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Item 7. Management’s Discussion and Analysis

2026-02-12 compared with 2025-02-12 · 221 added, 148 removed, 228 unchanged (62% of the section changed)

9 unchanged sentences

• Impact of Inflation

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 December 31, 2024, we owned, directly or indirectly in consolidated joint ventures, and leased to independent operators 258 skilled nursing facilities (“SNFs”), multi-service campuses, assisted living facilities (“ALFs”) and independent living facilities (“ILFs”), consisting of 28,088 operational beds and units located in 32 states with the highest concentration of properties by rental income located in California and Texas.

As of December 31, 2024, 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 $795.2 million and one financing receivable with a carrying value of $96.0 million.

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

As of December 31, 2025, CareTrust REIT owned, directly or indirectly in consolidated joint ventures, and leased to independent operators, 407 skilled nursing facilities, senior housing communities and other properties consisting of 37,628 operational beds and units located in 32 states and the United Kingdom (the “U.K.”) with the highest concentration of properties by rental income located in California, the U.K., Texas, and Tennessee.

As of December 31, 2025, we also had other real estate related investments consisting of four preferred equity investments, 16 real estate secured loans receivable and five mezzanine loans receivable with a carrying value of $899.3 million and one financing receivable with a carrying value of $92.2 million.

During the fourth quarter of 2025, we began utilizing the structure authorized by the REIT Investment Diversification and Empowerment Act of 2007 (commonly referred to as “RIDEA”) as permitted by the Housing and Economic Recovery Act of 2008 in connection with the establishment of a senior housing operating platform (“SHOP”) and completed our first SHOP acquisition in December 2025.

As of December 31, 2025, CareTrust REIT also owned, indirectly in consolidated joint ventures, the properties and operations of three senior housing communities consisting of 270 units in Texas that are operated on our behalf by independent managers pursuant to the terms of separate management agreements under our SHOP platform.

Recent Developments

SHOP Communities

During the fourth quarter of 2025, we began utilizing the RIDEA structure and established a SHOP platform through the acquisition of three senior housing communities.

The Acquisition

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

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 inflation (including higher supply costs), elevated interest rates and related changes to consumer spending, including, but not limited to, causing individuals to delay or defer moves to seniors housing, has adversely impacted and could continue to adversely impact our tenants’ ability to meet some of their financial obligations to us.

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

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

healthcare system, shutdown of the federal government, 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.

We continue to monitor changes in the interest rate environment and the effect of changing rates on our business.

In addition, current macroeconomic conditions and the resulting market volatility may adversely impact our ability to sell properties on acceptable terms, if at all, which could result in additional impairment charges.

As a result of the above factors, our tenants are continuing to experience elevated operating costs at their facilities.

At a portfolio wide level, occupancy levels at our seniors housing facilities, comprising our ALFs and ILFs, continue to remain below occupancy levels at the onset of the COVID-19 pandemic.

Within our SNFs, occupancy levels have continued to improve since their trough in January 2021 and have reached or exceeded occupancy levels prior to the onset of the COVID-19 pandemic, for most of our tenants.

As a result of impacts experienced by our operators since the onset of the COVID-19 pandemic and due to recent market trends and uncertainties, the ability of some of our tenants and borrowers to meet their financial obligations to us in full has been negatively impacted.

As a result of impacts experienced by our operators due to recent market trends and uncertainties, the ability of some of our tenants and borrowers to meet their financial obligations to us in full may be negatively impacted.

From time to time in the past, we have taken actions to reposition one or more properties with a replacement tenant or sell the property and, in certain cases, we have also restructured tenants’ long-term obligations.

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

During the three and twelve months ended December 31, 2024, we collected 98.8% and 98.5% of contractual rents and interest due from our tenants and borrowers excluding cash deposits, respectively.

would be adversely impacted and we may incur additional expenses or obligations and be required to recognize additional impairment charges or fair value adjustments.

For more information regarding the potential impact of public health crises, including COVID-19, and macroeconomic conditions on our business, see “Risk Factors” in Item 1A of this report.

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

During the three months and year ended December 31, 2025, we collected 100% and 99.7% of contractual rents and interest due from our operators and borrowers exclusive of properties held-for-sale and sold during the period, respectively.

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

During the third quarter of 2025, both Idaho and North Carolina announced Medicaid reimbursement rate reductions that could adversely impact the operations of our tenants and borrowers at our SNFs located in those states.

In Idaho, the Department of Health and Welfare enacted a 4% across-the-board rate cut in response to an $80 million budget shortfall.

Effective December 10, 2025, North Carolina reversed the Medicaid reimbursement reductions and restored rates to September 30, 2025 levels.

On July 4, 2025, President Trump signed the One Big Beautiful Bill Act of July 2025 (“OBBBA”) into law.

This comprehensive budget reconciliation package reshapes 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 and borrowers, particularly those operating in states with high Medicaid census.

The Centers for Medicare and Medicaid Services (“CMS”) issued a final rule on July 31, 2024, updating Medicare payment policies and rates for SNFs for fiscal year 2025.

This update included a 4.2% increase in Medicare Part A payments to SNFs, totaling approximately $1.4 billion.

These increases partially offset some of our tenants’ and borrowers’ higher operating costs.

Further, in this final rule, CMS expanded its ability to impose penalties on SNFs for health and safety deficiencies/non-compliance by allowing for more per instance and per day civil monetary penalties to be imposed for such health and safety deficiencies/non-compliance, as appropriate.

CMS issued a final rule on July 31, 2025, updating Medicare payment policies and rates for SNFs for fiscal year 2026.

This update provides for a net increase of 3.2% in Medicare Part A payments to SNFs.

This increase is expected to partially offset some of our tenants’ and borrowers’ higher operating costs.

On April 22, 2024, CMS issued a final rule intended to establish comprehensive minimum staffing requirements for nursing homes.

However, the rule was vacated by a federal court in Texas in April 2025.

Subsequently, the OBBBA, enacted

on July 4, 2025, imposed a legislative moratorium on the rule, effective until September 30, 2034.

Further, in December 2025, HHS announced that it formally repealed these minimum staffing requirements.

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

On October 13, 2023, California Senate Bill No.

525 (“SB 525”) was signed into law, requiring a substantial increase in the minimum wage for workers operating in certain health care facilities.

As a result of SB 525, certain health care facilities (including licensed skilled nursing facilities) operating in California are required to increase the wages of their covered health care employees to at least $21 per hour, which was initially required to be effective from June 1, 2024 to May 31, 2026, $22 or $23 per hour (depending on facility type) from June 1, 2026 to May 31, 2028, and $25 per hour after June 1, 2028.

As a result of SB 525, certain health care facilities (including licensed skilled nursing facilities) operating in California are required to increase the wages of their covered health care employees to at least $21 per hour, which was initially required to be effective from June 1, 2024 to May 31, 2026, $22 or $23 per hour (depending on property type) from June 1, 2026 to May 31, 2028, and $25 per hour after June 1, 2028.

After the initial implementation was delayed by the Governor of California in June 2024, SB 525 went into effect on October 16, 2024.

The Centers for Medicare and Medicaid Services (“CMS”) issued a final rule on July 31, 2024, updating Medicare payment policies and rates for SNFs for fiscal year 2025.

This update includes a 4.2% increase in Medicare Part A payments to SNFs, totaling approximately $1.4 billion.

These increases are expected to partially offset some of our tenants’ higher operating costs.

On April 22, 2024, CMS issued a final rule regarding minimum staffing requirements and increased inspections at nursing homes in order to establish comprehensive nurse staffing requirements.

The rule consists of three core staffing requirements:

(1) overall minimum standard of 3.48 total nurse staff hours per resident day;

(2) minimum nurse staffing standards of 0.55 hours per resident day for registered nurses and 2.45 hours of care from a certified nurse’s aid per resident per day;

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

The rule includes a staggered implementation approach for which CMS will publish additional details on compliance as the implementation dates approach.

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

however, no funding for the additional staff will be provided.

We are currently evaluating the impact of the rule, but believe the unfunded mandate to increase staff may have a material and adverse impact on the financial condition of our tenants.

Recent Investments

The following table summarizes the Company’s acquisitions from January 1, 2024 through February 12, 2025 (dollars in thousands):

The following table summarizes our acquisitions from January 1, 2025 through December 31, 2025 (dollars in thousands):

Type of Property Purchase Price (1)

1 unchanged sentence

Number of Properties Number of Beds/Units (3)

Skilled nursing (4)

$ 732,919 $ 67,924 43 4,632

Multi-service campuses (4)

Skilled nursing triple-net (4)

$ 616,521 $ 53,988 27 3,214

Assisted living (4)

Senior housing triple-net (5)

908,507 69,506 135 7,822

1 unchanged sentence

(1) Purchase price includes capitalized acquisition costs.

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

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

(4) Includes facilities held in consolidated joint ventures.

(2) Initial annual cash rent represents initial annual cash rent for the first 12 months.

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

(4) Includes properties held in consolidated joint ventures.

See Note 4, Real Estate Investments, Net , and Note 15, Variable Interest Entities , for additional information.

The following table summarizes our financing receivable investment from January 1, 2024 through February 12, 2025 (dollars in thousands):

Investment Type Investment (1)

Initial Annual Interest Income (2)

Number of Properties Number of Beds/Units (3)

Financing receivable $ 95,723 $ 11,560 46 3,820

Total $ 95,723 $ 11,560 46 3,820

(1) Investment does not include transaction costs given they were expensed during the year ended December 31, 2024 as a result of our election to use the fair value option.

(2) Represents annualized investment-date interest income.

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

The following table summarizes other real estate related investments by the Company from January 1, 2024 through February 12, 2025 (dollars in thousands):

Investment Type (1)

Investment Initial Annual Interest Income (2)

(5) Includes U.K.

Care Homes acquired in connection with the Acquisition.

See Note 3, Acquisitions , for additional information.

On July 31, 2025, we swapped 10 U.K.

Care Homes for six U.K.

Care Homes and received £2.2 million in cash before selling costs.

The amounts shown above are inclusive of this asset swap.

See Note 5, Impairment of Real Estate Investments, Assets Held for Sale and Asset Sales , for additional information.

On December 1, 2025, the Company purchased three senior housing communities for $40.3 million via JVs, which includes capitalized acquisition costs.

In exchange, the Company holds approximately 98% of the equity interest in the JVs.

The JV partner contributed the remaining $0.9 million of the total investment in exchange for approximately 2% of the equity interest in the JVs.

The three senior housing communities are operated by a third party manager under the SHOP platform.

The following table summarizes our other real estate related investments from January 1, 2025 through December 31, 2025 (dollars in thousands):

Investment Type Investment Initial Annual Interest Income (1)

Number of Properties Number of Beds/Units (2)

3 unchanged sentences

Total $ 160,857 $ 15,893 33 4,016

(1) Table excludes a $1.0 million mortgage loan originated in connection with the sale of one ALF during the period presented.

