiration, and the ability to reposition our properties on the same or better terms in the event of nonrenewal or in the event we replace an existing tenant, as well as any obligations, including indemnification obligations, we may incur in connection with the replacement of an existing tenant;

(viii) the availability of and the ability to identify (a) tenants who meet our credit and operating standards, and (b) suitable acquisition opportunities and the ability to acquire and lease the respective properties to such tenants on favorable terms;

(ix) the ability to generate sufficient cash flows to service our outstanding indebtedness;

(x) access to debt and equity capital markets;

(xi) fluctuating interest rates;

(xii) the impact of public health crises, including significant COVID-19 outbreaks as well as other pandemics or epidemics;

(xiii) the ability to retain our key management personnel;

(xiv) the ability to maintain our status as a real estate investment trust (“REIT”);

(xv) changes in the U.S.

(i) the ability and willingness of our tenants and borrowers to meet and/or perform their obligations under the agreements we have entered into with them, including without limitation, their respective obligations to indemnify, defend and hold us harmless from and against various claims, litigation and liabilities;

(ii) the risk that we may have to incur additional impairment charges related to our assets held for sale if we are unable to sell such assets at the prices we expect;

(iii) the impact of healthcare reform legislation, including potential minimum staffing level requirements, on the operating results and financial conditions of our tenants and borrowers;

(iv) the ability of our tenants and borrowers to comply with applicable laws, rules and regulations in the operation of the properties we lease to them or finance;

(v) the intended benefits of our acquisition of Care REIT plc (“Care REIT”) may not be realized, and we will be subject to additional risks from our investment in Care REIT and any other international investments;

(vi) the ability and willingness of our tenants to renew their leases with us upon their expiration, and the ability to reposition our properties on the same or better terms in the event of nonrenewal or in the event we replace an existing tenant, as well as any obligations, including indemnification obligations, we may incur in connection with the replacement of an existing tenant;

(vii) the availability of and the ability to identify (a) tenants who meet our credit and operating standards, and (b) suitable acquisition opportunities and the ability to acquire and lease the respective properties to such tenants on favorable terms;

(viii) the ability to generate sufficient cash flows to service our outstanding indebtedness;

(ix) access to debt and equity capital markets;

(x) fluctuating interest and currency rates;

(xi) the impact of public health crises, including significant COVID-19 outbreaks as well as other pandemics or epidemics;

(xii) the ability to retain our key management personnel;

(xiii) the ability to maintain our status as a real estate investment trust (“REIT”);

(xiv) changes in the U.S.

tax law and other state, federal or local laws, whether or not specific to REITs;

(xvi) other risks inherent in the real estate business, including potential liability relating to environmental matters and illiquidity of real estate investments;

and (xvii) any additional factors included under Item 1A “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024, as such risk factors may be amended, supplemented or superseded from time to time by other reports we file with the Securities and Exchange Commission (the “SEC”).

(xv) other risks inherent in the real estate business, including potential liability relating to environmental matters and illiquidity of real estate investments;

and (xvi) any additional factors included under Item 1A “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024 and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, as such risk factors may be amended, supplemented or superseded from time to time by other reports we file with the Securities and Exchange Commission (the “SEC”).

Forward-looking statements speak only as of the date of this report.

Except in the normal course of our public disclosure obligations, we expressly disclaim any obligation to release publicly any updates or revisions to any forward-looking statements to reflect any change in our expectations or any change in events, conditions or circumstances on which any statement is based.

CareTrust REIT is a self-administered, publicly-traded REIT engaged in the ownership, acquisition, financing, development and leasing of skilled nursing, seniors housing and other healthcare-related properties.

As of March 31, 2025, we owned, directly or indirectly in consolidated joint ventures, and leased to independent operators 255 skilled nursing facilities (“SNFs”), multi-service campuses, assisted living facilities (“ALFs”) and independent living facilities (“ILFs”) consisting of 27,672 operational beds and units located in 32 states with the highest concentration of properties by rental income located in California, Texas and Tennessee.

As of March 31, 2025, we also had other real estate related investments consisting of three preferred equity investments, 15 real estate secured loans receivable and five mezzanine loans receivable with a carrying value of $799.8 million and one financing receivable with a carrying value of $96.6 million.

As of June 30, 2025, we owned, directly or indirectly in consolidated joint ventures, and leased to independent operators 400 skilled nursing facilities (“SNFs”), multi-service campuses, U.K.

care homes, assisted living facilities (“ALFs”) and independent living facilities (“ILFs”) consisting of 36,162 operational beds and units located in 32 states and the U.K.

with the highest concentration of properties by rental income located in California, Texas, the U.K.

and Tennessee.

As of June 30, 2025, we also had other real estate related investments consisting of four preferred equity investments, 14 real estate secured loans receivable and five mezzanine loans receivable with a carrying value of $840.9 million and one financing receivable with a carrying value of $97.3 million.

Recent Developments

Planned Acquisition

On March 11, 2025, the Company announced (the “Rule 2.7 Announcement”) pursuant to Rule 2.7 of the United Kingdom City Code on Takeovers and Mergers (the “Code”) a firm intention to make a cash offer (the “Offer”) to acquire (the “Acquisition”), through its wholly-owned direct subsidiary, CR United Bidco Limited (“Bidco”), the entire issued and to be issued ordinary share capital (other than Scheme Restricted Shares (as defined in the Rule 2.7 Announcement)) of Care REIT plc (“Target”).

Target is a UK-based real estate investment trust listed on the Main Market of the London Stock Exchange focused on investment in care homes throughout the United Kingdom.

The Acquisition is intended to be effected by means of a scheme of arrangement (the “Scheme”) under Part 26 of the United Kingdom Companies Act 2006.

Under the terms of the Scheme, Target shareholders, other than any Sanctions Disqualified Shareholders (as defined in the Rule 2.7 Announcement) will be entitled to receive 108 pence in cash for each Target share they hold, which values the Target’s existing issued and to be issued ordinary share capital at approximately $597 million, and, together with the assumption of Target’s net debt of approximately $259 million, represents a total purchase price of approximately $856 million.

Payments will be in Great British Pounds but are expressed in US dollars based on the exchange rate of 0.7501 GBP to 1.00 USD on April 30, 2025.

The transaction has been unanimously approved by the boards of directors of both the Company and Target and has also been approved by the requisite majorities of Target shareholders at the Target shareholder meetings convened to approve it.

Completion of the acquisition is further conditioned on (i) sanction of the Scheme by the High Court of Justice of England and Wales and (ii) other customary conditions (the “Conditions”).

The Offer is subject to termination if not completed by 11:59 pm (London time) on July 9, 2025 (or such later date (if any) as the Company and Target may agree with the consent of the United Kingdom Panel on Takeovers and Mergers and as the Court may approve (if such approval(s) is/are required)).

Subject to the satisfaction or waiver of the Conditions, it is expected that the Acquisition will be completed in May 2025.

The Acquisition

On May 8, 2025, we closed our acquisition (the “Care REIT Acquisition”) of Care REIT plc (“Care REIT” or “Target”).

In connection with this acquisition, on June 30, 2025, we also acquired substantially all of the assets of Impact Health Partners LLP, the investment manager of Care REIT (together with the Care REIT Acquisition, the “Acquisition”).

