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Item 7. Management’s Discussion and Analysis

2026-02-24 compared with 2025-02-25 · 258 added, 240 removed, 426 unchanged (54% of the section changed)

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The following discussion should be read in conjunction with our Consolidated Financial Statements included in Part IV, Item 15 of this Annual Report on Form 10-K.

We are a REIT organized under Maryland law that primarily owns medical office and life science properties, senior living communities and other healthcare related properties throughout the United States.

As of December 31, 2024, we owned 367 properties located in 36 states and Washington, D.C., including 32 properties classified as held for sale and three closed senior living communities.

We are a REIT organized under Maryland law that primarily owns senior living communities, medical office and life science properties and other healthcare related properties throughout the United States.

As of December 31, 2025, we owned 298 properties located in 33 states and Washington, D.C., including 13 properties classified as held for sale.

As of December 31, 2025, we owned an equity interest in each of the Seaport JV and the LSMD JV that own medical office and life science properties located in five states with an aggregate of approximately 2.2 million rentable square feet that were 99% leased with an average (by annualized rental income) remaining lease term of 14.2 years.

We are encouraged by positive trends, including increases in rates and occupancy in our SHOP segment.

Beginning in September 2025, we transitioned the management of 116 of our senior living communities previously managed by Five Star to seven different third party managers in connection with AlerisLife's sale of all of its assets and the wind-down of its business.

As of December 31, 2025, we completed the transition of all of the Five Star managed senior living communities to these managers.

As of December 31, 2025, our 212 senior living communities were managed by 14 new and existing third party managers.

As we transitioned these communities from Five Star, we experienced temporary disruption, including reduction in our cash flows.

We are encouraged by positive trends, including increases in rates, margins and occupancy in our SHOP segment.

Additionally, we expect that favorable supply and demand dynamics in the senior living industry will enable our managers to continue to grow occupancy and drive positive performance.

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As a result of these reviews, our strategy to drive positive performance includes analyzing non-performing communities for potential disposition or transition to different operators.

We are closely monitoring the impacts of the current economic and market conditions on all aspects of our business, including, but not limited to, uncertainties surrounding interest rates and inflation, volatility in the public debt and equity markets, global geopolitical hostilities and tensions, economic uncertainties, labor market conditions and changes in real estate utilization.

government shutdown, economic uncertainties and tariffs, labor market conditions and changes in real estate utilization.

We expect to experience continued variability in labor, insurance and food costs in our SHOP segment.

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PORTFOLIO OVERVIEW

The following tables present an overview of our portfolio (dollars in thousands, except investment per square foot or unit data):

The following tables present an overview of our portfolio (dollars in thousands, except investment per unit or square foot data):

As of December 31, 2025 Number

Properties Square

Feet or Number of Units

Properties Number of Units or Square

Gross Book Value of Real Estate Assets (1)

% of Total Gross Book Value of Real Estate Assets Investment per

Square Foot or Unit (2)

2024 Revenues % of 2024 Revenues 2024

% of Total Gross Book Value of Real Estate Assets Investment per Unit or

Square Foot (2)

2025 Revenues

% of 2025 Revenues

SHOP 212 23,217 units $ 4,416,727 70.4 % $ 190,237 $ 1,312,655 85.4 % $ 139,256 50.0 %

Medical Office and Life Science Portfolio 67 5,558,089 sq.

1,489,391 23.7 % $ 268 193,809 12.6 % 108,130 38.8 %

SHOP 232 24,978 units 4,628,144 64.5 % $ 185,289 1,244,389 83.2 % 106,060 41.0 %

Triple net leased senior living communities 9 1,328 units 161,734 2.6 % $ 121,788 15,773 1.0 % 15,769 5.7 %

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As of and for the Year Ended December 31,

SHOP 81.0 % 79.3 %

Medical Office and Life Science Portfolio (4)

91.2 % 82.2 %

SHOP 79.3 % 78.1 %

Triple net leased senior living communities 100.0 % 100.0 %

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(1) Represents gross book value of real estate assets at cost plus certain acquisition costs, before depreciation and purchase price allocations and less impairment write downs, if any.

(2) Represents gross book value of real estate assets divided by number of rentable square feet or living units, as applicable, at December 31, 2024.

(2) Represents gross book value of real estate assets divided by number of living units or rentable square feet, as applicable, at December 31, 2025.

(3) We calculate our NOI on a consolidated basis and by reportable segment.

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We operate in, and report financial information for, the following two segments:

Medical Office and Life Science Portfolio and SHOP.

Our Medical Office and Life Science Portfolio segment primarily consists of medical office properties leased to medical providers and other medical related businesses, as well as life science properties primarily leased to biotech laboratories and other similar tenants.

SHOP and Medical Office and Life Science Portfolio.

Our SHOP segment consists of managed senior living communities that provide short term and long term residential living and in some instances care and other services for residents where we pay fees to managers to operate the communities on our behalf.

We also report “all other” operations, which consists of triple net leased wellness centers and senior living communities that are leased to third party operators from which we receive rents.

Senior Housing Operating Portfolio

Our managed senior living communities are operated by third parties pursuant to management agreements and we lease nearly all of our senior living communities, including those managed by third party managers, to our TRSs.

As of December 31, 2025, we completed the transition of all of the Five Star managed senior living communities to these managers.

Five Star previously managed a large portion of our senior living communities for our account pursuant to an amended and restated master management agreement, or the Master Management Agreement, which was scheduled to expire in 2036 and terminated in December 2025 in connection with AlerisLife's sale of all of its assets and the wind-down of its business.

Pursuant to the Master Management Agreement, Five Star received a management fee equal to 5% of the gross revenues realized at the applicable senior living communities plus reimbursement for its direct costs and expenses related to such communities.

Our third party managers manage all 212 of our senior living communities as of December 31, 2025.

In March 2024, we terminated our management agreement with one of our third party managers, Cedarhurst Senior Living, which manages certain of our communities located in Wisconsin and Illinois and transitioned these communities to another third party manager, Charter Senior Living, with which we have an existing relationship.

As a result of the transition of 116 of our senior living communities managed by Five Star to different third party managers, we incurred transition costs, including certain termination fees and other costs associated with the re-branding and marketing of these communities.

For the year ended December 31, 2025, we recorded $10.4 million of these costs to acquisition and certain other transaction related costs in our consolidated statements of comprehensive income (loss).

The terms of the management agreements with our third party managers are generally as follows:

the managers will receive a management fee equal to 5% to 6% of the gross revenues realized at the applicable senior living communities.

Certain of our management agreements also provide that the manager will receive a reimbursement for direct costs and expenses related to such communities.

Additionally, the managers have the ability to earn incentive fees equal to 15% to 30% of the amount by which EBITDA of the applicable communities exceeds the target EBITDA for the applicable communities.

The managers can also earn a construction supervision fee ranging between 3% and 5% of construction costs.

The initial terms of the management agreements are generally five to ten years, subject to automatic extensions of successive terms of two years each unless earlier terminated or timely notice of nonrenewal is delivered.

The management agreements also generally provide us with the right to terminate the management agreements for communities that do not earn 70% to 85% of the target EBITDA for such communities, after an agreed upon stabilized period.

The following table presents a summary of our managers as of December 31, 2025:

Manager Location Number of Communities Number of Units

Discovery Senior Living Various (7 States) 44 5,095

Sinceri Senior Living Various (11 States) 38 7,261

Charter Senior Living FL/IL/MD/TN/VA/WI 30 1,759

Phoenix Senior Living AL/AR/KY/MO/NC/SC 26 1,822

Tutera Senior Living IL/IN/KS/TN 18 1,967

Oaks-Caravita Senior Care (1)

Stellar Senior Living AZ/CO/NM/TX 14 2,015

Northstar Senior Living AZ/CA 7 418

Navion Senior Solutions SC 5 238

WellQuest Living CA/NV 5 798

Oaks Senior Living GA 3 264

IntegraCare Senior Living PA 2 146

Ciel Senior Living NY 1 306

Omega Senior Living NE 1 69

(1) Includes 13 communities with 669 units classified as held for sale as of December 31, 2025.

(2) Excludes one closed senior living community.

For further information regarding the terms of the management agreements with our managers and of the terminated Master Management Agreement and our other prior business arrangements with Five Star, see Note 6 to our Consolidated Financial Statements included in Part IV, Item 15 of this Annual Report on Form 10-K, and for more information about our dealings and relationships with Five Star generally, see “Related Person Transactions” below and Note 8 to our Consolidated Financial Statements included in Part IV, Item 15 of this Annual Report on Form 10-K.

Medical Office and Life Science Portfolio

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54,633 1.1% 5,559 3.4% 2032

55,102 0.8% 5,335 2.6% 2033

Medtronic, Inc.

201,522 3.1% 5,297 2.5% 2027 - 2028

Sonova Holding AG 116,444 2.3% 5,405 3.3% 2033

Boston Children's Hospital 99,063 2.0% 4,377 2.7% 2028

Magellan Health Inc.

197,976 3.9% 3,916 2.4% 2027

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79,968 1.6% 3,908 2.4% 2026 - 2033

197,976 3.0% 3,955 1.9% 2027

McKesson Corporation 477,772 9.4% 3,823 2.4% 2028 - 2030

United Healthcare Services, Inc.

149,719 3.0% 3,741 2.3% 2026

McKesson Corporation 477,772 7.3% 3,823 1.8% 2028 - 2030

Hawaii Pacific Health 85,956 1.3% 3,803 1.8% 2026 - 2029

Revvity, Inc.

105,462 2.1% 3,681 2.3% 2028

HCA Holdings Inc.

Hawaii Pacific Health 85,956 1.7% 3,592 2.2% 2029 - 2036

Medtronic, Inc.

94,522 1.9% 3,387 2.1% 2028

New York University 109,983 2.2% 3,335 2.1% 2026 - 2031

HCA Holdings Inc.

66,296 1.3% 3,319 2.0% 2026 - 2031

Ultragenyx Pharmaceutical Inc.

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Sentara Health 139,212 2.7% 3,008 1.9% 2027 - 2032

WRA Management, Inc.

35,067 0.5% 2,594 1.2% 2025 - 2045

Organogenesis Holdings Inc.

Orthofix Medical Inc.

81,712 1.6% 2,814 1.7% 2037

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99,378 2.0% 2,290 1.4% 2029

Warner Chilcott Limited 81,712 1.2% 2,258 1.1% 2027

Think Surgical, Inc.

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Covenant Health System 55,807 1.1% 2,022 1.2% 2034

North American Science Associates, LLC 82,854 1.6% 1,846 1.2% 2029

Surgical Care Affiliates, LLC 38,208 0.8% 1,835 1.2% 2033

The Boeing Company 90,349 1.6% 1,818 1.1% 2028

All Other Tenants 1,878,413 37.1% 67,127 41.4% 2026 - 2045

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(1) Annualized rental income is based on rents pursuant to existing leases as of December 31, 2025, including straight line rent adjustments and estimated recurring expense reimbursements for certain net and modified gross leases and excluding lease value amortization at certain of our medical office and life science properties.

(2) In January 2025, we sold three life science properties, including properties leased by these tenants, for a sales price of $159,025, excluding closing costs.

Senior Housing Operating Portfolio

Our managed senior living communities are operated by third parties pursuant to management agreements.

Five Star, which is an operating division of AlerisLife, manages many of our SHOP communities, and we lease nearly all of our senior living communities, including those managed by third party managers, to our TRSs.

Five Star manages 118 of our senior living communities for our account pursuant to an amended and restated master management agreement, or the Master Management Agreement.

Pursuant to the Master Management Agreement, Five Star receives a management fee equal to 5% of the gross revenues realized at the applicable senior living communities plus reimbursement for its direct costs and expenses related to such communities.

Five Star may receive an annual incentive fee equal to 15% of the amount by which the annual EBITDA of all communities on a combined basis exceeds the target EBITDA for all communities on a combined basis for such calendar year.

The target EBITDA for those senior living communities on a combined basis is increased annually based on the greater of the annual increase of the consumer price index, or CPI, or 2%, plus 6% of any capital investments funded at the managed senior living communities on a combined basis in excess of the target capital investment.

Unless otherwise agreed, the target capital investment increases annually based on the greater of the annual increase of CPI or 2%.

Any senior living communities that are undergoing a major renovation or repositioning are excluded from the calculation of the incentive fee.

The Master Management Agreement expires in 2036, subject to Five Star's right to extend for two consecutive five year terms if Five Star achieves certain performance targets for the combined managed communities portfolio, unless earlier terminated.

Pursuant to the Master Management Agreement, beginning in 2025, we have the right to terminate up to 10% of the senior living communities that Five Star is continuing to manage, based on total revenues per year for failure to meet 80% of a target EBITDA for the applicable period.

In addition, Five Star delivered to us a related amended and restated guaranty agreement pursuant to which Five Star is continuing to guarantee the payment and performance of each of its applicable subsidiary's obligations under the applicable management agreements.

Our other third party managers manage 114 of our senior living communities.

In October 2022, we and one of our operators agreed to terminate the lease agreements for three of these senior living communities and replaced them with management agreements under our TRS structure, and an affiliate of the same operator will continue to operate these properties.

Additionally, effective October 31, 2022, Five Star ceased managing our active adult community, and RMR assumed management of that community.

For the years ended December 31, 2024, 2023 and 2022, we recorded $2.2 million, $0.0 million and $2.1 million, respectively, of costs that we incurred related to retention, transition, termination and other costs to acquisition and certain other transaction related costs in our consolidated statements of comprehensive income (loss).

The terms of the management agreements with the other third party managers are generally as follows:

the other third party managers will receive a management fee equal to 5% to 6% of the gross revenues realized at the applicable senior living communities plus reimbursement for direct costs and expenses related to such communities.

These agreements generally also provide for the other third party managers to earn a minimum base fee for a portion of the term of the agreement.

Additionally, the other third party managers have the ability to earn incentive fees equal to 15% to 25% of the amount by which EBITDA of the applicable communities exceeds the target EBITDA for the applicable communities.

The other third party managers can also earn a construction supervision fee ranging between 3% and 5% of construction costs.

The initial terms of the management agreements with the other third party managers are generally five years, subject to automatic extensions of successive terms of two years each unless earlier terminated or timely notice of nonrenewal is delivered.

The management agreements with the other third party managers also generally provide us with the right to terminate the management agreements for communities that do not earn 70% to 80% of the target EBITDA for such communities, after an agreed upon stabilized period.

The following table presents a summary of the other third party managers as of December 31, 2024:

Manager Location Number of Communities Number of Units

Charter Senior Living FL/MD/TN/VA/IL/WI 30 1,759

IntegraCare Senior Living PA 2 146

Life Care Services DE 3 517

Navion Senior Solutions SC 5 238

Northstar Senior Living AZ/CA 7 418

Oaks-Caravita Senior Care GA/SC 26 1,415

Oaks Senior Living GA 3 264

Omega Senior Living NE 1 69

Phoenix Senior Living AL/AR/KY/MO/NC/SC 23 1,457

Stellar Senior Living CO/TX/WY 10 1,094

(1) Excludes three closed senior living communities.

For further information regarding the terms of the Master Management Agreement and of the management agreements with the other third party managers and our other business arrangements with Five Star, see Note 6 to our Consolidated Financial Statements included in Part IV, Item 15 of this Annual Report on Form 10-K, and for more information about our dealings and relationships with Five Star generally, and the risks which may arise as a result of these related person transactions, see “Risk Factors—Risks Related to Our Relationships with RMR and AlerisLife (including Five Star)” in Part I, Item 1A of this Annual Report on Form 10-K, “Related Person Transactions” below and Note 8 to our Consolidated Financial Statements included in Part IV, Item 15 of this Annual Report on Form 10-K.

As of December 31, 2025, lease expirations at our triple net leased wellness centers and senior living communities leased to third party operators were as follows (dollars in thousands):

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2026 — — $ — — % — %

2026 — — — — % — %

2027 4 533 units 4,799 15.8 % 15.8 %

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2031 — — — — % 34.3 %

18 876 units 10,254 25.8 % 51.6 %

2032 — — — — % 34.3 %

2033 1 215 units 5,234 17.3 % 51.6 %

2034 and thereafter 7 682,646 sq.

2034 — — — — % 51.6 %

2035 and thereafter 8 148 units and 682,646 sq.

14,658 48.4 % 100.0 %

Total 19 $ 30,284 100.0 %

Weighted average remaining lease term (in years) 8.6 9.7

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Annualized rental income includes estimated percentage rents and straight line rent adjustments and excludes lease value amortization.

(2) We have entered into an agreement to sell these 18 communities for a sales price of $135.0 million, excluding closing costs.

We expect this sale to close during the first quarter of 2025.

(3) Excludes one closed senior living community classified as held for sale as of December 31, 2024.

(4) Weighted average lease term is calculated based on square feet and annualized rental income.

During the year ended December 31, 2024, we entered into renewal leases at three of our wellness centers totaling 129,600 square feet at rates that were 7.5% higher than prior rents for the same space at a weighted average lease term of five years.

We did not incur any leasing costs or concessions commitments for these renewals.

GENERAL INDUSTRY TRENDS

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According to U.S.

Census data, the age 75+ demographic is projected to be among the fastest growing age cohorts in the United States over the next 20 years, and according to CMS, the age 85+ demographic is projected to grow over 30% over the next five years.

Also, as a result of medical advances, seniors are living longer.

Census data, the age 75+ demographic is projected to be among the fastest growing age cohorts in the United States with an average annual growth of 4% between 2025 and 2035.

Census Bureau projects that the age 75+ demographic as a percentage of the total U.S.

population will increase from an estimated 8.1% in 2025 to 11.1% in 2035.

Also, as a result of medical advances, seniors are living longer, and CMS reports that healthcare spending is projected to grow at an average rate of 5.8% per year, and as a result, in health spending as a percentage of GDP is projected to exceed 20% by 2033.

Due to these demographic trends, we expect the demand for senior living services and housing to increase for the foreseeable future.

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As a result of elevated financing and construction costs over recent years, inventory growth for senior living communities has been historically low.

According to NIC, annual inventory growth was 1.2% across all markets during the fourth quarter of 2024.

According to NIC, annual inventory growth was 0.5% across primary and secondary markets during the fourth quarter of 2025.

Additionally, annual absorption was 2.8% for the fourth quarter of 2025, according to NIC.

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For the Year Ended December 31,

Medical Office and Life Science Portfolio $ 213,320 $ 220,530

SHOP $ 1,312,655 $ 1,244,389

Medical Office and Life Science Portfolio 193,809 213,320

All Other 31,389 37,718

Total revenues $ 1,537,853 $ 1,495,427

Medical Office and Life Science Portfolio $ (66,668) $ (12,183)

SHOP $ (110,000) $ (89,807)

Medical Office and Life Science Portfolio (48,633) (66,668)

All Other (127,253) (213,780)

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NOI by segment:

Medical Office and Life Science Portfolio $ 115,683 $ 122,566 $ (6,883) (5.6) %

SHOP $ 139,256 $ 106,060 $ 33,196 31.3 %

Medical Office and Life Science Portfolio 108,130 115,683 (7,553) (6.5) %

All Other 31,127 37,142 (6,015) (16.2) %

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General and administrative 45,502 26,518 18,984 71.6 %

Acquisition and certain other transaction related costs 2,510 10,853 (8,343) (76.9) %

Impairment of assets 70,734 18,380 52,354 nm

(Loss) gain on sale of properties (18,938) 1,205 (20,143) nm

Gains on equity securities, net — 8,126 (8,126) (100.0) %

Acquisition and certain other transaction related costs 10,356 2,510 7,846 nm

Impairment of assets 165,702 70,734 94,968 134.3 %

Gain (loss) on sale of properties 117,730 (18,938) 136,668 nm

Gain on insurance recoveries 7,522 — 7,522 100.0 %

Interest and other income 5,839 8,950 (3,111) (34.8) %

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(204,498) (235,239) 30,741 (13.1) %

Loss on modification or early extinguishment of debt (324) (2,468) 2,144 (86.9) %

Loss before income taxes and equity in net earnings (losses) of investees (371,385) (272,666) (98,719) 36.2 %

Income tax expense (467) (445) (22) 4.9 %

Equity in net earnings (losses) of investees 1,597 (20,461) 22,058 nm

Loss on modification or early extinguishment of debt (42,526) (324) (42,202) nm

Loss before income taxes and equity in net earnings of investees (320,903) (371,385) 50,482 (13.6) %

Income tax expense (1,743) (467) (1,276) nm

Equity in net earnings of investees 36,760 1,597 35,163 nm

Net loss $ (285,886) $ (370,255) $ 84,369 (22.8) %

nm – not meaningful

Medical Office and Life Science Portfolio:

Comparable Properties (1)

All Properties

As of December 31, As of December 31,

As of and For the Year Ended December 31, As of and For the Year Ended December 31,

2025 2024 2025 2024

Total properties 184 184 212 232

Total square feet 6,976 6,971 7,953 8,610

Number of units 21,201 21,201 23,217 24,978

Occupancy 81.9 % 80.9 % 81.0 % 79.3 %

Average monthly rate (2)

$ 5,404 $ 5,137 $ 5,455 $ 5,193

Year Ended December 31,

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Change 2025 2024 2025 2024 $

Rental income $ 194,274 $ 192,972 $ 1,302 0.7 % $ 19,046 $ 27,558 $ 213,320 $ 220,530 $ (7,210) (3.3) %

Residents fees and services $ 1,141,276 $ 1,073,753 $ 67,523 6.3 % $ 171,379 $ 170,636 $ 1,312,655 $ 1,244,389 $ 68,266 5.5 %

Property operating expenses (994,135) (949,223) $ 44,912 4.7 % (179,264) (189,106) (1,173,399) (1,138,329) $ 35,070 3.1 %

NOI $ 147,141 $ 124,530 $ 22,611 18.2 % $ (7,885) $ (18,470) $ 139,256 $ 106,060 $ 33,196 31.3 %

(1) Consists of medical office and life science properties that we have owned and which have been in service continuously since January 1, 2023;

excludes properties classified as held for sale or out of service undergoing redevelopment, if any, and properties owned by unconsolidated joint ventures in each of which we own an equity interest.

Rental income.

Rental income increased at our comparable properties primarily due to increased parking revenue at one of our properties and leasing activity, partially offset by vacancies at certain of our properties.

Rental income decreased at our non-comparable properties primarily due to vacancies at one of our properties sold during the fourth quarter of 2024 and one of our properties classified as held for sale as of December 31, 2024 and dispositions since January 1, 2023, partially offset by a tenant default at one of our properties during 2023 and an increase in rental income at one of our properties classified as held for sale as of December 31, 2024.

(1) Consists of senior living communities that we have owned, are in service and reported in the same segment since January 1, 2024;

excludes communities classified as held for sale, closed or out of service, if any, and planned dispositions.

Properties are included in same property once stabilized for the full period in both comparison periods presented.

(2) Average monthly rate reflects the average monthly residents fees and services per occupied unit for the period presented.

The average monthly rate is calculated based on the actual number of days during the period.

Residents fees and services.

Residents fees and services are the revenues earned at our managed senior living communities.

We recognize these revenues as services are provided and related fees are accrued.

Residents fees and services increased at our comparable properties primarily due to increases in occupancy and average monthly rate at our communities as shown in the table above.

The increase at our comparable properties was driven by ongoing pricing strategies and sustained demand in the markets of our communities.

Based on these observed trends, we expect both occupancy and average monthly rates to remain favorable during 2026, although such expectations are subject to market and operating conditions.

The activity for our non-comparable properties reflects the 13 communities classified as held for sale as of December 31, 2025, 10 communities transitioned to an existing third party manager during 2024, four communities that are not stabilized for both periods presented and one closed community.

Property operating expenses.

Property operating expenses consist of real estate taxes, utility expenses, insurance, management fees, salaries and benefit costs of property level personnel, repairs and maintenance expense, cleaning expense and other direct costs of operating these properties.

The increase in property operating expenses at our comparable properties is primarily due to increased insurance costs recorded in 2024 and increases in cleaning costs and utility expenses, partially offset by a decrease in real estate taxes due to refunds realized and a reduction in assessed values as a result of successful appeals during 2024.

Property operating expenses decreased at our non-comparable properties primarily due to dispositions since January 1, 2023.

Property operating expenses consist of real estate taxes, utility expenses, insurance, wages and benefit costs of community level personnel, repairs and maintenance expense, management fees, cleaning expense and other direct costs of operating these communities.

Property operating expenses increased at our comparable properties primarily due to increases in labor costs, management fees as a result of higher revenues, utilities, real estate taxes, marketing and other direct costs.

These increases were partially offset by decreased insurance costs due to a reduction in premiums.

Net operating income.

The change in NOI reflects the net changes in rental income and property operating expenses described above.

The change in NOI reflects the net changes in residents fees and services and property operating expenses described above.

Medical Office and Life Science Portfolio:

Comparable Properties (1)

All Properties

As of and For the Year Ended December 31, As of and For the Year Ended December 31,

As of December 31, As of December 31,

2025 2024 2025 2024

Total properties 63 63 67 98

Number of units 23,135 23,135 24,978 25,209

Total square feet 5,224 5,224 5,558 7,953

Occupancy 95.7 % 95.6 % 91.2 % 82.2 %

Average monthly rate (2)

$ 5,103 $ 4,807 $ 5,193 $ 4,888

Year Ended December 31,

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Change 2025 2024 2025 2024 $

Residents fees and services $ 1,138,903 $ 1,051,806 $ 87,097 8.3 % $ 105,486 $ 100,102 $ 1,244,389 $ 1,151,908 $ 92,481 8.0 %

Rental income $ 159,257 $ 157,598 $ 1,659 1.1 % $ 34,552 $ 55,722 $ 193,809 $ 213,320 $ (19,511) (9.1) %

Property operating expenses (63,095) (62,792) 303 0.5 % (22,584) (34,845) (85,679) (97,637) (11,958) (12.2) %

NOI $ 96,162 $ 94,806 $ 1,356 1.4 % $ 11,968 $ 20,877 $ 108,130 $ 115,683 $ (7,553) (6.5) %

(1) Consists of senior living communities that we have owned and which have been in service, reported in the same segment and operated by the same operator continuously since January 1, 2023;

excludes communities classified as held for sale, closed or out of service, if any.

(2) Average monthly rate reflects the average monthly residents fees and services per occupied unit for the period presented.

The average monthly rate is calculated based on the actual number of days during the period.

Residents fees and services.

Residents fees and services are the revenues earned at our managed senior living communities.

We recognize these revenues as services are provided and related fees are accrued.

Residents fees and services increased at our comparable properties primarily due to increases in occupancy and average monthly rate at our communities as shown in the table above.

We expect residents fees and services to continue to increase in the short term at our comparable SHOP communities due to favorable market fundamentals, inflation and operational improvements at our communities.

The activity for our non-comparable properties primarily reflects the 13 communities transitioned to an existing third party manager during 2024 and six properties classified as held for sale as of December 31, 2024.

(1) Consists of medical office and life science properties that we have owned and which have been in service continuously since January 1, 2024;

excludes properties classified as held for sale or out of service undergoing redevelopment, if any, planned dispositions and properties owned by unconsolidated joint ventures of which we own an equity interest.

Properties are included in same property once stabilized for the full period in both comparison periods presented.

Rental income.

Rental income increased at our comparable properties primarily due to increases from our net leasing activity and a $600 termination fee paid by a former tenant at one of our properties during the year ended December 31, 2025.

This space was subsequently re-leased to another tenant in April 2025.

These increases were partially offset by a $1,380 reserve of rental income for a tenant that is in default and no longer paying rent.

We have re-leased a portion of this space to another tenant with a 2026 lease commencement date.

Rental income decreased at our non-comparable properties primarily due to dispositions since January 1, 2024 and a vacancy at one of our properties undergoing redevelopment.

Property operating expenses.

Property operating expenses increased at our comparable properties primarily due to increases in labor costs, maintenance and repairs, dietary expenses, insurance costs and other direct costs, partially offset by reduced contract labor.

The activity for our non-comparable properties primarily reflects the 13 communities transitioned to an existing third party manager during 2024 and six properties classified as held for sale.

The increase in property operating expenses at our comparable properties was primarily due to increases in utility expenses, HVAC expenses and snow removal costs, partially offset by a decrease in insurance costs, real estate taxes due to lower assessed values as a result of successful tax appeals at certain of our properties, as well as other direct costs.

Property operating expenses decreased at our non-comparable properties primarily due to dispositions since January 1, 2024.

Net operating income.

The change in NOI reflects the net changes in residents fees and services and property operating expenses described above.

The change in NOI reflects the net changes in rental income and property operating expenses described above.

All Other (1) :

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NOI $ 29,393 $ 26,775 $ 2,618 9.8 % $ 1,734 $ 10,367 $ 31,127 $ 37,142 $ (6,015) (16.2) %

(1) All Other operations consist of all of our other operations, including certain senior living communities and wellness centers that are leased to third party operators, which segment we do not consider to be sufficiently material to constitute a separate reportable segment, and any other income or expenses that are not attributable to a specific reportable segment.

(1) All Other operations consist of all of our other operations, including certain wellness centers and senior living communities that are leased to third party operators, which segment we do not consider to be sufficiently material to constitute a separate reportable segment, and any other income or expenses that are not attributable to a specific reportable segment.

(2) Consists of properties that we have owned and which have been reported in the same segment and leased to the same operator continuously since January 1, 2024;

excludes properties classified as held for sale, if any.

excludes properties classified as held for sale and planned dispositions, if any.

Properties are included in same property once stabilized for the full period in both comparison periods presented.

(3) All tenant operating data presented are based upon the operating results provided by our tenants for the most recent prior period for which tenant operating results are available to us.

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Rental income.

Rental income increased at our comparable properties primarily due to higher cash rents received during 2024, partially offset by increased 2023 revenue from a cash settlement from a tenant previously in default under leases for six of our wellness centers.

In January 2023, we agreed to amend the lease for three of these wellness centers and repossess the remaining three wellness centers.

The three wellness centers we repossessed were subsequently re-leased to other tenants.

The activity for our non-comparable properties primarily reflects the 18 triple net leased senior living communities classified as held for sale as of December 31, 2024.

Rental income increased at our comparable properties primarily due to new leases for one of our wellness center tenants.

The activity for our non-comparable properties primarily reflects the 18 triple net leased senior living communities that we sold in February 2025 as well as one senior living community that transitioned to a triple net lease in December 2025.

Property operating expenses.

Property operating expenses consist of real estate taxes, insurance and other expenses that are not paid directly by our tenants.

The decrease in property operating expenses for our comparable properties primarily reflects real estate taxes and other expenses we paid during 2023 on behalf of a tenant previously in default under leases for six of our wellness centers.

We also continued to pay real estate taxes and other expenses for two wellness centers until the leases commenced during 2024.

The decrease in property operating expenses for our comparable properties primarily reflects real estate taxes and other expenses paid directly by our tenants during the year ended December 31, 2025, which were previously paid by us during prior periods.

Net operating income.

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Depreciation and amortization expense.

Depreciation and amortization expense increased primarily due to the purchase of capital improvements at certain of our properties, partially offset by certain depreciable assets becoming fully depreciated and dispositions since January 1, 2023.

Depreciation and amortization expense decreased primarily due to dispositions since January 1, 2024 and certain depreciable assets becoming fully depreciated, partially offset by the purchase of capital improvements at certain of our properties.

General and administrative expense .

General and administrative expense consists of fees paid to RMR under our business management agreement, legal and accounting fees, fees and expenses of our Trustees, equity compensation expense and other costs relating to our status as a publicly traded company.

General and administrative expense increased primarily due to an increase in fees incurred to RMR under our business management agreement of $2,503 as a result of an increase in average share price and weighted average debt, partially offset by a decrease in legal and other professional fees and franchise taxes.

General and administrative expense increased primarily due to an incentive management fee of $17,905 payable to RMR under our business management agreement.

Acquisition and certain other transaction related costs.

For the year ended December 31, 2025, we incurred transition costs as a result of our transition of 116 communities to both new and existing third party managers.

For the year ended December 31, 2024, acquisition and certain other transaction related costs primarily represent termination and other fees as a result of our transition of 13 communities to an existing third party manager.

For the year ended December 31, 2023, acquisition and certain other transaction related costs primarily represent costs incurred in connection with our terminated merger with Office Properties Income Trust, costs incurred for financial advisory services regarding our then existing 2024 debt maturities and costs related to the transition of certain senior living communities to other third party managers.

Impairment of assets.

For information about our asset impairment charges, see Note 3 to our Consolidated Financial Statements included in Part IV, Item 15 of this Annual Report on Form 10-K.

(Loss) gain on sale of properties.

Gain (loss) on sale of properties.

For information regarding (loss) gain on sale of properties, see Note 3 to our Consolidated Financial Statements included in Part IV, Item 15 of this Annual Report on Form 10-K.

Gains on equity securities, net.

Gains on equity securities, net, represent the net gains to adjust our investment in AlerisLife to its fair value during 2023.

For further information regarding our investment in AlerisLife, see Notes 2 and 8 to our Consolidated Financial Statements included in Part IV, Item 15 of this Annual Report on Form 10-K.

Gain on insurance recoveries.

During the year ended December 31, 2025, we recognized a gain on insurance recoveries related to cash received from our insurance provider in excess of our losses for a claim that was finalized.

For further information regarding this gain on insurance recoveries, see Note 3 to our Consolidated Financial Statements included in Part IV, Item 15 of this Annual Report on Form 10-K.

Interest and other income.

The decrease in interest and other income is primarily due to lower average invested cash balances during the year ended December 31, 2024 compared to the year ended December 31, 2023 and $1,581 of funds we received from certain programs under the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act, the American Rescue Plan Act, or ARPA, and various state programs during the year ended December 31, 2023.

The decrease in interest and other income is primarily due to lower average invested cash balances and interest rates during the year ended December 31, 2025 compared to the year ended December 31, 2024.

Interest expense.

Interest expense increased primarily due to the issuance of $940,534 of our senior secured notes due 2026 in December 2023, resulting in discount accretion of $86,778 during 2024.

Additionally, we executed a $120,000 mortgage loan in May 2024 at a fixed interest rate of 6.864% per annum.

These increases were partially offset by the repayment and termination of our former credit facility and the redemption of $250,000 of our senior notes that were scheduled to mature in May 2024.

The net proceeds from our $940,534 senior secured notes due 2026 were used to make these repayments in December 2023 aggregating $700,000.

Additionally, in June 2024, we redeemed $60,000 of our outstanding 9.75% senior unsecured notes due 2025 using proceeds from the $120,000 mortgage loan executed in May 2024 and in November 2024 we redeemed another $60,000 of our outstanding 9.75% senior unsecured notes due 2025 using cash on hand.

Interest expense decreased primarily due to the redemption during 2025 of an aggregate $380,000 of our remaining 9.75% senior unsecured notes due 2025.

Additionally, there was a decrease in discount accretion for our senior secured notes due 2026 due to the full redemption of the remaining balance of these notes during 2025.

During the years ended December 31, 2025 and 2024, we recognized discount accretion of $63,241 and $86,778, respectively, for our senior secured notes due 2026.

These decreases were partially offset by four mortgage financings totaling $343,157 during 2025, the execution of a $120,000 mortgage loan in May 2024 at a fixed interest rate of 6.864% per annum and the issuance of $375,000 in aggregate principal amount of our 7.25% senior secured notes due 2030 in September 2025.

Loss on modification or early extinguishment of debt.

During the year ended December 31, 2025, we recorded a loss on early extinguishment of debt in connection with the redemption of all $940,534 of our senior secured notes due 2026 and $380,000 of our remaining 9.75% senior unsecured notes due 2025.

During the year ended December 31, 2024, we recorded a loss on early extinguishment of debt in connection with the partial redemption of an aggregate $120,000 of our outstanding 9.75% senior unsecured notes due 2025.

During the year ended December 31, 2023, we recorded a loss on modification or early

extinguishment of debt in connection with amendments to and repayment in full of our then credit facility as well as redemption of $250,000 of our 4.750% senior notes due May 2024.

For further information regarding our loss on modification or early extinguishment of debt, see Note 9 to our Consolidated Financial Statements included in Part IV, Item 15 of this Annual Report on Form 10-K.

Income tax expense.

Income tax expense is the result of operating income we earned in certain jurisdictions where we are subject to state income taxes.

Equity in net earnings (losses) of investees.

Equity in net earnings (losses) of investees is the change in the fair value of our investments in our joint ventures and also represents our proportionate share of the earnings of our equity method investment in AlerisLife.

Equity in net earnings of investees.

Equity in net earnings of investees is the change in the fair value of our investments in our joint ventures and also represents our proportionate share of the earnings of our equity method investment in AlerisLife.

As a result of the wind-down of AlerisLife's business, during the year ended December 31, 2025, we recognized additional earnings from our investment based on disposition activities by AlerisLife resulting in a cash dividend of $27,200 received in January 2026.

For further information regarding our investments in our joint ventures and AlerisLife, see Notes 2, 3 and 8 to our Consolidated Financial Statements included in Part IV, Item 15 of this Annual Report on Form 10-K.

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FFO is calculated on the basis defined by the National Association of Real Estate Investment Trusts, which is net income (loss), calculated in accordance with GAAP, excluding any gain or loss on sale of properties, equity in net earnings or losses of investees, loss on impairment of real estate assets, gains or losses on equity securities, net, if any, and including adjustments to reflect our proportionate share of FFO of our equity method investees, plus real estate depreciation and amortization of consolidated properties, as well as certain other adjustments currently not applicable to us.

In calculating Normalized FFO, we adjust for the items shown below including similar adjustments for our unconsolidated joint ventures, if any.

In calculating Normalized FFO, we adjust for the items shown below including similar adjustments for our unconsolidated joint ventures and incentive management fees, if any.

FFO and Normalized FFO are among the factors considered by our Board of Trustees when determining the amount of distributions to our shareholders.

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Depreciation and amortization 261,923 284,957

Loss (gain) on sale of properties 18,938 (1,205)

(Gain) loss on sale of properties (117,730) 18,938

Impairment of assets 165,702 70,734

Gains on equity securities, net — (8,126)

Equity in net (earnings) losses of investees (1,597) 20,461

Equity in net earnings of investees (36,760) (1,597)

Share of FFO from unconsolidated joint ventures 9,649 9,006

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FFO 2,597 25,590

Incentive management fees (1)

Acquisition and certain other transaction related costs 10,356 2,510

Gain on insurance recoveries (7,522) —

Loss on modification or early extinguishment of debt 42,526 324

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Distributions declared $ 0.04 $ 0.04

(1) Incentive management fees are estimated and accrued during the applicable measurement period.

Actual incentive management fees are calculated based on common share total return, as defined in our business management agreement, for the three year period ending December 31 of the applicable calendar year, and are included in general and administrative expenses in our consolidated statements of comprehensive income (loss).

In January 2026, we paid an incentive management fee of $17,905 to RMR for the year ended December 31, 2025.

Property Net Operating Income (NOI)

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Net loss $ (285,886) $ (370,255)

Equity in net (earnings) losses of investees (1,597) 20,461

Equity in net earnings of investees (36,760) (1,597)

Income tax expense 1,743 467

Loss before income taxes and equity in net earnings (losses) of investees (371,385) (272,666)

Loss before income taxes and equity in net earnings of investees (320,903) (371,385)

Loss on modification or early extinguishment of debt 42,526 324

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Interest and other income (5,839) (8,950)

Gains on equity securities, net — (8,126)

Loss (gain) on sale of properties 18,938 (1,205)

(Gain) loss on sale of properties (117,730) 18,938

Impairment of assets 165,702 70,734

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Total NOI $ 278,513 $ 258,885

Medical Office and Life Science Portfolio NOI $ 115,683 $ 122,566

SHOP NOI $ 139,256 $ 106,060

Medical Office and Life Science Portfolio NOI 108,130 115,683

All Other NOI 31,127 37,142

Total NOI $ 278,513 $ 258,885

LIQUIDITY AND CAPITAL RESOURCES

Our principal sources of cash to meet operating and capital expenses, pay our debt service obligations and make distributions to our shareholders are the operating cash flows we generate as rental income from our leased properties, residents fees and services revenues from our managed communities and proceeds from the disposition of certain properties.

LIQUIDITY AND CAPITAL RESOURCES (dollars in thousands)

Our principal sources of cash to meet operating and capital expenses, pay our debt service obligations and make distributions to our shareholders are the operating cash flows we generate as residents fees and services revenues from our managed communities, rental income from our leased properties and proceeds from the disposition of certain properties.

We believe that these sources of funds will be sufficient to meet our operating and capital expenses, pay our debt service obligations and make distributions to our shareholders for at least the next 12 months and for the foreseeable future thereafter.

Our future cash flows from operating activities will depend primarily upon:

• our ability to receive rents from our tenants;

• our ability to maintain or increase the occupancy of, and the rates at, our properties;

• our ability to receive rents from our tenants;

• our and our managers' abilities to control operating expenses and capital expenses at our properties, including increased operating expenses that we may incur in response to wage and commodity price inflation, limited labor availability and increased insurance costs;

• our managers' abilities to maintain or increase our returns from our managed senior living communities.

The following is a summary of our sources and uses of cash flows for the periods presented, as reflected in our Consolidated Statements of Cash Flows included in Part IV, Item 15 of this Annual Report on Form 10-K (dollars in thousands):

Year Ended December 31,

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Cash and cash equivalents and restricted cash at end of period $ 121,799 $ 149,854

We have a significant number of unencumbered properties in our SHOP segment.

As of December 31, 2024, our unencumbered gross book value of real estate assets was $5.0 billion.

As of February 21, 2025, we have executed term sheets with various lenders for proceeds of approximately $276.0 million, and are in active negotiations with an additional lender for expected proceeds of $64.0 million, for loans that will be secured by certain of our unencumbered SHOP communities.

We believe that with $144.6 million of cash and cash equivalents as of December 31, 2024, the above referenced loan proceeds and proceeds from sales of certain unencumbered properties, we will satisfy the $380.0 million outstanding principal amount of 9.75% senior unsecured notes due in June 2025, which is our next significant debt maturity.

Our Operating Liquidity and Resources

We generally receive minimum rents from tenants at our medical office and life science properties, triple net leased wellness centers and senior living communities monthly, we receive residents fees and services revenues, net of expenses, from our managed senior living communities monthly and we receive percentage rents from tenants at certain of our triple net senior living senior living communities monthly, quarterly or annually.

The increase in cash provided by operating activities for the year ended December 31, 2024 compared to 2023 was primarily due to higher cash flows from our properties as a result of increased rates and occupancy at the senior living communities in our SHOP segment.

Additionally, cash interest payments decreased in 2024 compared to 2023 primarily due to the repayment and termination of our former credit facility and the redemption of $250.0 million of our senior notes in December 2023.

We receive residents fees and services revenues, net of expenses, from our managed senior living communities monthly, we generally receive minimum rents from tenants at our senior living communities, medical office and life science properties and triple net leased wellness centers monthly and we receive percentage rents from tenants at certain of our triple net senior living communities monthly, quarterly or annually.

The change in cash (used in) provided by operating activities for the year ended December 31, 2025 compared to 2024 was primarily due to the accreted interest of $152,869 paid during 2025 as a result of the redemption in full of our outstanding senior secured notes due 2026.

We incurred a $17,905 incentive management fee pursuant to our business management agreement for the year ended December 31, 2025.

We paid this incentive management fee to RMR in January 2026.

Our Investing Liquidity and Resources

The decrease in cash used in investing activities for the year ended December 31, 2024 compared to 2023 was primarily due to a decrease in real estate improvements and an increase in proceeds from the sale of properties during 2024 compared to 2023.

The decrease was partially offset by our purchase in February 2024 of approximately 34.0% of the then outstanding AlerisLife common shares from ABP Trust at the tender offer price of $1.31 per share for a total purchase price, including transaction related costs, of $15.5 million.

During 2023, we tendered all of our AlerisLife common shares at $1.31 per share.

The following is a summary of capital expenditures, development, redevelopment and other activities for the periods presented (dollars in thousands):

The change in cash provided by (used in) investing activities for the year ended December 31, 2025 compared to 2024 was primarily due to an increase in proceeds from the sale of properties, a $28,000 cash distribution paid to us by the Seaport JV, aggregate cash dividends of $20,400 paid to us by AlerisLife, a reduction in real estate improvements and our purchase on February 16, 2024 of approximately 34.0% of the then outstanding AlerisLife common shares from ABP Trust at the tender offer price of $1.31 per share for a total purchase price, including transaction related costs, of $15,459.

These changes were partially offset by $8,500 of contributions made to the Seaport JV in 2025.

The following is a summary of capital expenditures, development, redevelopment and other activities for the periods presented:

Year Ended December 31,

SHOP fixed assets and capital improvements $ 96,940 $ 93,043

Medical Office and Life Science Portfolio capital expenditures:

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Recurring capital expenditures - Medical Office and Life Science Portfolio 34,508 27,291

SHOP fixed assets and capital improvements 93,043 100,981

Wellness centers lease related costs (1)

Total recurring capital expenditures $ 131,448 $ 140,952

Development, redevelopment and other activities - Medical Office and Life Science Portfolio (3)

$ 3,012 $ 9,244

Development, redevelopment and other activities - SHOP (3)

$ 14,194 $ 46,558

Development, redevelopment and other activities - Medical Office and Life Science Portfolio (3)

Total development, redevelopment and other activities $ 14,502 $ 49,570

Capital expenditures by segment:

Medical Office and Life Science Portfolio $ 30,303 $ 60,298

SHOP $ 111,134 $ 139,601

Medical Office and Life Science Portfolio 34,816 30,303

All Other - wellness centers — 20,618

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(2) Includes capital expenditures to replace obsolete building components that extend the useful life of existing assets or other improvements to increase the marketability of the property.

(3) Includes capital expenditures that reposition a property or result in new sources of revenue.

(3) Includes capital expenditures that reposition a property or result in change of use or new sources of revenue.

We generally plan to continue investing capital in our properties, including redevelopment projects, to better position these properties in their respective markets in order to increase our returns in future years.

As of December 31, 2024, we had estimated unspent leasing related obligations at our medical office and life science properties of approximately $22.6 million, of which we expect to spend approximately $19.7 million during calendar year 2025.

We expect to fund these obligations using operating cash flows, cash on hand, proceeds from the disposition of certain properties and future financing activities.

As of December 31, 2025, we had estimated unspent leasing related obligations at our medical office and life science properties of approximately $10,241, of which we expect to spend approximately $8,734 during the next 12 months.

We expect to fund these obligations using operating cash flows and cash on hand.

We are currently in the process of redeveloping certain properties, primarily our managed senior living communities.

We continue to assess opportunities to redevelop other properties in our SHOP segment and Medical Office and Life Science Portfolio.

We continue to assess opportunities to redevelop other properties in our SHOP segment and Medical Office and Life Science Portfolio segment.

These redevelopment projects may require significant capital expenditures and time to complete and we may defer certain redevelopment projects to preserve liquidity.

Additionally, due to labor availability constraints and wage and commodity price inflation, the capital investments we plan to make may be delayed or cost more than we expect.

During the year ended December 31, 2024, we sold five properties for an aggregate sales price of $35.7 million, excluding closing costs.

Subsequent to December 31, 2024, we sold five properties for an aggregate sales price of $178.7 million, excluding closing costs.

The net proceeds from three of these properties sold in 2025, which have a sales price, excluding closing costs, of $159.0 million, will be used to partially redeem our outstanding senior secured notes due 2026.

As of February 24, 2025, we had 26 properties under agreements or letters of intent to sell for an aggregate sales price of $219.6 million, excluding closing costs.

The net proceeds from 19 of these properties, which have an expected aggregate sales price, excluding closing costs, of $142.1 million, will be used to partially redeem our outstanding senior secured notes due 2026, if the sales of such properties are completed.

During the year ended December 31, 2025, we sold 69 properties for an aggregate sales price of $604,874, excluding closing costs.

The net proceeds from 35 of these properties sold, which had a sales price of $402,234, excluding closing costs, were used to partially redeem our then outstanding senior secured notes due 2026.

As of February 20, 2026, we had 13 properties under agreement to sell for an aggregate sales price of $23,000, excluding closing costs.

We may not complete the sales of any or all of the properties we currently plan to sell.

Also, we may sell some or all of these properties at amounts that are less than currently expected and/or less than the carrying values of such properties and we may incur losses on any such sales as a result.

For further information regarding

our dispositions, see Note 3 to our Consolidated Financial Statements included in Part IV, Item 15 of this Annual Report on Form 10-K.

On February 14, 2025, AlerisLife paid an aggregate cash dividend of $50.0 million to its stockholders.

Our pro rata share of this cash dividend was $17.0 million.

Also, we may sell some or all of these properties at amounts that are less than currently expected and/or less than the carrying values of such properties and we may incur losses on any such

sales as a result.

For further information regarding our dispositions, see Note 3 to our Consolidated Financial Statements included in Part IV, Item 15 of this Annual Report on Form 10-K.

On February 14, 2025, AlerisLife paid an aggregate cash dividend of $50,000 to its stockholders.

Our pro rata share of this cash dividend was $17,000.

On July 15, 2025, AlerisLife paid an aggregate cash dividend of $10,000 to its stockholders.

Our pro rata share of this cash dividend was $3,400.

On January 9, 2026, in connection with the wind-down of its business, AlerisLife paid an aggregate cash dividend of $80,000 to its stockholders.

Our pro rata share of this cash dividend was $27,200.

On August 21, 2025, the Seaport JV paid an aggregate cash distribution of $280,000 to its investors in connection with the $1,000,000 refinancing of its prior mortgage loan in August 2025.

Our pro rata share of this cash distribution was $28,000.

In January 2026, we provided notice to exercise our purchase option for the two properties securing our finance leases for $14,500, with closing expected in April 2026.

Our Financing Liquidity and Resources

The decrease in cash used in financing activities for the year ended December 31, 2024 compared to 2023 was primarily due to $700.0 million in repayments of borrowings under our former credit facility during 2023, the redemption in December 2023 of all $250.0 million of our outstanding 4.750% senior notes due May 2024 and our execution of a $120.0 million mortgage loan during 2024.

The decrease was partially offset by the issuance of $940.5 million in aggregate principal amount at maturity of our senior secured notes due 2026 in a private offering, raising net proceeds of $730.4 million, after deducting initial purchaser discounts and estimated offering costs, and the redemption of $120.0 million of our 9.75% senior notes due June 2025 during 2024.

As of December 31, 2024, we had $144.6 million of cash and cash equivalents.

The increase in cash used in financing activities for the year ended December 31, 2025 compared to 2024 was primarily due to the redemption of our outstanding senior secured notes due 2026 and redemption of our outstanding senior secured notes due 2025, partially offset by our issuance of $375,000 in aggregate principal amount of our 7.25% senior secured notes due 2030 in a private placement, raising net proceeds of $364,726, after deducting discounts and commissions to the initial purchasers and other fees and expenses.

Additionally, we executed four mortgage financings for aggregate proceeds, excluding closing costs, of $343,157 in 2025.

In June 2025, we obtained a $150,000 revolving credit facility secured by 14 SHOP communities.

Our revolving credit facility is available for general business purposes, including acquisitions.

We can borrow, repay and reborrow funds available under our revolving credit facility, and no principal repayments are due, until maturity.

Availability of borrowings under our credit agreement is subject to satisfying certain financial covenants and other credit facility conditions.

Our revolving credit facility matures in June 2029 and we have two six-month extension options for the maturity date of the facility, subject to satisfaction of certain conditions and payment of an extension fee.

Interest payable on borrowings under our revolving credit facility is based on an annual rate of secured overnight financing rate, or SOFR, plus a premium of 2.50% to 3.00%, depending on our net leverage ratio, as defined in our credit agreement, which was 2.50% as of December 31, 2025.

We also pay an unused commitment fee of 25 to 35 basis points per annum based on amounts outstanding under our revolving credit facility.

As of December 31, 2025, the annual interest rate payable on borrowings under our revolving credit facility was 6.47%.

As of December 31, 2025 and February 23, 2026, we had no borrowings under our revolving credit facility and $150,000 available for borrowings.

As of December 31, 2025, we had $105,407 of cash and cash equivalents.

We typically use cash balances, net proceeds from offerings of securities, debt issuances or dispositions of assets and cash flows from our operations to fund our operations, debt repayments, distributions, acquisitions, investments, capital expenditures and other general business purposes.

During the year ended December 31, 2024, we paid quarterly cash distributions to our shareholders totaling approximately $9.6 million using cash on hand.

During the year ended December 31, 2025, we paid quarterly cash distributions to our shareholders totaling approximately $9,661 using cash on hand.

For further information regarding the distributions we paid during 2025, see Note 5 to our Consolidated Financial Statements included in Part IV, Item 15 of this Annual Report on Form 10-K.

On January 16, 2025, we declared a quarterly distribution to common shareholders of record on January 27, 2025 of $0.01 per share, or approximately $2.4 million in aggregate.

On January 15, 2026, we declared a quarterly distribution to common shareholders of record on January 26, 2026 of $0.01 per share, or approximately $2,421 in aggregate.

We paid this distribution on February 19, 2026, using cash on hand.

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Our credit and debt ratings depend upon evaluations by credit rating agencies of our business practices and plans, including our ability to maintain our earnings, our liquidity position, to stagger our debt maturities and to balance our use of debt and equity capital so that our financial performance and leverage ratios afford us flexibility to withstand any reasonably anticipated adverse changes.

Similarly, our ability to raise equity capital in the future will depend primarily upon equity capital market conditions and our ability to conduct our business to maintain and grow our operating cash flows.

Similarly, our

ability to raise equity capital in the future will depend primarily upon equity capital market conditions and our ability to conduct our business to maintain and grow our operating cash flows.

We intend to conduct our business activities in a manner which will afford us reasonable access to capital for investment and financing activities, but we cannot be sure that we will be able to successfully carry out that intention.

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Further, those conditions could also disrupt capital markets and limit our access to financing from public sources, particularly if the global financial markets experience significant disruptions.

In January 2023, we repaid $113.6 million in outstanding borrowings under our former credit facility and the commitments were reduced to $586.4 million.

In February 2023, we further reduced the commitments to $450.0 million following our repayment of $136.4 million in outstanding borrowings under our former credit facility.

Until its repayment in full and termination on December 21, 2023, we had a $450.0 million credit facility that was fully drawn.

At December 21, 2023, our former credit facility required interest to be paid on borrowings at an annual rate of 8.4%, plus a facility fee of $0.3 million per quarter.

On December 21, 2023, we completed a private offering of $940.5 million in aggregate principal amount at maturity of senior secured notes due January 2026, with a one-year extension option.

The net proceeds from the offering were approximately $730.4 million after deducting initial purchaser discounts and estimated offering costs.

We used a portion of the net proceeds to repay in full the $450.0 million outstanding under our then secured credit facility and to redeem $250.0 million of our senior notes that were scheduled to mature in May 2024.

No cash interest will accrue on these senior secured notes prior

The accreted value of these senior secured notes will increase at a rate of 11.25% per annum compounded semiannually on January 15 and July 15 of each year.

Our $940.5 million in outstanding senior secured notes due 2026 are fully and unconditionally guaranteed, on a joint, several and senior secured basis, by certain of our subsidiaries that own 95 properties, or the Collateral Guarantors, and on a joint, several and unsecured basis, by all our subsidiaries other than the Collateral Guarantors and certain excluded subsidiaries.

These notes and the guarantees provided by the Collateral Guarantors are secured by a first priority lien and security interest in each of the collateral properties and 100% of the equity interests in each of the Collateral Guarantors.

In January 2025, we sold three properties that secure these senior secured notes for a sales price of $159.0 million, excluding closing costs.

As of February 24, 2025, we are under agreements to sell 19 additional properties that secure these senior secured notes for an expected aggregate sales price of $142.1 million, excluding closing costs.

The net proceeds from these sales will be used to partially redeem these senior secured notes.

In May 2024, we executed a $120.0 million fixed rate, interest only mortgage loan secured by eight medical office and life science properties.

In May 2024, we executed a $120,000 fixed rate, interest only mortgage loan secured by eight medical office and life science properties.

This mortgage loan matures in June 2034 and requires that interest be paid at an annual rate of 6.864%.

The net proceeds from this mortgage loan were approximately $117.1 million after deducting estimated closing costs, and in June 2024 we used $60.0 million of the net proceeds to partially redeem our then outstanding $500.0 million 9.75% senior notes due 2025.

In November 2024, we redeemed $60.0 million of our outstanding 9.75% senior unsecured notes due 2025 using cash on hand.

In January 2024, Moody's upgraded our 9.75% senior notes due 2025 and our 4.375% senior notes due 2031 ratings from Ca to Caa3 and our senior unsecured debt rating from C to Ca, and Moody's also assigned a Caa2 rating to our senior secured notes due 2026.

In January 2024, Standard & Poor's upgraded our 9.75% senior notes due 2025 rating from CCC+ to B, our 4.375% senior notes due 2031 rating from CCC+ to B and our senior unsecured debt rating from CCC- to CCC, and Standard & Poor's also assigned a B rating to our senior secured notes due 2026.

The net proceeds from this mortgage loan were approximately $117,100 after deducting estimated closing costs, and in June 2024 we used $60,000 of the net proceeds to partially redeem our then outstanding $500,000 9.75% senior notes due 2025.

In November 2024, we redeemed $60,000 of our outstanding 9.75% senior unsecured notes due 2025 using cash on hand.

In March 2025, we executed a $140,000 floating rate mortgage loan secured by 14 SHOP communities.

This mortgage loan matures in March 2028 and requires that interest be paid at an annual rate of SOFR plus a premium of 2.50% with interest-only payments through April 2027, and we have two six-month extension options of the interest-only period, subject to satisfaction of certain conditions.

In connection with this mortgage loan, we have purchased an interest rate cap with a SOFR strike rate equal to 4.50% pursuant to the terms of the applicable loan agreement.

In April 2025, we executed a $108,873 fixed rate mortgage financing secured by seven SHOP communities.

These mortgage loans mature in May 2035 and require that interest be paid at an annual rate of 6.22% with interest-only payments through May 2030.

In May 2025, we executed a $64,000 fixed rate mortgage loan secured by four SHOP communities.

This mortgage loan matures in June 2030 and requires that interest be paid at an annual rate of 6.57%.

In May 2025, we executed a $30,284 fixed rate mortgage financing secured by two SHOP communities.

These mortgage loans mature in June 2035 and require that interest be paid at an annual rate of 6.36% with interest-only payments through June 2028.

From April through June 2025, we used the net proceeds from these 2025 mortgage financings, together with cash on hand, to fully redeem the remaining $380,000 principal balance of our 9.75% senior unsecured notes due June 2025.

In September 2025, we issued $375,000 in aggregate principal amount of our 7.25% senior secured notes due 2030 in a private placement, raising net proceeds of $364,726, after deducting discounts and commissions to the initial purchasers and other estimated fees and expenses.

These notes are fully and unconditionally guaranteed, on a joint, several and senior secured basis, by certain of our subsidiaries that own 36 properties, or the 2030 Collateral Guarantors, and on a joint, several and unsecured basis, by all of our subsidiaries other than the 2030 Collateral Guarantors and certain excluded subsidiaries.

These notes and the guarantees provided by the 2030 Collateral Guarantors are secured by a first priority lien and security interest on 100% of the equity interests in each of the 2030 Collateral Guarantors.

These notes require semi-annual interest payments through maturity.

We used $307,006 of the net proceeds from this offering to partially redeem our then outstanding $641,376 senior secured notes due 2026.

In October 2025, we partially redeemed $10,249 of our then outstanding $334,370 senior secured notes due 2026.

In December 2025, we redeemed the remaining $324,121 of our outstanding senior secured notes due 2026 using net proceeds from the sales of both encumbered properties and unencumbered properties, as well as cash on hand.

In August 2025, Moody's upgraded our issuer credit rating from Caa3 to Caa1, senior secured notes due 2026 rating from Caa2 to B3, our 4.375% senior notes due 2031 rating from Caa3 to Caa1, and our senior unsecured notes from Ca to Caa2.

In September 2025, Standard & Poor's upgraded our issuer credit rating from CCC+ to B-, our senior secured notes due 2026 and our 4.375% senior notes due 2031 ratings from B to B+ and our senior unsecured notes note rating from CCC+ to B-.

Additionally, Standard & Poor's rated our 7.25% senior secured notes due 2030 as B+.

For further information regarding our outstanding debt, see Note 9 to our Consolidated Financial Statements included in Part IV, Item 15 of this Annual Report on Form 10-K.

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Our principal debt obligations at December 31, 2025 were:

(1) $2.0 billion outstanding principal amount of senior unsecured notes;

(2) $940.5 million outstanding principal amount of senior secured notes;

and (3) $127.5 million aggregate principal amount of mortgage notes (excluding discounts, premiums and net debt issuance costs) secured by nine properties.

(1) $1,600,000 outstanding principal amount of senior unsecured notes;

(2) $375,000 outstanding principal amount of senior secured notes;

(3) $328,500 aggregate principal amount of fixed rate mortgage notes (excluding discounts, premiums and net debt issuance costs) secured by 22 properties;

and (4) $140,000 principal amount of a floating rate mortgage loan (excluding discounts, premiums and net debt issuance costs) secured by 14 properties.

For further information regarding our indebtedness, see Note 9 to our Consolidated Financial Statements included in Part IV, Item 15 of this Annual Report on Form 10-K.

Our senior notes are governed by our senior notes indentures and their supplements.

Our senior notes indentures and their supplements provide for acceleration of payment of all amounts outstanding upon the occurrence and continuation of certain events of default.

Our senior notes indentures and their supplements also contain covenants that restrict our ability to incur debts, including debts secured by mortgages on our properties, in excess of calculated amounts and require us to maintain various financial ratios.

As of December 31, 2024, we believe we were in compliance with all of the covenants under our senior notes indentures and their supplements and our other debt obligations.

Our credit agreement, our mortgage loan agreements and our senior notes indentures and their supplements provide for acceleration of payment of all amounts outstanding upon the occurrence and continuation of certain events of default.

Our credit agreement and our senior notes indentures and their supplements also contain covenants that restrict our ability to incur debts, including debts secured by mortgages on our properties, in excess of calculated amounts and require us to maintain various financial ratios.

As of December 31, 2025, we believe we were in compliance with all of the covenants under our debt agreements.

Although we continue to take steps to enhance our ability to maintain sufficient liquidity, as noted elsewhere in this Annual Report on Form 10-K, a protracted negative impact on the economy or the industries in which our properties and businesses operate resulting from wage or commodity price inflation, high interest rates, geopolitical risks or other economic, market or industry conditions, including the delayed recovery of the senior housing industry, economic downturns or a possible recession, may cause increased pressure on our ability to satisfy financial and other covenants.

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See "—Our Financing Liquidity and Resources" above for information regarding recent changes to our issuer credit rating and senior debt ratings.

Our senior unsecured notes indentures and their supplements contain cross default provisions to any other debts of more than $20.0 million ($50.0 million or more in the case of our senior notes indentures and supplements entered in February 2016, February 2018, June 2020, February 2021 and December 2023).

The loan agreements governing the aggregate $620.0 million secured debt financing related to the Seaport JV contain customary covenants and provide for acceleration of payment of all amounts due thereunder upon the occurrence and continuation of certain events of default.

We no longer include this $620.0 million of secured debt financing in our consolidated balance sheet following the deconsolidation of the net assets of this joint venture;

however, we continue to provide certain guaranties on this debt.

Our revolving credit facility contains cross default provisions to any other debts of more than $25,000.

Our senior unsecured notes indentures and their supplements contain cross default provisions to any other debts of more than $20,000 ($50,000 or more in the case of our senior notes indentures and supplements entered in February 2016, February 2018 and February 2021).

The loan agreements governing the aggregate $1,000,000 secured debt financing related to the Seaport JV contain customary covenants and provide for acceleration of payment of all amounts due thereunder upon the occurrence and continuation of certain events of default.

We provide certain limited recourse guaranties on this debt, with our liability limited to $100,000.

The debt secured by the properties included in the LSMD JV in which we own a 20% equity interest is guaranteed by this joint venture and is non-recourse to us.

Supplemental Guarantor Information

On May 28, 2020, we issued $1.0 billion of our 9.75% senior notes due 2025.

We subsequently redeemed $500.0 million and $120.0 million of this debt during 2022 and 2024, respectively, with $380.0 million remaining outstanding.

On February 3, 2021, we issued $500.0 million of our 4.375% senior notes due 2031.

As of December 31, 2024, all $380.0 million of our 9.75% senior notes due 2025 and all $500.0 million of our 4.375% senior notes due 2031 were fully and unconditionally guaranteed, on a joint, several and unsecured basis, by all of our subsidiaries except certain excluded subsidiaries.

On February 3, 2021, we issued $500,000 of our 4.375% senior notes due 2031.

As of December 31, 2025, all $500,000 of our 4.375% senior notes due 2031 were fully and unconditionally guaranteed, on a joint, several and unsecured basis, by all of our subsidiaries except certain excluded subsidiaries.

The notes and related guarantees are effectively subordinated to all of our and the subsidiary guarantors' secured indebtedness, respectively, to the extent of the value of the applicable collateral, and are structurally subordinated to all indebtedness and other liabilities and any preferred equity of any of our subsidiaries that do not guarantee the notes.

Our remaining $1.1 billion of senior unsecured notes do not have the benefit of any guarantees.

A subsidiary guarantor's guarantee of our 9.75% senior notes due 2025 and our 4.375% senior notes due 2031, as applicable, and all other obligations of such subsidiary guarantor under the indenture governing the notes will automatically terminate and such subsidiary guarantor will automatically be released from all of its obligations under such subsidiary guarantee and the indenture under certain circumstances, including on or after the date (a) the notes have an investment grade rating from two rating agencies and one of such investment grade ratings is a mid-BBB investment grade rating and (b) no default or event of default has occurred and is continuing under the indenture.

Our non-guarantor subsidiaries are separate and distinct legal entities and have no obligation, contingent or otherwise, to pay any amounts due on our 9.75% senior notes due 2025 or our 4.375% senior notes due 2031 or the respective guarantees, or to make any funds available therefor, whether by dividend, distribution, loan or other payments.

The rights of holders of our 9.75% senior notes due 2025 and our 4.375% senior notes due 2031, as applicable, to benefit from any of the assets of our non-guarantor subsidiaries are subject to the prior satisfaction of claims of those subsidiaries' creditors and any preferred equity holders.

As a result, our 9.75% senior notes due 2025 and our 4.375% senior notes due 2031 and the respective guarantees are structurally subordinated to all indebtedness, guarantees and other liabilities of our subsidiaries that do not guarantee our 9.75% senior notes due 2025 and our 4.375% senior notes due 2031, including guarantees of other indebtedness of ours, payment obligations under lease agreements, trade payables and preferred equity.

The following tables present summarized financial information for guarantor entities and issuer, on a combined basis after eliminating (i) intercompany transactions and balances among the guarantor entities and (ii) equity in earnings from, and any investments in, any subsidiary that is a non-guarantor (dollars in thousands):

Our remaining $1,100,000 of senior unsecured notes do not have the benefit of any guarantees.

A subsidiary guarantor's guarantee of our 4.375% senior notes due 2031 and all other obligations of such subsidiary guarantor under the indenture governing the notes will automatically terminate and such subsidiary guarantor will automatically be released from all of its obligations under such subsidiary guarantee and the indenture under certain circumstances, including on or after the date (a) the notes have an investment grade rating from two rating agencies and one of such investment grade ratings is a mid-BBB investment grade rating and (b) no default or event of default has occurred and is continuing under the indenture.

Our non-guarantor subsidiaries are separate and distinct legal entities and have no obligation, contingent or otherwise, to pay any amounts due on our 4.375% senior notes due 2031 or their guarantees, or to make any funds available therefor, whether by dividend, distribution, loan or other payments.

The rights of holders of our 4.375% senior notes due 2031

to benefit from any of the assets of our non-guarantor subsidiaries are subject to the prior satisfaction of claims of those subsidiaries' creditors and any preferred equity holders.

As a result, our 4.375% senior notes due 2031 and their guarantees are structurally subordinated to all indebtedness, guarantees and other liabilities of our subsidiaries that do not guarantee our 4.375% senior notes due 2031, including guarantees of other indebtedness of ours, payment obligations under lease agreements, trade payables and preferred equity.

December 31, 2025

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We allocate the purchase prices of our properties to land, building and improvements based on determinations of the fair values of these assets assuming the properties are vacant.

We determine the fair value of each property using methods similar to those used by independent appraisers, which may involve estimated cash flows that are based on a number of factors, including capitalization rates and discount rates, among others.

We determine the fair value of each property using methods similar to those used by independent appraisers, which may involve estimated cash flows that are based on a number of factors,

including capitalization rates and discount rates, among others.

In some circumstances, we engage independent real estate appraisal firms to provide market information and evaluations which are relevant to our purchase price allocations and determinations of depreciable useful lives;

however, we are ultimately responsible for the purchase price allocations and determinations of useful lives.

place leases and (ii) our estimates of fair market lease rates for the corresponding leases, measured over a period equal to the terms of the respective leases.

We allocate a portion of the purchase price to above market and below market leases based on the present value (using an interest rate which reflects the risks associated with acquired in place leases at the time each property was acquired by us) of the difference, if any, between (i) the contractual amounts to be paid pursuant to the acquired in place leases and (ii) our estimates of fair market lease rates for the corresponding leases, measured over a period equal to the terms of the respective leases.

The terms of below market leases that include bargain renewal options, if any, are further adjusted if we determine that renewal is probable.

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For the year ended December 31, 2025, substantially all of our NOI was generated from properties where a majority of the revenues are derived from our tenants' and residents' private resources, and a small amount of our NOI was generated from properties where a majority of the revenues are derived from Medicare and Medicaid payments.

Nonetheless, we own, and our tenants, managers and operators operate, facilities in many states that participate in federal and state healthcare payment programs, including the federal Medicare and state Medicaid programs and other federal and state healthcare payment programs.

Nonetheless, we own, and our managers, operators and tenants operate, facilities in many states that participate in federal and state healthcare payment programs, including the federal Medicare and state Medicaid programs and other federal and state healthcare payment programs.

Also, some of our medical office and life science property tenants participate in federal Medicare and state Medicaid programs and other government healthcare payment programs.

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Examples of these, and other information regarding such matters and developments, are provided under the caption “Business—Government Regulation and Reimbursement” above in Part I, Item 1 of this Annual Report on Form 10-K.

We cannot currently predict the type and magnitude of the potential Medicare and Medicaid policy changes, rate changes or other changes that may be implemented, but we believe that some of these changes will cause these government funded healthcare programs to fail to provide rates that match our and our tenants' increasing expenses and that such changes may be material and adverse to our future financial results.

During the years ended December 31, 2024, 2023 and 2022, we recognized $0.0 million, $1.6 million and $4.3 million, respectively, in interest and other income in our consolidated statements of comprehensive income (loss) related to funds received under the CARES Act and ARPA.

healthcare programs to fail to provide rates that match our and our tenants' increasing expenses and that such changes may be material and adverse to our future financial results.

During the years ended December 31, 2025, 2024 and 2023, we recognized $0, $0 and $1,581, respectively, in interest and other income in our consolidated statements of comprehensive income (loss) related to funds received under the Coronavirus Aid, Relief, and Economic Security Act and the American Rescue Plan Act.

Senior housing operations have historically reflected modest seasonality.

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We do not expect the direct impact of these increases to be material to our results of operations, because the increased costs either would be the responsibility of our tenants directly or in the longer term, passed through and paid by tenants of our properties.

Although we do not believe it is likely in the foreseeable future, laws enacted to mitigate climate change may make some of our buildings obsolete or cause us to make material investments in our properties, which could materially and adversely affect our financial condition or the financial condition of our tenants or managers and their ability to pay rent or returns to us.

Although we do not believe it is likely in the foreseeable future, laws enacted to mitigate climate change may make some of our buildings obsolete or cause us to make material investments in our properties, which could materially and adversely affect our financial condition or the financial condition of our managers or tenants and their ability to pay rent or returns to us.

In an effort to reduce the effects of any increased energy costs in the future, we continuously study ways to improve the energy efficiency at all of our properties.

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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-K

Item 7. Management’s Discussion and Analysis