What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-08-05 compared with 2025-05-08 · 622 added, 395 removed, 1116 unchanged (48% of the section changed)

13 unchanged sentences

Total real estate investments, net 1,565,270 1,768,966

Assets held for sale 1,725 —

Cash and cash equivalents 47,123 21,652

19 unchanged sentences

7.375 % Series A cumulative redeemable perpetual preferred stock, $ 0.01 par value, 4,740,000 authorized;

3,977,144 issued and outstanding as of March 31, 2025 and December 31, 2024

3,920,228 and 3,977,144 issued and outstanding as of June 30, 2025 and December 31, 2024, respectively

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 March 31, 2025 and December 31, 2024

Common stock, $ 0.01 par value, 300,000,000 shares authorized, 28,296,439 shares issued and outstanding as of March 31, 2025 and December 31, 2024

3,563,787 and 3,630,000 issued and outstanding as of June 30, 2025 and December 31, 2024, respectively

Common stock, $ 0.01 par value, 300,000,000 shares authorized, 28,448,845 and 28,296,439 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively

Additional paid-in capital 2,532,585 2,533,706

11 unchanged sentences

(In thousands, except share and per share data)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Revenue from tenants $ 85,332 $ 88,817 $ 171,775 $ 177,116

3 unchanged sentences

Operating fees to related parties

— 6,424 — 12,790

Termination fees to related parties

— 98,241 — 98,241

Acquisition and transaction related 497 357 548 499

2 unchanged sentences

Total expenses 93,502 189,032 191,910 278,451

Operating loss before gain on sale of real estate investments

Operating gain/(loss) before gain on sale of real estate investments

( 8,170 ) ( 100,215 ) ( 20,135 ) ( 101,335 )

Gain on sale of real estate investments

Operating income (loss)

Gain (loss) on sale of real estate investments

2,652 ( 225 ) 27,641 ( 225 )

Operating (loss) income

( 5,518 ) ( 100,440 ) 7,506 ( 101,560 )

Other expense:

Interest expense ( 15,836 ) ( 17,752 ) ( 30,365 ) ( 34,135 )

Interest and other (expense) income

(Loss) gain on non-designated derivatives

Interest and other income

231 457 216 529

Gain on extinguishment of debt 257 — 257 —

Gain on non-designated derivatives

32 882 31 2,833

Total other expenses, net

3 unchanged sentences

— ( 65 ) 6 ( 135 )

Net loss attributable to non-controlling interests ( 54 ) —

( 20,834 ) ( 116,918 ) ( 22,349 ) ( 132,468 )

Net loss (income) attributable to non-controlling interests

31 452 ( 23 ) 452

Allocation for preferred stock ( 3,386 ) ( 3,450 ) ( 6,836 ) ( 6,900 )

16 unchanged sentences

(In thousands, except share data)

Three Months Ended March 31, 2025

Six Months Ended June 30, 2025

Series A Preferred Stock Series B Preferred Stock Common Stock

4 unchanged sentences

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-based compensation

— — — — — — 570 — — 570 — 570

Distributions declared on Series A Preferred Stock, $ 0.92 per share

3 unchanged sentences

Distributions to non-controlling interest holders — — — — — — — — — — ( 93 ) ( 93 )

Repurchase of Series A Preferred Stock

( 56,916 ) — — — — — ( 822 ) — — ( 822 ) — ( 822 )

Repurchase of Series B Preferred Stock

— — ( 66,213 ) ( 1 ) — — ( 915 ) — — ( 916 ) — ( 916 )

Net loss — — — — — — — — ( 22,372 ) ( 22,372 ) 23 ( 22,349 )

1 unchanged sentence

Rebalancing of ownership percentage — — — — — — 46 — — 46 ( 46 ) —

Balance, March 31, 2025

Balance, June 30, 2025

3,920,228 $ 40 3,563,787 $ 35 28,296,439 $ 1,132 $ 2,532,585 $ 9,441 $ ( 1,896,200 ) $ 647,033 $ 5,449 $ 652,482

Three Months Ended March 31, 2024

Three Months Ended June 30, 2025

Series A Preferred Stock Series B Preferred Stock Common Stock

2 unchanged sentences

Par Value Number of Shares Par Value Additional Paid-in Capital Accumulated Other Comprehensive Income Distributions in excess of accumulated earnings Total Stockholders Equity Non-controlling Interests Total Equity

Balance, March 31, 2025

3,977,144 $ 40 3,630,000 $ 36 28,296,439 $ 1,132 $ 2,533,737 $ 11,646 $ ( 1,872,012 ) $ 674,579 $ 5,541 $ 680,120

Share-based compensation

— — — — — — 570 — — 570 — 570

Distributions declared on Series A Preferred Stock, $ 0.46 per share

— — — — — — — — ( 1,800 ) ( 1,800 ) — ( 1,800 )

Distributions declared on Series B Preferred Stock, $ 0.45 per share

— — — — — — — — ( 1,585 ) ( 1,585 ) — ( 1,585 )

Distributions to non-controlling interest holders — — — — — — — — — — ( 46 ) ( 46 )

Repurchase of Series A Preferred Stock

( 56,916 ) — — — — — ( 822 ) — — ( 822 ) — ( 822 )

Repurchase of Series B Preferred Stock

— — ( 66,213 ) ( 1 ) — — ( 915 ) — — ( 915 ) — ( 915 )

Net loss — — — — — — — — ( 20,803 ) ( 20,803 ) (31) ( 20,834 )

Unrealized loss on designated derivatives

— — — — — — — ( 2,205 ) — ( 2,205 ) — ( 2,205 )

Rebalancing of ownership percentage — — — — — — 15 — — 15 ( 15 ) —

Balance, June 30, 2025

3,920,228 $ 40 3,563,787 $ 35 28,296,439 $ 1,132 $ 2,532,585 $ 9,441 $ ( 1,896,200 ) $ 647,033 $ 5,449 $ 652,482

Share and per share data have been adjusted for all periods presented to reflect a one-for-four reverse stock split effective September 30, 2024.

The accompanying notes are an integral part of these unaudited consolidated financial statements.

NATIONAL HEALTHCARE PROPERTIES, INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(In thousands, except share data)

Six Months Ended June 30, 2024

Series A Preferred Stock Series B Preferred Stock Common Stock

Number of Shares Par Value Number of Shares Par Value Number of Shares Par Value Additional Paid-in Capital Accumulated Other Comprehensive (Loss) Income Distributions in Excess of Accumulated Earnings Total Stockholders Equity Non-controlling Interests Total Equity

Balance, December 31, 2023

13 unchanged sentences

Rebalancing of ownership percentage — — — — — — 43 — — 43 ( 43 ) —

Balance, June 30, 2024

3,977,144 $ 40 3,630,000 $ 36 28,309,545 $ 1,132 $ 2,533,484 $ 24,468 $ ( 1,802,415 ) $ 756,745 $ 5,842 $ 762,587

Three Months Ended June 30, 2024

Series A Preferred Stock Series B Preferred Stock Common Stock

Number of Shares Par Value Number of Shares Par Value Number of Shares Par Value Additional Paid-in Capital Accumulated Other Comprehensive Income Distributions in Excess of Accumulated Earnings Total Stockholders Equity Non-controlling Interests Total Equity

Balance, March 31, 2024

3,977,144 $ 40 3,630,000 $ 36 28,309,545 $ 1,132 $ 2,533,232 $ 25,744 $ ( 1,682,499 ) $ 877,685 $ 6,362 $ 884,047

Stock-based compensation

— — — — — — 230 — — 230 — 230

Distributions declared on Series A Preferred Stock, $ 0.46 per share

— — — — — — — — ( 1,834 ) ( 1,834 ) — ( 1,834 )

Distributions declared on Series B Preferred Stock, $ 0.45 per share

— — — — — — — — ( 1,616 ) ( 1,616 ) — ( 1,616 )

Distributions to non-controlling interest holders — — — — — — — — — — ( 46 ) ( 46 )

Net loss — — — — — — — — ( 116,466 ) ( 116,466 ) ( 452 ) ( 116,918 )

Unrealized gain on designated derivatives — — — — — — — ( 1,276 ) — ( 1,276 ) — ( 1,276 )

Rebalancing of ownership percentage — — — — — — 22 — — 22 ( 22 ) —

Balance, June 30, 2024

3,977,144 $ 40 3,630,000 $ 36 28,309,545 $ 1,132 $ 2,533,484 $ 24,468 $ ( 1,802,415 ) $ 756,745 $ 5,842 $ 762,587

Share and per share data have been adjusted for all periods presented to reflect a one-for-four reverse stock split effective September 30, 2024.

4 unchanged sentences

(In thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities:

3 unchanged sentences

Amortization of deferred financing costs 2,295 1,661

(Accretion) amortization of terminated swap — ( 1,218 )

Accretion of terminated swap

Amortization of mortgage premiums and discounts, net 44 45

3 unchanged sentences

Equity-based compensation 570 460

Gain on sale of real estate investments

(Gain) loss on sale of real estate investments

( 27,641 ) 225

Cash received from non-designated derivative instruments 1,775 3,565

Gain (loss) on non-designated derivative instruments

Gain on non-designated derivative instruments

( 31 ) ( 2,833 )

Impairment charges 27,111 2,669

Gain on extinguishment of debt

Deferred tax valuation allowance

2 unchanged sentences

Prepaid expenses and other assets ( 1,990 ) ( 1,824 )

Termination fees payable to related parties

Accounts receivable, net

Accounts payable, accrued expenses and other liabilities ( 36,416 ) ( 2,854 )

Deferred leasing costs

Deferred rent 2,130 393

10 unchanged sentences

Payments on credit facilities ( 24,593 ) ( 2,885 )

Proceeds from mortgage notes payable — ( 291 )

Proceeds from credit facilities — 6,960

Payments on mortgage notes payable ( 429 ) ( 584 )

Proceeds from termination of derivative instruments 648 —

Payments of deferred financing costs ( 205 ) ( 199 )

Repurchase of preferred stock

Distributions paid on Series A Preferred Stock

5 unchanged sentences

( 33,892 ) ( 3,700 )

Net change in cash, cash equivalents and restricted cash 52,313 ( 14,902 )

Cash, cash equivalents and restricted cash, beginning of period 74,095 91,316

Cash, cash equivalents and restricted cash, end of period $ 126,408 $ 76,414

NATIONAL HEALTHCARE PROPERTIES, INC.

2 unchanged sentences

(In thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Net change in cash, cash equivalents and restricted cash $ 29,075 $ ( 10,343 )

Cash, cash equivalents and restricted cash, beginning of period 74,095 91,316

Cash, cash equivalents and restricted cash, end of period $ 103,170 $ 80,973

Six Months Ended June 30,

Cash and cash equivalents, end of period $ 47,123 $ 29,461

6 unchanged sentences

Common stock issued through stock dividends $ — $ 23,695

Preferred stock dividend declared

$ 3,478 $ 3,450

Mortgages issued with acquisition of real estate investments $ — $ 7,500

Proceeds from real estate sales used to repay mortgage notes payable $ 82,540 $ —

Mortgage notes payable repaid with proceeds from real estate sales $ ( 82,540 ) $ —

5 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

June 30, 2025

Note 1 — Organization

4 unchanged sentences

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 March 31, 2025, the Company owned 181 properties (including one land parcel) located in 30 states and comprised of 7.6 million rentable square feet.

As of June 30, 2025, the Company owned 175 properties (including one land parcel and one property classified as held for sale) located in 30 states and comprised of 7.3 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”).

2 unchanged sentences

See the “ Internalization ” section in this Note for additional information.

As of March 31, 2025, the Company owned 44 SHOPs using the REIT Investment Diversification and Empowerment Act of 2007 (“RIDEA”) structure in its SHOP segment.

As of June 30, 2025, the Company owned 41 (including one property classified as held for sale) 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”.

As of March 31, 2025, the Company had four eligible independent contractors operating 44 SHOPs.

As of June 30, 2025, the Company had four eligible independent contractors operating 41 SHOPs.

The Company has two operating and reportable business segments:

outpatient medical facilities (OMFs) and senior housing operating properties (SHOPs).

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.

In its OMF operating segment, the Company owns, manages and leases single and multi-tenant OMFs where tenants are generally 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.

From October 2020 through January 2024, the Company issued an aggregate of approximately 5.2 million shares of common stock as stock dividends (as adjusted to reflect the Reverse Stock Split (as defined below)).

5 unchanged sentences

The Estimated Per-Share NAV published on March 26, 2025 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.

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.

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 and the termination of the Company’s prior arrangement for advisory management services provided by the Advisor.

All assets, contracts and employees necessary for the Company to conduct its business were contributed by the Advisor Parent 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.

2 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

June 30, 2025

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 property management agreement, in each case subject to certain other adjustments (collectively, the “Closing Payments” in an aggregate amount of $ 106.6 million).

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”) in a principal amount of $ 30.3 million, equal to the difference between the Closing Date Cash Consideration and the Closing Payments , which Promissory Note was repaid in full in January 2025.

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 at a ratio of one-for-four, which became effective on September 30, 2024 (the “Reverse Stock Split”).

