What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-05-06 compared with 2025-11-04 · 273 added, 376 removed, 370 unchanged (64% of the section changed)

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Forward-looking statements involve inherent risks and uncertainties regarding events, conditions and financial trends that may affect our future plans of operation, business strategy, results of operations and financial position.

A number of important factors could cause actual results to differ materially from those included within or contemplated by such forward-looking statements, including, but not limited to, our dependence on our operators for revenue and cash flow;

operational and legal risks and liabilities under our new SHOP segment;

A number of important factors could cause actual results to differ materially from those included within or contemplated by such forward-looking statements, including, but not limited to, operational and legal risks and liabilities under our new SHOP segment;

our dependence on the ability of our third-party independent operators to successfully manage and operate our SHOP communities;

our dependence on our operators for revenue and cash flow;

government regulation of the health care industry;

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required regulatory approvals for operation of health care facilities;

a failure to comply with federal, state, or local regulations for the operation of health care facilities;

a failure to comply with applicable law or regulations for the operation of health care facilities;

the adequacy of insurance coverage maintained by our operators;

our reliance on a few major operators;

our ability to find suitable replacement operators for our SHOP communities;

our ability to renew leases or enter into favorable terms of renewals or new leases;

the impact of inflation, operator financial or legal difficulties;

the impact of inflation;

operator financial or legal difficulties;

the sufficiency of collateral securing mortgage loans;

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Executive Overview

Business and Investment Strategy

We are a REIT that invests in seniors housing and health care properties through sale-leasebacks, financing receivables, mortgage financing, joint ventures and structured finance solutions including preferred equity and mezzanine lending.

We create, sustain and enhance stockholder equity value and provide current income for distribution to stockholders through real estate investments in seniors housing and health care properties managed by experienced operators.

The following graph summarizes our gross investments as of September 30, 2025:

Our primary seniors housing and health care property classifications include skilled nursing centers (“SNF”), independent living communities (“ILF”), assisted living communities (“ALF”), memory care communities (“MC”) and combinations thereof.

We also invest in other (“OTH”) types of properties, such as land parcels, projects under development (“UDP”) and behavioral health care hospitals.

To meet these objectives, we attempt to invest in properties that provide opportunity for additional value and current returns to our stockholders and diversify our investment portfolio by geographic location, operator, property classification and form of investment.

Additionally, during the second quarter of 2025, we began utilizing the structure authorized by the REIT Investment Diversification and Empowerment Act of 2007 (Commonly referred to as “RIDEA”) as permitted by the Housing and Economic Recovery Act of 2008.

We conduct and manage our business as two operating segments for internal reporting and internal decision-making purposes:

real estate investments and seniors housing operating portfolio (“SHOP”).

For purposes of this quarterly report and other presentations, we generally include ILF, ALF, MC, and combinations thereof in the seniors housing communities classification (“SH”).

As of September 30, 2025, seniors housing and health care properties comprised approximately 99.5% of our gross investment portfolio.

Company Overview

We are a health care real estate investment trust (“REIT”) that invests in seniors housing and health care properties through our owned seniors housing operating portfolio (“SHOP”), triple-net leases and joint ventures.

We have been operating since August 1992.

Our primary seniors housing and health care property classifications include skilled nursing centers (“SNF”), assisted living communities (“ALF”), independent living communities (“ILF”), memory care communities (“MC”) and combinations thereof.

We also have investments in other (“OTH”) types of

properties, such as land parcels, projects under development (“UDP”) and a behavioral health care hospital.

For purposes of this quarterly report and other presentations, we generally include ILF, ALF, MC, and combinations thereof in the seniors housing communities classification (“SH”).

Substantially all of our revenues and sources of cash flows from operations are derived from rents from operating leases, resident fees and services, interest earned on financing receivables, interest earned on outstanding loans receivable and income from investments in unconsolidated joint ventures.

Income from our investments represent our primary source of liquidity to fund distributions and are dependent upon the performance of the operators on their lease and loan obligations and the rates earned thereon.

the extent that the operators experience operating difficulties and are unable to generate sufficient cash to make payments to us, there could be a material adverse impact on our consolidated results of operations, liquidity and/or financial condition.

Income from our investments represent our primary source of liquidity to fund distributions and are dependent upon the performance of our SHOP communities and operators on their lease and loan obligations and the rates earned thereon.

To the extent that the operators experience operating difficulties and are unable to generate sufficient cash to make payments to us, there could be a material adverse impact on our consolidated results of operations, liquidity and/or financial condition.

To mitigate this risk, we monitor our investments through a variety of methods determined by investment type, property type and operator.

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In addition, operating leases are typically structured as master leases and loans are generally cross-defaulted and cross-collateralized with other loans, operating leases or agreements between us and the operator and its affiliates.

During the second quarter of 2025, we began utilizing the structures provided for in the REIT Investment Diversification and Empowerment Act of 2007 (commonly referred to as “RIDEA”) as permitted by the Housing and Economic Recovery Act of 2008 and established a seniors housing operating portfolio (“SHOP”).

Under a typical RIDEA structure, we have certain oversight approval rights and the right to review operational and financial reporting information, but our independent third party operators will ultimately control the day-to-day operations of the property, pursuant to the terms of our management agreements.

Offering RIDEA structures represent a further aspect of our traditional strategy of investing through vehicles such as non-cancelable triple-net operating (“NNN” or “Triple-Net”) leases, mortgage loans, and structured finance.

We believe that RIDEA structures provide us with additional investment opportunities.

During the second quarter of 2025, we terminated the Anthem Memory Care, LLC (“Anthem”) and New Perspective Senior Living, LLC (“New Perspective”) Triple-Net master leases and converted the 13 communities covered under the master leases to our new SHOP segment.

Additionally, we acquired eight seniors housing communities within our SHOP segment.

Accordingly, as of September 30, 2025, our SHOP segment is comprised of 21 independent living, assisted living and memory care communities that are managed on behalf of LTC by five independent operators pursuant to the terms of separate management agreements.

We conduct and manage our business as two operating segments, for reporting and decision-making purposes:

i) real estate investments (“Real Estate Investments”) segment which consists of owned real properties subject to non-cancelable triple-net leases (“NNN” or “Triple-Net Portfolio”), financing receivables, mortgage loans, notes receivable and unconsolidated joint ventures and ii) SHOP segment.

Business and Investment Strategy

Since commencing operations in August 1992, our objective has been to create, sustain and enhance stockholder equity value and provide current income for distribution to stockholders through real estate investments in seniors housing and health care properties managed by experienced operators.

Our goal is to invest in properties that provide opportunity for additional value and current returns to our stockholders and diversify our investment portfolio by geographic location and operator.

During the second quarter of 2025, we began utilizing the structure authorized by the REIT Investment Diversification and Empowerment Act of 2007 (Commonly referred to as “RIDEA”) as permitted by the Housing and Economic Recovery Act of 2008.

Under RIDEA, we are permitted to participate directly in the cash flow of qualified healthcare properties (compared to receiving solely contractual rental income) and have certain oversight approval rights and the right to review operational and financial reporting information.

However, our independent third-party operators ultimately control the day-to-day operations of the property, pursuant to the terms of our management agreements.

Offering RIDEA structures represents a further aspect of our traditional strategy of investing through vehicles such as non-cancelable triple-net operating leases, mortgage loans, and structured finance.

We believe that RIDEA structures provide us with additional investment and higher growth opportunities.

We also have identified opportunities to convert existing triple-net leases into our new SHOP segment, and in certain instances have completed these conversions.

To develop and implement RIDEA structures, we may need to continue to commit financial and operational resources.

While we anticipate that adding RIDEA transactions will be positive for our business model, our ability to succeed in this new segment will be determined by numerous factors, including our ability to identify suitable investments and our relationship with operators of RIDEA structures.

Depending upon the availability and cost of external capital, we anticipate making additional investments in health care related properties.

and our relationship with operators of our SHOP communities.

We rely on the SHOP operator’s personnel, expertise, resources, good faith, and judgement to manage our SHOP communities efficiently and effectively.

We also rely on the SHOP operators to set appropriate resident fees, provide accurate property-level financial results for our properties in a timely manner, and otherwise operate our SHOP communities in compliance with the terms of our management agreements and all applicable laws and regulations.

Depending upon the availability and cost of external capital, we anticipate making additional investments in seniors housing communities.

New investments are generally funded from cash on hand, proceeds from periodic asset sales, temporary borrowings under our unsecured revolving line of credit and internally generated cash flows.

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Real Estate Portfolio Overview

The following tables summarize our real estate investment portfolio as of September 30, 2025 ( dollar amounts in thousands ):

Nine Months Ended

September 30, 2025

The following tables summarize our real estate investment portfolio as of March 31, 2026 ( dollar amounts in thousands ):

Three Months Ended

March 31, 2026

Rental Income

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Fees and Services

Owned-Triple-Net:

Triple-Net Portfolio:

Seniors Housing

Skilled Nursing

Triple-Net Portfolio

Seniors Housing

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Seniors Housing

Skilled Nursing

Total Financing Receivables

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Joint Ventures

Seniors Housing

Skilled Nursing

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Total Portfolio

(1) We have investments in owned properties, including Triple-Net and SHOP, financing receivables, mortgage loans, notes receivable and unconsolidated joint ventures in 25 states to 31 operators.

