3 unchanged sentences
Should one or more of these risks or uncertainties materialize, actual results may differ materially from those expressed or implied by the forward-looking statements.
−Removed: See “Forward-Looking Statements” elsewhere in this Annual Report on Form 10-K for a description of these risks and uncertainties.
−Removed: We are a REIT for U.S.
−Removed: federal income tax purposes.
−Removed: We acquire, own and manage a diversified portfolio of healthcare-related real estate focused on outpatient medical facilities and senior housing operating properties.
−Removed: As of December 31, 2024, we owned 193 properties (including one land parcel) located in 31 states and comprised of 8.4 million rentable square feet.
+Added: See “Cautionary Note on Forward-Looking Statements” elsewhere in this Annual Report on Form 10-K for a description of these risks and uncertainties.
+Added: We have elected to be taxed as a REIT commencing with our taxable year ended December 31, 2013.
+Added: We acquire, own and manage a diversified portfolio of healthcare-related real estate focused on SHOPs and OMFs.
+Added: As of December 31, 2025, we owned 167 properties and a land parcel located in 29 states, consisted of 37 senior housing communities, with 3,615 units, in our SHOP segment and 130 outpatient medical facilities, with approximately 3.7 million square feet of GLA in our OMF segment.
+Added: We operate in two reportable business segments for management and financial reporting purposes:
+Added: SHOP and OMF.
+Added: All of our properties across both business segments are located throughout the United States.
+Added: In our SHOP segment, we invest in senior housing properties through the RIDEA structure.
+Added: As of December 31, 2025, we engaged three eligible independent contractors to operate 37 SHOPs.
+Added: In our OMF operating segment, we own, manage and lease single- and multi-tenant OMFs where tenants are generally required to pay their pro rata share of property operating expenses and certain capital expenditures, which may be subject to expense exclusions and floors, in addition to base rent.
+Added: We or third-party managers manage our OMFs.
Substantially all of our business is conducted through the OP and its wholly-owned subsidiaries.
−Removed: 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.
−Removed: Prior to the Internalization, the Advisor and Property Manager were under common control with the Advisor Parent and these related parties received compensation and fees for providing services to us.
+Added: Prior to consummation of the Internalization on September 27, 2024, our former Advisor and its related affiliates managed our day-to-day business and 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.
−Removed: the Property Manager became our wholly-owned subsidiary as a result of the Internalization.
See Note 1 — Organization and Note 9—Related Party Transactions and Arrangements to our Consolidated Financial Statements for additional information.
Effective September 30, 2024, we also effected the Reverse Stock Split.
−Removed: We operate in two reportable business segments for management and financial reporting purposes:
−Removed: OMFs and SHOPs.
−Removed: All of our properties across both business segments are located throughout the United States.
−Removed: In our OMF operating segment, we own, manage and lease single and multi-tenant OMFs where tenants are required to pay their pro rata share of property operating expenses, which may be subject to expense exclusions and floors, in addition to base rent.
−Removed: Our Property Manager or third-party managers manage our OMFs.
−Removed: In our SHOP segment, we invest in seniors housing properties through the RIDEA structure.
−Removed: As of December 31, 2024, we had four eligible independent contractors operating 44 SHOPs.
−Removed: We declared and issued quarterly dividends entirely in shares of our common stock from October 2020 through January 2024.
−Removed: We do not intend to declare any further stock dividends in the future.
Critical Accounting Policies and Estimates
−Removed: Set forth below is a summary of the critical accounting policies and estimates that management believes are important to the preparation of our Consolidated Financial Statements.
−Removed: Certain of our accounting estimates are particularly important for an understanding of our financial position and results of operations and require the application of significant judgment by our management.
−Removed: As a result, these estimates are subject to a degree of uncertainty.
−Removed: These significant accounting estimates and critical accounting policies include:
−Removed: Revenue Recognition
−Removed: Our revenues, which are derived primarily from lease contracts, include rent received from tenants in our OMF segment.
−Removed: As of December 31, 2024, these leases had a weighted average remaining lease term of 6.5 years.
−Removed: Rent from tenants in our OMF segment (as discussed below) is recorded in accordance with the terms of each lease on a straight-line basis over the initial term of the lease.
−Removed: Because many of the leases provide for rental increases at specified intervals, straight-line basis accounting requires us to record a receivable for, and include in revenue from tenants on a straight-line basis, unbilled rent receivables that we will only receive if the tenant makes all rent payments required through the expiration of the initial term of the lease.
−Removed: When we acquire a property, the acquisition date is considered to be the commencement date for purposes of this calculation.
−Removed: For new leases after acquisition, the commencement date is considered to be the date the tenant takes control of the space.
−Removed: For lease modifications, the commencement date is considered to be the date the lease modification is executed.
−Removed: We defer the revenue related to lease payments received from tenants in advance of their due dates.
−Removed: Tenant revenue also includes operating expense reimbursements which generally increase with any increase in property operating and maintenance expenses in our OMF segment.
−Removed: In addition to base rent, dependent on the specific lease, tenants are generally required to pay either (i) their pro rata share of property operating and maintenance expenses, which may be subject to expense exclusions and floors, or (ii) their share of increases in property operating and maintenance expenses to the extent they exceed the properties’ expenses for the base year of the respective leases.
−Removed: Under ASC 842, we have elected to report combined lease and non-lease components in a single line “Revenue from tenants.” For expenses paid directly by the tenant, under both ASC 842 and 840, we have reflected them on a net basis.
−Removed: Our revenues also include resident services and fee income primarily related to rent derived from lease contracts with residents in our SHOP segment, held using a structure permitted under RIDEA.
−Removed: Rental income from residents in our SHOP segment is recognized as earned when services are provided.
−Removed: Residents pay monthly rent that covers occupancy of their unit and basic services, including utilities, meals and some housekeeping services.
−Removed: The terms of the leases are short term in nature, primarily month-to-month.
−Removed: We defer the revenue related to lease payments received from tenants and residents in advance of their due dates.
−Removed: Pursuant to certain of our lease agreements, tenants are required to reimburse us 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.
−Removed: We continually review receivables related to rent and unbilled rent and determine 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.
−Removed: Under the leasing standards, we are required to assess, based on credit risk only, if it is probable that we will collect virtually all of the lease payments at lease commencement date and it must continue to reassess collectability periodically thereafter based on new facts and circumstances affecting the credit risk of the tenant.
−Removed: If we determine that it is probable it will collect virtually all of the lease payments (rent and common area maintenance), the lease will continue to be accounted for on an accrual basis (i.e.
−Removed: straight-line).
−Removed: However, if we determine it is not probable that we will collect virtually all of the lease payments, the lease will be accounted for on a cash basis and a full reserve would be recorded on previously accrued amounts in cases where it was subsequently concluded that collection was not probable.
−Removed: Cost recoveries from tenants are included in operating revenue from tenants in accordance with current accounting rules, on the accompanying consolidated statements of operations and comprehensive loss in the period the related costs are incurred, as applicable.
−Removed: During the years ended December 31, 2024, 2023 and 2022, we recorded reductions in revenue of $1.5 million, $1.2 million and $3.2 million, respectively, related to uncollectible accounts.
−Removed: Approximately $1.3 million of bad debt expense recorded in the year ended December 31, 2022, related to previously disposed properties.
−Removed: There were no significant write-offs related to previously disposed properties during the year ended December 31, 2024 and 2023.
−Removed: Investments in Real Estate
−Removed: Investments in real estate are recorded at cost.
−Removed: Improvements and replacements are capitalized when they extend the useful life or improve the productive capacity of the asset.
−Removed: Costs of repairs and maintenance are expensed as incurred.
+Added: The preparation of our Consolidated Financial Statements in conformity with GAAP included in Part IV, Item 15 of this Annual Report on Form 10-K requires us to use judgment in the application of critical accounting estimates and assumptions.
+Added: We base these estimates on our experience and assumptions we believe to be reasonable under the circumstances.
+Added: These estimates could affect our financial position or results of operations.
+Added: If our judgment or interpretation of the facts and circumstances relating to various transactions or other matters had been different, it is possible that different accounting would have been applied, resulting in a different presentation of our Consolidated Financial Statements.
+Added: We periodically re-evaluate our estimates and assumptions and, in the event estimates or assumptions prove to be different from actual results, we make adjustments in subsequent periods to reflect more current estimates and assumptions about matters that are inherently uncertain.
+Added: Below is a discussion of accounting policies and estimates that we consider critical in that they may require complex judgment in their application or require estimates about matters that are inherently uncertain.
+Added: For a more detailed discussion of our significant accounting policies, see Note 2 — Summary of Significant Accounting Policies to our Consolidated Financial Statements.
+Added: Purchase Price Allocation
At the time an asset is acquired, we evaluate the inputs, processes and outputs of the asset acquired to determine if the transaction is a business combination or asset acquisition.
1 unchanged sentence
If an acquisition qualifies as an asset acquisition, the related transaction costs are generally capitalized and subsequently amortized over the useful life of the acquired assets.
−Removed: See the “ Purchase Price Allocation” section below for a discussion of the initial accounting for investments in real estate.
−Removed: Disposal of real estate investments that represent a strategic shift in operations that will have a major effect on our operations and financial results are required to be presented as discontinued operations in the consolidated statements of operations.
−Removed: No properties were presented as discontinued operations during the years ended December 31, 2024, 2023 and 2022.
−Removed: 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.
−Removed: We evaluate probability of sale based on specific facts including whether a sales agreement is in place and the buyer has made significant non-refundable deposits.
−Removed: Properties are no longer depreciated when they are classified as held for sale.
−Removed: There were no real estate investments held for sale as of December 31, 2024 and 2023.