(1) Represents annualized acquisition-date interest income, less subservicing fees, if applicable.

2 unchanged sentences

Financing Activities

On December 18, 2024, we amended and restated our Second Amended Credit Agreement (as defined under “― Liquidity and Capital Resources ― Material Cash Requirements” below).

See Note 7, Debt , for additional information.

On September 19, 2024, we prepaid in full the $200.0 million aggregate principal amount outstanding under the Term Loan (as defined under “― Liquidity and Capital Resources ― Material Cash Requirements” below).

See Note 7, Debt , for additional information.

On June 3, 2024, KeyBank National Association purchased a $75.0 million undivided participation interest in a $165.0 million mortgage loan from us (see Note 5, Other Real Estate Related and Other Investments , for additional information).

On July 30, 2024, we exercised the call option on the $75.0 million secured borrowing.

See Note 7, Debt , for additional information.

In July 2025, we paid off the entire outstanding balance of the secured notes payable and paid off and terminated the secured revolving credit facilities, which were each assumed in connection with the Acquisition.

In connection with the payoff of the secured revolving credit facilities, we terminated 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 (as defined below).

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 (as defined below).

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.

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.

Public Offering of Common Stock

On November 1, 2024, we completed an underwritten public offering of 15.9 million newly issued shares of our common stock at a price of $32.00, resulting in gross proceeds of $507.8 million.

The proceeds were used to fund acquisitions during the fourth quarter of 2024.

On August 14, 2025, we completed an underwritten public offering of 23.0 million newly issued shares of our common stock at a price per share of $32.00, resulting in gross proceeds of $736.0 million.

We used a portion of the proceeds to pay down the outstanding revolving credit facility and intend to use the remaining proceeds to fund acquisitions.

At-The-Market Offering of Common Stock

On January 21, 2025, we entered into a new equity distribution agreement to issue and sell, from time to time, up to $750.0 million in aggregate offering price of our common stock through an “at-the-market” equity offering program (the “New ATM Program”) and terminated our previous $750.0 million “at-the-market” equity offering program (together, with all previous at-the-market equity offering programs, the “Previous ATM Programs” and together with the New ATM Program, the “ATM Programs”).

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 December 31, 2024.

The following tables summarize the ATM Program activity for the year ended December 31, 2024 (in thousands, except per share amounts).

For the Year Ended

December 31, 2024

We 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 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 expect to receive upon physical settlement will 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.

During the year ended December 31, 2025, we entered into ATM forward contracts under the ATM Program with a financial institution acting as a forward purchaser to sell 6.5 million shares of common stock at a weighted average initial sales price of $37.30 per share, respectively, before commissions and offering expenses.

For the shares subject to the ATM forward contracts, we will not receive any proceeds from sales of those shares of common stock by the forward sellers until the forward contracts are settled.

The following table summarizes the ATM Program activity for the year ended December 31, 2025 (in thousands, except per share amounts).

For the Year Ended December 31, 2025

Number of shares 12,608

1 unchanged sentence

Gross proceeds (1)

(1) Total gross proceeds is before $13.4 million of commissions paid to the sales agents and forward adjustments during the year ended December 31, 2024, under the ATM Program.

(1) Total gross proceeds is before $4.6 million of commissions paid to the sales agents during the year ended December 31, 2025, under the ATM Program.

In January 2026, we entered into ATM forward contracts under the ATM Program with a financial institution acting as a forward purchaser to sell 3.5 million shares of common stock at an initial sales price of $37.00 per share before commissions and offering expenses.

As of February 12, 2026, we had $8.1 million available for future issuances under the ATM Program.

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

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

Impairment of Real Estate Assets

During the year ended December 31, 2024, we recognized aggregate impairment charges of $42.2 million, of which $18.8 million related to properties held for sale, $9.4 million related to properties held for investment, and $14.0 million related to properties that were sold.

During the year ended December 31, 2025, we recognized aggregate impairment charges of $2.5 million, which related to properties that were sold.

Asset Sales and Held for Sale Reclassifications

We periodically reassess our investments and tenant relationships, and from time to time we have selectively disposed of certain facilities or investments, or terminated tenant relationships, and we expect to continue making such reassessments and, where appropriate, taking such actions.

We periodically reassess our investments and operator relationships, and from time to time we have selectively disposed of certain properties or investments, or terminated operator relationships, and we expect to continue making such reassessments and, where appropriate, taking such actions.

We classify our real estate investments as held for sale when the applicable criteria have been met, which includes a formal plan to sell the properties that is expected to be completed within one year, among other criteria.

2 unchanged sentences

Year Ended December 31, 2025

Number of facilities 17

Number of properties (1)

Net sales proceeds (2)

Net carrying value 121,953

Net loss on sale $ (2,208)

Net gain on sale

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

In addition, two properties sold during the year ended December 31, 2025 were not classified as held for sale during the year.

(2) Net sales proceeds includes non-cash consideration related to an asset exchange and $36.0 million of seller financing.

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

Net Carrying Value Number of Facilities

Net Carrying Value Number of Properties

December 31, 2024

4 unchanged sentences

December 31, 2025

Subsequent to December 31, 2024, we sold or disposed of three SNFs, one SNF Campus and one ALF, for which we expect to record an estimated gain on sale of real estate of $3.9 million.

Results of Operations

Operating Results

Our primary business consists of acquiring, developing, financing and owning real property to be leased to third party tenants in the healthcare sector.