We treat these acquisitions as a single transaction as they were entered into in contemplation of one another and were intended to achieve an overall economic effect.

The Care REIT Acquisition was implemented by means of a court-sanctioned scheme of arrangement (the “Scheme”) under Part 26 of the United Kingdom Companies Act of 2006.

Under the terms of the Scheme, Care REIT stockholders received 108 pence in cash per share, totaling approximately $595.4 million.

At closing, we also assumed Care REIT’s liabilities of approximately $290.9 million.

In addition, we paid the partners of Impact Health Partners LLP approximately $6.8 million for substantially all of Impact Health Partners LLP’s assets.

Market Trends and Uncertainties

Recent macroeconomic conditions, particularly market uncertainty, declining consumer sentiment, inflation (including higher supply costs and shortages), elevated interest rates and related changes to consumer spending, has adversely impacted and could continue to adversely impact our tenants’ ability to meet some of their financial obligations to us.

Recent macroeconomic conditions, particularly market uncertainty, immigration restrictions and changes to immigration enforcement policy, changes to the U.S.

healthcare system, declining consumer sentiment, inflation (including higher supply costs and shortages), effects of global tariffs, elevated interest rates and related changes to consumer spending, has adversely impacted and could continue to adversely impact our tenants’ ability to meet some of their financial obligations to us.

Higher interest rates and market volatility have also increased our costs of capital to finance acquisitions and increased our borrowing costs.

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See “Impairment of Real Estate Assets, Assets Held for Sale and Asset Sales” below.

During the three months ended March 31, 2025, we collected 99.2% of contractual rents and interest due from our operators and borrowers excluding cash deposits.

During the three months ended June 30, 2025, we collected 99.7% of contractual rents and interest due from our operators and borrowers excluding cash deposits.

In the event our tenants or borrowers are unable to satisfy their obligations to us and we are unable to effect these actions on terms that are as favorable to us as those currently in place, our rental and interest income would be adversely impacted and we may incur additional expenses or obligations and be required to recognize additional impairment charges or fair value adjustments.

Regulatory Updates

On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act (“OBBBA”), a comprehensive budget reconciliation package reshaping federal policy across numerous sectors of the American economy, including taxation, healthcare, social safety nets, immigration, and education.

The OBBBA includes the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act of 2017 and other changes to the Internal Revenue Code of 1986, as amended (the “Code”) that affect REITs and their investors.

For instance, for taxable years beginning on or after January 1, 2026, the OBBBA modifies the REIT asset test requirement with respect to taxable REIT subsidiaries, providing that not more than 25% (previously 20%) of the gross value of a REIT’s assets may be represented by securities of one or more taxable REIT subsidiaries.

Additionally, the OBBBA permanently extends the Code Section 199A pass-through qualified business income deduction.

This allows certain individuals, trusts, and estates to continue deducting 20% of their qualified business income, including qualified REIT dividends.

The OBBBA also introduced sweeping changes to healthcare policy and funding in the U.S.

which may affect our industry in ways we cannot yet predict.

Notably, however, the bill did not include previously proposed cuts to Medicaid reimbursement rates for SNFs, which is expected to provide continued stability for many of our tenants, particularly those operating in states with high Medicaid census.

While the long-term impact of the legislation will depend on subsequent rule making and state-level implementation, we believe the bill’s passage reduces near-term reimbursement risk and supports the financial health of our operator base.

We continue to monitor regulatory developments closely and remain engaged with our tenants to assess the operational and financial implications of this and other legislative actions.

In April 2025, the Centers for Medicare and Medicaid Services (“CMS”) proposed a payment rate update to SNF reimbursements for fiscal 2026, which includes a net increase of 2.8% in Medicare Part A payments to SNFs.

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and (3) a requirement to have a registered nurse onsite 24 hours a day, seven days a week.

The rule included a staggered implementation approach for which CMS was required

to publish additional details on compliance as the implementation dates approached.

The rule included a staggered implementation approach for which CMS was required to publish additional details on compliance as the implementation dates approached.

The rule also included possible waivers and temporary hardship exemptions for select facilities;

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Recent Investments

The following table summarizes our acquisitions from January 1, 2025 through May 1, 2025 (dollars in thousands):

The following table summarizes our acquisitions from January 1, 2025 through August 6, 2025 (dollars in thousands):

Type of Property Purchase Price (1)

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$ 166,537 $ 16,100 11 973

Care Homes (5)

854,277 65,196 131 7,405

Multi-service campuses (6)

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(1) Purchase price includes capitalized acquisition costs.

(2) Initial annual cash rent represents initial cash rent for the first twelve months.

(2) Initial annual cash rent represents initial cash rent for the first twelve months, excluding inflation linked increases.

(3) The number of beds/units includes operating beds at acquisition date.

(4) Includes one SNF held through a joint venture.

(4) Includes 11 SNFs held through joint ventures.

See Note 4, Real Estate Investments, Net , and Note 13, Variable Interest Entities , for additional information.

(5) Includes one multi-service campus held through a joint venture.

The following table summarizes our other real estate related investments from January 1, 2025 through May 1, 2025 (dollars in thousands):

(5) Represents U.K.

Care Homes acquired in connection with the Acquisition.

See Note 3, Acquisitions , for additional information.

On July 31, 2025, the Company swapped 10 U.K.

Care Homes for six U.K.

Care Homes and received $2.9 million in cash before selling costs.

The amounts shown above are inclusive of this asset swap.

See Note 16, Subsequent Events , for additional information.

(6) Includes two multi-service campuses held through joint ventures.

See Note 4, Real Estate Investments, Net , Note 13, Variable Interest Entities, and Note 16, Subsequent Events , for additional information.

The following table summarizes our other real estate related investments from January 1, 2025 through August 6, 2025 (dollars in thousands):

Investment Type Investment Annual Initial Interest Income (1)

Number of Properties Number of Beds/Units (2)

Mortgage secured loans receivable $ 20,065 $ 1,789 9 1,186

Mezzanine loans receivable 6,389 842 1 148

Preferred equity 30,000 3,600 N/A N/A

Total $ 56,454 $ 6,231 10 1,334

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(2) The number of beds/units includes operating beds at the investment date.

Financing Activity

On May 30, 2025, the Operating Partnership entered into a first amendment to the Third Amended Credit Agreement (the “First Amendment to the Third Amended Credit Agreement”).

The First Amendment to the Third Amended Credit Agreement provides for an unsecured term loan facility (the “Term Loan Facility”) with term loan commitments in an aggregate principal amount of $500.0 million in addition to the Third Amended Revolving Facility.

Subsequent to June 30, 2025, we paid off the entire outstanding balance of the secured notes payable.

We also paid off and terminated the secured revolving credit facilities, which were assumed in connection with the Acquisition.

In connection with the payoff of the secured revolving credit facilities, we settled the outstanding interest rate caps.

We funded the payoffs with cash on hand and $65.0 million in net borrowings under the Third Amended Revolving Facility.

On July 10, 2025, we entered into two interest rate swaps, with a notional amount of $250.0 million each, to hedge the variable cash flows associated with the Term Loan Facility.

The interest rate swaps convert the Term Loan Facility’s Term SOFR rate to an effective fixed interest rate of 3.5%.

Our objective in using interest rate derivatives is to change variable interest rates to fixed interest rates by using interest rate swaps.

Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for us making fixed-rate payments over the term of the agreements without exchange of the underlying notional amount.

At-The-Market Offering of Common Stock

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In addition to the issuance and sale of shares of our common stock, we may also enter into one or more forward sales agreements (each, an “ATM forward contract”) with sales agents for the sale of shares of our common stock under the ATM Program.

There were no outstanding ATM forward contracts that had not settled as of March 31, 2025.

There were no outstanding ATM forward contracts that had not settled as of June 30, 2025.

In the event we enter into an ATM forward contract to sell shares of common stock pursuant to the ATM Program, we would expect to fully physically settle forward equity sales by delivery of shares of common stock to the forward purchaser and receive cash proceeds upon one or more settlement dates, which are typically a one-year term, at our discretion, prior to the final settlement date, at which time we would expect to receive aggregate net cash proceeds at settlement equal to the number of shares sold on a forward basis multiplied by the relevant forward price per share.

The weighted average forward sale price that we would expect to receive upon physical settlement would be subject to adjustment for (i) a floating interest rate factor equal to a specified daily rate less a spread, (ii) the forward purchaser’s stock borrowing costs and (iii) scheduled dividends through the settlement.

The following tables summarize the ATM Program activity for the three months ended March 31, 2025 and 2024 (in thousands, except per share amounts).

For the Three Months Ended

March 31, 2025 March 31, 2024

The following tables summarize the ATM Program activity for the three and six months ended June 30, 2025 and 2024 (in thousands, except per share amounts).

For the Three Months Ended For the Six Months Ended

June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024

Number of shares 12,055 12,145 12,608 23,745

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$ 353,907 $ 306,534 $ 369,871 $ 579,767

(1) Total gross proceeds is before $0.2 million and $3.4 million of commissions paid to the sales agents during the three months ended March 31, 2025 and 2024, respectively, under the ATM Program.

As of March 31, 2025, we had $734.0 million available for future issuances under the New ATM Program.

In April 2025, we sold 3.4 million shares for gross proceeds of $99.5 million at an average sales price per share of $28.90.

As of May 1, 2025, we had $634.5 million available for future issuances under the New ATM Program.

(1) Total gross proceeds is before $4.4 million and $3.8 million of commissions paid to the sales agents during the three months ended June 30, 2025 and 2024, respectively, under the ATM Program.

Total gross proceeds is before $4.6 million and $7.2 million of commissions paid to the sales agents during the six months ended June 30, 2025 and 2024, respectively, under the ATM Program.

As of June 30, 2025, we had $380.1 million available for future issuances under the New ATM Program.

Impairment of Real Estate Assets, Assets Held for Sale, and Asset Sales

We did not recognize any impairment charges during the three months ended March 31, 2025.

During the three months ended March 31, 2024, we recognized an impairment charge of $2.7 million related to properties held for sale, which is reported in impairment of real estate investments in the condensed consolidated income statements.

We did not recognize any impairment charges during the three and six months ended June 30, 2025.

During the three and six months ended June 30, 2024, we recognized an impairment charge of $25.7 million and $28.5 million, respectively, related to properties held for sale, which is reported in impairment of real estate investments in the condensed consolidated income statements.

Asset Sales and Held for Sale Reclassifications

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Upon designation as held for sale, we cease depreciation and record the investment at the lower of carrying value or estimated fair value less costs to sell, which could result in an impairment of the real estate investments held for sale, if necessary.

The following table summarizes our dispositions for the three months ended March 31, 2025 (dollars in thousands):

For the Three Months Ended March 31,

The following table summarizes our dispositions for the three and six months ended June 30, 2025 and 2024 (dollars in thousands):

For the Three Months Ended June 30,

For the Six Months Ended June 30,

2025 2024 2025 2024

Number of facilities (1)

Net sales proceeds (2)

$ — $ 94 $ 44,401 $ 1,140

Net carrying value — 73 40,525 1,108

Net gain on sale $ — $ 21 $ 3,876 $ 32

(1) One non-operational previously impaired facility sold during the three months ended March 31, 2025 was not classified as held for sale as of December 31, 2024.

(1) One non-operational previously impaired facility sold during the six months ended June 30, 2025 was not classified as held for sale as of December 31, 2024.

(2) Net sales proceeds for the six months ended June 30, 2024 includes $1.0 million of seller financing in connection with the sale of one ALF in January 2024.

The following table summarizes our assets held for sale activity for the period presented (dollars in thousands):

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December 31, 2024 $ 57,261 10

Additions to assets held for sale 38,430 10

Assets sold (40,525) (4)

March 31, 2025 $ 16,736 6

June 30, 2025 $ 55,166 16

Results of Operations

Three Months Ended March 31, 2025 Compared to Three Months Ended December 31, 2024:

Three Months Ended June 30, 2025 Compared to Three Months Ended March 31, 2025:

Three Months Ended Increase

(Decrease) Percentage

March 31, 2025 December 31, 2024

June 30, 2025 March 31, 2025

(dollars in thousands)

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Interest expense 13,038 6,669 6,369 96 %

Property taxes 2,065 1,946 119 6 %

Impairment of real estate investments — 5,353 (5,353) (100) %

Property taxes and insurance 2,117 2,065 52 3 %

Transaction costs 61 888 (827) (93) %

Provision for loan losses, net — 4,900 (4,900) (100) %

Property operating expenses 938 105 833 *

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Unrealized gain on other real estate related investments, net 1,968 1,287 681 53 %

Gain on foreign currency transaction 4,413 — 4,413 *

Income tax expense (1,030) — (1,030) *

Net loss attributable to noncontrolling interests (643) (609) (34) 6 %

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Three Months Ended Increase (Decrease)

(in thousands) March 31, 2025 December 31, 2024

(in thousands) June 30, 2025 March 31, 2025

Contractual cash rent $ 81,383 $ 68,500 $ 12,883

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Amortization of lease incentives (48) (49) 1

Amortization of below market leases 926 926 —

Amortization of above and below market leases 973 926 47

Total amount in rental income $ 86,033 $ 71,646 $ 14,387

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For tenants on a cash basis, this represents the lesser of the amount that would be recognized on a straight-line basis or cash that has been received.

Total contractual rent increased by $9.5 million due to a $9.1 million increase in rental income from real estate investments made after September 30, 2024, an increase of $0.7 million in tenant reimbursements, a $0.5 million increase in rental rates for our existing tenants, and an increase of $0.1 million related to the transfer of one facility to a new operator, partially offset by a $0.7 million decrease due to assets sold during the first quarter of 2025 and a $0.2 million decrease in rental income recognized related to certain tenants on a cash basis method of accounting.

Total contractual rent increased by $12.6 million due to an $11.9 million increase in rental income from real estate investments made after December 31, 2024, including properties acquired in connection with the Acquisition, a $1.1 million increase in rental rates for our existing tenants, and an increase of $0.3 million related to the transfer of five facilities to new operators, partially offset by a $0.3 million decrease due to assets sold during the first quarter of 2025, a decrease of $0.3 million in tenant reimbursements and a $0.1 million decrease in rental income recognized related to certain tenants on a cash basis method of accounting.

Straight-line rent increased by $1.8 million related to the Acquisition.

Interest income from financing receivable.

The $1.8 million increase in interest income from financing receivable was due to an investment classified as a financing receivable in December 2024.

Interest and other income.

The $1.6 million, or 7%, decrease in interest and other income was primarily due to a decrease of $1.8 million of interest earned on money market funds and escrow deposits and a decrease of $0.4 million of

interest income due to a lower number of days during the three months ended March 31, 2025 compared to the three months ended December 31, 2024, partially offset by an increase of $0.6 million of interest income on new loan investments made after September 30, 2024.

Interest income from financing receivable did not change significantly during the quarter ended June 30, 2025 compared to the quarter ended March 31, 2025.

Interest income from other real estate related investments and other income.

The $1.4 million, or 6%, increase in interest income from other real estate related investments and other income was primarily due to an increase of $1.5 million of interest earned on escrow deposits primarily related to the Acquisition, an increase of $0.4 million of interest income on new loan investments made after December 31, 2024, an increase of $0.2 million due to origination and extension fees, and an increase of $0.2 million related to the number of days in the quarter compared to the prior quarter, partially offset by a decrease of $0.7 million of interest earned on money market funds and a decrease of $0.2 million of interest income due to loans paid off after December 31, 2024.

Depreciation and amortization.

The $2.3 million, or 15%, increase in depreciation and amortization was primarily due to an increase of $2.9 million due to acquisitions and capital improvements made after September 30, 2024, partially offset by a decrease of $0.5 million due to classifying assets as held for sale after September 30, 2024 and a decrease of $0.1 million due to assets becoming fully depreciated after September 30, 2024.

The $3.4 million, or 19%, increase in depreciation and amortization was primarily due to an increase of $3.4 million due to acquisitions and capital improvements made after December 31, 2024, including related to properties acquired in connection with the Acquisition.

Interest expense.

Interest expense increased by approximately $6.4 million as detailed below:

Change in interest expense for the three months ended March 31, 2025 compared to the three months ended December 31, 2024

Change in interest expense for the three months ended June 30, 2025 compared to the three months ended March 31, 2025

(in thousands)

Increases to interest expense due to:

Increase in outstanding borrowing amount for the Revolving Facility $ 1,421

Increase due to new Term Loan Facility $ 2,412

Increase in outstanding borrowing amount for the Revolving Facility, net 2,084

Increase in outstanding borrowing due to debt assumed in the Acquisition 1,770

Other changes in interest expense 103

Total change to interest expense $ 6,369

Property taxes.

The $0.1 million, or 6%, increase in property taxes was primarily due to an increase of $0.2 million due to reassessments and increased effective tax rates, partially offset by a decrease of $0.1 million related to properties that were sold subsequent to September 30, 2024.

Impairment of real estate investments.

During the three months ended December 31, 2024, we recognized impairment charges of $5.4 million related to properties we plan to sell or repurpose or have sold.

No impairment charges were recognized during the three months ended March 31, 2025.

Property taxes and insurance.

The $0.1 million, or 3%, increase in property taxes and insurance was primarily due to an increase of $0.3 million due to acquisitions made after December 31, 2024, partially offset by a decrease of $0.2 million related to reassessments.

Transaction costs.

During the three months ended June 30, 2025, we recognized $0.1 million of non-capitalizable acquisition costs.

During the three months ended March 31, 2025, we recognized $0.9 million of unsuccessful acquisition pursuit costs that we classify as transaction costs.

During the three months ended December 31, 2024, we recognized $1.3 million of transaction costs related to the investment in a financing receivable for which we elected the fair value option.

Provision for loan losses, net.

During the three months ended December 31, 2024, we recorded a $4.9 million expected credit loss related to one other loan receivable with a principal balance of $4.9 million that has been placed on non-accrual status.

No provision for loan losses was recognized during the three months ended March 31, 2025.

Property operating expenses.

During the three months ended June 30, 2025, we recognized $0.9 million of property operating expenses related to assets we plan to sell or repurpose, re-tenant, or have sold.

During the three months ended March 31, 2025, we recognized $0.5 million of property operating expenses related to assets we plan to sell or repurpose, re-tenant, or have sold, partially offset by $0.4 million in recoveries.

During the three months ended December 31, 2024, we recognized $1.3 million of property operating expenses related to assets we plan to sell or repurpose, re-tenant, or have sold.

General and administrative expense.

General and administrative expense decreased by $0.3 million as detailed below:

General and administrative expense increased by $3.5 million as detailed below:

Three Months Ended Increase (Decrease)

(in thousands) March 31, 2025 December 31, 2024

Share-based compensation $ 3,909 $ 1,461 $ 2,448

Cash compensation 2,090 1,597 493

(in thousands) June 30, 2025 March 31, 2025

Incentive compensation $ 3,424 $ 1,225 $ 2,199

Share-based compensation 3,026 3,909 (883)

Professional services 2,453 876 1,577

Cash compensation 2,003 2,090 (87)

Taxes and insurance 470 218 252

3 unchanged sentences

During the three months ended March 31, 2025, we recorded a $3.9 million gain on sale of real estate related to the sale of three SNFs and one multi-service campus.

During the three months ended December 31, 2024, we recorded a $46,000 gain on sale of real estate related to the sale of three ALFs.

No properties were sold during the three months ended June 30, 2025.

Unrealized gain on other real estate related investments, net.

During the three months ended June 30, 2025, we recorded $2.3 million of unrealized gains on our secured and mezzanine loans receivable, partially offset by unrealized losses of

$0.3 million, to bring the interest rates in line with market rates.

During the three months ended March 31, 2025, we recorded $1.8 million of unrealized gains on our secured and mezzanine loans receivable, partially offset by unrealized losses of $0.5 million, to bring the interest rates in line with market rates.

During the three months ended December 31, 2024, we recorded $11.1 million of unrealized gains on our secured and mezzanine loans receivable, partially offset by unrealized losses of $1.4 million, primarily due to a decrease in interest rates.

Gain on foreign currency transaction.

During the three months ended June 30, 2025, we recorded a $4.4 million foreign currency gain on cash paid to Care REIT shareholders in connection with the Care REIT Acquisition.

Income tax expense.

During the three months ended June 30, 2025, we recorded a $1.0 million income tax expense related to foreign withholding taxes related to taxable income in the U.K.

Net loss attributable to noncontrolling interests.

The $0.4 million increase in net loss attributable to noncontrolling interests was due to an investment entered into subsequent to September 30, 2024.

Three Months Ended March 31, 2025 Compared to Three Months Ended March 31, 2024:

Three Months Ended Increase

Net loss attributable to noncontrolling interests did not change significantly during the quarter ended June 30, 2025 compared to the quarter ended March 31, 2025.