−Removed: Purchase Price Allocation
In both a business combination and an asset acquisition, we allocate the purchase price of acquired properties to tangible and identifiable intangible assets or liabilities based on their respective fair values.
6 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.
−Removed: All acquisitions during the years ended December 31, 2024, 2023 and 2022 were asset acquisitions.
−Removed: We acquired four properties during the year ended December 31, 2024.
For acquired properties with leases classified as operating leases, we allocate the purchase price to tangible and identifiable intangible assets acquired and liabilities assumed, based on their respective fair values.
1 unchanged sentence
We also consider information obtained about each property as a result of our pre-acquisition due diligence in estimating the fair value of the tangible and intangible assets acquired and intangible liabilities assumed.
−Removed: Tangible assets include land, land improvements, buildings, fixtures and tenant improvements on an as-if vacant basis.
We utilize various estimates, processes and information to determine the as-if vacant property value.
3 unchanged sentences
Factors considered in the analysis of the in-place lease intangibles include an estimate of carrying costs during the expected lease-up period for each property, taking into account current market conditions and costs to execute similar leases.
−Removed: In estimating carrying costs, we include real estate taxes, insurance and other operating expenses and estimates of lost rentals at contract rates during the expected lease-up period, which typically ranges from six to 24 months.
+Added: In estimating carrying costs, we include real estate taxes, insurance and other operating expenses and estimates of lost rentals at contract rates during the expected lease-up period.
We also estimate costs to execute similar leases including leasing commissions, legal and other related expenses.
Above-market and below-market lease values for acquired properties are initially recorded based on the present value (using a discount rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to each in-place lease and (ii) management’s estimate of market rental rates for each corresponding in-place lease, measured over a period equal to the remaining initial term of the lease for above-market leases and the remaining initial term plus the term of any below-market fixed rate renewal options for below-market leases.
−Removed: The aggregate value of intangible assets related to customer relationships, as applicable, is measured based on our evaluation of the specific characteristics of each tenant’s lease and our overall relationship with the tenant.
−Removed: Characteristics considered by us 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.
−Removed: We did not record any intangible asset amounts related to customer relationships during the years ended December 31, 2024 and 2023.
−Removed: Accounting for Leases
−Removed: Lessor Accounting
−Removed: We evaluate new leases (by us or by a predecessor lessor/owner) pursuant to ASC 842:
−Removed: Leases to determine lease classification.
−Removed: A lease is classified by a lessor as a sales-type lease if the significant risks and rewards of ownership reside with the tenant.
−Removed: This situation is met if, among other things, there is an automatic transfer of title during the lease, a bargain purchase option, the non-cancelable lease term is for more than a major part of the remaining economic useful life of the asset (e.g., equal to or greater than 75%), the present value of the minimum lease payments represents substantially all (e.g., equal to or greater than 90%) of the leased property’s fair value at lease inception, or the asset is so specialized in nature that it provides no alternative use to the lessor (and therefore would not provide any future value to the lessor) after the lease term.
−Removed: Further, such new leases would be evaluated to consider whether they would be failed sale-leaseback transactions and accounted for as financing transactions by the lessor.
−Removed: As of December 31, 2024 and 2023, we had no leases as a lessor that would be considered as sales-type leases or financings under sale-leaseback rules.
−Removed: As a lessor of real estate, we have elected, by class of underlying assets, to account for lease and non-lease components (such as tenant reimbursements of property operating and maintenance expenses) as a single lease component as an operating lease because (i) the non-lease components have the same timing and pattern of transfer as the associated lease component;
−Removed: and (ii) the lease component, if accounted for separately, would be classified as an operating lease.
−Removed: Additionally, only incremental direct leasing costs may be capitalized under the accounting guidance.
−Removed: Indirect leasing costs in connection with new or extended tenant leases, if any, are being expensed.
−Removed: Lessee Accounting
−Removed: We are also the lessee under certain land leases which will continue to be classified as operating leases under transition elections unless subsequently modified.
−Removed: These leases are reflected on the consolidated balance sheets as of December 31, 2024 and 2023, and the rent expense is reflected on a straight-line basis over the lease term in the consolidated statements of operations and comprehensive loss for the years ended December 31, 2024, 2023 and 2022.
−Removed: For lessees, the accounting standard requires the application of a dual lease classification approach, classifying leases as either operating or finance leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee.
−Removed: Lease expense for operating leases is recognized on a straight-line basis over the term of the lease, while lease expense for finance leases is recognized based on an effective interest method over the term of the lease.
−Removed: Also, lessees must recognize a right-of-use asset (“ROU”) and a lease liability for all leases with a term of greater than 12 months regardless of their classification.
−Removed: Further, certain transactions where at inception of the lease the buyer-lessor accounted for the transaction as a purchase of real estate and a new lease, may be required to have symmetrical accounting to the seller-lessee if the transaction was not a qualified sale-leaseback and accounted for as a financing transaction.
−Removed: For additional information and disclosures related to our operating leases, see Note 16 — Commitments and Contingencies to our Consolidated Financial Statements.
Impairment of Long-Lived Assets
−Removed: When circumstances indicate the carrying value of a property may not be recoverable, we review the property for impairment.
−Removed: This review is based on an estimate of the future undiscounted cash flows, excluding interest charges, expected to result from the property’s use and eventual disposition.
−Removed: These estimates consider factors such as expected future operating income, market and other applicable trends and residual value, as well as the effects of leasing demand, competition and other factors.
−Removed: If an impairment exists, due to the inability to recover the carrying value of a property, we would recognize an impairment loss in the consolidated statements of operations and comprehensive loss to the extent that the carrying value exceeds the estimated fair value of the property for properties to be held for use.
−Removed: For properties held for sale, the impairment loss recorded would equal the adjustment to fair value less estimated cost to dispose of the asset.
−Removed: These assessments have a direct impact on net loss because recording an impairment loss results in an immediate negative adjustment to earnings.
−Removed: Above-and Below-Market Lease Amortization
−Removed: Capitalized above-market lease values are amortized as a reduction of revenue from tenants over the remaining terms of the respective leases and the capitalized below-market lease values are amortized as an increase to revenue from tenants over the remaining initial terms plus the terms of any below-market fixed rate renewal options of the respective leases.
−Removed: If a tenant with a below-market rent renewal does not renew, any remaining unamortized amount will be taken into income at that time.
−Removed: Capitalized above-market ground lease values are amortized as a reduction of property operating expense over the remaining terms of the respective leases.
−Removed: Capitalized below-market ground lease values are amortized as an increase to property operating expense over the remaining terms of the respective leases and expected below-market renewal option periods.
−Removed: Recently Issued Accounting Pronouncements
−Removed: See Note 2 — Summary of Significant Accounting Policies — Recent Accounting Pronouncements to our Consolidated Financial Statements for further discussion.
+Added: Management assesses on a continuous basis whether there are indicators that the carrying value of our real estate properties may be impaired.
+Added: Such indicators include significant declines in market value, changes in property use or condition, legal or business developments, costs that significantly exceed management’s expectations, ongoing operating losses and changes in anticipated holding period.
+Added: If any of these indicators are present, management evaluates whether the property’s carrying value may not be recoverable based on an estimate of future undiscounted cash flows, excluding interest charges, expected to result from the property’s use and eventual disposition.
+Added: If an impairment exists due to the inability to recover the carrying value, we will recognize an impairment loss in the consolidated statements of operations and comprehensive loss to the extent that the carrying value exceeds the estimated fair value of real estate properties which are held for use.
+Added: Our estimated fair value is primarily based upon (i) estimated sales prices from signed contracts or letters of intent from third-party offers or (ii) discounted cash flow models of the property over its anticipated hold period.
+Added: Capitalization rates and discount rates utilized in these models are based upon unobservable rates that we believe to be within a reasonable range of current market rates.
+Added: In addition, such cash flow models consider factors such as expected future operating income, market and other applicable trends, residual value, leasing demand, competition, and other relevant factors.
+Added: Recent Accounting Pronouncements
+Added: See “ Note 2 — Summary of Significant Accounting Policies — Recent Accounting Pronouncements ” to our Consolidated Financial Statements for the impact of new accounting standards.
Results of Operations
+Added: We, through our chief operating decision maker (“CODM”), evaluate the performance of the combined properties in each segment based on total revenues from tenants, less property operating costs.
+Added: As such, this excludes all other items of expense and income included in the financial statements in calculating net loss (each item discussed separately in “Other Results of Operations” below).
+Added: We use net operating income (“NOI”) to assess and compare property level performance and to make decisions concerning the operation of our properties.
+Added: We believe that NOI is useful as a performance measure because, when compared across periods, NOI reflects the impact on operations from trends in occupancy rates, rental rates, operating expenses and acquisition activity on an unleveraged basis, providing perspective not immediately apparent from consolidated loss before income taxes.
+Added: NOI presented by us may not be comparable to NOI reported by other REITs that define NOI differently.
+Added: We believe that in order to facilitate a clear understanding of our operating results, NOI should be examined in conjunction with net income (loss) and net income (loss) attributable to common stockholders (each as determined in accordance with GAAP) as presented in our Consolidated Financial Statements.
+Added: NOI should not be considered as an alternative to net income (loss) and net income (loss) attributable to common stockholders (each as determined in accordance with GAAP) as an indication of our performance or to cash flows as a measure of our liquidity.
+Added: A reconciliation of NOI to net income (loss) attributable to common stockholders can be found in “ Note 15 — Segment Reporting ” to our Consolidated Financial Statements.
Below is a discussion of our results of operations for the years ended December 31, 2025 and 2024.
