What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-11-05 compared with 2025-08-05 · 440 added, 406 removed, 1332 unchanged (39% of the section changed)

4 unchanged sentences

(In thousands, except share and per share data)

September 30,

2025 December 31, 2024

19 unchanged sentences

Mortgage notes payable, net $ 696,806 $ 779,160

Credit facilities 337,624 362,216

Fannie Mae secured debt

336,181 362,216

Market lease intangible liabilities, net 5,114 6,125

7 unchanged sentences

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

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

3,845,515 and 3,977,144 issued and outstanding as of September 30, 2025 and December 31, 2024, respectively

7.125 % Series B cumulative redeemable perpetual preferred stock, $ 0.01 par value, 3,680,000 authorized;

3,563,787 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

3,466,117 and 3,630,000 issued and outstanding as of September 30, 2025 and December 31, 2024, respectively

Common stock, $ 0.01 par value, 300,000,000 shares authorized, 28,426,694 and 28,296,439 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively

Additional paid-in capital 2,530,535 2,533,706

11 unchanged sentences

(In thousands, except share and per share data)

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

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

2025 2024 2025 2024

13 unchanged sentences

1,749 ( 22,505 ) ( 18,386 ) ( 123,840 )

Gain (loss) on sale of real estate investments

Gain on sale of real estate investments

626 1,579 28,267 1,354

Operating (loss) income

Operating income (loss)

2,375 ( 20,926 ) 9,881 ( 122,486 )

4 unchanged sentences

Gain on extinguishment of debt — — 257 —

Gain on non-designated derivatives

(Loss) gain on non-designated derivatives

( 77 ) ( 2,384 ) ( 46 ) 449

2 unchanged sentences

Loss before income taxes ( 12,468 ) ( 40,769 ) ( 34,821 ) ( 173,102 )

Income tax expense (benefit)

Income tax benefit

( 66 ) — ( 60 ) ( 135 )

( 12,534 ) ( 40,769 ) ( 34,881 ) ( 173,237 )

Net loss (income) attributable to non-controlling interests

Net (income) loss attributable to non-controlling interests

( 21 ) 77 ( 44 ) 529

3 unchanged sentences

Other comprehensive loss:

Unrealized (loss) gain on designated derivatives ( 2,205 ) ( 1,276 ) ( 7,199 ) 1,004

Unrealized loss on designated derivatives

( 1,881 ) ( 10,167 ) ( 9,080 ) ( 9,163 )

Comprehensive loss attributable to common stockholders

11 unchanged sentences

(In thousands, except share data)

Six Months Ended June 30, 2025

Nine Months Ended September 30, 2025

Series A Preferred Stock Series B Preferred Stock Common Stock

6 unchanged sentences

— — — — — — 1,903 — — 1,903 — 1,903

Common stock issuance, net of tax withholdings

— — — — 11,026 — ( 612 ) — — ( 612 ) — ( 612 )

Distributions declared on Series A Preferred Stock, $ 1.38 per share

10 unchanged sentences

Rebalancing of ownership percentage — — — — — — 41 — — 41 ( 41 ) —

Balance, June 30, 2025

Balance, September 30, 2025

3,845,515 $ 38 3,466,117 $ 35 28,307,465 $ 1,132 $ 2,530,535 $ 7,560 $ ( 1,912,081 ) $ 627,219 $ 5,429 $ 632,648

Three Months Ended June 30, 2025

Three Months Ended September 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

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

1 unchanged sentence

— — — — — — 1,333 — — 1,333 — 1,333

Common stock issuance, net of tax withholdings

— — — — 11,026 — ( 612 ) — — ( 612 ) — ( 612 )

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

11 unchanged sentences

Rebalancing of ownership percentage — — — — — — ( 5 ) — — ( 5 ) 5 —

Balance, June 30, 2025

Balance, September 30, 2025

3,845,515 $ 38 3,466,117 $ 35 28,307,465 $ 1,132 $ 2,530,535 $ 7,560 $ ( 1,912,081 ) $ 627,219 $ 5,429 $ 632,648

5 unchanged sentences

(In thousands, except share data)

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

Series A Preferred Stock Series B Preferred Stock Common Stock

15 unchanged sentences

Rebalancing of ownership percentage — — — — — — 103 — — 103 ( 103 ) —

Balance, June 30, 2024

Balance, September 30, 2024

3,977,144 $ 40 3,630,000 $ 36 28,296,439 $ 1,132 $ 2,533,697 $ 14,301 $ ( 1,846,558 ) $ 702,648 $ 5,658 $ 708,306

Three Months Ended June 30, 2024

Three Months Ended September 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

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

1 unchanged sentence

— — — — — — 153 — — 153 — 153

Distributions declared in common stock, $ 0.21 per share

— — — — ( 13,106 ) — — — — — — —

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

6 unchanged sentences

Rebalancing of ownership percentage — — — — — — 60 — — 60 ( 60 ) —

Balance, June 30, 2024

Balance, September 30, 2024

3,977,144 $ 40 3,630,000 $ 36 28,296,439 $ 1,132 $ 2,533,697 $ 14,301 $ ( 1,846,558 ) $ 702,648 $ 5,658 $ 708,306

5 unchanged sentences

(In thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from operating activities:

6 unchanged sentences

Amortization (accretion) of market lease and other intangibles, net 2,022 ( 822 )

2,196 ( 687 )

Bad debt expense 659 914

Equity-based compensation 1,903 613

(Gain) loss on sale of real estate investments

Gain on sale of real estate investments

( 28,267 ) ( 1,354 )

Cash received from non-designated derivative instruments 2,609 5,405

Gain on non-designated derivative instruments

( 31 ) ( 2,833 )

Loss (gain) on non-designated derivative instruments

Impairment charges 33,752 11,498

9 unchanged sentences

Deferred rent 3,013 ( 364 )

Net cash (used in) provided by operating activities

Net cash used in operating activities

( 3,008 ) ( 86,300 )

4 unchanged sentences

Proceeds from sales of real estate investments 90,340 82,278

Net cash provided by (used in) investing activities

Net cash provided by investing activities

73,137 58,563

Cash flows from financing activities:

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

Proceeds from credit facilities — 6,960

Payments on Fannie Mae and other secured debt

( 26,034 ) ( 4,327 )

Proceeds from Fannie Mae and other secured debt

Payments on mortgage notes payable ( 645 ) ( 879 )

Payments of deferred financing costs ( 205 ) ( 199 )

Proceeds from promissory note — 30,267

Repurchase of preferred stock ( 4,503 ) —

Distributions paid on Series A Preferred Stock ( 5,410 ) ( 5,501 )

( 3,634 ) ( 3,668 )

Distributions paid on Series B Preferred Stock ( 4,752 ) ( 4,849 )

( 3,200 ) ( 3,232 )

Distributions to non-controlling interest holders ( 139 ) ( 139 )

Net cash used in financing activities

Net cash (used in) provided by financing activities

( 41,688 ) 21,333

Net change in cash, cash equivalents and restricted cash $ 28,441 $ ( 6,404 )

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

Cash, cash equivalents and restricted cash, end of period $ 102,536 $ 84,912

NATIONAL HEALTHCARE PROPERTIES, INC.