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

Six Months Ended Increase

(Decrease) Percentage

March 31, 2025 March 31, 2024

June 30, 2025 June 30, 2024

(dollars in thousands)

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Interest expense 19,707 16,907 2,800 17 %

Property taxes 2,065 1,801 264 15 %

Property taxes and insurance 4,182 3,777 405 11 %

Impairment of real estate investments — 28,455 (28,455) (100) %

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Unrealized gain (loss) on other real estate related investments, net 3,255 (2,489) 5,744 (231) %

Net (loss) income attributable to noncontrolling interests (609) 4 (613) *

Gain on foreign currency transaction 4,413 — 4,413 *

Income tax expense (1,030) — (1,030) *

Net loss attributable to noncontrolling interests (1,252) (336) (916) 273 %

• Not meaningful

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Rental income increased by $48.8 million as detailed below:

Three Months Ended

Six Months Ended

Increase (Decrease)

(in thousands) March 31, 2025 March 31, 2024

(in thousands) June 30, 2025 June 30, 2024

Contractual cash rent $ 149,883 $ 104,402 $ 45,481

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Amortization of lease incentives (97) (4) (93)

Amortization of below market leases 926 575 351

Amortization of above and below market leases 1,899 1,150 749

Total amount in rental income $ 157,679 $ 108,909 $ 48,770

Total contractual rent includes initial contractual cash rent and tenant operating expense reimbursements, as adjusted for applicable rental escalators and rent increases due to capital expenditures funded by the Company.

For tenants on a

cash basis, this represents the lesser of the amount that would be recognized on a straight-line basis or cash that has been received.

Total contractual rent increased by $17.8 million due to an $18.4 million increase in rental income from real estate investments made after December 31, 2023, a $1.6 million increase in rental rates for our existing tenants and a $0.8 million increase in tenant reimbursements, partially offset by a $2.3 million decrease in rental income recognized related to certain tenants on a cash basis method of accounting and a $0.7 million decrease in rental income related to dispositions made after December 31, 2023.

For tenants on a cash basis, this represents the lesser of the amount that would be recognized on a straight-line basis or cash that has been received.

Total contractual rent increased by $46.3 million due to a $46.7 million increase in rental income from real estate investments made after December 31, 2023, including properties acquired in connection with the Acquisition, a $3.3 million increase in rental rates for our existing tenants, a $0.9 million increase in tenant reimbursements, and an increase of $0.5 million related to the transfer of seven facilities to new operators, partially offset by a $3.5 million decrease in rental income recognized related to certain tenants on a cash basis method of accounting and a $1.6 million decrease in rental income related to dispositions made after December 31, 2023.

Straight-line rent increased by $1.8 million due to the Acquisition.

Interest income from financing receivable.

During the three months ended March 31, 2025, we recorded $2.8 million of interest income related to an investment classified as a financing receivable in December 2024.

During the six months ended June 30, 2025, we recorded $5.7 million of interest income related to an investment classified as a financing receivable in December 2024.

Interest income from other real estate related investments and other income.

The $12.6 million increase in interest and other income was primarily due to an increase of $13.2 million due to the origination of loans receivable after December 31, 2023 and an increase of $0.1 million due to originations of other loans, partially offset by a decrease of $0.4 million of interest income on money market funds and escrow deposits, a decrease of $0.2 million related to a partial prepayment and a $0.1 million decrease of interest income due to placing one other loan on non-accrual status.

The $22.7 million increase in interest and other income was primarily due to an increase of $24.7 million due to the origination of loans receivable after December 31, 2023, an increase of $4.7 million of interest income earned on escrow deposits and an increase of $0.2 million due to originations of other loans, partially offset by a decrease of $6.2 million of interest income on money market funds, a decrease of $0.5 million related to loan payments and a $0.2 million decrease of interest income due to placing one other loan on non-accrual status.

Depreciation and amortization.

The $4.4 million, or 33%, increase in depreciation and amortization was primarily due to an increase of $5.9 million related to acquisitions and capital improvements made after December 31, 2023, partially offset by a decrease of $0.9 million due to classifying assets as held for sale after December 31, 2023 and a decrease of $0.6 million due to assets becoming fully depreciated after December 31, 2023.

The $11.7 million, or 43%, increase in depreciation and amortization was primarily due to an increase of $14.6 million related to acquisitions and capital improvements made after December 31, 2023, partially offset by a decrease of $1.9 million due to classifying assets as held for sale after December 31, 2023, a decrease of $0.9 million due to assets becoming fully depreciated after December 31, 2023 and a decrease of $0.1 million due to the impairment of assets after December 31, 2023.

Interest expense.

Interest expense decreased by $1.6 million as detailed below:

Change in interest expense for the three months ended March 31, 2025 compared to the three months ended March 31, 2024

Interest expense increased by $2.8 million as detailed below:

Change in interest expense for the six months ended June 30, 2025 compared to the six months ended June 30, 2024

(in thousands)

Decreases to interest expense due to:

Decrease due to prepayment of Term Loan $ (3,558)

Total decreases to interest expense (3,558)

Increases to interest expense due to:

Increase in outstanding borrowing amount for the Revolving Facility $ 5,410

Increase due to new Term Loan Facility 2,412

Increase due to assumption of debt in connection with the Acquisition 1,770

Other changes in interest expense (1)

Total increases to interest expense 10,301

Decreases to interest expense due to:

Decrease due to prepayment of a prior term loan (7,005)

Other changes in interest expense (1)

Total decreases to interest expense (7,501)

Total change in interest expense $ 2,800

Property taxes.

The $0.3 million, or 15%, increase in property taxes was due to a $0.5 million increase related to acquisitions made after December 31, 2023, partially offset by a decrease of $0.1 million due to reassessments and a decrease of $0.1 million related to properties that were sold subsequent to December 31, 2023.

(1) Other changes in interest expense generally relate to changes to loan fee amortization.

Property taxes and insurance.

The $0.4 million, or 11%, increase in property taxes was due to a $1.0 million increase related to acquisitions made after December 31, 2023, partially offset by a decrease of $0.5 million due to reassessments and a decrease of $0.1 million due to the sale of three properties after December 31, 2023.

Impairment of real estate investments.

During the three months ended March 31, 2024, we recognized impairment charges of $2.7 million related to properties classified as held for sale.

We did not recognize any impairment charges during the three months ended March 31, 2025.

During the six months ended June 30, 2024, we recognized impairment charges of $28.5 million related to properties classified as held for sale.

We did not recognize any impairment charges during the six months ended June 30, 2025.

Transaction costs.

During the three months ended March 31, 2025, we recognized $0.9 million of unsuccessful acquisition pursuit costs that we classify as transaction costs.

We did not recognize any transaction costs during the three months ended March 31, 2024.

During the six months ended June 30, 2025, we recognized $0.9 million of transaction costs primarily related to unsuccessful acquisition pursuit costs that we classify as transaction costs.

We did not recognize any transaction costs during the six months ended June 30, 2024.

Property operating expenses.

During the three months ended March 31, 2024, we recognized $0.7 million of property operating expenses related to assets we plan to sell or repurpose, re-tenant or have sold.

During the six months ended June 30, 2025, we recognized $1.4 million of property operating expenses related to assets we plan to sell or repurpose, re-tenant, or have sold, partially offset by $0.4 million in recoveries.

During the six months ended June 30, 2024, we recognized $0.9 million of property operating expenses related to assets we plan to sell or repurpose, re-tenant or have sold.

General and administrative expense.