Reverse Stock Split, Name Change and Common Stock Par Value Adjustment

On September 26, 2024, 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 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 Quarterly Report on Form 10-Q 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 another Articles of 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.

On September 26, 2024, the Company filed another Articles of 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.”

All share and per share data in this Quarterly Report on Form 10-Q have been adjusted for all periods presented to reflect the Reverse Stock Split.

Note 2 — Summary of Significant Accounting Policies

2 unchanged sentences

The information furnished includes all adjustments and accruals of a normal recurring nature, which, in the opinion of management, are necessary for a fair statement of results for the interim periods.

The results of operations for the three months ended March 31, 2025 and 2024 are not necessarily indicative of the results for the entire year or any subsequent interim periods.

The results of operations for the three and six months ended June 30, 2025 and 2024 are not necessarily indicative of the results for the entire year or any subsequent interim periods.

These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2024, which are included in the Company’s Annual Report on Form 10-K filed with the United States Securities and Exchange Commission (the “SEC”) on February 27, 2025.

Except for those required by new accounting pronouncements discussed below, there have been no significant changes to the Company’s significant accounting policies during the three months ended March 31, 2025.

Principles of Consolidation and Basis of Presentation

7 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

June 30, 2025

Use of Estimates

4 unchanged sentences

The Company’s revenues, which are derived primarily from lease contracts, include rent received from tenants in its OMF segment.

As of March 31, 2025, these leases had a weighted average remaining lease term of 5.8 years.

As of June 30, 2025, these leases had a weighted average remaining lease term of 5.7 years.

Rent from tenants in the Company’s OMF segment is recorded in accordance with the terms of each lease on a straight-line basis over the initial term of the lease.

13 unchanged sentences

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 over the next five years and thereafter as of March 31, 2025.

The following table presents future base rent payments on a cash basis due to the Company over the next five years and thereafter as of June 30, 2025.

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.

8 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

June 30, 2025

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.

2 unchanged sentences

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.

The Company recorded reductions in revenue of $ 0.2 million for uncollectable amounts during both the three months ended March 31, 2025 and 2024.

Cost recoveries from tenants are included in operating revenue from tenants, in accordance with current accounting rules, in the Company’s consolidated statements of operations and comprehensive loss in the period the related costs are incurred, as applicable.

The Company recorded reductions in revenue of $ 0.4 million and $ 0.6 million for uncollectable amounts during the three and six months ended June 30, 2025, respectively, and $ 0.6 million and $ 0.8 million for uncollectable amounts during the three and six months ended June 30, 2024, respectively.

Investments in Real Estate

7 unchanged sentences

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 three months ended March 31, 2025 and 2024.

No properties were presented as discontinued operations during the three and six months ended June 30, 2025 and 2024.

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.

1 unchanged sentence

Properties are no longer depreciated when they are classified as held for sale.

There were no real estate investments held for sale as of March 31, 2025 or December 31, 2024.

There was one SHOP property classified as held for sale as of June 30, 2025.

Amounts related to this property are recorded in “assets held for sale” on the Company’s consolidated balance sheets.

There were no properties classified as held for sale as of December 31, 2024.

Purchase Price Allocation

7 unchanged sentences

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.

During the three months ended March 31, 2024, the Company acquired four properties.

During the three months ended March 31, 2025, the Company did no t acquire any properties.

All acquisitions during the three months ended March 31, 2024 were asset acquisitions.

During the six months ended June 30, 2024, the Company acquired four properties.

During the six months ended June 30, 2025, the Company did no t acquire any properties.

All acquisitions during the six months ended June 30, 2024 were asset acquisitions.

NATIONAL HEALTHCARE PROPERTIES, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

June 30, 2025

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.

11 unchanged sentences

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 three months ended March 31, 2025 or 2024.

The Company did not record any intangible asset amounts related to customer relationships during the six months ended June 30, 2025 or 2024.

Accounting for Leases

12 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

June 30, 2025

Lessee Accounting

31 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

June 30, 2025

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.

9 unchanged sentences

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 March 31, 2025, the Company owned 44 seniors housing properties which are leased and operated through its TRS.

As of June 30, 2025, the Company owned 41 seniors housing properties which are leased and operated through its TRS.

The TRS is a wholly-owned subsidiary of the OP.

5 unchanged sentences

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 March 31, 2025 and December 31, 2024 consisted of deferred rent and net operating loss carryforwards.

Significant components of the deferred tax assets and liabilities as of June 30, 2025 and December 31, 2024 consisted of deferred rent and net operating loss carryforwards.

Because of the TRS’s 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 $ 11.1 million as of March 31, 2025.

thus the Company has provided a 100 % valuation allowance of $ 11.4 million as of June 30, 2025.

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 had a deferred tax asset of $ 10.5 million with a full valuation allowance.

Stock-Based Compensation

The Company recognizes share-based payments to employees and directors, including grants of restricted shares of common stock and restricted stock units (including performance-based awards), in general and administrative expense in the Company’s consolidated statements of operations and comprehensive loss on a straight-line basis over the requisite service period based on the grant date fair value of the award.

Forfeitures of share-based awards are recognized as they occur.

NATIONAL HEALTHCARE PROPERTIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025

Recently Issued Accounting Pronouncements

9 unchanged sentences

The Company is evaluating the impact of the adoption of ASU 2023-09 on its consolidated financial statements.

NATIONAL HEALTHCARE PROPERTIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

In November 2024, the FASB issued ASU No.

12 unchanged sentences

The Company invests in healthcare-related facilities, primarily OMFs and SHOPs, which expand and diversify its portfolio and revenue base.

The Company owned 181 properties (including one land parcel) as of March 31, 2025.

No properties were acquired during the three months ended March 31, 2025.

During the three months ended March 31, 2024, the Company acquired four properties.

All acquisitions in the three months ended March 31, 2024 were considered asset acquisitions for accounting purposes.

The following table presents the allocation of real estate assets acquired and liabilities assumed as of March 31, 2025 and December 31, 2024:

(In thousands) March 31, 2025 December 31, 2024

Real estate investments, at cost:

Land $ — $ 1,266

Buildings, fixtures and improvements — 9,302

Total tangible assets — 10,568

Acquired intangibles:

In-place leases and other intangible assets — 2,388

Market lease and other intangible assets — 150

Market lease liabilities — —

Total intangible assets and liabilities — 2,538

Mortgage notes payable, net

Cash paid for real estate investments, including acquisitions $ — $ 5,606

Number of properties purchased — 4

The Company owned 175 properties (including one land parcel) as of June 30, 2025.

No properties were acquired during the six months ended June 30, 2025.

NATIONAL HEALTHCARE PROPERTIES, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

June 30, 2025

Significant Concentrations

As of March 31, 2025 and 2024, 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 for the portfolio on a straight-line basis.

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 March 31, 2025 and 2024:

As of June 30, 2025 and 2024, 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 for the portfolio on a straight-line basis.

State 2025 2024

2 unchanged sentences

Pennsylvania 10.7 % 10.5 %

Iowa 10.3 % *

* Not greater than 10%.

1 unchanged sentence

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 and accretion of above- and below-market ground leases, net, for the periods presented:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(In thousands) 2025 2024 2025 2024

4 unchanged sentences

Amortization of above- and below-market ground leases, net (3)

$ 32 $ 57 $ 2,410 $ 96

(1) Reflected within depreciation and amortization expense.

10 unchanged sentences

$ 362 $ 686 $ 474 $ 448 $ 472

Three Months Ended March 31, 2025

The Company disposed of 12 held-for-use OMFs during the three months ended March 31, 2025 for an aggregate contract sales price of $ 168.4 million.

These dispositions resulted in an aggregate gain on sale of $ 25.0 million, which is presented in the Company’s consolidated statements of operations and comprehensive loss for the three months ended March 31, 2025.

The 12 held-for-use OMFs were previously impaired by $ 8.8 million in the year ended December 31, 2024 .

NATIONAL HEALTHCARE PROPERTIES, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

Three Months Ended March 31, 2024

During the three months ended March 31, 2024, the Company did no t dispose of any properties.

June 30, 2025

Three and Six Months Ended June 30, 2025

The Company disposed of three held-for-use OMFs and three held-for-use SHOPs during the three months ended June 30, 2025 for an aggregate contract sales price of $ 21.4 million.

These dispositions resulted in an aggregate gain on sale of $ 2.7 million, which is presented in the Company’s consolidated statements of operations and comprehensive loss for the three months ended June 30, 2025.

The Company disposed of 15 held-for-use OMFs and three held-for-use SHOPs during the six months ended June 30, 2025 for an aggregate contract sales price of $ 189.8 million.

These dispositions resulted in an aggregate gain on sale of $ 27.6 million, which is presented in the Company’s consolidated statements of operations and comprehensive loss for the six months ended June 30, 2025.

Three and Six Months Ended June 30, 2024

The Company disposed of one held-for-use SHOP during the three and six months ended June 30, 2024 for a contract sales price of $ 3.3 million.

The Company recorded a $ 0.2 million loss on the sale of this SHOP, which is presented in the Company’s consolidated statement of operations and comprehensive loss for the three and six months ended June 30, 2024.

Assets Held for Sale

2 unchanged sentences

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 March 31, 2025 and December 31, 2024.

There was one SHOP classified as held for sale as of June 30, 2025.

There were no properties classified as held for sale as of December 31, 2024.

Assets Held for Use

6 unchanged sentences

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.

NATIONAL HEALTHCARE PROPERTIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025

Impairment Charges

The following table presents impairment charges by segment recorded during the three months ended March 31, 2025 and 2024:

Three Months Ended March 31,

The following table presents impairment charges by segment recorded during the three and six months ended June 30, 2025 and 2024:

Three Months Ended June 30, Six Months Ended June 30,

(In thousands) 2025 2024 2025 2024

$ 1,142 $ 2,409 $ 1,889 $ 2,409

14,070 — 25,222 260

Total impairment charges (1)

$ 15,212 $ 2,409 $ 27,111 $ 2,669

(1) Amounts presented for the three months ended March 31, 2025 primarily relate to two held-for-use SHOPs and one held-for-use OMF.

These properties were impaired to their contractual sales price as determined by their purchase and sale agreements and were subsequently sold in April 2025 or expected to be sold.

NATIONAL HEALTHCARE PROPERTIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

(1) Amounts presented for the six months ended June 30, 2025 primarily relate to two held-for-use SHOPs and two held-for-use OMF.

These properties were impaired to their contractual sales price as determined by their purchase and sale agreements and were subsequently sold or expected to be sold.

Note 4 — Mortgage Notes Payable, Net

The following table reflects the Company’s mortgage notes payable as of March 31, 2025 and December 31, 2024:

The following table reflects the Company’s mortgage notes payable as of June 30, 2025 and December 31, 2024:

Outstanding Loan Amount as of Effective Interest Rate (1) as of

Portfolio Encumbered Properties March 31,

2025 December 31, 2024 March 31,

Portfolio Encumbered Properties June 30,

2025 December 31, 2024 June 30,

2025 December 31, 2024 Interest Rate Maturity

(In thousands) (In thousands)

Fox Ridge Bryant - Bryant, AR 1 $ 6,426 $ 6,471 3.98 % 3.98 % Fixed May 2047

Fox Ridge Chenal - Little Rock, AR 1 14,729 14,833 2.95 % 2.95 % Fixed May 2049

Fox Ridge North Little Rock - North Little Rock, AR 1 9,139 9,204 2.95 % 2.95 % Fixed May 2049

Capital One OMF Loan (2)(4)

38 330,248 363,957 3.71 % 3.58 % Fixed

Barclays OMF Loan 56 219,500 234,173 6.45 % 6.45 % Fixed June 2033

Multi-Property CMBS Loan (4)

1 unchanged sentence

BMO CMBS Loan 7 33,066 37,472 2.89 % 2.89 % Fixed Dec.

Barclays OMF Loan 56 219,500 234,173 6.45 % 6.45 % Fixed June 2033

Fox Ridge Chenal - Little Rock, AR 1 14,624 14,833 2.95 % 2.95 % Fixed May 2049

Fox Ridge North Little Rock - North Little Rock, AR 1 9,074 9,204 2.95 % 2.95 % Fixed May 2049

BMO CPC Mortgage 4 7,500 7,500 6.84 % 6.84 % Fixed March 2034

Fox Ridge Bryant - Bryant, AR 1 $ 6,381 $ 6,471 3.98 % 3.98 % Fixed May 2047

Gross mortgage notes payable 123 706,164 789,647 4.64 % 4.56 %

4 unchanged sentences

_____________

(1) Calculated on a weighted average basis for all mortgages outstanding as of March 31, 2025 and December 31, 2024.

(2) Variable rate loan, based on daily SOFR (as defined below) as of March 31, 2025 and December 31, 2024, which is fixed as a result of entering into “pay-fixed” interest rate swap agreements.

The Company allocated $ 330.2 million and $ 378.5 million of its “pay-fixed” interest rate swaps to this mortgage consistently as of March 31, 2025 and December 31, 2024, respectively.

(1) Calculated on a weighted average basis for all mortgages outstanding as of June 30, 2025 and December 31, 2024.

(2) Variable rate loan, based on daily SOFR (as defined below) as of June 30, 2025 and December 31, 2024, which is fixed as a result of entering into “pay-fixed” interest rate swap agreements.

The Company allocated $ 330.2 million and $ 378.5 million of its “pay-fixed” interest rate swaps to this mortgage consistently as of June 30, 2025 and December 31, 2024, respectively.

In December 2024, the Company proactively executed an amendment to the hedged notional amount to match the expected prospective loan balance of $ 364.0 million.

5 unchanged sentences

(4) 2025 amounts include debt paydowns related to dispositions of $ 33.7 million on the Capital One OMF Loan, $ 30.6 million on the Multi-Property CMBS Loan and $ 14.7 million on the Barclays OMF Loan.

As of March 31, 2025, the Company had pledged $ 1.2 billion in total real estate investments, at cost, as collateral for its $ 721.0 million of gross mortgage notes payable.

As of June 30, 2025, the Company had pledged $ 1.2 billion in total real estate investments, at cost, as collateral for its $ 706.2 million of gross mortgage notes payable.

This real estate is not available to satisfy other debts and obligations unless first satisfying the mor tgage 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.

Notably, 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.

As of March 31, 2025, 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.

NATIONAL HEALTHCARE PROPERTIES, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

June 30, 2025

Some of the Company’s mortgage note agreements require compliance with certain property-level financial covenants, including debt service coverage ratios.

Notably, 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.

As of June 30, 2025, 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.

Note 5 — Credit Facilities

The Company had the following credit facilities outstanding as of March 31, 2025 and December 31, 2024:

The Company had the following credit facilities outstanding as of June 30, 2025 and December 31, 2024:

Outstanding Facility

1 unchanged sentence

Credit Facilities Encumbered Properties (1)

2025 December 31, 2024 March 31,

2025 December 31, 2024 June 30,

2025 December 31, 2024 Interest Rate Maturity

6 unchanged sentences

Total Credit Facilities 21 $ 337,624 $ 362,216 6.86 % 7.23 %

(1) Encumbered properties are as of March 31, 2025.

(2) Secured by first-priority mortgages on 11 of the Company’s seniors housing properties as of March 31, 2025 with an aggregate carrying value, at cost of $ 356.3 million.

(3) Secured by first-priority mortgages on ten of the Company’s seniors housing properties as of March 31, 2025 with an aggregate carrying value, at cost of $ 265.6 million.

(4) Calculated on a weighted average basis for all credit facilities outstanding as of March 31, 2025 and December 31, 2024, respectively.

(5) The Company has eight active non-designated interest rate cap agreements with an aggregate notional amount of $ 369.2 million which limited one-month 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 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 %, 5.94 % and 6.50 %, respectively, as of March 31, 2025 and 5.89 %, 5.93 % and 6.50 %, respectively, as of December 31, 2024.

(6) Secured by seven OMF properties as of March 31, 2025 with an aggregate carrying value, at cost of $ 33.2 million.

(1) Encumbered properties are as of June 30, 2025.

(2) Calculated on a weighted average basis for all credit facilities outstanding as of June 30, 2025 and December 31, 2024, respectively.

(3) The Company has nine active non-designated interest rate cap agreements with an aggregate notional amount of $ 481.3 million which limited one-month 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 in the consolidated statements of operations and comprehensive loss ( see 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 and KeyBank Fannie Mae Facility were 5.89 % and 5.93 %, respectively, as of both June 30, 2025 and December 31, 2024.

(4) The Company repaid in full and terminated the OMF Warehouse Facility in April 2025.

As of March 31, 2025, the Company had pledged $ 655.1 million in total real estate investments, at cost as collateral under its credit facilities.

As of June 30, 2025, the Company had pledged $ 623.5 million in total real estate investments, at cost as collateral under its credit facilities.

All of the real estate assets pledged to secure borrowings under the Company’s credit 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 the property is satisfied or the property is removed from the pledged collateral.

Unencumbered real estate investments, at cost as of March 31, 2025 were $ 427.0 million, although there can be no assurance as to the amount of liquidity the Company would be able to generate from using these une ncumbered assets as collateral for future mortgage loans, future advances under the credit facilities or other future financings.

Unencumbered real estate investments, at cost as of June 30, 2025 were $ 431.6 million, although there can be no assurance as to the amount of liquidity the Company would be able to generate from using these une ncumbered assets as collateral for future mortgage loans, future advances under the credit facilities or other future financings.

Fannie Mae Master Credit Facilities

1 unchanged sentence

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 March 31, 2025, $ 339.1 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 minim um debt service coverage and maximum loan-to-value tests.

Borrowings under the Fannie Mae Master Credit Facilities bore 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.

NATIONAL HEALTHCARE PROPERTIES, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

Through March 31, 2025, the Company had provided cash deposits totaling $ 12.1 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.

June 30, 2025

The Fannie Mae Master Credit Facilities mature on November 1, 2026.

Through June 30, 2025, the Company had provided cash deposits totaling $ 12.1 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.

These deposits are recorded as restricted cash on the Company’s consolidated balance sheets and are pledged as additional collateral for the Fannie Mae Master Credit Facilities.

2 unchanged sentences

On December 22, 2023, the Company, through wholly-owned subsidiaries of the OP, entered into a loan agreement with Capital One to provide up to $ 50.0 million of variable-rate financing.

As of March 31, 2025, $ 21.7 million was outstanding under the facility.

In April 2025, the Company repaid in full and terminated the facility .

Non-Designated Interest Rate Caps

As of March 31, 2025 the Company had eight non-designated 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.

As of June 30, 2025 the Company had nine non-designated interest rate cap agreements with an aggregate notional amount of $ 481.3 million which caps SOFR at 3.50 % with terms through November 2026.

The Company does not apply hedge accounting to these non-designated interest cap 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 comprehensive loss.

2 unchanged sentences

In April 2025, the Company terminated two interest rate caps with a notional of $ 21.7 million related to the OMF Warehouse Facility upon the facility’s full repayment.

In June 2025, the Company purchased three interest rate caps with a notional of $ 133.8 million for $ 1.1 million that limit one-month SOFR to 3.50 % and mature in November 2026 related to the Fannie Mae Master Credit Facilities.

These interest rate caps were purchased in advance of interest rate caps set to expire.

Future Principal Payments

The following table summarizes the scheduled aggregate principal payments for the five years subsequent to March 31, 2025 and thereafter, on all of the Company’s outstanding mortgage notes payable and credit facilities:

The following table summarizes the scheduled aggregate principal payments for the five years subsequent to June 30, 2025 and thereafter, on all of the Company’s outstanding mortgage notes payable and credit facilities:

Future Principal Payments

7 unchanged sentences

Total $ 706,164 $ 337,624 $ 1,043,788

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) 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, net cash provided by its property dispositions and potential new financings utilizing certain of its currently unencumbered properties.

NATIONAL HEALTHCARE PROPERTIES, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

June 30, 2025

Note 6 — Fair Value of Financial Instruments

12 unchanged sentences

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 March 31, 2025, 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.

However, as of June 30, 2025, 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.

5 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

The following table presents information about the Company’s assets and liabilities measured at fair value as of March 31, 2025 and December 31, 2024, aggregated by the level in the fair value hierarchy within which those instruments fall.

June 30, 2025

The following table presents information about the Company’s assets and liabilities measured at fair value as of June 30, 2025 and December 31, 2024, aggregated by the level in the fair value hierarchy within which those instruments fall.

(In thousands) Quoted Prices in Active Markets

3 unchanged sentences

Level 3 Total

March 31, 2025

June 30, 2025

Derivative assets, at fair value (non-designated) $ — $ 1,755 $ — $ 1,755

10 unchanged sentences

Real Estate Investments - Held for Use

The Company has impaired real estate investments held for use, which were carried at fair value on a non-recurring basis on the consolidated balance sheets as of March 31, 2025 and December 31, 2024.

As of March 31, 2025, the Company owned seven held-for-use properties ( three 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 recorded impairment charges on three properties to reduce the carrying value to its contractual sales price as determined by purchase and sale agreements.

The Company has impaired real estate investments held for use, which were carried at fair value on a non-recurring basis on the consolidated balance sheets as of June 30, 2025 and December 31, 2024.

See Note 3 — Real Estate Investments, Net - Assets Held for Use and Impairment Charges for additional details.

1 unchanged sentence

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 March 31, 2025 and December 31, 2024.

The Company classified one property as held for sale as of June 30, 2025 and none as of December 31, 2024.

Financial Instruments Not Measured at Fair Va lue

1 unchanged sentence

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.

NATIONAL HEALTHCARE PROPERTIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

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:

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

(In thousands) Level Carrying Amount Fair Value Carrying Amount Fair Value

4 unchanged sentences

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.

NATIONAL HEALTHCARE PROPERTIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025

Note 7 — Derivatives and Hedging Activities

7 unchanged sentences

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 March 31, 2025 and December 31, 2024:

(In thousands) Balance Sheet Location March 31,

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 June 30, 2025 and December 31, 2024:

(In thousands) Balance Sheet Location June 30,

2025 December 31, 2024

4 unchanged sentences

Cash Flow Hedges of Interest Rate Risk

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.

As of March 31, 2025 and December 31, 2024, the Company had one derivative with a notional value of $ 330.2 million and $ 378.5 million, respectively, designated as a cash flow hedges of interest rate risk.

In December 2024, the Company proactively executed an amendment to the hedged notional amount to match the expected prospective loan balance of $ 364.0 million.

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 three months ended March 31, 2025 and the year ended December 31, 2024, 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.

As of June 30, 2025 and December 31, 2024, the Company had one derivative with a notional value of $ 330.2 million and $ 378.5 million, respectively, designated as a cash flow hedges of interest rate risk.

Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.

This derivative was used to hedge the variable cash flows associated with variable-rate debt.

The changes in the fair value of derivatives designated and that qualify as cash flow hedges are recorded in accumulated other comprehensive loss and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings.

Amounts reported in accumulated other comprehensive loss related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt.

During the next 12 months, from July 1, 2025 through June 30, 2026 , the Company estimates that $ 7.2 million will be reclassified from other comprehensive income as a decrease to interest expense.

During the six months ended June 30, 2025, the Company received $ 1.5 million in connection with the partial unwind of a derivative.

In conjunction with the partial unwind, the Company accelerated the reclassification of gains of $ 1.5 million from other comprehensive income to earnings as a result of the hedged forecasted transactions becoming probable not to occur.

This gain was recorded as a reduction in interest expense in its consolidated statements of operations and comprehensive loss for the six months ended June 30, 2025.

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:

NATIONAL HEALTHCARE PROPERTIES, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

During the three months ended March 31, 2025, the Company received $ 1.5 million in connection with the partial unwind of a derivative.

This gain was recorded as a reduction in interest expense on its consolidated statements of operations and comprehensive loss for the three months ended March 31, 2025.

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:

Three Months Ended March 31,

June 30, 2025

Three Months Ended June 30, Six Months Ended June 30,

(In thousands) 2025 2024 2025 2024

3 unchanged sentences

Total amount of interest expense presented in the consolidated statements of operations and comprehensive loss $ ( 15,836 ) $ ( 17,752 ) $ ( 30,365 ) $ ( 34,135 )

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 12 months, from April 1, 2025 through March 31, 2026, the Company estimates that $ 7.5 million will be reclassified from AOCI as a decrease to interest expense or other comprehensive income relating to the “pay-fixed” swaps designated as derivatives.

Non-Designated Derivatives

The Company had the following outstanding interest rate derivatives with current effective notional amounts that were not designated as hedges in qualified hedging relationships as of March 31, 2025 and December 31, 2024:

March 31, 2025 December 31, 2024

These derivatives are used to manage the Company’s exposure to interest rate movements, but do not meet the strict hedge accounting requirements to be classified as hedging instruments.

Changes in the fair value of derivatives not designated as hedges under a qualifying hedging relationship are recorded directly to net income and recorded in gain on non-designated derivatives in the Company’s consolidated statements of operations and comprehensive loss.

June 30, 2025 December 31, 2024

Interest Rate Derivatives Number of Instruments Notional Amount (1)

4 unchanged sentences

(1) Notional amount represents the currently active interest rate cap contracts.

(2) All of the Company’s interest rate cap agreements limited one-month SOFR to 3.50 % with terms through January 2027.

The actual one-month SOFR rates during the three months ended March 31, 2025 exceeded the strike price rate of 3.50 % and the Company received payments under these agreements.

Changes in the fair market value of these non-designated derivatives, as well as any cash received, are presented within gain (loss) on non-designated derivatives in the Company’s consolidated statements of operations and comprehensive loss.

(2) All of the Company’s interest rate cap agreements limited one-month SOFR to 3.50 % with terms through November 2026.

The actual one-month SOFR rates during the three months ended June 30, 2025 exceeded the strike price rate of 3.50 % and the Company received payments under these agreements.

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 limit the Company’s exposure to interest rate movements for economic purposes, however, the Company has not elected to apply hedge accounting.

Five interest rate caps with an aggregate notional amount of $ 289.4 million mature in 2025, which represents the next interest rate cap maturity.

Three interest rate caps with an aggregate notional amount of $ 138.5 million matured in July 2025 and were replaced with three new interest rate caps with a notional of $ 133.8 million that limit one-month SOFR to 3.50 % and will mature in November 2026.

Beginning in the year ended December 31, 2022, 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 net loss and are presented within gain (loss) on non-designated derivatives in the Company’s consolidated statements of operations and comprehensive loss.

The loss on non-de signated derivatives was nominal for the three months ended March 31, 2025.

The gain on non-designated derivatives was $ 2.0 million for the three months ended March 31, 2024.

During the three months ended March 31, 2025 and 2024, the Company received aggregate payments of $ 0.9 million and $ 1.8 million, respectively, related to its effective interest rate caps as SOFR exceeded the effective rates of the capped debt.

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 net loss and are presented within gain on non-designated derivatives in the Company’s consolidated statements of operations and comprehensive loss.

NATIONAL HEALTHCARE PROPERTIES, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

June 30, 2025

Offsetting Derivatives

The table below presents a gross presentation, the effects of offsetting, and a net presentation of the Company’s derivatives (both designated and non-designated) as of March 31, 2025 and December 31, 2024.

The table below presents a gross presentation, the effects of offsetting, and a net presentation of the Company’s derivatives (both designated and non-designated) as of June 30, 2025 and December 31, 2024.

The net amounts of derivative assets or liabilities can be reconciled to the tabular disclosure of fair value.

2 unchanged sentences

(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

March 31, 2025 $ 13,281 $ — $ — $ 13,281 $ — $ — $ 13,281

June 30, 2025 $ 11,208 $ — $ — $ 11,208 $ — $ — $ 11,208

December 31, 2024 $ 19,206 $ — $ — $ 19,206 $ — $ — $ 19,206

1 unchanged sentence

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 March 31, 2025, there were no derivatives in a net liability position.

As of June 30, 2025, 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

As of both March 31, 2025 and December 31, 2024, the Company had 28,296,439 shares of common stock outstanding, 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 from October 2020 and through January 2024.

As of both June 30, 2025 and December 31, 2024, the Company had 28,448,845 and 28,296,439 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 from October 2020 and through January 2024.

From October 2020 and through January 2024, the Company issued an aggregate of 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 three months ended March 31, 2025 or the year ended December 31, 2024.

Except for restricted shares awarded under the Plan (as defined below), no shares of common stock were issued during the three and six months ended June 30, 2025, and, except for shares issued as stock dividends in January 2024, no other additional shares of common stock were issued during the year ended December 31, 2024.

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.

1 unchanged sentence

See Note 1 — Organization for additional information.

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

2 unchanged sentences

Shares issued under the DRIP are recorded as equity in the accompanying consolidated balance sheets in the period distributions are declared.

During the three months ended March 31, 2025 and the year ended December 31, 2024, the Company did no t issue any shares of common stock pursuant to the DRIP.

NATIONAL HEALTHCARE PROPERTIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

During the six months ended June 30, 2025 and the year ended December 31, 2024, the Company did no t issue any shares of common stock pursuant to the DRIP.

Stockholder Rights Plan

2 unchanged sentences

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.

NATIONAL HEALTHCARE PROPERTIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025

Preferred Stock and Preferred Units

4 unchanged sentences

Also, in connection with an underwritten offering in October 2021, the Company classified and designated 3,680,000 shares of its authorized preferred stock in October 2021 as authorized shares of its Series B Preferred Stock.

The Company had 3,977,144 shares of Series A Preferred Stock issued and outstanding as of March 31, 2025 and December 31, 2024.

The Company had 3,630,000 shares of Series B Preferred Stock issued and outstanding as of March 31, 2025 and December 31, 2024.

The Company also had 100,000 Series A Preferred Units outstanding as of March 31, 2025 and December 31, 2024, which were accounted for as a component of non-controlling interests.

The Company also had 100,000 Series A Preferred Units outstanding as of June 30, 2025 and December 31, 2024, which were accounted for as a component of non-controlling interests.

See Note 13 — Non-controlling Interests for additional information.

Preferred Stock Repurchase Program

On May 2, 2025, the Board authorized a stock repurchase program for up to an aggregate amount of $ 50.0 million of the Series A Preferred Stock and Series B Preferred Stock.

During the three months ended June 30, 2025, the Company repurchased and retired 56,916 shares of Series A Preferred Stock at an average price of $ 14.46 and 66,213 shares of Series B Preferred Stock at an average price of $ 13.83 , inclusive of commissions.

Any repurchased shares are treated as authorized and unissued shares of preferred stock without designation as to class or series in accordance with Maryland law and the terms of the Series A Preferred Stock and Series B Preferred Stock and shown as a reduction of stockholder’s equity at cost.

Distributions and Dividends

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.

3 unchanged sentences

Fees Incurred in Connection with the Operations of the Company Prior to the Internalization

Prior to September 2024, the former Advisor managed the Company’s day-to-day business and received compensation and fees for providing services to the Company pursuant to the Second Amended and Restated Advisory Agreement by and among the Company, the OP and the Advisor (as amended, the “Advisory Agreement”) that took effect in February 2017.

Prior to September 2024, the former Advisor managed the Company’s day-to-day business and received compensation and fees for providing services to the Company pursuant to an advisory agreement.

Immediately following 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.

The following describes certain expenses and fees that the Company was obligated to pay under the advisory agreement prior to its termination.

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.

NATIONAL HEALTHCARE PROPERTIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

Asset Management Fees

9 unchanged sentences

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.

NATIONAL HEALTHCARE PROPERTIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025

The Board previously approved the issuance of 359,250 Class B Units to the Advisor in connection with this arrangement.

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 March 31, 2025, the Company determined that achieving the Performance Condition was not yet considered probable for accounting purposes.

As of June 30, 2025, the Company determined that achieving the Performance Condition was not yet considered probable for accounting purposes.

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.

1 unchanged sentence

In connection with the Internalization, immediately prior to Closing, the Advisor transferred 359,250 Class B Units to the Advisor Parent.

The Advisory Agreement also required the Company to pay the Advisor a base management fee, which was payable on the first business day of each month.

The advisory agreement also required the Company to pay the Advisor a base management fee.

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 was equal to one-twelfth of 1.25 % of the cumulative net proceeds of any equity issued by the Company and its subsidiaries subsequent to February 17, 2017 per month.

In addition, the advisory agreement required the Company to pay the Advisor certain variable management/incentive fee quarterly in arrears.

No incentive fee was incurred for the three months ended March 31, 2024 .

No incentive fee was incurred for the six months ended June 30, 2024 .

Upon termination of the advisory agreement, the Company is no longer obligated to pay the base management fee or the variable management/incentive fee.

1 unchanged sentence

Professional Fees and Other Reimbursements

Prior to the termination of the Advisory Agreement, 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.

During the three months ended March 31, 2024 , t he Company incurred $ 2.5 million of reimbursement expenses from the Advisor for providing administrative services.

These reimbursement expenses were included in general and administrative expense on the consolidated statements of operations and comprehensive loss.

Prior to the termination of the advisory agreement, the Company reimbursed the Advisor’s costs of providing administrative services including personnel costs.

During the three and six months ended June 30, 2024 , t he Company incurred $ 3.0 million and $ 7.0 million , respectively, of reimbursement expenses from the Advisor for providing administrative services.

These reimbursement expenses were included in general and administrative expense in the consolidated statements of operations and comprehensive loss.

The Advisor was also reimbursed for services provided for which it incurred investment-related expenses or insourced expenses.

Property Management Fees

4 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

June 30, 2025

Summary of Related Party Expenses and 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:

Three Months Ended March 31, Payable (Prepayments) as of

(In thousands) Incurred Incurred March 31,

Three Months Ended June 30, Six Months Ended June 30, Payable (Prepayments) as of

2025 2024 2025 2024

(In thousands) Incurred Incurred Incurred

Incurred June 30,

2025 December 31, 2024

2 unchanged sentences

Termination fees (1)

— 98,241 — 98,241 — 30,267

Ongoing fees and reimbursements:

1 unchanged sentence

Professional fees and other reimbursements (2)

— 3,021 — 6,980

Property management fees (3)

— 1,022 — 2,492 — —

Total related party operation fees and reimbursements $ — $ 107,742 $ — $ 118,649 $ — $ 30,267

1 unchanged sentence

(2) Included in general and administrative expenses in the consolidated statements of operations.

(3) The three months ended March 31, 2024 includ e $ 0.6 million of leasing commissions which are capitalized and included in deferred costs, net on the Company’s consolidated balance sheets.

(3) The three months and six ended June 30, 2024 includ e $ 0.1 million and $ 0.6 million, respectively, of leasing commissions which are capitalized and included in deferred costs, net on the Company’s consolidated balance sheets.

Internalization

2 unchanged sentences

Fees Incurred in Connection with a Listing

Under the LPA, if the common stock of the Company is listed on a national securities exchange, an affiliate of the Advisor Parent 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.

None of these distributions has been earned through the date of this Quarterly Report on Form 10-Q and no such distribution was incurred during the three months ended March 31, 2025 or 2024.

Under the LPA, if the common stock of the Company is listed on a national securities exchange, an affiliate of the Advisor Parent 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 (i) the market value of all issued and outstanding shares of common stock at the time of listing plus distributions since the Company’s initial public offering of common stock in 2013 exceeds (ii) the aggregate capital contributed by the original investors plus an amount equal to a 6.0 % cumulative, pre-tax non-compounded annual return to the original investors in the Company’s initial public offering of common stock in 2013.

None of these distributions has been earned through the date of this Quarterly Report on Form 10-Q and no such distribution was incurred during the three and six months ended June 30, 2025 or 2024.

The Company currently expects it is highly unlikely that the OP will be obligated to make such a subordinated incentive listing distribution.

Subordinated Participation in Net Sales Proceeds

Under the LPA, upon a liquidation or sale of all or substantially all of the Company’s assets, including through a merger or sale of stock, an affiliate of the Advisor Parent 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.

None of these distributions has been earned through the date of this Quarterly Report on Form 10-Q and no such participation in net sales proceeds became due and payable during the three months ended March 31, 2025 or 2024.

Termination Fees

Under the LPA, upon termination or non-renewal of the advisory agreement with the Advisor, with or without cause, an affiliate of the Advisor Parent 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 affiliate of the Advisor Parent deferred its right to receive a subordinated distribution upon termination until either a listing on a national securities exchange or other liquidity event occurs.

Under the LPA, upon a liquidation or sale of all or substantially all of the Company’s assets, including through a merger or sale of stock, an affiliate of the Advisor Parent 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 the original investors in the Company’s initial public offering of common stock in 2013 plus payment to investors of a 6.0 % cumulative, pre-tax non-compounded annual return on the capital contributed by investors.

NATIONAL HEALTHCARE PROPERTIES, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

June 30, 2025

Termination Fees

None of these fees has been earned through the date of this Quarterly Report on Form 10-Q and no such fees became due and payable during the six months ended June 30, 2025 or 2024.

The Company currently expects it is highly unlikely that the OP will be obligated to make such subordinated termination distributions.

Note 10 — Economic Dependency

2 unchanged sentences

Note 11 — Equity-Based Compensation

Restricted Share Plan

Stock-Based Compensation

On May 22, 2025, the Company’s stockholders approved the 2025 Omnibus Incentive Compensation Plan of National Healthcare Properties, Inc.

(the “Plan”).

The Plan provides for the granting of stock-based compensation to employees and directors, including restricted shares of common stock, restricted stock units (“RSUs”) and long-term incentive partnership units in the OP.

The maximum number of shares of common stock reserved for awards under the Plan is 1.9 million shares plus 6.5 % of any shares issued and sold by the Company in any private or public offering that occurs following the approval of the Plan through, and including, an initial public offering of the Company’s common stock pursuant to an effective registration statement filed with the SEC.

As of June 30, 2025, 1.7 million of the reserve shares are available for future equity rewards.

Under the Plan, the fair market value of restricted shares of common stock is expensed over the vesting period.

Time-based restricted shares granted to the Board, executive officers and employees, which vest based solely upon passage of time, generally vest on a graded schedule over a period of one to three years .

The fair value of time-based restricted shares is based on the Company’s most recently published NAV.

Performance-based RSUs granted to the executive officers and certain other employees may be earned and vest, if at all, at the end of a three-year performance period subject to continued employment through the performance period and the achievement of performance goals set forth in the related award agreements.

The number of shares that ultimately vest based on performance can be either 0 % or vary from 50 % to 200 % of target depending on the level of achievement of the performance criteria.

The fair value of performance-based RSUs is determined based on the Company’s most recently published NAV and management’s expectation of the amount of RSUs to be earned and vested at the end of the performance period.

The total grant date fair value of time-based restricted shares and performance-based RSUs granted during the three and six months ended June 30, 2025 was $ 6.5 million.

Upon vesting of restricted shares and RSUs, the participant is required to pay the related tax withholding obligation, as applicable.

The Company generally reduces the number of shares of common stock delivered to pay the employee tax withholding obligation.

The value of the shares withheld is dependent on the Company’s most recently published NAV.

The following table summarizes stock-based compensation activity for the six months ended June 30, 2025 (units in thousands):

NATIONAL HEALTHCARE PROPERTIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025

Number of Restricted Shares or RSUs Weighted-Average Issue Price

Unvested, January 1, 2025

Granted 202 32.15

Forfeitures — —

Unvested, June 30, 2025

Total stock-based compensation cost was $ 0.6 million for the three and six months June 30, 2025, which was recognized in general and administrative expense in the Company’s consolidated statements of operations and comprehensive loss.

As of June 30, 2025 there was $ 7.5 million of future expenses related to unvested stock-based compensation arrangements granted under the Plan, which is expected to be recognized over a weighted average period of 2.3 years.

Previous Restricted Share Plan

The Company previously adopted an employee and director incentive restricted share plan (the “RSP”), which provided the Company with the ability to grant awards of restricted shares of common stock (“restricted shares”).

The RSP expired in February 2023.

As of March 31, 2025, there were no unvested shares under the RSP plan and 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 $ 0.2 million for the three months ended March 31, 2024.

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 three months ended March 31, 2025 or 2024.

As of June 30, 2025, there were no unvested shares under the RSP and 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 $ 0.2 million and $ 0.5 million for the three and six months ended June 30, 2024, respectively.

Note 12 — Accumulated Other Comprehensive Income

4 unchanged sentences

Amount of gain reclassified from accumulated other comprehensive income ( 6,058 )

Balance, March 31, 2025

Balance, June 30, 2025

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.

2 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

June 30, 2025

Note 13 — Non-controlling Interests

1 unchanged sentence

Balance as of

(In thousands) March 31, 2025 December 31, 2024

(In thousands) June 30, 2025 December 31, 2024

Series A Preferred Units held by third parties $ 2,578 $ 2,578

3 unchanged sentences

Total Non-controlling interests $ 5,449 $ 5,565

Net loss attributable to non-controlling interests on the Company’s consolidated statements of operations and comprehensive loss are comprised of the following:

Three Months Ended March 31,

Net loss attributable to non-controlling interests in the Company’s consolidated statements of operations and comprehensive loss are comprised of the following:

Three Months Ended June 30, Six Months Ended June 30,

(in thousands) 2025 2024 2025 2024

14 unchanged sentences

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 three months ended March 31, 2025 and 2024, Series A Preferred Unit holders were paid $ 47,000 and $ 46,000 , respectively.

During the three and six months ended June 30, 2025 and 2024, Series A Preferred Unit holders were paid $ 46,000 and $ 0.1 million, respectively.

Common OP Units

4 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

June 30, 2025

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.

1 unchanged sentence

Dur ing the three months ended March 31, 2025 and 2024 , Common OP Unit non-controlling interest holders were no t paid any cash distribu tions.

Dur ing the six months ended June 30, 2025 and 2024 , Common OP Unit non-controlling interest holders were no t paid any cash distribu tions.

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 March 31, 2025 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.

The 405,998 Common OP Units outstanding as of June 30, 2025 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

6 unchanged sentences

Distributions

Third Party Net Investment Amount Non-Controlling Ownership Percentage Net Real Estate Assets Subject to Investment Arrangement Three Months Ended March 31,

Third Party Net Investment Amount Non-Controlling Ownership Percentage Net Real Estate Assets Subject to Investment Arrangement Three Months Ended June 30,

Property Name

(Dollar amounts in thousands)

Investment Date March 31, 2025 March 31, 2025 March 31, 2025 December 31, 2024 2025 2024

Investment Date June 30, 2025 June 30, 2025 June 30, 2025 December 31, 2024 2025 2024

Plaza Del Rio Outpatient Medical Campus Portfolio (1)

$ 806 6.6 % $ 13,177 $ 12,763 — —

(1) Of the six total properties in the Plaza Del Rio Outpatient Medical 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.

(1) Of the six total properties in the Plaza Del Rio Outpatient Medical Campus Portfolio, three properties were encumbered under the Capital One OMF Loan and one property was encumbered under the Multi-Property CMBS Loan.

See Note 4 — Mortgage Notes Payable, Net and Note 5 — Credit Facilities for additional information.

1 unchanged sentence

The following is a summary of the basic and diluted net loss per share computation for the periods presented and has been retroactively adjusted to reflect the stock dividends and the Reverse Stock Split (see Note 1 — Organization and Note 8 — Stockholders’ Equity for additional details):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Net loss attributable to common stockholders (in thousands)

10 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

June 30, 2025

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.

The amounts in the table below have been retroactively adjusted to reflect the stock dividends and the Reverse Stock Split (see Note 1 — Organization for additional details):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Unvested restricted shares (1)

2,930 13,107 1,473 13,105

Common OP Units (2)

5 unchanged sentences

(1) Weighted average number of antidilutive unvested restricted shares outstanding for the periods presented.

Th ere were zero and 52,428 unvested restricted shares outstanding as of March 31, 2025 and 2024, respectively.

Th ere were 219,339 and 52,428 unvested restricted shares outstanding as of June 30, 2025 and 2024, respectively.

(2) Weighted average number of antidilutive Common OP Units presented as shares outstanding for the periods presented, at the current redemption rate reflecting adjustments for the effect of the stock dividends and the Reverse Stock Split (see Note 1 — Organization for additional details).

There were 405,998 Common OP Units outstanding as of March 31, 2025 and 2024.

There were 405,998 Common OP Units outstanding as of June 30, 2025 and 2024.

The securities held by the Company are eliminated in consolidation.

(3) Weighted average number of antidilutive Class B Units presented as shares outstanding for the periods presented, at the current redemption rate reflecting adjustments for the effect of the stock dividends and the Reverse Stock Split (see Note 1 — Organization for additional details).

There were 359,250 Class B Units outstanding as of March 31, 2025 and 2024.

These Class B Units were unvested as of March 31, 2025 and 2024 (see Note 9 — Related Party Transactions and Arrangements for additional information).

There were 359,250 Class B Units outstanding as of June 30, 2025 and 2024.

These Class B Units were unvested as of June 30, 2025 and 2024 (see Note 9 — Related Party Transactions and Arrangements for additional information).

Note 15 — Segment Reporting

1 unchanged sentence

OMFs and SHOPs.

The disclosures below for the three months ended March 31, 2025 and 2024 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.

The disclosures below for the three months ended June 30, 2025 and 2024 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 (“NOI”) 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.

4 unchanged sentences

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.

The Company evaluates the performance of the combined properties in each segment using 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.

8 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

The following table presents the operating financial information for the Company’s two business segments for the three months ended March 31, 2025 and 2024:

Three Months Ended March 31,

June 30, 2025

The following table presents the operating financial information for the Company’s two business segments for the three months ended June 30, 2025 and 2024:

Three Months Ended June 30, Six Months Ended June 30,

(in thousands) 2025 2024 2025 2024

1 unchanged sentence

Property operating and maintenance 8,013 9,727 19,181 19,427

$ 19,466 $ 24,899

NOI $ 21,239 $ 24,944 $ 40,706 $ 49,843

Revenue from tenants $ 56,080 $ 54,146 $ 111,888 $ 107,846

4 unchanged sentences

18,832 17,295 38,358 34,992

$ 9,437 $ 8,255

NOI $ 10,245 $ 8,868 $ 19,681 $ 17,123

(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.

4 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

June 30, 2025

Reconciliation to Consolidated Financial Information

A reconciliation of the total reportable segments’ NOI to consolidated net loss attributable to common stockholders is presented below:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(in thousands) 2025 2024 2025 2024

6 unchanged sentences

Operating fees to related parties

— ( 6,424 ) — ( 12,790 )

Termination fees to related parties

— ( 98,241 ) — ( 98,241 )

Acquisition and transaction related ( 497 ) ( 357 ) ( 548 ) ( 499 )

2 unchanged sentences

Gain (loss) on sale of real estate investment

2,652 ( 225 ) 27,641 ( 225 )

Interest expense ( 15,836 ) ( 17,752 ) ( 30,365 ) ( 34,135 )

Interest and other income (expense)

(Loss) gain on non-designated derivatives

Interest and other income

231 457 216 529

Gain on extinguishment of debt

Gain on non-designated derivatives

32 882 31 2,833

Loss before income taxes

2 unchanged sentences

— ( 65 ) 6 ( 135 )

Net loss attributable to non-controlling interests ( 54 ) —

( 20,834 ) ( 116,918 ) ( 22,349 ) ( 132,468 )

Net loss (gain) attributable to non-controlling interests

31 452 ( 23 ) 452

Preferred stock distributions

1 unchanged sentence

Net loss attributable to common stockholders $ ( 24,189 ) $ ( 119,916 ) $ ( 29,208 ) $ ( 138,916 )

NATIONAL HEALTHCARE PROPERTIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025

The following table reconciles investments in real estate, net by segment to consolidated total assets as of the periods presented:

(In thousands) March 31, 2025 December 31, 2024

(In thousands) June 30, 2025 December 31, 2024

Investments in real estate, net:

2 unchanged sentences

Total investments in real estate, net 1,565,270 1,768,966

Assets held for sale 1,725 —

Cash and cash equivalents 47,123 21,652

6 unchanged sentences

Accounts receivable, net

$ 8,096 $ 5,850

Total assets $ 1,758,896 $ 1,946,023

NATIONAL HEALTHCARE PROPERTIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

The following table reconciles capital expenditures by reportable business segment, excluding corporate non-real estate expenditures, for the periods presented:

Three Months Ended March 31,

(In thousands) 2025 2024

OMF Segment $ 3,565 $ 1,094

SHOP Segment 2,103 4,066

Total capital expenditures $ 5,668 $ 5,160

Note 16 — Commitments and Contingencies

As of March 31, 2025, the Company had six operating and five direct financing lease agreements.

As of June 30, 2025, the Company had six operating and five direct financing lease agreements.

The six operating leases have durations, including assumed renewals, ranging from 17.4 years to 36.3 years, excluding an adjacent parking lot lease with a term of 1.3 years.

The Company did not enter into any additional ground leases during the three months ended March 31, 2025.

As of March 31, 2025, the Company had ROU assets and liabilities of $ 6.9 million and $ 7.8 million, re spectively, which are included in operating lease right-of-use assets and operating lease liabilities, respectively, on the Company’s consolidated balance sheets.

The Company did not enter into any additional ground leases during the six months ended June 30, 2025.

As of June 30, 2025, the Company had ROU assets and liabilities of $ 6.8 million and $ 7.8 million, re spectively, 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 29.6 years and a weighted-average discount rate of 7.35 % as of March 31, 2025.

For each of the three months ended March 31, 2025 and 2024, the Company paid cash of $ 0.2 million for amounts included in the measurement of lease liabilities and recorded expense of $ 0.2 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.

The following table reflects the base cash rental payments due from the Company for the next five years as of March 31, 2025:

The Company’s ground operating leases have a weighted-average remaining lease term, including assumed renewals, of 29.4 years and a weighted-average discount rate of 7.36 % as of June 30, 2025.

For each of the three months ended June 30, 2025 and 2024, the Company paid cash of $ 0.2 million for amounts included in the measurement of lease liabilities and recorded expense of$ 0.2 million on a straight-line basis in accordance with the current accounting guidance.

For each of the six months ended June 30, 2025 and 2024, the Company paid cash of $ 0.4 million and recorded expense of $ 0.4 million.

The ground operating lease expense is recorded in property operating and maintenance expense in the Company’s consolidated statements of operations and comprehensive loss.

NATIONAL HEALTHCARE PROPERTIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025

The following table reflects the base cash rental payments due from the Company for the next five years as of June 30, 2025:

Future Base Rent Payments

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Total present value of minimum lease payments $ 7,801 $ 4,018

(1) The direct finance lease liability is included in accounts payable and accrued expenses on the balance sheet as of March 31, 2025.

(1) The direct finance lease liability is included in accounts payable and accrued expenses on the balance sheet as of June 30, 2025.

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.

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In the ordinary course of business, the Company may become subject to litigation, claims and regulatory matters.

As of March 31, 2025, there are no material legal or regulatory proceedings pending or known to be contemplated against the Company or its properties.

NATIONAL HEALTHCARE PROPERTIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

As of June 30, 2025, 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 March 31, 2025, 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.

As of June 30, 2025, 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 Quarterly Report on Form 10-Q and determined that there have not been any events that have occurred that would require adjustments to disclosures in the consolidated financial statements except for those listed below:

Subsequent to March 31, 2025, the Company disposed of one OMF and three SHOPs for an aggregate contract sales price of $ 9.1 million.

In April 2025, the Company repaid the OMF Warehouse Facility in full in the amount of $ 21.7 million plus unpaid interest and terminated the facility and the two related interest rate caps with a notional of $ 21.7 million.

Subsequent to June 30, 2025, the Company disposed of one SHOP for the contract sales price of $ 1.8 million.

Management ’ s Discussion and Analysis of Financial Condition and Results of Operations.

17 unchanged sentences

and that our ongoing or potential future transactions are subject to market conditions and capital availability and may not be identified or completed on favorable terms, or at all.

Some of the additional risks and uncertainties, although not all risks and uncertainties, that could cause our actual results to differ materially from those presented in our forward-looking statements are set forth in the Risk Factors section of our Annual Report on Form 10-K for the year ended December 31, 2024 as well as Part II — Other Information, Item IA — Risk Factors below.

Some of the additional risks and uncertainties, although not all risks and uncertainties, that could cause our actual results to differ materially from those presented in our forward-looking statements are set forth in the Risk Factors section of our Annual Report on Form 10-K for the year ended December 31, 2024, in Part II — Other Information, Item IA — Risk Factors of this Quarterly Report on Form 10-Q and as described from time to time in our other filings with the Securities and Exchange Commission.

We are a real estate investment trust (“REIT”) for U.S.

federal income tax purposes.

We acquire, own and manage a diversified portfolio of healthcare-related real estate focused on outpatient medical facilities and senior housing operating properties.

As of March 31, 2025, we owned 181 properties (including one land parcel) located in 30 states and comprised of 7.6 million rentable square feet.

We acquire, own and manage a diversified portfolio of healthcare-related real estate focused on outpatient medical facilities (“OMFs”) and senior housing operating properties (“SHOPs”).

As of June 30, 2025, we owned 175 properties (including one land parcel) located in 30 states and comprised of 7.3 million rentable square feet.

Substantially all of our business is conducted through the OP and its wholly-owned subsidiaries.

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We operate in two reportable business segments for management and financial reporting purposes:

outpatient medical facilities (“OMFs”) and senior housing operating properties (“SHOPs”).

OMFs and SHOPs.

All of our properties across both business segments are located throughout the United States.

In our OMF operating segment, we own, manage and lease 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.

In our OMF operating segment, we own, manage and lease single- and multi-tenant OMFs where tenants are generally 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.

Our Property Manager or third-party managers manage our OMFs.

In our SHOP segment, we invest in seniors housing properties through the REIT Investment Diversification and Empowerment Act of 2007 structure.

As of March 31, 2025, we had four eligible independent contractors operating 44 SHOPs.

As of June 30, 2025, we had four eligible independent contractors operating 41 SHOPs.

We declared and issued quarterly dividends entirely in shares of our common stock from October 2020 through January 2024.

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We intend 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 and until we list our common stock.

Internalization

On September 27, 2024, we consummated the Internalization after, among other things, terminating the advisory agreement with the Advisor.

For more information regarding the Internalization, including the fees paid therewith, see Note 1 — Organization and Note 9 — Related Party Transactions and Arrangements to our consolidated financial statements in this Quarterly Report on Form 10-Q.

As a result of the Internalization, our termination of the advisory agreement and the Property Manager becoming our wholly-owned subsidiary, we no longer incur the asset management, property management and other fees and expenses that we were obligated to pay to the Advisor and its affiliates prior to the Internalization.

With an internalized workforce, we have incurred and will continue to incur costs for employee compensation and other general and administrative expenses.

Reverse Stock Split

7 unchanged sentences

See Note 2 — Summary of Significant Accounting Policies - Recently Issued Accounting Pronouncements to our consolidated financial statements in this Quarterly Report on Form 10-Q for further discussion.

The following table presents certain additional information about the properties we owned as of March 31, 2025:

The following table presents certain additional information about the properties we owned as of June 30, 2025:

Portfolio Number

8 unchanged sentences

Total Portfolio 175 7,342,577 $ 2,218,141

(1) Inclusive of leases signed but not yet commenced as of March 31, 2025.

(2) Weighted-average remaining lease term in years is calculated based on square feet as of March 31, 2025.

(3) Gross asset value represents total real estate investments, at cost ($2.3 billion total as of March 31, 2025) net of gross market lease intangible liabilities ($20.0 million total as of March 31, 2025).

(1) Inclusive of leases signed but not yet commenced as of June 30, 2025.

(2) Weighted-average remaining lease term in years is calculated based on square feet as of June 30, 2025.

(3) Gross asset value represents total real estate investments, at cost ($2.2 billion total as of June 30, 2025) net of gross market lease intangible liabilities ($19.9 million total as of June 30, 2025).

Cumulative impairment charges are reflected within gross asset value.

(4) Includes one parcel of land.

As of March 31, 2025, we had 3,939 rentable units in our SHOP segment.

The SHOP segment excludes one closed SHOP with 39 rentable units and a land parcel.

(5) Percentage leased for the OMF segment is presented as of the end of the peri od shown;

percentage leased for the SHOP segment is presented for the duration of the period shown.

As of June 30, 2025, we had 3,784 rentable units in our SHOP segment.

The SHOP segment excludes one closed SHOP with 39 rentable units.

(5) Percentage leased for the OMF segment is presented as of the end of the period shown;

percentage leased for the SHOP segment represents occupancy as of the end of the period shown.

Results of Operations

Comparison of the Three Months Ended March 31, 2025 and 2024

Net loss attributable to common stockholders was $5.0 million and $19.0 million, respectively, for the three months ended March 31, 2025, and 2024.

The following table shows our results of operations for the three months ended March 31, 2025 and 2024 and the period to period change by line item of the consolidated statements of operations:

Three Months Ended March 31, Increase (Decrease)

Comparison of the Three Months Ended June 30, 2025 and 2024

Net loss attributable to common stockholders was $24.2 million and $119.9 million, respectively, for the three months ended June 30, 2025, and 2024.

The following table shows our results of operations for the three months ended June 30, 2025 and 2024 and the period to period change by line item of the consolidated statements of operations:

Three Months Ended June 30, Increase (Decrease)

(Dollars in thousands) 2025 2024 $

5 unchanged sentences

— 6,424 (6,424)

Termination fees to related parties

— 98,241 (98,241)

Acquisition and transaction related 497 357 140

3 unchanged sentences

Operating loss before loss on sale of real estate investments (8,170) (100,215) 92,045

(11,965) (1,120) (10,845)

Gain on sale of real estate investments

Gain (loss) on sale of real estate investments

2,652 (225) 2,877

Operating income (loss)

Operating loss

(5,518) (100,440) 94,922

1 unchanged sentence

Interest expense (15,836) (17,752) 1,916

Interest and other (expense) income

(Loss) gain on non-designated derivatives

Interest and other income

231 457 (226)

Gain on extinguishment of debt 257 — 257

Gain on non-designated derivatives

Total other expenses (15,316) (16,413) 1,097

6 unchanged sentences

Segment Results — Outpatient Medical Facilities

The following table presents the revenue and property operating and maintenance expense and the period to period change within our OMF segment for the three months ended March 31, 2025 and 2024:

Three Months Ended March 31, Increase (Decrease) to NOI

The following table presents the revenue and property operating and maintenance expense and the period to period change within our OMF segment for the three months ended June 30, 2025 and 2024:

Three Months Ended June 30, Increase (Decrease) to NOI

(in thousands) 2025 2024 $ %

1 unchanged sentence

Property operating and maintenance 8,013 9,727 (1,714) (17.6) %

$ 19,466 $ 24,899 $ (5,433) (21.8) %

Number of Properties at March 31,

Occupancy for the Three Months Ended March 31,

NOI $ 21,239 $ 24,944 $ (3,705) (14.9) %

Number of Properties at June 30,

Occupancy at June 30,

2025 2024 2025 2024

Total Portfolio 133 160 91.0 % 90.3 %

136 160 90.5 % 90.5 %

Revenue from tenants primarily reflects contractual rent received from tenants in our OMFs and operating expense reimbursements.

These reimbursements generally increase in proportion with the increase in property operating and maintenance expenses in our OMF segment.

Pursuant to many of our lease agreements in our OMFs, tenants are required to pay their pro rata share of property operating and maintenance expenses, which may be subject to expense exclusions and floors, in addition to base rent.

Property operating and maintenance expenses reflect the costs associated with our OMFs, including real estate taxes, utilities, repairs, maintenance and unaffiliated third-party property management fees.

The OMF net operating income (“NOI”) decrease for the three months ended March 31, 2025 over the same period in 2024 was primarily driven by the disposition of 24 OMFs subsequent to March 31, 2024.

Pursuant to many of our lease agreements in our OMFs, tenants are generally required to pay their pro rata share of property operating and maintenance expenses, which may be subject to expense exclusions and floors, certain capital expenditures, and salaries in addition to base rent.

Property operating and maintenance expenses reflect the costs associated with our OMFs, including real estate taxes, utilities, repairs, maintenance and property management fees.

The OMF net operating income (“NOI”) decrease for the three months ended June 30, 2025 over the same period in 2024 was primarily driven by the disposition of 27 OMFs subsequent to June 30, 2024, which was partially offset by positive trends in revenue driven by occupancy gains.

(See Note 15 - Segment Reporting to our consolidated financial statements in this Quarterly Report on Form 10-Q for additional information on our presentation of NOI for the segments).

Segment Results — Seniors Housing Operating Properties

The following table presents the revenue and property operating and maintenance expenses and the period to period change within our SHOP segment for the three months ended March 31, 2025 and 2024:

Three Months Ended March 31, Increase (Decrease) to NOI

The following table presents the revenue and property operating and maintenance expenses and the period to period change within our SHOP segment for the three months ended June 30, 2025 and 2024:

Three Months Ended June 30, Increase (Decrease) to NOI

(in thousands) 2025 2024 $ %

1 unchanged sentence

Property operating and maintenance 45,835 45,278 557 1.2 %

$ 9,437 $ 8,255 $ 1,182 14.3 %

Number of Properties at March 31,

Occupancy for the Three Months Ended March 31,

NOI $ 10,245 $ 8,868 $ 1,377 15.5 %

Number of Properties at June 30,

Occupancy for the Three Months Ended June 30,

2025 2024 2025 2024

1 unchanged sentence

42 47 81.4 % 75.8 %

(1) Includes two and one land parcels for the three months ended March 31, 2025 and 2024, respectively.

(1) Includes one and two land parcels for the three months ended June 30, 2025 and 2024, respectively.

Revenues from tenants within our SHOP segment are generated in connection with rent and services offered to residents depending on the level of care required, as well as fees associated with other ancillary services.

Property operating and maintenance expenses relate to the costs associated with staffing to provide care for the residents in our SHOPs, as well as food, marketing, real estate taxes, management fees paid to our third-party operators and costs associated with maintaining the physical site.

The SHOP NOI increase for the three months ended March 31, 2025 over the same period in 2024 was primarily due to positive trends in revenue driven by occupancy gains and continued expense management, partially offset by the disposition of two SHOPs subsequent to March 31, 2024.

The SHOP NOI increase for the three months ended June 30, 2025 over the same period in 2024 was primarily due to positive trends in revenue driven by occupancy gains, partially offset by higher operating expenses in 2025, and the disposition of three SHOPs subsequent to June 30, 2024.

Other Results of Operations

Impairment Charges

We recorded $11.9 million of impairment charges during the three months ended March 31, 2025, related primarily to two held-for-use SHOPs ($11.2 million) and one held-for-use OMF ($0.7 million).

These properties were impaired to their contractual sales price as determined by their purchase and sale agreements and were subsequently sold in April 2025 or expected to be sold.

We recorded $15.2 million of impairment charges during the three months ended June 30, 2025, related primarily to a held-for-use SHOP ($14.1 million).

This property was impaired to its contractual sales price as determined by its purchase and sale agreement and is expected to be sold.

See Note 3 — Real Estate Investments, Net to our consolidated financial statements in this Quarterly Report on Form 10-Q for additional information on the impairment charges.

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Following the consummation of the Internalization, we are no longer paying the above-referenced fees to the related parties.

Operating fees to these related parties were 6.4 million for the three months ended March 31, 2024.

No operating fees to related parties were incurred during the three months ended March 31, 2025 as a result of the Internalization.

Operating fees to these related parties were $6.4 million for the three months ended June 30, 2024.

No operating fees to related parties were incurred during the three months ended June 30, 2025 as a result of the Internalization.

See Note 9 — Related Party Transactions and Arrangements to our consolidated financial statements in this Quarterly Report on Form 10-Q which provides detail on our fees and expense reimbursements to our former Advisor.

Acquisition and Transaction Related Expenses

Acquisition and transaction related expenses were relatively consistent for the three months ended March 31, 2025 and 2024.

Acquisition and transaction related expenses were relatively consistent for the three months ended June 30, 2025 and 2024.

General and Administrative Expenses

General and administrative expenses decreased by $1.6 million to $5.2 million for the three months ended March 31, 2025 from $6.8 million for the three months ended March 31, 2024, primarily due to higher expense reimbursements to the former Advisor for the three months ended March 31, 2024, which included $0.7 million of severance costs for employees of the Advisor, partially offset by the lower professional fees incurred for the three months ended March 31, 2025 after the Internalization .

General and administrative expenses increased by $0.7 million to $5.4 million for the three months ended June 30, 2025 from $4.7 million for the three months ended June 30, 2024, primarily due to the stock-based compensation incurred in the three months ended June 30, 2025.

See Note 11 — Equity-Based Compensation to our consolidated financial statements in this Quarterly Report on Form 10-Q which provides detail on stock-based compensation.

Depreciation and Amortization Expenses

Depreciation and amortization expense increased by $3.0 million to $23.7 million for the three months ended March 31, 2025 from $20.7 million for the three months ended March 31, 2024.

The increase was primarily attributable to amortization of deferred leasing commissions.

Depreciation and amortization expense decreased by $3.4 million to $18.5 million for the three months ended June 30, 2025 from $21.9 million for the three months ended June 30, 2024.

The decrease was primarily attributable to property dispositions subsequent to the second quarter of 2024.

Gain on Sale of Real Estate Investments

During the three months ended March 31, 2025, we disposed of twelve OMFs for an aggregate contract sales price of $168.4 million and recorded an aggregate gain on sale of $25.0 million.

During the three months ended March 31, 2024, we did not dispose of any properties.

During the three months ended June 30, 2025, we disposed of three held-for-use OMFs and three held-for-use SHOPs for an aggregate contract sales price of $21.4 million.

These dispositions resulted in an aggregate gain on sale of $2.7 million.

During the three months ended June 30, 2024 we disposed of one SHOP for a contract sales price of $3.3 million and recorded a loss on sale of $0.2 million.

Interest Expense

Interest expense decreased by $1.9 million to $14.5 million for the three months ended March 31, 2025 from $16.4 million for the three months ended March 31, 2024.

The decrease in interest expense was mainly due to lower average balances of our indebtedness and lower weighted average interest rates during the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, and the proceeds of $1.5 million in connection to the partial unwind of an interest rate swap.

In conjunction with the partial unwind, the Company accelerated the reclassification of gains of $1.5 million from other comprehensive income to earnings as a result of the hedged forecasted transactions becoming probable not to occur.

This gain was recorded as a reduction in interest expense on its consolidated statements of operations and comprehensive loss for the three months ended March 31, 2025.

Interest expense decreased by $1.9 million to $15.8 million for the three months ended June 30, 2025 from $17.8 million for the three months ended June 30, 2024.

The decrease in interest expense was mainly due to lower average balances of our indebtedness and lower weighted average interest rates during the three months ended June 30, 2025, as compared to the three months ended June 30, 2024.

Our interest expense in future periods will vary based on our level of future borrowings and the cost of borrowings, among other factors (including the impact of variable rates to the extent such borrowings are not hedged).

Continued high interest rates may adversely impact the terms on which we may borrow in the future and thus our results of operations.

Interest and Other (Expense) Income

Interest and other (expense) income includes income from our investment securities and interest income earned on cash and cash equivalents held during the period.

Interest and other (expense) income was relatively flat for the three months ended March 31, 2025 and 2024.

Interest and Other Income

Interest and other income includes income from our investment securities and interest income earned on cash and cash equivalents held during the period.

Interest and other income was decreased by $0.2 million to $0.2 million for the three months ended June 30, 2025 from $0.5 million for the three months ended June 30, 2024.

This decrease is due to excess insurance reimbursement in June 30, 2024, partially offset by higher interest rates on, and balances of, our cash accounts during the three months ended June 30, 2025.

Gain on extinguishment of debt

We recorded a $0.3 million gain on extinguishment of debt the three months ended June 30, 2025 in connection with the repayment of a loan prior to maturity relating to the sale of a property.

Gain (loss) on Non-Designated Derivatives

The gain (loss) in the three months ended March 31, 2025 and 2024 on non-designated derivative instruments related to interest rate caps that are designed to protect us from adverse interest rate changes in connection with our credit facilities, which have floating interest rates.

The gain (loss) in the three months ended June 30, 2025 and 2024 on non-designated derivative instruments related to interest rate caps that are designed to protect us from adverse interest rate changes in connection with our credit facilities, which have floating interest rates.

The relevant amounts in each period represent the change in value and any cash received on the non-designated derivatives.

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Income taxes generally relate to our SHOPs, which are leased to our TRS.

We recorded an income tax expense of approximately $0.1 million for the three months ended March 31, 2024 .

Income tax expense for the three months ended March 31, 2025 was not material.

We recorded an income tax expense of approximately $0.1 million for the three months ended June 30, 2024 .

Income tax expense for the three months ended June 30, 2025 was not material.

Because of our TRS’s recent operating history of losses and the adverse economic impacts from increases in the rate of inflation in recent years on the results of operations of our SHOP assets, we are not able to conclude that it is more likely than not we will realize the future benefit of our deferred tax assets;

thus we have recorded a 100% valuation allowance on our net deferred tax assets through March 31, 2025.

thus we have recorded a 100% valuation allowance on our net deferred tax assets through June 30, 2025.

If and when we believe it is more likely than not that we will recover our deferred tax assets, we will reverse the valuation allowance as an income tax benefit in our consolidated statements of comprehensive loss.

Allocation for Preferred Stock Distributions

Allocation for preferred stock was $3.5 million for each of the three months ended March 31, 2025 and 2024.

Allocation for preferred stock was $3.4 million for each of the three months ended June 30, 2025 and 2024.

These amounts represent the allocation of our net loss that is attributable to holders of Series A Preferred Stock and Series B Preferred Stock.

The following table presents a reconciliation of our net cash provided by operations from our net loss for the three months ended March 31, 2025 and 2024:

Three Months Ended March 31, Increase

Comparison of the Six Months Ended June 30, 2025 and 2024

Net loss attributable to common stockholders was $29.2 million and $138.9 million, respectively, for the six months ended June 30, 2025 and 2024.

The following table shows our results of operations for the six months ended June 30, 2025 and 2024 and the period to period change by line item of the consolidated statements of operations:

Six Months Ended June 30, Increase (Decrease)

(in thousands) 2025 2024

Revenue from tenants $ 171,775 $ 177,116 $ (5,341)

Operating expenses:

Property operating and maintenance 111,388 110,150 1,238

Impairment charges 27,111 2,669 24,442

Operating fees to related parties

— 12,790 (12,790)

Termination fees to related parties

— 98,241 (98,241)

Acquisition and transaction related 548 499 49

General and administrative 10,618 11,436 (818)

Depreciation and amortization 42,245 42,666 (421)

Total expenses

191,910 278,451 (86,541)

Operating loss before gain/ (loss) on sale of real estate investments

(20,135) (101,335) 81,200

Gain (loss) on sale of real estate investments

27,641 (225) 27,866

Operating income (loss)

7,506 (101,560) 109,066

Other income (expense):

Interest expense (30,365) (34,135) 3,770

Interest and other income

216 529 (313)

Gain on extinguishment of debt 257 — 257

Gain on non-designated derivatives 31 2,833 (2,802)

Total other expenses

(29,861) (30,773) 912

Loss before income taxes (22,355) (132,333) 109,978

Income tax expense 6 (135) 141

Net loss (22,349) (132,468) 110,119

Net (income) loss attributable to non-controlling interests

(23) 452 (475)

Allocation for preferred stock (6,836) (6,900) 64

Net loss attributable to common stockholders $ (29,208) $ (138,916) $ 109,708

Segment Results — Outpatient Medical Facilities

The following table presents the revenue and property operating and maintenance expense and the period to period change within our OMF segment for the six months ended June 30, 2025 and 2024:

Six Months Ended June 30, Increase (Decrease) to NOI

(in thousands) 2025 2024 $

Revenue from tenants $ 59,887 $ 69,270 $ (9,383) (13.5) %

Property operating and maintenance 19,181 19,427 (246) (1.3) %

$ 40,706 $ 49,843 $ (9,137) (18.3) %

Number of Properties at June 30,

Occupancy at June 30,

2025 2024 2025 2024

Total Portfolio

133 160 91.0 % 90.3 %

Revenue from tenants primarily reflects contractual rent received from tenants in our OMFs and operating expense reimbursements.

These reimbursements generally increase in proportion with the increase in property operating and maintenance expenses in our OMF segment.

Property operating and maintenance expenses reflect the costs associated with our OMFs, including real estate taxes, utilities, repairs, maintenance and property management fees.

The OMF NOI decrease for the six months ended June 30, 2025 over the same period in 2024 was primarily driven by the disposition of 27 OMFs subsequent to June 30, 2024, which was partially offset by positive trends in revenue driven by occupancy gains.

Segment Results — Seniors Housing - Operating Properties

The following table presents the revenue and property operating and maintenance expense and the period to period change within our SHOP segment for the six months ended June 30, 2025 and 2024:

Six Months Ended June 30, Increase (Decrease) to NOI

(in thousands) 2025 2024 $

Revenue from tenants $ 111,888 $ 107,846 $ 4,042 3.7 %

Property operating and maintenance 92,207 90,723 1,484 1.6 %

$ 19,681 $ 17,123 $ 2,558 14.9 %

Number of Properties at June 30,

Occupancy for the Six Months Ended June 30,

2025 2024 2025 2024

Total Portfolio (1)

42 47 79.0 % 77.4 %

(1) Includes one and two land parcels for the six months ended June 30, 2025 and 2024, respectively.

The SHOP NOI increase for the six months ended June 30, 2025 over the same period in 2024 was primarily due to positive trends in revenue driven by occupancy gains, partially offset by higher operating expenses in 2025 and the disposition of three SHOPs subsequent to June 30, 2024.

Other Results of Operations

Impairment Charges

We recorded $27.1 million of impairment charges during the six months ended June 30, 2025 on three held-for-use SHOPs and two OMFs.

These properties were impaired to their contractual sales price as determined by their purchase and sale agreements.

Three of the properties have been sold and the remaining are expected to be sold.

We recorded $2.7 million of impairment charges during the six months ended June 30, 2024 on one held-for-use SHOP and one held-for-use OMF.

See Note 3 — Real Estate Investments, Net to our consolidated financial statements in this Quarterly Report on Form 10-Q for additional information on the impairment charges for the six months ended June 30, 2025 and 2024.

Operating Fees to Related Parties

Operating fees to these related parties were $12.8 million for the six months ended June 30, 2024.

No operating fees to related parties were incurred during the six months ended June 30, 2025 as a result of the Internalization.

Termination Fees to Related Parties

We recorded $98.2 million of termination fees to related parties in the six months ended June 30, 2024 as a result of our termination of the advisory agreement with the Advisor and transition to self-management through the Internalization.

Acquisition and Transaction Related Expenses

Acquisition and transaction related expenses were relatively flat for the six months ended June 30, 2025 and 2024.

General and Administrative Expenses

General and administrative expenses decreased by $0.8 million to $10.6 million for the six months ended June 30, 2025 compared to $11.4 million for the six months ended June 30, 2024.

The decrease in general and administrative expenses was primarily due to $0.7 million of severance payments incurred in the six months ended June 30, 2024 made to former employees of the Former Advisor and savings in professional fees and insurance in the six months ended June 30, 2025.

This was partially offset by the stock-based compensation incurred in the six months ended June 30, 2025.

Depreciation and Amortization Expenses

Depreciation and amortization expense decreased by $0.4 million to $42.2 million for the six months ended June 30, 2025 as compared with $42.7 million for the six months ended June 30, 2024.

The decrease was primarily attributable to property dispositions subsequent to the second quarter of 2024, which was partly offset by amortization of deferred leasing commissions.

Gain (Loss) on Sale of Real Estate Investments

During the six months ended June 30, 2025, we disposed of 15 held-for-use OMFs and three held-for-use SHOPs for an aggregate contract sales price of $$189.8 million.

These dispositions resulted in a gain on sale of $27.6 million.

During the six months ended June 30, 2024, we disposed of one SHOP for a contract sales price of $3.3 million.

This disposition resulted in a loss on sale of $0.2 million in the six months ended June 30, 2024 .

Interest Expense

Interest expense decreased by $3.8 million to $30.4 million for the six months ended June 30, 2025 from $34.1 million for the six months ended June 30, 2024.

The decrease in interest expense was mainly due to lower average balances of our indebtedness and lower weighted average interest rates during the six months ended June 30, 2025 as compared to the six months ended June 30, 2024.

Continued high interest rates may adversely impact the terms on which we may borrow in the future and thus our results of operations.

Interest and Other Income

Interest and other income includes income from our investment securities and interest income earned on cash and cash equivalents held during the period.

Interest and other income decreased by $0.3 million to $0.2 million for the six months ended June 30, 2025 from $0.5 million.

This decrease is due to excess insurance reimbursement in June 30, 2024, partially offset by higher interest rates on, and balances of, our cash accounts.

Gain on extinguishment of debt

We recorded a $0.3 million gain on extinguishment of debt the six months ended June 30, 2025 in connection with the repayment of a loan prior to maturity relating to the sale of a property.

Gain on Non-Designated Derivatives

Gain on non-designated derivative instruments for the six months ended June 30, 2025 and 2024 related to interest rate caps that are designed to protect us from adverse interest rate changes in connection with the Fannie Mae Master Credit Facilities, which have floating interest rates.

Income Tax Expense

Income taxes generally relate to our SHOPs, which are leased to our TRS.

We recorded an income tax expense of approximately $0.1 million for the six months ended June 30, 2024 .

Income tax expense for the six months ended June 30, 2025 was not material.

Allocation for Preferred Stock

Allocation for preferred stock was $6.8 million for the six months ended June 30, 2025 and $6.9 million for the six months ended June 30, 2024 .

These amounts represent the allocation of our net loss that is attributable to holders of Series A Preferred Stock and Series B Preferred Stock.

The following table presents a reconciliation of our net cash provided by operations from our net loss for the six months ended June 30, 2025 and 2024:

Six Months Ended June 30, Increase

(in thousands)

2025 2024 (Decrease)

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Cash Flows from Operating Activities

Cash flows provided by operating activities decreased by $23.8 million during the three months ended March 31, 2025 compared to the same period in 2024, primarily due to full repayment of the $30.3 million promissory note issued to the Advisor Parent in connection with the Internalization, which was repaid in full in January 2025.

Cash flows provided by operating activities decreased by $22.1 million during the six months ended June 30, 2025 compared to the same period in 2024, primarily due to full repayment of the $30.3 million promissory note issued to the Advisor Parent in connection with the Internalization, which was repaid in full in January 2025.

This was partially offset by a lower net loss in 2025 due to higher NOI generated by our properties.

Cash Flows from Investing Activities

Cash flows provided by investing activities increased by $90.3 million during the three months ended March 31, 2025 compared to the same period in 2024, primarily due to proceeds from the sale of 12 held-for-use OMFs during the three months ended March 31, 2025 .

Cash flows provided by investing activities increased by $91.7 million during the six months ended June 30, 2025 compared to the same period in 2024, primarily due to proceeds from the sale of 15 held-for-use OMFs during the six months ended June 30, 2025 .

Cash Flows from Financing Activities

Cash flows used in financing activities decreased by $0.7 million during the three months ended March 31, 2025 compared to the same period in 2024, primarily due to proceeds received from the partial unwind of an interest rate swap.

Cash flows used in financing activities decreased by $30.2 million during the six months ended June 30, 2025 compared to the same period in 2024, primarily due to the full repayment of the OMF Warehouse Facility for $21.7 million and preferred stock repurchases of $1.7 million in 2025 under our preferred stock repurchase program discussed below.

Liquidity and Capital Resources

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We expect to fund our 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 our operating activities, potential future advances under our Fannie Mae Master Credit Facilities, net cash provided by our property dispositions (as discussed below) and potential new financings utilizing certain of our currently unencumbered properties.

As of March 31, 2025, we had $71.4 million of cash and cash equivalents.

As of June 30, 2025, we had $47.1 million of cash and cash equivalents.

The Barclays OMF Loan Agreement requires us to maintain a minimum balance of cash and cash equivalents of $12.5 million at all times.

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Following the Internalization, we are no longer required to pay asset management and property management fees to the Advisor Parent.

As of March 31, 2025, our total debt leverage ratio (total debt divided by total gross asset value) was approximately 44.6%.

As of June 30, 2025, our total debt leverage ratio (total debt divided by total gross asset value) was approximately 44.9%.

Net debt totaled $1.0 billion, which represents gross debt ($1.0 billion) less cash and cash equivalents ($47.1 million).

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Cumulative impairment charges are reflected within gross asset value.

As of March 31, 2025, we had total gross borrowings of $1.1 billion, at a weighted-average interest rate of 5.40% and a weighted-average remaining term of 3.9 years.

As of June 30, 2025, we had total gross borrowings of $1.0 billion, at a weighted-average interest rate of 5.36% and a weighted-average remaining term of 3.7 years.

The weighted-average interest rate includes the impact of “pay-fixed” swaps that are designated as hedging instruments on a portion of our variable-rate debt, but does not include the impact of our non-designated interest rate caps (discussed below).

Inclusive of our non-designated interest rate caps, the weighted-average economic interest rate on our total gross borrowings was 5.1% as of March 31, 2025.

As of March 31, 2025, the carrying value of our real estate investments, at cost was $2.3 billion, with $1.2 billion of this asset value pledged as collateral for mortgage notes payable and $655.1 million of this asset value pledged to secure advances under our credit facilities.

Inclusive of our non-designated interest rate caps, the weighted-average economic interest rate on our total gross borrowings was 5.04% as of June 30, 2025.

As of June 30, 2025, the carrying value of our real estate investments, at cost was $2.2 billion, with $1.2 billion of this asset value pledged as collateral for mortgage notes payable and $623.5 million of this asset value pledged to secure advances under our credit facilities.

These real estate assets are not available to satisfy other debts and obligations, or to serve as collateral with respect to new indebtedness, as applicable, unless the existing indebtedness associated with the property is satisfied or the property is removed from the borrowing base of the credit facilities, which would impact availability thereunder.

Unencumbered real estate investments, at cost as of March 31, 2025 was $427.0 million.

Unencumbered real estate investments, at cost as of June 30, 2025 was $431.6 million.

There can be no assurance as to the amount of liquidity we would be able to generate from leveraging these unencumbered real estate investments, if we are able to leverage them at all.

Mortgage Notes Payable

As of March 31, 2025, we had $721.0 million in mortgage notes payable outstanding, all of which is either fixed-rate or effectively fixed through our interest rate swap at a weighted-average annual interest rate of 4.63% and a weighted-average remaining term of 5.1 years.

During the three months ended March 31, 2024, we entered into the BMO CPC Mortgage Loan in connection with a four-property acquisition also completed in the three months ended March 31, 2025.

The mortgage has a principal balance of $7.5 million, bears interest at an annual fixed rate of 6.84% and matures in March 2034 with no principal amounts due until that time.

As of June 30, 2025, we had $706.2 million in mortgage notes payable outstanding, all of which is either fixed-rate or effectively fixed through our interest rate swap at a weighted-average annual interest rate of 4.64% and a weighted-average remaining term of 4.9 years.

Credit Facilities

As of March 31, 2025, $360.8 million was outstanding under our credit facilities, which bore interest at a weighted-average annual rate of 6.93% and had a weighted-average remaining term of 1.6 years.

Inclusive of our non-designated interest rate caps, the weighted-average economic interest rate on our credit facilities was 5.95% as of March 31, 2025.

As of June 30, 2025, $337.6 million was outstanding under our credit facilities, which bore interest at a weighted-average annual rate of 6.86% and had a weighted-average remaining term of 1.3 years.

Inclusive of our non-designated interest rate caps, the weighted-average economic interest rate on our credit facilities was 5.91% as of June 30, 2025.

In April 2025, the Company repaid the OMF Warehouse Facility in full in the amount of $21.7 million plus unpaid interest and terminated the facility.

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Our interest rate caps are used to limit our exposure to interest rate movements on our Fannie Mae Master Credit Facilities for economic purposes, however, we do not elect to apply hedge accounting to these instruments.

As of March 31, 2025, we had eight SOFR-based interest rate caps with an aggregate notional amount of $369.2 million, which limits one-month SOFR to 3.50% and have varying maturities through January 2027.

As of June 30, 2025, we had nine SOFR-based interest rate caps with an aggregate notional amount of $481.3 million, which limits one-month SOFR to 3.50% and have varying maturities through November 2026.

Although these interest rate caps are not designated hedging instruments, we consider them economically related to our variable-rate credit facility borrowings.

As SOFR has increased beyond 3.50%, we received cash payments of $0.9 million in the three months ended March 31, 2025.

We received $1.8 million of cash payments in the three months ended March 31, 2024.

We have five interest rate caps with a notional amount of $289.4 million which mature in 2025, which represents the next maturing interest rate caps.

In April 2025, the Company terminated two interest rate caps with a notional of $21.7 million.

As SOFR has increased beyond 3.50%, we received cash payments of $1.8 million in the six months ended June 30, 2025.

We received $3.6 million of cash payments in the six months ended June 30, 2024.

We have three interest rate caps with a notional amount of $138.5 million which mature in July 2025, which represents the next maturing interest rate caps.

In April 2025, we terminated two interest rate caps with a notional of $21.7 million.

In June 2025, we purchased three interest rate caps with a notional of $133.8 million for $1.1 million that limit one-month SOFR to 3.50% and mature in November 2026 related to the Fannie Mae Master Credit Facilities.

These interest rate caps were purchased in advance of interest rate caps set to expire.

Capital Expenditures

During the three months ended March 31, 2025, our capital expenditures were $5.7 million, of which $3.6 million related to our OMF segment and $2.1 million related to our SHOP segment.

During the six months ended June 30, 2025, our aggregate capital expenditures were $12.4 million.

We anticipate our quarterly rate of capital expenditures for the OMF and SHOP segments throughout the remainder of 2025 to be relatively stable.

Dispositions — Three Months Ended March 31, 2025

We disposed of 12 held-for-use OMFs during the three months ended March 31, 2025 for an aggregate contract sales price of $168.4 million.

These dispositions resulted in an aggregate gain on sale of $25.0 million, which is presented in our consolidated statements of operations and comprehensive loss for the three months ended March 31, 2025.

Dispositions — Subsequent to March 31, 2025

We disposed of one OMF and three SHOPs subsequent to March 31, 2025 for an aggregate contract sales price of $9.1 million.

Dispositions — Three and Six Months Ended June 30, 2025

We disposed of three held-for-use OMFs and three held-for-use SHOPs during the three months ended June 30, 2025 for an aggregate contract sales price of $21.4 million.

These dispositions resulted in an aggregate gain on sale of $2.7 million, which is presented in our consolidated statements of operations and comprehensive loss for the three months ended June 30, 2025.

We disposed of 15 held-for-use OMFs and three held-for-use SHOPs during the six months ended June 30, 2025 for an aggregate contract sales price of $189.8 million.

These dispositions resulted in an aggregate gain on sale of $27.6 million , which is presented in our consolidated statements of operations and comprehensive loss for the six months ended June 30, 2025.

Dispositions — Subsequent to June 30, 2025

Subsequent to June 30, 2025, we disposed of one SHOP for the contract sales price of $1.8 million.

Preferred Stock Repurchase Program

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The program does not obligate us to repurchase any specific number of shares of Series A Preferred Stock and Series B Preferred Stock.

During the three months ended June 30, 2025, we repurchased and retired 56,916 shares of our Series A Preferred Stock at an average price of $14.46 and 66,213 shares of our Series B Preferred Stock at an average price of $13.83, inclusive of commissions.

Non-GAAP Financial Measures

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The table below reflects the items deducted from or added to net loss attributable to stockholders in our calculation of FFO and AFFO for the periods indicated:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(In thousands) 2025 2024 2025 2024

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(Gain) loss on sale of real estate investments

(2,652) 225 (27,641) 225

Adjustments for non-controlling interests

(146) (120) (202) (221)

FFO (as defined by NAREIT) attributable to stockholders

5,352 (96,499) 9,468 (95,592)

(Amortization) accretion of market lease and other intangibles, net

(135) (228) 2,196 (687)

Straight-line rent adjustments

(635) (90) (1,658) 98

Acquisition and transaction related (1)

497 357 548 499

Termination fees to related parties

— 98,241 — 98,241

Equity-based compensation 570 230 570 460

Depreciation and amortization on non-real estate assets 1,411 1,025 2,836 2,015

Mark-to-market (gains)/losses from derivatives (2)

Mark-to-market losses from derivatives (2)

813 910 1,744 732

Non-cash components of interest expense (3)

1,481 862 2,339 488

Adjustments for non-controlling interests

(13) (451) (32) (449)

Gain on extinguishment

(257) — (257) —

Casualty-related charges (4)

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The following table shows the sources for the payment of distributions to preferred stockholders, including distributions on unvested restricted shares and Common OP Units, but excluding distributions related to Class B Units as these distributions are recorded as an expense in our consolidated statements of operations and comprehensive loss, for the periods indicated.

No cash distributions were made to common stockholders, restricted shareholders, holders of Common OP Units or holders of Class B Units in the three months ended March 31, 2025.

No cash distributions were made to common stockholders, restricted shareholders, holders of Common OP Units or holders of Class B Units in the three months ended June 30, 2025.

Three Months Ended

March 31, 2025

(Dollars in thousands) Amounts Percentage of Distributions

March 31, 2025 June 30, 2025

(Dollars in thousands) Amounts Percentage of Distributions Amounts Percentage of Distributions

Distributions:

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Distributions to holders of Series B Preferred Stock

1,616 46.2% 1,584 46.2%

Distributions paid to holders of Series A Preferred Units 47 1.4% 46 1.3%

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Cash flows used in operations (1)

$ — —% $ — —%

Available cash on hand (2)

3,497 100.0% 3,430 100.0%

Total source of distribution coverage $ 3,497 100.0% $ 3,430 100.0%

Cash flows used in operations (in accordance with GAAP)

$ (21,229) $ (13,177)

Net loss (in accordance with GAAP) $ (1,515) $ (20,834)

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(2) Cash available cash on hand also includes proceeds from property dispositions and additional secured financings and borrowings under our credit facilities.

For the three months ended March 31, 2025, cash flows used in operations were $21.2 million.

For the six months ended June 30, 2025, cash flows used in operations were $13.2 million.

We had not historically generated sufficient cash flows from operations to fund the payment of dividends and other distributions at the current rate prior to switching from paying cash dividends to stock dividends on our common stock.

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Recent increases in inflation, driven by factors such as labor shortages, supply chain disruptions, higher property insurance, property tax and interest rates and increased economic and political uncertainties due to the tariffs imposed by, or imposed on, the United States, have and may continue to have adverse impacts on our results of operations and our liquidity as well as our tenants’ and residents’ ability to pay rent.

As of March 31, 2025, the increase to the 12-month Consumer Price Index for all items, as published by the Bureau of Labor Statistics, was 3.0%.

As of June 30, 2025, the increase to the 12-month Consumer Price Index for all items, as published by the Bureau of Labor Statistics, was 3.0%.

To hel p mitigate the adverse impact of inflation, most of our leases with our tenants in our OMF segment contain rent escalation provisions which increase the cash that is due under these leases over time.

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

What changed 10-Q

Item 1. Financial Statements