−Removed: See the “Results of Operations” section located under Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023 for a discussion of our results of operations for the year ended December 31, 2023 and comparisons between December 31, 2023 and 2022.
+Added: See the “Results of Operations” section located under Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024 for a discussion of our results of operations for the year ended December 31, 2024 and comparison between the years ended December 31, 2024 and 2023.
Comparison of the Years Ended December 31, 2025 and 2024
−Removed: Net loss attributable to common stockholders was $203.5 million and $86.1 million for the years ended December 31, 2024 and 2023, respectively.
−Removed: The following table shows our results of operations for the years ended December 31, 2024 and 2023 and the year-to-year change by line item of the consolidated statements of operations:
+Added: The following table shows our results of operations for the years ended December 31, 2025 and 2024 and the year-to-year change by line item of the consolidated statements of operations (dollars in thousands):
Year ended December 31, Increase (Decrease)
−Removed: (in thousands) 2024 2023 $ %
+Added: 2025 2024 $ %
Revenue from tenants $ 342,279 $ 353,794 $ (11,515) (3.3) %
1 unchanged sentence
Property operating and maintenance (1)
−Removed: Impairment charges 24,881 4,676 20,205 NM
+Added: 218,898 221,452 (2,554) (1.2)
+Added: Impairment charges 44,914 24,881 20,033 80.5
Termination fees to related parties
— 106,650 (106,650) NM
−Removed: Operating fees to related parties 19,203 25,527 (6,324) (24.8) %
−Removed: Acquisition and transaction related 7,949 545 7,404 NM
+Added: Operating fees to related parties — 19,203 (19,203) NM
+Added: Acquisition and transaction related 516 7,949 (7,433) (93.5)
General and administrative (1)
+Added: 24,190 22,440 1,750 7.8
Depreciation and amortization 78,261 84,067 (5,806) (6.9)
Total expenses 366,779 486,642 (119,863) (24.6)
−Removed: Operating loss before loss on sale of real estate investments (132,848) (4,416) (128,432) NM
−Removed: Gain (loss) on sale of real estate investments
−Removed: 9,307 (322) 9,629 NM
−Removed: Operating loss (123,541) (4,738) (118,803) NM
+Added: Operating loss before gain on sale of real estate investments
+Added: (24,500) (132,848) 108,348 81.6
+Added: Gain on sale of real estate investments
+Added: 27,800 9,307 18,493 198.7
+Added: Operating income (loss)
+Added: 3,300 (123,541) 126,841 102.7
Other (expense) income:
Interest expense (61,281) (69,447) 8,166 11.8
−Removed: Interest and other income 1,051 734 317 43.2 %
+Added: Interest and other income, net
+Added: 272 1,051 (779) (74.1)
Gain on extinguishment of debt
−Removed: Gain (loss) on non-designated derivatives
−Removed: 1,544 (1,995) 3,539 NM
−Removed: Total other expenses, net
257 392 (135) (34.4)
+Added: (Loss) gain on non-designated derivatives
+Added: (72) 1,544 (1,616) (104.7)
+Added: Total other expense, net
+Added: (60,824) (66,460) 5,636 8.5
Loss before income taxes (57,524) (190,001) 132,477 69.7
1 unchanged sentence
Net loss (57,685) (190,263) 132,578 69.7
−Removed: Net loss attributable to non-controlling interests 567 82 485 NM
−Removed: Allocation for preferred stock (13,799) (13,799) — NM
+Added: Net loss attributable to non-controlling interests 64 567 (503) (88.7)
+Added: Allocation for preferred stock (13,446) (13,799) 353 2.6
Net loss attributable to common stockholders $ (71,067) $ (203,495) $ 132,428 65.1 %
−Removed: Net Operating Income
−Removed: We, through our chief operating decision maker (“CODM”), evaluate the performance of the combined properties in each segment based on total revenues from tenants, less property operating costs.
−Removed: As such, this excludes all other items of expense and income included in the financial statements in calculating net loss (each item discussed separately in “Other Results of Operations” below).
−Removed: We use net operating income (“NOI”) to assess and compare property level performance and to make decisions concerning the operation of our properties.
−Removed: We believe that NOI is useful as a performance measure because, when compared across periods, NOI reflects the impact on operations from trends in occupancy rates, rental rates, operating expenses and acquisition activity on an unleveraged basis, providing perspective not immediately apparent from consolidated loss before income taxes.
−Removed: NOI presented by us may not be comparable to NOI reported by other REITs that define NOI differently.
−Removed: We believe that in order to facilitate a clear understanding of our operating results, NOI should be examined in conjunction with net income (loss) and net income (loss) attributable to common stockholders (each as determined in accordance with GAAP) as presented in our Consolidated Financial Statements.
−Removed: NOI should not be considered as an alternative to net income (loss) and net income (loss) attributable to common stockholders (each as determined in accordance with GAAP) as an indication of our performance or to cash flows as a measure of our liquidity.
−Removed: A reconciliation of NOI to net income (loss) attributable to common stockholders can be found in Note 1 5 — Segment Reporting to our Consolidated Financial Statements.
−Removed: Segment Results — Outpatient Medical Facilities
−Removed: The following table presents the components of NOI and the period to period change within our OMF segment for the years ended December 31, 2024 and 2023:
−Removed: Year Ended December 31, Increase (Decrease) to NOI
−Removed: (In thousands) 2024 2023 $ %
+Added: (1) Certain 2024 amounts have been reclassified from general and administrative to property operating and maintenance to align with the current period presentation.
+Added: Segment Results — Senior Housing Operating Properties
+Added: The following table presents the results of operations and the period-to-period change in our SHOP segment for the years ended December 31, 2025 and 2024 (dollars in thousands):
+Added: Year ended December 31, Increase (Decrease)
+Added: 2025 2024 $ %
Revenue from tenants $ 225,221 $ 216,477 $ 8,744 4.0 %
Property operating and maintenance 182,640 181,947 693 0.4
−Removed: $ 98,116 $ 97,495 $ 621 0.6 %
+Added: NOI $ 42,581 $ 34,530 $ 8,051 23.3 %
Number of properties at December 31,
−Removed: Occupancy (1) for the Years Ended December 31,
+Added: Average monthly revenue per occupied room for the year ended December 31,
+Added: Average unit occupancy for the year ended December 31,
2025 2024 2025 2024 2025 2024
−Removed: Total Portfolio
+Added: Total communities (1)
37 44 $6,078 $5,791 81.9% 77.4%
−Removed: (1) Occupancy for the OMF segment is presented as of the end of the period shown.
−Removed: Revenue from tenants primarily reflects contractual rent received from tenants in our OMFs and operating expense reimbursements.
−Removed: These reimbursements generally increase in proportion with the increase in property operating and maintenance expenses in our OMF segment.
−Removed: Pursuant to many of our lease agreements in our OMFs, tenants are required to pay their pro rata share of property operating and maintenance expenses, which may be subject to expense exclusions and floors, in addition to base rent.
−Removed: Property operating and maintenance expenses reflect the costs associated with our OMFs, including real estate taxes, utilities, repairs, maintenance and unaffiliated third-party property management fees.
−Removed: The OMF NOI increase for the year ended December 31, 2024 over the prior year was primarily driven by the acquisition of four properties in the first quarter of 2024, partially offset by the disposition of 12 OMF properties in the third and fourth quarters of 2024.
−Removed: Segment Results — Seniors Housing Operating Properties
−Removed: The following table presents the revenue and property operating and maintenance expense and the period to period change within our SHOP segment for the years ended December 31, 2024 and 2023:
−Removed: Year Ended December 31, Increase (Decrease) to NOI
−Removed: (In thousands) 2024 2023 $ %
+Added: (1) Excludes one land parcel with a gross asset value of $0.6 million.
+Added: Revenue 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.
+Added: Property operating and maintenance expense relates to the costs associated with staffing to provide care for the residents in our SHOPs, as well as supplies, overhead and management fees paid to our third-party operators and costs associated with maintaining the physical site.
+Added: The increase in SHOP NOI for the year ended December 31, 2025 over the prior year was primarily due to positive trends in occupancy and revenue per occupied room, partially offset by (i) higher property operating and maintenance expense driven by higher occupancy and inflationary impacts on labor costs and (ii) the nine SHOPs sold in 2024 and 2025.
+Added: Segment Results — Outpatient Medical Facilities
+Added: The following table presents the results of operations and the period-to-period change in our OMF segment for the years ended December 31, 2025 and 2024 (dollars in thousands):
+Added: Year ended December 31, Increase (Decrease)
+Added: 2025 2024 $ %
Revenue from tenants $ 117,058 $ 137,317 $ (20,259) (14.8) %
Property operating and maintenance 36,258 39,505 (3,247) (8.2)
+Added: NOI $ 80,800 $ 97,812 $ (17,012) (17.4) %
+Added: Number of properties at December 31,
+Added: Ending occupancy for the year ended December 31,
2025 2024 2025 2024
−Removed: Number of Properties at December 31, Average Unit Occupancy for the Years Ended December 31,
+Added: Total outpatient medical facilities
130 148 92.8% 90.5%
−Removed: Total communities 45 48 77.4 % 74.4 %
−Removed: 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.
−Removed: 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.
−Removed: The SHOP NOI increase for the year ended December 31, 2024 over the prior year was primarily due to positive trends in revenue driven by occupancy gains, partially offset by higher operating and maintenance expenses, which was primarily attributable to macro inflationary impacts on labor costs.
+Added: Revenue from tenants within our OMF segment primarily reflects contractual rent received from tenants and operating expense reimbursements.
+Added: These reimbursements generally increase in proportion with the increase in property operating and maintenance expense in our OMF segment.