General and administrative expense increased by $8.6 million as detailed below:

Three Months Ended

Six Months Ended

Increase/(Decrease)

(in thousands) March 31, 2025 March 31, 2024

(in thousands) June 30, 2025 June 30, 2024

Share-based compensation $ 6,935 $ 3,526 $ 3,409

Cash compensation 2,090 1,765 325

Incentive compensation 4,649 3,000 1,649

Cash compensation 4,093 3,307 786

Professional services 3,329 1,366 1,963

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Gain on sale of real estate, net.

During the three months ended March 31, 2025, we recorded a $3.9 million gain on sale of real estate related to the sale of three SNFs and one multi-service campus.

During the three months ended March 31, 2024, we recorded an $11,000 gain on sale of real estate, net related to the sale of one SNF and one ALF.

During the six months ended June 30, 2025, we recorded a $3.9 million gain on sale of real estate related to the sale of three SNFs and one multi-service campus.

During the six months ended June 30, 2024, we recorded a $32,000 gain on sale of real estate, net related to the sale of two SNFs and one ALF.

Unrealized gain (loss) on other real estate related investments, net.

During the three months ended March 31, 2024, we recorded a $0.8 million unrealized loss on our secured and mezzanine loans receivable due to an increase in interest rates, partially offset by unrealized gains of $0.2 million due to an increase in expected cash flows on floating rate loans.

Net loss (income) attributable to noncontrolling interests.

The $0.6 million increase in net loss attributable to noncontrolling interests was due to an investment entered into subsequent to December 31, 2023.

During the six months ended June 30, 2025, we recorded $4.1 million of unrealized gains on our secured and mezzanine loans receivable, partially offset by unrealized losses of $0.8 million, to bring the interest rates in line with market rates.

During the six months ended June 30, 2024, we recorded a $3.2

million unrealized loss on our secured and mezzanine loans receivable due to an increase in interest rates, partially offset by unrealized gains of $0.7 million due to an increase in expected cash flows on floating rate loans due to an increase in projected forward interest rates.

Gain on foreign currency transaction.

During the six months ended June 30, 2025, we recorded a $4.4 million foreign currency gain on cash paid to Care REIT shareholders in connection with the Care REIT Acquisition.

Income tax expense.

During the six months ended June 30, 2025, we recorded a $1.0 million income tax expense related to foreign withholding taxes related to taxable income in the U.K.

Net loss attributable to noncontrolling interests.

The $0.9 million increase in net loss attributable to noncontrolling interests was primarily due to investments entered into subsequent to December 31, 2023.

Liquidity and Capital Resources

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• capital expenditures for improvements to our properties.

In addition, in connection with our planned acquisition of Care REIT plc, we expect to pay an aggregate of approximately $597 million in cash to the Target shareholders, other than any Sanctions Disqualified Shareholders (as defined in the Rule 2.7 Announcement).

We have deposited $606.0 million in an escrow account to be used to satisfy the purchase consideration in connection with planned acquisition, which is classified as restricted cash on our condensed consolidated balance sheet as of March 31, 2025.

In connection with the planned acquisition, we would also assume Target’s net debt of approximately $259 million .

Our long-term liquidity needs consist primarily of funds necessary to pay for acquisitions and other investments (including mortgage and mezzanine loan originations), capital expenditures, and scheduled debt maturities.

We intend to invest in and/or develop additional healthcare and seniors housing properties as suitable opportunities arise and so long as adequate sources of financing are available.

We expect that future investments in and/or development of properties, including any improvements or renovations of current or newly-acquired properties, will depend on and will be financed by, in whole or in part, our existing cash, borrowings available to us under the Third Amended Credit Facility (as defined below), future borrowings or the proceeds from sales of shares of our common stock pursuant to our ATM Program or additional issuances of common stock or other securities.

We expect that future investments in and/or development of properties, including any improvements or renovations of current or newly-acquired properties, will depend on and will be financed by, in whole or in part, our existing cash, borrowings available to us un der the Third Amended Revolving Facility (as defined below), future borrowings or the proceeds from sales of shares of our common stock pursuant to our ATM Program or additional issuances of common stock or other securities.

In addition, we may seek financing from U.S.

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Department of Housing and Urban Development, in appropriate circumstances in connection with acquisitions and refinancing of existing mortgage loans.

We believe that our expected operating cash flow from rent collections and interest payments on our other real estate related investments, together with our cash balance, available borrowing capacity under the Third Amended Revolving Facility (as defined below) and availability under the ATM Program will be sufficient to meet ongoing debt service requirements, dividend plans, operating lease obligations, capital expenditures, working capital requirements, the financing of our planned acquisition of Care REIT plc and other needs for at least the next 12 months.

We expect to meet our long-term liquidity needs with cash flows from operations and financing arrangements.

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Although we are subject to restrictions on our ability to incur indebtedness, we expect that we will be able to refinance existing indebtedness or incur additional indebtedness for acquisitions or other purposes, if needed.

However, there can be no assurance that we will be able to refinance our indebtedness, incur additional indebtedness or access additional sources of capital, such as by issuing common stock or other debt or equity securities, on terms that are acceptable to us or at all.

As of March 31, 2025, we are in compliance with all debt covenants on our outstanding indebtedness.

However, there can be no

assurance that we will be able to refinance our indebtedness, incur additional indebtedness or access additional sources of capital, such as by issuing common stock or other debt or equity securities, on terms that are acceptable to us or at all.

As of June 30, 2025, we are in compliance with all debt covenants on our outstanding indebtedness.

The following table presents selected data from our condensed consolidated statements of cash flows for the periods presented (dollars in thousands):

For the Three Months Ended March 31,

For the Six Months Ended June 30,

Net cash provided by operating activities $ 172,157 $ 101,795

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Net cash provided by financing activities 745,059 567,528

Net increase in cash, cash equivalents and restricted cash 418,688 156,725

Cash, cash equivalents and restricted cash as of the beginning of period 213,822 294,448

Cash, cash equivalents and restricted cash as of the end of period $ 632,510 $ 451,173

Net cash provided by operating activities increased for the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

Effect of foreign currency translation 319 —

Net increase in cash and cash equivalents 92,229 200,686

Cash and cash equivalents as of the beginning of period 213,822 294,448

Cash and cash equivalents as of the end of period $ 306,051 $ 495,134

Net cash provided by operating activities increased for the six months ended June 30, 2025 compared to the six months ended June 30, 2024.

Operating cash inflows are derived primarily from the rental payments received under our lease agreements and interest income received on our other real estate related investments, including as a result of new investments.

Operating cash outflows consist primarily of interest expense on our borrowings and general and administrative expenses.

The net increase of $22.6 million in cash provided by operating activities for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 is primarily due to an increase in rental income received, an increase in interest income received on our other real estate related investments, and a decrease in cash paid for interest expense, partially offset by an increase in cash paid for general and administrative expense.

Cash used in investing activities for the three months ended March 31, 2025 was primarily comprised of $82.6 million in acquisitions of real estate, investment in real estate related investments and escrow deposits for potential acquisitions of real estate and $2.3 million of purchases of equipment, furniture and fixtures and improvements to real estate, partially offset by $44.4 million in net proceeds from the sale of real estate and $4.6 million in principal payments received from our other real estate related investments and other loans receivable.

Cash used in investing activities for the three months ended March 31, 2024 was primarily comprised of $122.9 million in acquisitions of real estate, investment in real estate related investments and other loans receivable and escrow deposits for potential acquisitions of real estate and $0.4 million of purchases of equipment, furniture and fixtures and improvements to real estate.

Our cash flows provided by financing activities for the three months ended March 31, 2025 were primarily comprised of $425.0 million in borrowings under our Third Amended Revolving Facility (as defined below), $15.5 million in net proceeds from the issuance of common stock and $1.4 million in contributions from noncontrolling interests, partially offset by $54.4 million in dividends paid, a $3.3 million net settlement adjustment on restricted stock, $0.9 million in distributions to noncontrolling interests, and a $0.1 million payment of deferred financing costs.

Our cash flows provided by financing activities for the three months ended March 31, 2024 were primarily comprised of $269.8 million in net proceeds from the issuance of common stock and $0.4 million in contributions from noncontrolling interests, partially offset by $36.5 million in dividends paid and a $2.5 million net settlement adjustment on restricted stock.

The net increase of $70.4 million in cash provided by operating activities for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 is primarily due to an increase in rental income received, an increase in interest income received on our other real estate related investments, and a decrease in cash paid for interest expense, partially offset by an increase in cash paid for general and administrative expense.

Cash used in investing activities for the six months ended June 30, 2025 was primarily comprised of $842.8 million in acquisitions of real estate, investment in real estate related investments and other loans receivable and escrow deposits for potential acquisitions of real estate, $30.0 million in preferred equity investments and $6.8 million of purchases of equipment, furniture and fixtures and improvements to real estate, partially offset by $44.4 million in net proceeds from the sale of real estate and $9.9 million in principal payments received from our other real estate related investments and other loans receivable.

Cash used in investing activities for the six months ended June 30, 2024 was primarily comprised of $458.5 million in acquisitions of real estate, investment in real estate related investments and other loans receivable and escrow deposits for potential acquisitions of real estate, $9.0 million in preferred equity investments and $1.3 million of purchases of equipment, furniture and fixtures and improvements to real estate.

Our cash flows provided by financing activities for the six months ended June 30, 2025 were primarily comprised of $500.0 million in net borrowings under our Third Amended Revolving Facility (as defined below), $365.3 million in net proceeds from the issuance of common stock and $6.9 million in contributions from noncontrolling interests, partially offset by $117.4 million in dividends paid, a $4.2 million payment of deferred financing costs, a $3.3 million net settlement adjustment on restricted stock and $2.2 million in distributions to noncontrolling interests.

Our cash flows provided by financing activities for the six months ended June 30, 2024 were primarily comprised of $572.2 million in net proceeds from the issuance of common stock, $75.0 million in proceeds from a secured borrowing and $0.6 million in contributions from noncontrolling interests, partially offset by $77.7 million in dividends paid and a $2.5 million net settlement adjustment on restricted stock.

Material Cash Requirements

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The Notes accrue interest at a rate of 3.875% per annum payable semiannually in arrears on June 30 and December 30 of each year, commencing on December 30, 2021.

The obligations under the Notes are guaranteed, jointly and severally, on an unsecured basis, by us and all of our subsidiaries (other than the Issuers) that guarantee obligations under the Amended Credit Facility (as defined below).

As of March 31, 2025, we were in compliance with all applicable financial covenants under the indenture governing the Notes.

As of June 30, 2025, we were in compliance with all applicable financial covenants under the indenture governing the Notes.

See Note 8, Debt, to our condensed consolidated financial statements included in this report for further information about the Notes.

1 unchanged sentence

On December 16, 2022, we, together with certain of our subsidiaries, entered into a second amended and restated credit and guaranty agreement with KeyBank National Association, as administrative agent, an issuing bank and swingline lender (as amended from time to time, the “Second Amended Credit Agreement”).

The Operating Partnership is the borrower under the Second Amended Credit Agreement, and the obligations thereunder are guaranteed, jointly and severally, on an unsecured basis, by us and substantially all of our subsidiaries.

The Second Amended Credit Agreement, which amends and restates our amended and restated credit and guaranty agreement, dated as of February 8, 2019 (as amended, the “Prior Credit Agreement”) provided for:

The Operating Partnership was the borrower under the Second Amended Credit Agreement, and the obligations thereunder were guaranteed, jointly and severally, on an unsecured basis, by us and substantially all of our subsidiaries.

The Second Amended Credit Agreement, which amended and restated our amended and restated credit and guaranty agreement, dated as of February 8, 2019 (as amended, the “Prior Credit Agreement”) provided for:

(i) an unsecured revolving credit facility (the “Revolving Facility”) with revolving commitments in an aggregate principal amount of $600.0 million, including a letter of credit subfacility for 10% of the then available revolving commitments and a swingline loan subfacility for 10% of the then available revolving commitments and (ii) the continuation of the unsecured term loan credit facility which was previously extended under the Prior Credit Agreement (the “Term Loan” and together with the Revolving Facility, the “Second Amended Credit Facility”) in an aggregate principal amount of $200.0 million.

Future borrowings under the Second Amended Credit Facility will be used for working capital purposes, for capital expenditures, to fund acquisitions and for general corporate purposes.

On October 10, 2023, we entered into the First Amendment to the Second Amended Credit Agreement with KeyBank National Association (the “First Amendment”).

The First Amendment restates the definition of Consolidated Total Asset Value to include net proceeds from at-the-market forward commitments executed but not yet closed as of the relevant date as if such proceeds had actually been received.

On October 10, 2023, we entered into the First Amendment to the Second Amended Credit Agreement with KeyBank National Association (the “First Amendment to the Second Amended Credit Agreement”).

The First Amendment to the Second Amended Credit Agreement restated the definition of Consolidated Total Asset Value to include net proceeds from at-the-market forward commitments executed but not yet closed as of the relevant date as if such proceeds had actually been received.

On December 18, 2024, we, together with certain of our subsidiaries, entered into a third amended and restated credit and guaranty agreement with KeyBank National Association, as administrative agent, an issuing bank and swingline lender, and the lenders party thereto (as amended from time to time, the “Third Amended Credit Agreement”).

1 unchanged sentence

Future borrowings under the Third Amended Revolving Facility will be used for working capital purposes, for capital expenditures, to fund acquisitions and for general corporate purposes.

The Third Amended Credit Agreement also provides that, subject to customary conditions, including obtaining lender commitments and pro forma compliance with financial maintenance covenants under the Third Amended Credit Agreement, the Operating Partnership may seek to increase the aggregate principal amount of the revolving commitments and/or establish one or more new tranches of term loans under the Third Amended Credit Facility in an aggregate amount not to exceed $800.0 million.

As of March 31, 2025, we had borrowings outstanding of $425.0 million under the Third Amended Revolving Facility.

The Revolving Facility has a maturity date of February 9, 2029, and includes, at our sole discretion, two six-month extension options.

The interest rates applicable to loans under the Third Amended Revolving Facility are, at the Operating Partnership’s option, equal to either a base rate plus a margin ranging from 0.05% to 0.55% per annum or Adjusted Term SOFR or Adjusted Daily Simple SOFR (each as defined in the Third Amended Credit Agreement) plus a margin ranging from 1.05% to 1.55% per annum based on the debt to asset value ratio of the Company and our consolidated subsidiaries (subject to decrease at the Operating Partnership’s election if we obtain certain specified investment grade ratings on our senior long-term unsecured debt).

The Third Amended Credit Agreement also provides that, subject to customary conditions, including obtaining lender commitments and pro forma compliance with financial maintenance covenants under the Third Amended Credit Agreement, the Operating Partnership may seek to increase the aggregate principal amount of the revolving commitments and/or establish one or more new tranches of term loans under the Third Amended Revolving Facility in an aggregate amount not to exceed $800.0 million.

On May 30, 2025, we entered into the First Amendment to the Third Amended Credit Agreement.

As of June 30, 2025, we had $500.0 million of borrowings outstanding under the Term Loan Facility and no borrowings outstanding under the Third Amended Revolving Facility.

The Third Amended Revolving Facility has a maturity date of February 9, 2029, and includes, at our sole discretion, two six-month extension options.

The Term Loan Facility has a maturity date of May 30, 2030.

The interest rates applicable to loans under the Third Amended Revolving Facility are, at the Operating Partnership’s option, equal to either a base rate plus a margin ranging from 0.05% to 0.55% per annum or Term SOFR or Daily Simple SOFR (each as defined in the Third Amended Credit Agreement) plus a margin ranging from 1.05% to 1.55% per annum based on the debt to asset value ratio of the Company and our consolidated subsidiaries (subject to decrease at the Operating Partnership’s election if we obtain certain specified investment grade ratings on our senior long-term unsecured debt).

In addition, the Operating Partnership will pay a facility fee on the revolving commitments under the Third Amended Revolving Facility ranging from 0.15% to 0.35% per annum, based on the debt to asset value ratio of the Company and our consolidated subsidiaries (unless we obtain certain specified investment grade ratings on our senior long-term unsecured debt and the Operating Partnership elects to decrease the applicable margin as described above, in which case the Operating Partnership will pay a facility fee on the revolving commitments ranging from 0.125% to 0.30% per annum based off the credit ratings of the Company’s senior long-term unsecured debt).

As of March 31, 2025, we were in compliance with all applicable financial covenants under the Third Amended Credit Agreement.

The interest rates applicable to loans under the Term Loan Facility are, at the Operating Partnership’s option, equal to either a base rate plus a margin ranging from 0.10% to 0.80% per annum or Term SOFR or Daily Simple SOFR (each as defined in the Third Amended Credit Agreement) plus a margin ranging from 1.10% to 1.80% per annum based on the debt to asset value ratio of the Company and our consolidated subsidiaries (subject to decrease at the Operating Partnership’s election if we obtain certain specified investment grade ratings on our senior long-term unsecured debt).

The First Amendment to the Third Amended Credit Agreement also removed the SOFR credit spread adjustment applicable to loans under the Third Amended Revolving Facility bearing interest at Term SOFR or Daily Simple SOFR.

As of June 30, 2025, we were in compliance with all applicable financial covenants under the Third Amended Credit Agreement.

See Note 8, Debt, to our condensed consolidated financial statements included in this report for further information about the Third Amended Credit Agreement.

Debt assumed in connection with the Acquisition

On May 8, 2025, we closed the Care REIT Acquisition, by means of a court-sanctioned scheme of arrangement under Part 26 of the United Kingdom Companies Act of 2006, and assumed Care REIT’s liabilities of approximately $290.9 million.

The borrowings included three secured revolving credit facilities totaling an aggregate principal amount of approximately $240 million, of which approximately $159 million of borrowings was outstanding as of June 30, 2025.

The secured revolving credit facilities had maturity dates ranging between April 2026 and December 2029.

The borrowings also included approximately $51 million aggregate principal amount of 2.93% secured notes payable due December 2035 and approximately $52 million aggregate principal amount of 3.00% secured notes payable due June 2035.

On July 8, 2025, the secured notes payable were fully paid off.

In addition, on July 31, 2025, the secured revolving credit facilities were fully paid off and related outstanding interest rate caps were settled.

See Note 8, Debt , and Note 16, Subsequent Events , to our condensed consolidated financial statements included in this report for further information about the debt assumed in connection with the Acquisition and our repayment of this indebtedness.

As of June 30, 2025, we were in compliance with all applicable financial covenants under the borrowings assumed from the Acquisition.

Commitments and Contingencies

As of March 31, 2025, we had committed to fund expansions, construction, capital improvements and ESG incentives, which provides eligible triple-net tenants with monetary inducements to make sustainable improvements to our properties, at certain triple-net leased facilities totaling $7.2 million, of which $6.3 million is subject to rent increase at the time of funding.

As of June 30, 2025, we had committed to fund expansions, construction, capital improvements and ESG incentives, which provides eligible triple-net tenants with monetary inducements to make sustainable improvements to our properties, at certain triple-net leased facilities totaling $9.9 million, of which $8.4 million is subject to rent increase at the time of funding.

We expect to fund the capital expenditures in the next one to two years.

As of March 31, 2025, we have non-real estate secured loan commitments of $12.2 million.

We are also party to a purchase and sale agreement which provides for an earn-out obligation of up to $10.0 million for one SNF in Virginia which was acquired during 2024.

The earn-out is available, contingent on the operator achieving certain thresholds per the agreement, beginning in October 2025 through October 2026.

In addition, one mortgage loan includes an earn-out advance of $9.0 million upon satisfaction of certain conditions.

As of June 30, 2025, we have mortgage loan commitments of $8.7 million and non-real estate secured loan commitments of $11.9 million.

As of June 30, 2025, we have earn-out commitments of $10.8 million, $10.0 million of which are related to a purchase and sale agreement which provides for an earn-out obligation for one SNF in Virginia that was acquired during 2024.

The $10.0 million earn-out is available, contingent on the operator achieving certain thresholds per the agreement, beginning in October 2025 through October 2026.

See Note 14, Commitments and Contingencies, to our condensed consolidated financial statements included in this report for further information.

1 unchanged sentence

We are required to pay dividends in order to maintain our REIT status and we expect to make quarterly dividend payments in cash with the annual dividend amount no less than 90% of our annual REIT taxable income, determined without regard to the dividends paid deduction and excluding any net capital gains.

See Note 8, Equity, to our condensed consolidated financial statements included in this report for a summary of the cash dividends per share of our common stock declared by our board of directors for the three months ended March 31, 2025 .

See Note 9, Equity and Redeemable Noncontrolling Interests, to our condensed consolidated financial statements included in this report for a summary of the cash dividends per share of our common stock declared by our board of directors for the three months ended June 30, 2025 .

Critical Accounting Policies and Estimates

5 unchanged sentences

Please refer to “Critical Accounting Policies and Estimates” in the “Management’s Discussion and Analysis of Financial Condition and Results of Ope rations” section of our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 12, 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 Quarterly Report on Form 10-Q.

There have been no material changes in such critical accounting policies during the three months ended March 31, 2025.

There have been no material changes in such critical accounting policies during the six months ended June 30, 2025.

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.

What changed 10-Q

Item 2. Management’s Discussion and Analysis