Our primary business consists of acquiring, developing, financing and owning real property to be leased to third party tenants or operated by third party mangers in the healthcare sector.

Year Ended December 31, 2025 Compared to Year Ended December 31, 2024

3 unchanged sentences

Rental income $ 368,194 $ 228,261 $ 139,933 61 %

Resident fees and services 1,225 — 1,225 *

Interest income from financing receivable 11,492 1,009 10,483 *

2 unchanged sentences

Interest expense 43,707 30,310 13,397 44 %

Property taxes 7,838 6,170 1,668 27 %

Property taxes and insurance 8,768 7,838 930 12 %

Senior housing operating expenses 952 — 952 *

Impairment of real estate investments 2,483 42,225 (39,742) (94) %

Transaction costs 5,329 1,326 4,003 *

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

Property operating expenses 5,714 3,423 2,291 67 %

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

Property operating (recoveries) expenses (138) 5,714 (5,852) (102) %

General and administrative 52,465 28,923 23,542 81 %

Other income (loss):

Other income, net 4,350 — 4,350 *

Loss on extinguishment of debt (390) (657) 267 (41) %

(Loss) gain on sale of real estate, net (2,208) 2,218 (4,426) (200) %

Unrealized gain (loss) on other real estate related investments, net 9,045 (6,485) 15,530 (239) %

Net loss attributable to noncontrolling interests

Gain (loss) on sale of real estate, net

31,548 (2,208) 33,756 *

Unrealized gain on other real estate related investments, net

15,831 9,045 6,786 75 %

Gain on foreign currency transactions, net 4,012 — 4,012 *

Income tax expense

(5,001) — (5,001) *

Net loss attributable to noncontrolling interests (252) (681) 429 (63) %

10 unchanged sentences

Amortization of lease incentives (193) (22) (171)

Amortization of below market leases 2,885 384 2,501

Total rental income $ 228,261 $ 198,599 $ 29,662

Amortization of above and below market leases, net 6,798 2,885 3,913

Total amount in rental income $ 368,194 $ 228,261 $ 139,933

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

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 cash rent increased by $27.2 million due to an increase of $25.9 million in contractual cash rent from real estate investments made after

January 1, 2023, an increase of $5.1 million from increases in rental rates for our existing tenants, a $1.2 million increase in tenant reimbursements, and an increase of $0.4 million related to transfers of facilities between operators, partially offset by a $4.6 million decrease in rental income related to certain tenants on a cash basis method of accounting and a $0.8 million decrease related to the disposal of real estate.

Total contractual cash rent increased by $127.4 million due to an increase of $123.6 million in contractual cash rent from real estate investments made after January 1, 2024, including properties acquired in connection with the Acquisition, an increase of $6.5 million from increases in rental rates for our existing tenants, an increase of $2.8 million related to transfers of properties between operators, and a $2.1 million increase in tenant reimbursements, partially offset by a $3.9 million decrease in rental income related to certain tenants on a cash basis method of accounting and a $3.7 million decrease related to the disposal of real estate .

Straight-line rent increased by $8.8 million due to the Acquisition.

Amortization of above and below market leases increased $3.9 million primarily due to lease terminations in August 2025, which accelerated the amortization of the applicable below market lease intangibles.

Resident fees and services.

During the year ended December 31, 2025, we recorded $1.2 million of resident fees and services related to the acquisition of three senior housing communities under the SHOP platform in December 2025.

Interest income from financing receivable.

During the year ended December 31, 2024, we recorded $1.0 million of interest income related to an investment classified as a financing receivable in December 2024.

Interest income from financing receivable increased $10.5 million for the year ended December 31, 2025 due to an investment classified as a financing receivable in December 2024.

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

The $47.8 million, or 250%, increase in interest and other income is primarily due to an increase of $33.2 million related to the origination of loans receivable subsequent to January 1, 2023, an increase of $16.2 million in interest income on money market funds, an increase of $0.4 million due to originations of other loans, and an increase of $0.2 million related to a loan origination fee received during the year ended December 31, 2024, partially offset by a decrease of $1.5 million related to repayments of loans receivable and a decrease of $0.7 million related to prepayment penalties on one mezzanine loan receivable and one mortgage loan receivable during the year ended December 31, 2023.

The $28.5 million, or 42%, increase in interest and other income was primarily due to an increase of $32.2 million from the origination of loans receivable after January 1, 2024, an increase of $4.6 million of interest income earned on escrow deposits in connection with the Acquisition and an increase of $1.0 million due to originations of other loans, partially offset by a decrease of $7.3 million of interest income on money market funds, a decrease of $1.7 million related to loan payments and a $0.3 million decrease of interest income due to placing one other loan on non-accrual status during 2024.

See above under “Recent Developments” for additional information on the origination of loans receivable.

Depreciation and amortization.

Depreciation and amortization expense increased $5.6 million, or 11%, for the year ended December 31, 2024 from $56.8 million compared to $51.2 million for the year ended December 31, 2023.

The $5.6 million increase in depreciation and amortization was primarily due to an increase of $9.8 million related to new real estate investments and capital improvements made after January 1, 2023, partially offset by a decrease in depreciation of $2.8 million due to assets becoming fully depreciated after January 1, 2023, and a $1.4 million decrease from assets sold and classified as held for sale.

Depreciation and amortization expense increased $36.1 million, or 63%, for the year ended December 31, 2025 to $92.9 million compared to $56.8 million for the year ended December 31, 2024.