+Added: Pursuant to many of our lease agreements in our OMFs, tenants are required to pay their pro rata share of property operating and maintenance expenses and certain capital expenditures, which may be subject to expense exclusions and floors, in addition to base rent.
+Added: Property operating and maintenance expense reflects the costs associated with our OMFs, including real estate taxes, utilities, repairs, maintenance and unaffiliated third-party property management fees.
+Added: The decrease in OMF NOI for the year ended December 31, 2025 over the prior year was primarily due to disposition of 30 OMFs in the second half of 2024 and throughout 2025, partially offset by favorable leasing activity and acquisition of four OMFs during 2024.
Other Results of Operations
Impairment Charges
−Removed: We recorded $24.9 million of impairment charges for the year ended December 31, 2024 related primarily to two held-for-use SHOP properties ($13.4 million) and two held-for-use OMF properties ($11.2 million).
−Removed: We incurred $4.7 million of impairment charges for the year ended December 31, 2023 related to one held-for-use SHOP property and one held-for-use OMF property.
−Removed: See Note 3 — Real Estate Investments to our Consolidated Financial Statements for additional information on impairment charges.
−Removed: Operating Fees to Related Parties
−Removed: Prior to the consummation of the Internalization, our former Advisor and the Property Manager were paid for asset management and property management services for managing our properties on a day-to-day basis.
−Removed: Following the consummation of the Internalization, we are no longer paying the above-referenced fees to the related parties.
−Removed: Operating fees to related parties decreased by $6.3 million to $19.2 million for the year ended December 31, 2024 from $25.5 million for the year ended December 31, 2023 as a result of the Internalization.
−Removed: See Note 9 — Related Party Transactions and Arrangements to our Consolidated Financial Statements for additional details regarding our fees and expense reimbursements to our former Advisor.
+Added: We recorded $44.9 million of impairment charges for the year ended December 31, 2025 related to seven SHOP properties ($37.9 million) and four OMF properties ($7.0 million).
+Added: We recorded $24.9 million of impairment charges for the year ended December 31, 2024 related primarily to two SHOP properties ($13.4 million) and two OMF properties ($11.2 million).
Termination Fees to Related Parties
−Removed: We recorded $106.7 million of termination fees to related parties for the year ended December 31, 2024 as a result of our termination of the Advisory Agreement with our former Advisor and transition to self-management through the Internalization, comprised of an internalization fee of $98.2 million, an asset management fee of $5.5 million and a property management fee of $2.9 million.
−Removed: See Note 1 — Organization to our Consolidated Financial Statements for additional details regarding the Internalization.
−Removed: Acquisition and Transaction Related Expenses
−Removed: Acquisition and transaction related expenses were $7.9 million for the year ended December 31, 2024 and $0.5 million for the year ended December 31, 2023.
−Removed: This increase was primarily due to $5.3 million of advisory, legal and other professional costs and non-recurring employee transition expenses directly related to the Internalization.
−Removed: General and Administrative Expenses
−Removed: General and administrative expenses increased by $3.8 million to $22.7 million for the year ended December 31, 2024 compared to $18.9 million for the year ended December 31, 2023.
−Removed: The increase was primarily attributable to employee compensation costs incurred by us after the Internalization and certain severance and other compensation reimbursement payments made to our former Advisor prior to the Internalization.
−Removed: Depreciation and Amortization Expenses
−Removed: Depreciation and amortization expense increased by $1.2 million to $84.1 million for the year ended December 31, 2024 from $82.9 million for the year ended December 31, 2023.
−Removed: The increase was primarily attributable to amortization of deferred leasing commissions.
−Removed: Gain (Loss) on Sale of Real Estate Investments
−Removed: During the year ended December 31, 2024, we disposed of two SHOPs, 12 OMFs and one land parcel for an aggregate contract sales price of $118.1 million.
−Removed: One of the two disposed SHOPs was previously impaired by $2.1 million in the year ended December 31, 2023.
−Removed: These dispositions resulted in an aggregate gain on sale of $9.3 million in the year ended December 31, 2024.
−Removed: During the year ended December 31, 2023, we disposed of four SHOPs and one OMF for an aggregate contract sales price of $13.8 million.
−Removed: Two of the four disposed SHOPs were previously impaired by $15.1 million in the year ended December 31, 2022.
−Removed: These dispositions resulted in an aggregate loss on sale of $0.3 million in the year ended December 31, 2023.
−Removed: See Note 3 — Real Estate Investments, Net to our Consolidated Financial Statements for additional information on the dispositions noted above.
+Added: We recorded $106.7 million of termination fees to related parties for the year ended December 31, 2024 as a result of our termination of the prior advisory agreement with our former Advisor and transition to self-management through the Internalization, comprised of an internalization fee of $98.2 million, an asset management fee of $5.5 million and a property management fee of $2.9 million.
+Added: This item did not recur in 2025.
+Added: Operating Fees to Related Parties
+Added: Prior to the consummation of the Internalization, our former Advisor and its affiliates were paid asset management and property management fees of $19.2 million in 2024 for managing our properties on a day-to-day basis.
+Added: We no longer had to pay such fees in 2025 following the consummation of the Internalization .
+Added: Acquisition and Transaction Related
+Added: Acquisition and transaction related expenses decreased $7.4 million in 2025 over the prior year primarily due to $5.3 million of advisory, legal and other professional costs and non-recurring employee transition expenses directly related to the Internalization incurred in 2024.
+Added: General and Administrative
+Added: General and administrative expense increased $1.8 million in 2025 over the prior year primarily due to cash severance, acceleration of equity vesting and other related expenses in connection with the transition of chief financial officer role in 2025.
+Added: Depreciation and Amortization
+Added: Depreciation and amortization expense decreased $5.8 million in 2025 over the prior year primarily due to the disposition of 30 OMFs and nine SHOPs throughout 2024 and 2025, partially offset by depreciation on capital expenditures placed in service throughout 2024 and 2025.
+Added: Gain on Sale of Real Estate Investments
+Added: During the year ended December 31, 2025, we disposed of seven SHOPs and 18 OMFs for an aggregate contract sales price of $202.5 million, which resulted in an aggregate net gain on sale of $27.8 million.
+Added: During the year ended December 31, 2024, we disposed of two SHOPs, 12 OMFs and one land parcel for an aggregate contract sales price of $118.1 million, which resulted in an aggregate gain on sale of $9.3 million.
Interest Expense
−Removed: Interest expense increased by $3.4 million to $69.4 million for the year ended December 31, 2024 from $66.1 million for the year ended December 31, 2023.
−Removed: The increase in interest expense was mainly due to higher average balances of amounts outstanding under our indebtedness during the year ended December 31, 2024 as compared to the year ended December 31, 2023.
−Removed: This increase was partially offset by lower weighted average interest rates.
−Removed: Inclusive of our non-designated interest rate caps, the weighted-average economic interest rate on our total gross borrowings was 5.0% as of both December 31, 2024 and 2023.
−Removed: Interest and Other Income
−Removed: Interest and other income includes income from our investment securities and interest income earned on cash and cash equivalents held during the period.
−Removed: Interest and other income was approximately $1.1 million for the year ended December 31, 2024 and approximately $0.7 million for the year ended December 31, 2023.
−Removed: Interest and other income increased in 2024 due to higher interest rates on, and balances of, our cash accounts.
+Added: Interest expense decreased $8.2 million in 2025 over the prior year primarily due to lower average debt balances, partially offset by higher weighted average economic interest rates and cash received in connection with the termination of an interest rate swap.
+Added: Inclusive of our non-designated interest rate caps, the weighted-average economic interest rate on our total gross borrowings was 5.75% and 5.06% as of December 31, 2025 and 2024, respectively.
+Added: Interest and Other Income, Net
+Added: Interest and other income includes interest income earned on cash and cash equivalents invested in short-term money market funds and expenses not covered by insurance, net of recoveries.
+Added: Interest and other income decreased $0.8 million in 2025 over the prior year primarily due to $0.5 million higher expenses not covered by insurance, net of recoveries and $0.4 million in excess insurance reimbursement received in 2024.
Gain on Extinguishment of Debt
−Removed: We recorded a $0.4 million gain on extinguishment of debt in 2024 in connection with the repayment of a loan prior to maturity relating to the sale of an OMF.
−Removed: Gain (Loss) on Non-Designated Derivatives
−Removed: Gain on non-designated derivative instruments for the years ended December 31, 2024 and 2023 related to interest rate caps that are designed to protect us from adverse interest rate changes in connection with our Fannie Mae Master Credit Facilities and OMF Warehouse Facility, which have variable interest rates.
−Removed: The gain recorded in the year ended December 31, 2024 was due to increases in forward-interest rate curves, and represents the increase in fair value as well as $6.8 million of cash received from our interest rate caps.
−Removed: The loss recorded in the year ended December 31, 2023 was due to decreases in forward-interest rate curves, and represents the decrease in fair value as well as $5.6 million of cash received from our interest rate caps.
+Added: We recorded a gain on extinguishment of debt of $0.3 million and $0.4 million in 2025 and 2024, respectively, in connection with repayment of loans prior to maturity relating to asset sales.
+Added: (Loss) Gain on Non-Designated Derivatives
+Added: (Loss) gain on non-designated derivative instruments includes mark-to-market adjustments of non-designated interest rate caps designed to protect us from adverse interest rate changes in connection with our Fannie Mae Secured Debt and the previous $50.0 million variable-rate warehouse facility with Capital One (the “OMF Warehouse Facility”), which have variable interest rates.