(1) We have investments in owned properties, including our Triple-Net Portfolio and SHOP, financing receivables, mortgage loans, notes receivable and unconsolidated joint ventures in 23 states to 30 operators.

(2) Includes three parcels of land held-for-use and one behavioral health care hospital.

(3) We funded $1,177 under a $26,120 mortgage loan commitment for the construction of a 116-unit ILF, ALF and MC located in Illinois.

(3) We funded $14,310 under a $26,120 mortgage loan commitment for the construction of a 116-unit SH located in Illinois.

The loan bears interest at a current rate of 9.0 % and an IRR of 9.5%.

(4) Excludes $8,448 variable rental income from lessee reimbursement of our real estate taxes, $4,573 rental income related to termination of master leases and converting the communities into our new SHOP and $1,514 write-off of straight-line rent.

(4) Excludes $2,268 variable rental income from lessee reimbursement of our real estate taxes.

(5) Resident fees and services include all amounts earned from residents, based on individual resident agreements, at our SHOP communities.

(6) Excludes $1,300 of interest income related to mortgage loan receivables that have been paid off.

(6) Excludes $2,618 of interest income from financing receivables related to the sale of properties accounted for as a financing receivable.

(7) Included in the Interest and other income line item of our Consolidated Statements of Income .

Excludes $2,672 interest income from loans that have been paid off.

(8) Excludes income from the redemption of our preferred equity investment in a joint venture.

As of September 30, 2025, we had $2.0 billion in net carrying value of investments as follows ( dollar amounts in thousands ):

Owned-Triple-Net

As of March 31, 2026, we had $2.0 billion in net carrying value of investments as follows ( in thousands ):

Triple-Net Portfolio

Financing receivables

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Unconsolidated joint ventures

Investments, net

The following table provides details on the components of revenues and related net operating income (“NOI”) across our portfolio ( in thousands ):

Three Months Ended

Nine Months Ended

September 30, 2025

Real Estate Investment segment:

Owned-Triple-Net

Triple-Net Portfolio

Contractual cash rental income

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Effective interest income (2)

Write-off of effective interest related to sale of properties accounted for as a financing receivable (2)

Interest income from financing receivables

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Total revenue-Real Estate Investments segment

Property level expenses-real estate investments

Triple-net lease property tax expense

NOI-Real Estate Investment Segment (5)

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NOI-SHOP Segment (5)

(1) At September 30, 2025, the straight-line rent receivable balance on our Consolidated Balance Sheets was $18,545.

(2) At September 30, 2025, the financing receivables effective interest receivable balance which is included in the Interest receivable line item on our Consolidated Balance Sheets was $6,517.

(3) At September 30, 2025, the mortgage loans receivable effective interest receivable balance which is included in the interest receivable line item on our Consolidated Balance Sheets was $13,698.

(4) At September 30, 2025, the other notes receivable effective interest receivable balance which is included in the interest receivable line item on our Consolidated Balance Sheets was $97.

(1) At March 31, 2026, the straight-line rent receivable balance on our Consolidated Balance Sheets was $17,615.

(2) At March 31, 2026, the financing receivables effective interest receivable balance, which is included in the Interest receivable line item on our Consolidated Balance Sheets, was $7,075.

During the three months ended March 31, 2026, we wrote-off $198 effective interest receivable previously recognized related to the sale of properties accounted for as a financing receivable.

(3) At March 31, 2026, the mortgage loans receivable effective interest receivable balance, which is included in the Interest receivable line item on our Consolidated Balance Sheets, was $14,394.

(4) At March 31, 2026, the other notes receivable effective interest receivable balance, which is included in the Interest receivable line item on our Consolidated Balance Sheets, was $50.

(5) See Non-GAAP Financial Measures below for additional information and reconciliation.

The following table outlines information related to our Triple-Net lease extensions during the nine months ended September 30, 2025 ( dollar amounts in thousands ):

The following table outlines information related to our triple-net lease extensions during the three months ended March 31, 2026 ( dollar amounts in thousands ):

Type of Property

April 30, 2026

April 30, 2031

December 31, 2025

December 31, 2026

February 28, 2025

February 28, 2026

February 28, 2031

December 31, 2025

December 31, 2026

(1) Subsequent to September 30, 2025, Genesis Healthcare, Inc.

(“Genesis”) filed for Chapter 11 bankruptcy.

Genesis has paid their contractual rent through November 2025.

(2) The purchase option window provided in the master lease, which expired on December 31, 2024, was extended for another year to December 31, 2025.

Additionally, During 2025, we terminated two existing leases with the same operator and combined them into a single master lease.

The new combined master lease has a five-year term with one 1-year extension option and four 5-year extension options.

Annual cash rent is $2.5 million for the first lease year escalating by 2.0% annually thereafter.

The terms and economics of the new combined master lease are similar to those of the two leases that were terminated.

In connection with the termination of these leases, we wrote-off straight-line rent receivable and lease incentive balances totaling $0.5 million.

During the fourth quarter of 2025, we expect to convert these seniors housing communities under the new combined master lease from our triple-net portfolio into our SHOP segment.

Upon conversion, the new combined master lease will be terminated, and we will enter into a management agreement with an operator new to us.

In conjunction with the new master lease termination, we expect to write-off a $1.0 million working capital note during the fourth quarter of 2025.

Also, as previously discussed, during 2025, we terminated the Anthem Triple-Net master leases and converted the communities covered under the master leases into our new SHOP segment.

In conjunction with the conversion, we wrote-off Anthem’s working capital note of $2.7 million and the related interest receivable of $0.4 million.

In addition, we terminated our New Perspective Triple-Net lease and converted the community covered under the lease into our SHOP segment.

In connection with the conversion, we paid New Perspective a $6.0 million lease termination fee.

October 31, 2026

October 31, 2030

During the three months ended March 31, 2026, we terminated a master lease and converted two seniors housing communities covered under the master lease into our SHOP segment.

Upon conversion, we entered into a management agreement with an operator new to us.

The communities are located in Texas with a total of 88 units and an aggregate gross book value of $26.3 million.

Subsequent to March 31, 2026, we terminated an additional triple-net master lease and converted two seniors housing communities covered under the master lease into our SHOP segment.

Upon conversion, we entered into a management agreement with another operator, also new to us.

The communities are located in Georgia and South Carolina with a total of 159 units and an aggregate gross book value of $32.4 million.

Update on Certain Operators

ALG Senior Living

We hold controlling interest in three joint ventures with ALG Senior Living (“ALG”).

The joint ventures own 28 assisted living and memory care communities in North Carolina (27) and South Carolina (1) with a total of 1,263 units.

The joint ventures lease these communities to affiliates of ALG under three 10-year master leases and has provided the lessee with the option to purchase these communities.

In accordance with generally accepted accounting principles (“GAAP”), the communities are recorded as Financing Receivables on our Consolidated Balance Sheets.

Additionally, ALG operates a 45-unit assisted living and memory care community in North Carolina under a mortgage loan, which was scheduled to mature in January 2025.

During 2025, the mortgage loan maturity was extended to May 2026.

ALG has paid their contractual rent and interest obligations through November 2025.

Anthem Memory Care

Anthem operated 12 memory care communities located in California, Colorado, Kansas, Illinois and Ohio under Triple-Net master leases.

During the second quarter of 2025, we terminated the Anthem Triple-Net master leases and converted the 12 memory care communities covered under the master leases into our new SHOP segment.

In conjunction with the conversion, we wrote-off Anthem’s working capital note of $2.7 million and the related interest receivable of $0.4 million during the second quarter of 2025.

Genesis Healthcare, Inc.

During the second quarter of 2025, we received Genesis’ written notice of its exercise of a 5-year extension option, which would extend the term of the lease to April 30, 2031.

During the second quarter of 2025, we received written notice from Genesis Healthcare Inc.

(“Genesis”) of its exercise of a 5-year extension option, which extended the term of the lease to April 30, 2031.

During the third quarter of 2025, Genesis filed for Chapter 11 bankruptcy.

Accordingly, we wrote-off straight-line rent receivable balance of $1.3 million related to Genesis’ master lease.

Accordingly, we wrote-off the straight-line rent receivable balance of $1.3 million related to Genesis’ master lease.

During the three months ended March 31, 2026, a federal bankruptcy judge approved the sale of Genesis’ assets to a newly formed investment group.

Affiliates of Genesis lease six skilled nursing centers in New Mexico (five) and Alabama (one) with a total of 782 beds under a master lease with LTC.

Genesis has paid their contractual rent through November 2025.

Genesis has paid their contractual rent through May 2026.

Prestige Healthcare

Prestige Healthcare (“Prestige”) operates 21 skilled nursing centers located in Michigan secured under four mortgage loans and two skilled nursing centers located in South Carolina under a master lease.

Prestige is our largest operator based upon revenues and assets representing 13.3% of our total revenues and 12.7% of our total assets as of September 30, 2025.

Prior to an amendment in July 2025, under one of the mortgage loans with Prestige secured by 14 properties, the minimum mortgage interest payment due to us was based on an annual current pay rate of 8.5% on the outstanding loan balance.

Prestige is our largest operator based on total revenues and second largest operator based on total assets, representing 8.0% of our total revenues and 12.3% of our total assets as of March 31, 2026.