The $36.1 million increase in depreciation and amortization was primarily due to an increase of $38.4 million related to acquisitions and capital improvements made after January 1, 2024 and an increase of $2.4 million due to lease terminations in August 2025, which accelerated the amortization of the applicable in-place lease intangibles, partially offset by a decrease of $2.4 million due to the disposal of assets, a decrease of $1.7 million due to assets becoming fully depreciated after January 1, 2024 and a decrease of $0.6 million due to classifying assets as held for sale after January 1, 2024.

Interest expense.

Interest expense decreased by $10.6 million as detailed below:

Interest expense increased by $13.4 million as detailed below:

Change in interest expense for the year ended December 31, 2025 compared to the year ended December 31, 2024

(in thousands)

Decreases to interest expense due to:

Decrease in outstanding borrowing amount for the Prior Revolving Facility $ (8,517)

Decrease due to prepayment of Term Loan (4,007)

Total decrease to interest expense (12,524)

Increases to interest expense due to:

Issuance of secured borrowing 931

Increase in interest rates for the Term Loan 650

Increase due to new Term Loan Facility

Increase in outstanding borrowing amount for the Third Amended Revolving Facility 5,975

Increase due to assumption of debt in connection with the Acquisition

Other changes in interest expense (1)

Total increases to interest expense

Decreases to interest expense due to:

Decrease due to prepayment of a prior term loan

Decrease due to prepayment of secured borrowing

Total decreases to interest expense

Total change in interest expense $ 13,397

Property taxes .

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

Property taxes and insurance .

Property taxes increased $0.9 million, or 12%, for the year ended December 31, 2025 compared to December 31, 2024.

The increase was primarily due to a $2.8 million increase in property taxes due to new real estate investments made after January 1, 2023, partially offset by a decrease of $1.1 million related to properties sold after January 1, 2023.

The increase was due to a $2.5 million increase related to acquisitions made after January 1, 2024, partially offset by a decrease of $1.2 million due to reassessments and a decrease of $0.4 million due to properties that were sold after January 1, 2024.

Senior housing operating expenses.

During the year ended December 31, 2025, we recorded $1.0 million of senior housing operating expenses related to the acquisition of three senior housing communities under the SHOP platform in December 2025.

Impairment of real estate investments.

During the year ended December 31, 2025, we recognized aggregate impairment charges of $2.5 million which related to properties that were sold.

Transaction costs.

During the year ended December 31, 2025, we recognized $5.3 million of transaction costs primarily related to integrating the operations of Care REIT plc.

During the year 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.

No such transaction costs were recorded during the year ended December 31, 2023.

Provision for loan losses, net.

Provision for loan losses.

During the year 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 year ended December 31, 2023.

Property operating expenses.

During the years ended December 31, 2024 and 2023, we recognized $5.7 million and $3.4 million, respectively, of property operating expenses related to assets we plan to sell or repurpose, re-tenant, or have sold.

There was no such provision for loan losses recorded during the year ended December 31, 2025.

Property operating (recoveries) expenses.

During the year ended December 31, 2025, we recognized $2.4 million in recoveries, partially offset by $2.3 million of property operating expenses related to assets we plan to sell or repurpose, re-tenant, or have sold.

During the year ended December 31, 2024, we recognized $5.7 million of property operating expenses related to assets we plan to sell or repurpose, re-tenant, or have sold.

General and administrative expense.

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Incentive compensation $ 18,463 $ 9,699 $ 8,764

Cash compensation 6,474 5,636 838

Share-based compensation 11,896 6,130 5,766

Other administrative expense 1,400 1,041 359

Cash compensation 9,656 6,474 3,182

Professional services 5,942 2,785 3,157

Other administrative expense 2,152 1,400 752

Taxes and insurance 1,934 1,019 915

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Total change in general and administrative expense $ 52,465 $ 28,923 $ 23,542

Other income, net.

During the year ended December 31, 2025, we recorded other income of $5.0 million related to a fee received in connection with the release of a property from a purchase agreement, partially offset by $0.6 million in fees paid in connection with the transaction.

Loss on extinguishment of debt.

During the year ended December 31, 2024, we recorded a $0.7 million loss on extinguishment of debt related to the exit fee associated with the call of the secured borrowing and the write-off of deferred financing costs associated with the prepayment of the Term Loan (as defined below).

No loss on extinguishment of debt was recognized during the year ended December 31, 2023.

(Loss) gain on sale of real estate, net .

During the year ended December 31, 2024, we recorded a $2.3 million loss on the sale of real estate related to the sale of 12 SNFs, partially offset by a $0.1 million gain on the sale of real estate related to the sale of four ALFs and one SNF.

During the year ended December 31, 2023, we recorded a $2.3 million gain on sale of real estate related to the sale of two ALFs and one SNF, partially offset by a $0.1 million loss on sale of real estate related to the sale of two ALFs.

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

During the year ended December 31, 2025, we recorded a loss on extinguishment of debt of $0.4 million associated with the prepayment of the secured revolving credit facilities that were assumed in connection with the Acquisition.

During the year ended December 31, 2024, we recorded a loss on extinguishment of debt of $0.7 million related to the exit fee associated with the call of the secured borrowing and the write-off of deferred financing costs associated with the prepayment of the Term Loan (as defined below).

Gain (loss) on sale of real estate, net .

During the year ended December 31, 2025, we recorded a $31.5 million gain on sale of real estate related to the sale of five SNFs and 19 senior housing communities.

During the year ended December 31, 2024, we recorded a $2.3 million loss on sale of real estate related to the sale of 12 SNFs, partially offset by a $0.1 million gain on sale of real estate related to the sale of four senior housing communities and one SNF.

Unrealized gain on other real estate related investments, net .

During the year ended December 31, 2025, we recorded a net unrealized gain of $15.8 million, which was primarily comprised of $17.2 million of unrealized gains on our secured and mezzanine loans receivable, partially offset by unrealized losses of $1.0 million, to bring the interest rates in line with market rates and an unrealized foreign currency loss of $0.4 million related to one mortgage loan receivable.

During the year ended December 31, 2024, we recorded an unrealized gain of $17.8 million due to a decrease in interest rates during the second half of 2024, partially offset by an unrealized loss of $8.8 million due to an increase in interest rates during the first half of 2024.

During the year ended December 31, 2023, we recorded an unrealized loss of $8.1 million due to rising interest rates and a $0.3 million loss due to a loan origination fee paid, partially offset by unrealized gains of $0.7 million due to a decrease in projected forward interest rates and a reversal of a previously recognized unrealized loss of $1.2 million related to the repayment of one mezzanine loan receivable and the partial repayment of one mortgage loan receivable.

Gain on foreign currency transactions, net.

During the year ended December 31, 2025, we recorded a $4.4 million foreign currency gain on cash paid to Care REIT shareholders in connection with the Care REIT Acquisition, partially offset by a $0.3 million foreign currency loss on cash paid in connection with the acquisition of Impact Health Partners LLP and a $0.1 million loss related to our cash flow hedges.

Income tax expense.

During the year ended December 31, 2025, we recorded $5.0 million of income tax expense, primarily related to foreign withholding taxes related to taxable income in the U.K.

Net loss attributable to noncontrolling interests.

Net loss attributable to noncontrolling interests decreased primarily due to other income recognized during the year ended December 31, 2025, partially offset by investments entered into subsequent to January 1, 2024.

Year Ended December 31, 2024 Compared to Year Ended December 31, 2023

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• dividend plans;

• property operating expenses;

• operating lease obligations;

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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 intend to invest in and/or develop additional healthcare and senior housing communities 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-acquir ed 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 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.

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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 o ur cash balance, available borrowing capacity under the Third Amended Revolving Facility, 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 and other needs for at least the next 12 months.

We believe that our expected operating cash flow from rent collections, resident fees and services and interest payments on our other real estate related investments, together with o ur cash balance, available borrowing capacity under the Third Amended Revolving Facility, and availability under the ATM Program will be sufficient to meet ongoing debt service requirements, dividend plans, property operating expenses, operating lease obligations, capital expenditures, working capital requirements 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.

While we may from time to time sell properties as part of our hold / investment strategy on an investment-by-investment basis, we currently do not expect to sell any of our properties to meet liquidity needs.

Our quarterly cash dividend and any failure of our operators to pay rent or of our borrowers to make interest or principal payments may impact our available capital resources.

Our quarterly cash dividend and any failure of our tenants to pay rent or of our borrowers to make interest or principal payments may impact our available capital resources.

We have filed an automatic shelf registration statement with the U.S.

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On January 21, 2025, we entered into the New ATM Program.

In addition to the issuance and sale of shares of our common stock, we may also enter into one or more ATM forward contracts with sales agents for the sale of shares of our common stock under the ATM Program.

In addition to the issuance and sale of shares of our common stock, we from time to time enter into one or more ATM forward contracts with sales agents for the sale of shares of our common stock under the ATM Program.

See “At-The-Market Offering of Common Stock” for information regarding activity under the ATM Program.

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Net cash provided by financing activities 1,051,019 1,188,806

Net (decrease) increase in cash and cash equivalents (80,626) 281,270

Effect of foreign currency translation

Net (decrease) in cash and cash equivalents (15,780) (80,626)

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

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Net cash provided by operating activities for the year ended December 31, 2025 was $394.0 million compared to $244.3 million for the year ended December 31, 2024, an increase of $149.8 million.

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

Operating cash outflows consist primarily of interest expense on our

borrowings and general and administrative expenses.

The net increase of $89.5 million in cash provided by operating activities for the year ended December 31, 2024 is primarily due to an increase in interest income received on our other real estate related investments, rental income received, and a decrease in cash paid for interest expense, partially offset by an increase in cash paid for operating expenses related to assets we plan to sell, have sold, or repurpose and an increase in cash paid for general and administrative expense.

Cash used in investing activities for the year ended December 31, 2024 was primarily comprised of $1,472.1 million in acquisitions of real estate, investments in real estate related investments and other loans receivable, and investments in financing receivable, $8.0 million of purchases of equipment, furniture and fixtures and improvements to real estate, and $52.0 million in preferred equity investments, partially offset by $13.9 million in net proceeds from real estate sales and $4.5 million of payments received on real estate related investments and other loans receivable.

Cash used in investing activities for the year ended December 31, 2023 was primarily comprised of $297.9 million in acquisitions of real estate and investments in real estate related investments and other loans receivable and $11.0 million of purchases of equipment, furniture and fixtures and improvements to real estate, and $1.8 million in preferred equity investments, partially offset by $26.5 million of payments received on real estate related investments and other loans receivable and $16.3 million in net proceeds from real estate sales.

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 $149.8 million in cash provided by operating activities for the year ended December 31, 2025 is primarily due to an increase in rental income received and an increase in interest income received on our other real estate related investments, partially offset by an increase in cash paid for general and administrative expense and an increase in cash paid for interest expense.

Cash used in investing activities for the year ended December 31, 2025 was primarily comprised of $1.6 billion 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 $14.9 million of purchases of equipment, furniture and fixtures and improvements to real estate, partially offset by $79.3 million in net proceeds from real estate sales, $75.1 million of payments received on real estate related investments and other loans receivable and $4.4 million of principal payments received on our financing receivable.

Cash used in investing activities for the year ended December 31, 2024 was primarily comprised of $1.5 billion in acquisitions of real estate, investments in real estate related investments and other loans receivable, and investments in financing receivable, $8.0 million of purchases of equipment, furniture and fixtures and improvements to real estate, and $52.0 million in preferred equity investments, partially offset by $13.9 million in net proceeds from real estate sales and $4.5 million of payments received on real estate related investments and other loans receivable.

Our cash flows provided by financing activities for the year ended December 31, 2025 were primarily comprised of $1.1 billion of net proceeds from the issuance of common stock, $650.0 million in borrowings under the unsecured revolving credit facility, $500.0 million in proceeds from the issuance of the senior unsecured term loan and $3.0 million in contributions from noncontrolling interests net of distributions, partially offset by a $650.0 million payment on the unsecured revolving credit facility, $259.3 million in dividends paid, $153.8 million in payments of the revolving credit facility, $102.4 million paid to redeem the secured notes payable, $4.6 million in payments of debt extinguishment and deferred financing costs, and a $3.3 million net settlement adjustment on restricted stock.

Our cash flows provided by financing activities for the year ended December 31, 2024 were primarily comprised of $1,552.9 million of net proceeds from the issuance of common stock, $75.0 million in proceeds from a secured borrowing and $19.8 million in contributions from noncontrolling interests net of distributions, partially offset by a $200.0 million prepayment of the Term Loan, $172.2 million in dividends paid, a $75.0 million payment on the secured borrowing, a $9.2 million payment on extinguishment of debt and deferred financing costs, and a $2.5 million net settlement adjustment on restricted stock.

Our cash flows provided by financing activities for the year ended December 31, 2023 were primarily comprised of $634.4 million of net proceeds from the issuance of common stock under the ATM Program and $1.9 million in net contributions from noncontrolling interests, partially offset by $125.0 million in net payments under our Revolving Credit Facility (as defined below), $115.5 million in dividends paid and a $1.5 million net settlement adjustment on restricted stock.

Year Ended December 31, 2024 Compared to Year Ended December 31, 2023

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3.875% Senior Unsecured Notes due 2028

On June 17, 2021, our wholly owned subsidiary, CTR Partnership, L.P.

On June 17, 2021, our operating subsidiary, CTR Partnership, L.P.

(the “Operating Partnership”), and its wholly owned subsidiary, CareTrust Capital Corp.

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

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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 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”) provides 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 “Prior 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 Prior 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.

Borrowings under the Second Amended Credit Facility were 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.

The First Amendment 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 September 19, 2024 (the “Prepayment Date”), we prepaid all $200.0 million aggregate principal amount of our outstanding Term Loan.

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The Third Amended Credit Agreement, which amends and restates our Second Amended Credit Agreement provides for an unsecured revolving credit facility (the “Third Amended Revolving Facility”) with revolving commitments in an aggregate principal amount of $1.2 billion, 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.

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.

Future borrowings under the Third Amended Credit 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 December 31, 2024, we had 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.

Prior to the prepayment, the Term Loan had a maturity date of February 8, 2026.

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).

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).

On May 30, 2025, we entered into 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” and together with the Third Amended Revolving Facility, the “Third Amended Credit Facility”) with term loan commitments in an aggregate principal amount of $500.0 million in addition to the Third Amended Credit Facility.

On January 14, 2026, we entered into the Second Amendment to the Third Amended Credit Agreement.

The Second Amendment to the Third Amended Credit Agreement amended the definition of Permitted Encumbrances to include liens on assets located in the United Kingdom or on equity interests of any person owning such assets, in each case, securing intercompany loans.

As of December 31, 2025 , we had $500.0 million of borrowings outstanding under the Term Loan Facility and no borrowings outstanding under the Third Amended Revolving Facility.

Th e 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 Credit 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).

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 Credit Facility bearing interest at Term SOFR or Daily Simple SOFR.

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

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Capital Expenditures

As of December 31, 2024, 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 tot aling $6.6 million, of which $5.7 million is s ubject to rent increase at the time of funding.

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

As of December 31, 2024, we entered into a purchase and sale agreement which provided 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.

As of December 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 pro perties, at certain triple-net leased properties totaling $6.2 million, of which $5.1 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.

S ee Note 16, Commitments and Contingencies , to our consolidated financial statements included in this report for further information regarding our obligation to finance certain capital expenditures under our triple-net leases.

Earn-out Obligations

As of December 31, 2025, we are party to purchase and sale agreements that provide for earn‑out obligations totaling up to $42.5 million related to the acquisition of skilled nursing facilities.

This includes an earn‑out obligation of up to $10.0 million for one SNF in Virginia acquired in 2024, which becomes available upon the operator’s achievement of specified performance thresholds from October 2025 through October 2026.

In addition, we have an earn‑out obligation of up to $32.5 million under a purchase and sale agreement for five skilled nursing facilities in Virginia, North Carolina, and Maryland acquired in 2025, which becomes available upon the operator’s achievement of specified performance thresholds from December 2026 through December 2028.

Dividend Plans

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 and Redeemable Noncontrolling Interest, to our 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 2024, 2023 and 2022.

See Note 10, Equity and Redeemable Noncontrolling Interests, to our 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 2025, 2024 and 2023.

Critical Accounting Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and 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.

and 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.

Management believes that the assumptions and estimates used in preparation of the underlying consolidated financial statements are reasonable.

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For a discussion of our significant accounting policies, see Note 2, Summary of Significant Accounting Policies, to our consolidated financial statements included in this report.

Principles of Consolidation.

The Company is required to continually evaluate its VIE relationships and consolidate these entities when it is determined to be the primary beneficiary of their operations.

A VIE is broadly defined as an entity where either:

(i) the equity investment at risk is insufficient to finance that entity’s activities without additional subordinated financial support, (ii) substantially all of an entity’s activities either involve or are conducted on behalf of an investor that has disproportionately few voting rights, or (iii) the equity investors as a group lack any of the following:

(a) the power through voting or similar rights to direct the activities of an entity that most significantly impact the entity’s economic performance, (b) the obligation to absorb the expected losses of an entity, or (c) the right to receive the expected residual returns of an entity.

Criterion (iii) above is generally applied to limited partnerships and similarly structured entities by assessing whether a simple majority of the limited partners hold substantive rights to participate in the significant decisions of the entity or have the ability to remove the decision maker or liquidate the entity without cause.

If neither of those criteria are met, the entity is a VIE.

The designation of an entity as a VIE is reassessed upon certain events, including, but not limited to:

(i) a change to the contractual arrangements of the entity or in the ability of a party to exercise its participation or kick-out rights, (ii) a change to the capitalization structure of the entity, or (iii) acquisitions or sales of interests that constitute a change in control.

A variable interest holder is considered to be the primary beneficiary of a VIE if it has the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and has the obligation to absorb losses of, or the right to receive benefits from, the entity that could potentially be significant to the VIE.

The Company qualitatively assesses whether it is (or is not) the primary beneficiary of a VIE.

The Company’s consideration of various factors include, but is not limited to, which activities most significantly impact the entity’s economic performance and the ability to direct those activities, its form of ownership interest, its representation on the VIE’s governing body, the size and seniority of its investment, its ability and the rights of other investors to participate in policy making decisions, its ability to manage its ownership interest relative to the other interest holders, and its ability to replace the VIE manager and/or liquidate the entity.

For any investment in a joint venture that is not considered to be a VIE, the Company would evaluate the type of ownership rights held by limited partner(s) that may preclude consolidation by the majority interest holder.

The assessment of limited partners’ rights and their impact on the control of a joint venture should be made at inception of the joint venture and continually reassessed.

Impairment of Long-Lived Assets.

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The judgment regarding the existence of impairment indicators, used to determine if an impairment assessment is necessary, is based on factors such as, but not limited to, market conditions, operator performance and legal structure.

If indicators of impairment are present, we evaluate the carrying value of the related real estate investments in relation to the future undiscounted cash flows of the underlying facilities.

The most significant inputs to the undiscounted cash flows include, but are not limited to, historical and projected facility level financial results, a lease coverage ratio, the intended hold period by us, and a terminal capitalization rate.

If indicators of impairment are present, we evaluate the carrying value of the related real estate investments in relation to the future undiscounted cash flows of the underlying properties.

The most significant inputs to the undiscounted cash flows include, but are not limited to, historical and projected property level financial results, a lease coverage ratio, the intended hold period by us, revenue and expense growth rates, stabilized occupancy, and a terminal capitalization rate.

The analysis is also significantly impacted by determining the lowest level of cash flows, which generally would be at the master lease level of cash flows.

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The fair value of the assets held for sale is based on estimated sales prices, which are considered to be Level 3 measurements within the fair value hierarchy.

Estimated sales prices are determined using a market approach (comparable sales model), which relies on certain assumptions by management, including:

Estimated sales prices are determined using a market approach (comparable sales model), which relies on certain assumptions by management,

(i) comparable market transactions, (ii) estimated prices per unit, and (iii) binding agreements for sales and non-binding offers to purchase from unrelated third-parties.

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See Note 2, Summary of Significant Accounting Policies, in the Notes to Consolidated Financial Statements for further detail.

Our assessment of collectibility of tenant receivables includes a binary assessment of whether or not substantially all of the amounts due under a

tenant’s lease agreement are probable of collection.

Our assessment of collectibility of tenant receivables includes a binary assessment of whether or not substantially all of the amounts due under a tenant’s lease agreement are probable of collection.

This assessment involves significant judgment by management and considers the operator’s performance and anticipated trends, payment history, and the existence and creditworthiness of guarantees, among other factors, in making this determination.

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Because of the inherent uncertainty of valuation, the estimated fair value of our financial instruments may differ significantly from the values that would have been used had a ready market for the financial instruments existed, and the differences could be material to our consolidated financial statements.

We did not materially change the assumptions used in the analysis during the year ended December 31, 2025.

Impact of Inflation

Our rental income in future years will be impacted by changes in inflation.

Almost all of our triple-net lease agreements, including the Ensign leases, provide for an annual rent escalator based on the percentage change in the Consumer Price Index (but not less than zero), subject to maximum fixed percentages.

Almost all of our triple-net lease agreements, including the Ensign leases, provide for an annual rent escalator based on the percentage change in the Consumer Price Index or Retail Price Index (“RPI”) (but not less than zero), some of which are subject to a floor and/or cap, or fixed rent escalators.

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What changed 10-K

Item 7. Management’s Discussion and Analysis