National Healthcare Properties, Inc. 10-K

Item 9A. Controls and Procedures Evaluation of Disclosure Controls and Procedures In accordance with Rules 13a-15(b) and 15d-15(b) of the Exchange Act, our disclosure controls and procedures include internal controls and other procedures designed to provide reasonable assurance that information required to be disclosed in this and other reports filed under the Exchange Act is recorded, processed, summarized and reported within the required time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures. It should be noted that no system of controls can provide complete assurance of achieving a company’s objectives and that future events may impact the effectiveness of a system of controls. Table of Contents Our Chief Executive Officer and Chief Financial Officer, together with other members of our management, carried out an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of the end of the period covered by this Annual Report on Form 10-K. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures are effective as of December 31, 2024 at a reasonable level of assurance. Management’s Annual Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) or 15d-15(f) promulgated under the Exchange Act. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Our internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may deteriorate. Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2024. In making that assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework (2013). Based on its assessment, our management concluded that, as of December 31, 2024, our internal control over financial reporting was effective based on those criteria. This Annual Report on Form 10-K does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. The effectiveness of our internal control over financial reporting has not been audited by our independent registered public accounting firm because we are a “non-accelerated filer” as defined under SEC rules. Changes in Internal Control Over Financial Reporting During the three months ended December 31, 2024, there were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Item 9B. Other Information Trading Plans None . Item 9C. Disclosure Regarding Foreign Jurisdictions That Prevent Inspections Not Applicable. 60 PART III Item 10. Directors, Executive Officers and Corporate Governance We have adopted a Code of Business Conduct and Ethics that applies to all of our executive officers and directors, including but not limited to, our principal executive officer and principal financial officer. A copy of our Code of Business Conduct and Ethics may be obtained, free of charge, by sending a written request to our executive office: 540 Madison Ave., 27th Floor, New York, NY 10022, Attention: Secretary. Our Code of Business Conduct and Ethics is also publicly available on our website at www.nhpreit.com. If we make any substantive amendments to the Code of Business Conduct and Ethics or grant any waiver, including any implicit waiver, from a provision of the Code of Business Conduct and Ethics to our chief executive officer, chief financial officer, chief accounting officer or controller or persons performing similar functions, we will disclose the nature of the amendment or waiver on that website or in a report on Form 8-K. We have also adopted insider trading policies and procedures governing the purchase, sale, and/or other dispositions of our securities by directors, officers and employees, or the Company itself, that are reasonably designed to promote compliance with insider trading laws, rules and regulations and the listing standards applicable to the Company (the “Insider Trading Policy”). Our Insider Trading Policy is filed as Exhibit 19.1 to this Annual Report on Form 10-K. The information required by this Item will be set forth in our definitive proxy statement with respect to our 2025 annual meeting of stockholders to be filed not later than 120 days after the end of the 2024 fiscal year, and is incorporated herein by reference. Item 11. Executive Compensation The information required by this Item will be set forth in our definitive proxy statement with respect to our 2025 annual meeting of stockholders to be filed not later than 120 days after the end of the 2024 fiscal year, and is incorporated herein by reference. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The information required by this Item will be set forth in our definitive proxy statement with respect to our 2025 annual meeting of stockholders to be filed not later than 120 days after the end of the 2024 fiscal year, and is incorporated herein by reference. Item 13. Certain Relationships and Related Transactions, and Director Independence The information required by this Item will be set forth in our definitive proxy statement with respect to our 2025 annual meeting of stockholders to be filed not later than 120 days after the end of the 2024 fiscal year, and is incorporated herein by reference. Item 14. Principal Accountant Fees and Services The information required by this Item will be set forth in our definitive proxy statement with respect to our 2025 annual meeting of stockholders to be filed not later than 120 days after the end of the 2024 fiscal year, and is incorporated herein by reference. PART IV Item 15. Exhibit and Financial Statement Schedules (a) Financial Statements and Financial Statement Schedules 1. Financial Statements: See the Index to Consolidated Financial Statements at page F-1 of this Annual Report on Form 10-K. 2. Financial Statement Schedules: The following financial statement schedule is included herein at page F-42 of this Annual Report on Form 10-K: Schedule III — Real Estate and Accumulated Depreciation. (b) Exhibits See Exhibit Index below. 61 Table of Contents EXHIBIT INDEX The following exhibits are included, or incorporated by reference, in this Annual Report on Form 10-K for the year ended December 31, 2024 (and are numbered in accordance with Item 601 of Regulation S-K): Exhibit No. Description 2.1 Agreement and Plan of Merger, dated August 6, 2024, by and among the Company, HTI Merger Sub, LLC, Healthcare Trust Advisors, LLC and AR Global Investments, LLC (filed as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on August 7, 2024 and incorporated by reference herein) 3.1 Composite Articles of Amendment and Restatement for the Company (filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2024 filed with the SEC on November 12, 2024 and incorporated by reference herein. 3.2 Articles Supplementary of the Company relating to election to be subject to Section 3-803 of the Maryland General Corporation Law, dated November 9, 2017 (filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2017 filed with the SEC on November 14, 2017 and incorporated by reference herein) 3.3 Articles Supplementary relating to the designation of shares of 7.375% Series A Cumulative Redeemable Perpetual Preferred Stock, dated December 6, 2019 (filed as an exhibit to the Company’s Registration Statement on Form 8-A filed with the SEC on December 6, 2019 and incorporated by reference herein) 3.4 Articles Supplementary designating additional shares of 7.375% Series A Cumulative Redeemable Perpetual Preferred Stock, dated September 15, 2020 (filed as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on September 15, 2020 and incorporated by reference herein) 3.5 Articles Supplementary relating to the designation of shares of 7.125% Series B Cumulative Redeemable Perpetual Preferred Stock, dated October 4, 2021 (filed as an exhibit to the Company’s Registration Statement on Form 8-A filed with the SEC on October 4, 2021 and incorporated by reference herein) 3.6 Articles of Amendment to the Company’s Charter, filed September 26, 2024 (Reverse Stock Split) (filed as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on September 30, 2024 and incorporated by reference herein) 3.7 Articles of Amendment to the Company’s Charter, filed September 26, 2024 (Name Change and Par Value Adjustment) (filed as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on September 30, 2024 and incorporated by reference herein) 3.8 Composite Amended and Restated Bylaws of the Company (filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2024 filed with the SEC on November 12, 2024 and incorporated by reference herein) 3.9 Amendment No. 3 to the Amended and Restated Bylaws of the Company (filed as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on September 30, 2024 and incorporated by reference herein) 4.1 Agreement of Limited Partnership of the OP, dated as of February 14, 2013 (filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2013 filed with the SEC on May 14, 2013 and incorporated by reference herein) 4.2 First Amendment, dated December 31, 2013, to the Agreement of Limited Partnership of the OP, dated February 14, 2013 (filed as an exhibit to the Company’s Quarterly Report on Form 10-K for the fiscal year ended December 31, 2013 filed with the SEC on March 7, 2014 and incorporated by reference herein) 4.3 Second Amendment, dated April 15, 2015, to the Agreement of Limited Partnership of the OP, dated as of February 14, 2013 (filed as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on October 6, 2016 and incorporated by reference herein) 4.4 Third Amendment, dated December 6, 2019, to the Agreement of Limited Partnership of the OP, dated February 14, 2013 (filed as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on December 6, 2019 and incorporated by reference herein) 4.5 Fourth Amendment, dated September 15, 2020, to the Agreement of Limited Partnership of the OP, dated February 14, 2013 (filed as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on September 15, 2020 and incorporated by reference herein) 4.6 Fifth Amendment, dated May 7, 2021, to the Agreement of Limited Partnership of the OP, dated February 14, 2013 (filed as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on May 10, 2021 and incorporated by reference herein) 4.7 Sixth Amendment, dated October 4, 2021, to the Agreement of Limited Partnership of the OP, dated February 14, 2013 (filed as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on October 4, 2021 and incorporated by reference herein) 4.8 Rights Agreement, dated May 18, 2020, between the Company and Computershare Trust Company, N.A., as Rights Agent (filed as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on May 19, 2020 and incorporated by reference herein) 4.9 * Description of Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 62 Table of Contents Exhibit No. Description 10.1 Amended and Restated Property Management and Leasing Agreement, dated as of February 17, 2017, by and among the Company, the OP and Healthcare Trust Properties, LLC (filed as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on February 17, 2017 and incorporated by reference herein) 10.2 First Amendment, dated as of April 9, 2018, to Amended and Restated Property Management and Leasing Agreement, by and among the Company, the OP and Healthcare Trust Properties, LLC (filed as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on April 16, 2018 and incorporated by reference herein) 10.3 Second Amendment, dated as of November 11, 2021, to Amended and Restated Property Management and Leasing Agreement, by and among the Company, the OP and Healthcare Trust Properties, LLC (filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021 filed with the SEC on November 12, 2021 and incorporated by reference herein) 10.4 Form of Restricted Stock Award Agreement Pursuant to the Employee and Director Incentive Restricted Share Plan of the Company (filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016 filed with the SEC on August 15, 2016 and incorporated by reference herein) 10.5 Master Credit Facility Agreement, dated as of October 31, 2016, by and among the borrowers party thereto and KeyBank National Association (filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2016 filed with the SEC on November 10, 2016 and incorporated by reference herein) 10.6 First Amendment to Master Credit Facility, dated April 26, 2017, by among the borrowers party thereto and KeyBank National Association (filed as an exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 filed with the SEC on March 20, 2018 and incorporated by reference herein) 10.7 Reaffirmation, Joinder and Second Amendment to Master Credit Facility, dated October 26, 2017, by among the borrowers party thereto and KeyBank National Association (filed as an exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 filed with the SEC on March 20, 2018 and incorporated by reference herein) 10.8 Master Credit Facility Agreement, dated as of October 31, 2016, by and among the borrowers party thereto and Capital One Multifamily Finance, LLC (filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2016 filed with the SEC on November 10, 2016 and incorporated by reference herein) 10.9 Reaffirmation, Joinder and First Amendment to Master Credit Facility, dated March 30, 2017, by among the borrowers party thereto and Capital One Multifamily Finance, LLC (filed as an exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 filed with the SEC on March 20, 2018 and incorporated by reference herein) 10.10 Second Amendment to Master Credit Facility, dated October 26, 2017, by among the borrowers party thereto and Capital One Multifamily Finance, LLC (filed as an exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 filed with the SEC on March 20, 2018 and incorporated by reference herein) 10.11 Third Amendment to Master Credit Facility, dated March 2, 2018, by among the borrowers party thereto and Capital One Multifamily Finance, LLC (filed as an exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 filed with the SEC on March 20, 2018 and incorporated by reference herein) 10.12 Amended and Restated Loan Agreement, dated as of December 20, 2019, by and among the borrower entities party thereto, Capital One, National Association and the other lenders party thereto (filed as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on December 27, 2019 and incorporated by reference herein) 10.13 Amended and Restated Guaranty of Recourse Obligations, dated as of December 20, 2019, by the OP in favor of Capital One, National Association (filed as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on December 27, 2019 and incorporated by reference herein) 10.14 Amended and Restated Hazardous Materials Indemnity Agreement, dated as of December 20, 2019, by the OP and the borrower entities party thereto, for the benefit of Capital One, National Association (filed as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on December 27, 2019 and incorporated by reference herein) 10.15 Amended and Restated Employee and Director Incentive Restricted Share Plan of the Company, effective as of August 31, 2017 (filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2017 filed with the SEC on November 14, 2017 and incorporated by reference herein) 10.16 Form of Restricted Stock Award Agreement Pursuant to the Amended and Restated Employee and Director Incentive Restricted Share Plan of the Company (filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2017 filed with the SEC on November 14, 2017 and incorporated by reference herein) 63 Table of Contents Exhibit No. Description 10.17 Loan Agreement, dated as of December 28, 2017, among the borrower entities party thereto and Capital One, National Association (filed as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on January 4, 2018 and incorporated by reference herein) 10.18 Guaranty of Recourse Obligation, dated as of December 28, 2017, by the OP in favor of Capital One, National Association (filed as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on January 4, 2018 and incorporated by reference herein) 10.19 Hazardous Materials Indemnity Agreement, dated as of December 28, 2017, by the OP and the borrower entities party thereto, for the benefit of Capital One, National Association (filed as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on January 4, 2018 and incorporated by reference herein) 10.20 Loan Agreement, dated as of April 10, 2018, by and among the borrowers party thereto, and KeyBank National Association, as lender (filed as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on April 16, 2018 and incorporated by reference herein) 10.21 Promissory Note A -1, dated as of April 10, 2018, by the borrowers party thereto in favor of KeyBank National Association, as lender (filed as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on April 16, 2018 and incorporated by reference herein) 10.22 Promissory Note A-2, dated as of April 10, 2018, by the borrowers party thereto in favor of KeyBank National Association, as lender (filed as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on April 16, 2018 and incorporated by reference herein) 10.23 Guarantee Agreement, dated as of April 10, 2018, by the OP in favor of KeyBank National Association, as (filed as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on April 16, 2018 and incorporated by reference herein) 10.24 Environmental Indemnity Agreement, dated as of April 10, 2018, by the borrowers party thereto and the OP in favor of KeyBank National Association, as indemnitee (filed as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on April 16, 2018 and incorporated by reference herein) 10.25 * # Form of Indemnification Agreement with Directors and Officers 10.26 Amended and Restated Senior Secured Revolving Credit Agreement dated as of March 13, 2019 by and among the OP, KeyBank National Association and the other lender parties thereto (filed as an exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 filed with the SEC on March 14, 2019 and incorporated by reference herein) 10.27 First Amendment to Amended and Restated Senior Secured Revolving Credit Agreement entered into as of March 13, 2019 by and among the OP, KeyBank National Association and the other lender parties thereto (filed as an exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 filed with the SEC on March 24, 2020 and incorporated by reference herein) 10.28 Second Amendment to First Amended and Restated Senior Secured Credit Agreement, entered into as of August 10, 2020, among the OP, the Company, the other guarantor parties thereto, KeyBank National Association and the other lenders party thereto (filed as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on August 13, 2020 and incorporated by reference herein) 10.29 Third Amendment to First Amended and Restated Senior Secured Credit Agreement, entered into as of November 12, 2021, among the OP, the Company, the other guarantor parties thereto, KeyBank National Association and the other lenders party thereto (filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021 filed with the SEC on November 12, 2021 and incorporated by reference herein) 10.30 Fourth Amendment to First Amended and Restated Senior Credit Agreement, entered into as of August 11, 2022, among the OP, the Company, the other guarantor parties thereto, KeyBank National Association and the other lenders party thereto (filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2022 filed with the SEC on August 12, 2022 and incorporated by reference herein) 10.31 Loan Agreement dated as of May 24, 2023, among the borrower entities party thereto, Barclays Capital Real Estate Inc., Société Générale Financial Corporation, and KeyBank National Association (filed as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on May 31, 2023 and incorporated by reference herein) 10.32 Guaranty Agreement dated as of May 24, 2023, by the OP in favor of Barclays Capital Real Estate Inc., Société Générale Financial Corporation, and KeyBank National Association (filed as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on May 31, 2023 and incorporated by reference herein) 10.33 Environmental Indemnity Agreement, dated as of May 24, 2023, by the OP and the borrower entities party thereto, for the benefit of Barclays Capital Real Estate Inc., Société Générale Financial Corporation, and KeyBank National Association (filed as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on May 31, 2023 and incorporated by reference herein) 10.34 Loan Agreement, dates as of December 22, 2023, among the borrower entities thereto and Capital One, National Association (filed as an exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on March 15, 2024 and incorporated by reference herein) 10.35 Loan Agreement, dated as of February 22, 2024, among the borrower entities party thereto and Bank of Montreal (filed as an exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on March 15, 2024 and incorporated by reference herein) 64 Table of Contents Exhibit No. Description 10.36 # Employment Agreement, dated September 25, 2024, by and between the Company and Michael Anderson (filed as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on September 30, 2024 and incorporated by reference herein) 10.37 # Employment Agreement, dated December 20, 2024, by and between the Company and Scott Lappetito (filed as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on December 20, 2024 and incorporated by reference herein) 19.1 * Insider Trading Policy of the Company 21.1 * List of Subsidiaries of the Company 23.1 * Consent of PricewaterhouseCoopers LLP 31.1 * Certification of the Principal Executive Officer of the Company pursuant to Securities Exchange Act Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 31.2 * Certification of the Principal Financial Officer of the Company pursuant to Securities Exchange Act Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 32 + Written statements of the Principal Executive Officer and Principal Financial Officer of the Company pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 97 Compensation Clawback Policy (furnished as an exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on March 15, 2024) 99.1 Second Amended and Restated Share Repurchase Program (filed as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on July 14, 2017 and incorporated by reference herein) 99.2 Amendment to Second Amended and Restated Share Repurchase Program (filed as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on January 29, 2019 and incorporated by reference herein) 99.3 Second Amendment to Second Amended and Restated Share Repurchase Program (filed as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on March 27, 2019 and incorporated by reference herein) 99.4 Third Amendment to Second Amended and Restated Share Repurchase Program (filed as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on July 23, 2019 and incorporated by reference herein) 99.5 Fourth Amendment to Second Amended and Restated Share Repurchase Program (filed as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on August 21, 2019 and incorporated by reference herein) 99.6 Fifth Amendment to Second Amended and Restated Share Repurchase Program (filed as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on January 9, 2020 and incorporated by reference herein) 101.INS * XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. 101.SCH * XBRL Taxonomy Extension Schema Document 101.CAL * XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF * XBRL Taxonomy Extension Definition Linkbase Document 101.LAB * XBRL Taxonomy Extension Label Linkbase Document 101.PRE * XBRL Taxonomy Extension Presentation Linkbase Document 104 * Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document __________ * Filed herewith + Furnished herewith # Management contract or compensatory plan or arrangement Item 16. Form 10-K Summary Not applicable. 65 Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. NATIONAL HEALTHCARE PROPERTIES, INC. By /s/ Michael Anderson Michael Anderson Chief Executive Officer and President (Principal Executive Officer) Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Name Capacity Date /s/ Leslie D. Michelson Non-Executive Chair of the Board of Directors, Independent Director February 27, 2025 Leslie D. Michelson /s/ Michael Anderson Chief Executive Officer, President and Director February 27, 2025 Michael Anderson (Principal Executive Officer) /s/ Scott M. Lappetito Chief Financial Officer and Treasurer February 27, 2025 Scott M. Lappetito (Principal Financial Officer and Principal Accounting Officer) /s/ Elizabeth K. Tuppeny Independent Director February 27, 2025 Elizabeth K. Tuppeny /s/ Edward G. Rendell Independent Director February 27, 2025 Edward G. Rendell /s/ B.J. Penn Independent Director February 27, 2025 B.J. Penn /s/ Edward M. Weil, Jr. Director February 27, 2025 Edward M. Weil, Jr. 66 Table of Contents NATIONAL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page Report of Independent Registered Public Accounting Firm (PCAOB ID 238 ) F- 2 Consolidated Balance Sheets as of December 31, 202 4 and 202 3 F- 4 Consolidated Statements of Operations and Comprehensive Loss for the Years Ended December 31, 202 4 , 202 3 and 202 2 F- 5 Consolidated Statements of Changes in Equity for the Years Ended December 31, 2024, 2023 and 2022 F- 6 Consolidated Statements of Cash Flows for the Years Ended December 31, 2024, 2023 and 2022 F- 7 Notes to Consolidated Financial Statements F- 9 Financial Statement Schedule: Schedule III — Real Estate and Accumulated Depreciation as of December 31, 2024 F- 48 F-1 Table of Contents Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders of National Healthcare Properties, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of National Healthcare Properties, Inc. and its subsidiaries (the "Company") as of December 31, 2024 and 2023, and the related consolidated statements of operations and comprehensive loss, of changes in equity and of cash flows for each of the three years in the period ended December 31, 2024, including the related notes and financial statement schedule listed in the accompanying index (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024 in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Purchase Price Allocations for Property Acquisitions As described in Note 2 and 3 to the consolidated financial statements, during the year ended December 31, 2024, the Company completed real estate acquisitions, net of below market lease liabilities assumed, of $13.1 million. For acquired properties with leases classified as operating leases, management allocates the purchase price to tangible and identifiable intangible assets acquired and liabilities assumed based on their respective fair values. Tangible assets include land, land improvements, buildings, fixtures and tenant improvements on an as-if vacant basis. Management utilizes various estimates, processes and information to determine the as-if vacant property value. Management estimates the fair value using data from appraisals, comparable sales, discounted cash flow analysis and other methods. Fair value estimates are also made using significant assumptions such as capitalization rates, market rental rates, discount rates, and land values per square foot. Identifiable intangible assets include amounts allocated to acquired leases for above- and below-market lease rates and the value of in-place leases. Above-market and below-market lease values for acquired properties are initially recorded based on the present value (using a discount rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to each in-place lease and (ii) management’s estimate of market rental rates for each corresponding in-place lease, measured over a period equal to the remaining initial term of the lease for above-market leases and the remaining initial term plus the term of any below- market fixed rate renewal options for below- market leases. The principal considerations for our determination that performing procedures relating to purchase price allocations for property acquisitions is a critical audit matter are (i) the significant judgment by management when developing the fair value estimates of tangible and intangible assets acquired and liabilities assumed; (ii) a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating management’s significant assumptions related to capitalization rates, market rental rates, discount rates, and land values per square foot; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge. F-2 Table of Contents Report of Independent Registered Public Accounting Firm Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included, among others (i) reading the purchase agreements and lease documents; (ii) testing the completeness and accuracy of underlying data used by management in the fair value estimates, and (iii) testing management’s process for estimating the fair value of tangible and intangible assets acquired and liabilities assumed, including testing management’s projected cash flows and evaluating the accuracy of valuation outputs. Testing management’s process included evaluating the appropriateness of the valuation methods and reasonableness of the significant assumptions related to capitalization rates, market rental rates, discount rates, and land values per square foot. Evaluating the reasonableness of the significant assumptions included considering whether these assumptions were consistent with external market data, comparable transactions, and evidence obtained in other areas of the audit. In conjunction with certain purchase price allocations, professionals with specialized skill and knowledge were used to assist in evaluating the reasonableness of certain assumptions utilized by management related to capitalization rates, market rental rates, discount rates, and land values per square foot. /s/ PricewaterhouseCoopers LLP New York, New York February 27, 2025 We have served as the Company's auditor since 2019. F-3 Table of Contents NATIONAL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share data) December 31, 2024 2023 ASSETS Real estate investments, at cost: Land $ 190,082 $ 207,987 Buildings, fixtures and improvements 2,012,401 2,120,352 Acquired intangible assets 284,447 293,295 Total real estate investments, at cost 2,486,930 2,621,634 Less: accumulated depreciation and amortization ( 725,831 ) ( 681,977 ) Total real estate investments, net 1,761,099 1,939,657 Cash and cash equivalents 21,652 46,409 Restricted cash 52,443 44,907 Derivative assets, at fair value 19,206 28,370 Straight-line rent receivable, net 22,841 26,325 Operating lease right-of-use assets 7,480 7,713 Prepaid expenses and other assets 40,033 35,781 Deferred costs, net 21,269 15,997 Total assets $ 1,946,023 $ 2,145,159 LIABILITIES AND EQUITY Mortgage notes payable, net $ 779,160 $ 808,995 Credit facilities 362,216 361,026 Market lease intangible liabilities, net 6,125 8,165 Accounts payable and accrued expenses (including $ 30,267 and $ 295 due to related parties as of December 31, 2024 and 2023, respectively) 89,575 48,356 Operating lease liabilities 8,109 8,038 Deferred rent 7,217 6,500 Distributions payable 3,496 3,496 Total liabilities 1,255,898 1,244,576 Stockholders’ Equity 7.375 % Series A cumulative redeemable perpetual preferred stock, $ 0.01 par value, 4,740,000 authorized as of December 31, 2024 and 2023; 3,977,144 issued and outstanding as of December 31, 2024 and 2023 40 40 7.125 % Series B cumulative redeemable perpetual preferred stock, $ 0.01 par value, 3,680,000 authorized; 3,630,000 issued and outstanding as of December 31, 2024 and 2023 36 36 Common stock, $ 0.01 par value, 300,000,000 shares authorized, 28,296,439 shares and 27,886,255 shares issued and outstanding as of December 31, 2024 and 2023, respectively 1,132 1,115 Additional paid-in capital 2,533,706 2,509,303 Accumulated other comprehensive income (loss) 16,640 23,464 Distributions in excess of accumulated earnings ( 1,866,994 ) ( 1,639,804 ) Total stockholders’ equity 684,560 894,154 Non-controlling interests 5,565 6,429 Total equity 690,125 900,583 Total liabilities and equity $ 1,946,023 $ 2,145,159 Share and per share data have been adjusted for all periods presented to reflect an one-for-four reverse stock split effective September 30, 2024. The accompanying notes are an integral part of these consolidated financial statements. F-4 Table of Contents NATIONAL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (In thousands, except share and per share data) Year Ended December 31, 2024 2023 2022 Revenue from tenants $ 353,794 $ 345,925 $ 335,846 Operating expenses: Property operating and maintenance 221,148 217,792 213,444 Impairment charges 24,881 4,676 27,630 Termination fees to related parties 106,650 — — Operating fees to related parties 19,203 25,527 25,353 Acquisition and transaction related 7,949 545 1,484 General and administrative 22,744 18,928 17,287 Depreciation and amortization 84,067 82,873 82,064 Total expenses 486,642 350,341 367,262 Operating loss before gain on sale of real estate investments ( 132,848 ) ( 4,416 ) ( 31,416 ) Gain (loss) on sale of real estate investments 9,307 ( 322 ) ( 125 ) Operating loss ( 123,541 ) ( 4,738 ) ( 31,541 ) Other (expense) income: Interest expense ( 69,447 ) ( 66,078 ) ( 51,740 ) Interest and other income 1,051 734 27 Gain on extinguishment of debt 392 — — Gain (loss) on non-designated derivatives 1,544 ( 1,995 ) 3,834 Total other expenses, net ( 66,460 ) ( 67,339 ) ( 47,879 ) Loss before income taxes ( 190,001 ) ( 72,077 ) ( 79,420 ) Income tax expense ( 262 ) ( 303 ) ( 201 ) Net loss ( 190,263 ) ( 72,380 ) ( 79,621 ) Net loss attributable to non-controlling interests 567 82 135 Allocation for preferred stock ( 13,799 ) ( 13,799 ) ( 13,799 ) Net loss attributable to common stockholders ( 203,495 ) ( 86,097 ) ( 93,285 ) Other comprehensive (loss) income: Unrealized (loss) gain on designated derivatives ( 6,824 ) ( 13,446 ) 51,251 Comprehensive loss attributable to common stockholders $ ( 210,319 ) $ ( 99,543 ) $ ( 42,034 ) Weighted-average common shares outstanding — Basic and Diluted (1) 28,286,391 28,280,430 28,260,835 Net loss per common share attributable to common stockholders — Basic and Diluted (1) $ ( 7.19 ) $ ( 3.04 ) $ ( 3.30 ) __________ (1) Retroactively adjusted for the effects of previous stock dividends (see Note 1 — Organization for details). Share and per share data have been adjusted for all periods presented to reflect an one-for-four reverse stock split effective September 30, 2024. The accompanying notes are an integral part of these consolidated financial statements. F-5 Table of Contents NATIONAL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY Years Ended December 31, 2024, 2023 and 2022 (In thousands, except share data) Series A Preferred Stock Series B Preferred Stock Common Stock Accumulated Other Comprehensive Income (Loss) Number of Shares Par Value Number of Shares Par Value Number of Shares Par Value Additional Paid-in Capital Distributions in Excess of Accumulated Earnings Total Stockholders’ Equity Non-controlling Interests Total Equity Balance, December 31, 2021 3,977,144 $ 40 3,630,000 $ 36 24,820,439 $ 993 $ 2,329,839 $ ( 14,341 ) $ ( 1,282,871 ) $ 1,033,696 $ 6,704 $ 1,040,400 Issuance of Series B Preferred stock, net — — — — — — ( 42 ) — — ( 42 ) — ( 42 ) Share-based compensation, net — — — — — — 1,185 — — 1,185 — 1,185 Distributions declared in common stock, $ 0.85 per share — — — — 1,449,694 58 86,243 — ( 86,301 ) — — — Dividends declared on Series A Preferred Stock, $ 1.84 per share — — — — — — — — ( 7,333 ) ( 7,333 ) — ( 7,333 ) Dividends declared on Series B Preferred stock, $ 1.78 per share — — — — — — — — ( 6,466 ) ( 6,466 ) — ( 6,466 ) Distributions to non-controlling interest holders — — — — — — — — — — ( 184 ) ( 184 ) Net loss — — — — — — — — ( 79,486 ) ( 79,486 ) ( 135 ) ( 79,621 ) Unrealized loss on designated derivative — — — — — — — 51,251 — 51,251 — 51,251 Rebalancing of ownership percentage — — — — — — ( 166 ) — — ( 166 ) 166 — Balance, December 31, 2022 3,977,144 40 3,630,000 36 26,270,133 1,051 2,417,059 36,910 ( 1,462,457 ) 992,639 6,551 999,190 Share-based compensation, net — — — — — — 919 — — 919 — 919 Distributions declared in common stock, $ 0.85 per share — — — — 1,616,122 64 91,186 — ( 91,250 ) — — — Dividends declared on Series A Preferred Stock, $ 1.84 per share — — — — — — — — ( 7,333 ) ( 7,333 ) — ( 7,333 ) Dividends declared on Series B Preferred Stock, $ 1.78 per share — — — — — — — — ( 6,466 ) ( 6,466 ) — ( 6,466 ) Distributions to non-controlling interest holders — — — — — — — — — — ( 185 ) ( 185 ) Contributions from non-controlling interest holders — — — — — — — — — — 284 284 Net loss — — — — — — — — ( 72,298 ) ( 72,298 ) ( 82 ) ( 72,380 ) Unrealized loss on designated derivative — — — — — — — ( 13,446 ) — ( 13,446 ) — ( 13,446 ) Rebalancing of ownership percentage — — — — — — 139 — — 139 ( 139 ) — Balance, December 31, 2023 3,977,144 40 3,630,000 36 27,886,255 1,115 2,509,303 23,464 ( 1,639,804 ) 894,154 6,429 900,583 Share-based compensation, net — — — — — — 613 — — 613 — 613 Distributions declared in common stock, $ 0.85 per share — — — — 410,184 17 23,678 — ( 23,695 ) — — — Dividends declared Series A Preferred Stock, $ 1.84 per share — — — — — — — — ( 7,333 ) ( 7,333 ) — ( 7,333 ) Dividends declared on Series B Preferred Stock, $ 1.78 per share — — — — — — — — ( 6,466 ) ( 6,466 ) ( 6,466 ) Distributions to non-controlling interest holders — — — — — — — — — — ( 185 ) ( 185 ) Contributions from non-controlling interest holders — — — — — — — — — — — — Net loss — — — — — — — — ( 189,696 ) ( 189,696 ) ( 567 ) ( 190,263 ) Unrealized loss on designated derivative — — — — — — — ( 6,824 ) — ( 6,824 ) — ( 6,824 ) Rebalancing of ownership percentage — — — — — — 112 — — 112 ( 112 ) — Balance, December 31, 2024 3,977,144 $ 40 3,630,000 $ 36 28,296,439 $ 1,132 $ 2,533,706 $ 16,640 $ ( 1,866,994 ) $ 684,560 $ 5,565 $ 690,125 Share and per share data have been adjusted for all periods presented to reflect an one-for-four reverse stock split effective September 30, 2024. The accompanying notes are an integral part of these consolidated financial statements. F-6 Table of Contents NATIONAL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Year Ended December 31, 2024 2023 2022 Cash flows from operating activities: Net loss $ ( 190,263 ) $ ( 72,380 ) $ ( 79,621 ) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 84,067 82,873 82,064 Amortization of deferred financing costs 3,376 6,702 4,879 (Accretion) amortization of terminated swap ( 1,218 ) ( 4,195 ) 423 Amortization of mortgage premiums and discounts, net 89 91 51 Accretion of market lease and other intangibles, net ( 1,428 ) ( 890 ) ( 625 ) Bad debt expense 1,515 1,225 3,159 Equity-based compensation 613 919 1,185 (Gain) loss on non-designated derivative instruments ( 1,544 ) 1,995 ( 3,834 ) Cash received from non-designated derivative instruments 6,810 5,580 286 (Gain) loss on sales of real estate investments ( 9,307 ) 322 125 Gain on extinguishment of debt ( 392 ) — — Impairment charges 24,881 4,676 27,630 Deferred tax valuation allowance 2,397 1,165 2,750 Changes in assets and liabilities: Straight-line rent receivable ( 794 ) ( 1,049 ) ( 1,523 ) Prepaid expenses and other assets ( 4,443 ) ( 6,069 ) ( 3,036 ) Accounts payable, accrued expenses and other liabilities 4,659 83 ( 2,924 ) Deferred rent 1,136 576 ( 2,694 ) Net cash (used in) provided by operating activities ( 79,846 ) 21,624 28,295 Cash flows from investing activities: Property acquisitions ( 5,606 ) ( 35,261 ) ( 25,538 ) Investments in non-designated interest rate caps ( 1,709 ) ( 9,962 ) — Capital expenditures ( 21,908 ) ( 22,397 ) ( 27,993 ) Proceeds from sales of real estate investments 93,195 4,803 11,749 Net cash provided by (used in) investing activities 63,972 ( 62,817 ) ( 41,782 ) Cash flows from financing activities: Payments on credit facilities ( 5,769 ) ( 200,602 ) ( 2,998 ) Proceeds from credit facilities 6,960 34,748 30,000 Proceeds from mortgage notes payable — 240,000 — Payments on mortgage notes payable ( 18,822 ) ( 1,139 ) ( 6,662 ) Proceeds from interest rate swap terminations — 5,413 — Payments of deferred financing costs — ( 8,748 ) ( 1,672 ) Proceeds from promissory note 30,267 — — Proceeds from issuance of Series B Preferred Stock, net — — ( 42 ) Dividends paid on Series A Preferred stock ( 7,333 ) ( 7,334 ) ( 7,333 ) Dividends paid on Series B Preferred stock ( 6,466 ) ( 6,466 ) ( 6,466 ) Contributions from non-controlling interest holders — 284 — Distributions to non-controlling interest holders ( 184 ) ( 185 ) ( 184 ) Net cash (used in) provided by financing activities ( 1,347 ) 55,971 4,643 Net change in cash, cash equivalents and restricted cash ( 17,221 ) 14,778 ( 8,844 ) Cash, cash equivalents and restricted cash, beginning of year 91,316 76,538 85,382 Cash, cash equivalents and restricted cash, end of year $ 74,095 $ 91,316 $ 76,538 F-7 Table of Contents NATIONAL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Year Ended December 31, 2024 2023 2022 Cash, cash equivalents, end of period $ 21,652 $ 46,409 $ 53,654 Restricted cash, end of period 52,443 44,907 22,884 Cash, cash equivalents and restricted cash, end of period $ 74,095 $ 91,316 $ 76,538 Supplemental disclosures of cash flow information: Cash paid for interest $ 61,038 $ 63,720 $ 45,042 Cash paid for income and franchise taxes 416 454 566 Non-cash investing and financing activities: Common stock issued through stock dividends 23,695 91,250 86,301 Mortgages issued with acquisition of real estate investments 7,500 — — Accrued capital expenditures 455 2,902 — Accrued offering costs on Series B Preferred Stock — — 78 Proceeds from real estate sales used to repay mortgage notes payable 20,370 2,663 — Mortgage notes payable repaid with proceeds from real estate sales ( 20,370 ) ( 2,663 ) — Proceeds from real estate sales used to repay amounts outstanding under the Prior Credit Facility — 5,167 — Amounts outstanding under the Prior Credit Facility repaid with proceeds from real estate sales — ( 5,167 ) — The accompanying notes are an integral part of these consolidated financial statements. F-8 Table of Contents NATIONAL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 Note 1 — Organization National Healthcare Properties, Inc. (formerly known as Healthcare Trust, Inc.) (including, as required by context, National Healthcare Properties Operating Partnership, L.P. (the “OP”) and its subsidiaries, the “Company”) is a real estate investment trust (“REIT”) for U.S. federal income tax purposes. The Company acquires, owns and manages a diversified portfolio of healthcare-related real estate, focused on outpatient medical facilities (“OMFs”) and senior housing operating properties (“SHOPs”). As of December 31, 2024, the Company owned 193 properties (including one land parcel) located in 31 states and comprised of 8.4 million rentable square feet. Substantially all of the Company’s business is conducted through the OP and its wholly owned subsidiaries, including taxable REIT subsidiaries (“TRSs”). Prior to the consummation of the Internalization (as defined below) on September 27, 2024, the Company’s former advisor, Healthcare Trust Advisors, LLC (the “Advisor”), managed its day-to-day business with the assistance of its property manager, Healthcare Trust Properties, LLC (the “Property Manager”). Prior to the consummation of the Internalization, the Advisor and Property Manager were under common control with AR Global Investments, LLC (the “Advisor Parent”), and these related parties received compensation and fees for providing services to the Company. See the “Internalization” section in this Note for additional information. The Company also reimbursed, and in the case of the Property Manager, continues to reimburse, these entities for certain expenses they incur in providing these services to the Company. Healthcare Trust Special Limited Partnership, LLC (the “Special Limited Partner”), which is also under common control with the Advisor Parent, also has an interest in the Company through ownership of interests in the OP. As of December 31, 2024, the Company owned 44 SHOPs using the REIT Investment Diversification and Empowerment Act of 2007 (“RIDEA”) structure in its SHOP segment. Under RIDEA, a REIT may lease “qualified healthcare properties” on an arm’s length basis to a TRS if the property is operated on behalf of such subsidiary by a person who qualifies as an “eligible independent contractor.” The Company has three operating segments: (i) Outpatient Medical Facilities, (ii) Senior Housing Operating Properties, and (iii) Triple net leased healthcare facilities. The Company aggregates its operating segments into two reportable business segments for management and internal financial reporting purposes: OMFs and SHOPs. All of the Company’s properties across both business segments are located throughout the United States. In its OMF operating segment, the Company owns, manages and leases single and multi-tenant OMFs where tenants are required to pay their pro rata share of property operating expenses, which may be subject to expense exclusions and floors, in addition to base rent. The Property Manager or third-party managers manage the Company’s OMFs. In its SHOP segment, the Company invests in seniors housing properties through the RIDEA structure. As of December 31, 2024, the Company had four eligible independent contractors operating 44 SHOPs. The Company declared quarterly dividends entirely in shares of its common stock from October 2020 through January 2024. Dividends payable entirely in shares of common stock are treated in a fashion similar to a stock split for accounting purposes specifically related to per-share calculations for the current and prior periods. Since October 2020, the Company has issued an aggregate of approximately 5.2 million shares as stock dividends (as adjusted to reflect the Reverse Stock Split (as defined below)). No other additional shares of common stock have been issued since October 2020. References made to weighted-average shares and per-share amounts in the accompanying consolidated statements of operations and comprehensive income have been retroactively adjusted to reflect the cumulative increase in shares outstanding resulting from the stock dividends since October 2020 and through January 2024, and are noted as such throughout the accompanying financial statements and notes. S ee Note 8 — Stockholder’s Equity for additional information on the stock dividends. On March 27, 2024, the Company published a new estimate of per-share net asset value (“Estimated Per-Share NAV”) as of December 31, 2023. The Estimated Per-Share NAV published on March 27, 2024 has not been adjusted since publication and will not be adjusted until the Company’s board of directors (the “Board”) determines a new Estimated Per-Share NAV. The Company intends to publish Estimated Per-Share NAV periodically at the discretion of the Board, provided that such estimates will be made at least once annually unless the Company lists its common stock. Internalization On September 27, 2024 (the “Closing Date”), the Company consummated (the “Closing”) the transactions (the “Internalization”) contemplated by that certain merger agreement dated August 6, 2024 (the “Internalization Agreement”) by and among the Company, HTI Merger Sub, LLC, a Delaware limited liability company and a wholly-owned subsidiary of the Company (“Merger Sub”), the Advisor and the Advisor Parent. F-9 Table of Contents NATIONAL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 Consummation of the Internalization resulted in the internalization of the Company’s management through the merger of the Advisor with and into Merger Sub, with the Advisor being the surviving entity (under the name “Healthcare Trust Advisors, LLC”) and the termination of the Company’s prior arrangement for advisory management services provided by the Advisor pursuant to the Advisory Agreement (as defined in Note 9 — Related Party Transactions and Arrangements ). All assets, contracts and employees necessary for the Company to conduct its business were contributed by the Advisor Parent (and/or its affiliates) to the Advisor prior to the Closing Date, including all of the equity interests in the Property Manager, which became a wholly-owned subsidiary of the Company following the Internalization. Pursuant to the Internalization Agreement, on the Closing Date, (i) the outstanding membership interests of the Advisor were converted into the right to receive from the Company an internalization fee of $ 98.2 million and (ii) the Advisor Parent received (x) an asset management fee of $ 5.5 million, representing the aggregate base management fee that the Company would have been required to pay to the Advisor during the remaining three month notice period required to terminate the Advisory Agreement, and (y) a property management fee of $ 2.9 million, representing the aggregate management fees that the Company would have been required to pay to the Property Manager through the current term of the Property Management Agreement, in each case, as adjusted to the extent the amount of such asset management and property management fees exceed or are less than the amount required to be paid by the Advisor Parent to employees placed with the Company pursuant to the Internalization prior to the Closing and the amounts due under contracts acquired by the Company in the Internalization relating to the pre-Closing period (collectively, the “Closing Payments” in an aggregate amount of $ 106.6 million). The Advisor Parent also delivered cash to the Company at Closing in order for the Company to pay any unpaid employee bonuses for calendar year 2023 and any accrued bonuses for calendar year 2024 to the extent that the Company has previously reimbursed the Advisor Parent for, but the Advisor Parent has not paid, such bonuses. Pursuant to the Internalization Agreement, because the Closing Payments exceeded the Company’s Available Cash (as defined in the Internalization Agreement), the Company paid the Advisor Parent an aggregate cash consideration of $ 75.0 million (such cash amount, the “Closing Date Cash Consideration”), and the Company issued to the Advisor Parent an unsecured promissory note (the “Promissory Note”) (as further defined in Note 9 — Related Party Transactions and Arrangements ) in a principal amount of $ 30.3 million, equal to the difference between the Closing Date Cash Consideration and the Closing Payments . In January 2025, the Company repaid the Promissory Note in full including any unpaid interest at the time of payment. See Note 9 — Related Party Transactions and Arrangements and Note 17 — Subsequent Events for additional information. Reverse Stock Split On September 26, 2024, following approval by the Board and in accordance with Maryland General Corporate Law, the Company filed Articles of Amendment to the Company’s articles of amendment and restatement (as amended to date, the “Charter”) with the State Department of Assessments and Taxation of Maryland (“SDAT”) to effect a reverse stock split of the Company’s common stock, par value $ 0.01 per share (the “common stock”), at a ratio of one-for-four, which became effective on September 30, 2024 (the “Reverse Stock Split”). As a result of the Reverse Stock Split, the par value of the common stock adjusted to $ 0.04 per share. The number of authorized shares of common stock under the Charter remains unchanged. All share and per share data in this Annual Report on Form 10-K have been adjusted for all periods presented to reflect the Reverse Stock Split. Name Change and Common Stock Par Value Adjustment On September 26, 2024, following approval by the Board, the Company filed Articles of Amendment (the “Second Charter Amendment”) to the Company’s Charter with the SDAT to (i) change the Company’s name to “National Healthcare Properties, Inc.” from “Healthcare Trust, Inc.” and (ii) adjust the par value of the Company’s common stock back to $ 0.01 per share following the Reverse Stock Split, both of which became effective on September 30, 2024. In connection with its name change, the Company, as the general partner of the OP, caused the name of the OP to be changed to “National Healthcare Properties Operating Partnership, L.P.” from “Healthcare Trust Operating Partnership, L.P.” Note 2 — Summary of Significant Accounting Policies Basis of Accounting The accompanying consolidated financial statements of the Company are prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States (“GAAP”). F-10 Table of Contents NATIONAL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 Principles of Consolidation and Basis of Presentation The accompanying consolidated financial statements include the accounts of the Company, the OP and its subsidiaries. All intercompany accounts and transactions are eliminated in consolidation. In determining whether the Company has a controlling financial interest in a joint venture and the requirement to consolidate the accounts of that entity, management considers factors such as ownership interest, authority to make decisions and contractual and substantive participating rights of the other partners or members as well as whether the entity is a variable interest entity (“VIE”) for which the Company is the primary beneficiary. The Company has determined the OP is a VIE of which the Company is the primary beneficiary. Substantially all of the Company’s assets and liabilities are held by the OP. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Management makes significant estimates regarding revenue recognition, purchase price allocations to record investments in real estate, impairments, fair value measurements and income taxes, as applicable. Out-of-Period Adjustments During the year ended December 31, 2023, the Company identified certain historical errors in its statements of operations and comprehensive income (loss), consolidated statements of changes in equity, and statements of cash flows since 2019, which impacted the quarterly financial statements and annual periods previously issued. Specifically, the Company had understated depreciation and amortization expense on certain capital improvements and deferred leasing commissions, thereby understating previously reported depreciation and amortization expense by $ 0.1 million and $ 0.6 million for the years ended December 31, 2022, and pre-2022 periods, respectively. As of December 31, 2022, the cumulative impact of recording the correct depreciation and amortization expense is an understatement of depreciation and amortization expense of $ 0.7 million, accumulated depreciation of $ 0.3 million and deferred costs of $ 0.4 million. The Company concluded that the errors noted above were not material for the year ended December 31, 2023 or any prior periods, and has adjusted the amounts on a cumulative basis in the consolidated financial statements for the year ended December 31, 2023 Revenue Recognition The Company’s revenues, which are derived primarily from lease contracts, include rent received from tenants in its OMF segment. As of December 31, 2024, these leases had a weighted average remaining lease term of 6.5 years. Rent from tenants in the Company’s OMF segment (as discussed below) is recorded in accordance with the terms of each lease on a straight-line basis over the initial term of the lease. Because many of the leases provide for rental increases at specified intervals, straight-line basis accounting requires the Company to record a receivable for, and include in revenue from tenants on a straight-line basis, unbilled rent receivables that the Company will only receive if the tenant makes all rent payments required through the expiration of the initial term of the lease. When the Company acquires a property, the acquisition date is considered to be the commencement date for purposes of this calculation. For new leases after acquisition, the commencement date is considered to be the date the tenant takes control of the space. For lease modifications, the commencement date is considered to be the date the lease modification is executed. The Company defers the revenue related to lease payments received from tenants in advance of their due dates. Tenant revenue also includes operating expense reimbursements which generally increase with any increase in property operating and maintenance expenses in the Company’s OMF segment. In addition to base rent, dependent on the specific lease, tenants are generally required to pay either (i) their pro rata share of property operating and maintenance expenses, which may be subject to expense exclusions and floors or (ii) their share of increases in property operating and maintenance expenses to the extent they exceed the properties’ expenses for the base year of the respective leases. Under ASC 842, the Company has elected to report combined lease and non-lease components in a single line “Revenue from tenants.” For expenses paid directly by the tenant, under both ASC 842 and 840, the Company has reflected them on a net basis. The Company’s revenues also include resident services and fee income primarily related to rent derived from lease contracts with residents in the Company’s SHOP segment, held using a structure permitted under RIDEA. Rental income from residents in the Company’s SHOP segment is recognized as earned when services are provided. Residents pay monthly rent that covers occupancy of their unit and basic services, including utilities, meals and some housekeeping services. The terms of the leases are short term in nature, primarily month-to-month. F-11 Table of Contents NATIONAL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 The Company defers the revenue related to lease payments received from tenants and residents in advance of their due dates. Pursuant to certain of the Company’s lease agreements, tenants are required to reimburse the Company for certain property operating and maintenance expenses related to non-SHOP assets (recorded in revenue from tenants), in addition to paying base rent, whereas under certain other lease agreements, the tenants are directly responsible for all operating and maintenance costs of the respective properties. The following table presents future base rent payments on a cash basis due to the Company as of December 31, 2024 over the next five years and thereafter. These amounts exclude tenant reimbursements and contingent rent payments, as applicable, that may be collected from certain tenants based on provisions related to sales thresholds and increases in annual rent based on exceeding certain economic indexes, among other items. These amounts also exclude SHOP leases which are short-term in nature. (In thousands) Future Base Rent Payments 2025 $ 102,490 2026 98,736 2027 89,887 2028 76,345 2029 66,636 Thereafter 315,834 Total $ 749,928 The Company continually reviews receivables related to rent and unbilled rent and determines collectability by taking into consideration the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area in which the property is located. Under the leasing standards, the Company is required to assess, based on credit risk only, if it is probable that the Company will collect virtually all of the lease payments at lease commencement date and it must continue to reassess collectability periodically thereafter based on new facts and circumstances affecting the credit risk of the tenant. If the Company determines that it is probable it will collect virtually all of the lease payments (rent and common area maintenance), the lease will continue to be accounted for on an accrual basis (i.e., straight-line). However, if the Company determines it is not probable that it will collect virtually all of the lease payments, the lease will be accounted for on a cash basis and a full reserve would be recorded on previously accrued amounts in cases where it was subsequently concluded that collection was not probable. Cost recoveries from tenants are included in operating revenue from tenants, in accordance with current accounting rules, on the accompanying consolidated statements of operations and comprehensive loss in the period the related costs are incurred, as applicable. During the years ended December 31, 2024, 2023 and 2022, the Company recorded reductions in revenue of $ 1.5 million, $ 1.2 million and $ 3.2 million, respectively, related to uncollectible accounts. Approximately $ 1.3 million of bad debt expense recorded in the year ended December 31, 2022, related to previously disposed properties. There were no significant write-offs related to previously disposed properties during the years ended December 31, 2024 and 2023. Investments in Real Estate Investments in real estate are recorded at cost. Improvements and replacements are capitalized when they extend the useful life or improve the productive capacity of the asset. Costs of repairs and maintenance are expensed as incurred. At the time an asset is acquired, the Company evaluates the inputs, processes and outputs of the asset acquired to determine if the transaction is a business combination or asset acquisition. If an acquisition qualifies as a business combination, the related transaction costs are recorded as an expense in the consolidated statements of operations and comprehensive loss. If an acquisition qualifies as an asset acquisition, the related transaction costs are generally capitalized and subsequently amortized over the useful life of the acquired assets. See the “ Purchase Price Allocation” section in this Note for a discussion of the initial accounting for investments in real estate. F-12 Table of Contents NATIONAL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 Disposal of real estate investments that represent a strategic shift in operations that will have a major effect on the Company's operations and financial results are required to be presented as discontinued operations in the consolidated statements of operations. No properties were presented as discontinued operations during the years ended December 31, 2024, 2023 and 2022. Properties that are intended to be sold are to be designated as “held for sale” on the consolidated balance sheets at the lesser of carrying amount or fair value less estimated selling costs when they meet specific criteria to be presented as held for sale, most significantly that the sale is probable within one year. The Company evaluates probability of sale based on specific facts including whether a sales agreement is in place and the buyer has made significant non-refundable deposits. Properties are no longer depreciated when they are classified as held for sale. There were no real estate investments held for sale as of December 31, 2024 or 2023. Purchase Price Allocation In both a business combination and an asset acquisition, the Company allocates the purchase price of acquired properties to tangible and identifiable intangible assets or liabilities based on their respective fair values. Tangible assets may include land, land improvements, buildings, fixtures and tenant improvements on an as if vacant basis. Intangible assets may include the value of in-place leases and above- and below-market leases and other identifiable assets or liabilities based on lease or property specific characteristics. In addition, any assumed mortgages receivable or payable and any assumed or issued non-controlling interests (in a business combination) are recorded at their estimated fair values. In allocating the fair value to assumed mortgages, amounts are recorded to debt premiums or discounts based on the present value of the estimated cash flows, which is calculated to account for either above or below-market interest rates. In allocating the fair value to any assumed or issued non-controlling interests, amounts are recorded at their fair value at the close of business on the acquisition date. In a business combination, the difference between the purchase price and the fair value of identifiable net assets acquired is either recorded as goodwill or as a bargain purchase gain. In an asset acquisition, the difference between the acquisition price (including capitalized transaction costs) and the fair value of identifiable net assets acquired is allocated to the non-current assets. The Company acquired four properties during the year ended December 31, 2024. Each of these acquisitions were accounted for as an asset acquisition. For acquired properties with leases classified as operating leases, the Company allocates the purchase price to tangible and identifiable intangible assets acquired and liabilities assumed, based on their respective fair values. In making estimates of fair values for purposes of allocating purchase price, the Company utilizes a number of sources, including independent appraisals that may be obtained in connection with the acquisition or financing of the respective property and other market data. The Company also considers information obtained about each property as a result of the Company’s pre-acquisition due diligence in estimating the fair value of the tangible and intangible assets acquired and intangible liabilities assumed. The Company utilizes various estimates, processes and information to determine the as-if vacant property value. The Company estimates the fair value using data from appraisals, comparable sales, discounted cash flow analysis and other methods. Fair value estimates are also made using significant assumptions such as capitalization rates, market rental rates, discount rates and land values per square foot. Identifiable intangible assets include amounts allocated to acquired leases for above- and below-market lease rates and the value of in-place leases. Factors considered in the analysis of the in-place lease intangibles include an estimate of carrying costs during the expected lease-up period for each property, taking into account current market conditions and costs to execute similar leases. In estimating carrying costs, the Company includes real estate taxes, insurance and other operating expenses and estimates of lost rentals at contract rates during the expected lease-up period, which typically ranges from six to 24 months. The Company also estimates costs to execute similar leases including leasing commissions, legal and other related expenses. Above-market and below-market lease values for acquired properties are initially recorded based on the present value (using a discount rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to each in-place lease and (ii) management’s estimate of market rental rates for each corresponding in-place lease, measured over a period equal to the remaining initial term of the lease for above-market leases and the remaining initial term plus the term of any below-market fixed rate renewal options for below-market leases. The aggregate value of intangible assets related to customer relationships, as applicable, is measured based on the Company’s evaluation of the specific characteristics of each tenant’s lease and the Company’s overall relationship with the tenant. Characteristics considered by the Company in determining these values include the nature and extent of its existing business relationships with the tenant, growth prospects for developing new business with the tenant, the tenant’s credit quality and expectations of lease renewals, among other factors. The Company did not record any intangible asset amounts related to customer relationships during the years ended December 31, 2024, 2023 and 2022. F-13 Table of Contents NATIONAL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 Accounting for Leases Lessor Accounting The Company evaluates new leases (by the Company or by a predecessor lessor/owner) pursuant to ASC 842: Leases to determine lease classification. A lease is classified by a lessor as a sales-type lease if the significant risks and rewards of ownership reside with the tenant. This situation is met if, among other things, there is an automatic transfer of title during the lease, a bargain purchase option, the non-cancelable lease term is for more than a major part of the remaining economic useful life of the asset (e.g., equal to or greater than 75%), the present value of the minimum lease payments represents substantially all (e.g., equal to or greater than 90%) of the leased property’s fair value at lease inception, or the asset is so specialized in nature that it provides no alternative use to the lessor (and therefore would not provide any future value to the lessor) after the lease term. Further, such new leases would be evaluated to consider whether they would be failed sale-leaseback transactions and accounted for as financing transactions by the lessor. As a lessor of real estate, the Company has elected, by class of underlying assets, to account for lease and non-lease components (such as tenant reimbursements of property operating and maintenance expenses) as a single lease component as an operating lease because (i) the non-lease components have the same timing and pattern of transfer as the associated lease component; and (ii) the lease component, if accounted for separately, would be classified as an operating lease. Additionally, only incremental direct leasing costs may be capitalized under the accounting guidance. Indirect leasing costs in connection with new or extended tenant leases, if any, are being expensed. Lessee Accounting The Company is also the lessee under certain land leases which will continue to be classified as operating leases under transition elections unless subsequently modified. These leases are reflected on the consolidated balance sheets as of December 31, 2024 and 2023, and the rent expense is reflected on a straight-line basis over the lease term in the consolidated statements of operations and comprehensive loss for the years ended December 31, 2024, 2023 and 2022. For lessees, the accounting standard requires the application of a dual lease classification approach, classifying leases as either operating or finance leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. Lease expense for operating leases is recognized on a straight-line basis over the term of the lease, while lease expense for finance leases is recognized based on an effective interest method over the term of the lease. Also, lessees must recognize a right-of-use asset (“ROU”) and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Further, certain transactions where at inception of the lease the buyer-lessor accounted for the transaction as a purchase of real estate and a new lease may be required to have symmetrical accounting to the seller-lessee if the transaction was not a qualified sale-leaseback and accounted for as a financing transaction. For additional information and disclosures related to the Company’s operating leases, see Note 16 — Commitments and Contingencies . Gain on Dispositions of Real Estate Investments Gains on sales of rental real estate are not considered sales to customers and will generally be recognized pursuant to the provisions included in ASC 610-20, Gains and Losses from the Derecognition of Nonfinancial Assets (“ASC 610-20”). Impairment of Long-Lived Assets When circumstances indicate the carrying value of a property may not be recoverable, the Company reviews the property for impairment. This review is based on an estimate of the future undiscounted cash flows, excluding interest charges, expected to result from the property’s use and eventual disposition. These estimates consider factors such as expected future operating income, market and other applicable trends and residual value, as well as the effects of leasing demand, competition and other factors. If an impairment exists, due to the inability to recover the carrying value of a property, the Company would recognize an impairment loss in the consolidated statements of operations and comprehensive loss to the extent that the carrying value exceeds the estimated fair value of the property for properties to be held for use. For properties held for sale, the impairment loss recorded would equal the adjustment to fair value less estimated cost to dispose of the asset. These assessments have a direct impact on net income (loss) because recording an impairment loss results in an immediate negative adjustment to earnings. For additional information, see Note 3 — Real Estate Investments, Net . Reportable Segments The Company’s reportable segments, based on how it evaluates its business and allocates resources, are as follows: (i) OMF and (ii) SHOP. For additional information see Note 15 — Segment Reporting . F-14 Table of Contents NATIONAL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 Depreciation and Amortization Depreciation is computed using the straight-line method over the estimated useful lives of up to 40 years for buildings and building improvements, 15 years for land improvements and fixtures, and the shorter of the useful life or the remaining lease term for tenant improvements and leasehold interests. Construction in progress is not depreciated until the project has reached substantial completion. The value of certain other intangibles such as certificates of need in certain jurisdictions are amortized over the expected period of benefit (generally the life of the related building). The value of in-place leases, exclusive of the value of above-market and below-market in-place leases, is amortized to expense over the remaining periods of the respective leases. The value of customer relationship intangibles, if any, is amortized to expense over the initial term and any renewal periods in the respective leases, but in no event does the amortization period for intangible assets exceed the remaining depreciable life of the building. If a tenant terminates its lease, the unamortized portion of the in-place lease value and customer relationship intangibles is charged to expense. Assumed mortgage premiums or discounts are amortized as an increase or reduction to interest expense over the remaining terms of the respective mortgages. Above and Below-Market Lease Amortization Capitalized above-market lease values are amortized as a reduction of revenue from tenants over the remaining terms of the respective leases and the capitalized below-market lease values are amortized as an increase to revenue from tenants over the remaining initial terms plus the terms of any below-market fixed rate renewal options of the respective leases. If a tenant with a below-market rent renewal does not renew, any remaining unamortized amount will be taken into income at that time. Capitalized above-market ground lease values are amortized as a reduction of property operating expense over the remaining terms of the respective leases. Capitalized below-market ground lease values are amortized as an increase to property operating expense over the remaining terms of the respective leases and expected below-market renewal option periods. Derivative Instruments The Company may use derivative financial instruments to hedge all or a portion of the interest rate risk associated with its borrowings. Certain of the techniques used to hedge exposure to interest rate fluctuations may also be used to protect against declines in the market value of assets that result from general trends in debt markets. The principal objective of such agreements is to minimize the risks and costs associated with the Company’s operating and financial structure as well as to hedge specific anticipated transactions. The Company records all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Derivatives may also be designated as hedges of the foreign currency exposure of a net investment in a foreign operation. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge certain of its risk, even though hedge accounting does not apply, or the Company elects not to apply hedge accounting. The accounting for subsequent changes in the fair value of these derivatives depends on whether each has been designated and qualifies for hedge accounting treatment. If the Company elects not to apply hedge accounting treatment, any change in the fair value of these derivative instruments is recognized immediately in gains (losses) on derivative instruments in the accompanying consolidated statements of operations and comprehensive loss. Prior to the adoption of ASU 2017-12 on January 1, 2019 if the derivative is designated and qualifies for hedge accounting treatment, the change in the estimated fair value of the derivative is recorded in other comprehensive loss to the extent that it is effective, with any ineffective portion of a derivative’s change in fair value immediately recognized in earnings. After the adoption of ASU 2017-12, if the derivative qualifies for hedge accounting, all of the change in value is recorded in other comprehensive loss. F-15 Table of Contents NATIONAL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 Non-controlling Interests The non-controlling interests represent the portion of the common and preferred equity in the OP that is not owned by the Company as well as certain investment arrangements with other unaffiliated third parties whereby such investors receive an ownership interest in certain of the Company’s property-owning subsidiaries and are entitled to receive a proportionate share of the net operating cash flow derived from the subsidiaries’ property. Non-controlling interests are presented as a separate component of equity on the consolidated balance sheets and presented as net loss attributable to non-controlling interests on the consolidated statements of operations and comprehensive loss. Non-controlling interests are allocated a share of net income or loss based on their share of equity ownership, including any preferential amounts. See Note 13 — Non-Controlling Interests for additional information. Cash and Cash Equivalents Cash and cash equivalents includes cash in bank accounts as well as investments in highly liquid money market funds with original maturities of three months or less. The Company deposits cash with high quality financial institutions. These deposits are guaranteed by the Federal Deposit Insurance Company (“FDIC”) up to an insurance limit. At December 31, 2024 and 2023, the Company had deposits of $ 21.7 million and $ 46.4 million, of which $ 11.9 million and $ 34.2 million, respectively, were in excess of the amount insured by the FDIC. Although the Company bears risk to amounts in excess of those insured by the FDIC, it does not anticipate any losses as a result. Deferred Costs Deferred costs, net, consists of deferred financing costs related to the Fannie Mae Master Credit Facilities (as defined in Note 5 — Credit Facilities) , and deferred leasing costs. Deferred financing costs relating to mortgage notes payable (see Note 4 — Mortgage Notes Payable, Net ) are reflected net of the related financing in the mortgage notes payable, net line item of the Company’s consolidated balance sheet. Deferred financing costs associated with the Fannie Mae Master Credit Facilities and mortgage notes payable represent commitment fees, legal fees, and other costs associated with obtaining commitments for financing. These costs are amortized over the term of the financing agreement using the effective interest method for the Fannie Mae Master Credit Facilities and using the effective interest method over the expected term for the mortgage notes payable. Unamortized deferred financing costs are expensed if the associated debt is refinanced or paid down before maturity. Costs incurred in seeking financial transactions that do not close are expensed in the period in which it is determined that the financing will not close. Deferred leasing costs, consisting primarily of lease commissions and professional fees incurred in connection with new leases, are deferred and amortized over the term of the lease. Equity-Based Compensation The Company has a stock-based incentive award program for its directors, which is accounted for under the guidance of share- based payments. The cost of services received in exchange for these stock awards is measured at the grant date fair value of the award and the expense for such awards is included in general and administrative expenses and is recognized over the service period (i.e., vesting) required or when the requirements for exercise of the award have been met (see Note 11 — Equity-Based Compensation ). Income Taxes The Company elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”), commencing with the taxable year ended December 31, 2013. If the Company continues to qualify for taxation as a REIT, it generally will not be subject to U.S. federal corporate income tax to the extent it distributes all of its REIT taxable income (which does not equal net income as calculated in accordance with GAAP) to its stockholders. REITs are subject to a number of organizational and operational requirements, including a requirement that the Company distribute annually at least 90% of the Company’s REIT taxable income to the Company’s stockholders. F-16 Table of Contents NATIONAL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 If the Company fails to continue to qualify as a REIT in any taxable year and does not qualify for certain statutory relief provisions, the Company will be subject to U.S. federal, state and local income taxes at regular corporate rates beginning with the year in which it fails to qualify and may be precluded from being able to elect to be treated as a REIT for the Company’s four subsequent taxable years. The Company had no REIT taxable income requiring distribution to its stockholders for each of the years ended December 31, 2024, 2023 and 2022. Accordingly, no provision for U.S. federal or state income taxes related to such REIT taxable income was recorded in the Company’s financial statements. Even if the Company continues to qualify as a REIT, it may be subject to certain state and local taxes on its income and property, and U.S. federal income and excise taxes on its undistributed income. Certain limitations are imposed on REITs with respect to the ownership and operation of seniors housing properties. Generally, to qualify as a REIT, the Company cannot directly or indirectly operate seniors housing properties. Instead, such facilities may be either leased to a third-party operator or leased to a TRS and operated by a third party on behalf of the TRS. Accordingly, the Company has formed a TRS that is wholly-owned by the OP to lease its SHOPs and the TRS has entered into management contracts with unaffiliated third-party operators to operate the facilities on its behalf. As of December 31, 2024, the Company owned 44 seniors housing properties which are leased and operated through its TRS. The TRS is a wholly-owned subsidiary of the OP. A TRS is subject to U.S. federal, state and local income taxes. The Company records net deferred tax assets to the extent the Company believes these assets will more likely than not be realized. In making such determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies (including modifying intercompany leases with the TRS) and recent financial operations. In the event the Company determines that it would not be able to realize the deferred income tax assets in the future in excess of the net recorded amount, the Company establishes a valuation allowance which offsets the previously recognized income tax asset. Deferred income taxes result from temporary differences between the carrying amounts of the TRS’s assets and liabilities used for financial reporting purposes and the amounts used for income tax purposes as well as net operating loss carryforwards. Significant components of the deferred tax assets and liabilities as of December 31, 2024 consisted of deferred rent and net operating loss carryforwards. During the year ended December 31, 2023, the Company modified 26 intercompany leases with the TRS which reduced intercompany rent. Because of the TRS’ historical operating losses and the adverse economic impacts from increases in the rate of inflation in recent years on the results of operations of the Company’s SHOP assets, the Company is not able to conclude that it is more likely than not it will realize the future benefit of its deferred tax assets; thus the Company has provided a 100 % valuation allowance of $ 10.5 million and $ 8.1 million as of December 31, 2024 and 2023, respectively. If and when the Company believes it is more likely than not that it will recover its deferred tax assets, the Company will reverse the valuation allowance as an income tax benefit in its consolidated statements of comprehensive loss. As of December 31, 2024, the Company’s consolidated TRS had net operating loss carryforwards for federal income tax purposes of approximately $ 40.5 million (of which $ 6.8 million were incurred prior to January 1, 2018). Carryforwards from losses incurred prior to January 1, 2018, if unused, these will begin to expire in 2036. For net operating losses incurred subsequent to December 31, 2017, there is no expiration date. As of December 31, 2024, the Company had a deferred tax asset of $ 10.5 million with a full valuation allowance. The following table details the composition of the Company’s tax (expense) benefit for the years ended December 31, 2024, 2023 and 2022, which includes U.S. federal and state income taxes incurred by the Company’s TRS. The Company estimated its income tax (expense) benefit relating to its TRS using a combined federal and state rate of approximately 0.0 % for the years ended December 31, 2024, 2023 and 2022. These income taxes are reflected in income tax (expense) benefit on the accompanying consolidated statements of operations and comprehensive loss. Year Ended December 31, 2024 2023 2022 (In thousands) Current Deferred Current Deferred Current Deferred Federal (expense) benefit $ — $ 1,936 $ — $ 1,023 $ — $ 2,145 State (expense) benefit ( 262 ) 461 ( 303 ) 142 ( 201 ) 604 Deferred tax asset valuation allowance — ( 2,397 ) — ( 1,165 ) — ( 2,749 ) Total income tax benefit (expense) $ ( 262 ) $ — $ ( 303 ) $ — $ ( 201 ) $ — As of December 31, 2024 and 2023, the Company had no material uncertain income tax positions. Generally, tax years prior to 2021 remain open to examination due to net operating losses carry forwards. F-17 Table of Contents NATIONAL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 Per Share Data Net loss per basic share of common stock is calculated by dividing net loss by the weighted-average number of shares (retroactively adjusted for the stock dividends and the Reverse Stock Split) of common stock issued and outstanding during such period. Diluted net loss per share of common stock considers the effect of potentially dilutive shares of common stock outstanding during the period. CARES Act Grants On March 27, 2020, the CARES Act was signed into law and it provides funding to Medicare providers in order to provide financial relief during the COVID-19 pandemic. Funds provided under the program were to be used for the preparation, prevention and medical response to COVID-19, and were designated to reimburse providers for healthcare related expenses and lost revenues attributable to COVID-19. The Company did no t receive any funds through the CARES Act during the years ended December 31, 2024 and 2023. During the year ended December 31, 2022, the Company received $ 4.5 million in funding from CARES Act grants. For accounting purposes, the CARES Act funds are treated as a grant contribution from the government. The funding the Company received was recognized as a reduction of property operating and maintenance expenses in the Company’s consolidated statements of operations to offset the negative impacts of COVID-19. Recent Accounting Pronouncements Adopted In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-07 , Segment Reporting — Improvements to Reportable Segment Disclosures, which requires incremental disclosures related to a public entity’s reportable segments. Required disclosures include, on an annual and interim basis, significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included within each reported measure of segment profit or loss, an amount for other segment items (which is the difference between segment revenue less segment expenses and less segment profit or loss) and a description of its composition, the title and position of the CODM, and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. The standard also permits disclosure of more than one measure of segment profit. The ASU should be adopted retrospectively unless it is impracticable to do so. The Company adopted the annual requirements under ASU 2023-07 on January 1, 2024 and plans to adopt interim requirements under ASU 2023-07. The Company has included financial statement disclosures in accordance with ASU 2023-07 within Note 1 5 — Segment Reporting. Not yet Adopted In December 2023, the FASB issued Accounting Standards Update 2023-09, Improvements to Income Tax Disclosures (“ASU 2023-09”) , which requires public entities on an annual basis to (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than five percent of the amount computed by multiplying pretax income or loss by the applicable statutory income tax rate). ASU 2023-09 is effective for fiscal years beginning after December 15, 2025. The Company is evaluating the impact of the adoption of ASU 2023-09 on its consolidated financial statements. In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”). ASU 2024-03 requires public business entities (PBEs) to provide disaggregated disclosure in tabular format in the notes to financial statements of specific expenses, including but not limited to: (i) employee compensation, (ii) depreciation, and (iii) intangible asset amortization. In January 2025, the FASB issued ASU No. 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) : Clarifying the Effective Date , to clarify that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted. The Company is evaluating the impact these ASUs will have on its disclosures. F-18 Table of Contents NATIONAL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 Note 3 — Real Estate Investments, Net Property Acquisitions The Company invests in healthcare-related facilities, primarily OMFs and SHOPs, which expand and diversify its portfolio and revenue base. The Company owned 193 properties (including one land parcel) as of December 31, 2024. During the year ended December 31, 2024, the Company acquired four single-tenant OMFs for an aggregate contract purchase price of $ 12.6 million. All acquisitions in 2024, 2023 and 2022 were considered asset acquisitions for accounting purposes. The following table presents the allocation of the assets acquired and liabilities assumed during the years ended December 31, 2024, 2023 and 2022: Year Ended December 31, (In thousands) 2024 2023 Real estate investments, at cost: Land $ 1,266 $ 3,373 Buildings, fixtures and improvements 9,302 27,069 Total tangible assets 10,568 30,442 Acquired intangibles: In-place leases and other intangible assets (1) 2,388 5,057 Market lease and other intangible assets (1) 150 33 Market lease liabilities (1) — ( 271 ) Total intangible assets and liabilities 2,538 4,819 Mortgage notes payable assumed, net ( 7,500 ) — Cash paid for real estate investments, including acquisitions $ 5,606 $ 35,261 Number of properties purchased 4 7 __________ (1) Weighted-average remaining amortization periods for in-place leases and above-market leases acquired were both 13.6 years as of December 31, 2024. Weighted-average remaining amortization periods for in-place leases, above-market and below market leases acquired were 8.7 years, 11.3 years and 9.3 years, respectively, as of December 31, 2023. Significant Tenants As of December 31, 2024, 2023 and 2022, the Company did not have any tenants (including for this purpose, all affiliates of such tenants) whose annualized rental income on a straight-line basis represented 10% or greater of total annualized rental income on a straight-line basis for the portfolio. The following table lists the states where the Company had concentrations of properties where annualized rental income on a straight-line basis represented 10% or more of consolidated annualized rental income on a straight-line basis for all properties as of December 31, 2024, 2023 and 2022: December 31, State 2024 2023 2022 Florida 21.2 % 19.9 % 19.2 % Pennsylvania 11.6 % 10.6 % * Georgia 10.4 % * * __________ * Not greater than 10%. F-19 Table of Contents NATIONAL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 Intangible Assets and Liabilities Acquired intangible assets and liabilities consisted of the following as of the periods presented: December 31, 2024 December 31, 2023 (In thousands) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Intangible assets: In-place leases $ 260,534 $ 214,961 $ 45,573 $ 269,363 $ 210,172 $ 59,191 Market lease assets 14,446 12,819 1,627 14,465 12,548 1,917 Other intangible assets 9,467 1,293 8,174 9,467 1,325 8,142 Total acquired intangible assets $ 284,447 $ 229,073 $ 55,374 $ 293,295 $ 224,045 $ 69,250 Intangible liabilities: Market lease liabilities $ 22,789 $ 16,664 $ 6,125 $ 23,520 $ 15,355 $ 8,165 The following table discloses amounts recognized within the consolidated statements of operations and comprehensive loss related to amortization of in-place leases and other intangible assets, amortization and accretion of above- and below-market lease assets and liabilities, net and the amortization of above-and below-market ground leases, for the periods presented: Year Ended December 31, (In thousands) 2024 2023 2022 Amortization of in-place leases and other intangible assets (1) $ 12,258 $ 13,080 $ 15,076 Accretion of above-and below-market leases, net (2) $ ( 1,420 ) $ ( 1,050 ) $ ( 795 ) Amortization of above-and below-market ground leases, net (3) $ 176 $ 159 $ 159 __________ (1) Reflected within depreciation and amortization expense. (2) Reflected within revenue from tenants. (3) Reflected within property operating and maintenance expense. The following table provides the projected amortization and adjustments to revenue from tenants for the next five years: (In thousands) 2025 2026 2027 2028 2029 In-place lease assets $ 9,589 $ 8,100 $ 5,048 $ 3,730 $ 3,238 Other intangible assets 10 10 10 10 10 Total to be added to amortization expense $ 9,599 $ 8,110 $ 5,058 $ 3,740 $ 3,248 Above-market lease assets $ ( 364 ) $ ( 330 ) $ ( 243 ) $ ( 205 ) $ ( 112 ) Below-market lease liabilities 1,134 980 664 600 557 Total to be added to revenue from tenants $ 770 $ 650 $ 421 $ 395 $ 445 Dispositions Year Ended December 31, 2024 During the year ended December 31, 2024, the Company disposed of two SHOPs, 12 OMFs and one land parcel for an aggregate contract sales price of $ 118.1 million, which resulted in an aggregate gain on sale of $ 9.3 million. The Company had previously recorded $ 2.1 million of impairment charges on the one of the two SHOP properties in the year ended December 31, 2023. Subsequent to the Year Ended December 31, 2024 Subsequent to December 31, 2024, the Company disposed of 11 OMFs for an aggregate contract sales price of $ 114.4 million and used a portion of the net proceeds to fully repay the outstanding balance on the Promissory Note (including any unpaid interest at the time of payment). Year Ended December 31, 2023 During the year ended December 31, 2023, the Company disposed of four SHOPs and one OMF for an aggregate contract sales price of $ 13.8 million, which resulted in an aggregate loss on sale of $ 0.3 million. The Company had previously recorded $ 15.1 million of impairment charges on two of the four disposed SHOP properties in the year ended December 31, 2022. F-20 Table of Contents NATIONAL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 Year Ended December 31, 2022 During the year ended December 31, 2022, the Company disposed of four SHOPs for an aggregate contract sales price of $ 12.4 million, which resulted in an aggregate loss on sale of $ 0.1 million. The Company had previously recorded $ 34.0 million of impairment charges on these properties in the year ended December 31, 2021. Assets Held for Sale When assets are identified by management as held for sale, the Company reflects them separately on its balance sheet and stops recognizing depreciation and amortization expense on the identified assets and estimates the sales price, net of costs to sell, of those assets. If the carrying amount of the assets classified as held for sale exceeds the estimated net sales price, the Company records an impairment charge equal to the amount by which the carrying amount of the assets exceeds the Company’s estimate of the net sales price of the assets. For held-for-sale properties, the Company predominately uses the contract sales price as fair market value. There were no assets held for sale as of December 31, 2024 or 2023. Assets Held for Use When circumstances indicate the carrying value of a property classified as held for use may not be recoverable, the Company reviews the property for impairment. For the Company, the most common triggering events are (i) concerns regarding the tenant (i.e., credit or expirations) in the Company’s single-tenant properties or significant vacancy in the Company’s multi-tenant properties and (ii) changes to the Company’s expected holding period as a result of business decisions or non-recourse debt maturities. If a triggering event is identified, the Company considers the projected cash flows due to various performance indicators, and where appropriate, the Company evaluates the impact on its ability to recover the carrying value of the properties based on the expected cash flows on an undiscounted basis over its intended holding period. The Company makes certain assumptions in this approach including, among others, the market and economic conditions, expected cash flow projections, intended holding periods and assessments of terminal values. Where more than one possible scenario exists, the Company uses a probability weighted approach in estimating cash flows. As these factors are difficult to predict and are subject to future events that may alter management’s assumptions, the future cash flows estimated by management in its impairment analysis may not be achieved, and actual losses or impairment may be realized in the future. If the undiscounted cash flows over the expected hold period are less than the carrying value, the Company reflects an impairment charge to write the asset down to its fair value. Property Damage and Insurance Recoveries During the year ended December 31, 2024, one OMF property sustained fire damages estimated at $ 2.9 million, which the Company recovered through its property insurance policy. F-21 Table of Contents NATIONAL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 Impairment Charges The following table presents impairment charges by segment recorded during the years ended December 31, 2024, 2023 and 2022: Year Ended December 31, (In thousands) 2024 2023 2022 OMF Segment: Illinois skilled nursing facilities (1) (6) $ — $ — $ 10,644 Acuity Specialty Hospital Mesa (2) 8,829 — — Sassafras OMF (3) (6 — — 1,844 Sun City OMF (4) (6) 2,409 2,554 — Total OMF impairment charges 11,238 2,554 12,488 SHOP Segment: Various held for use SHOPs (5) (6) 13,643 2,122 15,142 Total SHOP impairment charges 13,643 2,122 15,142 Total impairment charges $ 24,881 $ 4,676 $ 27,630 (1) These seven properties were impaired after the Company received an offer by the tenant to purchase all seven properties, which caused the Company to reassess its expected holding period for these properties. As of December 31, 2024, these properties were disposed. (2) This property was impaired to reduce its carrying value to its contractual sales price of $ 6.0 million as determined by a purchase and sale agreement executed in 2024. The property was subsequently disposed in January 2025. (3) The Company began marketing this property for sale in the fourth quarter of 2022 and this property was disposed in the year ended December 31, 2023. (4) This property has been actively marketed for sale since September 2021. As of December 31, 2024, this property was not disposed. (5) For the year ended December 31, 2024, includes two properties actively marketed for sale and one additional property that was disposed in 2024. Of the two properties, one property was impaired in the year ended December 31, 2023 and one property was impaired in year ended December 31, 2022. (6) The two remaining properties were impaired to reduce their carrying values to their estimated fair values, respectively, as determined by the Assets Held for Use approach described above. F-22 Table of Contents NATIONAL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 Note 4 — Mortgage Notes Payable, Net The following table reflects the Company’s mortgage notes payable as of December 31, 2024 and 2023: Portfolio Encumbered Properties Outstanding Loan Amount as of December 31, Effective Interest Rate (1) as of December 31, Interest Rate 2024 2023 2024 2023 Maturity (In thousands) (In thousands) Fox Ridge Bryant - Bryant, AR 1 6,471 6,647 3.98 % 3.98 % Fixed May 2047 Fox Ridge Chenal - Little Rock, AR 1 14,833 15,242 2.95 % 2.95 % Fixed May 2049 Fox Ridge North Little Rock - North Little Rock, AR 1 9,204 9,458 2.95 % 2.95 % Fixed May 2049 Capital One OMF Loan 40 363,957 378,500 3.58 % 3.71 % Fixed (2) Dec. 2026 Multi-Property CMBS Loan 20 116,037 116,037 4.60 % 4.60 % Fixed May 2028 Shiloh - Illinois — — 12,745 4.34 % 4.34 % Fixed Jan. 2025 BMO CMBS 8 37,472 42,750 2.89 % 2.89 % Fixed Dec. 2031 Barclays OMF Loan 60 234,173 240,000 6.45 % 6.45 % Fixed June 2033 BMO CPC Mortgage 4 7,500 — 6.84 % — % Fixed March 2034 Gross mortgage notes payable 135 789,647 821,379 4.56 % 4.58 % Deferred financing costs, net of accumulated amortization (3) ( 9,304 ) ( 11,111 ) Mortgage premiums and discounts, net ( 1,183 ) ( 1,273 ) Mortgage notes payable, net $ 779,160 $ 808,995 __________ (1) Calculated on a weighted average basis for all mortgages outstanding as of December 31, 2024 and 2023. (2) Variable rate loan, based on daily SOFR, which is fixed as a result of entering into “pay-fixed” interest rate swap agreements. The Company allocated $ 378.5 million of its “pay-fixed” interest rate swaps to this mortgage consistently as of December 31, 2024 and 2023. In late December 2024, the Company proactively executed a minor amendment to the hedged notional to match the expected prospective loan balance of $ 364.0 million. This amendment became effective in January 2025. (3) Deferred financing costs represent commitment fees, legal fees and other costs associated with obtaining financing. These costs are amortized to interest expense over the terms of the respective financing agreements using the effective interest method. Unamortized deferred financing costs are generally expensed when the associated debt is refinanced or repaid before maturity. Costs incurred in seeking financial transactions that do not close are expensed in the period in which it is determined that the financing will not close. As of December 31, 2024, the Company had pledged $ 1.3 billion in real estate investments, at cost, as collateral for its $ 789.6 million of gross mortgage notes payable. This real estate is not available to satisfy other debts and obligations unless first satisfying the mortgage notes payable secured by these properties. The Company makes payments of principal and interest, or interest only, depending upon the specific requirements of each mortgage note, on a monthly basis. Some of the Company’s mortgage note agreements require compliance with certain property-level financial covenants including debt service coverage ratios. As of December 31, 2024, the Company was in compliance with these financial covenants. See Note 5 — Credit Facilities - Future Principal Payments for a schedule of principal payment requirements of the Company’s mortgage notes and credit facilities. Barclays OMF Loan On May 24, 2023, the Company, through certain subsidiaries of the OP, entered into a non-recourse loan agreement (the “Barclays OMF Loan Agreement”), with (i) Barclays Capital Real Estate Inc., (ii) Société Générale Financial Corporation and (iii) KeyBank National Association (each individually, a “Lender,” and collectively, the “Lenders”), in the aggregate amount of $ 240.0 million (the “Barclays OMF Loan”). In connection with the Barclays OMF Loan Agreement, the OP entered into a guaranty agreement and an environmental indemnity agreement for the benefit of the Lenders. The Barclays OMF Loan is secured by, among other things, first priority mortgages on the Company’s interests in 60 OMFs with an aggregate gross asset value of $ 406.3 million. The Barclays OMF Loan has a 10-year term and is interest-only at a fixed rate of 6.453 % per year. Under the Barclays OMF Loan Agreement, the Company is required to make interest-only payments on a monthly basis with the principal balance due on the maturity date of June 6, 2033. The Barclays OMF Loan Agreement requires the OP to comply with certain covenants, including, maintaining combined cash and cash equivalents totaling at least $ 12.5 million at all times. F-23 Table of Contents NATIONAL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 Subject to certain conditions, the Company may prepay the Barclays OMF Loan in whole or in part at any time after one year from closing with a pre-payment premium equal to the Yield Maintenance Program (as defined in the Barclays OMF Loan Agreement) by providing the lenders thereunder with prior written notice of prepayment no less than thirty days before prepayment, subject to a pre-payment premium equal to the Yield Maintenance Premium (as defined in the Barclays OMF Loan Agreement). Following the earlier of May 24, 2026 and the date that is two years after the securitization of the Barclays OMF Loan, the Company may prepay the Barclays OMF Loan through defeasance, Notwithstanding the foregoing, the Barclays OMF Loan may be prepaid at par during the final six months of the term. The Company paid $ 7.8 million in deferred financing costs related to the Barclays OMF Loan, which is amortized into interest expense over the term of the loan. At the closing of the Barclays OMF Loan, the Company applied $ 194.8 million of the Barclays OMF Loan proceeds to repay and terminate the Company’s then-existing credit facility (the “Prior Credit Facility”). The Company also terminated its interest rate swap contracts that formerly hedged interest rate changes under the Prior Credit Facility (see Note 7 — Derivatives and Hedging Activities for additional information). The remaining proceeds of approximately $ 39.0 million (after the payment of Barclays OMF Loan closing costs and reimbursement of deposits) were used for general corporate purposes, subject to the terms of the Barclays OMF Loan Agreement. Additionally, by terminating the Prior Credit Facility, the Company is no longer subject to certain restrictive covenants previously imposed by the Prior Credit Facility (see Note 5 — Credit Facilities for additional information). BMO OMF Loan On November 15, 2021, the Company entered into a $ 42.8 million loan agreement (the “BMO OMF Loan”) with Bank of Montreal (“BMO”). The BMO OMF Loan requires monthly interest-only payments, with the principal balance due on the maturity date. The BMO OMF Loan permits BMO to securitize the entire BMO OMF Loan or any portion thereof. At the closing of the BMO OMF Loan, the net proceeds after accrued interest and closing costs were used to (i) repay approximately $ 37.0 million of indebtedness under the Prior Credit Facility, under which nine of the properties were included as part of the borrowing base prior to the BMO OMF Loan, and (ii) fund approximately $ 2.5 million in deposits required to be made at closing into reserve accounts required under the loan agreement. The remaining $ 2.4 million net proceeds available to the Company were used for general corporate purposes and acquisitions. BMO CPC Mortgage On February 22, 2024, the Company entered into the BMO CPC Mortgage Loan in connection with a four -property acquisition also completed in the year ended December 31, 2024. The mortgage has a principal balance of $ 7.5 million, bears interest at an annual fixed rate of 6.84 % and matures in February 2034 with no principal amounts due until that time. F-24 Table of Contents NATIONAL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 Note 5 — Credit Facilities The Company had the following credit facilities outstanding as of December 31, 2024 and 2023: Outstanding Facility Amount as of December 31, Effective Interest Rate as of December 31, (6) Credit Facility Encumbered Properties (1) 2024 2023 2024 2023 Interest Rate Maturity (In thousands) (In thousands) Fannie Mae Master Credit Facilities: Capital One Facility 11 (2) $ 203,405 $ 206,944 7.19 % 7.86 % Variable (6) Nov. 2026 KeyBank Facility 10 (3) 137,103 139,334 7.24 % 7.91 % Variable (6) Nov. 2026 Total Fannie Mae Master Credit Facilities 21 $ 340,508 $ 346,278 Other Facilities: OMF Warehouse Facility 7 (4) 21,708 14,748 7.55 % 8.36 % Variable (6) Dec. 2026 Total Credit Facilities 28 $ 362,216 $ 361,026 7.23 % (5) 7.90 % (5) _______ (1) Encumbered properties are as of December 31, 2024. (2) Secured by first-priority mortgages on 11 of the Company’s SHOPs as of December 31, 2024 with an aggregate carrying value of $ 354.1 million. (3) Secured by first-priority mortgages on 10 of the Company’s SHOPs as of December 31, 2024 with an aggregate carrying value of $ 264.9 million. (4) Secured by first-priority mortgages on seven of the Company’s OMFs as of December 31, 2024 with an aggregate carrying value of $ 32.6 million. (5) Calculated on a weighted average basis for all credit facilities outstanding as of December 31, 2024 and 2023, respectively. (6) The effective rates above only include the impact of designated hedging instruments. The Company also has eight active non-designated interest rate cap agreements with an aggregate notional amount of $ 369.2 million which limits 30-day SOFR to 3.50 %. The Company did not designate these derivatives as hedges and accordingly, the changes in value and any cash received from these derivatives are presented within gain (loss) on derivative instruments on the consolidated statements of operations and comprehensive loss (see discussion below and Note 7 — Derivatives and Hedging Activities for additional details). Inclusive of the impact of these non-designated derivatives, the economic interest rates on the Capital One Fannie Mae Facility, KeyBank Fannie Mae Facility and OMF Warehouse Facility were 5.89 %, 5.93 % and 6.50 %, respectively, as of December 31, 2024 and 5.89 %, 5.95 % and 6.50 %, respectively, as of December 31, 2023 As of December 31, 2024, the carrying value of the Company’s real estate investments, at cost was $ 2.5 billion, with $ 1.3 billion of this amount pledged as collateral for mortgage notes payable, $ 619.0 million of this amount pledged to secure advances under the Fannie Mae Master Credit Facilities and $ 32.6 million of this amount pledged to secure advances under the OMF Warehouse Facility. All of the real estate assets pledged to secure debt or comprising the borrowing base of the relevant facilities are not available to satisfy other debts and obligations, or to serve as collateral with respect to new indebtedness, unless, as applicable, the existing indebtedness associated with such real estate assets is satisfied or the asset is removed from the borrowing base of the relevant facilities, which would impact availability thereunder. Unencumbered real estate investments, at cost as of December 31, 2024 was $ 533.1 million, although there can be no assurance as to the amount of liquidity the Company would be able to generate from using these unencumbered assets as collateral for mortgage loans, adding them to the borrowing base of the Fannie Mae Master Credit Facilities or OMF Warehouse Facility, or other future financings. Prior Credit Facility The Company’s prior credit facility (the “Prior Credit Facility”) consisted of two components, a revolving credit facility and a term loan, which were interest-only and would have matured on March 13, 2024. The Prior Credit Facility was fully repaid in May 2023 with net proceeds provided by the Barclays OMF Loan (see Note 4 — Mortgage Notes Payable, Net for details) and the Prior Credit Facility was terminated. At termination, the Company wrote off the remaining deferred financing costs associated with the Prior Credit Facility of $ 2.6 million, which is included in interest expense in the consolidated statements of operations and comprehensive loss for the year ended December 31, 2023. F-25 Table of Contents NATIONAL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 Fannie Mae Master Credit Facilities On October 31, 2016, the Company, through wholly-owned subsidiaries of the OP, entered into a master credit facility agreement relating to a secured credit facility with KeyBank (the “KeyBank Facility”) and a master credit facility agreement with Capital One for a secured credit facility with Capital One Multifamily Finance LLC, an affiliate of Capital One (the “Capital One Facility” and, together with the KeyBank Facility, the “Fannie Mae Master Credit Facilities”). Advances made under these agreements were assigned by Capital One and KeyBank to Fannie Mae at closing for inclusion in Fannie Mae’s Multifamily MBS program. As of December 31, 2024, $ 340.5 million was outstanding under the Fannie Mae Master Credit Facilities. The Company may request future advances under the Fannie Mae Master Credit Facilities by adding eligible properties to the collateral pool subject to customary conditions, including satisfaction of minimum debt service coverage and maximum loan-to-value tests. Until June 30, 2023, borrowings under the Fannie Mae Master Credit Facilities bore annual interest at a rate that varied on a monthly basis and was equal to the sum of the current LIBOR for one month U.S. dollar-denominated deposits and a spread ( 2.41 % and 2.46 % for the Capital One Facility and the KeyBank Facility, respectively). Effective July 1, 2023, the Fannie Mae Master Credit Facilities automatically transitioned to SOFR-based borrowings with monthly interest equal to the sum of the current SOFR for one-month denominated deposits and a spread of ( 2.41 % and 2.46 % for the Capital One Facility and the KeyBank Facility, respectively). The Fannie Mae Master Credit Facilities mature on November 1, 2026. In the year ended December 31, 2023, the Company provided cash deposits totaling $ 11.8 million to Fannie Mae because the debt service coverage ratios of the underlying properties of each facility were below the minimum required amounts per the debt agreements. The Company provided an additional deposit of $ 0.3 million during the year December 31, 2024, bringing the total deposits to $ 12.1 million as of December 31, 2024. These deposits are recorded as restricted cash on the Company’s consolidated balance sheet and are pledged as additional collateral for the Fannie Mae Master Credit Facilities. This deposit will be refunded upon the earlier of the Company’s achievement of a debt service coverage ratio above the minimum required amount of 1.40 or the maturity of the Fannie Mae Master Credit Facilities. OMF Warehouse Facility On December 22, 2023, the Company, through wholly-owned subsidiaries of the OP, entered into a loan agreement with Capital One (the “OMF Warehouse Facility”) to provide up to $ 50.0 million of variable-rate financing. As of December 31, 2024, $ 21.7 million was outstanding under the OMF Warehouse Facility. The Company may request future advances under the OMF Warehouse Facility by adding eligible OMFs to the collateral pool subject to customary conditions, including satisfaction of minimum debt service coverage and maximum loan-to-value tests. Borrowings under the OMF Warehouse Facility bear interest at a monthly rate equal to the sum of the current SOFR for one-month denominated deposits and a spread of 3.0 %. Interest payments are due monthly, with no principal payments due until maturity in December 2026. Non-Designated Interest Rate Caps As of December 31, 2024, the Company had eight SOFR-based interest rate cap agreements with an aggregate current effective notional amount of $ 369.2 million which caps SOFR at 3.50 % with terms through January 2027. The Company does not apply hedge accounting to these agreements and changes in value as well as any cash received are presented within (loss) gain on non-designated derivatives in the Company’s consolidated statements of operations and comprehensive loss. See Note 7 — Derivatives and Hedging Activities for additional information regarding the Company’s derivatives. In connection with the Fannie Mae Master Credit Facilities, the Company was required to enter into interest rate cap agreements, which the Company periodically renews upon their expiration. During the year ended December 31, 2024, the Company paid total premiums of $ 1.5 million to renew one interest rate cap with an aggregate notional amount of $ 58.1 million which matured during the year ended December 31, 2024. The Company also paid a premium of $ 0.3 million for a new interest rate cap with a notional amount of $ 7.0 million which matures in January 2027. F-26 Table of Contents NATIONAL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 Future Principal Payments The following table summarizes the scheduled aggregate principal payments for the five years subsequent to December 31, 2024 and thereafter, on all of the Company’s outstanding debt (mortgage notes payable and credit facilities): Future Principal Payments (In thousands) Mortgage Notes Payable Credit Facilities Total 2025 $ 865 $ 5,769 $ 6,634 2026 364,850 356,447 721,297 2027 922 — 922 2028 116,989 — 116,989 2029 982 — 982 Thereafter 305,039 — 305,039 Total $ 789,647 $ 362,216 $ 1,151,863 The Company’s existing principal demands for cash are to fund acquisitions, capital expenditures, the payment of its operating and administrative expenses, debt service obligations (including principal repayment), the repayment of the Promissory Note (which was repaid in full in January 2025) and distributions to holders of its Series A Preferred Stock and Series B Preferred Stock. The Company closely monitors its current and anticipated liquidity position relative to its current and anticipated demands for cash and believes that it has sufficient current liquidity to meet its financial obligations for at least the next twelve months. The Company expects to fund its future short-term operating liquidity requirements, including distributions to holders of Series A Preferred Stock and Series B Preferred Stock, through a combination of current cash on hand, net cash provided by its operating activities, potential future advances under its Fannie Mae Master Credit Facilities and OMF Warehouse Facility, net cash provided by its property dispositions and potential new financings utilizing certain of its currently unencumbered properties. Note 6 — Fair Value of Financial Instruments GAAP establishes a hierarchy of valuation techniques based on the observability of inputs used in measuring asset and liabilities at fair value. GAAP establishes market-based or observable inputs as the preferred source of values, followed by valuation models using management assumptions in the absence of market inputs. The three levels of the hierarchy are described below: Level 1 — Quoted prices in active markets for identical assets and liabilities that the reporting entity has the ability to access at the measurement date. Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset and liability or can be corroborated with observable market data for substantially the entire contractual term of the asset or liability. Level 3 — Unobservable inputs that reflect the entity’s own assumptions that market participants would use in the pricing of the asset or liability and are consequently not based on market activity, but rather through particular valuation techniques. The determination of where an asset or liability falls in the hierarchy requires significant judgment and considers factors specific to the asset or liability. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company evaluates its hierarchy disclosures each quarter and depending on various factors, it is possible that an asset or liability may be classified differently from quarter to quarter. However, the Company expects that changes in classifications between levels will be rare. Financial Instruments Measured at Fair Value on a Recurring Basis Derivative Instruments Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with those derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by the Company and its counterparties. However, as of December 31, 2024 and 2023, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of the Company’s derivatives. As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy. F-27 Table of Contents NATIONAL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 The valuation of derivative instruments is determined using a discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, as well as observable market-based inputs, including interest rate curves and implied volatilities. In addition, credit valuation adjustments are incorporated into the fair values to account for the Company’s potential nonperformance risk and the performance risk of the counterparties. The following table presents information about the Company’s assets and liabilities measured at fair value as of December 31, 2024 and 2023, aggregated by the level in the fair value hierarchy within which those instruments fall. (In thousands) Quoted Prices in Active Markets Level 1 Significant Other Observable Inputs Level 2 Significant Unobservable Inputs Level 3 Total December 31, 2024 Derivative assets, at fair value (non-designated) $ — $ 2,554 $ — $ 2,554 Derivative assets, at fair value (designated) — 16,652 — 16,652 Total $ — $ 19,206 $ — $ 19,206 December 31, 2023 Derivative assets, at fair value (non-designated) $ — $ 6,111 $ — $ 6,111 Derivative assets, at fair value (designated) 22,259 22,259 Total $ — $ 28,370 $ — $ 28,370 A review of the fair value hierarchy classification is conducted on a quarterly basis. Changes in the type of inputs may result in a reclassification for certain assets. There has been no transfer into or out of Level 3 financial instruments during the periods presented. Real Estate Investments Measured at Fair Value on a Non-Recurring Basis Real Estate Investments Held-for-Use The Company has impaired real estate investments held-for-use, which are carried at fair value on a non-recurring basis on the consolidated balance sheet as of December 31, 2024 and 2023. As of December 31, 2024, the Company owned 20 held-for-use properties ( 16 OMFs and four SHOPs) for which the Company had reconsidered their expected holding periods, all of which are being marketed for sale. As a result, the Company evaluated the impact on its ability to recover the carrying values of the respective properties and has previously recorded impairment charges on one property to reduce the carrying value to its estimated fair value. As of December 31, 2023, the Company owned 12 held-for-use properties ( eight OMFs, three SHOPs and one land parcel) for which the Company has reconsidered its expected holding periods, of which four properties ( one OMF and two SHOPs and one land parcel) are being marketed for sale. As a result, the Company evaluated the impact on its ability to recover the carrying values of the properties noted above and recorded impairment charges to write these properties down to their estimated fair values. The Company had also previously written down other held-for-use properties which have subsequently been sold. See Note 3 — Real Estate investments, Net - “Assets Held for Use and Related Impairments” for additional details. Real Estate Investments Held-for-Sale Real estate investments held-for-sale are carried at net realizable value on a non-recurring basis and are generally classified in Level 3 of the fair value hierarchy. The Company did not have any real estate investments classified as held-for-sale as of December 31, 2024 and 2023. Financial Instruments Not Measured at Fair Value The Company is required to disclose the fair value of financial instruments for which it is practicable to estimate that value. The fair values of short-term financial instruments such as cash and cash equivalents, restricted cash, straight-line rent receivable, net, prepaid expenses and other assets, deferred costs, net, accounts payable and accrued expenses, deferred rent and distributions payable approximate their carrying value on the consolidated balance sheets due to their short-term nature. F-28 Table of Contents NATIONAL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 The fair values of the Company’s remaining financial instruments that are not reported at fair value on the consolidated balance sheets are reported below: December 31, 2024 December 31, 2023 (In thousands) Level Carrying Amount Fair Value Carrying Amount Fair Value Gross mortgage notes payable and mortgage premium and discounts, net 3 $ 788,464 $ 747,542 $ 820,106 $ 787,665 Credit facilities 3 $ 362,216 $ 362,974 $ 361,026 $ 361,792 Total Debt 3 $ 1,150,680 $ 1,110,516 $ 1,181,132 $ 1,149,457 The fair value of the mortgage notes payable is estimated using a discounted cash flow analysis, based on the Company’s experience with similar types of borrowing arrangements, excluding the value of derivatives. Note 7 — Derivatives and Hedging Activities Risk Management Objective of Using Derivatives The Company may use derivative financial instruments, including interest rate swaps, caps, collars, options, floors and other interest rate derivative contracts, to hedge all or a portion of the interest rate risk associated with its borrowings. The principal objective of such arrangements is to minimize the risks and/or costs associated with the Company’s operating and financial structure as well as to hedge specific anticipated transactions. Additionally, in using interest rate derivatives, the Company aims to add stability to interest expense and to manage its exposure to interest rate movements. The Company does not intend to utilize derivatives for speculative purposes or purposes other than interest rate risk management. The use of derivative financial instruments carries certain risks, including the risk that the counterparties to these contractual arrangements are not able to perform under the agreements. To mitigate this risk, the Company only enters into derivative financial instruments with counterparties with high credit ratings and with major financial institutions with which the Company, and its affiliates, may also have other financial relationships. The Company does not anticipate that any of its counterparties will fail to meet their obligations. The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the consolidated balance sheets as of December 31, 2024 and 2023: December 31, (In thousands) Balance Sheet Location 2024 2023 Derivatives designated as hedging instruments: Interest rate “pay-fixed” swaps Derivative assets, at fair value $ 16,652 $ 22,259 Derivatives not designated as hedging instruments: Interest rate caps Derivative assets, at fair value $ 2,554 $ 6,111 Cash Flow Hedges of Interest Rate Risk As of both December 31, 2024 and December 31, 2023, the Company had one derivative with a notional value of $ 378.5 million, designated as a cash flow hedge of interest rate risk. In late December 2024, the Company proactively executed a minor amendment to the hedged notional to match the expected prospective loan balance of 364.0 million. This amendment became effective in January 2025. The Company uses its interest rate swap as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for fixed-rate payments by the Company over the life of the agreement without exchange of the underlying notional amount. During the years ended December 31, 2024 and 2023, such derivatives were used to hedge the variable cash flows associated with variable-rate debt. The remaining interest rate “pay-fixed” swap has a base interest rate of 1.61 % and matures December 2026. The changes in the fair value of derivatives designated and that qualify as cash flow hedges are recorded in accumulated other comprehensive income (“AOCI”) and are subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. F-29 Table of Contents NATIONAL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 The table below details the location in the financial statements of the gain (loss) recognized on interest rate derivatives designated as cash flow hedges for the periods presented: Year Ended December 31, (In thousands) 2024 2023 2022 Amount of gain recognized in accumulated other comprehensive income on interest rate derivatives $ 8,716 $ 5,324 $ 50,098 Amount of gain (loss) reclassified from accumulated other comprehensive income into earnings as reductions to (increases in) interest expense $ 15,540 $ 18,770 $ ( 1,153 ) Total amount of interest expense presented in the consolidated statements of operations and comprehensive loss $ 69,447 $ 66,078 $ 51,740 2023 Swap Terminations During the year ended December 31, 2023, the Company terminated two LIBOR-based interest rate swap agreements with an aggregate notional amount of $ 50.0 million and six SOFR-based interest rate swap agreements with an aggregate notional amount of $ 150.0 million. These borrowings were hedging a portion of the Company’s aggregate SOFR and LIBOR-based borrowings. The swaps were terminated in asset positions, and the Company received $ 1.9 million in cash from the LIBOR-based swap terminations, and $ 3.5 million in cash from the SOFR-based swap terminations. Because the Company continues to carry variable-rate borrowings in excess of the notional amounts of the terminated swaps, these amounts were included in AOCI and will be amortized into earnings as a reduction to interest expense from the termination dates of the swaps through March 2024 (the original term of the swap and the Prior Credit Facility). For the year ended December 31, 2023, the Company reclassified $ 4.2 million from AOCI as decreases to interest expense. The remaining $ 1.2 million associated with the 2023 terminated swaps in AOCI as of December 31, 2023 was reclassified into earnings as a decrease to interest expense through March 2024. Amounts reported in AOCI related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. During the next twelve months, from January 1, 2025 through December 31, 2025, the Company estimates that $ 9.0 million will be reclassified from other comprehensive income as a decrease to interest expense relating to the “pay-fixed” swaps designated as derivatives. Non-Designated Derivatives The Company had the following outstanding interest rate derivatives that were not designated as a hedges in qualifying hedging relationships as of as of December 31, 2024 and 2023: December 31, 2024 December 31, 2023 Interest Rate Derivatives Number of Instruments Notional Amount Number of Instruments Notional Amount (1) (In thousands) (In thousands) Interest rate caps (2) 8 $ 369,218 7 $ 364,170 __________ (1) Notional amount represents the currently active interest cap contract and excludes one inactive cap agreements (included in the instrument count) with a notional amount of $ 52.6 million as of December 31, 2023, which took effect upon the expiration of a similar cap included above and effectively extended the term for the same notional amount. (2) All of the Company’s interest rate cap agreements limit 30-day SOFR to 3.50 % with terms through January 2027. Changes in the fair market value of these non-designated derivatives, as well as any cash received, are presented within gain on non-designated derivatives in the Company’s consolidated statements of operations and comprehensive loss. These derivatives are used to manage the Company’s exposure to interest rate movements, but the Company has not elected to apply hedge accounting. As of December 31, 2024, the Company had entered into eight SOFR-based interest rate caps with a notional amount of $ 369.2 million which limit 30-day SOFR borrowings to 3.50 % and have varying expiration dates through January 2027. F-30 Table of Contents NATIONAL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 Beginning in the fourth quarter of 2022, both LIBOR and SOFR exceeded 3.50 % and the Company began receiving payments under these interest rate caps. While the Company does not apply hedge accounting for these interest rate caps, they are economically hedging the Capital One Facility, KeyBank Facility and OMF Warehouse Facility. Changes in the fair value of, and any cash received from, derivatives not designated as hedges under a qualifying hedging relationship are recorded directly to earnings and are presented within (loss) gain on non-designated derivatives in the Company’s consolidated statements of operations and comprehensive loss. For the years ended December 31, 2024, 2023 and 2022, (loss) gain on non-designated derivatives were a gain of $ 1.5 million (including cash received of 6.8 million), a loss of $ 2.0 million (including cash received of 5.6 million) and a gain of $ 3.8 million (including cash received of $ 0.3 million), respectively. The Company paid premiums of $ 1.5 million to renew one interest rate cap with an aggregate notional amount of $ 58.1 million which matured during the year ended December 31, 2024, and the Company also paid $ 0.3 million for a new interest rate cap entered into during the year ended December 31, 2024 for a notional amount of $ 7.0 million. Three interest rate caps with a notional amount of $ 138.5 million mature in July 2025, which represents the next interest rate cap maturity. The Company is required to maintain an aggregate notional value of its interest rate caps equal to the aggregate principal value of its Fannie Mae Credit Facilities, and accordingly expects to renew this maturing cap which is actively hedging exposure to SOFR at a strike price of 3.50 %. All of the Company’s LIBOR-based interest rate caps were transitioned to SOFR-based contracts effective July 1, 2023. Offsetting Derivatives The table below presents a gross presentation, the effects of offsetting, and a net presentation of the Company’s derivatives as of December 31, 2024 and 2023. The net amounts of derivative assets or liabilities can be reconciled to the tabular disclosure of fair value. The tabular disclosure of fair value provides the location that derivative assets and liabilities are presented on the consolidated balance sheets. Gross Amounts Not Offset in the Consolidated Balance Sheet (In thousands) Gross Amounts of Recognized Assets Gross Amounts of Recognized (Liabilities) Gross Amounts Offset in the Consolidated Balance Sheet Net Amounts of Assets presented in the Consolidated Balance Sheet Financial Instruments Cash Collateral Received Net Amount December 31, 2024 $ 19,206 — — $ 19,206 — — $ 19,206 December 31, 2023 $ 28,370 — — $ 28,370 — — $ 28,370 Credit-Risk-Related Contingent Features The Company has agreements in place with each of its derivative counterparties that contain a provision where if the Company either defaults or is capable of being declared in default on any of its indebtedness, then the Company could also be declared in default on its derivative obligations. As of December 31, 2024 there were no derivatives in a net liability position. The Company is not required to post any collateral related to these agreements and was not in breach of any agreement provisions. Note 8 — Stockholders’ Equity Common Stock As of December 31, 2024 and 2023, the Company had 28,296,439 and 27,886,255 shares of common stock outstanding, respectively, including unvested restricted shares, shares issued pursuant to the Company’s distribution reinvestment plan (“DRIP”), net of share repurchases, and shares issued as stock dividends since October 2020 and through January 2024. Since October 2020, the Company has issued an aggregate of approximately 5.2 million shares (as adjusted to reflect the Reverse Stock Split) in respect to the stock dividends. Except for shares issued as dividends, no other additional shares of common stock were issued during the years ended December 31, 2024 or 2023. References made to weighted-average shares and per-share amounts in the consolidated statements of operations and comprehensive income or loss have been retroactively adjusted to reflect the cumulative increase in shares outstanding due to the stock dividends, and are noted as such throughout the accompanying financial statements and notes. In addition, on March 27, 2024, the Company published a new Estimated Per-Share NAV as of December 31, 2023, which was approved by the Board on March 27, 2024. See Note 1 — Organization for additional information. F-31 Table of Contents NATIONAL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 Share Repurchase Program Under the Company’s share repurchase program (the “SRP”), as amended from time to time, qualifying stockholders are able to sell their shares to the Company in limited circumstances. The Board suspended the SRP in August 2020 and no further repurchase requests under the SRP may be made unless and until the SRP is reactivated. No assurances can be made as to when or if the SRP will be reactivated. When a stockholder requests redemption and redemption is approved by the Board, the Company will reclassify such obligation from equity to a liability based on the settlement value of the obligation. Shares repurchased under the SRP have the status of authorized but unissued shares. Distribution Reinvestment Plan Pursuant to the DRIP, stockholders may elect to reinvest distributions paid in cash by the Company into shares of common stock. The Company has the right to amend the DRIP or terminate the DRIP with ten days ’ notice to participants. Shares issued under the DRIP are recorded as equity in the accompanying consolidated balance sheets in the period distributions are declared. During the years ended December 31, 2024, 2023 and 2022, the Company did no t issue any shares of common stock pursuant to the DRIP. Stockholder Rights Plan In May 2020, the Company announced that the Board had approved a stockholder rights plan. In December 2020, the Company issued a dividend of one common share purchase right for each share of its common stock outstanding as authorized by its Board in its discretion. During the year ended December 31, 2023, The Company extended the expiration date of the stockholders rights plan from May 18, 2023 to May 18, 2026. Preferred Stock The Company is authorized to issue up to 50,000,000 shares of preferred stock. In connection with an underwritten offering in December 2019 (see details below), the Company classified and designated 1,610,000 shares of its authorized preferred stock as authorized shares of its Series A Preferred Stock. In September 2020, the Board authorized the classification of 600,000 additional shares of the Company’s preferred stock as Series A Preferred Stock in connection with the preferred stock purchase agreement and registration rights agreement with B. Riley Principal Capital, LLC and in May 2021, the Board authorized the classification of 2,530,000 additional shares of the Company’s preferred stock as Series A Preferred Stock in connection with an offering in May 2021. The Company had 3,977,144 shares of Series A Preferred Stock issued and outstanding, as of December 31, 2024 and 2023. In connection with an underwritten offering in October 2021, the Company classified and designated 3,680,000 shares of its authorized preferred stock on October 4, 2021 as authorized shares of its 7.125 % Series B Cumulative Redeemable Perpetual Preferred Stock, $ 0.01 par value per share (“Series B Preferred Stock”). As a result of an underwritten offering in October 2021, the Company had 3,630,000 shares of Series B Preferred Stock issued and outstanding as of December 31, 2024 and 2023. The Company also had 100,000 Series A Preferred Units outstanding as of December 31, 2024 and December 31, 2023, which were accounted for as a component of non-controlling interests. See Note 13 — Non-controlling Interests for additional information. F-32 Table of Contents NATIONAL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 Series A Preferred Stock Terms Holders of Series A Preferred Stock are entitled to cumulative dividends in the amount of $ 1.84375 per share each year, which is equivalent to the rate of 7.375 % of the $ 25.00 liquidation preference per share per annum. The Series A Preferred Stock has no stated maturity and will remain outstanding indefinitely unless redeemed, converted or otherwise repurchased. The Series A Preferred Stock may be redeemed, in whole or in part, at the Company’s option, at any time and from time to time, at a cash redemption price of $ 25.00 per share, plus an amount equal to all dividends accrued and unpaid (whether or not authorized or declared), if any, to, but not including, the redemption date. In addition, upon the occurrence of a Delisting Event or a Change of Control (each as defined in the articles supplementary governing the terms of the Series A Preferred Stock (the “Series A Articles Supplementary”)), the Company may, subject to certain conditions, at its option, redeem the Series A Preferred Stock, in whole or in part, after the first date on which the Delisting Event occurred or within 120 days after the first date on which the Change of Control occurred, as applicable, by paying the liquidation preference of $ 25.00 per share, plus an amount equal to all dividends accrued and unpaid (whether or not authorized or declared), if any, to, but not including, the redemption date. Upon the occurrence of a Change of Control during a continuing Delisting Event, unless the Company has elected to exercise its redemption right, holders of the Series A Preferred Stock will have certain rights to convert Series A Preferred Stock into shares of Company’s common stock. In addition, upon the occurrence of a Delisting Event, the dividend rate will be increased on the day after the occurrence of the Delisting Event by 2.00 % per annum to the rate of 9.375 % of the $ 25.00 liquidation preference per share per annum (equivalent to $ 2.34375 per share each year) from and after the date of the Delisting Event. Following the cure of such Delisting Event, the dividend rate will revert to the rate of 7.375 % of the $ 25.00 liquidation preference per share per annum. The necessary conditions to convert the Series A Preferred Stock into common stock have not been met as of December 31, 2024. Therefore, Series A Preferred Stock did not impact Company’s earnings per share calculations for the years ended December 31, 2024, 2023 and 2022. The Series A Preferred Stock ranks senior to common stock, with respect to dividend rights and rights upon the Company’s voluntary or involuntary liquidation, dissolution or winding up. Voting rights for holders of Series A Preferred Stock exist primarily with respect to the ability to elect two additional directors to the board of directors if six or more quarterly dividends (whether or not authorized or declared or consecutive) payable on the Series A Preferred Stock are in arrears, and with respect to voting on amendments to the Company’s charter (which includes the Series A Articles Supplementary) that materially and adversely affect the rights of the Series A Preferred Stock or create additional classes or series of shares of the Company’s capital stock that are senior to the Series A Preferred Stock. Other than the limited circumstances described above and in the Series A Articles Supplementary, holders of Series A Preferred Stock do not have any voting rights. Series A Preferred Units In September 2021, the Company partially funded the purchase of an OMF from an unaffiliated third party by causing the OP to issue 100,000 partnership units in the OP designated as “Series A Preferred Units”. These were recorded at fair value on the date of the acquisition at $ 2.6 million and were included as part of the consideration paid for the acquisition. Additionally, these are considered a non-controlling interest for the Company and were recorded as an increase in non-controlling interests on the consolidated balance sheet (see Note 13 — Non-controlling Interests for additional information). F-33 Table of Contents NATIONAL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 Series B Preferred Stock Series B Preferred Stock — Terms Holders of Series B Preferred Stock are entitled to cumulative dividends in the amount of $ 1.78125 per share each year, which is equivalent to the rate of 7.125 % of the $ 25.00 liquidation preference per share per annum. The Series B Preferred Stock has no stated maturity and will remain outstanding indefinitely unless redeemed, converted or otherwise repurchased. On and after October 6, 2026, at any time and from time to time, the Series B Preferred Stock will be redeemable in whole or in part, at the Company’s option, at a cash redemption price of $ 25.00 per share, plus an amount equal to all dividends accrued and unpaid (whether or not authorized or declared), if any, to, but not including, the redemption date. In addition, upon the occurrence of a Delisting Event or a Change of Control (each as defined in the articles supplementary governing the terms of the Series B Preferred Stock (the “Series B Articles Supplementary”)), the Company may, subject to certain conditions, at its option, redeem the Series B Preferred Stock, in whole or in part, after the first date on which the Delisting Event occurred or within 120 days after the first date on which the Change of Control occurred, as applicable, by paying the liquidation preference of $ 25.00 per share, plus an amount equal to all dividends accrued and unpaid (whether or not authorized or declared), if any, to, but not including, the redemption date. Upon the occurrence of a Change of Control during a continuing Delisting Event, unless the Company has elected to exercise its redemption right, holders of the Series B Preferred Stock will have certain rights to convert Series B Preferred Stock into shares of Company’s common stock. In addition, upon the occurrence of a Delisting Event, the dividend rate will be increased on the day after the occurrence of the Delisting Event by 2.00 % per annum to the rate of 9.125 % of the $ 25.00 liquidation preference per share per annum (equivalent to $ 2.28125 per share each year) from and after the date of the Delisting Event. Following the cure of such Delisting Event, the dividend rate will revert to the rate of 7.125 % of the $ 25.00 liquidation preference per share per annum. The necessary conditions to convert the Series B Preferred Stock into common stock have not been met as of December 31, 2024. Therefore, Series B Preferred Stock did not impact Company’s earnings per share calculations for the year ended December 31, 2024 and 2023. The Series B Preferred Stock ranks on parity with the Company’s Series A Preferred Stock, and senior to its common stock, with respect to dividend rights and rights upon the Company’s voluntary or involuntary liquidation, dissolution or winding up. Voting rights for holders of Series B Preferred Stock exist primarily with respect to the ability to elect two additional directors to the board of directors if six or more quarterly dividends (whether or not authorized or declared or consecutive) payable on the Series B Preferred Stock are in arrears, and with respect to voting on amendments to the Company’s charter (which includes the Series B Articles Supplementary) that materially and adversely affect the rights of the Series B Preferred Stock or create additional classes or series of shares of the Company’s capital stock that are senior to the Series B Preferred Stock. Other than the limited circumstances described above and in the Series B Articles Supplementary, holders of Series B Preferred Stock do not have any voting rights. Distributions and Dividends Common Stock From March 1, 2018 until June 30, 2020, the Company paid monthly distributions to stockholders at a rate equivalent to $ 3.40 (as adjusted to reflect the Reverse Stock Split) per annum per share of common stock. On August 13, 2020, the Board changed the Company’s common stock distribution policy to preserve the Company’s liquidity and maintain additional financial flexibility. Under the policy, distributions authorized by the Board on the Company’s shares of common stock were issued on a quarterly basis in arrears in shares of the Company’s common stock valued at the Company’s Estimated Per Share NAV of common stock in effect on the applicable date: F-34 Table of Contents NATIONAL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 Stock Dividend Declaration Date Stock Dividend Issue Date Quarterly Stock Dividend Rate (per share) January 3, 2022 January 15, 2022 0.014655 April 1, 2022 April 18, 2022 0.014167 July 1, 2022 July 15, 2022 0.014167 October 3, 2022 October 17, 2022 0.014167 January 3, 2023 January 18, 2023 0.014167 April 3, 2023 April 17, 2023 0.015179 July 3, 2023 July 17, 2023 0.015179 October 2, 2023 October 16, 2023 0.015179 January 3, 2024 January 16, 2024 0.015179 The Company did not declare a quarterly stock dividend in April 2024, and does not intend to declare any further stock dividends in the future. Note 9 — Related Party Transactions and Arrangements As of December 31, 2024 and 2023, the Special Limited Partner owned 2,718 shares of the Company’s outstanding common stock. As of December 31, 2023, the Advisor held 90 partnership units in the OP designated as “Common OP Units”. In connection with the Internalization, immediately prior to Closing, the Advisor transferred the 90 Common OP Units to the Advisor Parent. As of December 31, 2024, the Advisor Parent held 90 Common OP Units. Fees Incurred in Connection with the Operations of the Company The Second Amended and Restated Advisory Agreement by and among the Company, the OP and the Advisor (as amended, the “Second A&R Advisory Agreement”) took effect on February 17, 2017. On July 25, 2019, the Company entered into Amendment No. 1 to the Advisory Agreement (the “Advisory Agreement Amendment”), which was unanimously approved by the Company’s independent directors. Additional information on the Advisory Agreement Amendment is included later in this Note under “Professional Fees and Other Reimbursements.” Immediately following the Closing of the Internalization, the Company and the Advisor (now a wholly owned subsidiary of the Company following the Internalization) terminated the Advisory Agreement by mutual agreement. Certain expenses have been incurred as a result of the Company’s decision to terminate the Advisory Agreement, which are discussed below in the section “ Internalization — Termination Fees ”. The following describes certain expenses and fees that the Company was obligated to pay under the Advisory Agreement prior to its termination in connection with the Internalization. Acquisition Expense Reimbursements The Advisor was reimbursed for services provided for which it incurred investment-related expenses, or insourced expenses. The amount reimbursed for insourced expenses was not permitted to exceed 0.5 % of the contract purchase price of each acquired property or 0.5 % of the amount advanced for a loan or other investment. Additionally, the Company reimbursed the Advisor for third-party acquisition expenses. Under the Advisory Agreement, total acquisition expenses were not permitted to exceed 4.5 % of the contract purchase price of the Company’s portfolio or 4.5 % of the amount advanced for all loans or other investments. This threshold was not exceeded through September 27, 2024, the date the Advisory Agreement was terminated. Asset Management Fees Under the limited partnership agreement of the OP (as amended from time to time, the “LPA”) and the previous advisory agreement and until March 31, 2015, for its asset management services, the Company issued the Advisor an asset management subordinated participation by causing the OP to issue to the Advisor partnership units of the OP designated as “Class B Units” (“Class B Units”). The Class B Units were intended to be profit interests and vest, and no longer are subject to forfeiture, at such time as: (x) the value of the OP’s assets plus all distributions made equals or exceeds the total amount of capital contributed by investors plus a 6.0 % cumulative, pre-tax, non-compounded annual return thereon (the “Economic Hurdle”); (y) any one of the following occurs: (1) a listing; (2) another liquidity event or (3) the termination of the advisory agreement by an affirmative vote of a majority of the Company’s independent directors without cause; and (z) the Advisor is still providing advisory services to the Company (the “Performance Condition”). F-35 Table of Contents NATIONAL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 Unvested Class B Units would be forfeited immediately if: (a) the advisory agreement is terminated for any reason other than a termination without cause; or (b) the advisory agreement is terminated by an affirmative vote of a majority of the Company’s independent directors without cause before the Economic Hurdle has been met. Subject to approval by the Board, the Class B Units were issued to the Advisor quarterly in arrears pursuant to the terms of the LPA. The number of Class B Units issued in any quarter was equal to: (i) the excess of (A) the product of (y) the cost of assets multiplied by (z) 0.1875 % over (B) any amounts payable as an oversight fee (as described below) for such calendar quarter; divided by (ii) the value of one share of common stock as of the last day of such calendar quarter, which was initially equal to $ 22.50 (the price in the Company’s initial public offering of common stock minus the selling commissions and dealer manager fees). The value of issued Class B Units will be determined and expensed when the Company deems the achievement of the Performance Condition to be probable. As of December 31, 2024, the Company determined that achieving the Performance Condition was not yet considered probable for accounting purposes. The Advisor received cash distributions on each issued Class B Unit equivalent to the cash distribution paid, if any on the Company’s common stock. These cash distributions on Class B Units will be included in general and administrative expenses in the consolidated statements of operations and comprehensive loss if the Performance Condition is considered probable to occur. The Board has previously approved the issuance of 359,250 Class B Units to the Advisor in connection with this arrangement. The Board determined in February 2018 that the Economic Hurdle had been satisfied, however none of the events have occurred, including a listing of the Company’s common stock on a national securities exchange, which would have satisfied the other vesting requirement of the Class B Units. Therefore, no expense has ever been recognized in connection with the Class B Units. On May 12, 2015, the Company, the OP and the Advisor entered into an amendment to the then-current advisory agreement, which, among other things, provided that the Company would cease causing the OP to issue Class B Units to the Advisor with respect to any period ending after March 31, 2015. In connection with the Internalization, immediately prior to Closing, the Advisor transferred 359,250 Class B Units to the Advisor Parent. Effective February 17, 2017, the Advisory Agreement required the Company to pay the Advisor a base management fee, which is payable on the first business day of each month. The fixed portion of the base management fee was equal to $ 1.625 million per month, while the variable portion of the base management fee is equal to one-twelfth of 1.25 % of the cumulative net proceeds of any equity (including convertible equity and certain convertible debt but excluding proceeds from the DRIP) issued by the Company and its subsidiaries subsequent to February 17, 2017 per month. There were no variable management fees earned from the issuance of common stock dividends. Upon termination of the Advisory Agreement, the Company is no longer obligated to pay the base management fee. In addition, the Advisory Agreement required the Company to pay the Advisor a variable management/incentive fee quarterly in arrears equal to (1) the product of fully diluted shares common stock outstanding multiplied by (2) (x) 15.0 % of the applicable prior quarter’s Core Earnings (as defined below) per share in excess of $ 0.375 per share plus (y) 10.0 % of the applicable prior quarter’s Core Earnings per share in excess of $ 0.47 per share. No incentive fee was incurred for the year ended December 31, 2024 or 2023. Upon termination of the Advisory Agreement, the Company is no longer obligated to pay a variable management/incentive fee. In connection with the Internalization, on the Closing Date, the Advisor Parent received an asset management fee of $ 10.9 million, representing the aggregate Base Management Fee (as defined in the Advisory Agreement) that the Company would have been required to pay to the Advisor during the six month notice period required to terminate the Advisory Agreement, which began on June 25, 2024 when the Company delivered notice to the Advisor of its intention to effect the Internalization, inclusive of $ 5.5 million of Base Management Fees that the Company would have been required to pay to the Advisor during the remaining three month notice period following the Closing Date. Property Management Fees Unless the Company contracts with a third party, the Company pays the Property Manager a property management fee on a monthly basis, equal to 1.5 % of gross revenues from the Company’s stand-alone single-tenant net leased properties managed and 2.5 % of gross revenues from all other types of properties managed, plus market-based leasing commissions applicable to the geographic location of the property. The Company also reimburses the Property Manager for property level expenses incurred by the Property Manager. The Property Manager may charge a separate fee for the one-time initial rent-up or leasing-up of newly constructed properties in an amount not to exceed the fee customarily charged in arm’s length transactions by others rendering similar services in the same geographic area for similar properties, and the Property Manager is allowed to receive a higher property management fee in certain cases if approved by the Company’s Board of Directors (including a majority of the independent directors). F-36 Table of Contents NATIONAL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 On February 17, 2017, the Company entered into the Amended and Restated Property Management and Leasing Agreement (the “Property Management Agreement”) with the OP and the Property Manager. The Property Management Agreement automatically renews for successive one-year terms unless any party provides written notice of its intention to terminate the Property Management Agreement. The Company provided the Property Manager with notice of its intent to self-manage in June 2024, and, in connection with the Internalization, the Advisor Parent contributed all its equity interests in the Property Manager to the Company. Following the Closing of the Internalization, the Property Management Agreement remains in place as an intercompany agreement. Professional Fees and Other Reimbursements The Company reimbursed the Advisor’s costs of providing administrative services including personnel costs, except for costs to the extent that the employees perform services for which the Advisor received a separate fee. This reimbursement included reasonable overhead expenses for employees of the Advisor or its affiliates directly involved in the performance of services on behalf of the Company, including the reimbursement of rent expense at certain properties that are both occupied by employees of the Advisor or its affiliates and owned by affiliates of the Advisor. During the years ended December 31, 2024, 2023 and 2022, the Company incurred $ 10.6 million, $ 10.6 million and $ 8.8 million, respectively, of reimbursement expenses from the Advisor for providing administrative services. These reimbursement expenses are included in general and administrative expense on the consolidated statements of operations and comprehensive loss. Bonus Awards Reimbursements for the cash portion of 2023 bonuses paid by the Advisor to its employees, or employees of its affiliates, were expensed and reimbursed on a monthly basis during the year ended December 31, 2023 in accordance with estimates provided by the Advisor. These amounts were awarded in May 2024 and were scheduled to be paid by the Advisor to its employees from September 2024 to March 2025. Following the Internalization, pursuant to the Internalization Agreement, the Advisor Parent remitted the unpaid portion of these amounts to the Company, which subsequently paid out such amounts in October 2024 to the employees who joined the Company from the Advisor as part of the Internalization. For the cash portion of 2024 accrued bonuses for the Advisor’s employees, or employees of its affiliates, the Company previously reimbursed the Advisor for such amounts in accordance with estimates provided by the Advisor. Following the Internalization, pursuant to the Internalization Agreement, the Advisor Parent remitted such amounts to the Company for subsequent payment to the employees who joined the Company from the Advisor as part of the Internalization. Promissory Note In connection with the consideration payable to the Advisor Parent under the Internalization Agreement, the Company issued the Promissory Note in a principal amount of $ 30.3 million to the Advisor Parent on the Closing Date. The Promissory Note was a senior unsecured obligation of the Company and ranked equal in right of payment with all of the Company’s existing and future indebtedness. The Promissory Note bore interest per annum of Term SOFR (as defined in the Promissory Note) plus 1.25 % until January 1, 2025 and Term SOFR plus 3.25 % on and after January 1, 2025, with such interest payable monthly. The Promissory Note’s maturity date was June 28, 2025 and may be prepaid, in whole or in part, prior to the maturity date without any pre-payment penalties. The Promissory Note is included in accounts payable and accrued expenses on the balance sheet as of December 31, 2024. In January 2025, the Company repaid the Promissory Note in full including any unpaid interest at the time of payment. F-37 Table of Contents NATIONAL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 Summary of fees, expenses and related payables The following table details amounts incurred and payable in connection with the Company’s operations-related services described above as of and for the periods presented: Year Ended December 31, Payable (Prepayments) as of 2024 2023 2022 December 31, (In thousands) Incurred Incurred Incurred 2024 2023 Non-recurring fees and reimbursements: Acquisition cost reimbursements $ 20 $ 32 $ 23 $ — $ — Ongoing fees and reimbursements: Asset management fees 16,374 21,831 21,831 — — Professional fees and other reimbursements (1) 10,589 10,595 8,820 — 198 Property management fees (2) 3,584 4,135 4,200 — 97 Termination fees (including the Promissory Note) (3) 106,650 — — 30,267 — Total related party operation fees and reimbursements $ 137,217 $ 36,593 $ 34,874 $ 30,267 $ 295 __________ (1) Included in general and administrative expenses in the consolidated statements of operations. For the year ended December 31, 2024, includes amount related to the purchase of tail directors and officers liability insurance policy covering the former Advisor and the Company in connection with the Internalization. (2) Inclusive of $ 0.8 million and $ 0.4 million of leasing commissions which are included in prepaid expenses and other assets on the consolidated balance sheet as of December 31, 2024 and 2023. (3) For the year ended December 31, 2024, includes the Closing Payments payable to the Advisor pursuant to the terms of the Internalization, including an internalization fee of $ 98.2 million, an asset management fee of $ 5.5 million and a property management fee of $ 2.9 million. See Note 1 — Organization — Internalization for additional information. Also reflects the Promissory Note issued to the Advisor Parent in connection with the Internalization which was paid in full in January 2025. Internalization For details regarding the terms of the Internalization, see Note 1 — Organization — Internalization. Promotes Incurred in Connection with a Listing or the Liquidation of the Company’s Real Estate Assets Promote Incurred in Connection with a Listing If the common stock of the Company is listed on a national securities exchange, the Special Limited Partner will be entitled to receive a promissory note as evidence of its right to receive a subordinated incentive listing distribution from the OP equal to 15.0 % of the amount by which the market value of all issued and outstanding shares of common stock plus distributions exceeds the aggregate capital contributed plus an amount equal to a 6.0 % cumulative, pre-tax non-compounded annual return to investors in the Company’s initial public offering of common stock. No such distribution was incurred during the years ended December 31, 2024, 2023 and 2022. If the Special Limited Partner or any of its affiliates receives the subordinated incentive listing distribution the Special Limited Partner and its affiliates will no longer be entitled to receive the subordinated participation in net sales proceeds distribution described below. Subordinated Participation in Net Sales Proceeds Upon a liquidation or sale of all or substantially all of the Company’s assets, including through a merger or sale of stock, the Special Limited Partner will be entitled to receive a subordinated participation in the net sales proceeds of the sale of real estate assets from the OP equal to 15.0 % of remaining net sale proceeds after return of capital contributions to investors in the Company’s initial public offering of common stock plus payment to investors of a 6.0 % cumulative, pre-tax non-compounded annual return on the capital contributed by investors. No such participation in net sales proceeds became due and payable during the years ended December 31, 2024, 2023 and 2022. Any amount of net sales proceeds paid to the Special Limited Partner or any of its affiliates prior to the Company’s listing will reduce dollar for dollar the amount of the subordinated incentive listing distribution described above. F-38 Table of Contents NATIONAL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 Promote in Connection with a Termination Under the LPA, upon termination or non-renewal of the advisory agreement with the Advisor, with or without cause, the Special Limited Partner was entitled to receive a promissory note as evidence of its right to receive subordinated termination distributions from the OP equal to 15.0 % of the amount by which the sum of the Company’s market value plus distributions exceeds the sum of the aggregate capital contributed plus an amount equal to a 6.0 % cumulative, pre-tax, non-compounded annual return to investors in the Company’s initial public offering of common stock. However, in accordance with the terms of the LPA, in connection with the Internalization and the Company’s termination of the Advisory Agreement, the Special Limited Partner deferred its right to receive a subordinated distribution upon termination until either a subsequent listing of its common shares on a national securities exchange or other liquidity event occurs. Note 10 — Economic Dependency Under various agreements, prior to the Internalization, the Company engaged the Advisor, its affiliates and entities under common control with the Advisor to provide certain services that were essential to the Company, including asset management services, supervision of the management and leasing of properties owned by the Company and asset acquisition and disposition decisions, as well as other administrative responsibilities for the Company including accounting services and investor relations. As a result of these relationships, the Company was dependent upon the Advisor and its affiliates prior to the Internalization. Note 11 — Equity-Based Compensation Restricted Share Plan The Company adopted an employee and director incentive restricted share plan (as amended from time to time, the “RSP”), which provided the Company with the ability to grant awards of restricted shares of common stock (“restricted shares”) to the Company’s directors, officers and employees, employees of the Advisor and its affiliates, employees of entities that provide services to the Company, directors of the Advisor or of entities that provide services to the Company, certain consultants to the Company and the Advisor and its affiliates or to entities that provide services to the Company. The RSP expired in accordance with its terms in February 2023. The total number of shares of common stock that may be subject to awards granted under the RSP may not exceed 5.0 % of the Company’s outstanding shares of common stock on a fully diluted basis at any time and in any event will not exceed 4.2 million shares (as such number may be further adjusted for stock splits, stock dividends, combinations and similar events). Restricted shares vest on a straight-line basis over periods of three to five years and may not, in general, be sold or otherwise transferred until restrictions are removed and the shares have vested. Holders of restricted shares may receive cash distributions prior to the time that the restrictions on the restricted shares have lapsed. Any distributions payable in shares of common stock are subject to the same restrictions as the underlying restricted shares. F-39 Table of Contents NATIONAL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 The following table reflects the amount of restricted shares outstanding as of December 31, 2024 and activity for the period presented: Number of Common Shares Weighted-Average Issue Price Unvested, December 31, 2021 39,857 $ 84.84 Stock dividend 2,078 59.44 Granted — — Vested ( 17,599 ) 94.68 Forfeitures — — Unvested, December 31, 2022 24,336 75.56 Stock Dividend 1,293 57.08 Granted — — Vested ( 12,718 ) 81.58 Forfeitures — — Unvested, December 31, 2023 12,911 67.78 Stock dividend 196 56.00 Granted — — Vested ( 13,107 ) 67.60 Forfeitures — — Unvested, December 31, 2024 — $ — As of December 31, 2024, the Company did not have any remaining unrecognized compensation cost related to unvested restricted share awards granted under the RSP. Compensation expense related to restricted shares was $ 0.6 million, $ 0.9 million and $ 1.2 million during the years ended December 31, 2024, 2023 and 2022, respectively. Other Share-Based Compensation The Company may issue common stock in lieu of cash to pay fees earned by the Company’s directors at the respective director’s election. There are no restrictions on shares issued in lieu of cash compensation since these payments in lieu of cash relate to fees earned for services performed. No such shares were issued during the years ended December 31, 2024, 2023 and 2022. Note 12 — Accumulated Other Comprehensive Income The following table illustrates the changes in accumulated other comprehensive income as of and for the periods presented: (In thousands) Unrealized Gains (Losses) on Designated Derivative Balance, December 31, 2021 $ ( 14,341 ) Other comprehensive income, before reclassifications 50,098 Amount of gain reclassified from accumulated other comprehensive income 1,153 Balance, December 31, 2022 36,910 Other comprehensive income, before reclassifications 5,324 Amount of gain reclassified from accumulated other comprehensive income ( 18,770 ) Balance, December 31, 2023 23,464 Other comprehensive income, before reclassifications 8,716 Amount of gain reclassified from accumulated other comprehensive income ( 15,540 ) Balance, December 31, 2024 $ 16,640 F-40 Table of Contents NATIONAL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 Accumulated other comprehensive income predominately relates to the unrealized gains (losses) on designated derivatives, however, as previously discussed in Note 7 — Derivatives and Hedging Activities , previously designated hedges were terminated and the termination costs are being amortized over the term of the hedged item. Note 13 — Non-Controlling Interests Non-controlling interests on the Company’s consolidated balance sheet is comprised of the following: Balance as of December 31, (In thousands) 2024 2023 Series A Preferred Units held by third parties $ 2,578 $ 2,578 Common OP Units held by third parties 2,212 3,156 Total Non-controlling Interests in the OP 4,790 5,734 Non-controlling interests in property owning subsidiaries 775 695 Total Non-controlling Interests $ 5,565 $ 6,429 Net loss attributable to non-controlling interests on the Company’s consolidated statement of operations is comprised of the following: Year Ended December 31, (in thousands) 2024 2023 2022 Income attributable to Series A Preferred Units held by third parties $ ( 184 ) $ ( 185 ) $ ( 184 ) Loss attributable to Common OP Units held by third parties 837 317 341 Net loss attributable to non-controlling interests in the OP 653 132 157 Income attributable to non-controlling interests in property-owning subsidiaries ( 86 ) ( 50 ) ( 22 ) Net loss attributable to non-controlling interests $ 567 $ 82 $ 135 Non-Controlling Interests in the OP For preferred and common shares issued by the Company, the Company causes the OP to issue to the Company mirror securities with substantially equivalent economic rights in exchange for the contribution of the capital raised by such issuances. The securities held by the Company are eliminated in consolidation. Series A Preferred Units The Company is the sole general partner and holds substantially all of the Series A Preferred Units (except as discussed below). All common and preferred units in the OP held by the Company are eliminated in consolidation. In September 2021, the Company partially funded the purchase of a OMF from an unaffiliated third party by causing the OP to issue 100,000 Series A Preferred Units to the unaffiliated third party, with a face value of $ 25.00 per unit, which were recorded at issuance at a then fair value of $ 2.6 million, or $ 25.78 per unit, to the unaffiliated third party. A holder of Series A Preferred Units has the right to receive cash distributions equivalent to the cash distributions, if any, on the Company’s Series A Preferred Stock, which earn dividends at a rate equal to 7.375 % of its face value. After holding the Series A Preferred Units for a period of one year , a holder of Series A Preferred Units has the right to redeem Series A Preferred Units for, at the option of the OP, the corresponding number of shares of the Company’s Series A Preferred Stock, or the cash equivalent. The remaining rights of the limited partners in the OP are limited, however, and do not include the ability to replace the general partner or to approve the sale, purchase or refinancing of the OP’s assets. During both the years ended December 31, 2024 and 2023, Series A Preferred Unit holders were paid distributions of $ 0.2 million. Common OP Units The Company is the sole general partner and holds substantially all of the Common OP Units. As of December 31, 2023, the Advisor held 90 partnership units in the OP designated as “Common OP Units”. In connection with the Internalization, immediately prior to Closing, the Advisor transferred the 90 Common OP Units to the Advisor Parent. As of December 31, 2024, the Advisor Parent held 90 Common OP Units. F-41 Table of Contents NATIONAL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 In November 2014, the Company partially funded the purchase of an OMF from an unaffiliated third party by causing the OP to issue 405,908 Common OP Units, with a value of $ 10.1 million, or $ 25.00 per unit, to the unaffiliated third party. A holder of Common OP Units has the right to receive cash distributions equivalent to the cash distributions, if any, on the Company’s common stock in an amount retroactively adjusted to reflect the stock dividends, other stock dividends and other similar events. After holding the Common OP Units for a period of one year , a holder of Common OP Units has the right to redeem Common OP Units for, at the option of the OP, the corresponding number of shares of the Company’s common stock, as retroactively adjusted for the stock dividends, other stock dividends and other similar events, or the cash equivalent. The remaining rights of the limited partners in the OP are limited, however, and do not include the ability to replace the general partner or to approve the sale, purchase or refinancing of the OP’s assets. During the years ended December 31, 2024 and 2023, Common OP Unit non-controlling interest holders were no t paid any cash distributions. Stock dividends do not cause the OP to issue additional Common OP Units, rather, the redemption ratio to common stock is adjusted. The 405,998 Common OP Units outstanding as of December 31, 2024 would be redeemable for 124,161 shares of common stock, giving effect to adjustments for the impact of the stock dividends through January 2024 and the Reverse Stock Split. Non-Controlling Interests in Property Owning Subsidiaries The Company also has investment arrangements with other unaffiliated third parties whereby such investors receive an ownership interest in certain of the Company’s property-owning subsidiaries and are entitled to receive a proportionate share of the net operating cash flow derived from the subsidiaries’ property. Upon disposition of a property subject to non-controlling interest, the investor will receive a proportionate share of the net proceeds from the sale of the property. The investor has no recourse to any other assets of the Company. Due to the nature of the Company’s involvement with these arrangements and the significance of its investment in relation to the investment of the third party, the Company has determined that it controls each entity in these arrangements and therefore the entities related to these arrangements are consolidated within the Company’s financial statements. A non-controlling interest is recorded for the investor’s ownership interest in the properties. The following table summarizes the activity related to investment arrangements with the unaffiliated third parties: Third Party Net Investment Amount Non-Controlling Ownership Percentage Net Real Estate Assets Subject to Investment Arrangement Distributions Property Name As of December 31, As of December 31, As of December 31, Year Ended December 31, (Dollar amounts in thousands) Investment Date 2024 2024 2024 2023 2024 2023 2022 Plaza Del Rio Medical Office Campus Portfolio (1) May 2015 $ 775 7.1 % $ 12,763 $ 12,687 $ — $ — $ — __________ (1) Of the six total properties in the Plaza Del Rio Medical Office Campus Portfolio, three properties were encumbered under the Capital One OMF Loan, two properties were pledged to the OMF Warehouse Facility and one property was encumbered under the Multi-Property CMBS Loan. See Note 4 — Mortgage Notes Payable and Note 5 — Credit Facilities for additional information. Note 14 — Net Loss Per Share The following is a summary of the basic and diluted net loss per share computation for the years ended December 31, 2024, 2023 and 2022 and has been retroactively adjusted to reflect the stock dividends and the Reverse Stock Split (see Note 1 — Organization and Note 8 — Stockholder’s Equity for additional information): Year Ended December 31, 2024 2023 2022 Net loss attributable to stockholders (in thousands) $ ( 203,495 ) $ ( 86,097 ) $ ( 93,285 ) Basic and diluted weighted-average shares outstanding (1) 28,286,391 28,280,430 28,260,835 Basic and diluted net loss per share $ ( 7.19 ) $ ( 3.04 ) $ ( 3.30 ) __________ (1) Weighted average number of shares of common stock outstanding for the periods presented. There were 28,296,439 , 27,886,255 and 26,270,133 shares of common stock outstanding as of December 31, 2024, 2023 and 2022, respectively. F-42 Table of Contents NATIONAL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 Diluted net loss per share assumes the conversion of all common stock equivalents into an equivalent number of shares of common stock, unless the effect is antidilutive. The Company considers unvested restricted shares, Common OP Units and Class B Units to be common share equivalents. Series A Preferred Units are non-participating. The Company had the following common stock equivalents on a weighted-average basis that were excluded from the calculation of diluted net loss per share attributable to stockholders as their effect would have been antidilutive. December 31, 2024 2023 2022 Unvested restricted shares (1) — 20,827 37,538 Common OP Units (2) 124,161 124,161 124,161 Class B Units (3) 109,865 109,865 109,865 Total weighted average antidilutive common share equivalents 234,026 254,853 271,564 ________ (1) Weighted average number of antidilutive unvested restricted shares outstanding for the periods presented. There were zero , 12,911 and 24,336 unvested restricted shares outstanding as of December 31, 2024, 2023 and 2022, respectively. (2) Weighted average number of antidilutive Common OP Units presented as shares outstanding for the periods presented, at the current conversion rate as retroactively adjusted for the effects of the stock dividends. There were 405,998 Common OP Units outstanding as of December 31, 2024, 2023 and 2022. (3) Weighted average number of antidilutive Class B Units presented as shares outstanding for the periods presented, at the current conversion rate as retroactively adjusted for the effects of the stock dividends. There were 359,250 Class B Units outstanding as of December 31, 2024, 2023 and 2022. Note 15 — Segment Reporting The Company has three operating segments: (i) outpatient medical facilities, (ii) senior housing operating properties and (iii) triple net leased healthcare facilities. These operating segments are aggregated into two reportable business segments: OMFs and SHOPs. The disclosures below for the years ended December 31, 2024, 2023 and 2022 are presented for the Company’s two reportable business segments for management and internal financial reporting purposes. The Company’s CODM is provided financial data on a periodic basis which includes net operating income (as defined below) for each of the reportable business segments. This serves as the profit or loss measure used by the CODM for performance assessment and resource allocation. The Company’s CODM is its Chief Executive Officer. The Company, through its CODM, evaluates performance and makes resource allocations based on its two business segments. The OMF segment primarily consists of facilities leased to healthcare-related tenants under long-term leases, which may require such tenants to pay a pro rata share of property-related expenses as well as seniors housing properties, hospitals, inpatient rehabilitation facilities and skilled nursing facilities under long-term leases, under which tenants are generally responsible to directly pay property-related expenses. The SHOP segment consists of direct investments in seniors housing properties, primarily providing assisted living, independent living and memory care services, which are operated through engaging independent third-party operators. Net Operating Income The Company evaluates the performance of the combined properties in each segment using net operating income (NOI) which is defined as total revenues from tenants, less property operating costs. As such, this excludes all other items of expense and income included in the consolidated financial statements in calculating consolidated income (loss) before income taxes. The Company uses NOI to assess and compare property level performance and to make decisions concerning the operation of the properties. The Company believes that NOI is useful as a performance measure because, when compared across periods, NOI reflects the impact on operations from trends in occupancy rates, rental rates, operating expenses and acquisition activity on an unleveraged basis, providing perspective not immediately apparent from consolidated income (loss) before income taxes. NOI excludes certain components from consolidated income (loss) before income taxes in order to provide results that are more closely related to a property’s results of operations. For example, interest expense is not necessarily linked to the operating performance of a real estate asset and is often incurred at the corporate level. In addition, depreciation and amortization, because of historical cost accounting and useful life estimates, may distort operating performance at the property level. NOI presented by the Company may not be comparable to NOI reported by other REITs that define NOI differently. F-43 Table of Contents NATIONAL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 The following table presents the operating financial information for the Company’s two business segments for the years ended December 31, 2024, 2023 and 2022: Year Ended December 31, (In thousands) 2024 2023 2022 OMFs (1) : Revenue from tenants $ 137,317 $ 135,449 $ 131,444 Less: Property operating and maintenance 39,201 37,954 35,945 NOI $ 98,116 $ 97,495 $ 95,499 SHOPs: Revenue from tenants $ 216,477 $ 210,476 $ 204,402 Less: Property Operating and maintenance: Compensation related expenses (2) 110,389 109,281 109,198 Other property operating and maintenance (3) 71,558 70,557 68,301 NOI $ 34,530 $ 30,638 $ 26,903 (1) The CODM uses NOI to evaluate performance of the OMF segment as a large portion of the property-level operating expenses is recovered from tenants. (2) Includes costs incurred for salaries, benefits and other labor related costs. (3) Includes costs incurred for supplies, management fees and overhead. F-44 Table of Contents NATIONAL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 Reconciliation to Consolidated Financial Information A reconciliation of the total reportable segments’ revenue from tenants to consolidated revenue from tenants and the total reportable segments’ NOI to consolidated income (loss) before income taxes and consolidated net loss attributable to common stockholders is presented below: Year Ended December 31, (In thousands) 2024 2023 2022 Revenue from tenants OMFs $ 137,317 $ 135,449 $ 131,444 SHOPs 216,477 210,476 204,402 Total consolidated revenue from tenants $ 353,794 $ 345,925 $ 335,846 Loss before income tax and net loss attributable to common stockholders: Net Operating Income: OMFs $ 98,116 $ 97,495 $ 95,499 SHOPs 34,530 30,638 26,903 Total NOI 132,646 128,133 122,402 Impairment charges ( 24,881 ) ( 4,676 ) ( 27,630 ) Operating fees to related parties ( 19,203 ) ( 25,527 ) ( 25,353 ) Termination fees to related parties ( 106,650 ) — — Acquisition and transaction related ( 7,949 ) ( 545 ) ( 1,484 ) General and administrative ( 22,744 ) ( 18,928 ) ( 17,287 ) Depreciation and amortization ( 84,067 ) ( 82,873 ) ( 82,064 ) Gain (loss) on sale of real estate investments 9,307 ( 322 ) ( 125 ) Interest expense ( 69,447 ) ( 66,078 ) ( 51,740 ) Interest and other income 1,051 734 27 Gain (loss) on non-designated derivatives 1,544 ( 1,995 ) 3,834 Gain on extinguishment of debt 392 — — Loss before income taxes ( 190,001 ) ( 72,077 ) ( 79,420 ) Income tax expense ( 262 ) ( 303 ) ( 201 ) Net loss ( 190,263 ) ( 72,380 ) ( 79,621 ) Net loss attributable to non-controlling interests 567 82 135 Allocation for preferred stock ( 13,799 ) ( 13,799 ) ( 13,799 ) Net loss attributable to common stockholders $ ( 203,495 ) $ ( 86,097 ) $ ( 93,285 ) F-45 Table of Contents NATIONAL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 The following table reconciles real estate investments, net by segment to consolidated total assets as of the periods presented: December 31, (In thousands) 2024 2023 ASSETS Investments in real estate, net: OMFs $ 1,004,741 $ 1,114,963 SHOPs 756,358 824,694 Total investments in real estate, net 1,761,099 1,939,657 Cash and cash equivalents 21,652 46,409 Restricted cash 52,443 44,907 Derivative assets, at fair value 19,206 28,370 Straight-line rent receivable, net 22,841 26,325 Operating lease right-of-use asset 7,480 7,713 Prepaid expenses and other assets 40,033 35,781 Deferred costs, net 21,269 15,997 Total assets $ 1,946,023 $ 2,145,159 The following table reconciles capital expenditures by reportable business segments, excluding corporate non-real estate expenditures, for the periods presented: Year Ended December 31, (In thousands) 2024 2023 2022 OMFs $ 8,967 $ 10,467 $ 10,542 SHOPs 12,941 14,832 17,451 Total capital expenditures $ 21,908 $ 25,299 $ 27,993 Note 16 — Commitments and Contingencies As of December 31, 2024, the Company had seven operating and six direct financing lease agreements. The seven operating leases have durations, including assumed renewals, ranging from 17.9 years to 82.7 years, excluding an adjacent parking lot lease with a term of 1.7 years. The Company did not enter into any additional ground leases during the year ended December 31, 2024. As of December 31, 2024, the Company had ROU assets and liabilities of $ 7.5 million and $ 8.1 million, respectively, which are included in operating lease right-of-use assets and operating lease liabilities, respectively, on the Company’s consolidated balance sheets. In determining operating ROU assets and lease liabilities for the Company’s existing operating leases upon the adoption of the lease guidance issued in 2019, as well as for new operating leases in the current period, the Company was required to estimate an appropriate incremental borrowing rate on a fully-collateralized basis for the terms of the leases. Because the terms of the Company’s ground leases are significantly longer than the terms of borrowings available to the Company on a fully-collateralized basis, the Company’s estimate of this rate required significant judgment. The Company’s ground operating leases have a weighted-average remaining lease term, including assumed renewals, of 32.3 years and a weighted-average discount rate of 7.36 % as of December 31, 2024. For each of the years ended December 31, 2024, 2023 and 2022, the Company paid cash of $ 0.7 million, $ 0.7 million and $ 0.7 million for amounts included in the measurement of lease liabilities and recorded expense of $ 0.7 million, $ 0.8 million and $ 0.9 million, on a straight-line basis in accordance with the current accounting guidance. The ground operating lease expense is recorded in property operating expenses in the Company’s consolidated statements of operations and comprehensive loss. F-46 Table of Contents NATIONAL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 Future Base Rent Payments (In thousands) Operating Leases Direct Financing Leases (1) 2025 $ 653 $ 93 2026 649 95 2027 617 97 2028 618 100 2029 620 102 Thereafter 20,705 7,013 Total minimum lease payments 23,862 7,500 Less: amounts representing interest ( 15,753 ) ( 2,671 ) Total present value of minimum lease payments $ 8,109 $ 4,829 __________ (1) The Direct Finance Lease liability is included in Accounts Payable and accrued expenses on the balance sheet as of December 31, 2024. The Direct Financing lease asset is included as part of building and improvements as the land component was not required to be bifurcated under ASU 840. Litigation and Regulatory Matters In the ordinary course of business, the Company may become subject to litigation, claims and regulatory matters. There are no material legal or regulatory proceedings pending or known to be contemplated against the Company or its properties. Environmental Matters In connection with the ownership and operation of real estate, the Company may potentially be liable for costs and damages related to environmental matters. As of December 31, 2024, the Company had not been notified by any governmental authority of any non-compliance, liability or other claim, and is not aware of any other environmental condition that it believes will have a material adverse effect on the results of operations. Note 17 — Subsequent Events The Company has evaluated subsequent events through the filing of this Annual Report on Form 10-K and determined that there have not been any events that have occurred that would require adjustments to disclosures in the consolidated financial statements except the following disclosures: In January 2025, the Company disposed of 11 OMFs for an aggregate contract sales price of $ 114.4 million and used a portion of the net proceeds to fully repay the outstanding balance on the Promissory Note (including any unpaid interest at the time of payment) and $ 70.7 million of mortgages. F-47 Table of Contents National Healthcare Properties, Inc. and Subsidiaries Real Estate and Accumulated Depreciation Schedule III December 31, 2024 (In thousands) Initial Costs Subsequent to Acquisition Property State Acquisition Date Encumbrances Land Building and Improvements Land Building and Improvements (8) Gross Amount (1) (2) Accumulated Depreciation (3) (4) Adena Health Center - Jackson, OH (7) OH Jun-13 $ — $ 242 $ 4,494 $ — $ ( 25 ) $ 4,711 $ 1,333 Ouachita Community Hospital - West Monroe, LA LA Jul-13 — 633 5,304 — — 5,937 1,608 CareMeridian - Littleton, CO CO Aug-13 — 976 8,900 — 111 9,987 3,511 Oak Lawn Medical Center - Oak Lawn, IL IL Aug-13 5,610 835 7,217 — 743 8,795 2,203 Surgery Center of Temple - Temple, TX TX Aug-13 3,989 225 5,208 — 432 5,865 1,766 Greenville Health System - Greenville, SC SC Oct-13 3,045 720 3,045 — 713 4,478 1,021 Stockbridge Family Medical - Stockbridge, GA GA Feb-14 1,823 823 1,799 — 236 2,858 713 Arrowhead Medical Plaza II - Glendale, AZ AZ Feb-14 7,769 — 9,758 — 2,421 12,179 4,425 Village Center Parkway - Stockbridge, GA GA Feb-14 2,412 1,135 2,299 — 347 3,781 999 Creekside OMF - Douglasville, GA GA Apr-14 7,619 2,709 5,320 — 1,620 9,649 2,414 Bowie Gateway Medical Center - Bowie, MD MD May-14 9,262 983 10,321 — 426 11,730 3,118 Campus at Crooks & Auburn Building D - Rochester Mills, MI MI May-14 3,924 640 4,166 — 164 4,970 1,407 Berwyn Medical Center - Berwyn, IL IL May-14 — 1,305 7,559 — 239 9,103 2,136 Countryside Medical Arts - Safety Harbor, FL FL May-14 7,233 915 7,663 — 582 9,160 2,427 St. Andrews Medical Park - Venice, FL FL May-14 10,534 1,668 10,005 — 1,667 13,340 3,959 Campus at Crooks & Auburn Building C - Rochester Mills, MI MI Jun-14 3,711 609 3,893 — 198 4,700 1,349 Laguna Professional Center - Elk Grove, CA CA Jul-14 10,670 1,811 14,598 — 318 16,727 4,522 UC Davis OMF - Elk Grove, CA CA Jul-14 6,868 1,138 7,242 — 318 8,698 2,411 Estate at Hyde Park - Tampa, FL (6) FL Jul-14 — 1,777 20,308 — 1,472 23,557 6,438 Addington Place of Clarkston - Clarkston, MI (6) MI Aug-14 — 655 19,967 — 2,225 22,847 6,404 Sunnybrook of Burlington - Burlington, IA (5) IA Aug-14 — 518 16,739 — 592 17,849 5,488 Sunnybrook of Carroll - Carroll, IA (5) IA Aug-14 — 473 11,263 — 152 11,888 3,272 Prairie Hills at Cedar Rapids - Cedar Rapids, IA (6) IA Aug-14 — 195 8,595 — 375 9,165 2,586 Prairie Hills at Clinton - Clinton, IA (5) IA Aug-14 — 890 18,882 — 303 20,075 5,842 Prairie Hills at Des Moines - Des Moines, IA (5) IA Aug-14 — 647 13,745 — 415 14,807 4,377 Sunnybrook of Fairfield - Fairfield, IA IA Aug-14 — 340 14,115 — 447 14,902 4,402 Prairie Hills at Independence - Independence, IA IA Aug-14 — 473 10,600 — 222 11,295 3,205 Sunnybrook of Mt. Pleasant - Mt. Pleasant, IA IA Aug-14 — 205 10,935 — 442 11,582 3,216 Sunnybrook of Muscatine - Muscatine, IA (5) IA Aug-14 — 302 13,840 — 330 14,472 4,128 Prairie Hills at Tipton - Tipton, IA IA Aug-14 — 306 10,409 — 234 10,949 2,947 Liberty Court - Dixon, IL IL Aug-14 — 119 1,998 — 76 2,193 673 Addington Place of Lakeside Vista - Dixon, IL (5) MI Aug-14 — 378 12,196 — 2,810 15,384 4,183 The Atrium - Rockford, IL IL Aug-14 — 164 1,746 — 117 2,027 507 F-48 Table of Contents National Healthcare Properties, Inc. and Subsidiaries Real Estate and Accumulated Depreciation Schedule III December 31, 2024 (In thousands) Initial Costs Subsequent to Acquisition Property State Acquisition Date Encumbrances Land Building and Improvements Land Building and Improvements (8) Gross Amount (1) (2) Accumulated Depreciation (3) (4) Arrowhead Medical Plaza I - Glendale, AZ AZ Sep-14 5,268 — 6,447 — 1,811 8,258 2,701 Sunnybrook of Burlington - Land - Burlington, IA IA Sep-14 — 620 — — — 620 — Community Health OMF - Harrisburg, PA PA Sep-14 4,875 — 6,170 — 4 6,174 1,635 Brady OMF - Harrisburg, PA PA Sep-14 17,758 — 22,485 — 4 22,489 5,815 Landis Memorial - Harrisburg, PA PA Sep-14 — — 32,484 — 4 32,488 8,426 FOC II - Mechanicsburg, PA PA Sep-14 13,144 — 16,473 — 173 16,646 4,958 FOC Clinical - Mechanicsburg, PA PA Sep-14 15,507 — 19,634 — 4 19,638 5,736 FOC I - Mechanicsburg, PA PA Sep-14 7,302 — 8,923 — 324 9,247 2,940 Addington Place of Brunswick - Brunswick, GA GA Sep-14 — 1,509 14,402 — 735 16,646 4,597 Addington Place of Dublin - Dublin, GA GA Sep-14 — 403 9,281 — 313 9,997 3,022 Addington Place of Johns Creek - Johns Creek, GA (6) GA Sep-14 — 997 11,943 — 982 13,922 3,930 Addington Place of Jupiter - Jupiter, FL (5) FL Sep-14 — 3,741 49,534 — 1,673 54,948 14,786 Addington Place of Lee's Summit - Lee's Summit, MO (6) MO Sep-14 — 2,734 25,008 — 662 28,404 7,554 Addington Place of Roswell - Roswell, GA GA Sep-14 — 1,000 8,611 ( 783 ) ( 7,092 ) 1,736 — Addington Place of College Harbour - St Petersburg, FL FL Sep-14 — 3,791 8,684 — 3,756 16,231 4,234 Addington Place of Stuart - Stuart, FL (5) FL Sep-14 — 5,018 60,575 — 1,969 67,562 18,312 Addington Place of East Lake - Tarpon Springs, FL (6) FL Sep-14 — 2,360 13,728 — 4,108 20,196 5,889 Addington Place of Titusville - Titusville, FL (5) FL Sep-14 — 1,379 13,976 — 913 16,268 4,948 Gateway OMF - Clarksville, TN TN Oct-14 14,070 — 16,367 — 1,452 17,819 5,241 Dyer Building - Dyer, IN IN Oct-14 6,615 601 8,992 — 195 9,788 2,482 757 Building - Munster, IN IN Oct-14 5,885 645 7,885 — 123 8,653 2,108 761 Building - Munster, IN IN Oct-14 6,553 1,436 8,616 — 221 10,273 2,494 759 Building - Munster, IN IN Oct-14 7,929 1,101 8,899 — 42 10,042 2,445 Meadowbrook Senior Living - Agoura Hills, CA (6) CA Nov-14 — 8,821 48,682 — 3,425 60,928 14,682 Mount Vernon Medical Office Building - Mount Vernon, WA WA Nov-14 14,652 — 18,519 — 37 18,556 5,065 Wellington at Hershey's Mill - West Chester, PA PA Dec-14 — 8,531 80,734 — 8,788 98,053 24,728 Eye Specialty Group Medical Building - Memphis, TN TN Dec-14 6,315 775 7,223 — — 7,998 1,911 Addington Place of Alpharetta - Alpharetta, GA GA Dec-14 — 1,604 26,069 — 455 28,128 7,643 Addington Place of Prairie Village - Prairie Village, KS (6) KS Dec-14 — 1,782 21,869 — 658 24,309 6,712 Bloom OMF - Harrisburg, PA PA Dec-14 12,985 — 15,928 — 517 16,445 4,471 Medical Sciences Pavilion - Harrisburg, PA PA Dec-14 17,616 — 22,309 — — 22,309 5,698 Pinnacle Center - Southaven, MS MS Dec-14 8,045 1,378 6,547 — 2,264 10,189 2,589 F-49 Table of Contents National Healthcare Properties, Inc. and Subsidiaries Real Estate and Accumulated Depreciation Schedule III December 31, 2024 (In thousands) Initial Costs Subsequent to Acquisition Property State Acquisition Date Encumbrances Land Building and Improvements Land Building and Improvements (8) Gross Amount (1) (2) Accumulated Depreciation (3) (4) Paradise Valley Medical Plaza - Phoenix, AZ AZ Dec-14 21,464 — 25,194 — 1,988 27,182 7,710 Victory Medical Center at Craig Ranch - McKinney, TX TX Dec-14 — 1,596 40,475 — 774 42,845 10,781 Acuity Specialty Hospital - Mesa, AZ AZ Jan-15 — 1,977 16,203 ( 1,226 ) ( 11,551 ) 5,403 46 Acuity Specialty Hospital - Sun City, AZ AZ Jan-15 — 2,329 15,795 ( 1,758 ) ( 12,866 ) 3,500 54 Addington Place of Shoal Creek - Kansas City, MO (6) MO Feb-15 — 3,723 22,259 — 911 26,893 6,679 Aurora Healthcare Center - Green Bay, WI WI Mar-15 1,910 1,130 1,678 — — 2,808 528 Aurora Healthcare Center - Greenville, WI WI Mar-15 828 259 958 — — 1,217 319 Aurora Healthcare Center - Kiel, WI WI Mar-15 1,965 676 2,214 — — 2,890 622 Aurora Healthcare Center - Plymouth, WI WI Mar-15 17,296 2,891 24,224 — — 27,115 6,831 Aurora Healthcare Center - Waterford, WI WI Mar-15 4,789 590 6,452 — — 7,042 1,755 Aurora Healthcare Center - Wautoma, WI WI Mar-15 4,295 1,955 4,361 — — 6,316 1,236 Arbor View Assisted Living and Memory Care - Burlington, WI WI Mar-15 — 367 7,815 — 174 8,356 2,545 Advanced Orthopaedic Medical Center - Richmond, VA VA Apr-15 17,216 1,523 19,229 — 1,051 21,803 5,138 Palm Valley Medical Plaza - Goodyear, AZ AZ Apr-15 5,512 1,890 4,940 — 1,275 8,105 1,894 Physicians Plaza of Roane County - Harriman, TN TN Apr-15 6,397 1,746 7,842 — 440 10,028 2,281 Adventist Health Lacey Medical Plaza - Hanford, CA CA Apr-15 11,451 328 13,302 — 872 14,502 3,404 Medical Center I - Peoria, AZ AZ May-15 3,013 807 1,115 — 1,894 3,816 1,466 Medical Center II - Peoria, AZ (7) AZ May-15 — 945 1,330 — 5,048 7,323 2,387 Commercial Center - Peoria, AZ AZ May-15 2,555 959 1,110 — 1,167 3,236 806 Medical Center III - Peoria, AZ AZ May-15 2,714 673 1,651 — 1,931 4,255 1,355 Morrow Medical Center - Morrow, GA GA Jun-15 4,775 1,155 5,674 — 656 7,485 1,750 Belmar Medical Building -Lakewood, CO CO Jun-15 3,738 819 4,287 — 754 5,860 1,516 Addington Place - Northville, MI (6) MI Jun-15 — 440 14,975 — 1,327 16,742 4,444 Medical Center V - Peoria, AZ AZ Jul-15 3,768 1,089 3,200 — 1,252 5,541 1,394 Legacy Medical Village - Plano, TX TX Jul-15 29,377 3,755 31,097 — 2,352 37,204 8,742 Scripps Cedar Medical Center - Vista, CA CA Aug-15 14,151 1,213 14,596 — 2,112 17,921 4,132 Ramsey Woods Memory Care - Cudahy, WI WI Oct-15 — 930 4,990 — 182 6,102 1,446 East Coast Square West - Cedar Point, NC NC Oct-15 4,054 1,535 4,803 — 18 6,356 1,224 East Coast Square North - Morehead City, NC NC Oct-15 3,906 899 4,761 — 464 6,124 1,266 Eastside Cancer Institute - Greenville, SC SC Oct-15 6,065 1,498 6,637 — 784 8,919 1,947 Sky Lakes Klamath Medical Clinic - Klamath Falls, OR OR Oct-15 — 433 2,623 — — 3,056 650 Courtyard Fountains - Gresham, OR OR Dec-15 — 2,476 50,601 — 3,034 56,111 13,860 Presence Healing Arts Pavilion - New Lenox, IL IL Dec-15 4,532 — 6,768 — 337 7,105 1,775 F-50 Table of Contents National Healthcare Properties, Inc. and Subsidiaries Real Estate and Accumulated Depreciation Schedule III December 31, 2024 (In thousands) Initial Costs Subsequent to Acquisition Property State Acquisition Date Encumbrances Land Building and Improvements Land Building and Improvements (8) Gross Amount (1) (2) Accumulated Depreciation (3) (4) Mainland Medical Arts Pavilion - Texas City, TX TX Dec-15 5,469 320 7,923 — 331 8,574 2,257 Renaissance on Peachtree - Atlanta, GA (5) GA Dec-15 — 4,535 68,895 — 4,071 77,501 18,199 Fox Ridge Senior Living at Bryant - Bryant, AR AR Dec-15 6,471 1,687 12,936 ( 564 ) ( 6,125 ) 7,934 598 Fox Ridge Senior Living at Chenal - Little Rock, AR AR Dec-15 14,833 6,896 20,579 — 762 28,237 6,198 Fox Ridge North Little Rock - North Little Rock, AR AR Dec-15 9,204 — 19,265 — 608 19,873 5,272 High Desert Medical Group Medical Office Building - Lancaster, CA CA Apr-17 6,863 1,459 9,300 — — 10,759 2,348 Northside Hospital - Canton, GA GA Jul-17 7,789 3,408 8,191 — 611 12,210 1,754 West Michigan Surgery Center - Big Rapids, MI MI Aug-17 4,036 258 5,677 — — 5,935 1,105 Camellia Walk Assisted Living and Memory Care - Evans, GA (5) GA Sep-17 — 1,854 17,372 — 1,457 20,683 4,623 Cedarhurst of Collinsville - Collinsville, IL IL Dec-17 — 1,228 8,652 ( 993 ) ( 7,278 ) 1,609 — Beaumont Medical Center - Warren, MI MI Dec-17 7,224 1,078 9,525 — 20 10,623 1,859 DaVita Dialysis - Hudson, FL FL Dec-17 1,582 226 1,979 — 121 2,326 392 DaVita Bay Breeze Dialysis Center - Largo, FL FL Dec-17 1,083 399 896 — 297 1,592 241 Greenfield Medical Plaza - Gilbert, AZ AZ Dec-17 4,165 1,476 4,144 — 504 6,124 958 RAI Care Center - Clearwater, FL FL Dec-17 2,628 624 3,156 — 84 3,864 596 Illinois CancerCare - Galesburg, IL IL Dec-17 1,945 290 2,457 — 131 2,878 525 UnityPoint Clinic - Muscatine, IA (7) IA Dec-17 — 570 4,541 — 37 5,148 912 Lee Memorial Health System Outpatient Center - Ft. Myers, FL Dec-17 3,764 439 4,374 — 722 5,535 1,071 Decatur Medical Office Building - Decatur, GA GA Dec-17 3,104 695 3,273 — 597 4,565 786 Madison Medical Plaza - Joliet, IL IL Dec-17 11,482 — 16,855 — 135 16,990 3,018 Woodlake Office Center - Woodbury, MN MN Dec-17 8,399 1,017 10,688 — 1,460 13,165 2,462 Rockwall Medical Plaza - Rockwall, TX TX Dec-17 4,140 1,097 4,582 — 409 6,088 1,067 MetroHealth Buckeye Health Center - Cleveland, OH OH Dec-17 3,408 389 4,367 — 255 5,011 963 UnityPoint Clinic - Moline, IL (7) IL Dec-17 — 396 2,880 — 5 3,281 577 VA Outpatient Clinic - Galesberg, IL IL Dec-17 — 359 1,852 — — 2,211 423 Philip Professional Center - Lawrenceville, GA GA Dec-17 6,595 1,285 6,714 — 353 8,352 1,474 Florida Medical Heartcare - Tampa, FL FL Mar-18 1,692 586 1,902 — — 2,488 361 Florida Medical Somerset - Tampa, FL FL Mar-18 970 61 1,366 — — 1,427 233 Florida Medical Tampa Palms - Tampa, FL FL Mar-18 1,049 141 1,402 — — 1,543 245 Florida Medical Wesley Chapel - Tampa, FL FL Mar-18 1,681 485 1,987 — — 2,472 394 Aurora Health Center - Milwaukee, WI WI Apr-18 3,660 1,014 4,041 — 361 5,416 882 F-51 Table of Contents National Healthcare Properties, Inc. and Subsidiaries Real Estate and Accumulated Depreciation Schedule III December 31, 2024 (In thousands) Initial Costs Subsequent to Acquisition Property State Acquisition Date Encumbrances Land Building and Improvements Land Building and Improvements (8) Gross Amount (1) (2) Accumulated Depreciation (3) (4) Vascular Surgery Associates - Tallahassee, FL FL May-18 4,274 902 5,383 — — 6,285 1,002 Glendale OMF - Farmington Hills, MI MI Aug-18 8,637 504 12,332 — ( 135 ) 12,701 2,023 Crittenton Washington OMF - Washington Township, MI MI Sep-18 3,438 640 4,090 — 325 5,055 789 Crittenton Sterling Heights OMF - Sterling Heights, MI MI Sep-18 2,830 1,398 2,695 — 69 4,162 593 Advocate Aurora OMF - Elkhorn, WI WI Sep-18 7,606 181 9,452 — — 9,633 1,621 Pulomnary & Critical Care Med PA Nov-18 3,495 621 3,805 — — 4,426 673 Dignity Emerus Blue Diamond - Las Vegas, NV NV Nov-18 14,610 2,182 16,594 — ( 274 ) 18,502 2,751 Dignity Emerus Craig Rd - North Las Vegas, NV NV Nov-18 20,851 3,807 22,803 — ( 208 ) 26,402 3,815 Greenfield OMF - Greenfield, WI WI Jan-19 8,073 1,552 8,333 — 339 10,224 1,450 Milwaukee OMF - South Milwaukee, WI WI Jan-19 4,304 410 5,041 — — 5,451 786 St. Francis WI OMF - St. Francis, WI WI Jan-19 9,849 865 11,355 — 251 12,471 1,856 Lancaster Medical Arts OMF - Lancaster, PA PA Jun-19 3,062 85 4,417 — — 4,502 614 Women's Healthcare Group OMF - York, PA PA Jun-19 1,894 624 2,161 — — 2,785 336 Pioneer Spine Sports - Northampton, MA MA Jul-19 1,559 435 1,858 — — 2,293 310 Pioneer Spine Sport - Springfield, MA MA Jul-19 1,947 333 2,530 — — 2,863 381 Pioneer Spine Sports - West Springfield, MA MA Jul-19 3,175 374 4,295 — — 4,669 638 Cedarhurst of Edwardsville - Edwardsville, IL IL Jan-20 — 321 9,032 — 153 9,506 1,366 UMPC Sir Thomas Court - Harrisburg, PA PA Jan-20 4,772 745 6,272 — — 7,017 840 UMPC Fisher Road - Mechanicsburg, PA PA Jan-20 3,122 747 3,844 — — 4,591 561 Swedish American OMF - Roscoe, IL IL Jan-20 4,394 599 5,862 — — 6,461 991 Cedarhurst of Sparta - Sparta, IL IL Jan-20 — 381 13,807 — 181 14,369 2,054 UMPC Chambers Hill - Harrisburg, PA PA Feb-20 3,221 498 4,238 — — 4,736 554 Cedarhurst of Shiloh - Shiloh, IL IL Mar-20 — 376 28,299 — 195 28,870 3,784 Bayshore Naples Memory Care - Naples, FL FL Mar-20 — 3,231 17,112 — 1,314 21,657 2,401 Circleville OMF - Circleville, OH OH Dec-20 3,235 765 4,011 — 11 4,787 466 OrthoOne Hilliard - Hilliard, OH OH May-21 2,562 760 3,118 — ( 110 ) 3,768 396 South Douglas OMF - Midwest City, OK OK Jun-21 3,054 628 3,863 — — 4,491 450 Fort Wayne Opthomology Engle - Fort Wayne, IN IN Jun-21 4,488 516 6,124 — — 6,640 607 Fort Wayne Opthomology Dupont - Fort Wayne, IN IN Jun-21 2,196 597 2,653 — — 3,250 340 St. Peters Albany 2 Palisades - Albany, NY NY Jun-21 3,642 516 4,342 — 498 5,356 576 Hefner Pointe Medical Center - Oklahoma City, OK OK Jun-21 3,851 678 4,819 — 200 5,697 540 F-52 Table of Contents National Healthcare Properties, Inc. and Subsidiaries Real Estate and Accumulated Depreciation Schedule III December 31, 2024 (In thousands) Initial Costs Subsequent to Acquisition Property State Acquisition Date Encumbrances Land Building and Improvements Land Building and Improvements (8) Gross Amount (1) (2) Accumulated Depreciation (3) (4) St. Peters Troy 2 New Hampshire - Troy, NY NY Jun-21 1,955 330 2,444 — 101 2,875 277 St Peters - Albany, NY - 4 Palisades NY Jul-21 2,122 542 2,416 — 163 3,121 288 St Peters - Albany, NY - 5 Palisades NY Jul-21 4,142 593 5,359 — 139 6,091 555 St Lukes Heart Vascular Center - East Stroudsburg PA Aug-21 2,507 363 3,224 — 99 3,686 300 Metropolitan Eye Lakeshore Surgery - St. Clair, MI MI Aug-21 3,288 203 4,632 — — 4,835 410 Naidu Clinic - Odessa, TX TX Sep-21 2,142 730 2,409 — 11 3,150 235 Belpre V Cancer Center - Belpre, OH OH Sep-21 44,236 1,153 63,894 — — 65,047 5,386 Center for Advanced Dermatology - Lakewood, CO CO Dec-21 1,988 1,034 1,874 — 15 2,923 172 Florida Medical Clinic - Tampa, FL FL Dec-21 1,651 1,104 1,137 — 186 2,427 148 Pensacola Nephrology OMF - Pensacola, FL FL Dec-21 4,656 1,579 5,121 — 146 6,846 414 Millennium Eye Care - Freehold, NJ NJ May-22 2,550 635 6,014 — ( 2,900 ) 3,749 411 Bone and Joint Specialists - Merrillville, IN IN Jun-22 2,389 1,014 2,499 — — 3,513 174 Atlanta Gastroenterology Associates - Lawrenceville, GA GA Jun-22 3,334 2,639 2,263 — — 4,902 141 Eastern Carolina ENT - Greenville, NC NC Dec-22 4,414 663 5,828 — — 6,491 319 Hope Orthopedics - Salem, OR OR Mar-23 11,651 1,331 15,802 — — 17,133 762 St Peters - Albany, NY - 1444 Western Avenue NY Mar-23 2,986 754 3,639 — ( 2 ) 4,391 186 OSF Healthcare OMF - Dwight, IL (7) IL Sep-23 — 254 2,960 — — 3,214 105 OSF Healthcare OMF - Godfrey, IL (7) IL Sep-23 — 1,034 4,668 — — 5,702 171 CPC - LaPorte, IN IN Feb-24 1,686 287 2,090 — — 2,377 49 CPC - Valparaiso, IN IN Feb-24 2,286 460 2,763 — — 3,223 65 CPC - Hobart, IN IN Feb-24 2,179 132 2,939 — — 3,071 63 CPC - Merrillville, IN IN Feb-24 1,349 387 1,510 1 3 1,901 45 Fannie Mae Master Credit Facilities (5)(6) 340,508 OMF Warehouse Facility (7) 21,708 F-53 Table of Contents National Healthcare Properties, Inc. and Subsidiaries Real Estate and Accumulated Depreciation Schedule III December 31, 2024 (In thousands) Initial Costs Subsequent to Acquisition Property State Acquisition Date Encumbrances Land Building and Improvements Land Building and Improvements (8) Gross Amount (1) (2) Accumulated Depreciation (3) (4) Total $ 1,151,863 $ 195,405 $ 1,956,081 $ ( 5,323 ) $ 56,320 $ 2,202,483 $ 496,758 __________ (1) Acquired intangible lease assets allocated to individual properties in the amount of $ 284.4 million are not reflected in the table above. (2) The tax basis of aggregate land, buildings and improvements as of December 31, 2024 is $ 1.9 billion. (3) The accumulated depreciation column excludes $ 229.1 million of accumulated amortization associated with acquired intangible lease assets. (4) Depreciation is computed using the straight-line method over the estimated useful lives of up to 40 years for buildings and building improvements and 15 years for fixtures and land improvements. (5) These properties collateralize the Capital One Facility, which had $ 203.4 million of outstanding borrowings as of December 31, 2024. (6) These properties collateralize the KeyBank Facility, which had $ 137.1 million of outstanding borrowings as of December 31, 2024. (7) These properties collateralize the OMF Warehouse Facility, which had $ 21.7 million of outstanding borrowings as of December 31, 2024. (8) Includes adjustments for properties that have been impaired as of December 31, 2024. See — Real Estate Investments, Net “Assets Held for Use and Related Impairments” for additional information. F-54 Table of Contents National Healthcare Properties, Inc. and Subsidiaries Real Estate and Accumulated Depreciation Schedule III December 31, 2024 (In thousands) A summary of activity for real estate and accumulated depreciation for the years ended December 31, 2024, 2023 and 2022: December 31, (In thousands) 2024 2023 2022 Real estate investments, at cost (1) : Balance at beginning of year $ 2,328,339 $ 2,295,587 $ 2,345,708 Additions-acquisitions and capital expenditures 25,929 51,923 44,926 Disposals, impairments and reclasses (2) ( 151,785 ) ( 19,171 ) ( 95,047 ) Balance at end of the year $ 2,202,483 $ 2,328,339 $ 2,295,587 Accumulated depreciation (1) : Balance at beginning of year $ 458,010 $ 397,982 $ 328,095 Depreciation expense 63,851 64,445 63,143 Disposals, impairments and reclasses (2) ( 25,103 ) ( 4,417 ) 6,744 Balance at end of the year $ 496,758 $ 458,010 $ 397,982 __________ (1) Acquired intangible lease assets and related accumulated depreciation are not reflected in the table above. (2) Includes amounts relating to dispositions and impairment charges on assets for the years ended December 31, 2024, 2023 and 2022. F-55