Prior to an amendment in July 2025, under Prestige’s $179.9 million mortgage loan secured by 14 properties, the minimum mortgage interest payment due to us was based on an annual current pay rate of 8.5% on the outstanding loan balance.

The difference between the contractual interest rate and the current pay interest rate on the outstanding loan balance remained an obligation of Prestige and was payable through the application of security deposits we hold on behalf of Prestige or was payable at maturity.

During the first quarter of 2025, we received full contractual cash interest of $5.0 million from Prestige through $3.8 million of cash receipts and application of $1.2 million of Prestige’s security.

At March 31, 2025, Prestige’s security totaled $3.8 million.

During the second quarter of 2025, we received full contractual cash interest of $5.0 million from Prestige.

None of Prestige’s security was used to pay the difference between the contractual interest rate and the 8.5% current pay interest rate.

During the third quarter of 2025, the Prestige mortgage loan was modified to increase the current interest paid by Prestige from 8.5% to the full contractual interest rate of 11.14% and escalated annually.

The modification was effective July 1, 2025.

Additionally, the modification provides Prestige an option to prepay their mortgage loan at par and without penalty within a 12-month window beginning in July 2026.

Prestige is required to provide us with a 90-day notice of its intention to exercise the option and the ability for Prestige to exercise the pre-payment option is contingent on several factors including Prestige being current and in good standing on all its mortgage loans with LTC and obtaining replacement financing.

In conjunction with the loan amendment that provided the borrower with a penalty-free early payoff option, we wrote-off $41.5 million of interest receivable previously accrued related to this loan during the three months ended September 30, 2025.

Prestige is current on their contractual loan obligations through November 2025.

Other Operators

We had a JV that owned two assisted living communities with a total of 186 units in Oregon.

The communities were leased under two separate leases with the same operator, who was the non-controlling member of the JV.

During 2025, we acquired the operator’s $4.0 million non-controlling interest in the JV for $1.2 million and terminated the two existing leases.

In connection with the termination of these leases, we wrote-off $0.2 million straight-line rent receivable and $0.3 million lease incentive.

Concurrently, we entered into a new combined master lease with the same operator.

The new combined master lease has a five-year term with one 1-year extension option and four 5-year extension options.

Annual cash rent is $2.5 million for the first lease year, escalating by 2% annually thereafter.

Additionally, the master lease provides the operator with an earn-out of up to $4.0 million, contingent on achieving certain performance thresholds.

During the fourth quarter of 2025, we expect to convert these two assisted living communities under the new combined master lease from our triple-net portfolio into our SHOP segment.

Upon conversion, the new combined master lease will be terminated, and we will enter into a management agreement with an operator new to us.

In conjunction with the new master lease termination, we expect to write-off a $1.0 million working capital note during the fourth quarter of 2025.

Additionally, during the first quarter of 2025, we engaged a broker to sell seven skilled nursing centers under a master lease, following the operator’s election not to exercise the renewal option available under the master lease.

The master lease covered seven skilled nursing centers in California (1), Florida (2) and Virginia (4) with a gross book value of $71.7 million and was set to mature in January 2026.

Accordingly, these centers met the criteria under GAAP as held-for-sale and have been classified as held-for-sale.

The operator is obligated to pay rent on the portfolio through maturity and is current on rent obligations through November 2025.

Subsequent to September 30, 2025, we sold two skilled nursing centers within this portfolio located in Florida with a total of 240 beds for $43.0 million.

We received $41.9 million of net proceeds and expect to record a gain on sale of approximately $26.0 million.

Additionally, we sold the remaining five skilled nursing centers in Virginia (4) and California (1) with a total of 656 beds for an aggregate sales price of $80.0 million.

We will use the total proceeds of $78.9 million in a 1031 exchange for the acquisitions within our SHOP segment and anticipate recording an aggregate gain on sale of approximately $52.0 million.

These seven properties, which were classified as held-for-sale at September 30, 2025, had an aggregate gross book value and net book value of $71.7 million and $42.5 million, respectively.

During the third quarter of 2025, Prestige’s $179.9 million mortgage loan was modified to increase the current interest paid by Prestige from 8.5% to the then full contractual interest rate of 11.14% escalating annually.

Additionally, the modification provides Prestige an option to prepay this mortgage loan at par and without penalty within a 12-month window beginning in July 2026.

Prestige is required to provide us with at least a 90-day notice of its intention to exercise the option and the ability for Prestige to exercise the pre-payment option is contingent on several factors including Prestige being current and in good standing on all its mortgage loans with LTC and obtaining replacement financing.

During the third quarter of 2025, in conjunction with the loan amendment that provided the borrower with a penalty-free early payoff option, we wrote-off $41.5 million of effective interest previously accrued related to this loan.

During the three months ended March 31, 2026, Prestige provided notice of its intent to repay its $179.9 million mortgage loan and we expect them to repay the loan during the third quarter of 2026.

Prestige is current on their contractual loan obligations through May 2026.

2026 Activities Overview

The following tables summarize our transactions during the nine months ended September 30, 2025 (dollar amounts in thousands):

During the second quarter of 2025, we r the Anthem and New Perspective Triple-Net master leases and converted the communities covered under the master leases into our new SHOP segment.

Additionally, during the third quarter of 2025, we acquired eight seniors housing communities within our SHOP segment.

Accordingly, as of September 30, 2025, our SHOP segment is comprised of 21 independent living, assisted living and memory care communities that are managed on behalf by five independent operators pursuant to separate management agreements.

The following table provides information regarding our SHOP segment as of September 30, 2025 ( dollar amounts in thousands ):

(1) Subsequent to September 30, 2025, we acquired within our SHOP segment an 88-unit SH in Georgia for $22,900.

In conjunction with the acquisition, we entered into a management agreement with an operator new to us.

Additionally, we expect to convert two SH from our triple-net portfolio into our SHOP segment during the fourth quarter of 2025.

The communities are located in Oregon with a total of 186 units, with an aggregate gross book value of $33,102 and a net book value of $26,535.

Upon conversion, the Triple-Net master lease with the existing operator will be terminated and we will enter into a new management agreement with an operator new to us.

The following table summarizes our acquisitions within our SHOP segment during the nine months ended September 30, 2025 ( dollar amounts in thousands ):

The following tables summarize our transactions during the three months ended March 31, 2026 (dollar amounts in thousands):

Owned Real Properties–SHOP

During the three months ended March 31, 2026, we continued to expand our SHOP segment.

Accordingly, we terminated a triple-net master lease and converted two seniors housing communities covered under the master lease into our SHOP segment.

Upon conversion, we entered into a management agreement with an operator new to us.

The communities are located in Texas with a total of 88-units and an aggregate gross book value of $26.3 million.

Subsequent to March 31, 2026, we terminated a triple-net master lease and converted two seniors housing communities covered under the master lease into our SHOP segment.

Upon conversion, we entered into a management agreement with another operator new to us.

The communities are located in Georgia and South Carolina with a total of 159 units and an aggregate gross book value of $32.4 million.

Additionally, we acquired a portfolio of three seniors housing communities in Georgia.

The following table summarizes acquisitions within our SHOP segment during the three months ended March 31, 2026 ( dollar amounts in thousands ):

Type of Property

(1) Subsequent to September 30, 2025, we acquired an 88-unit seniors housing community within our SHOP segment in Georgia for $22,900.

Properties (1)

Beds/Units (1)

(1) Subsequent to March 31, 2026, we acquired a 61-unit seniors housing community within our SHOP segment in Illinois for $9,205.

In conjunction with the acquisition, we entered into a management agreement with an operator new to us.

Investment in Improvement projects

(2) In conjunction with this acquisition, we entered into a management agreement with another operator also new to us.

(3) Excludes $100 of additional costs incurred related to 2025 acquisitions.

Additionally, at acquisition, we received property tax proration credits of $76.

During the three months ended March 31, 2026, we funded capital improvement projects of $2.0 million within our SHOP segment.

Owned Real Properties–Triple-Net Portfolio

During the three months ended March 31, 2026, we extended a master lease covering four seniors housing communities in Oklahoma.

The following table provides information related to the lease extension ( dollar amounts in thousands ):

Type of Property

October 31, 2026

October 31, 2030

During the three months ended March 31, 2026 and subsequently, we terminated master leases and converted the communities covered under the master leases into our SHOP segment.

See Owned Real Properties – SHOP above for more information regarding these master leases.

During the three months ended March 31, 2026, we invested in the following improvement projects within our Triple-Net Portfolio ( in thousands ):

Type of Property

Seniors Housing Communities

Skilled Nursing Centers

Properties Held -for-Sale

(1) These properties were sold subsequent to September 30, 2025.

See footnote (3) to the Properties Sold table below for additional information.

Properties Sold

(Loss) Gain (1)

(1) Calculation of net (loss) gain includes cost of sales and write-off of straight-line receivable and lease incentives, when applicable.

(2) We sold a parcel of land adjacent to a memory care community within our portfolio.

(3) Subsequent to September 30, 2025, we sold two skilled nursing centers in Florida totaling 240 beds for $43,000.

We received $41,900 of net proceeds and expect to record a gain on sale of approximately $26,000.

Additionally, we sold five skilled nursing centers in Virginia (4) and California (1) with a total of 656 beds for an aggregate sales price of $79,950.

We will use the total proceeds of $78,900 in a 1031 exchange for the acquisitions within our SHOP segment and anticipate recording an aggregate gain on sale of approximately $52,000.

These seven properties, which were classified as held-for-sale at September 30, 2025, had an aggregate gross book value and net book value of $71,742 and $42,458, respectively .

Investment in Mortgage Loans Receivable

The following tables provide information regarding our investments in mortgage loans secured by first mortgages at September 30, 2025 (dollar amounts in thousands):

Interest Rate

Properties (3)

(1) Excludes the impact of the credit loss reserve.

(2) Some loans contain certain guarantees and provide for certain facility fees.

(3) Our mortgage loans are secured by properties located in five states with eight borrowers.

(4) During 2024, we committed to fund a $26,120 mortgage loan for the construction of a 116-unit ILF, ALF and MC located in Illinois.

The borrower contributed $12,300 of equity which initially funded the construction.

During the third quarter of 2025, we began funding the commitment.

The loan bears interest at a current rate of 9.0% and an IRR of 9.5%.

(5) During the three months ended September 30, 2025, we modified the mortgage loan to increase the current interest paid by Prestige, the borrower, from 8.5% to the full contractual interest rate of 11.14% escalated annually.

The modification was effective July 1, 2025.

Additionally, the modification provides Prestige an option to prepay their mortgage loan at par and without penalty within a 12-month window beginning in July 2026.

Prestige is required to provide us with a 90-day notice of its intention to exercise the option, and the ability for Prestige to exercise the pre-payment option is contingent on several factors including Prestige being current and in good standing on all its mortgage loans with LTC and obtaining replacement financing.

In conjunction with the loan modification that provided the borrower a penalty-free early payoff option, we wrote-off $41,455 of interest receivable previously accrued related to this loan during the three months ended September 30, 2025.

For more information related to the effective interest write-off see Note 3.

Real Estate Investments .

(6) Mortgage loans provide for 2.25% annual increases in the interest rate.

Financing Receivables

The following table summarizes our financing receivable activity for the three months ended March 31, 2026 ( in thousands ):

Investment and funding under financing receivables

Sale of properties accounted for as a financing receivable

Distribution paid to non-controlling interest related to sale of properties accounted for as a financing receivable

Recovery of credit losses

Net decrease in financing receivables

(1) During 2022, we entered into a JV that purchased three skilled nursing centers with a total of 299 beds located in Florida.

The JV leased the centers back to an affiliate of the seller and provided the seller-lessee with a purchase option.

Our JV partner contributed $14,325 of equity into the joint venture.

Accordingly, we consolidated the joint venture as Financing receivable and recorded the JV partner contribution as Non-controlling interest on our Consolidated Balance Sheets .

During the three months ended March 31, 2026, the lessee exercised its purchase option to acquire the skilled nursing centers underlying the joint venture.

In conjunction with this transaction, we received exit IRR income of $1,812.

Additionally, we wrote-off $198 effective interest receivable previously recognized over the term of the financing receivable through payoff.

Mortgage Loans Receivable

The following table summarizes our mortgage loan receivable activity for the three months ended March 31, 2026 ( in thousands ):

Originations and funding under mortgage loans receivable

Pay-offs received

Application of interest reserve

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Mortgage loan premium amortization

Provision for loan loss reserve

Provision for credit losses

Net increase in mortgage loans receivable

(1) Includes the following:

(a) $55,350 under a $57,550 mortgage loan commitment secured by two SH with a total of 171 units in California.

The loan term is five years at a rate of 8.3%;

(b) $39,330 under a $42,300 mortgage loan commitment secured by a 250-unit ILF, ALF and MC in Florida.

The loan term is five years at a fixed rate of 8.5%;

The borrower contributed $12,100 of equity upon origination in July 2023, which was used to initially fund the construction.

Our remaining commitment is $3,013.

The interest-only loan term is approximately three years at a rate of 8.75%, and includes two one-year extensions, each of which is contingent on certain coverage thresholds;

(d) $1,177 under a $26,120 mortgage loan commitment for the construction of the construction of a 116-unit ILF, ALF and MC located in Illinois.

(1) We funded the following:

(a) $6,515 under a $26,120 mortgage loan commitment for the construction of a 116-unit SH located in Illinois.

The borrower contributed $12,300 of equity, which was used to initially fund the construction.

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The loan bears interest at a current rate of 9.0% and an IRR of 9.5%;

(b) $640 under a $19,500 mortgage loan commitment for the construction of an 85-unit SH in Michigan.

The borrower contributed $12,100 equity upon origination, which was used to initially fund the construction.

Our remaining commitment is $1,757.

The 8.8% interest-only loan matures in September 2026 and includes two one-year extension, each of which is contingent on certain coverage thresholds.

Preferred Equity Investment in Unconsolidated Joint Ventures

During the nine months ended September 30, 2025, we received $16.0 million, which includes a 13% exit IRR of $3.0 million, from the redemption of our preferred equity investment in a joint venture that owns a 267-unit independent and assisted living community in Washington.

Investment in Notes Receivable

Advances under notes receivable

Principal payments received under notes receivable

Write-off of notes receivable

Recovery of credit losses

Net decrease in notes receivable

(1) Includes the following:

(a) $17,000 related to an early payoff of a mezzanine loan.

In conjunction with the mezzanine loan payoff, we received exit IRR income of $2,599 recognized as Interest and other income in our Consolidated Statements of Income .

The exit IRR income was partially offset by $1,624 of effective interest previously recognized over the term of the mezzanine loan through payoff;

(b) $639 related to the payoff of three working capital loans;

(2) Represents the write-off of Anthem working capital note in connection with the conversion of its Triple-Net leases to SHOP.

We have an acquisition, development and construction (“ADC”) loan that meets the accounting criteria to be considered a variable interest entity (“VIE”).

We are not the primary beneficiary of the VIE as we do not have both:

1) the power to direct the activities that most significantly affect the VIE’s

economic performance, and 2) the right to receive benefits from the VIE or the obligation to absorb losses of the VIE that could be significant to the VIE.

However, we do have significant influence over the VIE.

Therefore, we have accounted for the investment as a joint venture using the equity method of accounting.

The following table provides information regarding our unconsolidated joint venture investment at March 31, 2026 (dollar amounts in thousands):

(1) Represents a $12,700 mortgage loan, which is comprised of $11,164 funded at origination during the three months ended June 30, 2024, an interest reserve of $750 and a capital expenditure reserve of $786.

In accordance with U.S.

generally accepted accounting principles (“GAAP”), this mortgage loan was determined to be an ADC loan and is accounted for as an unconsolidated JV.

The five-year mortgage loan is interest-only at a current rate of 9.15%.

During the three months ended March 31, 2026, the operator provided notice of its intent to pay off this mortgage loan.

Subsequent to March 31, 2026, the mortgage loan was paid off.

Health Care Regulatory

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On July 31, 2025, CMS issued a final rule to update Medicare payment policies and rates for SNFs under the SNF prospective payment system (“SNF PPS”) for fiscal year (“FY”) 2026.

CMS announced that for FY 2026, it was updating SNF PPS rates by 3.2% based on the final SNF market basket of 3.3%, plus a 0.6% market basket forecast error adjustment, and a negative 0.7% productivity adjustment, which amounts to an increase in SNF PPS payments of $1.16 billion compared to payments in FY 2025.

CMS announced that it was updating SNF PPS rates by 3.2% based on the final SNF market basket of 3.3%, plus a 0.6% market basket forecast error adjustment, and a negative 0.7% productivity adjustment, which amounts to an increase in SNF PPS payments of $1.16 billion compared to payments in FY 2025.

CMS stated that its impact figures do not incorporate the SNF Value-Based Purchasing (“VBP”) reductions for certain SNFs subject to the net reduction in payments under the SNF VBP, which are estimated to total $208.36 million in FY 2026.

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CMS also announced it was finalizing its proposal to amend the reconsideration request policy and process.

On April 22, 2024, CMS issued the Minimum Staffing Standards for Long-Term Care Facilities and Medicaid Institutional Payment Transparency Reporting final rule.

The final rule set forth new comprehensive minimum staffing requirements.

It finalized a total nurse staffing standard of 3.48 hours per resident day (“HPRD”), which must include at least 0.55 hours per resident day of direct registered nurse care and 2.45 hours per resident day of direct nurse aide care.

It permitted facilities to use any combination of nurse staff (registered nurse, licensed practical nurse and licensed vocational nurse, or nurse aide) to account for the additional 0.48 hours per resident day needed to comply with the total nurse staffing standard.

CMS also finalized enhanced facility assessment requirements and a requirement to have a registered nurse onsite 24 hours a day, seven days a week (“24/7”), to provide skilled nursing care.

The final rule also provided a staggered implementation timeframe of the minimum nurse staffing standards and 24/7 registered nurse requirement based on geographic location as well as possible exemptions for qualifying facilities for some parts of these requirements based on workforce unavailability and other factors.

The final rule was challenged in federal courts in Texas and Iowa.

An April 2025 decision from the U.S.

District Court for the Northern District of Texas and a June 2025 decision from the U.S.

District Court for the Northern District of Iowa blocked the rule from taking effect.

The Texas federal court vacated the rule in full, finding that CMS had exceeded its authority in promulgating it.

Meanwhile, the Iowa federal court only vacated the 24/7 RN requirement and the minimum staffing hours requirement, while leaving the rest of the rule in place.

Department of Justice appealed the Texas federal court’s decision striking down the entire rule to the U.S.

Court of Appeals for the Fifth Circuit, but that appeal was dismiss at the government’s motion on September 19, 2025.

The Iowa federal court’s decision was also initially appealed to the U.S.

Court of Appeals for the Eighth Circuit, however that appeal was also voluntarily dismissed on a motion by the government on October 3, 2025.

Thus both federal district court rulings stand undisturbed.

Regardless, however, the 2025 budget reconciliation act (also known as the “One Big Beautiful Bill Act”), signed by President Trump on July 4, 2025, imposes a 10-year moratorium on the implementation and enforcement of the entire rule.

So even if a future administration seeks to re-challenge the court’s rulings at some point in the future, CMS is barred from implementing the rule until 2034 at the earliest.

On June 18, 2025, CMS issued a Quality, Safety and Oversight memorandum, QSO-25-NH, which outlines updates to how nursing home ratings are calculated and reported on the Nursing Home Care Compare website.

According to the QSO memo, as of July 30, 2025, CMS will publish average Five Star ratings and other performance-based information for chains or affiliated entities on the Nursing Home Care Compare website.

CMS will also be removing COVID-19 vaccination information from the main profile page of each nursing home effective as of the same date.

CMS will also be revising the methodology used to calculate Five Star Ratings.

In addition, CMS also recently announced a third extension for SNFs to submit required Medicare revalidations.

Facilities now have until January 1, 2026 to submit these filings.

There can be no assurance that these rules or future regulations modifying Medicare SNF payment rates or other requirements for Medicare and/or Medicaid participation will not have an adverse effect on the financial condition of our borrowers and lessees which could, in turn, adversely impact the timing or level of their payments to us and our overall financial condition.

On April 2, 2026, CMS issued a proposed rule for updates to Medicare payment policies and rates for SNFs under the SNF PPS for FY 2027.

CMS announced that for FY 2027, CMS proposed updating SNF PPS rates by 2.4% based on the proposed SNF market basket of 3.2%, and a negative 0.8% productivity adjustment.

CMS stated that these impact figures do not incorporate SNF VBP reductions for certain SNFs subject to a net reduction in payments under the SNF VBP.

CMS stated that SNF VBP adjustments are estimated to total $208.4 million in FY 2026.

CMS also announced that for the SNF QRP, CMS is proposing to remove two COVID-19 measures, revising the data submission deadline, and requiring the submission of MDS data on all SNF residents receiving covered skilled care in a SNF, regardless of payer, and that CMS is seeking feedback on two Requests for Information (“RFI”).

For the SNF VBP, CMS announced that it is providing estimated performance standards for the FY 2029 and FY 2030 program years and proposing an update to the program’s “snapshot date” for two measures that are calculated using MDS assessment data to maintain alignment with proposed SNF QRP submission deadlines for MDS assessment data.

There can be no assurance that these rules or future regulations modifying Medicare SNF payment rates or other requirements for Medicare and/or Medicaid participation will not have an adverse effect on the financial condition of our lessees and borrowers which could, in turn, adversely impact the timing or level of their payments to us and our overall financial condition.

Failure by an operator to comply with regulatory requirements can, among other things, jeopardize a facility’s compliance with the conditions of participation under relevant federal and state healthcare programs.

Further the ability of our operators to comply with applicable regulations, including minimum staffing requirements, can be adversely impacted by changes in the labor market and increases in inflation.

Further the ability of our operators to comply with applicable regulations can be adversely impacted by changes in the labor market and increases in inflation.

Key Performance Indicators, Trends and Uncertainties

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Concentration Risk.

We evaluate by gross investment our concentration risk in terms of asset mix, real estate investment mix, operator mix and geographic mix.

We evaluate a tenant/operator concentration based on whether revenues from transactions with a single external operator equal or exceed 10% of our total revenues.

No single operator accounted for 10% or more of total revenues for the three months ended March 31, 2026.

Additionally, we evaluate our concentration risk based on gross investment across asset mix, real estate investment mix, operator mix and geographic mix.

Concentration risk is valuable to understand what portion of our real estate investments could be at risk if certain sectors were to experience downturns.

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Investment mix measures the portion of our investments that relate to our various property classifications.

Operator/credit mix measures the portion of our investments that relate to our top five operators.

Operator mix measures the portion of our investments that relate to our top five operators.

Geographic mix measures the portion of our real estate investment that relate to our top five states.

The following table reflects our recent historical trends of concentration risk (gross investment, in thousands) :

Owned properties-Triple-Net

Owned properties-SHOP

Triple-Net Portfolio

Financing receivables

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Under development

Operator/credit mix:

Operator mix:

ALG Senior Living

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(1) Includes three parcels of land located adjacent to properties securing the Prestige Healthcare mortgage loan and are managed by Prestige.

(2) During the second quarter of 2025, we terminated the Anthem and New Perspective Triple-Net master leases and converted the communities covered under the master leases into our SHOP segment.

Additionally, during the third quarter of 2025, we acquired eight SHs within our SHOP segment.

These communities within our SHOP segment operated by independent operators on our behalf are classified as “SHOP operators” during the second and third quarters of 2025.

(2) During the second quarter of 2025, we terminated our Anthem Memory Care, LLC (“Anthem”) triple-net master leases and converted the communities covered under the master leases into our SHOP segment.

Accordingly, our Anthem Memory Care, LLC” communities were included with “SHOP operators” classification for periods subsequent to March 31, 2025.

(3) Our communities within our SHOP segment operated by independent operators on our behalf are classified as “SHOP operators”.

Our SHOP segment is not subject to operator/credit concentration risk.

(4) During the three months ended March 31, 2026, we acquired three seniors housing communities in Georgia with a gross book value of $108,129.

As a result of this transaction, California is no longer a top five state under our geographic mix and is replaced by Georgia.

Accordingly, our “Georgia” properties were reclassified from “Remaining states” and our California properties were reclassified to “Remaining states” for all periods presented.

Credit Strength.

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Fixed charge coverage ratio (9)

(1) Decreased due to increase in market capitalization resulting from the sale of common stock under our equity distribution agreement, as well as increase in stock price partially offset by increase in outstanding debt.

(2) Decreased due to decrease in outstanding debt.

(3) Decreased due to decrease in outstanding debt, partially offset by decrease in market capitalization resulting from lower stock price.

(4) Decreased due to increase in interest expense partially offset by increase in net operating income from our SHOP segment.

(5) Increased due to increase in outstanding debt partially offset by increase in gross asset value.

(6) Increased due to increase in outstanding debt partially offset by increase in market capitalization resulting from the sale of common stock under our equity distribution agreement as well as increase in stock price.

(3) Decreased due to increase in interest expense and decrease in rental income partially offset by increase in revenue from resident fees and services and interest and other income.

(7) Decreased due to increase in interest expense and decrease in rental income, partially offset by increase in net operating income from our SHOP segment, and revenue from interest and other income.

(8) Increased due to increase in outstanding debt and decrease in market capitalization from lower stock price.

(5) Decreased due to increase in market capitalization due to increase in stock price.

(6) Increased due to decrease in interest expense.

(7) Decreased due to decrease in outstanding debt, partially offset by decrease in gross asset value.

(8) Decreased due to decrease in outstanding debt, partially offset by decrease in market capitalization from lower stock price.

(9) Increased due to decrease in interest expense and increase in rental income, partially offset by decrease in other income.

(9) In calculating our interest coverage and fixed charge coverage ratios above, we use EBITDA re.

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Three Months Ended

September 30,

Rental income

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Seniors housing operating expenses

Write-off of effective interest receivable

Provision for credit losses

(Recovery) provision for credit losses

Transaction costs

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Income tax expense

Net (loss) income

Income allocated to non-controlling interests

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Net income available to common stockholders

(1) Decreased primarily due to the conversion of 13 communities from Triple-Net to our new SHOP segment, write-off of a straight-line rent receivable balance due to an operator filing for bankruptcy and lower rent from property sales, partially offset by rent increases from fair-market rent resets, escalations and capital improvements.

(2) Resident fees and services include all amounts earned from residents, based on individual resident agreements, at our SHOP communities.

(3) Decreased due to $41,455 of interest receivable previously accrued related to Prestige mortgage loan and mortgage loan payoffs partially offset by mortgage loan originations and additional funding.

(4) Decreased primarily due to aggregate one-time income of $4,052 received in 2024 from two former operators.

(5) Decreased due to lower average outstanding balance on our revolving line of credit, scheduled principal paydowns on our senior unsecured notes and lower interest rates.

(6) Represents operating expenses related to our new SHOP segment.

(7) In conjunction with the Prestige mortgage loan modification that provided Prestige a penalty-free early payoff option, we wrote-off the interest receivable previously accrued related to this mortgage loan.

(8) Increased primarily due to increase in incentive compensation expenses and other corporate expenses.

(9) Represents the net loss on sale related to a closed facility in Texas.

(10) Represents a net gain on sale of an 80-unit SH in Texas.

Nine Months Ended

September 30,

Rental income

Resident fees and services

Interest income from financing receivables

Interest income from mortgage loans

Interest and other income

Total revenues

Interest expense

Depreciation and amortization

Seniors housing operating expenses

Write-off of effective interest receivable

Provision for credit losses

Transaction costs

Triple-net lease property tax expense

General and administrative expenses

Total expenses

(Loss) gain on sale of real estate, net

Income from unconsolidated joint ventures

Income tax benefit

Income allocated to non-controlling interests

Net income attributable to LTC Properties, Inc.

Income allocated to participating securities

Net income available to common stockholders

(1) Decreased primarily due to conversion of 13 communities from Triple-Net to our new SHOP segment, a one-time revenue received in 2024 related to the repayment of $2,377 in rent credits, write-off of a straight-line rent receivable balance due to an operator filing for bankruptcy, lower rent due to property sales and the write-off of a straight-line rent receivable and lease incentive balance in connection with the termination of two existing leases with the same operator, and combining them into a single master lease.

These decreases were partially offset by rent increases from fair-market rent resets, annual escalations and amendments.

(1) Decreased primarily due to conversion of communities from our Triple-Net Portfolio to our SHOP segment and lower rent from property sales.

The decreases were partially offset by rent increases from fair-market rent resets and the turnaround impact of the 2025 write-off of a straight-line rent receivable and lease incentive balance in connection with the termination of two existing leases with the same operator and combining them into a single master lease.

(2) Increase due to establishing our new SHOP segment during the second quarter of 2025.

Resident fees and services include all amounts earned from residents, based on individual resident agreements, at our SHOP communities.

(3) Increased primarily due to the exchange of two mortgage loan receivables near the end of the second quarter of 2024 for controlling interests in two newly formed JVs that are accounted for as financing receivables.

(4) Decreased primarily due to explanation (3) above, write-off of Prestige interest receivable previously accrued and payoffs partially offset by additional mortgage loan funding.

(5) Decreased primarily due to aggregate one-time income of $4,052 received from two former operators and receipt of insurance proceeds in 2024.

(6) Decreased due to lower average outstanding balance on our revolving line of credit, scheduled principal paydowns on our senior unsecured notes and lower interest rates.

(7) Represents operating expenses related to our new SHOP segment.

(8) In conjunction with the Prestige mortgage loan modification that provided Prestige a penalty-free early payoff option, we wrote-off interest receivable previously accrued related to this mortgage loan.

(9) Increased due to the write-off of a working capital note and the related interest receivable in connection with the transition of Triple-Net leases covering 12 properties to RIDEA.

(10) Increased due to $5,971 lease termination fee paid to New Perspective upon conversion of the community covered under a Triple-Net lease into our SHOP segment and additional costs associated with the startup of new RIDEA platform.

(11) Increased primarily due to one-time expenses related to an employee’s retirement and increase in incentive compensation expenses and other corporate expenses.

(12) Represents the net loss on sale related to a closed facility in Texas and one SH in Oklahoma partially offset by a net gain on sale related to one SH and a parcel of land adjacent to an MC within our portfolio located in Ohio.

(13) Represents the gain on sale of a 80-unit SH in Texas, a 110-unit SH in Wisconsin and two closed properties located in Texas, partially offset by the aggregate loss on sale of 6 SHs located in Texas (five) and Florida (one).

(14) Increased due to the 13% exit IRR of $2,962 received in connection with the redemption of our preferred equity investment in a JV.

Seniors housing operating expenses include costs incurred to operate the properties in our SHOP segment.

(3) Increased primarily due to $1,812 received in connection with the sale of a portfolio of three SNFs in Florida accounted for as a financing receivable.

The increase was partially offset by decrease in interest income and the write-off of effective interest receivable, both related to the sale of such portfolio.

(4) Increased due to additional mortgage loan receivables funding partially offset by payoffs and a decrease in effective interest income related to converting Prestige mortgage loan to cash basis during the third quarter of 2025.

(5) Increased primarily due to entering into new term loans totaling $200,000 in the fourth quarter of 2025 and a higher average balance on our revolving line of credit partially offset by scheduled principal paydowns on our senior unsecured notes and lower interest rates.

(6) Increased due to acquisitions within our SHOP segment.

(7) Primarily represents the recovery of credit losses recorded in connection with the sale of three SNFs that were accounted for as a financing receivable.

See (3) above.

(8) Primarily represents the write-off of a working capital note and the related interest receivable in connection with the transition of triple-net leases covering 12 properties to SHOP.

(9) Decreased primarily due to the conversion of 17 communities from our Triple-Net Portfolio to SHOP and property sales.

Upon conversion into SHOP, two of the communities are operating and accounted for as one community.

(10) Increased primarily due to higher costs to support our growing SHOP segment and other corporate expenses.

(11) Decreased primarily due to the turnaround impact of a 13% exit IRR payment of $2,962 received in connection with the redemption of our preferred equity investment in a JV during the first quarter of 2025.

Non-GAAP Financial Measures

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We consider Funds from Operations (“FFO”), NOI and EBITDA re to be useful supplemental measures of our financial or operating performance.

Funds From Operations Available to Common Stockholders

Funds From Operations

FFO attributable to common stockholders, basic FFO attributable to common stockholders per share and diluted FFO attributable to common stockholders per share are supplemental measures of a REIT’s financial performance that are not defined by GAAP.

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The following table reconciles GAAP net income available to common stockholders to Nareit FFO available to common stockholders (unaudited, amounts in thousands, except per share amounts) :

Three Months Ended

Nine Months Ended

September 30,

GAAP net (loss) income available to common stockholders

Three Months Ended March 31,

GAAP net income available to common stockholders

Depreciation and amortization

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Nareit FFO attributable to common stockholders

NAREIT FFO attributable to common stockholders per share:

Effect of dilutive securities:

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Net Operating Income

Net operating income or NOI is a non-GAAP financial measure that is calculated as net income (loss) (computed in accordance with GAAP) before (i) general and administrative expenses, (ii) transaction costs, (iii) write-off of effective interest, (iv) provision for credit losses, (v) impairment loss, (vi) depreciation and amortization, (vii) interest expense, (viii) gain or loss on sale of real estate and (ix) income tax benefit or expense.

Net operating income or NOI is a non-GAAP financial measure that is calculated as net income (loss) (computed in accordance with GAAP) before (i) general and administrative expenses, (ii) transaction costs, (iii) (recovery) provision for credit losses, (iv) impairment loss, (v) depreciation and amortization, (vi) interest expense, (vii) gain or loss on sale of real estate and (viii) income tax benefit or expense.

We use NOI to reflect the operating performance of our portfolio because NOI excludes certain items that are not associated with the operations of our properties.

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Therefore, caution should be exercised when comparing our NOI to that of other REITs.

The following is a reconciliation of net income or loss, which is the most directly comparable GAAP financial measure to NOI for the three and nine months ended September 30, 2025 and 2024 ( in thousands ):

The following is a reconciliation of net income, which is the most directly comparable GAAP financial measure to NOI for the three months ended March 31, 2026 and 2025 ( in thousands ):

Three Months Ended

Nine Months Ended

September 30,

Net (loss) income

Income tax expense (benefit)

Income tax provision

Loss (gain) on sale of real estate, net

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Transaction costs

Write-off of effective interest

Provision for credit losses

(Recovery) provision for credit losses

Depreciation and amortization

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Earnings before interest, taxes, depreciation and amortization for real estate or EBITDA re is calculated as net income available to common stockholders (computed in accordance with GAAP) excluding (i) interest expense, (ii) income tax expense, (iii) real estate depreciation and amortization, (iv) impairment write-downs of depreciable real estate, (v) gains or losses on the sale of depreciable real estate, and (vi) adjustments for unconsolidated partnerships and joint ventures.

EBITDA re is not an alternative to net income, operating income or cash flows from operating activities as calculated and presented in accordance with GAAP.

You should not rely on EBITDA re as a substitute for any such GAAP financial measures or consider it in isolation, for the purpose of analyzing our financial performance, financial position or cash flows.

Net income is the most directly comparable GAAP measure to EBITDA re.

The following is a reconciliation of net income or loss, which is the most directly comparable GAAP financial measure to EBITDA re for the periods presented below (in thousands):

Adjusted EBITDA re is a supplemental non-GAAP financial measure calculated by adjusting EBIDA re for non-recurring items unrelated to ongoing operations.

We believe these metrics provide useful information to investors because they exclude the impact of various income and expense items that are not indicative of operating performance.

EBITDA re and Adjusted EBITDA re are not alternatives to net income, operating income or cash flows from operating activities as calculated and presented in accordance with GAAP.

You should not rely on EBITDA re or Adjusted EBITDA re as substitutes for any such GAAP financial measures or consider them in isolation, for the purpose of analyzing our financial performance, financial position or cash flows.

Net income is the most directly comparable GAAP measure to EBITDA re and/or Adjusted EBITDA re.

The following is a reconciliation of net income (loss), which is the most directly comparable GAAP financial measure to EBITDA re and Adjusted EBITDA re for the periods presented below ( in thousands ):

Three Months Ended

Net income (loss)

(Loss) gain on sale

Income tax (benefit) expense

Impairment loss

Loss (gain) on sale of real estate, net

Income tax provision (benefit)

Interest expense

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Fixed charge coverage ratio

(1) See (2), (3) and (4) below for explanation.

(2) Includes $41,455 effective interest write-off related to a mortgage loan amendment that permits penalty-free early payoff window within an allowable window, $1,271 straight-line rent receivable write-off due to an operator’s bankruptcy filing, $554 provision for credit losses related to mortgage loan originations and $488 of one-time transaction costs in connection with the transition to RIDEA partially offset by the exit IRR of $975 received in connection with an early payoff of a mezzanine loan and recovery of credit losses of $375 related to loan payoffs.