+Added: We incurred a loss on non-designated derivatives in 2025 primarily due to $3.5 million less cash received in 2025 from our interest rate caps as a result of a net decrease in the number of interest rate caps outstanding from 2024 to 2025, partially offset by a $1.9 million net change in the fair value of our interest rate caps.
Income Tax Expense
Income taxes generally relate to our SHOPs, which are leased to our TRS.
−Removed: We recorded income tax expense of $0.3 million for both years ended December 31, 2024 and 2023.
−Removed: 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 that we will realize the future benefit of our deferred tax assets and recorded a full valuation allowance;
−Removed: thus we have recorded a 100% valuation allowance on our net deferred tax assets through December 31, 2024.
−Removed: 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 operations and comprehensive loss.
+Added: We recorded income tax expenses of $0.2 million and $0.3 million for the years ended December 31, 2025 and 2024, respectively, primarily due to state income taxes incurred by our TRS.
Allocation for Preferred Stock
−Removed: Allocation for preferred stock was $13.8 million for the years ended December 31, 2024 and 2023.
−Removed: These amounts represent the allocation of our net income that is related to holders of Series A Preferred Stock and Series B Preferred Stock.
−Removed: Cash Flows from Operating Activities
−Removed: The following table presents a reconciliation of our net cash provided by operations from our net loss for the years ended December 31, 2024 and 2023:
−Removed: (in thousands) Year Ended December 31, Increase
−Removed: Cash flows from operating activities:
−Removed: 2024 2023 (Decrease)
+Added: Allocation for preferred stock was $13.4 million and $13.8 million for the years ended December 31, 2025 and 2024, respectively.
+Added: These amounts represent the allocation of our net income that is related to holders of our Series A Preferred Stock and our Series B Preferred Stock.
+Added: The decrease is due to repurchases of our preferred stock during the year ended December 31, 2025.
+Added: The following table presents a reconciliation of our net cash provided by operations from our net loss for the years ended December 31, 2025 and 2024 (in thousands):
+Added: Year ended December 31, Change
Cash, cash equivalents and restricted cash, beginning of year $ 74,095 $ 91,316 $ (17,221) (18.9) %
−Removed: Net cash (used in) provided by operating activities (79,846) 21,624 (101,470)
−Removed: Net cash provided by (used in) investing activities 63,972 (62,817) 126,789
−Removed: Net cash (used in) provided by financing activities (1,347) 55,971 (57,318)
+Added: Net cash provided by (used in) operating activities 6,951 (79,846) 86,797 108.7
+Added: Net cash provided by investing activities
+Added: 69,806 63,972 5,834 9.1
+Added: Net cash used in financing activities
+Added: (42,400) (1,347) (41,053) NM
Cash, cash equivalents and restricted cash, end of year $ 108,452 $ 74,095 $ 34,357 46.4 %
Cash Flows from Operating Activities
−Removed: Cash flows from operating activities decreased by $101.5 million during the year ended December 31, 2024 compared to 2023, primarily due to the termination fee incurred in connection with the Internalization in 2024.
−Removed: This was partially offset by higher property NOI in 2024.
+Added: Cash flows from operating activities increased by $86.8 million during the year ended December 31, 2025 compared to 2024, primarily due to growth in our SHOP segment and decrease in interest expense in 2025, partially offset by decrease in NOI from our OMF segment as a result of dispositions in 2025, and reduced fees paid to the former Advisor in 2025 in connection with the Internalization.
+Added: In 2024, we paid asset management and property management fees of $19.2 million and made a partial payment of $75 million relating to the termination fee.
+Added: In 2025, we did not incur any asset management or property management fees, however, we paid the outstanding portion of the termination fee of $30.3 million.
Cash Flows from Investing Activities
−Removed: Cash flows from investing activities increased by $126.8 million during the year ended December 31, 2024 compared to 2023, primarily due to higher disposition volume and lower acquisition volume in 2024.
+Added: Cash flows from investing activities increased by $5.8 million during the year ended December 31, 2025 compared to 2024, primarily due to higher proceeds from the sale of real estate investments and lower acquisition volume in 2025, partially offset by higher capital expenditures in 2025.
Cash Flows from Financing Activities
−Removed: Cash flows from financing activities decreased by $57.3 million during the year ended December 31, 2024 compared to 2023, primarily due to lower proceeds from mortgages and credit facilities and higher pay downs on our mortgages in 2024.
−Removed: This was partially offset by higher paydowns on the credit facilities in 2023 and proceeds from the Promissory Note (as defined below) in connection with the Internalization in 2024.
+Added: Cash flows from financing activities decreased by $41.1 million during the year ended December 31, 2025 compared to 2024, primarily due to net decrease in outstanding debt and repurchase of our preferred stock in 2025.
Liquidity and Capital Resources
−Removed: Our existing principal demands for cash are to fund acquisitions, capital expenditures, the payment of our operating and administrative expenses, debt service obligations (including principal repayment), the repayment of the Promissory Note (as discussed below, which was fully repaid in January 2025) and distributions to holders of our Series A Preferred Stock and Series B Preferred Stock.
−Removed: We closely monitor our current and anticipated liquidity position relative to our current and anticipated demands for cash and believe that we have sufficient current liquidity to meet our financial obligations for at least the next twelve months.
+Added: Our existing principal demands for cash are to fund acquisitions, capital expenditures, the payment of our operating and administrative expenses, debt service obligations (including principal repayment) and distributions to holders of our Series A Preferred Stock and our Series B Preferred Stock.
+Added: We closely monitor our current and anticipated liquidity position relative to our current and anticipated demands for cash and believe that we have sufficient current liquidity to meet our financial obligations for at least the next 12 months.
Our future liquidity requirements and available liquidity, however, depend on many factors, such as recent and continuing increases in inflation, labor shortages, supply chain disruptions and higher property insurance, property tax and interest rates, all of which have and may continue to have adverse impacts on our results of operations and thus ultimately our liquidity.
2 unchanged sentences
Risk Factors section of this Annual Report on Form 10-K.
−Removed: 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 and OMF Warehouse Facility, net cash provided by our property dispositions (as discussed below) and potential new financings utilizing certain of our currently unencumbered properties.
+Added: We expect to fund our future short-term operating liquidity requirements, including distributions to holders of our Series A Preferred Stock and our Series B Preferred Stock, through a combination of current cash on hand, net cash provided by our operating activities and property dispositions, future takedowns under our Revolving Facility and potential new financings utilizing certain of our unencumbered properties.
As of December 31, 2025 and 2024, we had $57.6 million and $21.7 million of cash and cash equivalents, respectively.
−Removed: The Barclays OMF Loan Agreement requires us to maintain a minimum balance of cash and cash equivalents of $12.5 million at all times.
−Removed: Internalization and Promissory Note
−Removed: Pursuant to the merger agreement dated August 6, 2024 (the “Internalization Agreement”) effecting the Internalization, (i) the outstanding membership interests of our former 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).
−Removed: 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.
−Removed: Because the Closing Payments exceeded our Available Cash (as defined in the Internalization Agreement), we paid the Advisor Parent aggregate cash consideration of $75.0 million (such cash amount, the “Closing Date Cash Consideration”), and we 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.
−Removed: The Promissory Note was a senior unsecured obligation and ranks equal in right of payment with all of our existing and future indebtedness.
−Removed: As of December 31, 2024, the full principal amount under the Promissory Note was outstanding.
−Removed: In January 2025, we disposed of 11 OMFs for an aggregate contract sales price of $114.4 million and used a portion of the net proceeds to fully repay the outstanding balance on the Promissory Note (including any unpaid interest at the time of payment).
−Removed: Following the Internalization, we are no longer required to pay asset management and property management fees to the Advisor Parent.
−Removed: We paid total asset management fees of $16.4 million during the year ended December 31, 2024 and total property management fees, including capitalized leasing commissions, of $3.6 million, during the year ended December 31, 2024, exclusive of the asset management fee and property management fee paid to the Advisor Parent as part of the Closing Payments discussed above.
−Removed: As of December 31, 2024, our Net Debt to Gross Asset Value ratio (net debt divided by gross asset value) was approximately 45.9%.
−Removed: Net debt totaled $1.1 billion, which represents gross debt ($1.2 billion) less cash and cash equivalents ($21.7 million).
+Added: The Secured Term Loan 4 due 2033 requires us to maintain a minimum balance of cash and cash equivalents of $12.5 million at all times.
+Added: As of December 31, 2025, our total debt leverage ratio (net debt divided by total gross asset value) was approximately 45.1%.
+Added: Net debt totaled $988.6 million, which represents total debt, net ($1.0 billion) less cash and cash equivalents ($57.6 million).
Gross asset value totaled $2.2 billion, which represents total real estate investments, at cost ($2.2 billion), net of gross market lease intangible liabilities ($19.6 million).
3 unchanged sentences
Inclusive of our non-designated interest rate caps, the weighted-average economic interest rate on our total gross borrowings was 5.75% as of December 31, 2025.
−Removed: As of December 31, 2024, the carrying value of our real estate investments, at cost was $2.5 billion, with $1.3 billion of this asset value pledged as collateral for mortgage notes payable, $619.0 million of this asset value pledged to secure advances under our credit facilities.
−Removed: 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.
+Added: As of December 31, 2025, the carrying value of our real estate investments, at cost was $2.2 billion, with $683.4 million of this asset value pledged as collateral for mortgage notes payable, $614.5 million of this asset value pledged to secure advances under our Fannie Mae Secured Debt and $867.3 million of this asset value added to the borrowing base of our Credit Facilities (as defined below).
+Added: 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 Secured Debt and the Credit Facilities, which would impact availability thereunder.
Unencumbered real estate investments, at cost as of December 31, 2025 was $22.2 million.
1 unchanged sentence
Mortgage Notes Payable
−Removed: As of December 31, 2024, we had $789.6 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 4.56% and a weighted-average remaining term of 5.2 years.
+Added: As of December 31, 2025, we had $375.5 million in mortgage notes payable outstanding, which bore interest at a weighted-average annual fixed interest rate of 5.52% and a weighted-average remaining term of 7.4 years.
Future scheduled principal payments on our mortgage notes payable for 2026 are $0.9 million.
−Removed: During the year ended December 31, 2024, we entered into the BMO CPC Mortgage Loan in connection with a four-property acquisition also completed in the year ended December 31, 2024.
−Removed: The mortgage has a principal balance of $7.5 million, bears interest at an annual fixed rate of 6.84% and matures in February 2034 with no principal amounts due until that time.
−Removed: For additional information on our mortgage notes, see Note 4 — Mortgage Notes Payable, net to our Consolidated Financial Statements.
−Removed: Credit Facilities
−Removed: As of December 31, 2024, we had $362.2 million outstanding under our credit facilities, which bore interest at a weighted-average annual rate of 7.23% and had a weighted-average remaining term of 1.8 years.
−Removed: Inclusive of our non-designated interest rate caps, the weighted average economic interest rate on our credit facilities was 5.94% as of December 31, 2024.
−Removed: For additional information on our credit facilities, see Note 5 — Credit Facilities to our Consolidated Financial Statements.
+Added: Fannie Mae and Other Secured Debt
+Added: As of December 31, 2025, we had $334.7 million outstanding under our Fannie Mae Secured Debt, which bore interest at a weighted-average annual rate of 6.65% and had a weighted-average remaining term of 0.8 years.
+Added: Inclusive of our non-designated interest rate caps that limit one-month SOFR at 3.50%, the weighted average economic interest rate on our Fannie Mae Secured Debt was 6.01% as of December 31, 2025.
+Added: 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.
+Added: Unsecured Credit Facilities
+Added: On December 11, 2025, we entered into (i) a $400 million senior unsecured revolving credit facility (the “Revolving Facility”) and (ii) a $150 million senior unsecured term loan facility (the “Term Loan” and, together with the Revolving Facility, the “Credit Facilities”) with Wells Fargo Bank, National Association, as administrative agent, and certain lenders party thereto.
+Added: As of December 31, 2025, we had $186.0 million and $150.0 million outstanding under our Revolving Facility and Term Loan, respectively.
+Added: The borrowings under Revolving Facility and Term Loan both bore interest at a weighted-average annual rate of 5.94% and had a weighted-average remaining term of 2.9 years as of December 31, 2025.
+Added: Inclusive of our interest rate swaps that convert variable interest rates to fixed interest rates, the economic interest rate on our Term loan was 5.51% as of December 31, 2025.
+Added: For additional information on our Fannie Mae Secured Debt, Credit Facilities and other mortgage notes payable and debt, see Note 5 — Mortgage Notes Payable and Other Debt to our Consolidated Financial Statements.
Non-Designated Interest Rate Caps
−Removed: Our interest rate caps are used to limit our exposure to interest rate movements on our Fannie Mae Master Credit Facilities for economic purposes;
+Added: 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.
−Removed: As of December 31, 2024, we had eight SOFR-based interest rate caps with an aggregate notional amount of $369.2 million, which limits one-month SOFR to 3.50% and have varying maturities through January 2027.
−Removed: Although these interest rate caps are not designated hedging instruments, we consider them economically related to our variable-rate credit facility borrowings.
−Removed: As SOFR has increased beyond 3.50%, we received cash payments of $6.8 million in the year ended December 31, 2024 and $5.6 million in the year ended December 31, 2023.
−Removed: We paid total premiums of $1.5 million to renew one cap with an aggregate notional amount of $58.1 million which matured during the year ended December 31, 2024.
−Removed: We also paid a premium of $0.3 million for a new interest rate cap with a notional amount of $7.0 million which matures in January 2027.
−Removed: We have five interest rate caps with a notional amount of $289.4 million which mature in 2025, which represents the next maturing interest rate caps.
−Removed: During the year ended December 31, 2023, we paid premiums of $10.0 million to renew expiring interest rate cap contracts.
+Added: As of December 31, 2025, we had six SOFR-based interest rate caps with an aggregate notional amount of $338.0 million, which limit one-month SOFR to 3.50% and have varying maturities through November 2026.
+Added: Although these interest rate caps are not designated hedging instruments, we consider them economically related to our variable-rate secured debt.
+Added: As SOFR has increased beyond 3.50%, we received cash payments of $3.3 million and $6.8 million in the years ended December 31, 2025 and 2024, respectively.
+Added: 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.
+Added: 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 Secured Debt.
+Added: These interest rate caps were purchased in advance of interest rate caps set to expire in July 2025.
+Added: 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.
+Added: These interest rate caps were purchased in advance of interest rate caps set to expire in November 2025.
Capital Expenditures
−Removed: During the year ended December 31, 2024, our capital expenditures were $21.9 million, of which $9.0 million related to our OMF segment and $12.9 million related to our SHOP segment.
−Removed: We anticipate a consistent rate of capital expenditures for the OMF and SHOP segments in 2025.
−Removed: Acquisitions — Year Ended December 31, 2024
−Removed: During the year ended December 31, 2024, we acquired four single-tenant OMFs for an aggregate contract purchase price of $12.6 million.
−Removed: These acquisitions were funded with $7.5 million of new mortgage debt from our BMO CPC Mortgage Loan and the remainder with cash on hand.
−Removed: Dispositions — Year Ended December 31, 2024
−Removed: During the year ended December 31, 2024, we disposed of two SHOPs, 12 OMFs and one land parcel for an aggregate contract sales price of $118.1 million.
−Removed: Dispositions — Subsequent to December 31, 2024
−Removed: Subsequent to December 31, 2024, we disposed of 11 OMFs for an aggregate contract sales price of $114.4 million and used a portion of the net proceeds to fully repay the outstanding balance on the Promissory Note (including any unpaid interest at the time of payment) as discussed above.
−Removed: Share Repurchase Program
−Removed: We did not repurchase any shares during the years ended December 31, 2024 and 2023.
−Removed: Non-GAAP Financial Measures
−Removed: This section discusses certain of the non-GAAP financial measures we use to evaluate our performance, including Funds from Operations (“FFO”) and Adjusted Funds from Operations (“AFFO”).
−Removed: A description of these non-GAAP financial measures and reconciliations to the most directly comparable GAAP measure, which is net income (loss) attributable to common stockholders, are provided below.
−Removed: We consider FFO and AFFO to be useful supplemental measures for reviewing comparative operating and financial performance because, by excluding the applicable items listed below, FFO and AFFO can help investors compare our operating performance between periods or as compared to other companies.
−Removed: While FFO and AFFO are relevant and widely used measures of operating performance of REITs, they do not represent, nor are they meant to replace, cash flows from operations and net income or loss as defined by GAAP, and should not be considered alternatives to those measures in evaluating our liquidity or operating performance.
−Removed: Rather, FFO and AFFO should be reviewed in conjunction with these and other GAAP measurements as an indication of our operational performance and are not necessarily indicative of cash available to fund our future cash requirements, including our ability to pay dividends and other distributions to our stockholders.
−Removed: Additionally, our computation of FFO and AFFO may not be comparable to FFO and AFFO reported by other REITs that do not define FFO in accordance with the current National Association of Real Estate Investment Trusts (“NAREIT”) definition or that interpret the current NAREIT definition or define AFFO differently than we do.
−Removed: The methods utilized to evaluate the performance of a publicly registered, non-listed REIT under GAAP should be construed as more relevant measures of operational performance and considered more prominently than the non-GAAP measures, FFO and AFFO, and the adjustments to GAAP in calculating FFO and AFFO.
−Removed: Funds from Operations
−Removed: Our Consolidated Financial Statements are presented in accordance with GAAP, utilizing historical cost accounting which, among other things, requires depreciation of real estate investments.
−Removed: As a result, our operating results imply that the value of our real estate investments will decrease predictably over a set time period.
−Removed: However, we believe that the value of our real estate investments will fluctuate over time based on various market conditions and as such, depreciation under historical cost accounting may be less informative.
−Removed: FFO is a standard REIT industry metric defined by NAREIT as net income or loss (computed in accordance with GAAP), adjusted for (i) real estate-related depreciation and amortization, (ii) impairment charges on depreciable real property, (iii) gains or losses from sales of depreciable real property and (iv) similar adjustments for non-controlling interests and unconsolidated entities.
−Removed: We believe that the use of FFO provides a more complete understanding of our operating performance to investors and to management, and when compared year-over-year, reflects the impact on our operations from trends in occupancy rates, rental rates, operating costs, general and administrative expenses and interest costs, which may not be immediately apparent from net loss.
−Removed: Adjusted Funds from Operations
−Removed: We also believe that AFFO is a meaningful supplemental non-GAAP measure of our operating results.
−Removed: We calculate AFFO by further adjusting FFO to reflect the performance of our portfolio for items we believe are not directly attributable to our operations.
−Removed: We believe that AFFO is a beneficial indicator of our ongoing portfolio performance and isolates the financial results of our operations.
−Removed: Our adjustments to FFO to arrive at AFFO include removing the impacts of (i) acquisition and transaction related costs (including certain expenses directly related to the Internalization and the Reverse Stock-Split), (ii) amortization of market-lease intangible assets and liabilities, (iii) adjustments for straight-line rent, (iv) termination fees to related parties, (v) equity-based compensation expense, (vi) depreciation and amortization related to non-real estate related assets, (vii) mark-to-market gains and losses from our non-designated derivatives, (viii) non-cash components of interest expense, (ix) casualty-related charges, (x) gains or losses on extinguishment of debt and (xi) similar adjustments for non-controlling interests and unconsolidated entities.
−Removed: We believe that AFFO is a recognized measure of sustainable operating performance by the REIT industry and is useful in comparing the sustainability of our operating performance with the sustainability of the operating performance of other real estate companies.
−Removed: 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:
−Removed: Year Ended December 31,
−Removed: (In thousands) 2024 2023 2022
−Removed: Net loss attributable to common stockholders (in accordance with GAAP) $ (203,495) $ (86,097) $ (93,285)
−Removed: Depreciation and amortization related to real estate assets
−Removed: 79,231 80,057 80,063
−Removed: Impairment charges 24,881 4,676 27,630
−Removed: (Gain) loss on sale of real estate investments
−Removed: (9,307) 322 125
−Removed: Adjustments for non-controlling interests (1)
−Removed: (466) (403) (490)
−Removed: FFO (as defined by NAREIT) attributable to common stockholders (109,156) (1,445) 14,043
−Removed: (Accretion) amortization of market lease and other lease intangibles, net (1,428) (890) (625)
−Removed: Straight-line rent adjustments (794) (1,049) (1,523)
−Removed: Acquisition and transaction related (2)
−Removed: 7,949 545 1,484
−Removed: Termination fees to related parties (3)
−Removed: Equity-based compensation
−Removed: 613 919 1,185
−Removed: Depreciation and amortization on non-real estate assets
−Removed: 4,836 2,816 2,001
−Removed: Mark-to-market (gains)/losses from derivatives (4)
−Removed: 5,266 7,576 (3,541)
−Removed: Non-cash components of interest expense (5)
−Removed: 2,247 2,606 5,353
−Removed: Adjustments for non-controlling interests (1)
−Removed: Gain on extinguishment of debt
−Removed: Casualty-related charges (6)
−Removed: AFFO attributable to common stockholders
−Removed: $ 15,740 $ 11,179 $ 18,596
−Removed: (1) Represents the portion of the adjustments allocable to non-controlling interests.
−Removed: (2) Includes certain advisory, legal, accounting, information technology, tax and other professional expenses and other non-recurring employee transition expenses of $4.8 million for the year ended December 31, 2024 that were directly related to the Internalization and the Reverse Stock Split.
−Removed: We do not consider these expenses to be indicative of our performance given their unique and non-recurring nature.
−Removed: (3) Represents the Closing Payments paid in connection with the Internalization.
−Removed: We do not consider such payments to be indicative of our performance given its unique and non-recurring nature.
−Removed: (4) Presented as total gains or losses from our non-designated derivatives net of cash received.
−Removed: (5) Non-cash components of interest expense include (i) deferred financing cost amortization, (ii) mortgage discount and premium amortization and (iii) amortized gains or losses from terminated hedging instruments.
−Removed: (6) Includes labor, supplies and evacuation expenses from natural disasters not covered by insurance.
+Added: During the year ended December 31, 2025, our aggregate capital expenditures paid were $28.7 million, of which $16.5 million was related to our OMF segment and $12.2 million was related to our SHOP segment.
+Added: During the year ended December 31, 2025, the Company disposed of seven SHOPs and 18 OMFs for an aggregate contract sales price of $202.5 million, which resulted in an aggregate net gain on sale of $27.8 million.
+Added: Preferred Stock Repurchase Program
+Added: On May 2, 2025, our Board authorized a preferred stock repurchase program for up to an aggregate amount of $50.0 million of our Series A Preferred Stock and our Series B Preferred Stock.
+Added: Under the program, which does not have a stated expiration date, we may repurchase shares of our Series A Preferred Stock and our Series B Preferred Stock from time to time through open
+Added: market purchases, including pursuant to Rule 10b5-1 pre-set trading plans, block trades, privately negotiated transactions, accelerated share repurchase transactions entered into with one or more counterparties or otherwise, in compliance with applicable securities laws and other legal requirements.
+Added: The timing, volume, and nature of repurchases are subject to market conditions, applicable securities laws and other factors, and the program may be amended, suspended or discontinued at any time.
+Added: The program does not obligate us to repurchase any specific number of shares of our Series A Preferred Stock and our Series B Preferred Stock.
+Added: During the year ended December 31, 2025, we repurchased and retired 131,629 shares of our Series A Preferred Stock at an average price of $15.39 and 213,344 shares of our Series B Preferred Stock at an average price of $15.94, inclusive of commissions.
+Added: As of December 31, 2025, up to $44.6 million was available under our preferred stock repurchase program.
+Added: Commitments and Contingencies
+Added: For a discussion of our commitments and contingencies, see “Note 16 — Commitments and Contingencies” to our Consolidated Financial Statements.
Dividends and Other Distributions
−Removed: Dividends on our Series A Preferred Stock are declared quarterly in an amount equal to $1.84375 per share each year ($0.460938 per share per quarter) to holders of Series A Preferred Stock, which is equivalent to 7.375% of per annum in the $25.00 liquidation preference per share of Series A Preferred Stock.
−Removed: Dividends on our Series B Preferred Stock are declared quarterly in an amount equal to $1.78125 per share each year ($0.445313 per share per quarter) to holders of Series B Preferred Stock, which is equivalent to 7.125% of per annum in the $25.00 liquidation preference per share of Series B Preferred Stock.
−Removed: Dividends on the Series A Preferred Stock and Series B Preferred Stock are cumulative and payable quarterly in arrears on the 15th day of January, April, July and October of each year or, if not a business day, the next succeeding business day to holders of record on the close of business on the record date set by our Board and declared by us.
−Removed: Any accrued and unpaid dividends payable with respect to the Series A Preferred Stock or Series B Preferred Stock become part of the liquidation preference thereof.
−Removed: Since mid-2020, we have not paid cash dividends on our shares of common stock but we issued stock dividends to the holders from October 2020 until January 2024.
+Added: Dividends on our Series A Preferred Stock are declared quarterly in an amount equal to $1.84375 per share each year ($0.460938 per share per quarter) to holders of our Series A Preferred Stock, which is equivalent to 7.375% of per annum in the $25.00 liquidation preference per share of our Series A Preferred Stock.
+Added: Dividends on our Series B Preferred Stock are declared quarterly in an amount equal to $1.78125 per share each year ($0.445313 per share per quarter) to holders of our Series B Preferred Stock, which is equivalent to 7.125% of per annum of the $25.00 liquidation preference per share of our Series B Preferred Stock.
+Added: Dividends on our Series A Preferred Stock and our Series B Preferred Stock are cumulative and payable quarterly in arrears.
+Added: Any accrued and unpaid dividends payable with respect to our Series A Preferred Stock or our Series B Preferred Stock become part of the liquidation preference thereof.
+Added: Since mid-2020, we have not paid cash dividends on our shares of common stock but we issued stock dividends to the holders of common stock from October 2020 until January 2024.
The stock dividends were declared quarterly using a rate of $3.40 (as adjusted to reflect the Reverse Stock Split) per share per year.
−Removed: The number of shares issued with each dividend is based on the estimated per share asset value in effect on the applicable date.
−Removed: We do not intend to declare further stock dividends in the future.
+Added: The number of shares issued with each dividend was based on the Estimated Per-Share NAV in effect on the applicable date.
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 year ended December 31, 2025.
−Removed: Three Months Ended Year Ended
−Removed: March 31, 2024 June 30, 2024 September 30, 2024 December 31, 2024 December 31, 2024
−Removed: (In thousands) Amounts Percentage of Distributions Amounts Percentage of Distributions Amounts Percentage of Distributions Amounts Percentage of Distributions Amounts Percentage of Distributions
+Added: December 31, 2025 December 31, 2024
+Added: (In thousands) Amounts Percentage of Distributions Amounts Percentage of Distributions
Distributions:
9 unchanged sentences
Total source of distribution coverage $ 13,629 51.0 % $ 13,983 — %
−Removed: $ 3,496 100.0 % $ 3,496 100.0 % $ 3,497 — % $ 3,494 100.0 % $ 13,983 — %
Cash flows provided by operations (in accordance with GAAP) $ 6,951 $ (79,846)
−Removed: $ 2,543 $ 8,395 $ (97,778) $ 6,994 $ (79,846)
Net loss (in accordance with GAAP) $ (57,685) $ (190,263)
(1) Assumes the use of available cash flows from operations before any other sources.
−Removed: (2) Year-to-date total does not equal the sum of the quarters.
−Removed: Each quarter and year-to-date period is evaluated separately for purposes of this table.
−Removed: Cash available cash on hand also includes proceeds from property dispositions and additional secured financings and borrowings under our credit facilities.
−Removed: For the year ended December 31, 2024, cash flows used in operations were $79.8 million.
+Added: For the year ended December 31, 2025, cash flows provided by operations were $7.0 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.
−Removed: As shown in the table above, we funded distributions to holders of Series A Preferred Stock, Series B Preferred Stock and Series A Preferred Units with cash flows provided by operations and available cash on hand.
+Added: As shown in the table above, we funded distributions to holders of our Series A Preferred Stock, Series B Preferred Stock and Series A Preferred Units with cash flows provided by operations and available cash on hand.
Our ability to pay distributions on our Series A Preferred Stock, Series B Preferred Stock and Series A Preferred Units and other distributions depends on our ability to increase the amount of cash we generate from property operations which in turn depends on a variety of factors, including, but not limited to, our ability to complete acquisitions of new properties and our ability to improve operations at our existing properties.
1 unchanged sentence
Our ability to improve operations at our existing properties is also subject to a variety of risks and uncertainties, many of which are beyond our control, and there can be no assurance we will be successful in achieving this objective.
+Added: Non-GAAP Financial Measures
+Added: This section discusses certain of the non-GAAP financial measures we use to evaluate our performance, including Funds from Operations (“FFO”) and Normalized Funds from Operations (“Normalized FFO”).
+Added: A description of these non-GAAP financial measures and reconciliations to the most directly comparable GAAP measure, which is net income (loss) attributable to common stockholders, are provided below.
+Added: We consider FFO and Normalized FFO to be useful supplemental measures for reviewing comparative operating and financial performance because, by excluding the applicable items listed below, FFO and Normalized FFO can help investors compare our operating performance between periods or to other companies (though other companies may calculate these measures differently than we do and the value of any such comparison may be limited).
+Added: While FFO and Normalized FFO are relevant and widely used measures of operating performance of REITs, they do not represent, nor are they meant to replace, cash flows from operations and net income or loss as defined by GAAP, and should not be considered alternatives to those measures in evaluating our liquidity or operating performance.
+Added: Rather, FFO and Normalized FFO should be reviewed in conjunction with these and other GAAP measurements as an indication of our operational performance and are not necessarily indicative of cash available to fund our future cash requirements, including our ability to pay dividends and other distributions to our stockholders.
+Added: Additionally, our computation of FFO and Normalized FFO may not be comparable to FFO and Normalized FFO reported by other REITs that do not define FFO in accordance with the current National Association of Real Estate Investment Trusts (“NAREIT”) definition or that interpret the current NAREIT definition or define Normalized FFO differently than we do.
+Added: The methods utilized to evaluate the performance of equity REITs under GAAP should be construed as more relevant measures of operational performance and considered more prominently than the non-GAAP measures, FFO and Normalized FFO, and the adjustments to GAAP in calculating FFO and Normalized FFO.
+Added: Funds from Operations and Normalized Funds from Operations
+Added: Our Consolidated Financial Statements are presented in accordance with GAAP, utilizing historical cost accounting which, among other things, requires depreciation of real estate investments.
+Added: As a result, our operating results imply that the value of our real estate investments will decrease predictably over a set time period.
+Added: However, we believe that the value of our real estate investments will fluctuate over time based on various market conditions and as such, depreciation under historical cost accounting may be less informative.
+Added: FFO is a standard REIT industry metric defined by NAREIT as net income or loss (computed in accordance with GAAP), adjusted for (i) real estate-related depreciation and amortization, (ii) impairment charges on depreciable real property, (iii) gains or losses from sales of depreciable real property and (iv) similar adjustments for non-controlling interests and unconsolidated entities.
+Added: We believe that the use of FFO provides a more complete understanding of our operating performance to investors and to management, and when compared year-over-year, reflects the impact on our operations from trends in occupancy rates, rental rates, operating costs, general and administrative expenses and interest costs, which may not be immediately apparent from net loss.
+Added: We believe that FFO is a recognized measure of operating performance by the REIT industry and is useful in comparing our operating performance with the operating performance of other real estate companies.
+Added: We also believe that Normalized FFO is a meaningful supplemental non-GAAP measure of our operating results.
+Added: We calculate Normalized FFO by further adjusting FFO to reflect the performance of our portfolio for items we believe are not directly attributable to our operations.
+Added: We believe that Normalized FFO is a beneficial indicator of our ongoing portfolio performance and isolates the financial results of our operations.
+Added: Our adjustments to FFO to arrive at Normalized FFO include removing the impacts of:
+Added: (i) acquisition and transaction related costs (including certain expenses directly related to the Internalization and the Reverse Stock-Split);
+Added: (ii) termination fees to related parties;
+Added: (iii) severance and other related costs;
+Added: (iv) mark-to-market gains and losses on non-designated derivatives and amortization related to terminated derivatives;
+Added: (v) casualty-related charges, net relating to significantly disruptive events that are infrequent in nature;
+Added: (vi) gains and losses on extinguishment
+Added: (vii) similar adjustments for non-controlling interests;
+Added: and (viii) certain other items set forth in the Normalized FFO reconciliation included therein.
+Added: We believe that Normalized FFO is useful because it allows investors, analysts and our management to compare our operating performance across periods on a consistent basis.
+Added: The table below reflects the items deducted from or added to net loss attributable to stockholders in our calculation of FFO and Normalized FFO for the periods indicated (dollars in thousands):
+Added: Year Ended December 31,
+Added: 2025 2024 2023
+Added: Net loss attributable to common stockholders (in accordance with GAAP) $ (71,067) $ (203,495) $ (86,097)
+Added: Depreciation and amortization on real estate assets
+Added: 72,615 79,231 80,057
+Added: Impairment charges 44,914 24,881 4,676
+Added: (Gain) loss on sale of real estate investments (27,800) (9,307) 322
+Added: Depreciation on real estate assets related to non-controlling interests
+Added: (394) (466) (403)
+Added: NAREIT FFO attributable to common stockholders
+Added: 18,268 (109,156) (1,445)
+Added: Acquisition and transaction related (1)
+Added: 516 7,949 545
+Added: Termination fees to related parties (2)
+Added: Severance and other related costs (3)
+Added: Derivatives mark-to-market and terminations (4)
+Added: 1,558 4,048 3,381
+Added: Casualty-related charges, net 864 489 63
+Added: Gain on extinguishment of debt (257) (392) —
+Added: Normalizing items related to noncontrolling interests (61) (540) 38
+Added: Normalized FFO attributable to common stockholders
+Added: $ 23,795 $ 9,048 $ 2,582
+Added: (1) Includes certain advisory, legal, accounting, information technology, tax and other professional expenses and other non-recurring employee transition expenses of $4.8 million for the year ended December 31, 2024 that were directly related to the Internalization and the Reverse Stock Split.
+Added: (2) Represents the closing payments paid in connection with the Internalization.
+Added: (3) Represents cash severance, acceleration of equity vesting and other related expenses in connection with the transition of the chief financial officer role in 2025.
+Added: (4) For the year ended December 31, 2025, includes $1.5 million of gain reclassified from other comprehensive income to earnings (recorded as a reduction to interest expense) in connection with cash received for the partial unwind of a hedge.
+Added: Leases with residents at our SHOPs typically do not have rent escalations, however, we are able to renew leases at market rates as they mature due to their short-term nature.
+Added: As inflation rates increase or persist at high levels, the cost of providing medical care at our SHOPs, particularly labor costs, will increase.
+Added: If we are unable to admit new residents or renew resident leases at market rates, while bearing these increased costs from providing services to our residents, our results of operations may be affected.
We may be adversely impacted by inflation on the leases with tenants in our OMF segment that do not contain indexed escalation provisions, or those leases which have escalations at rates which do not exceed or approximate current inflation rates.
+Added: 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 December 31, 2025, the increase to the 12-month CPI for all items, as published by the Bureau of Labor Statistics, was 3.2%.
To help 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.
−Removed: These provisions generally increase rental rates during the terms of the leases either at fixed rates or indexed escalations (based on CPI or other measures).
−Removed: Although most of our leases with tenants in our OMF segment contain rent escalation provisions, these rates are generally below the current rate of inflation.
−Removed: In addition to base rent, depending on the specific lease, OMF tenants are generally required to pay either (i) their pro rata share of property operating and maintenance expenses, which may be subject to expense exclusions and floors, or (ii) their share of increases in property operating and maintenance expenses to the extent they exceed the properties’ expenses for the base year of the respective leases.
+Added: These provisions generally increase rental rates during the terms of the leases either at fixed rates or indexed escalations (based on the Consumer Price Index or other measures).
+Added: Although most of our leases with tenants in our OMF segment contain rent escalation provisions, these rates have often been below the current rate of inflation in recent years.
+Added: In addition to base rent, depending on the specific lease, OMF tenants are generally required to pay either (i) their pro rata share of property operating and maintenance expenses and certain capital expenditures, which may be subject to expense exclusions and floors, or (ii) their share of increases in property operating and maintenance expenses to the extent they exceed the properties’ expenses for the base year of the respective leases.
Property operating and maintenance expenses include common area maintenance costs, real estate taxes and insurance.
Increased operating costs paid by our tenants under these net leases could have an adverse impact on our tenants if increases in their operating expenses exceed increases in their revenue, which may adversely affect our tenants’ ability to pay rent owed to us or property expenses to be paid, or reimbursed to us, by our tenants.
−Removed: Renewals of leases or future leases for our net lease properties may not be negotiated on a triple-net basis or on a basis requiring the tenants to pay all or some of such expenses, in which event we may have to pay those costs.
−Removed: If we are unable to lease properties on a triple-net basis or on a basis requiring the tenants to pay all or some of such expenses, or if tenants fail to pay required tax, utility and other impositions, we could be required to pay those costs.
−Removed: Leases with residents at our SHOPs typically do not have rent escalations;
−Removed: however, we are able to renew leases at market rates as they mature due to their short-term nature.
−Removed: As inflation rates increase or persist at high levels, the cost of providing medical care at our SHOPs, particularly labor costs, will increase.
−Removed: If we are unable to admit new residents or renew resident leases at market rates, while bearing these increased costs from providing services to our residents, our results of operations may be affected.
+Added: Renewals of leases or future leases for our net lease properties may not be negotiated on a net lease basis or on a basis requiring the tenants to pay all or some of such expenses, in which event we may have to pay those costs.
+Added: If we are unable to lease properties on a net lease basis or on a basis requiring the tenants to pay all or some of such expenses, or if tenants fail to pay required tax, utility and other impositions, we could be required to pay those costs.
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.