2 unchanged sentences

(In thousands)

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,

Nine Months Ended September 30,

Cash and cash equivalents, end of period $ 47,059 $ 32,858

17 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025

September 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 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.

As of September 30, 2025, the Company owned 174 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”).

Prior to the consummation of the Internalization (as defined below) on September 27, 2024, the Company’s former advisor, Healthcare Trust Advisors, LLC (the “Advisor”), managed its day-to-day business with the assistance of its property manager, Healthcare Trust Properties, LLC (the “Property Manager”);

the Advisor and Property Manager were under common control with AR Global Investments, LLC (the “Advisor Parent”), and these related parties received compensation and fees for providing services to the Company.

the former Advisor and Property Manager were under common control with AR Global Investments, LLC (the “Advisor Parent”), and these related parties received compensation and fees for providing services to the Company.

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

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.

As of September 30, 2025, the Company owned 40 (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 June 30, 2025, the Company had four eligible independent contractors operating 41 SHOPs.

As of September 30, 2025, the Company had four eligible independent contractors operating 39 SHOPs.

The Company has two operating and reportable business segments:

12 unchanged sentences

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 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.

Consummation of the Internalization resulted in the internalization of the Company’s management through the merger of the former Advisor with and into Merger Sub, with the former Advisor being the surviving entity and the termination of the Company’s prior arrangement for advisory management services provided by the former Advisor.

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

NATIONAL HEALTHCARE PROPERTIES, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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.

September 30, 2025

Pursuant to the Internalization Agreement, on the Closing Date, (i) the outstanding membership interests of the former Advisor were converted into the right to receive from the Company an internalization fee of $ 98.2 million and (ii) the former 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 former 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 former Advisor Parent an aggregate cash consideration of $ 75.0 million (such cash amount, the “Closing Date Cash Consideration”), and the Company issued to the former 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, Name Change and Common Stock Par Value Adjustment

9 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 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.

The results of operations for the three and nine months ended September 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 and six months ended June 30, 2025.

Principles of Consolidation and Basis of Presentation

7 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025

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

As of September 30, 2025, these leases had a weighted average remaining lease term of 5.5 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 June 30, 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 September 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

June 30, 2025

September 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.

3 unchanged sentences

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.

The Company recorded reductions in revenue of $ 0.7 million for uncollectable amounts during the nine months ended September 30, 2025, and $ 0.1 million and $ 0.9 million for uncollectable amounts during the three and nine months ended September 30, 2024, respectively.

Reductions in revenue for the three months ended September 30, 2025 was not material.

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 and six months ended June 30, 2025 and 2024.

No properties were presented as discontinued operations during the three and nine months ended September 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 was one SHOP property classified as held for sale as of June 30, 2025.

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

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

9 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 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.

During the nine months ended September 30, 2024, the Company acquired four properties.

During the nine months ended September 30, 2025, the Company did no t acquire any properties.

All acquisitions during the nine months ended September 30, 2024 were asset acquisitions.

NATIONAL HEALTHCARE PROPERTIES, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025

September 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 six months ended June 30, 2025 or 2024.

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

Accounting for Leases

12 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025

September 30, 2025

Lessee Accounting

31 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025

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

As of September 30, 2025, the Company owned 40 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 June 30, 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 September 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 $ 11.4 million as of June 30, 2025.

thus the Company has provided a 100 % valuation allowance of $ 11.7 million as of September 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.

6 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025

September 30, 2025

Recently Issued Accounting Pronouncements

20 unchanged sentences

To conform to the current year presentation, amounts related to “construction in progress” and “accounts receivable, net” for the comparative periods have been reclassified from “prepaid expenses and other assets” and presented separately on the Company’s consolidated balance sheets.

Certain prior period amounts within the Company’s consolidated statements of operations and comprehensive loss, and the notes thereto, have been reclassified to be consistent with the current period presentation.

This reclassification did not affect the total assets, total liabilities, stockholder’s equity, net loss, or earnings per share in any of the periods reported.

Note 3 — Real Estate Investments, Net

1 unchanged sentence

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

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.

The Company owned 174 properties (including one land parcel and one SHOP held-for-sale) as of September 30, 2025.

No properties were acquired during the nine months ended September 30, 2025.

NATIONAL HEALTHCARE PROPERTIES, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025

September 30, 2025

Significant Concentrations

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.

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 June 30, 2025 and 2024:

As of September 30, 2025 and 2024, the Company had one tenant (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.

September 30,

State 2025 2024

6 unchanged sentences

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 June 30, Six Months Ended June 30,

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

(In thousands) 2025 2024 2025 2024

20 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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.

September 30, 2025

Three and Nine Months Ended September 30, 2025

The Company disposed of one held-for-sale SHOP during the three months ended September 30, 2025 for a contract sales price of $ 1.8 million.

This disposition resulted in a gain on sale of $ 0.1 million, which is included in the Company’s consolidated statements of operations and comprehensive loss for the three months ended September 30, 2025.

The Company disposed of 15 held-for-use OMFs and four SHOPs ( three held-for-use and one held-for-sale) during the nine months ended September 30, 2025 for an aggregate contract sales price of $ 191.6 million.

These dispositions resulted in an aggregate gain on sale of $ 28.3 million, which is presented in the Company’s consolidated statements of operations and comprehensive loss for the nine months ended September 30, 2025.

Three and Nine Months Ended September 30, 2024

The Company disposed of seven held-for-use OMFs, one held-for-use SHOP and one land parcel during the three months ended September 30, 2024 for an aggregate contract sales price of $ 79.3 million.

These dispositions resulted in an aggregate gain on sale of $ 1.6 million, which is presented in the Company’s consolidated statements of operations and comprehensive loss for the three months ended September 30, 2024.

The Company disposed of seven held-for-use OMFs, two held-for-use SHOPs and one land parcel during the nine months ended September 30, 2024 for an aggregate contract sales price of $ 82.6 million.

These dispositions resulted in an aggregate gain on sale of $ 1.4 million, which is presented in the Company’s consolidated statements of operations and comprehensive loss for the nine months ended September 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 was one SHOP classified as held for sale as of June 30, 2025.

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

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

10 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025

September 30, 2025

Impairment Charges

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,

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

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

(In thousands) 2025 2024 2025 2024

3 unchanged sentences

$ 6,641 $ 8,829 $ 33,752 $ 11,498

(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.

(1) Amounts presented for the nine months ended September 30, 2025 primarily relate to held-for-use properties.

These properties were impaired to their contractual sales price as determined by their purchase and sale agreements or estimated fair value 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 June 30, 2025 and December 31, 2024:

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

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

Portfolio Encumbered Properties June 30,

2025 December 31, 2024 June 30,

2025 December 31, 2024 Interest Rate Maturity

Portfolio Encumbered Properties September 30,

2025 December 31, 2024 September 30,

2025 December 31, 2024 Interest Rate Maturity Formerly known as:

(In thousands) (In thousands)

Secured Term Loan 1 due 2028 (4)

15 85,771 116,037 4.60 % 4.60 % Fixed May 2028 Multi-Property CMBS Loan

Secured Term Loan 2 due 2026 (2)(4)

38 330,248 363,957 3.76 % 3.63 % Fixed Dec.

2026 Capital One OMF Loan

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)

15 85,771 116,037 4.60 % 4.60 % Fixed May 2028

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

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

Secured Term Loan 3 due 2031

7 33,066 37,472 2.93 % 2.93 % Fixed Dec.

2031 BMO CMBS Loan

Secured Term Loan 4 due 2033

56 219,500 234,173 6.54 % 6.54 % Fixed June 2033 Barclays OMF Loan

Single Property Mortgage 1 due 2047

1 $ 6,335 $ 6,471 4.04 % 4.04 % Fixed May 2047 Fox Ridge Bryant

Single Property Mortgage 2 due 2049

1 14,519 14,833 2.99 % 2.99 % Fixed May 2049 Fox Ridge Chenal

Single Property Mortgage 3 due 2049

1 9,009 9,204 2.99 % 2.99 % Fixed May 2049 Fox Ridge North Little Rock

Multi Property Mortgage 1 due 2034

4 $ 7,500 $ 7,500 6.94 % 6.94 % Fixed March 2034 BMO CPC Mortgage

Gross mortgage notes payable 123 705,948 789,647 4.70 % 4.62 %

4 unchanged sentences

_____________

(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.

(1) Calculated on a weighted average basis over 365 days for all mortgages outstanding as of September 30, 2025 and December 31, 2024.

(2) Variable rate loan, based on daily SOFR (as defined below) as of September 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 September 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 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.

NATIONAL HEALTHCARE PROPERTIES, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025

September 30, 2025

As of September 30, 2025, the Company had pledged $ 1.2 billion in total real estate investments, at cost, as collateral for its $ 705.9 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 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 June 30, 2025 and December 31, 2024:

As of September 30, 2025, the Company was in compliance with these financial covenants.

See Note 5 — -Future Principal Payments for a schedule of principal payment requirements of the Company’s mortgage notes and other secured debt.

Note 5 — Fannie Mae and Other Secured Debt

The Company had the following Fannie Mae and other secured debt outstanding as of September 30, 2025 and December 31, 2024:

Outstanding Facility

Amount as of Effective Interest Rate (2) (3)

Credit Facilities Encumbered Properties (1)

2025 December 31, 2024 June 30,

2025 December 31, 2024 Interest Rate Maturity

Fannie Mae Secured Debt

Encumbered Properties (1)

September 30,

2025 December 31, 2024 September 30,

2025 December 31, 2024 Interest Rate Maturity Formerly known as:

(In thousands) (In thousands)

Fannie Mae Master Credit Facilities:

Capital One Facility 11 $ 201,635 $ 203,405 6.84 % 7.19 % Variable Nov.

KeyBank Facility 10 135,989 137,103 6.89 % 7.24 % Variable Nov.

Total Fannie Mae Master Credit Facilities 21 $ 337,624 $ 340,508

OMF Warehouse Facility — (4) — 21,708 — % 7.55 % Variable Dec.

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

(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.

Secured Fannie Mae Loan 1 due 2026

11 $ 200,751 $ 203,405 6.98 % 7.29 % Variable Nov.

2026 Capital One Facility

Secured Fannie Mae Loan 2 due 2026

10 135,430 137,103 7.03 % 7.34 % Variable Nov.

2026 KeyBank Facility

Total Fannie Mae Secured Debt

21 $ 336,181 $ 340,508 7.00 % 7.31 %

OMF Warehouse Facility (4)

— — 21,708 — % 7.66 % Variable Dec.

Total Fannie Mae and Other Secured Debt

21 $ 336,181 $ 362,216 7.00 % 7.33 %

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

(2) Calculated on a weighted average basis over 365 days for all outstanding amount as of September 30, 2025 and December 31, 2024, respectively.

(3) The Company has six active non-designated interest rate cap agreements with an aggregate notional amount of $ 342.8 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 Fannie Mae and other secured debt were 6.00 % and 5.99 %, as of September 30, 2025 and December 31, 2024, respectively.

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

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 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

On October 31, 2016, the Company, through wholly-owned subsidiaries of the OP, entered into a master credit facility agreement relating to a secured credit facility with KeyBank (the “KeyBank Facility”) and a master credit facility agreement with Capital One for a secured credit facility with Capital One Multifamily Finance LLC, an affiliate of Capital One (the “Capital One Facility” and, together with the KeyBank Facility, the “Fannie Mae Master Credit Facilities”).

As of September 30, 2025, the Company had pledged $ 625.0 million in total real estate investments, at cost as collateral under its Fannie Mae and other secured debt.

All of the real estate assets pledged to secure borrowings under the Company’s Fannie Mae and other secured debt 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 September 30, 2025 were $ 418.9 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 Fannie Mae and other secured debt or other future financings.

Fannie Mae Secured Debt

On October 31, 2016, the Company, through wholly-owned subsidiaries of the OP, entered into a master secured debt agreement with KeyBank (the “KeyBank Secured Debt”) and a master secured debt agreement with Capital One Multifamily Finance LLC, an affiliate of Capital One (the “Capital One Secured Debt” and, together with the KeyBank Secured Debt, “Fannie Mae Secured Debt”).

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.

2 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025

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.

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.

These deposits will be refunded upon the earlier of the Company’s achievement of a debt service coverage ratio above the minimum required amount of 1.40 or the maturity of the Fannie Mae Master Credit Facilities.

September 30, 2025

The Company may request future advances under the Fannie Mae Secured Debt 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 Secured Debt 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 S ecured Debt and the KeyBank S ecured Debt , respectively.

The Fannie Mae Secured Debt matures on November 1, 2026.

Through September 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 Secured Debt.

OMF Warehouse Facility

2 unchanged sentences

Non-Designated Interest Rate Caps

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.

As of September 30, 2025 the Company had six non-designated interest rate cap agreements with an aggregate notional amount of $ 342.8 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.

See Note 7 — Derivatives and Hedging Activities for additional information regarding the Company’s derivatives.

In connection with the Fannie Mae Master Credit Facilities, the Company was required to enter into interest rate cap agreements which the Company periodically renews upon their expiration.

In connection with the Fannie Mae Secured Debt, the Company was required to enter into interest rate cap agreements which the Company periodically renews upon their expiration.

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 June 30, 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 September 30, 2025 and thereafter, on all of the Company’s outstanding mortgage notes payable and other secured debt:

Future Principal Payments

(In thousands) Mortgage Notes Payable Credit Facilities Total

(In thousands) Mortgage Notes Payable Fannie Mae Secured Debt

2025 (remainder) $ 219 $ 1,442 $ 1,661

8 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025

September 30, 2025

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.

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

Note 6 — Fair Value of Financial Instruments

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 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.

However, as of September 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

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.

September 30, 2025

The following table presents information about the Company’s assets and liabilities measured at fair value as of September 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

June 30, 2025

September 30, 2025

Derivative assets, at fair value (non-designated) $ — $ 843 $ — $ 843

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 June 30, 2025 and December 31, 2024.

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

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

Financial Instruments Not Measured at Fair Va lue

2 unchanged sentences

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:

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

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

1 unchanged sentence

3 $ 704,830 $ 691,087 $ 788,464 $ 747,542

Credit facilities 3 337,624 338,792 362,216 362,974

Other secured debt

3 336,181 336,752 362,216 362,974

Total debt $ 1,041,011 $ 1,027,839 $ 1,150,680 $ 1,110,516

3 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025

September 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 June 30, 2025 and December 31, 2024:

(In thousands) Balance Sheet Location June 30,

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 September 30, 2025 and December 31, 2024:

(In thousands) Balance Sheet Location September 30,

2025 December 31, 2024

4 unchanged sentences

Cash Flow Hedges of Interest Rate Risk

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.

As of September 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.

2 unchanged sentences

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.

During the next 12 months, from October 1, 2025 through September 30, 2026 , the Company estimates that $ 6.5 million will be reclassified from other comprehensive income as a decrease to interest expense.

During the nine months ended September 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.

This gain was recorded as a reduction in interest expense in its consolidated statements of operations and comprehensive loss for the nine months ended September 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:

2 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025

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

September 30, 2025

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

(In thousands) 2025 2024 2025 2024

Amount of (loss) gain recognized in accumulated other comprehensive income on interest rate derivatives

Amount of gain (loss) recognized in accumulated other comprehensive income on interest rate derivatives

$ 427 $ ( 6,588 ) $ ( 714 ) $ 2,732

4 unchanged sentences

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.

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 June 30, 2025 and December 31, 2024:

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Interest Rate Derivatives Number of Instruments Notional Amount (1)

5 unchanged sentences

(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.

The actual one-month SOFR rates during the three months ended September 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.

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.

While the Company does not apply hedge accounting for these interest rate caps, they are economically hedging the Fannie Mae and other secured 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.

2 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025

September 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 June 30, 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 September 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

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

September 30, 2025 $ 8,415 $ — $ — $ 8,415 $ — $ — $ 8,415

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 June 30, 2025, there were no derivatives in a net liability position.

As of September 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 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.

As of September 30, 2025 and December 31, 2024, the Company had 28,426,694 and 28,296,439 shares of common stock outstanding, respectively, including 119,229 shares of unvested restricted stock outstanding as of September 30, 2025, 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 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.

Except for restricted shares awarded under the Plan (as defined below), no shares of common stock were issued during the three and nine months ended September 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.

5 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 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.

During the nine months ended September 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

5 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025

September 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 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.

The Company also had 100,000 Series A Preferred Units outstanding as of September 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.

1 unchanged sentence

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.

During the three months ended September 30, 2025, the Company repurchased and retired 74,713 shares of Series A Preferred Stock at an average price of $ 16.10 and 97,670 shares of Series B Preferred Stock at an average price of $ 16.03 , inclusive of commissions.

During the nine months ended September 30, 2025, the Company repurchased and retired 131,629 shares of Series A Preferred Stock at an average price of $ 15.39 and 163,883 shares of Series B Preferred Stock at an average price of $ 15.14 , 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.

6 unchanged sentences

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.

Immediately following the Internalization, the Company and the former 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.

Asset Management Fees

Under the limited partnership agreement of the OP (as amended from time to time, the “LPA”) and the previous advisory agreement and until March 31, 2015, for its asset management services, the Company issued the Advisor an asset management subordinated participation by causing the OP to issue to the Advisor partnership units of the OP designated as “Class B Units” (“Class B Units”).

Under the limited partnership agreement of the OP (as amended from time to time, the “LPA”) and the previous advisory agreement and until March 31, 2015, for its asset management services, the Company issued the former Advisor an asset management subordinated participation by causing the OP to issue to the former Advisor partnership units of the OP designated as “Class B Units” (“Class B Units”).

The Class B Units were intended to be profit interests and vest, and no longer are subject to forfeiture, at such time as:

3 unchanged sentences

(2) another liquidity event or (3) the termination of the advisory agreement by an affirmative vote of a majority of the Company’s independent directors without cause;

and (z) the Advisor is still providing advisory services to the Company (the “Performance Condition”).

and (z) the former Advisor is still providing advisory services to the Company (the “Performance Condition”).

Unvested Class B Units would be forfeited immediately if:

4 unchanged sentences

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.

September 30, 2025

The Board previously approved the issuance of 359,250 Class B Units to the former 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 June 30, 2025, the Company determined that achieving the Performance Condition was not yet considered probable for accounting purposes.

As of September 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.

Therefore, no expense has ever been recognized in connection with the Class B Units.

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.

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

The advisory agreement also required the Company to pay the former 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 six months ended June 30, 2024 .

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

No incentive fee was incurred for the nine months ended September 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.

In connection with the Internalization, on the Closing Date, the Advisor Parent received an asset management fee of $ 10.9 million, representing the aggregate base management fee that the Company would have been required to pay to the Advisor during the six month notice period required to terminate the advisory agreement, inclusive of $ 5.5 million of base management fees that the Company would have been required to pay to the Advisor during the remaining three month notice period following the Closing Date.

In connection with the Internalization, on the Closing Date, the former Advisor Parent received an asset management fee of $ 10.9 million, representing the aggregate base management fee that the Company would have been required to pay to the former Advisor during the six month notice period required to terminate the advisory agreement, inclusive of $ 5.5 million of base management fees that the Company would have been required to pay to the former Advisor during the remaining three month notice period following the Closing Date.

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.

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.

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

During the three and nine months ended September 30, 2024 , t he Company incurred $ 2.7 million and $ 9.1 million , respectively, of reimbursement expenses from the former 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.

The former 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

June 30, 2025

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

Three Months Ended September 30, Nine Months Ended September 30, Payable (Prepayments) as of

2025 2024 2025 2024

(In thousands) Incurred Incurred Incurred

Incurred June 30,

Incurred September 30,

2025 December 31, 2024

10 unchanged sentences

Total related party operation fees and reimbursements $ — $ 17,917 $ — $ 136,566 $ — $ 30,267

(1) Reflects the Promissory Note issued to the Advisor Parent in connection with the Internalization, which was repaid in full in January 2025.

(1) Reflects the Promissory Note issued to the former Advisor Parent in connection with the Internalization, which was repaid in full in January 2025.

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

(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.

(3) The three months and nine ended September 30, 2024 includ e $ 0.1 million and $ 0.8 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 (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.

Under the LPA, if the common stock of the Company is listed on a national securities exchange, an affiliate of the former 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 nine months ended September 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 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.

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 and six months ended June 30, 2025 or 2024.

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 former 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

June 30, 2025

September 30, 2025

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 in 2013.

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.

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.

Under the LPA, upon termination or non-renewal of the advisory agreement with the former Advisor, with or without cause, an affiliate of the former 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 in 2013.

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 former 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.

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 nine months ended September 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

Under various agreements, prior to the Internalization, the Company engaged the Advisor, its affiliates and entities under common control with the Advisor to provide certain services that were essential to the Company, including asset management services, supervision of the management and leasing of properties owned by the Company and asset acquisition and disposition decisions, as well as other administrative responsibilities for the Company including accounting services and investor relations.

As a result of these relationships, the Company was dependent upon the Advisor and its affiliates prior to the Internalization.

Under various agreements, prior to the Internalization, the Company engaged the former Advisor, its affiliates and entities under common control with the former Advisor to provide certain services that were essential to the Company, including asset management services, supervision of the management and leasing of properties owned by the Company and asset acquisition and disposition decisions, as well as other administrative responsibilities for the Company including accounting services and investor relations.

As a result of these relationships, the Company was dependent upon the former Advisor and its affiliates prior to the Internalization.

Note 11 — Equity-Based Compensation

4 unchanged sentences

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.

As of September 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.

4 unchanged sentences

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.

The total grant date fair value of time-based restricted shares and performance-based RSUs granted during the nine months ended September 30, 2025 was $ 6.4 million, net of forfeitures.

No awards were granted during the three months ended September 30, 2025.

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

1 unchanged sentence

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):

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

NATIONAL HEALTHCARE PROPERTIES, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025

September 30, 2025

Number of Restricted Shares or RSUs Weighted-Average Issue Price

Unvested, January 1, 2025

Vested ( 30 ) $ 32.15

Granted 202 $ 32.15

Forfeitures ( 3 ) $ 32.15

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.

Unvested, September 30, 2025

Total stock-based compensation cost was $ 1.3 million and $ 1.9 million for the three and nine months September 30, 2025, respectively, which was recognized in general and administrative expense in the Company’s consolidated statements of operations and comprehensive loss.

As of September 30, 2025 there was $ 6.1 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 2.1 years.

Previous Restricted Share Plan

1 unchanged sentence

The RSP expired in February 2023.

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.

As of September 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 $ 0.6 million for the three and nine months ended September 30, 2024, respectively.

Note 12 — Accumulated Other Comprehensive Income

4 unchanged sentences

Amount of gain reclassified from accumulated other comprehensive income ( 8,366 )

Balance, June 30, 2025

Balance, September 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

June 30, 2025

September 30, 2025

Note 13 — Non-controlling Interests

1 unchanged sentence

Balance as of

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

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

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

4 unchanged sentences

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,

Three Months Ended September 30, Nine Months Ended September 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 and six months ended June 30, 2025 and 2024, Series A Preferred Unit holders were paid $ 46,000 and $ 0.1 million, respectively.

During the three and nine months ended September 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

June 30, 2025

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

Dur ing the nine months ended September 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 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.

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

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

Property Name

(Dollar amounts in thousands)

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

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

Plaza Del Rio Outpatient Medical Campus Portfolio (1)

1 unchanged sentence

(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.

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

Note 14 — Net Loss Per Share

The following is a summary of the basic and diluted net loss per share computation for the 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 June 30, Six Months Ended June 30,

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

2025 2024 2025 2024

11 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025

September 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 June 30, Six Months Ended June 30,

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

2025 2024 2025 2024

8 unchanged sentences

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

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

Th ere were 200,422 and zero unvested restricted shares outstanding as of September 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 June 30, 2025 and 2024.

There were 405,998 Common OP Units outstanding as of September 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 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).

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

These Class B Units were unvested as of September 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 June 30, 2025 and 2024 are presented for the Company’s two reportable business segments for management and internal financial reporting purposes.

The disclosures below for the three months ended September 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.

16 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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,

September 30, 2025

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

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

(in thousands) 2025 2024 2025 2024

15 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025

September 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 June 30, Six Months Ended June 30,

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

(in thousands) 2025 2024 2025 2024

33 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025

September 30, 2025

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

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

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

Investments in real estate, net:

13 unchanged sentences

Note 16 — Commitments and Contingencies

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 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.

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

The six operating leases have durations, including assumed renewals, ranging from 17.1 years to 36.1 years, excluding an adjacent parking lot lease with a term of 1.0 year.

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

As of September 30, 2025, the Company had ROU assets and liabilities of $ 7.3 million and $ 8.3 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 29.4 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.

The Company’s ground operating leases have a weighted-average remaining lease term, including assumed renewals, of 29.2 years and a weighted-average discount rate of 7.37 % as of September 30, 2025.

For each of the three months ended September 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 nine months ended September 30, 2025 and 2024, the Company paid cash of $ 0.6 million and recorded expense of $ 0.6 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.

1 unchanged sentence

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:

September 30, 2025

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

Future Base Rent Payments

5 unchanged sentences

Total present value of minimum lease payments $ 8,266 $ 4,017

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

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

1 unchanged sentence

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

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.

As of September 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 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.

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

Subsequent to September 30, 2025, the Company disposed of one SHOP in Georgia, for a contract sales price of $ 6.3 million.

As of September 30, 2025, the SHOP was classified as held-for-sale.

Subsequent to September 30, 2025, the Company entered into separate purchase and sale agreements to sell four properties consisting of two SHOPs and two OMFs for an aggregate contract sales price of $ 4.7 million.

The Company can provide no assurance that these dispositions will close on the expected timeline or at all.

In October 2025, the Company purchased two interest rate caps with a notional of $ 146.1 million for $ 0.4 million that limit one-month SOFR to 3.50 % and mature in November 2026 related to the Fannie Mae Secured Debt.

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

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

21 unchanged sentences

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.

As of September 30, 2025, we owned 174 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 our business is conducted through the OP and its wholly-owned subsidiaries.

Prior to consummation of the Internalization on September 27, 2024, our former Advisor managed our day-to-day business with the assistance of our property manager, Healthcare Trust Properties, LLC (the “Property Manager”);

the Advisor and Property Manager were under common control with AR Global Investments, LLC (the “Advisor Parent”) and these related parties received compensation and fees for providing services to us.

the former Advisor and Property Manager were under common control with AR Global Investments, LLC (the “Advisor Parent”) and these related parties received compensation and fees for providing services to us.

In connection with the Internalization, we internalized our advisory and property management functions with our own dedicated workforce;

6 unchanged sentences

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

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

As of September 30, 2025, we had four eligible independent contractors operating 39 SHOPs.

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

12 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 June 30, 2025:

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

Portfolio Number

8 unchanged sentences

Total Portfolio 174 7,309,680 $ 2,208,411

(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).

(1) Percentage leased as of September 30, 2025.

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

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

Cumulative impairment charges are reflected within gross asset value.

(4) Includes one parcel of land.

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.

As of September 30, 2025, we had 3,730 rentable units in our SHOP segment.

The SHOP segment excludes one vacant SHOP property.

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

1 unchanged sentence

Results of Operations

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)

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

Net loss attributable to common stockholders was $15.9 million and $44.1 million, respectively, for the three months ended September 30, 2025 and 2024.

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

Three Months Ended September 30, Increase (Decrease)

(Dollars in thousands) 2025 2024 $

12 unchanged sentences

Operating loss before loss on sale of real estate investments 1,749 (22,505) 24,254

Gain (loss) on sale of real estate investments

Gain on sale of real estate investments

626 1,579 (953)

Operating loss

Operating income (loss)

2,375 (20,926) 23,301

3 unchanged sentences

294 548 (254)

Gain on extinguishment of debt 257 — 257

Gain on non-designated derivatives

(77) (2,384) 2,307

Total other expenses (14,843) (19,843) 5,000

Loss before income taxes (12,468) (40,769) 28,301

Income tax expense (benefit)

Income tax benefit

Net loss (12,534) (40,769) 28,235

3 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 June 30, 2025 and 2024:

Three Months Ended June 30, 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 September 30, 2025 and 2024:

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

(in thousands) 2025 2024 $ %

2 unchanged sentences

NOI $ 20,631 $ 23,647 $ (3,016) (12.8) %

Number of Properties at June 30,

Occupancy at June 30,

Number of Properties at September 30,

Ending Occupancy at September 30,

2025 2024 2025 2024

4 unchanged sentences

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).

The OMF net operating income (“NOI”) decrease for the three months ended September 30, 2025 over the same period in 2024 was primarily driven by OMF dispositions subsequent to September 30, 2024, which was partially offset by increased expense recovery from tenants (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 June 30, 2025 and 2024:

Three Months Ended June 30, 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 September 30, 2025 and 2024:

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

(in thousands) 2025 2024 $ %

2 unchanged sentences

NOI $ 11,550 $ 8,886 $ 2,664 30.0 %

Number of Properties at June 30,

Occupancy for the Three Months Ended June 30,

Number of Properties at September 30,

Average Occupancy for the Three Months Ended September 30,

2025 2024 2025 2024

1 unchanged sentence

41 45 83.2 % 77.5 %

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

(1) Includes one land parcel for both the three months ended September 30, 2025 and 2024.

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 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.

The SHOP NOI increase for the three months ended September 30, 2025 over the same period in 2024 was primarily due to positive trends in revenue driven by occupancy gains and lower insurance expenses in 2025, which were partially offset by dispositions subsequent to September 30, 2024.

Other Results of Operations

Impairment Charges

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.

We recorded $6.6 million of impairment charges during the three months ended September 30, 2025.

This impairment was recorded to reduce the carrying value of two SHOPs and two OMFs to their estimated fair value.

We recorded $8.8 million of impairment charges during the three months ended September 30, 2024.

This impairment was recorded to reduce the carrying value of a held-for-use OMF to its estimated fair value .

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.

2 unchanged sentences

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 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.

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

No operating fees to related parties were incurred during the three months ended September 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.

Termination Fees to Related Parties

We recorded $8.4 million of termination fees to related parties in the three months ended September 30, 2024 as a result of our termination of the advisory agreement with the former Advisor and our transition to self-management through the Internalization.

Acquisition and Transaction Related Expenses

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

Acquisition and transaction related expenses decreased by $5.1 million to $0.1 million for the three months ended September 30, 2025 from $5.2 million for the three months ended September 30, 2024, primarily due to advisory, legal and other professional costs and non-recurring employee transition expenses directly related to the Internalization incurred in 2024.

General and Administrative Expenses

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.

General and administrative expenses increased by $0.2 million to $5.7 million for the three months ended September 30, 2025 from $5.5 million for the three months ended September 30, 2024, primarily due to the stock-based compensation expense incurred in the three months ended September 30, 2025.

This increase was partially offset by lower professional fees for the three months ended September 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 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.

Depreciation and amortization expense decreased by $2.7 million to $18.0 million for the three months ended September 30, 2025 from $20.7 million for the three months ended September 30, 2024.

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

Gain on Sale of Real Estate Investments

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.

Gain on sale of real estate investments decreased by $1.0 million to $0.6 million for the three months ended September 30, 2025 from $1.6 million for the three months ended September 30, 2024, primarily due to the disposal of seven OMFs, one SHOP and one land parcel for an aggregate contract sales price of $79.3 million and an aggregate gain on sale of $1.6 million in 2024.

Interest Expense

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.

Interest expense decreased by $2.9 million to $15.1 million for the three months ended September 30, 2025 from $18.0 million for the three months ended September 30, 2024.

The decrease in interest expense was mainly due to lower average balances of our indebtedness during the three months ended September 30, 2025, as compared to the three months ended September 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).

2 unchanged sentences

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.

Interest and other income decreased by $0.3 million to $0.3 million for the three months ended September 30, 2025 from $0.5 million for the three months ended September 30, 2024.

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

Gain (loss) on Non-Designated Derivatives

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 gain (loss) in the three months ended September 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 Fannie Mae Secured Debt, 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.

Income Tax Expense (Benefit)

Income Tax Benefit

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 June 30, 2024 .

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

We recorded an income tax benefit of approximately $0.1 million for the three months ended September 30, 2025.

Income tax benefit for the three months ended September 30, 2024 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 June 30, 2025.

thus we have recorded a 100% valuation allowance on our net deferred tax assets through September 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 $3.4 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.

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)

Allocation for preferred stock decreased by $0.1 million to $3.3 million for the three months ended September 30, 2025 from $3.5 million for the three months ended September 30, 2024 .

The decrease is due to repurchases of our preferred stock during the three months ended September 30, 2025.

Comparison of the Nine Months Ended September 30, 2025 and 2024

Net loss attributable to common stockholders was $45.1 million and $183.1 million, respectively, for the nine months ended September 30, 2025 and 2024.

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

Nine Months Ended September 30, Increase (Decrease)

(in thousands) 2025 2024

14 unchanged sentences

(18,386) (123,840) 105,454

Gain (loss) on sale of real estate investments

Gain on sale of real estate investments

28,267 1,354 26,913

6 unchanged sentences

Gain on extinguishment of debt 257 — 257

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

(Loss) gain on non-designated derivatives

(46) 449 (495)

Total other expenses

8 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 six months ended June 30, 2025 and 2024:

Six Months Ended June 30, 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 nine months ended September 30, 2025 and 2024:

Nine Months Ended September 30, Increase (Decrease) to NOI

(in thousands) 2025 2024 $

2 unchanged sentences

$ 60,689 $ 73,490 $ (12,801) (17.4) %

Number of Properties at June 30,

Occupancy at June 30,

Number of Properties at September 30,

Ending Occupancy at September 30,

2025 2024 2025 2024

5 unchanged sentences

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.

The OMF NOI decrease for the nine months ended September 30, 2025 over the same period in 2024 was primarily driven by OMF dispositions subsequent to September 30, 2024, which was partially offset by increased expense recovery from tenants.

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

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

Nine Months Ended September 30, Increase (Decrease) to NOI

(in thousands) 2025 2024 $

2 unchanged sentences

$ 31,232 $ 26,009 $ 5,223 20.1 %

Number of Properties at June 30,

Occupancy for the Six Months Ended June 30,

Number of Properties at September 30,

Average Occupancy for the Nine Months Ended September 30,

2025 2024 2025 2024

1 unchanged sentence

41 45 81.0 % 76.4 %

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

(1) Includes one land parcel for both the nine months ended September 30, 2025 and 2024,.

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.

The SHOP NOI increase for the nine months ended September 30, 2025 over the same period in 2024 was primarily due to positive trends in revenue driven by occupancy gains and lower insurance expenses in 2025, which were partially offset by dispositions subsequent to September 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.

We recorded $33.8 million of impairment charges during the nine months ended September 30, 2025 on five SHOPs and four OMFs.

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

We recorded $11.5 million of impairment charges during the nine months ended September 30, 2024 on two OMFs and one SHOP which were disposed in the nine months ended September 30, 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.

Operating fees to these related parties were $19.2 million for the nine months ended September 30, 2024.

No operating fees to related parties were incurred during the nine months ended September 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.

We recorded $106.7 million of termination fees to related parties in the nine months ended September 30, 2024 as a result of our termination of the advisory agreement with the former Advisor and our 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.

Acquisition and transaction related expenses decreased by $5.0 million to $0.6 million for the nine months ended September 30, 2025 compared to $5.7 million for the nine months ended September 30, 2024.

The decrease is primarily due to advisory, legal and other professional costs and non-recurring employee transition expenses directly related to the Internalization incurred in 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.

General and administrative expenses decreased by $1.3 million to $15.6 million for the nine months ended September 30, 2025 compared to $16.9 million for the nine months ended September 30, 2024.

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

This was partially offset by the stock-based compensation incurred in the nine months ended September 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 .

Depreciation and amortization expense decreased by $3.1 million to $60.3 million for the nine months ended September 30, 2025 as compared with $63.4 million for the nine months ended September 30, 2024.

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

Gain on Sale of Real Estate Investments

During the nine months ended September 30, 2025, we disposed of 15 held-for-use OMFs and four SHOPs (three held-for-use and one held-for-sale) for an aggregate contract sales price of $191.6 million and recorded an an aggregate gain on sale of $28.3 million.

During the nine months ended September 30, 2024, we disposed of seven OMFs, two SHOPs and one land parcel for an aggregate contract sales price of $82.6 million and recorded an aggregate gain on sale of $1.4 million.

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.

Interest expense decreased by $6.7 million to $45.4 million for the nine months ended September 30, 2025 from $52.1 million for the nine months ended September 30, 2024.

The decrease in interest expense was mainly due to lower average balances of our indebtedness nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024.

2 unchanged sentences

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.

Interest and other income decreased by $0.6 million to $0.5 million for the nine months ended September 30, 2025 from $1.1 million.

This decrease is due to excess insurance reimbursement in September 30, 2024.

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.

We recorded a $0.3 million gain on extinguishment of debt the nine months ended September 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.

Gain on non-designated derivative instruments for the nine months ended September 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 Secured Debt, 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.

We recorded an income tax expense of approximately $0.1 million for both nine months ended September 30, 2025 and 2024.

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

Allocation for preferred stock decreased by $0.2 million to $10.2 million for the nine months ended September 30, 2025 from $10.4 million for the nine months ended September 30, 2024 .

The decrease is due to repurchases of our preferred stock during the nine months ended September 30, 2025.

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

Nine Months Ended September 30, Increase

(in thousands)

1 unchanged sentence

Cash, cash equivalents and restricted cash, beginning of period $ 74,095 $ 91,316 $ (17,221)

Net cash (used in) provided by operating activities (13,177) 8,935 (22,112)

Net cash provided by (used in) investing activities 76,144 (15,578) 91,722

Net cash used in financing activities (33,892) (3,700) (30,192)

Net cash used in operating activities (3,008) (86,300) 83,292

Net cash provided by investing activities 73,137 58,563 14,574

Net cash (used in) provided by financing activities (41,688) 21,333 (63,021)

Cash, cash equivalents and restricted cash, end of period $ 102,536 $ 84,912 $ 17,624

Cash Flows from Operating Activities

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 provided by operating activities increased by $83.3 million during the nine months ended September 30, 2025 compared to the same period in 2024, primarily due to payments to the former Advisor Parent including partial repayment of the promissory note issued in connection with the Internalization (the “Promissory Note”) of $76.4 million in 2024.

Cash Flows from Investing Activities

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 provided by investing activities increased by $14.6 million during the nine months ended September 30, 2025 compared to the same period in 2024, primarily due to proceeds from the sale of 15 held-for-use OMFs and four held-for-use SHOPs during the nine months ended September 30, 2025 and lower costs incurred relating to property acquisitions in 2025 .

Cash Flows from Financing Activities

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.

Cash flows used in financing activities decreased by $63.0 million during the nine months ended September 30, 2025 compared to the same period in 2024, primarily due to the incurrence of the $30.3 million balance on the Promissory Note in 2024, full repayment of the OMF Warehouse Facility for $21.7 million in 2025 and preferred stock repurchases of $4.5 million in 2025 under our preferred stock repurchase program discussed below.

Liquidity and Capital Resources

3 unchanged sentences

Moreover, these adverse impacts, as well as the increased economic and political uncertainties due to the ongoing wars in Ukraine, Israel and related sanctions and the tariffs imposed by, or imposed on, the United States and its trading relationships, may also adversely impact our tenants’ and residents’ ability to pay rent and thus our cash flows.

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

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, net cash provided by our property dispositions (as discussed below) and potential new financings utilizing certain of our currently unencumbered properties.

As of September 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.

Internalization

Pursuant to the merger agreement dated August 6, 2024 (the “Internalization Agreement”) effecting the Internalization, (i) the outstanding membership interests of the Advisor were converted into the right to receive from us 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 we would have been required to pay to our former 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 we would have been required to pay to the Property Manager through the current term of the property management agreement, subject to certain other adjustments (collectively, the “Closing Payments” in an aggregate amount of $106.6 million).

Pursuant to the merger agreement dated August 6, 2024 (the “Internalization Agreement”) effecting the Internalization, (i) the outstanding membership interests of the former Advisor were converted into the right to receive from us an internalization fee of $98.2 million and (ii) the former Advisor Parent received (x) an asset management fee of $5.5 million, representing the aggregate base management fee that we would have been required to pay to our former 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 we would have been required to pay to the Property Manager through the current term of the property management agreement, subject to certain other adjustments (collectively, the “Closing Payments” in an aggregate amount of $106.6 million).

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.

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

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

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

As of September 30, 2025, our total debt leverage ratio (total debt divided by total gross asset value) was approximately 45.1%.

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

1 unchanged sentence

Cumulative impairment charges are reflected within gross asset value.

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.

As of September 30, 2025, we had total gross borrowings of $1.0 billion, at a weighted-average interest rate of 5.44% and a weighted-average remaining term of 3.5 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 5.04% 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 June 30, 2025 was $431.6 million.

Inclusive of our non-designated interest rate caps, the weighted-average economic interest rate on our total gross borrowings was 5.11% as of September 30, 2025.

As of September 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 $625.0 million of this asset value pledged to secure advances under our Fannie Mae and other secured debt.

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 Fannie Mae and other secured debt, which would impact availability thereunder.

Unencumbered real estate investments, at cost as of September 30, 2025 was $418.9 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 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 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.

As of September 30, 2025, we had $705.9 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 4.70% and a weighted-average remaining term of 4.6 years.

Fannie Mae and Other Secured Debt

As of September 30, 2025, $336.2 million was outstanding under our Fannie Mae and other secured debt, which bore interest at a weighted-average annual rate of 7.00% and had a weighted-average remaining term of 1.1 years.

Inclusive of our non-designated interest rate caps, the weighted-average economic interest rate was 6.00% as of September 30, 2025.

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

Non-Designated Interest Rate Caps

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 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 $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.

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

As of September 30, 2025, we had six SOFR-based interest rate caps with an aggregate notional amount of $342.8 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 secured debt.

As SOFR has increased beyond 3.50%, we received cash payments of $2.6 million in the nine months ended September 30, 2025.

We received $5.4 million of cash payments in the nine months ended September 30, 2024.

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.

In October 2025, we purchased two interest rate caps with a notional of $146.1 million for $0.4 million that limit one-month SOFR to 3.50% and mature in November 2026 related to the Fannie Mae Secured Debt.

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

Capital Expenditures

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 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.

During the nine months ended September 30, 2025, our aggregate capital expenditures were $17.0 million.

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

Dispositions — Three and Nine Months Ended September 30, 2025

We disposed of one held-for-sale SHOP during the three months ended September 30, 2025 for a contract sales price of $1.8 million.

This disposition resulted in a gain on sale of $0.1 million, which is included in our consolidated statements of operations and comprehensive loss for the three months ended September 30, 2025.

We disposed of 15 held-for-use OMFs and four SHOPs (three held-for-use and one held-for-sale) during the nine months ended September 30, 2025 for an aggregate contract sales price of $191.6 million.

These dispositions resulted in an aggregate gain on sale of $28.3 million, which is included in our consolidated statements of operations and comprehensive loss for the nine months ended September 30, 2025.

Dispositions — Subsequent to September 30, 2025

Subsequent to September 30, 2025, we disposed of one SHOP in Georgia for a contract sales price of $6.3 million.

As of September 30, 2025, the SHOP was classified as held-for-sale.

Preferred Stock Repurchase Program

3 unchanged sentences

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.

During the three months ended September 30, 2025, we repurchased and retired 74,713 shares of Series A Preferred Stock at an average price of $16.10 and 97,670 shares of Series B Preferred Stock at an average price of $16.03, inclusive of commissions.

During the nine months ended September 30, 2025, we repurchased and retired 131,629 shares of Series A Preferred Stock at an average price of $15.39 and 163,883 shares of Series B Preferred Stock at an average price of $15.14, inclusive of commissions.

Non-GAAP Financial Measures

19 unchanged sentences

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 June 30, Six Months Ended June 30,

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

(In thousands) 2025 2024 2025 2024

26 unchanged sentences

Gain on extinguishment

(257) — (257) —

Casualty-related charges (4)

18 unchanged sentences

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 June 30, 2025.

Three Months Ended

March 31, 2025 June 30, 2025

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

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 September 30, 2025.

Three Months Ended Year-To-Date

March 31, 2025 June 30, 2025 September 30, 2025 September 30, 2025

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

Distributions:

15 unchanged sentences

(1) Assumes the use of available cash flows from operations before any other sources.

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

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

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

For the nine months ended September 30, 2025, cash flows used in operations were $3.0 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.

5 unchanged sentences

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 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%.

As of September 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.

12 unchanged sentences

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