(3) Includes $5,971termination fee paid to New Perspective, $1,136 one-time costs associated with an employee’s retirement, $520 of one-time RIDEA transaction costs and $384 provision for credit losses related to a mortgage loan origination.

(4) Includes $2,693 write-off of a working capital note, $371 of related interest receivable, and $303 of one-time transaction costs, all in connection with the transition to RIDEA, partially offset by the 13% exit IRR of $2,962 received in connection with the redemption of our preferred equity investment in a JV.

(5) Includes a one-time additional straight-line income of $3,158 related to restoring accrual basis accounting for two master leases, recovery of credit losses of $511 related to a mortgage loan receivable write-off, partially offset by $290 provision for credit losses related to the write-off of an uncollectible loan receivable.

(6) Includes an aggregate one-time income of $4,493 received from three former operators, the recovery of provisions for credit losses of $293 related to a mortgage loan receivable payoff, partially offset by the uncollectible effective interest write-off of $613 of interest receivable related to the partial paydown of a mortgage loan receivable.

(1) Includes exit IRR income of $1,812 and recovery of credit losses of $765, both in connection with the sale of a portfolio of three SNFs in Florida accounted for as a financing receivable, offset by transaction costs of $688 and a $198 write-off of effective interest related to the sale of such portfolio.

(2) Includes $1,800 received in connection with the redemption of our preferred equity investment in a joint venture and $600 of one-time income received from a former operator, offset by a $957 write-off of a working capital note and $392 of transaction costs related to establishing our new SHOP segment.

(3) Includes $41,455 effective interest write-off related to Prestige loan amendment that permits penalty-free early payoff window within an allowable window, $1,271 straight-line rent receivable write-off due to an operator’s bankruptcy filing, $554 provision for credit losses related to mortgage loan originations and $488 of transaction costs related to establishing our new SHOP segment, offset by the exit IRR of $975 received in connection with an early payoff of a mezzanine loan and recovery of credit losses of $375 related to loan payoffs.

(4) Includes $5,971 termination fee paid to New Perspective, $1,136 one-time costs associated with an employee’s retirement, $520 of transaction costs related to establishing our new SHOP segment and $384 of provision for credit losses related to a mortgage loan origination.

(5) Includes $2,693 write-off of a working capital note, $371 of related interest receivable, and $303 of transaction costs, all in connection with establishing our new SHOP segment, offset by the 13% exit IRR of $2,962 received in connection with the redemption of our preferred equity investment in a JV.

Liquidity and Capital Resources

Sources and Uses of Cash

As of September 30, 2025, we had $400.0 million in liquidity as follows (amounts in thousands, except per share amounts) :

At September 30, 2025

As of March 31, 2026, we had $583.3 million in liquidity as follows (amounts in thousands, except number of share amounts) :

At March 31, 2026

Cash and cash equivalents

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Total Liquidity

(1) Subsequent to September 30, 2025, we repaid $62,900 under our new revolving line of credit.

Accordingly, we have $485,550 outstanding and $114,450 available for borrowing under our unsecured revolving line of credit.

(2) Subsequent to September 30, 2025, we sold 281,400 shares of common stock under our Equity Distribution Agreement.

Accordingly, we had $319,881 available under the Equity Distribution Agreement.

(3) Subsequent to September 30, 2025, we had $452,264 in liquidity.

See (1) and (2) above.

(1) Subsequent to March 31, 2026, we repaid $56,000 under our unsecured revolving line of credit.

Accordingly, we have $226,963 outstanding and $373,037 available for borrowing under our unsecured revolving line of credit as of May 6, 2026.

(2) Subsequent to March 31, 2026, we sold 1,402,933 shares of common stock for $51,917 of net proceeds under our Equity Distribution Agreement.

Accordingly, as of May 6, 2026, we had $192,353 available under the Equity Distribution Agreement.

We believe that our current cash balance, cash flow from operations available for distribution or reinvestment, our borrowing capacity and our potential ability to access the capital markets are sufficient to provide for payment of our current operating costs, meet debt obligations and pay common dividends at least sufficient to maintain our REIT status and repay borrowings at, or prior to, their maturity.

The timing, source and amount of cash flows used in financing and investing activities are sensitive to the capital markets environment, especially to changes in interest rates.

In addition inflation may adversely affect our operators’ business, results of operations, cash flows and financial condition which could, in turn, adversely affect our financial position.

In addition inflation may adversely affect the performance of our SHOP segment and our operators’ business, results of operations, cash flows and financial condition which could, in turn, adversely affect our financial position.

The operating results of the facilities will be impacted by various factors over which the operators/owners may have no control.

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In addition, we will monitor our borrowers and the underlying collateral for mortgage loans and will make future revisions to the provision, if considered necessary.

Depending on our borrowing capacity, compliance with financial covenants, ability to access the capital markets, and the payment of dividends may be negatively impacted.

We continuously evaluate the availability of cost-effective capital and believe we have sufficient liquidity for our current dividend, corporate expenses and additional capital investments in 2025 and 2026.

Our ability to access the capital markets and to pay dividends may be impacted by our borrowing capacity and compliance with financial covenants.

We continuously evaluate the availability of cost-effective capital and believe we have sufficient liquidity for our current dividend, corporate expenses and additional capital investments in 2026.

Our investments, principally our investments in owned properties, financing receivables and mortgage loans, are subject to the possibility of loss of their carrying values as a result of changes in market prices, interest rates and inflationary expectations.

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These sources and uses of cash are reflected in our Consolidated Statements of Cash Flows as summarized below ( in thousands ):

Nine Months Ended September 30,

Three Months Ended March 31,

Net cash provided by (used in):

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Cash and cash equivalents, end of period

Cash Flows from Operating Activities

Cash flows from operating activities increased $1.2 million during the three months ended March 31, 2026, compared to the same period in 2025, primarily due to net income generated from growth in our SHOP segment.

Cash Flows from Investing Activities

Net cash used in investing activities increased by $68.4 million during the three months ended March 31, 2026, compared to the same period in 2025, primarily driven by a $108.2 million increase in real estate investments and a $6.1 million increase in investments in mortgage loans receivable.

These increases were partially offset by a $62.2 million increase in proceeds from the sale of properties accounted for as a financing receivable and the turnaround impact of $13.0 million proceeds from the liquidation of our investment in an unconsolidated joint venture during the three months ended March 31, 2025.

Cash Flows from Financing Activities

Net cash provided by financing activities increased by $60.6 million during the three months ended March 31, 2026, compared to the same period in 2025, primarily driven by a $34.9 million increase in net proceeds from issuance of common stock and a $25.6 million increase in net borrowings under our revolving line of credit.

Debt Obligations

Unsecured Credit Facility.

We had an unsecured credit agreement (the “Credit Agreement”) that provided for an aggregate commitment of the lenders of up to $525.0 million comprised of a $425.0 million revolving credit facility (the “Revolving Line of Credit”) and two $50.0 million term loans (the “Term Loans”).

The Term Loans had maturities of November 19, 2025 and November 19, 2026.

The Revolving Line of Credit has a maturity date of November 19, 2026.

The Credit Agreement permitted us to request increases to the Revolving Line of Credit and Term Loans commitments up to a total of $1.0 billion.

During the third quarter of 2025, we entered into a new four-year unsecured credit agreement (“New Credit Agreement”) maturing in July 2029, to replace our previous Credit Agreement.

The New Credit Agreement increased the aggregate commitment on our revolving line of credit from $425.0 million to $600.0 million and provides for the opportunity to increase the total commitment to an aggregate of $1.2 billion.

The New Credit Agreement provides for a one-year extension option, subject to customary conditions.

Material terms of the New Credit Agreement remain unchanged.

In connection with the New Credit Agreement, the Term Loans were rolled into the new revolving line of credit, keeping the interest rate swap agreements intact at an average 2.3% rate, based on current margins.

Based on our leverage at September 30, 2025, the facility provides for interest annually at SOFR plus 115 basis points and a facility fee of 20 basis points.

We have an unsecured credit agreement (the “Credit Agreement”) that provides for an aggregate commitment of the lenders of up to $800.0 million comprised of a $600.0 million revolving credit facility (the “Revolving Line of Credit”) and term loans totaling $200.0 million (the “Term Loans”).

The Term Loans consist of $50.0 million, $55.0 million, $55.0 million and $40.0 million borrowings, with contractual maturities of three, four, five and seven years, respectively.

The Credit Agreement provides for the opportunity to increase the total commitment to an aggregate $1.2 billion (the “Accordion”) and allows for a one-year extension option, subject to customary conditions.

Based on our leverage at March 31, 2026, the facility provides for interest annually at SOFR plus 110 basis points and a facility fee of 15 basis points.

Interest Rate Swap Agreements.

In connection with entering into the Term Loans as described above, we entered into two receive variable/pay fixed interest rate swap agreements (the “Interest Rate Swaps”) with maturities of November 19, 2025 and November 19, 2026, respectively, that effectively locked in the forecasted interest payments on the Term Loans’ borrowings over their four and five year terms of the loans.

The Interest Rate Swaps are considered cash flow hedges and are recorded on our Consolidated Balance Sheets at fair value, with changes in the fair value of these instruments recognized in Accumulated other comprehensive income (loss) on our Consolidated Balance Sheets .

During the three and nine months ended September 30, 2025, we recorded a decrease of $0.7 million and $2.4 million in fair value of Interest Rate Swaps, respectively.

As discussed above, during the third quarter of 2025, Term Loans were paid off using proceeds from our new revolving line of credit under our New Credit

Agreement, keeping the Interest Rate Swaps intact through November 2025 at 2.3% and November 2026 at 2.4%, based on current margins.

As of September 30, 2025, the terms of the Interest Rate Swaps are as follows ( dollar amounts in thousands ):

During 2025, we entered into interest rate swaps with maturities of three, four, five and seven years, respectively (the “Interest Rate Swaps”) to effectively lock-in the forecasted interest payments on the Term Loans.

The Interest Rate Swaps are considered cash flow hedges and are recorded on our Consolidated Balance Sheets at fair value in Prepaid expenses and other assets , with cumulative changes in the fair value of these instruments recognized in Accumulated other comprehensive income (loss) on our Consolidated Balance Sheets .

During the three months ended March 31, 2026, we recorded an increase of $1.1 million to the fair value of Interest Rate Swaps.

As of March 31, 2026, the terms of the Interest Rate Swaps are as follows ( dollar amounts in thousands ):

Fair Value at

Maturity Date

September 30, 2025

November 2021

November 19, 2025

March 31, 2026

November 2021

November 19, 2026

December 2025

December 12, 2028

SOFR with 5-day lookback

December 2025

December 12, 2028

SOFR with 5-day lookback

December 2025

December 12, 2029

SOFR with 5-day lookback

December 2025

December 12, 2030

SOFR with 5-day lookback

December 2025

December 12, 2030

SOFR with 5-day lookback

December 2025

December 12, 2032

SOFR with 5-day lookback

December 2025

December 12, 2032

SOFR with 5-day lookback

(1) During the third quarter of 2025, the interest rate swap was rolled into the Revolving Line of Credit.

Senior Unsecured Notes.

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● a ratio of EBITDA, as calculated in the debt obligation, to fixed charges not less than 1.50 to 1.0.

At September 30, 2025, we were in compliance with all applicable financial covenants.

At March 31, 2026, we were in compliance with all applicable financial covenants.

These debt obligations also contain additional customary covenants and events of default that are subject to a number of important and significant limitations, qualifications and exceptions.

The debt obligations by component as of September 30, 2025 are as follows (dollar amounts in thousands):

The debt obligations by component as of March 31, 2026 are as follows (dollar amounts in thousands):

Debt Obligations

Revolving line of credit (2)

Term loans, net of debt issue costs

Senior unsecured notes, net of debt issue costs

(1) Represents weighted average interest rate as of September 30, 2025.

(2) Subsequent to September 30, 2025, we repaid $62,900 under our new revolving line of credit.

Accordingly, we have $485,550 outstanding and $114,450 available for borrowing under our unsecured revolving line of credit.

During the nine months ended September 30, 2025, our debt borrowings and repayments were as follows (in thousands):

(1) Represents weighted average interest rate as of March 31, 2026.

(2) Subsequent to March 31, 2026, we repaid $56,000 under our unsecured revolving line of credit.

Accordingly, we have $226,963 outstanding and $373,037 available for borrowing under our unsecured revolving line of credit, as of May 6, 2026.

During the three months ended March 31, 2026, our debt borrowings and repayments were as follows (in thousands):

Debt Obligations

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Senior unsecured notes

(1) Subsequent to September 30, 2025, we repaid $62,900 under our new revolving line of credit.

Accordingly, we have $485,550 outstanding and $114,450 available for borrowing under our unsecured revolving line of credit.

At September 30, 2025, we had 47,332,792 shares of common stock outstanding, total equity on our balance sheet $1.0 billion and our equity securities had a market value of $1.7 billion.

During the nine months ended September 30, 2025, we declared and paid $80.0 million of cash dividends.

During the nine months ended September 30, 2025, we acquired 151,018 shares of common stock held by employees who tendered owned shares to satisfy tax withholding obligations.

Subsequent to September 30, 2025, we declared a monthly cash dividend of $0.19 per share on our common stock for the months of October, November and December 2025, payable on October 31, November 28, and December 31, 2025, respectively, to stockholders of record on October 23, November 20, and December 23, 2025, respectively.

(1) Subsequent to March 31, 2026, we repaid $56,000 under our unsecured revolving line of credit.

Accordingly, as of May 6, 2026, we have $226,963 outstanding and $373,037 available for borrowing under our unsecured revolving line of credit.

At March 31, 2026, we had 49,778,523 shares of common stock outstanding, total equity on our balance sheet was $1.2 billion and our equity securities had a market value of $1.8 billion.

During the three months ended March 31, 2026, we declared and paid $29.2 million of cash dividends.

During the three months ended March 31, 2026, we acquired 149,745 shares of common stock held by employees who tendered owned shares to satisfy tax withholding obligations.

Subsequent to March 31, 2026, we declared a monthly cash dividend of $0.19 per share on our common stock for the months of April, May and June 2026, payable on April 30, May 29, and June 30, 2026, respectively, to stockholders of record on April 22, May 21, and June 22, 2026, respectively.

At-The-Market Program.

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The Equity Distribution Agreement provides for sales of common shares to be made by means of ordinary brokers’ transactions, which may include block trades, or transactions that are deemed to be “at the market” offerings.

During the nine months ended September 30, 2025, we sold 1,655,100 shares of common stock for $59.3 million in net proceeds under our Equity Distribution Agreement.

During the three months ended March 31, 2026, we sold 1,145,565 shares of common stock for $43.4 million in net proceeds under our Equity Distribution Agreement.

In conjunction with the sale of common stock, we incurred $550,000 of costs associated with this agreement which have been recorded in additional paid in capital as a reduction of proceeds received.

At September 30, 2025, we had $330.3 million available under the Equity Distribution Agreement.

At March 31, 2026, we had $244.5 million available under the Equity Distribution Agreement.

Subsequent to March 31, 2026, we sold 1,402,933 shares of common stock for $51.9 million in net proceeds under our Equity Distribution Agreement.

Accordingly, as of May 6, 2026, we have $192.4 million available under the Equity Distribution Agreement.

Available Shelf Registrations.

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Stock-Based Compensation.

During the second quarter of 2021, we adopted and our shareholders approved the 2021 Equity Participation Plan (“the 2021 Plan”) which replaces the 2015 Equity Participation Plan (“the 2015 Plan”).

During 2021, we adopted and our shareholders approved the 2021 Equity Participation Plan (“the 2021 Plan”), which replaced the 2015 Equity Participation Plan (“the 2015 Plan”).

Under the 2021 Plan, 1,900,000 shares of common stock have been authorized and reserved for awards, less one share for every one share that was subject to an award granted under the 2015 Plan after December 31, 2020 and prior to adoption.

In addition, any shares that

are not issued under outstanding awards under the 2015 Plan because the shares were forfeited or cancelled after December 31, 2020 will be added to and again be available for awards under the 2021 Plan.

In addition, any shares that are not issued under outstanding awards under the 2015 Plan because the shares were forfeited or cancelled after December 31, 2020 will be added to and again be available for awards under the 2021 Plan.

Under the 2021 Plan, the shares were authorized and reserved for awards to officers, employees, non-employee directors and consultants.

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Beginning in the first quarter of 2024, we entered into Performance Stock Unit Award Agreements, based upon absolute and relative total shareholder return, under the 2021 Plan.

During the nine months ended September 30, 2025, 165,549 shares of restricted stock and 182,915 performance-based stock units vested.

During the nine months ended September 30, 2025, we awarded restricted stock and performance-based stock units as follows:

During the three months ended March 31, 2026, 125,176 shares of restricted stock and 170,827 performance-based stock units vested.

During the three months ended March 31, 2026, we awarded restricted stock and performance-based stock units as follows:

Vesting Period

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ratably over 3 years

Restricted stock

April 30, 2028

Restricted stock

Performance-based stock units

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TSR targets (2)

(1) Vesting date is the earlier of the one-year anniversary of the award date and the date of the next annual meeting of the stockholders of LTC following the award date.

(2) Vesting is based on achieving certain total shareholder return (“TSR”) targets in 3 years.

(3) Vesting is based on achieving certain TSR targets relative to the TSR of a predefined peer group in 3 years.

(1) Vesting is based on achieving certain total shareholder return (“TSR”) targets in three years.

(2) Vesting is based on achieving certain TSR targets relative to the TSR of a predefined peer group in three years.

Critical Accounting Policies

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generally accepted accounting principles for interim financial information set forth in the Accounting Standards Codification as published by the Financial Accounting Standards Board, which require us to make estimates and assumptions regarding future events that affect the amounts reported in our financial statements and accompanying footnotes.

We base these estimates on our experience and assumptions regarding future events we believe to be reasonable under the circumstances.

We base these estimates on

our experience and assumptions regarding future events we believe to be reasonable under the circumstances.

Actual results could differ from those estimates and such differences may be material to the consolidated financial statements.

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QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There were no material changes in our market risk during the nine months ended September 30, 2025.

There were no material changes in our market risk during the three months ended March 31, 2026.

For additional information, refer to Item 7A as presented in our Annual Report on Form 10-K for the year ended December 31, 2025.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis