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Item 2. Management’s Discussion and Analysis

2026-05-04 compared with 2025-11-03 · 191 added, 441 removed, 245 unchanged (72% of the section changed)

1 unchanged sentence

The following discussion should be read in conjunction with our condensed consolidated financial statements and notes thereto included in this Quarterly Report on Form 10-Q and with our Annual Report.

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 September 30, 2025, we owned 335 properties located in 34 states and Washington, D.C., including 50 properties classified as held for sale.

As of September 30, 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 14.4 years.

On September 3, 2025, we announced that we entered into agreements with AlerisLife and seven different third party managers to transition the management of 116 of our senior living communities managed by Five Star to these managers.

As of September 30, 2025 , management agreements for 21 of our senior living communities had been transitioned from Five Star to new and existing managers.

As of November 3, 2025, management agreements for 85 communities had been transitioned to new managers and we expect to complete the management transitions for the remaining senior living communities by December 31, 2025.

We may experience temporary disruption, including reductions in our cash flows, as we transition these communities from Five Star.

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 March 31, 2026, we owned 285 properties located in 33 states and Washington, D.C.

As of March 31, 2026, 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 13.9 years.

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.

While certain costs, primarily labor, insurance and food costs, have increased, we expect these cost increases to moderate, which will provide our managers the opportunity to increase rates in excess of increases in costs, resulting in improving returns to us.

While certain costs, primarily labor, insurance and food costs, have increased, we expect these cost increases to moderate, which will provide our managers the opportunity to increase revenue in excess of increases in costs, resulting in improving returns to us.

In an effort to optimize performance, our asset management team reviews the results of each of our senior living communities and our operators, taking into account various factors such as performance metric benchmarks, location and other relevant data points.

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Portfolio Overview

The following tables present an overview of our portfolio as of September 30, 2025 (dollars in thousands, except investment per square foot or unit data):

As of September 30, 2025 Number

of Properties Square Feet or Number of Units Gross Book Value of Real Estate Assets (1)

% of Total Gross Book Value of Real Estate Assets Investment per Square Foot or Unit (2)

Q3 2025 Revenues

Q3 2025 NOI (3)

% of Q3 2025 NOI

The following tables present an overview of our portfolio as of and for the three months ended March 31, 2026 (dollars in thousands, except average monthly rate):

Number of Units Book Value

Number of or of Real Estate

Properties Square Feet Assets (1)

SHOP 199 22,573 units $ 4,375,739 $ 43,626 57.5 %

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Total 285 $ 6,230,599 $ 75,915 100.0 %

As of and For the Three Months Ended September 30,

SHOP 81.5 % 79.4 %

Medical Office and Life Science Portfolio (4)

86.6 % 80.8 %

Triple net leased senior living communities 100.0 % 100.0 %

Wellness centers 100.0 % 100.0 %

(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.

(2) We calculate our net operating income, or NOI, on a consolidated basis and by reportable segment.

Our definition of NOI and our reconciliation of net income (loss) to NOI are included below under the heading “Non-GAAP Financial Measures.”

(4) Medical office and life science property occupancy data includes (i) out of service assets undergoing redevelopment, (ii) space which is leased but is not occupied or is being offered for sublease by tenants and (iii) space being fitted out for occupancy.

During the three and nine months ended September 30, 2025, we entered into new and renewal leases in our Medical Office and Life Science Portfolio segment as summarized in the following tables (dollars and square feet in thousands, except per square foot amounts):

Three Months Ended September 30, 2025

New Leases Renewals Total

Square feet leased during the quarter 10 76 86

Weighted average rental rate change (by rentable square feet) 29.8 % 6.9 % 9.1 %

Weighted average lease term (years) 7.5 6.6 6.7

Total leasing costs and concession commitments (1)

$ 601 $ 1,793 $ 2,394

Total leasing costs and concession commitments per square foot (1)

Comparable Properties (1)

All Properties

As of and for the As of and for the

Three Months Ended March 31, Three Months Ended March 31,

2026 2025 2026 2025

Total leasing costs and concession commitments per square foot per year (1)

Total properties 184 184 199 231

Number of units 21,226 21,226 22,573 25,005

Occupancy 82.4 % 81.3 % 81.7 % 80.2 %

Average monthly rate (2)

$ 5,656 $ 5,341 $ 5,613 $ 5,413

Nine Months Ended September 30, 2025

Medical Office and Life Science Portfolio (3)

Total properties 65 65 67 93

Total square feet 5,349,272 5,349,272 5,558,089 7,619,667

Occupancy 95.3 % 94.7 % 91.8 % 80.6 %

Total properties:

Triple net leased senior living communities 8 8 9 9

Wellness centers 10 10 10 10

Rent coverage:

Triple net leased senior living communities 1.84 x 1.73 x 1.84 x 1.73 x

Wellness centers 3.09 x 2.51 x 3.09 x 2.51 x

Weighted average 2.49 x 2.12 x 2.49 x 2.12 x

(1) Consists of properties that we have owned and are in service and which have been reported in the same segment and leased to the same operator continuously since January 1, 2025;

excludes properties classified as held for sale, planned for sale, closed or out of service, if any, and medical office and life science properties owned by unconsolidated joint ventures in which we own an equity interest.

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.

(3) Medical office and life science property occupancy data includes (i) out of service assets undergoing redevelopment, (ii) space which is leased but is not occupied or is being offered for sublease by tenants and (iii) space being fitted out for occupancy.

(4) 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.

Rent coverage is calculated using the annualized operating cash flows from our triple net lease tenants' operations of our properties, before subordinated charges, if any, divided by annualized rental income.

We have not independently verified tenant operating data.

Excludes data for historical periods prior to our ownership of certain properties.

During the three months ended March 31, 2026, we entered into new and renewal leases in our Medical Office and Life Science Portfolio segment as summarized in the following table (dollars and square feet in thousands, except per square foot amounts):

Three Months Ended March 31, 2026

New Leases Renewals Total

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(1) Includes commitments made for leasing expenditures and concessions, such as tenant improvements, leasing commissions, tenant reimbursements and free rent.

Lease Expiration Schedules

As of September 30, 2025, lease expirations in our Medical Office and Life Science Portfolio segment were as follows (dollars in thousands):

Year Number of Tenants Square Feet Leased % of Total Leased Square Feet Cumulative % of Total Leased Square Feet Annualized Rental Income (1)

% of Total Annualized Rental Income Cumulative % of Total Annualized Rental Income

2025 27 71,907 1.2 % 1.2 % $ 2,936 1.5 % 1.5 %

2026 50 645,464 10.7 % 11.9 % 20,763 10.9 % 12.4 %

2027 66 749,776 12.5 % 24.4 % 19,183 10.0 % 22.4 %

2028 61 1,148,176 19.1 % 43.5 % 35,318 18.5 % 40.9 %

As of March 31, 2026, lease expirations in our Medical Office and Life Science Portfolio segment were as follows (dollars in thousands):

Cumulative Cumulative

% of Total % of Total % of Total % of Total

Number Leased Leased Leased Annualized Annualized Annualized

of Square Feet Square Feet Square Feet Rental Income Rental Income Rental Income

Year Tenants Expiring Expiring Expiring Expiring (1)

Expiring Expiring

2026 34 485,364 9.5 % 9.5 % $ 15,611 9.5 % 9.5 %

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2030 32 338,925 6.6 % 56.1 % 8,353 5.1 % 51.6 %

2034 and thereafter 43 752,349 12.6 % 100.0 % 28,889 15.1 % 100.0 %

Thereafter 96 2,237,515 43.9 % 100.0 % 79,346 48.4 % 100.0 %

Total 293 5,099,700 100.0 % $ 163,891 100.0 %

Weighted average remaining lease term (in years) 4.6 4.9

(1) Annualized rental income is based on rents pursuant to existing leases as of September 30, 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.

As of September 30, 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):

Year Number of Properties Number of Units or Square Feet Annualized Rental Income (1)

Percent of Total Cumulative Percent of Total

2025 — — $ — — % — %

2026 — — — — % — %

2027 4 533 units 4,229 15.1 % 15.1 %

(1) Annualized rental income is based on rents pursuant to existing leases as of March 31, 2026, and includes straight line rent adjustments and estimated recurring expense reimbursements for certain net and modified gross leases and excludes lease value amortization.

As of March 31, 2026, lease expirations at our triple net leased wellness centers and senior living communities leased to third party operators were as follows (dollars in thousands):

% of Total % of Total

Number of Units Annualized Annualized Annualized

Number of Or Rental Income Rental Income Rental Income

Year Properties Square Feet Expiring (1)

Expiring Expiring

2026 — — $ — — % — %

4 533 units 4,841 16.0 % 16.0 %

2030 5 277 units and 129,600 sq.

2028 — — — — % 16.0 %

2031 — — — — % 35.0 %

2032 — — — — % 35.0 %

2029 1 155 units 547 1.8 % 17.8 %

2034 and thereafter 7 682,646 sq.

13,917 49.5 % 100.0 %

2030 5 277 units and 129,600 square feet 5,062 16.7 % 34.5 %

Thereafter 9 363 units and 682,646 square feet 19,891 65.5 % 100.0 %

Total 19 $ 30,341 100.0 %

Weighted average remaining lease term (in years) 9.4

(1) Annualized rental income is based on rents pursuant to existing leases as of September 30, 2025.

(1) Annualized rental income is based on rents pursuant to existing leases as of March 31, 2026.

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

RESULTS OF OPERATIONS (dollars and square feet in thousands, unless otherwise noted)

(2) In April 2026, Stellar Senior Living LLC exercised its renewal option to extend its lease through 2037.

RESULTS OF OPERATIONS (dollars in thousands, unless otherwise noted)

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

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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, which 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.

The following table summarizes the results of operations of each of our segments for the three and nine months ended September 30, 2025 and 2024:

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

The following table summarizes the results of operations of each of our segments for the three months ended March 31, 2026 and 2025:

Three Months Ended March 31,

SHOP $ 317,225 $ 328,306

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The following section analyzes and discusses the results of operations of each of our segments for the periods presented.

Three Months Ended September 30, 2025 Compared to Three Months Ended September 30, 2024 (dollars and square feet in thousands, except average monthly rate):

Unless otherwise indicated, references in this section to changes or comparisons of results, income or expenses refer to comparisons of the results for the three months ended September 30, 2025 to the three months ended September 30, 2024.

Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025 (dollars in thousands):

Unless otherwise indicated, references in this section to changes or comparisons of results, income or expenses refer to comparisons of the results for the three months ended March 31, 2026 to the three months ended March 31, 2025.

Our definition of NOI and our reconciliation of net income (loss) to NOI and a description of why we believe NOI is an appropriate supplemental measure are included below under the heading “Non-GAAP Financial Measures.”

Three Months Ended September 30,

Three Months Ended March 31,

2026 2025 $ Change % Change

6 unchanged sentences

General and administrative 14,038 9,000 5,038 56.0 %

Acquisition and certain other transaction related costs 1,158 331 827 nm

Impairment of assets 93,243 23,031 70,212 nm

Gain on sale of properties 1,260 111 1,149 nm

Interest income and other expenses (774) 2,575 (3,349) (130.1) %

Interest expense

(48,886) (59,443) 10,557 (17.8) %

Loss on modification or early extinguishment of debt (11,191) — (11,191) 100.0 %

Loss before income taxes and equity in net earnings of investees (168,786) (99,068) (69,718) 70.4 %

Income tax expense (337) (148) (189) 127.7 %

Equity in net earnings of investees 5,083 527 4,556 nm

Net loss $ (164,040) $ (98,689) $ (65,351) 66.2 %

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Comparable Properties (1)

All Properties

As of and For the Three Months As of and For the Three Months

Ended September 30, Ended September 30,

2025 2024 2025 2024

Total properties 185 185 229 232

Number of units 21,638 21,638 24,906 25,152

Occupancy 82.4 % 81.0 % 81.5 % 79.4 %

Average monthly rate (2)

$ 5,413 $ 5,142 $ 5,472 $ 5,199

Three Months Ended September 30,

Comparable (1)

Non-Comparable

Properties Results Properties Results Consolidated Properties Results

2025 2024 Change Change 2025 2024 2025 2024 Change Change

Residents fees and services $ 289,378 $ 271,453 $ 17,925 6.6 % $ 44,012 $ 40,552 $ 333,390 $ 312,005 $ 21,385 6.9 %

Property operating expenses (257,344) (239,028) 18,316 7.7 % (46,426) (45,544) (303,770) (284,572) 19,198 6.7 %

NOI $ 32,034 $ 32,425 $ (391) (1.2) % $ (2,414) $ (4,992) $ 29,620 $ 27,433 $ 2,187 8.0 %

(1) Consists of senior living communities that we have owned, are in service and reported in the same segment since July 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 activity for our non-comparable properties primarily reflects the 15 communities classified as held for sale as of September 30, 2025 and nine communities transitioned to an existing third party manager during the 2024 period.

Property operating expenses.

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, marketing, contract labor costs and management fees as a result of higher revenues and other direct costs, partially offset by decreased insurance costs due to a reduction in premiums.

Net operating income.

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 September 30, As of September 30,

2025 2024 2025 2024

Total properties 65 65 88 99

Total square feet 5,362 5,362 6,931 8,192

Occupancy 93.3 % 93.3 % 86.6 % 80.8 %

Three Months Ended September 30,

Comparable (1)

Non-Comparable

Properties Results Properties Results Consolidated Properties Results

2025 2024 Change Change 2025 2024 2025 2024 Change Change

Rental income $ 40,266 $ 40,432 $ (166) (0.4) % $ 7,935 $ 12,469 $ 48,201 $ 52,901 $ (4,700) (8.9) %

Property operating expenses (16,417) (16,882) (465) (2.8) % (5,109) (8,192) (21,526) (25,074) (3,548) (14.2) %

NOI $ 23,849 $ 23,550 $ 299 1.3 % $ 2,826 $ 4,277 $ 26,675 $ 27,827 $ (1,152) (4.1) %

(1) Consists of medical office and life science properties that we have owned and which have been in service continuously since July 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 in each 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 decreased at our comparable properties primarily due to vacancies at certain of our properties, partially offset by an increase in real estate tax reimbursements at certain of our properties.

Rental income decreased at our non-comparable properties primarily due to dispositions since July 1, 2024.

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 decrease in property operating expenses at our comparable properties is primarily due to a decrease in insurance costs, salaries and other direct costs.

These decreases were partially offset by an increase in real estate taxes as a result of successful appeals at certain of our properties during the three months ended September 30, 2024.

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

Net operating income.

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

All Other (1) :

Comparable Properties (2)

All Properties

As of and For the Three Months Ended September 30, As of and For the Three Months Ended September 30,

2025 2024 2025 2024

Total properties:

Triple net leased senior living communities 8 8 8 27

Wellness centers 10 10 10 10

Rent coverage:

Triple net leased senior living communities (3)

1.85 x 1.82 x 1.85 x 1.79 x

Wellness centers (3)

3.23 x 1.99 x 3.23 x 1.99 x

Three Months Ended September 30,

Comparable (2)

Non-Comparable

Properties Results Properties Results Consolidated Properties Results

2025 2024 Change Change 2025 2024 2025 2024 Change Change

Rental income $ 7,115 $ 6,708 $ 407 6.1 % $ — $ 2,026 $ 7,115 $ 8,734 $ (1,619) (18.5) %

Property operating expenses (91) (51) 40 78.4 % — — (91) (51) 40 78.4 %

NOI $ 7,024 $ 6,657 $ 367 5.5 % $ — $ 2,026 $ 7,024 $ 8,683 $ (1,659) (19.1) %

(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 July 1, 2024;

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.

We have not independently verified tenant operating data.

Excludes data for historical periods prior to our ownership of certain properties.

Rental income.

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.

Net operating income.

The change in NOI primarily reflects the change in rental income described above.

Consolidated :

Depreciation and amortization expense.

Depreciation and amortization expense decreased primarily due to dispositions since July 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 decreased primarily due to $5,676 of estimated incentive management fees that we recognized for the three months ended September 30, 2025, compared to $6,934 for the three months ended September 30, 2024.

These incentive management fees were recorded as a result of our total shareholder return exceeding the returns for the MSCI U.S.

REIT/Health Care REIT Index over the applicable measurement period.

Acquisition and certain other transaction related costs.

Acquisition and certain other transaction related costs primarily represent costs incurred with acquisitions and non-recurring transactions that we expensed under GAAP.

We incurred transition costs during the three months ended September 30, 2025 as a result of the management transitions of 21 communities to both new and existing third party managers.

For more information about such management transitions of communities, see Note 9 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Acquisition and certain other transaction related costs 3,693 24 3,669 n/m

Impairment of assets — 38,472 (38,472) (100.0) %

For information about our asset impairment charges, see Note 3 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q and Note 3 to our consolidated financial statements included in Part IV, Item 15 of our Annual Report.

Gain on sale of properties.

For information regarding loss on sale of properties, see Note 3 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Interest income and other expenses.

The decrease in interest income and other expenses is primarily due to lower average invested cash balances and interest rates during the three months ended September 30, 2025 and other expenses.

(Loss) gain on sale of real estate (1,207) 110,140 (111,347) (101.1) %

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

Interest and other income 233 2,099 (1,866) (88.9) %

Interest expense (37,045) (57,831) 20,786 (35.9) %

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 and a decrease in discount accretion for our senior secured notes due 2026 due to the partial redemption of an aggregate $606,164 of these notes during 2025.

During the three months ended September 30, 2025 and 2024, we recognized discount accretion of $16,313 and $22,034, respectively, for our senior secured notes due 2026.

These decreases were partially offset by four mortgage financings totaling $343,157 during 2025 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 — (29,071) 29,071 (100.0) %

During the three months ended September 30, 2025, we recorded a loss on early extinguishment of debt in connection with our partial redemption of our senior secured notes due 2026.

For more information regarding our loss on modification or early extinguishment of debt, see Note 5 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

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.

Loss before income taxes and equity in net earnings of investees (42,749) (10,424) (32,325) n/m

Income tax expense (622) (49) (573) n/m

Equity in net earnings of investees 96 1,487 (1,391) (93.5) %

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.

For further information regarding our investment in AlerisLife, see Notes 3 and 11 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024 (dollars and square feet in thousands, except average monthly rate):

Unless otherwise indicated, references in this section to changes or comparisons of results, income or expenses refer to comparisons of the results for the nine months ended September 30, 2025 to the nine months ended September 30, 2024.

Nine Months Ended September 30,

2025 2024 $ Change % Change

NOI by segment:

SHOP $ 103,063 $ 81,127 $ 21,936 27.0 %

Medical Office and Life Science Portfolio 80,018 88,352 (8,334) (9.4) %

All Other 22,908 24,963 (2,055) (8.2) %

Total NOI 205,989 194,442 11,547 5.9 %

Depreciation and amortization 199,915 207,449 (7,534) (3.6) %

General and administrative 32,966 27,763 5,203 18.7 %

Acquisition and certain other transaction related costs 1,257 2,243 (986) (44.0) %

Impairment of assets 162,708 41,718 120,990 nm

Gain (loss) on sale of properties 103,971 (18,976) 122,947 (647.9) %

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

Interest income and other expenses 4,307 7,215 (2,908) (40.3) %

Interest expense

(157,643) (175,721) 18,078 (10.3) %

Loss on modification or early extinguishment of debt (40,388) (209) (40,179) nm

Loss before income tax expense and equity in net earnings (losses) of investees (273,088) (272,422) (666) 0.2 %

Income tax expense (1,229) (505) (724) 143.4 %

Equity in net earnings (losses) of investees 9,652 (9,882) 19,534 (197.7) %

Net loss $ (264,665) $ (282,809) $ 18,144 (6.4) %

nm - not meaningful

Comparable Properties (1)

All Properties

As of and For the Nine Months Ended September 30, As of and For the Nine Months Ended September 30,

2025 2024 2025 2024

Total properties 182 182 229 232

Number of units 21,453 21,453 24,906 25,152

Occupancy 81.6 % 80.6 % 80.8 % 79.1 %

Average monthly rate (2)

$ 5,385 $ 5,127 $ 5,442 $ 5,175

Nine Months Ended September 30,

Net loss $ (43,275) $ (8,986) $ (34,289) n/m

n/m - not meaningful

Comparable (1)

Non-Comparable

Properties Results Properties Results Consolidated Properties Results

Non-Comparable Consolidated

Properties Results Properties Results Properties Results

Three Months Ended Three Months Ended Three Months Ended

March 31, March 31, March 31,

2026 2025 Change Change 2026 2025 2026 2025 Change Change

3 unchanged sentences

(1) Consists of senior living communities that we have owned, are in service and reported in the same segment since January 1, 2025;

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

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

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 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 activity for our non-comparable properties primarily reflects the 15 communities classified as held for sale as of September 30, 2025 and 13 communities transitioned to an existing third party manager during the 2024 period.

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.

Residents fees and services decreased at our non-comparable properties primarily due to dispositions since January 1, 2025.

Property operating expenses.

Property operating expenses increased at our comparable properties primarily due to increases in labor costs, management fees as a result of higher revenues, marketing and other direct costs, partially offset by decreased insurance costs due to a reduction in premiums.

Property operating expenses increased at our comparable properties primarily due to increases in labor costs, management fees as a result of higher revenues, insurance costs and other direct costs, partially offset by decreases in maintenance and repair costs.

Property operating expenses decreased at our non-comparable properties primarily due to dispositions since January 1, 2025.

Net operating income.

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Medical Office and Life Science Portfolio:

Comparable Properties (1)

All Properties

As of September 30, As of September 30,

2025 2024 2025 2024

Total properties

Total square feet 5,350 5,350 6,931 8,192

Occupancy 93.3 % 93.3 % 86.6 % 80.8 %

Nine Months Ended September 30,

Comparable (1)

Non-Comparable

Properties Results Properties Results Consolidated Properties Results

Non-Comparable Consolidated

Properties Results Properties Results Properties Results

Three Months Ended Three Months Ended Three Months Ended

March 31, March 31, March 31,

2026 2025 Change Change 2026 2025 2026 2025 Change Change

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(1) Consists of medical office and life science properties that we have owned and which have been in service continuously since January 1, 2025;

excludes properties classified as held for sale, planned for sale or out of service undergoing redevelopment, if any, and properties owned by unconsolidated joint ventures in 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 decreased at our comparable properties primarily due to vacancies at certain of our properties and the write off of straight line rent for a former tenant at one of our properties, partially offset by a termination fee from this former tenant totaling $600 paid during the nine months ended September 30, 2025.

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

Rental income increased at our comparable properties primarily due to increases from our net leasing activity and property operating expense reimbursements at certain of our properties.

Rental income decreased at our non-comparable properties primarily due to dispositions since January 1, 2025.

Property operating expenses.

Property operating expenses increased at our comparable properties primarily due to an increase in HVAC expenses and snow removal costs, partially offset by a decrease in insurance and other direct costs.

The increase in property operating expenses at our comparable properties is primarily due to an increase in real estate taxes and other direct costs.

Property operating expenses decreased at our non-comparable properties primarily due to dispositions since January 1, 2025.

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

All Other (1) :

Comparable Properties (2)

All Properties

As of and For the Nine Months Ended September 30, As of and For the Nine Months Ended September 30,

2025 2024 2025 2024

Total properties:

Triple net leased senior living communities 8 8 8 27

Wellness centers 10 10 10 10

Rent coverage:

Triple net leased senior living communities (3)

1.85 x 1.82 x 1.85 x 1.79 x

Wellness centers (3)

3.23 x 1.99 x 3.23 x 1.99 x

Nine Months Ended September 30,

Comparable (1)

Non-Comparable

Properties Results Properties Results Consolidated Properties Results

Non-Comparable Consolidated

Properties Results Properties Results Properties Results

Three Months Ended Three Months Ended Three Months Ended

March 31, March 31, March 31,

2026 2025 Change Change 2026 2025 2026 2025 Change Change

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Property operating expenses (2)

(126) 59 185 n/m — — (126) 59 185 n/m

NOI $ 7,039 $ 7,179 $ (140) (2.0) % $ 186 $ 1,675 $ 7,225 $ 8,854 $ (1,629) (18.4) %

n/m - not meaningful

(1) 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, 2025;

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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.

We have not independently verified tenant operating data.

Excludes data for historical periods prior to our ownership of certain properties.

(2) For the three months March 31, 2025, we recognized a net credit of $59 related to tax refunds received during the period.

Rental income.

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.

There have been no material changes in rental income at our comparable properties.

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.

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 nine months ended September 30, 2025, which were previously paid by us during prior periods.

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

There have been no material changes in property operating expenses.

Net operating income.

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

The change in NOI primarily reflects the change in rental income described above.

Consolidated:

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General and administrative expense .

General and administrative expense increased primarily due to $12,231 of estimated incentive management fees that we recognized for the nine months ended September 30, 2025 compared to $6,934 for the nine months ended September 30, 2024.

General and administrative expense increased primarily due to $6,628 of estimated incentive management fees that we recognized for the three months ended March 31, 2026, compared to $2,407 for the three months ended March 31, 2025.

These incentive management fees were recorded as a result of our total shareholder return exceeding the returns for the MSCI U.S.

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Acquisition and certain other transaction related costs.

We incurred transition costs during the nine months ended September 30, 2025 as a result of our transition of 21 communities to both new and existing third party managers.

We incurred transition costs, including termination and other fees, during the 2024 period as a result of the management transitions of 13 communities to an existing third party manager.

For more information about such management transitions of communities, see Note 9 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Acquisition and certain other transaction related costs primarily represent costs incurred with acquisitions and non-recurring transactions that we expensed under GAAP.

During the three months ended March 31, 2026, we incurred transition costs as a result of our transition of 116 communities to both new and existing third party managers.

Impairment of assets.

Gain (loss) on sale of properties.

For information regarding gain (loss) on sale of properties, see Note 3 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q and Note 3 to our consolidated financial statements included in Part IV, Item 15 of our Annual Report.

(Loss) gain on sale of real estate.

For information regarding (loss) gain on sale of real estate, see Note 3 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q and Note 3 to our consolidated financial statements included in Part IV, Item 15 of our Annual Report.

Gain on insurance recoveries.

During the nine months ended September 30, 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 condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Interest income and other expenses.

The decrease in interest income and other expenses is primarily due to lower average invested cash balances and interest rates during the nine months ended September 30, 2025 compared to the 2024 period.

During the three months ended March 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 our Annual Report.

Interest and other income.

The decrease in interest and other income is primarily due to lower average invested cash balances and interest rates during the three months ended March 31, 2026.

Interest expense.

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 partial redemption of an aggregate $606,164 of these notes during 2025.

During the nine months ended September 30, 2025 and 2024, we recognized discount accretion of $54,742 and $64,133, 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.

Interest expense decreased primarily due to a decrease in discount accretion for our then senior secured notes due 2026 due to the full redemption of the remaining balance of these notes during 2025.

During the three months ended March 31, 2025, we recognized discount accretion of $22,122 for our then outstanding senior secured notes due 2026.

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

These decreases were partially offset by the issuance of $375,000 in aggregate principal amount of our 7.25% senior secured notes due 2030 in September 2025 and four mortgage financings totaling $343,157 during 2025.

Loss on modification or early extinguishment of debt.

During the nine months ended September 30, 2025, we recorded a loss on early extinguishment of debt in connection with the partial redemption of an aggregate $606,164 of our outstanding senior secured notes due 2026 and with the redemption of all $380,000 of our remaining 9.75% senior secured notes due 2025.

During the three months ended March 31, 2025, we recorded a loss on early extinguishment of debt in connection with the partial redemption of an aggregate $299,158 of our outstanding senior secured notes due 2026.

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 unconsolidated joint ventures and also represented our proportionate share of the earnings of our equity method investment in AlerisLife.

As of December 31, 2025, AlerisLife had ceased operations and was in the process of winding down its business.

We recognized no equity in net earnings of AlerisLife for the three months ended March 31, 2026.

For further information regarding our investment in AlerisLife, see Notes 3 and 11 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Non-GAAP Financial Measures (dollars in thousands, except per share amounts)

We present certain "non-GAAP financial measures" within the meaning of the applicable rules of the Securities and Exchange Commission, or the SEC, including funds from operations, or FFO, normalized funds from operations, or Normalized FFO, and NOI for the three and nine months ended September 30, 2025 and 2024.

These measures do not represent cash generated by operating activities in accordance with GAAP and should not be considered alternatives to net income (loss) as indicators of our operating performance or as measures of our liquidity.

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We calculate FFO and Normalized FFO as shown below.

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, and incentive management fees, if any.

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 real estate, 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 unconsolidated joint venture properties and prior to the wind-down of AlerisLife’s business, our proportionate share of FFO of our former equity method investment, 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 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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Other real estate companies and REITs may calculate FFO and Normalized FFO differently than we do.

Our calculations of FFO and Normalized FFO for the three and nine months ended September 30, 2025 and 2024 and reconciliations of net income (loss), the most directly comparable financial measure under GAAP reported in our condensed consolidated financial statements, to FFO and Normalized FFO appear in the following table.

Our calculations of FFO and Normalized FFO for the three months ended March 31, 2026 and 2025 and reconciliations of net income (loss), the most directly comparable financial measure under GAAP reported in our condensed consolidated financial statements, to FFO and Normalized FFO appear in the following table.

This table also provides a comparison of distributions to shareholders, FFO and Normalized FFO and net income (loss) per share for these periods.

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Three Months Ended March 31,

Net loss $ (43,275) $ (8,986)

Depreciation and amortization 62,914 68,325

(Gain) loss on sale of properties (1,260) (111) (103,971) 18,976

Loss (gain) on sale of real estate 1,207 (110,140)

Impairment of assets — 38,472

Equity in net (earnings) losses of investees (5,083) (527) (9,652) 9,882

Equity in net earnings of investees (96) (1,487)

Share of FFO from unconsolidated joint ventures 2,027 2,737

Adjustments to reflect our share of FFO attributable to an equity method investment 3,731 1,698 5,699 12,235

Adjustments to reflect our share of FFO attributable to a former equity method investment — 1,073

FFO 22,777 (10,006)

Incentive management fees (1)

5,676 6,934 12,231 6,934

Acquisition and certain other transaction related costs (2)

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Loss on modification or early extinguishment of debt — 29,071

Adjustments to reflect our share of Normalized FFO attributable to an equity method investment (2,418) 127 (1,441) (8,792)

Adjustments to reflect our share of Normalized FFO attributable to a former equity method investment — 331

Normalized FFO $ 33,098 $ 14,305

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Distributions declared $ 0.01 $ 0.01

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

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

(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 condensed consolidated statements of comprehensive income (loss) and are payable to RMR in January of the following calendar year.

In calculating net income (loss) in accordance with GAAP, we recognize estimated incentive management fees expense, if any, in the first, second and third quarters.

Although we recognize this expense, if any, in the first, second and third quarters for purposes of calculating net income (loss), we do not include these amounts in the calculation of Normalized FFO until the fourth quarter, when the amount of the incentive management fees expense for the calendar year, if any, is determined.

(2) Acquisition and certain other transaction related costs primarily represent costs incurred with acquisitions and non-recurring transactions that we expensed under GAAP.

During the three months ended March 31, 2026, we incurred transition costs as a result of our transition of 116 communities to both new and existing third party managers.

Property Net Operating Income (NOI)

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The calculation of NOI by reportable segment is included above in this Item 2.

The following table includes the reconciliation of net loss to NOI for the three and nine months ended September 30, 2025 and 2024.

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Reconciliation of Net Loss to NOI:

The following table includes the reconciliation of net income (loss) to NOI for the three months ended March 31, 2026 and 2025:

Three Months Ended March 31,

Net loss $ (43,275) $ (8,986)

Equity in net (earnings) losses of investees (5,083) (527) (9,652) 9,882

Equity in net earnings of investees (96) (1,487)

Income tax expense 622 49

Loss before income taxes and equity in net earnings (losses) of investees (168,786) (99,068) (273,088) (272,422)

Loss before income taxes and equity in net earnings of investees (42,749) (10,424)

Loss on modification or early extinguishment of debt — 29,071

Interest expense 37,045 57,831

Interest income and other expenses 774 (2,575) (4,307) (7,215)

Interest and other income (233) (2,099)

Gain on insurance recoveries — (7,522)

(Gain) loss on sale of properties (1,260) (111) (103,971) 18,976

Loss (gain) on sale of real estate 1,207 (110,140)

Impairment of assets — 38,472

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Depreciation and amortization 62,914 68,325

Total NOI $ 63,319 $ 63,943 $ 205,989 $ 194,442

SHOP NOI $ 29,620 $ 27,433 $ 103,063 $ 81,127

Medical Office and Life Science Portfolio NOI 26,675 27,827 80,018 88,352

All Other NOI 7,024 8,683 22,908 24,963

Total NOI $ 63,319 $ 63,943 $ 205,989 $ 194,442

NOI $ 75,915 $ 72,538

NOI by segment:

SHOP $ 43,626 $ 36,828

Medical Office and Life Science Portfolio 25,064 26,856

All Other 7,225 8,854

Total $ 75,915 $ 72,538

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 rental income from our leased properties, residents fees and services revenues from our managed communities and proceeds from the disposition of certain properties.

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;

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The following is a summary of our sources and uses of cash flows for the periods presented, as reflected in our condensed consolidated statements of cash flows:

Nine Months Ended September 30,

Three Months Ended March 31,

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

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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 communities monthly, quarterly or annually.

The decrease in cash provided by operating activities for the nine months ended September 30, 2025 compared to the prior period was primarily due to the accreted interest of $86,992 paid during the 2025 period as a result of the partial redemption of our outstanding senior secured notes due 2026.

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 leased senior living communities monthly, quarterly or annually.

The change in cash provided by (used in) operating activities for the three months ended March 31, 2026 compared to the prior period was primarily due to a reduction in interest paid during the 2026 period primarily due to accreted interest of $34,700 paid during the 2025 period as a result of the partial redemption of our then outstanding senior secured notes due 2026.

This increase was partially offset by the payment of 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 change in cash provided by (used in) investing activities for the nine months ended September 30, 2025 compared to the prior period 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 the 2025 period.

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

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

SHOP fixed assets and capital improvements $ 33,306 $ 27,923 $ 78,704 $ 59,637

Medical Office and Life Science Portfolio capital expenditures:

Lease related costs (1)

4,961 3,504 12,336 15,942

Building improvements (2)

2,295 1,359 5,337 4,130

Recurring capital expenditures - Medical Office and Life Science Portfolio 7,256 4,863 17,673 20,072

Wellness centers lease related costs (1)

— 5,488 — 17,002

Total recurring capital expenditures $ 40,562 $ 38,274 $ 96,377 $ 96,711

Development, redevelopment and other activities - SHOP (3)

$ 1,865 $ 11,714 $ 12,093 $ 18,608

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

175 537 175 2,362

Total development, redevelopment and other activities $ 2,040 $ 12,251 $ 12,268 $ 20,970

Capital expenditures by segment:

SHOP $ 35,171 $ 39,637 $ 90,797 $ 78,245

Medical Office and Life Science Portfolio 7,431 5,400 17,848 22,434

All Other - wellness centers

— 5,488 — 17,002

Total capital expenditures $ 42,602 $ 50,525 $ 108,645 $ 117,681

(1) Includes capital expenditures to improve tenants' space or amounts paid directly to tenants to improve their space and other leasing related costs, such as brokerage commissions and tenant inducements.

(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 change of use or new sources of revenue.

The decrease in cash provided by investing activities for the three months ended March 31, 2026 compared to the prior period was primarily due to a decrease in proceeds from the sale of real estate, partially offset by an increase in cash dividends paid to us by AlerisLife and our $5,800 of contributions made to the Seaport JV in the 2025 period.

In connection with the wind-down of its business, on January 9, 2026, AlerisLife paid an aggregate cash dividend of $80,000 to its stockholders, and our pro rata share of this cash dividend was $27,200.

Capital Expenditures

As of March 31, 2026, we had estimated unspent leasing related obligations at our medical office and life science properties of approximately $11,123, of which we expect to spend approximately $8,811 during the next 12 months.

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

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 September 30, 2025, we had estimated unspent leasing related obligations at our medical office and life science properties of approximately $22,615, of which we expect to spend approximately $20,405 during the next 12 months.

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

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

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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 nine months ended September 30, 2025, we sold 32 properties for an aggregate sales price of $353,675, excluding closing costs.

Subsequent to September 30, 2025, we sold 12 properties for an aggregate sales price of $42,130, excluding closing costs.

As of November 3, 2025, we had 38 properties under agreements or letters of intent to sell for an aggregate sales price of $237,219, excluding closing costs.

The net proceeds from the sales of 12 of these properties, which have an expected aggregate sales price, excluding closing costs, of $90,529, are required to be used to partially redeem our outstanding senior secured notes due 2026, if the sales of such properties are completed.

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 $50,000 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 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.

For further information regarding our capital expenditures, see Note 3 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

During the three months ended March 31, 2026, we sold 13 properties for an aggregate sales price of $23,000, excluding closing costs.

For further information regarding our dispositions, see Note 3 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

In April 2026, we acquired two land parcels located in Lexington, Kentucky previously subject to finance leases pursuant to our exercise of a purchase option for an aggregate purchase price of $14,500, excluding closing costs.

Our Financing Liquidity and Resources

The change in cash (used in) provided by financing activities for the nine months ended September 30, 2025 compared to the prior period was primarily due to the redemption of our outstanding senior secured notes due 2025 and partial redemption of our outstanding senior secured notes due 2026, partially offset by our issuance of $375,000 in aggregate principal amount of our 7.25% senior secured notes due 2030 in a private offering raising net proceeds of $364,726, after deducting discounts and commissions to the initial purchasers and other estimated fees and expenses.

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

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

The decrease in cash used in financing activities for the three months ended March 31, 2026 compared to the prior period was primarily due to the partial redemption of our then outstanding senior secured notes due 2026, partially offset by our incurrence of a $140,000 mortgage loan, in the 2025 period.

As of March 31, 2026, we had $121,774 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.

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

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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 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 September 30, 2025.

Interest payable on borrowings under our revolving credit facility is based on daily 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 March 31, 2026.

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 September 30, 2025, the annual interest rate payable on borrowings under our revolving credit facility was 6.84%.

As of September 30, 2025 and November 3, 2025, we had no borrowings under our revolving credit facility and $150,000 available for borrowings.

As of September 30, 2025, we had $201,371 of cash and cash equivalents.

During the nine months ended September 30, 2025, we paid quarterly cash distributions to our shareholders totaling approximately $7,240 using existing cash balances.

On October 9, 2025, we declared a quarterly distribution payable to common shareholders of record on October 27, 2025 in the amount of $0.01 per share, or approximately $2,421.

We expect to pay this distribution on or about November 13, 2025 using cash on hand.

For further information regarding the distribution we paid during 2025, see Note 7 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

We believe we may have access to various types of financings, including debt or equity offerings, to fund our operations and repay our debts and other obligations as they become due.

Our ability to complete, and the costs associated with, future debt or equity transactions depends primarily upon market conditions and our then creditworthiness and our ability to be in compliance with our debt covenants.

We have no control over market conditions.

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.

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.

A protracted negative impact on the economy or the industries in which our properties and businesses operate resulting from wage and 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 and a

possible recession, may have various negative consequences including a decline in financing availability and increased costs for financing.

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.

Our $334,370 in outstanding senior secured notes due 2026 are fully and unconditionally guaranteed, on a joint, several and senior secured basis, by the 2026 Collateral Guarantors, and on a joint, several and unsecured basis, by all of our subsidiaries other than the 2026 Collateral Guarantors and certain excluded subsidiaries.

These notes and the guarantees provided by the 2026 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 2026 Collateral Guarantors.

No cash interest will accrue on these notes prior to maturity.

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

We have a one-time option to extend the maturity date of these senior secured notes by one year, to January 15, 2027, subject to satisfaction of certain conditions and payment of an extension fee.

If we exercise this option, interest payments will be due semiannually during the extension period at an initial interest rate of 11.25% with increases of 50 basis points every 90 days these senior secured notes remain outstanding.

During the nine months ended September 30, 2025, we sold 22 properties that secured our senior secured notes due 2026 and used aggregate net proceeds of $299,158 from the sales of these properties to partially redeem these senior secured notes.

In October 2025, we used net proceeds of $10,249 from the sale of one property to partially redeem our outstanding senior secured notes due 2026.

We are currently under agreements or letters of intent to sell 12 properties securing our senior secured notes due 2026 for an aggregate sales price of $90,529, excluding closing costs.

The net proceeds from these sales are required to be used to partially redeem these senior secured notes, if these sales are completed.

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.

Our next significant debt maturity is $334,370 in outstanding senior secured notes with a maturity date of January 15, 2026, which is subject to a one-time option to extend the maturity date by one year, to January 15, 2027.

In September 2025, we issued $375,000 in aggregate principal amount of our 7.25% senior secured notes due 2030 in a private offering 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 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 the net proceeds from this offering to partially redeem $307,006 of our then outstanding $641,376 senior secured notes due 2026.

For further information regarding our outstanding debt, see Note 5 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

In August 2025, Moody's Investors Service, or 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, S&P Global, or S&P, 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, S&P rated our 7.25% senior secured notes due 2030 as B+.

Debt Covenants (dollars in thousands)

Our principal debt obligations at September 30, 2025 were:

As of March 31, 2026, the annual interest rate payable on borrowings under our revolving credit facility was 6.28%.

As of March 31, 2026 and April 30, 2026, we had no borrowings under our revolving credit facility and $150,000 available for borrowings.

Distributions

During the three months ended March 31, 2026, we paid a quarterly cash distribution to our shareholders totaling approximately $2,421 using cash on hand.

On April 9, 2026, we declared a quarterly distribution to common shareholders of record on April 21, 2026 of $0.01 per share, or approximately $2,421.

We expect to pay this distribution on or about May 14, 2026 using cash on hand.

Our principal debt obligations at March 31, 2026 were:

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

(2) $709,370 outstanding principal amount of senior secured notes;

(3) $329,175 aggregate principal amount of mortgage notes (excluding discounts, premiums and net debt issuance costs) secured by 36 properties;

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

(2) $375,000 outstanding principal amount of senior secured notes secured by 36 properties;

(3) $327,774 aggregate principal amount of fixed rate mortgage notes secured by 22 properties;

and (4) $140,000 principal amount floating rate mortgage loan secured by 14 properties.

For further information regarding our indebtedness, see Note 6 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

In April 2026, Moody's Investors Service, or Moody's, upgraded our issuer credit rating from Caa1 to B3, our senior secured notes due 2030 rating from B3 to B2, our 4.375% senior notes due 2031 rating from Caa1 to B3, and our senior unsecured notes from Caa2 to Caa1.

Moody's also updated our ratings outlook to positive.

For further information regarding our outstanding debt, see Note 6 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

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

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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 September 30, 2025, we believe we were in compliance with all of the covenants under our debt agreements.

As of March 31, 2026, 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 Quarterly Report on Form 10-Q, 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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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, June 2020, February 2021 and December 2023).

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.

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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 (dollars in thousands)

Supplemental Guarantor Information

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

As of September 30, 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.

As of March 31, 2026, 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.

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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.

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.

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:

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

Real estate properties, net $ 2,427,843 $ 2,452,118

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Total liabilities $ 2,100,928 $ 2,138,258

Nine Months Ended September 30, 2025

Three Months Ended

March 31, 2026

Revenues $ 219,921

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Impact of Government Reimbursement

For the nine months ended September 30, 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

For the three months ended March 31, 2026, 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.

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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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis