American Healthcare REIT (NYSE: AHR) outlines senior housing and medical portfolio strategy
Rhea-AI Filing Summary
American Healthcare REIT, Inc. is a self-managed healthcare REIT that acquires, owns and operates clinical real estate focused on senior housing, integrated senior health campuses, skilled nursing facilities and outpatient medical buildings in the U.S., U.K. and Isle of Man. It conducts most operations through American Healthcare REIT Holdings, LP, owning 99.0% of the operating partnership as of December 31, 2025. The company completed a major underwritten public offering in February 2024, issuing 64,400,000 shares of Common Stock for
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Insights
Diversified healthcare REIT with sizable 2024 equity raise and RIDEA exposure.
American Healthcare REIT describes a large, diversified healthcare real estate platform spanning senior housing, integrated senior health campuses, skilled nursing and outpatient medical buildings. Operations run through an operating partnership, with the REIT holding 99.0% of units as of
A key structural milestone was the
The business model mixes triple-net leases with RIDEA structures, especially in senior housing and integrated campuses, giving upside to operating performance but also exposing the company directly to labor, reimbursement and operating risks. Risk sections underscore dependence on a major manager for integrated campuses, geographic concentration in Indiana and Ohio, heavy healthcare regulation, inflation, and cybersecurity, suggesting that actual performance will be sensitive to both healthcare fundamentals and capital-market conditions.
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number:
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Securities registered pursuant to Section 12(b) of the Act:
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Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ☒
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ☐ Yes ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C.7262(b)) by the registered public accounting firm that prepared or issued its audit report.
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
The aggregate market value of the shares of voting Common Stock held by non-affiliates of the registrant, computed by reference to the closing sales price as of the last business day of the registrant’s most recently completed second fiscal quarter, was $
As of February 18, 2026, American Healthcare REIT, Inc. had
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’s definitive proxy statement for the 2026 annual meeting of stockholders are incorporated by reference into Part III of this Annual Report on Form 10-K.
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AMERICAN HEALTHCARE REIT, INC.
(A Maryland Corporation)
TABLE OF CONTENTS
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PART I |
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Item 1. |
Business |
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Item 1A. |
Risk Factors |
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Item 1B. |
Unresolved Staff Comments |
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Item 1C. |
Cybersecurity |
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Item 2. |
Properties |
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Item 3. |
Legal Proceedings |
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Item 4. |
Mine Safety Disclosures |
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PART II |
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Item 5. |
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |
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Item 6. |
[Reserved] |
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Item 7. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 7A. |
Quantitative and Qualitative Disclosures About Market Risk |
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Item 8. |
Financial Statements and Supplementary Data |
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Item 9. |
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure |
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Item 9A. |
Controls and Procedures |
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Item 9B. |
Other Information |
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Disclosure Regarding Foreign Jurisdictions that Prevent Inspections |
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Directors, Executive Officers and Corporate Governance |
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Executive Compensation |
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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |
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Item 13. |
Certain Relationships and Related Transactions, and Director Independence |
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Principal Accountant Fees and Services |
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Exhibits, Financial Statement Schedules |
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Form 10-K Summary |
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SIGNATURES |
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PART I
Item 1. Business.
The use of the words “we,” “us” or “our” refers to American Healthcare REIT, Inc. and its subsidiaries, including American Healthcare REIT Holdings, LP, except where otherwise noted.
Company
American Healthcare REIT, Inc., a Maryland corporation, is a self-managed real estate investment trust, or REIT, that acquires, owns and operates a diversified portfolio of clinical healthcare real estate properties, focusing primarily on senior housing, skilled nursing facilities, or SNFs, outpatient medical, or OM, buildings and other healthcare-related facilities. We have built a fully-integrated management platform, with approximately 121 employees as of December 31, 2025, that operates clinical healthcare properties throughout the United States, and in the United Kingdom and the Isle of Man. We own and operate our integrated senior health campuses, or ISHC, and senior-housing operating properties, or SHOP, utilizing the structure permitted by the REIT Investment Diversification and Empowerment Act of 2007, which is commonly referred to as a “RIDEA” structure. We have also originated and acquired secured loans and may acquire other real estate-related investments in the future on an infrequent and opportunistic basis. We generally seek investments that produce current income; however, we have selectively developed, and may continue to selectively develop, healthcare real estate properties. We have elected to be taxed as a REIT for U.S. federal income tax purposes. We believe that we have been organized and operated, and we intend to continue to operate, in conformity with the requirements for qualification and taxation as a REIT under the Internal Revenue Code of 1986, or the Code.
Operating Partnership
We conduct substantially all of our operations through American Healthcare REIT Holdings, LP, or our operating partnership, and we are the sole general partner of our operating partnership. As of December 31, 2025 and 2024, we owned 99.0% and 98.7%, respectively, of the operating partnership units, or OP units, in our operating partnership, and the remaining 1.0% and 1.3% of the OP units, respectively, were owned by the following limited partners: (i) AHI Group Holdings, LLC, which is owned and controlled by Jeffrey T. Hanson, our Chairman of the Board of Directors and Interim Chief Executive Officer and President, Danny Prosky, our Chief Executive Officer, President and director, who, as previously disclosed, is currently taking a leave of absence from his executive role for medical reasons, and Mathieu B. Streiff, one of our non-executive directors; and (ii) a wholly-owned subsidiary of Griffin Capital Company, LLC. See Note 11, Redeemable Noncontrolling Interests, and Note 12, Equity — Noncontrolling Interests in Total Equity, to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K, for a further discussion of the ownership in our operating partnership.
Public Offering and Listing
On February 9, 2024, pursuant to a Registration Statement filed with the United States Securities and Exchange Commission, or SEC, on Form S-11 (File No. 333-267464), as amended, we closed our underwritten public offering, or the February 2024 Offering, through which we issued 64,400,000 shares of Common Stock, for a total of $772,800,000 in gross offering proceeds. Such amounts include the exercise in full of the underwriters’ overallotment option to purchase up to an additional 8,400,000 shares of Common Stock. We listed these shares of Common Stock on the New York Stock Exchange, or NYSE, under the trading symbol “AHR” and began trading on February 7, 2024.
Following the closing of the February 2024 Offering and until August 5, 2024, we presented our Common Stock, Class T common stock and Class I common stock, as separate classes of common stock within our consolidated balance sheets and consolidated statements of equity. Any references to Common Stock in this Annual Report on Form 10-K refer to our NYSE-listed shares of common stock, whereas Class T common stock and Class I common stock refer to our historical non-listed shares of common stock. This applies to all historical periods presented herein. On August 5, 2024, 180 days after the listing of our Common Stock on the NYSE, each share of our Class T common stock and Class I common stock automatically converted into one share of our listed Common Stock.
See Note 12, Equity — Common Stock, to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K, for a further discussion of our public offerings.
Our principal executive offices are located at 18191 Von Karman Avenue, Suite 300, Irvine, California 92612, and our telephone number is (949) 270-9200. We maintain a website at www.AmericanHealthcareREIT.com, at which there is additional information about us. The contents of that site are not incorporated by reference in, or otherwise a part of, this filing. We make our periodic and current reports and all amendments to those reports available at www.AmericanHealthcareREIT.com as soon as reasonably practicable after such materials are electronically filed with the SEC. They also are available for printing by any stockholder upon request. In addition, copies of our filings with the SEC may be obtained from the SEC’s website, https://www.SEC.gov. Access to these filings is free of charge.
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Business Objectives and Growth Strategies
Our business objectives are to grow our earnings and cash flows, maintain financial flexibility, increase the value of our portfolio, make regular cash distributions to our stockholders and generate attractive risk-adjusted returns through the following growth strategies:
Investment Strategy
We have acquired, and may continue to acquire, properties either directly or jointly with third parties and may also consider disposing of non-core properties from time to time. We generally seek investments that produce current income; however, we have selectively developed, are currently developing (through Trilogy Investors, LLC, or Trilogy), and may continue to selectively develop, real estate properties. Our portfolio may include properties in various stages of development other than those producing current income. These stages include unimproved land both with and without entitlements and permits, property to be redeveloped and repositioned, newly constructed properties and properties in lease-up or other stabilization stages, all of which have limited or no relevant operating histories and current income. We make such investment determinations based upon a variety of factors, including the anticipated risk-adjusted returns for such properties when compared with other available properties, the appropriate diversification of our portfolio and our objectives of realizing both current income and capital appreciation.
We seek to grow our earnings and cash flows, maintain financial flexibility, increase the value of our portfolio, make regular cash distributions and generate attractive risk-adjusted returns for our stockholders through the business objectives and growth strategies discussed above. In order to achieve these objectives, we may invest using a number of investment structures, which may include direct acquisitions, joint ventures, leveraged investments, issuing securities for property and direct and indirect investments in real estate. In order to maintain our exemption from regulation as an investment company under the Investment Company Act of 1940, as amended, or the Investment Company Act, we may be required to limit our investments in certain types of real estate-related investments. See “Investment Company Act Considerations” below for a further discussion.
For each of our investments, regardless of property type, we seek to invest in properties with the following attributes:
We are not limited as to the geographic areas where we may acquire properties. We are not specifically limited in the number or size of properties we may acquire or on the percentage of our assets that we may invest in a single property or investment. The number and mix of properties and real estate-related investments we will acquire will depend upon real estate and market conditions and other
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circumstances existing at the time we are acquiring our properties and making our investments and the amount of debt financing available.
Real Estate Investments
We generally seek investments that produce current income. We expect our real estate investments to include:
Our real estate investments may also include:
We generally seek to acquire real estate of the types described above that will best enable us to meet our investment objectives, taking into account, among other things, the diversification of our portfolio at the time, relevant real estate and financial factors, location, income-producing capacity and the prospects for long-term appreciation of a particular property. As a result, we may acquire properties other than the types described above. In addition, we may acquire properties that vary from the parameters described above for a particular property type.
Our real estate investments generally take the form of holding fee title or long-term leasehold interests. Our investments may be made either directly through our operating partnership or indirectly through investments in joint ventures, limited liability companies, general partnerships or other co-ownership arrangements with the developers of the properties or other persons. See “Joint Ventures” below for a further discussion. In addition, we have exercised, and may continue to exercise, our purchase options to acquire properties that we currently lease.
Our obligation to close a transaction involving the purchase of real estate is generally conditioned upon the delivery and verification of certain documents, including, where appropriate: (i) plans and specifications; (ii) environmental reports (generally a minimum of a Phase I investigation); (iii) building condition reports; (iv) surveys; (v) evidence of marketable title subject to such liens and encumbrances; (vi) audited financial statements covering recent operations of real properties having operating histories unless such statements are not required to be filed with the SEC and delivered to stockholders; (vii) title insurance policies; and (viii) the availability of property and liability insurance policies. We have obtained, and we intend to continue to obtain, adequate insurance coverage for all real estate investments in which we invest.
In determining whether to purchase a particular real estate investment, we may obtain an option on such property, including land suitable for development. The amount paid for an option is normally surrendered if the real estate is not purchased and is normally credited against the purchase price if the real estate is purchased. We also may enter into arrangements with the seller or developer of a real estate investment whereby the seller or developer agrees that if, during a stated period, the real estate investment does not generate specified cash flows, the seller or developer will pay us cash in an amount necessary to reach the specified cash flows level, subject in some cases to negotiated dollar limitations.
We have acquired, and we intend to continue to acquire, leased properties with long-term leases and we generally do not intend to operate any healthcare-related facilities directly. As a REIT, we are prohibited from operating healthcare-related facilities directly; however, we have leased, and may continue to lease, healthcare-related facilities that we acquire to wholly-owned taxable REIT subsidiaries, or TRS, utilizing a RIDEA structure permitted by the Code. In such an event, our TRS will engage a third party in the business of operating healthcare-related facilities to manage the property. Through our TRS, we bear operational risks and liabilities
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associated with the operation of such healthcare-related facilities unlike our triple-net leased properties. Such operational risks and liabilities might include, but are not limited to, resident quality of care claims and governmental reimbursement matters.
Development and Construction Activities
On an opportunistic basis, we have selectively developed, are currently developing (through Trilogy), and may continue to selectively develop, real estate assets within our ISHC segment and other segments of our portfolio when market conditions warrant, which may be funded through capital that we, and in certain circumstances, our joint venture partners, provide. In doing so, we may be able to reduce overall purchase costs by developing property versus purchasing an existing property. We retain and will continue to retain independent contractors to perform the actual construction work on tenant improvements, as well as property development.
Terms of Leases
The terms and conditions of any lease we enter into with our tenants at our non-RIDEA properties may vary substantially. However, we expect that a majority of such tenant leases will require the tenant to pay or reimburse us for some or all of the operating expenses of the building based on the tenant’s proportionate share of rentable space within the building. Operating expenses typically include, but are not limited to, real estate and other taxes, utilities, insurance and building repairs, and other building operation and management costs. For our multi-tenanted properties, we generally expect to be responsible for the replacement of certain capital improvements affecting a property, including structural components of a property such as the roof of a building and other capital improvements such as parking facilities. We expect that many of our tenant leases will have terms of five or more years, some of which may have renewal options.
Substantially all of our leases with residents at our SHOP and ISHC that are operated utilizing a RIDEA structure are for a term of one year or less, which creates the opportunity for operators to adjust rents to reflect current market conditions.
Joint Ventures
We have entered into, and we may continue to enter into, joint ventures, general partnerships and other arrangements with one or more institutions or individuals, including real estate developers, operators, owners, investors and others, for the purpose of acquiring real estate. Such joint ventures may be leveraged with debt financing or unleveraged. We have entered into, and may continue to enter into, joint ventures to further diversify our investments or to access investments which meet our investment criteria that would otherwise be unavailable to us. In determining whether to invest in a particular joint venture, we will evaluate the real estate that such joint venture owns or is being formed to own under the same criteria described elsewhere in this Annual Report on Form 10-K for the selection of our other properties. However, we will not participate in tenant-in-common syndications or transactions.
Real Estate-Related Investments
In addition to our acquisition of properties, we have invested on an infrequent and opportunistic basis, and may continue to invest, in real estate-related investments, including loans and securities investments.
Investments in Real Estate Mortgages
We have invested, and we may continue to invest, in first and second mortgage loans, mezzanine loans, bridge loans mortgage participations and seller financing. However, we will not make or invest in any loans that are subordinate to any mortgage or equity interest of any of our directors or affiliates. In evaluating prospective loan investments, we consider factors, including, but not limited to: (i) the ratio of the investment amount to the underlying property’s value; (ii) current and projected cash flows of the property; (iii) the degree of liquidity of the investment; (iv) the quality, experience and creditworthiness of the borrower; and (v) in the case of mezzanine loans, the ability to acquire the underlying real property.
Our criteria for making or investing in loans are substantially the same as those involved in our investment in properties. In the event a real estate-related investment transaction is with any of our directors or their respective affiliates, an appraisal will be obtained from a certified independent appraiser to support its determination of fair market value. In addition, we will seek to obtain a customary lender’s title insurance policy or commitment as to the priority of the mortgage or condition of the title.
We are not limited as to the amount of our assets that may be invested in mezzanine loans, bridge loans and second mortgage loans. However, we recognize that these types of loans are riskier than first deeds of trust or first priority mortgages on income-producing, fee-simple properties, and we expect to minimize the amount of these types of loans in our portfolio. We will evaluate the fact that these types of loans are riskier in determining the rate of interest on the loans. We do not have any policy that limits the amount that we may invest in any single loan or the amount we may invest in loans to any one borrower. We have not established a portfolio turnover policy with respect to loans we invest in or originate.
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Financing Policies
We have used, and may continue to use, unsecured and secured debt as a means of providing additional funds for the acquisition of properties and real estate-related investments. When interest rates are high or financing is otherwise unavailable on a timely basis, we may purchase certain assets for cash with the intention of obtaining debt financing at a later time. We have also used, and may continue to use, derivative financial instruments such as fixed interest rate swaps and caps to add stability to interest expense and to manage our exposure to interest rate movements.
We seek to obtain financing on the most favorable terms available to us and refinance assets during the term of a loan only in limited circumstances, such as when a decline in interest rates makes it beneficial to prepay an existing loan, when an existing loan matures or if an attractive investment becomes available and the proceeds from the refinancing can be used to purchase such investment. The benefits of refinancing may include increased cash flows resulting from reduced debt service requirements, an increase in distributions from proceeds of the refinancing and an increase in diversification and assets owned if all or a portion of the refinancing proceeds are reinvested.
Dispositions
We have disposed, and may continue to dispose, of assets. We will determine whether a particular property or real estate-related investment should be sold or otherwise disposed of after consideration of the relevant factors, including prevailing economic conditions, with a view toward maximizing our investment objectives. We intend to hold each property or real estate-related investment we acquire for an extended period. However, circumstances might arise which could result in a shortened holding period for certain investments. A property or real estate-related investment may be sold before the end of the expected holding period if: (i) diversification benefits exist associated with disposing of the investment and rebalancing our investment portfolio; (ii) an opportunity arises to pursue a more attractive investment; (iii) the value of the investment might decline; (iv) with respect to our non-RIDEA properties, a major tenant involuntarily liquidates or is in default under its lease; (v) the investment was acquired as part of a portfolio acquisition and does not meet our general acquisition criteria; (vi) an opportunity exists to enhance overall investment returns by raising capital through sale of the investment; or (vii) the sale of the investment is in our best interest and the best interests of our stockholders.
The determination of whether a particular property or real estate-related investment should be sold or otherwise disposed of will be made after consideration of the relevant factors, including prevailing economic conditions, with a view toward maximizing our investment objectives.
Tax Status and Distribution Policy
We have elected to be taxed as a REIT for U.S. federal income tax purposes commencing with our taxable year ended December 31, 2016. We believe that we have been organized and operated, and we intend to continue to operate, in conformity with the requirements for qualification and taxation as a REIT under the Code. Our qualification as a REIT, and maintenance of such qualification, will depend on our ability to meet, on a continuing basis, various complex requirements under the Code relating to, among other things, the sources of our gross income, the composition and values of our assets, our distribution levels and the concentration of ownership of our stock.
As a REIT, we generally are not subject to U.S. federal income tax on the REIT taxable income that we currently distribute to our stockholders. Under the Code, REITs are subject to numerous organizational and operational requirements, including a requirement that they distribute annually at least 90.0% of their REIT taxable income to their stockholders. If we fail to qualify as a REIT in any calendar year and do not qualify for certain statutory relief provisions, our REIT taxable income would be subject to U.S. federal income tax at the regular corporate rate, and we would likely be precluded from qualifying for treatment as a REIT until the fifth calendar year following the year in which we fail to qualify. Accordingly, our failure to qualify as a REIT could have a material adverse effect on us. Even if we qualify as a REIT, we may still be subject to certain U.S. federal, state and local taxes on our income and assets and to U.S. federal income and excise taxes on our undistributed REIT taxable income. In addition, subject to maintaining our qualification as a REIT, a portion of our business has been, and is likely to continue to be, conducted through, and a portion of our income may be earned in, one or more TRSs that are themselves subject to regular corporate income taxation.
The amount of any cash distributions is determined by our board of directors, or our board, and depends on the amount of distributable funds, current and projected cash requirements, tax considerations, any limitations imposed by the terms of indebtedness we may incur, as well as other factors. If our investments produce sufficient cash flows, we expect to continue paying distributions to our stockholders as determined at the discretion of our board.
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To the extent that any distributions to our stockholders are paid out of our current or accumulated earnings and profits, such distributions are taxable as ordinary income. To the extent that any of our distributions exceed our current and accumulated earnings and profits, such amounts constitute a return of capital to our stockholders for U.S. federal income tax purposes and thereafter will constitute capital gain upon the sale of our stock by our stockholders. Any portion of distributions to our stockholders paid from net offering proceeds or borrowings will be treated in the same manner.
Our board shall authorize distributions, if any, on a quarterly basis. The amount of distributions we pay to our stockholders is determined by our board and is dependent on a number of factors, including funds available for the payment of distributions, our financial condition, capital expenditure requirements, annual distribution requirements needed to maintain our status as a REIT under the Code and restrictions imposed by our organizational documents and Maryland Law.
See Part II, Item 5, Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities — Distributions, for a further discussion of distributions approved by our board.
Competition
We compete with many other entities engaged in real estate investment activities for acquisitions and dispositions of ISHC, OM buildings, senior housing, SNFs, and other healthcare-related facilities. Our ability to successfully compete is impacted by economic trends, availability of acceptable investment opportunities, our ability to negotiate beneficial investment terms, availability and cost of capital, construction and development costs and applicable laws and regulations.
Income from our investments is dependent on the ability of our tenants and operators to compete with other healthcare operators. These operators compete on a local and regional basis for patients and residents, and the operators’ ability to successfully attract and retain patients and residents depends on key factors such as the number of properties in the local market, the quality of the affiliated health system, proximity to hospital campuses, the price and range of services available, the scope and quality of care, reputation, age and appearance of each property, demographic trends and the cost of care in each locality. For additional information on the risks associated with our business, please see Item 1A, Risk Factors.
Government Regulations
Our properties are subject to various federal, state and local regulatory requirements, and changes in these laws and regulations, or their interpretation by agencies, occur frequently. Further, our tenants and our healthcare facility operators, including our TRS entities that own and operate our properties under a RIDEA structure, are typically subject to extensive and complex federal, state and local healthcare laws and regulations relating to quality of care, government reimbursement, fraud and abuse practices and similar laws governing the operation of healthcare facilities, and we expect the healthcare industry, in general, will continue to face increased regulation and pressure in the areas of healthcare management, fraud and provision of services, among others. If we fail to comply with these various requirements, we may incur governmental fines or private damage awards. We believe, based in part on third-party due diligence reports which are generally obtained at the time we acquire the properties, that all of our properties comply in all material respects with current regulations. For additional information on the risks associated with our healthcare industry, please see Item 1A, Risk Factors.
Privacy and Security Laws and Regulations
There are various federal and state privacy laws and regulations that provide for consumer protection of personal health information, particularly electronic security and privacy. Compliance with such laws and regulations may require us to, among other things, conduct additional risk analysis, modify our risk management plan, implement new policies and procedures and conduct additional training. We are generally dependent on our tenants and management companies to fulfill our compliance obligations, and we have in certain circumstances developed a program to periodically monitor compliance with such obligations. However, there can be no assurance we would not be required to alter one or more of our systems and data security procedures to be in compliance with these laws. If we fail to adequately protect health information, we could be subject to civil or criminal liability and adverse publicity, which could harm our business and impact our ability to attract new tenants and residents. We may be required to notify individuals, as well as government agencies and the media, if we experience a data breach. See Item 1C, Cybersecurity, below for a further discussion.
Healthcare Licensure and Certification
Generally, certain properties in our portfolio are subject to licensure, may require a certificate of need, or CON, or other certification through regulatory agencies in order to operate and participate in Medicare and Medicaid programs. Requirements pertaining to such licensure and certification relate to the quality of care provided by the operator, qualifications of the operator’s staff and continuing compliance with applicable laws and regulations. In addition, CON laws and regulations may place restrictions on certain activities such as the addition of beds/units at our facilities and changes in ownership. Failure to obtain a license, CON or other
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certification, or revocation, suspension or restriction of such required license, CON or other certification, could adversely impact our properties’ operations and their ability to generate revenue from services provided. State CON laws are not uniform throughout the United States and are subject to change. We cannot predict the impact of state CON laws on our facilities or the operations of our tenants.
Compliance with the Americans with Disabilities Act
Under the Americans with Disabilities Act of 1990, as amended, or the ADA, all public accommodations must meet federal requirements for access and use by disabled persons. Additional federal, state and local laws also may require modifications to our properties or restrict our ability to renovate our properties. We cannot predict the cost of compliance with the ADA or other legislation. We may incur substantial costs to comply with the ADA or any other legislation.
Government Environmental Regulation and Private Litigation
Environmental laws and regulations hold us liable for the costs of removal or remediation of certain hazardous or toxic substances which may be on our properties. These laws could impose liability without regard to whether we are responsible for the presence or release of the hazardous materials. Government investigations and remediation actions may have substantial costs, and the presence of hazardous substances on a property could result in personal injury or similar claims by private plaintiffs. Various laws also impose liability on a person who arranges for the disposal or treatment of hazardous or toxic substances, and such person often must incur the cost of removal or remediation of hazardous substances at the disposal or treatment facility. These laws often impose liability whether or not the person arranging for the disposal ever owned or operated the disposal facility. As the owner of our properties, we may be deemed to have arranged for the disposal or treatment of hazardous or toxic substances.
Geographic Concentration
For a discussion of our geographic information, see Item 2, Properties — Geographic Diversification/Concentration Table, as well as Note 16, Segment Reporting, and Note 17, Concentration of Credit Risk, to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K.
Corporate Responsibility
We are committed to ethical business practices and dedicated to establishing a corporate responsibility program that benefits our residents, tenants, operators, employees, communities, and investors. We believe integrating corporate responsibility principles into our operations and across our portfolio of senior housing properties, skilled nursing facilities, and OM buildings will deliver a lasting and positive impact in the communities in which we operate by providing and facilitating high-quality care and outcomes. To achieve this, we have developed, and intend to update as applicable, our Corporate Responsibility Report and related policies, which are briefly summarized below. For updates and our latest corporate governance, environmental and social responsibility initiatives and accomplishments, please refer to our Corporate Responsibility Report and related policies, which can be found in their entirety on the Investor Relations section of our website, www.AmericanHealthcareREIT.com. Information contained on, or accessible through, our website is not incorporated by reference into and does not constitute a part of this Annual Report on Form 10-K.
Our board’s Nominating and Corporate Governance Committee has been delegated the authority to provide oversight and guidance to our board regarding corporate governance, environmental and social trends and best practices in connection with our corporate responsibility to society and the environment. In particular, the Nominating and Corporate Governance Committee shall, as it deems appropriate, recommend changes to our company’s corporate responsibility practices as necessary to comply with existing legal requirements or emerging trends and best practices. The Nominating and Corporate Governance Committee also periodically receives reports from the Corporate Responsibility Committee, that is composed of a cross-functional team across our organization that includes representatives from our Legal, Accounting and Finance, Human Resources, Investor Relations and Asset Management departments, regarding our corporate responsibility strategy, initiatives and policies. The Corporate Responsibility Committee is responsible for providing oversight and guidance of our corporate responsibility strategy and program and for monitoring compliance with legal requirements and regulations, and our Chief Operating Officer serves as the chairman of the Corporate Responsibility Committee.
Human Capital
As of December 31, 2025, we had approximately 121 employees, including 74 in Accounting and Finance, 17 in Asset Management, 10 in Investments, five in Information Technology and four in Legal. We recognize that our employees are a reflection of our values and our greatest asset, and we are dedicated to implementing programs that support our employees and provide the right tools to build a safe and healthy workplace. We also believe that one of the keys to our success is our ability to benefit from a wide range of opinions and experiences. As of December 31, 2025, 73.6% of our employees were minorities and 57.9% were female. We have several programs to support our employees’ professional development and to create a sense of belonging, including new hire
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mentorship programs, employee investment programs, employee satisfaction surveys, employee engagement events, and trainings related to health and safety and professional development. In 2025, our company was officially certified as a Great Place to Work® for 2025, based on direct feedback from employees and an independent analysis conducted by Great Place To Work®, the global authority on workplace culture. The Great Place To Work® Certification™ is awarded to organizations that deliver exceptional employee experiences.
Moreover, we have implemented a number of programs to foster not only their professional growth, but also their growth as global citizens. All of our employees are provided with a comprehensive benefits and wellness package, which may include high-quality medical, dental, and vision insurance, life insurance, 401(k) matching, long-term incentive plans, educational grants, fitness programs, employee stock purchase plan, and other benefits. We provide our employees, consultants and executive officers with competitive compensation and, where applicable, opportunities for equity ownership through our Second Amended and Restated 2015 Incentive Plan, or the AHR Incentive Plan, and Employee Stock Purchase Plan. See Note 12, Equity — Equity Compensation Plans, to the Consolidated Financial Statements that are part of this Annual Report on Form 10-K, for a further discussion.
Investment Company Act Considerations
We conduct, and intend to continue to conduct, our operations, and the operations of our operating partnership and any other subsidiaries, so that no such entity meets the definition of an “investment company” under Section 3(a)(1) of the Investment Company Act. We primarily engage in the business of investing in real estate assets; however, our portfolio does include, to a much lesser extent, other real estate-related investments. We have also acquired, and may continue to acquire, real estate assets through investments in joint venture entities, including joint venture entities in which we may not own a controlling interest. We anticipate that our assets generally will be held in our wholly and majority-owned subsidiaries, each formed to hold a particular asset. We monitor our operations and our assets on an ongoing basis in order to ensure that neither we, nor any of our subsidiaries, meet the definition of “investment company” under Section 3(a)(1) of the Investment Company Act. Among other things, we monitor the proportion of our portfolio that is placed in investments in securities.
Information About Industry Segments
We segregate our operations into reporting segments in order to assess the performance of our business in the same way that management reviews our performance and makes operating decisions. As of December 31, 2025, we operated through four reportable business segments: ISHC, OM, SHOP and triple-net leased properties.
Integrated Senior Health Campuses
ISHC are a valuable component of our portfolio because of their ability to provide a continuum of care for residents who require increasing levels of care. As of December 31, 2025, we owned and/or operated 147 ISHC. These facilities allow residents to “age-in-place” by providing independent living, assisted living, memory care, skilled nursing and certain ancillary services, all within a single campus setting. ISHC predominantly focus on need-driven segments of senior care (i.e., assisted living, memory care and skilled nursing) and charge market rents in lieu of entry fees, as is commonly the case with continuing care retirement communities. Predominantly all of our ISHC are operated utilizing a RIDEA structure, allowing us to participate in the upside from any improved operational performance while bearing the risk of any decline in operating performance.
Outpatient Medical
We value the stable and reliable cash flows our OM buildings provide our company, which we believe are particularly valuable during market disruptions and recessionary periods. As of December 31, 2025, we owned 74 OM buildings that we lease to third parties. These properties are similar to commercial office buildings, but typically require specialized infrastructure to accommodate physicians’ offices and examination rooms, as well as some ancillary uses, including pharmacies, hospital ancillary service space and outpatient services, such as diagnostic centers, rehabilitation clinics and outpatient-surgery operating rooms. Our OM buildings are typically multi-tenant properties leased to healthcare providers (hospitals and physician practices) under leases that generally provide for recovery of certain operating expenses and certain capital expenditures and have initial terms of five to 15 years with fixed annual rent escalations (historically ranging from 2% to 3% per year).
Senior Housing Operating Properties
We believe our SHOP segment has the potential for demand growth from an aging U.S. population. As of December 31, 2025, we owned and operated 97 senior housing and skilled nursing facilities in our SHOP segment. Such facilities cater to different segments of the elderly population based upon their personal needs and include independent living, assisted living, memory care or skilled nursing services. Residents of assisted living facilities typically require limited medical care but need assistance with eating, bathing, dressing and/or medication management. Services provided by operators at these facilities are primarily paid for by the residents directly or through private insurance and are therefore less reliant on government reimbursement programs, such as Medicaid
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and Medicare. The facilities in our SHOP segment are operated utilizing RIDEA structures, allowing us to participate in the upside from any improved operational performance while bearing the risk of any decline in operating performance.
Triple-Net Leased Properties
Our triple-net leased properties segment includes senior housing, skilled nursing facilities and hospitals. We lease such properties to tenants under triple-net or absolute-net leases that obligate the tenants to pay all property-related expenses, including maintenance, utilities, repairs, taxes, insurance and capital expenditures.
As of December 31, 2025, we owned six SNFs within our triple-net leased properties segment that we lease to third parties. SNF residents are generally higher acuity and need assistance with eating, bathing, dressing and/or medication management and also require available 24-hour nursing care. SNFs offer restorative, rehabilitative and custodial nursing care for people who cannot live independently but do not require the more extensive and sophisticated treatment available at hospitals. Skilled nursing services provided by our tenants in SNFs are paid for either by private sources or through the Medicare and Medicaid programs. Each SNF is leased to a single tenant under a triple-net lease, with an initial term typically ranging from 15 to 16 years, fixed annual rent escalations (historically ranging from 2% to 3% per year) and requiring minimum lease coverage ratios. We commonly structure SNFs under a master lease with multiple facilities in order to diversify our master tenant’s sources of rent and mitigate risk. We typically focus on SNF investments in states that require a CON in order to develop new SNFs, which we believe reduces the risk of over-supply.
As of December 31, 2025, we owned 11 senior housing facilities within our triple-net leased properties segment that we lease to third parties. Each facility is leased to a single tenant under a triple-net lease structure with an initial term that typically ranges from 14 to 15 years, fixed annual rent escalations (historically 2.5% per year) and requiring minimum lease coverage ratios. Such assets are commonly leased under a single master lease covering multiple facilities in order to diversify a master tenant’s sources of rent and mitigate risk.
As of December 31, 2025, we have one wholly-owned hospital and one hospital in which we own an approximately 90.6% interest within our triple-net leased properties segment. Services provided by operators and tenants in our hospitals are paid for by private sources, third-party payors (e.g., insurance and health maintenance organizations) or through the Medicare and Medicaid programs. Our hospital properties include acute care, long-term acute care, specialty and rehabilitation services that are leased to single tenants or operators under triple-net lease structures with an initial term ranging from 21 to 29 years and fixed annual rent escalations (historically 2% per year).
For a further discussion of our segment reporting for the years ended December 31, 2025, 2024 and 2023, see Item 2, Properties, Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, and Note 16, Segment Reporting, to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K.
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Item 1A. Risk Factors
Investing in our Common Stock involves risks. Our stockholders should carefully consider the risk factors below, together with all of the other information included in this Annual Report on Form 10-K, including our Consolidated Financial Statements and the notes thereto included herein. If any of these risks were to occur, our business, financial condition, liquidity, results of operations and prospects and our ability to service our debt and make distributions to our stockholders at a particular rate, or at all, could be materially and adversely affected (which we refer to collectively as “materially and adversely affecting us” or having “a material adverse effect on us” and comparable phrases).
Risk Factor Summary
Below is a summary of the principal factors that make an investment in our Common Stock speculative or risky. This summary should be read in conjunction with the full risk factors contained below.
Risks Related to Our Business and Financial Results
Risks Related to Investments in Real Estate
Risks Related to Real Estate-Related Investments
Risks Related to the Healthcare Industry
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Risks Related to Joint Ventures
Risks Related to Debt Financing
Risks Related to Our Corporate Structure and Organization
Risks Related to Taxes and Our REIT Status
Risks Related to Our Common Stock
Risks Related to Our Business and Financial Results
The financial deterioration, insolvency or bankruptcy of one or more of our major tenants, operators, borrowers or other obligors could have a material adverse effect on us.
A downturn in any of our tenants’, operators’, borrowers’ or other obligors’ businesses could ultimately lead to voluntary or involuntary bankruptcy or similar insolvency proceedings, including but not limited to assignment for the benefit of creditors, reorganization, liquidation or winding-up. Bankruptcy and insolvency laws afford certain rights to a defaulting tenant, operator or borrower that has filed for bankruptcy or reorganization that may render certain of our remedies unenforceable or, at the least, delay our ability to pursue such remedies and realize any related recoveries. A debtor has the right to assume, or to assume and assign to a third party, or to reject its executory contracts and unexpired leases in a bankruptcy proceeding. If a debtor were to reject its leases with us, obligations under such rejected leases would cease. The claim against the rejecting debtor would be an unsecured claim, which would be limited by the statutory cap set forth in the U.S. Bankruptcy Code, and there may be insufficient assets to satisfy all unsecured claims, even ones limited by the statutory cap. This statutory cap may be substantially less than the remaining rent actually owed under the lease. In addition, a debtor may also assert in bankruptcy proceedings that leases should be re-characterized as financing agreements, which could result in our being deemed a lender instead of a landlord. A lender’s rights and remedies, as compared to a landlord’s, generally are materially less favorable, and our rights as a lender may be subordinated to other creditors’ rights.
Furthermore, the automatic stay provisions of the U.S. Bankruptcy Code would preclude us from enforcing our remedies unless we first obtain relief from the court having jurisdiction over the bankruptcy case. This would effectively limit or delay our ability to collect unpaid rent or interest payments, and we may ultimately not receive any payment at all. In addition, we would likely be required to fund certain expenses and obligations to preserve the value of our properties, avoid the imposition of liens on our
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properties or transition our properties to a new tenant or operator. Additionally, we lease many of our properties to healthcare providers who provide long-term custodial care to the elderly. Evicting operators for failure to pay rent while the property is occupied typically involves specific procedural or regulatory requirements and may not be successful. Even if eviction is possible, we may determine not to do so due to reputational or other risks. Bankruptcy or insolvency proceedings typically also result in increased costs to the operator, significant management distraction and performance declines. If we are unable to transition affected properties, they would likely experience prolonged operational disruption, leading to lower occupancy rates and further depressed revenues. Publicity about the operator’s financial troubles and bankruptcy or insolvency proceedings may also negatively impact their and our reputations, decreasing customer demand and revenues. Any or all of these risks could have a material adverse effect on us.
We are dependent on tenants for our revenue, and lease defaults or terminations could reduce our ability to make distributions to our stockholders.
The successful performance of our real estate investments is materially dependent on the financial stability of our tenants. Lease payment defaults by tenants would cause us to lose the revenue associated with such leases and could reduce our ability to make distributions to our stockholders. If a property is subject to a mortgage, a default by a significant tenant on its lease payments to us may result in a foreclosure on the property if we are unable to find an alternative source of revenue to meet our mortgage payments. In the event of a tenant default, we may experience delays in enforcing our rights as landlord and may incur substantial costs in protecting our investment and re-leasing our property. Further, we cannot assure our stockholders that we will be able to re-lease the property for the rent previously received, if at all, or that lease terminations will not cause us to sell the property at a loss.
We have experienced net losses in the past and we may experience additional losses in the future.
Historically, we have experienced net losses (calculated in accordance with GAAP), and we may not become or remain profitable or realize growth in the value of our investments. Many of our losses can be attributed to depreciation and amortization, interest expense, general and administrative expenses, as well as acquisition expenses incurred in connection with purchasing properties or making other investments. For a further discussion of our operational history and the factors affecting our net losses, see Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations and our Consolidated Financial Statements and the notes thereto that are a part of this Annual Report on Form 10-K.
Our success depends, in part, on the continued contributions of certain of our key executives; in the event that a key executive is no longer employed by us or otherwise becomes unavailable to us for an extended period of time we could be materially and adversely affected.
Our success depends, to a significant degree, upon the continued contributions of our key executives. In particular, Danny Prosky, our Chief Executive Officer, President and a member of our Board of Directors, has made significant contributions to our company, and it would be difficult to replace his experience with our business and his expertise. Mr. Prosky is taking a leave of absence from his executive role due to a recent medical event, and Jeffrey T. Hanson, our Chairman of the Board of Directors and our former Chief Executive Officer from 2015 to 2021, has been appointed to serve as our Interim Chief Executive Officer and President during Mr. Prosky’s leave. At this time, we are unable to predict when Mr. Prosky may be able to resume his duties as our Chief Executive Officer and President. In the event that Mr. Prosky is unable to resume his duties or if Mr. Prosky or one of our other key executives is no longer employed by us, it could have a material adverse effect on us, and we may not be able to attract and hire equally capable individuals to replace them.
Our financial results and our ability to make distributions to our stockholders are subject to international, national and local market conditions we cannot control or predict.
We are subject to the risks of an international or national economic slowdown or downturn and other changes in international, national and local market conditions. The following factors may have affected, and may continue to affect, income from our properties, our ability to acquire and develop properties, and our overall financial results and ability to make distributions to our stockholders:
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The length and severity of any economic slowdown or downturn cannot be predicted with confidence at this time. We have been, and we expect may continue to be, negatively impacted to the extent an economic slowdown or downturn is prolonged or becomes more severe.
We face significant competition for the acquisition or disposition of senior housing, SNFs, OM buildings and other healthcare-related facilities, which may impede our ability to take, and increase the cost of, such actions, which may materially and adversely affect us.
We face significant competition from other entities engaged in real estate investment activities for acquisitions or dispositions of senior housing, SNFs, OM buildings and other healthcare-related facilities, some of whom may have greater resources, lower costs of capital and higher risk tolerances than we do. Increased competition makes it more challenging for us to identify and successfully capitalize on opportunities that meet our business objectives and could improve the bargaining power of our counterparties, thereby impeding our investment, acquisition and disposition activities. If we pay higher prices per property or receive lower prices for dispositions of our senior housing, SNFs, OM buildings or other healthcare-related facilities as a result of such competition, we may be materially and adversely affected.
Our investments in, and acquisitions of, senior housing, SNFs, OM buildings and other healthcare-related facilities may be unsuccessful or fail to meet our expectations.
Some of our acquisitions may not prove to be successful. We could encounter unanticipated difficulties and expenditures relating to any acquired properties, including contingent liabilities, and acquired properties might require significant management attention that would otherwise be devoted to our ongoing business. Such expenditures may negatively affect our results of operations. Investments in and acquisitions of senior housing, SNFs, OM buildings and other healthcare-related facilities entail risks associated with real estate investments generally, including risks that the investment will not achieve expected returns, that the cost estimates for necessary property improvements will prove inaccurate or that the tenant or operator will fail to meet performance expectations. In addition, we may not be able to identify off-market or other investment opportunities or investment opportunities that are strategically marketed to a limited number of investors at the rate that we anticipate or at all. We may be unable to obtain or assume financing for acquisitions on favorable terms or at all. Healthcare properties are often highly customizable and the development or redevelopment of such properties may require costly tenant-specific improvements. We may experience delays and disruptions to property redevelopment as a result of supply chain issues and construction material and labor shortages. We also may be unable to quickly and efficiently integrate new acquisitions, particularly acquisitions of portfolios of properties, into our existing operations, and this could have a material adverse effect on us. Acquired properties may be located in new markets, either within or outside the United States, where we may face risks associated with a lack of market knowledge or understanding of the local economy, lack of business relationships in the area, costs associated with opening a new regional office, and unfamiliarity with local governmental and
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permitting procedures. As a result, we cannot assure our stockholders that we will achieve the economic benefit we expect from acquisitions, investment, development and redevelopment opportunities and may lead to impairment of such assets.
If we cannot obtain debt or equity funding on favorable terms, our ability to acquire properties may be impaired or delayed, which could have a material adverse effect on us.
Our identified sources of debt or equity funding may not be available to us on favorable terms or at all. If we do not have access to sufficient funding on favorable terms in the future, we may not be able to acquire new properties, pay other expenses or expand our business when desired, or at all, which would have a material adverse effect on us.
All of our ISHC are managed by the Trilogy Manager and account for a significant portion of our revenues and operating income. Adverse developments in the Trilogy Manager’s business or financial strength could have a material adverse effect on us.
The Trilogy Manager manages all of the day-to-day operations for all of our ISHC pursuant to a long-term management agreement. These ISHC accounted for approximately 45.3% of our portfolio (based on aggregate contract purchase price) as of December 31, 2025 and contributed approximately 55.5% of our annualized base rent/annualized net operating income, or NOI, as of such date. We rely on the Trilogy Manager’s personnel, expertise, technical resources and information systems, proprietary information, good faith and judgment to manage our ISHC operations efficiently and effectively, and to identify and manage development opportunities for new ISHC. We also rely on the Trilogy Manager to provide accurate campus-level financial results for our ISHC in a timely manner and to otherwise operate our ISHC in compliance with the terms of our management agreement and all applicable laws and regulations. We depend on the Trilogy Manager’s ability to attract and retain skilled personnel to provide these services. A shortage of nurses or other trained personnel or general inflationary pressures may force the Trilogy Manager to enhance its pay and benefits package to compete effectively for such personnel, the cost of which we would bear, but it may not be able to offset these added costs by increasing the rates charged to residents. As such, any adverse developments in the Trilogy Manager’s business or financial strength, including its ability to retain key personnel, could impair its ability to manage our ISHC efficiently and effectively and could have a material adverse effect on us. In addition, if the Trilogy Manager experiences any significant financial, legal, accounting or regulatory difficulties due to a weak economy, industry downturn or otherwise, such difficulties could result in, among other adverse events, acceleration of its indebtedness, impairment of its continued access to capital, the enforcement of default remedies by its counterparties or the commencement of insolvency proceedings by or against it under the U.S. Bankruptcy Code. Any one or a combination of these risks could have a material adverse effect on us.
In the event that our management agreement with the Trilogy Manager is terminated or not renewed, we may be unable to replace the Trilogy Manager with another suitable operator, or, if we were successful in locating such an operator, we cannot guarantee that it would manage the ISHC efficiently and effectively or that any such transition would be completed timely, which may have a material adverse effect on us.
In the event we were to contemplate pursuing any existing or future contractual rights or remedies under our management agreement with the Trilogy Manager, including termination rights, we would consider numerous factors, including legal, contractual, regulatory, business and other relevant considerations. In the event that we exercise our rights to terminate the management agreement with the Trilogy Manager for any reason or such agreements are not renewed upon expiration of their terms, we would attempt to reposition the affected ISHC with another operator. Although we believe that other qualified national and regional operators would be interested in managing our ISHC, we cannot provide any assurance that we would be able to locate another suitable operator or, if we were successful in locating such an operator, that it would manage the ISHC efficiently and effectively or that any such transition would be completed timely or would not require substantial capital expenditures. Any such transition would likely result in disruption of the operation of such facilities, including matters relating to staffing and reporting. Moreover, the transition to a replacement operator may require approval by the applicable regulatory authorities and, in most cases, one or more of our lenders, including the mortgage lenders for certain of the ISHC, and we cannot provide any assurance that such approvals would be granted on a timely basis, if at all. Any inability to replace or delay in replacing the Trilogy Manager as the operator of our ISHC with a highly qualified successor on favorable terms could have a material adverse effect on us.
We may incur additional costs in re-leasing properties with specialized uses, which could materially and adversely affect us.
Some of the properties we have acquired and will seek to acquire are healthcare properties designed or built primarily for a particular tenant of a specific type of use known as a single-user facility. If we or our tenants terminate the leases for these properties or our tenants default on their lease obligations or lose their regulatory authority to operate such properties, we may not be able to locate suitable replacement tenants to lease the properties for their specialized uses. Alternatively, we may be required to spend substantial amounts to adapt the properties to other uses or incur other significant re-leasing costs. Any loss of revenues or additional capital expenditures required as a result may have a material adverse effect on us.
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A breach of, or failure in, information technology systems on which we rely could materially and adversely impact us.
We and our tenants and operators rely on information technology systems, including the internet and networks and systems maintained and controlled by third-party vendors and other third parties, to process, transmit and store information and to manage or support our business processes. Third-party vendors collect and hold personally identifiable information and other confidential information of our tenants, operators, patients, stockholders and employees. We also maintain confidential financial and business information regarding us and persons and entities with which we do business on our information technology systems. While we have enhanced our information technology systems in response to the general cybersecurity threat environment in recent years, we are not aware of any specific cybersecurity threat, including as a result of any previous cybersecurity or information security incident or breach, that has had a material effect on us, including our business strategy, results of operations or financial condition. However, there can be no assurance that a cybersecurity threat or incident that could have a material impact on us has not occurred or will not occur in the future.
While we and our tenants and operators take steps to protect the security of the information maintained in our information technology systems, including the use of commercially available systems, software, tools and monitoring to provide security for processing, transmitting and storing of the information, it is possible that such security measures will not be able to prevent human error or the systems’ improper functioning, or the loss, misappropriation, disclosure or corruption of personally identifiable information or other confidential or sensitive information, including information about our tenants and employees. Cybersecurity breaches, including physical or electronic break-ins, computer viruses, phishing scams, attacks by hackers, breaches due to employee error or misconduct and similar breaches can create and, in some instances in the past, have resulted in, system disruptions, shutdowns or unauthorized access to information maintained on our information technology systems or the information technology systems of our third-party vendors or other third parties or otherwise cause disruption or negative impacts to occur to our business and materially and adversely affect us. In addition, the cybersecurity threat landscape is rapidly evolving, and threat actors may leverage new and evolving technologies, such as artificial intelligence, previously unknown vulnerabilities to perpetrate attacks, as well as sophisticated anti-forensics techniques to evade detection. While we and, we believe, most of our tenants and operators maintain cyber risk insurance to provide some coverage for certain risks arising out of cybersecurity breaches, there is no assurance that such insurance would cover all or a significant portion of the costs or consequences associated with a cybersecurity breach. As our reliance on technology increases, including through the adoption or increased use of artificial intelligence or other emerging technologies by us and our partners, so will the risks posed to our information systems, both internal and those we outsource. In addition, as the techniques used to obtain unauthorized access to information technology systems become more varied and sophisticated and the occurrence of such breaches becomes more frequent, we and our third-party vendors and other third parties may be unable to adequately anticipate these techniques or breaches and implement appropriate preventative measures. There is no guarantee that any processes, procedures and internal controls we have implemented or will implement will prevent cyber intrusions. Any failure to prevent cybersecurity breaches and maintain the proper function, security and availability of our or our third-party vendors’ and other third parties’ information technology systems could interrupt our operations, damage our reputation and brand, damage our competitive position, make it difficult for us to attract and retain tenants and subject us to liability claims or regulatory penalties, which could materially and adversely affect us. Additionally, as increased regulatory compliance for cybersecurity protocols and disclosures, including rules requiring prompt disclosure of any material cybersecurity breaches or incidents, are required by state or federal authorities, the increased amount of resources, both time and expense, could also materially and adversely affect us, and we may be subject to regulatory action and lawsuits, should we fail to comply with such requirements.
The use of, or inability to use, artificial intelligence by us, our operators, our tenants and our vendors presents risks and challenges that may adversely impact our business and operating results or the business and operating results of our operators and tenants or may adversely impact the demand for properties.
We may use generative artificial intelligence and/or machine learning, or AI, tools in our operations. If our peers use AI tools to optimize operations and we fail to utilize AI tools in a comparable manner, we may be competitively disadvantaged. However, while AI tools may facilitate optimization and operational efficiencies, they also have the potential for inaccuracy, bias, infringement or misappropriation of intellectual property, and risks related to data privacy and cybersecurity. The use of AI tools may introduce errors or inadequacies that are not easily detectable, including deficiencies, inaccuracies or biases in the data used for AI training, or in the content, analyses or recommendations generated by AI applications. The results of such errors or inadequacies may adversely affect our business, financial condition and results of operations. The legal requirements relating to AI continue to evolve and remain uncertain, including how legal developments could impact our business and ability to enforce our proprietary rights or protect against infringement of those rights.
Cybersecurity threat actors may utilize AI tools to automate and enhance cybersecurity attacks against us. We utilize software and platforms designed to detect such cybersecurity threats, including AI-based tools, but these threats could become more sophisticated and harder to detect and counteract, which may pose significant risks to our data security and systems. Such cybersecurity attacks, if successful, could lead to data breaches, loss of confidential or sensitive information and financial or reputational harm.
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Our vendors may use AI tools in their products or services without our knowledge, and the providers of these tools may not meet the evolving regulatory or industry standards for privacy and data protection. Consequently, this may inhibit our or our vendors' ability to uphold an appropriate level of service and data privacy. If we, our vendors or other third parties with which we conduct business experience an actual or perceived breach of privacy or security incident due to the use of AI, we may be adversely impacted, lose valuable intellectual property or confidential information and incur harm to our reputation and the public perception of the effectiveness of our security measures.
In addition, investors, analysts and other market participants may use AI tools to process, summarize or interpret our financial information or other data about us. The use of AI tools in financial and market analysis may introduce risks similar to those described above, including an inaccurate interpretation of our financial or operational performance or market trends or conditions, which in turn could result in inaccurate conclusions or investment recommendations.
Risks Related to Investments in Real Estate
Changing market conditions could lead our real estate investments to decrease in value or may cause us to sell our properties at a loss in the future.
Our management, subject to the oversight of our board, may exercise its discretion as to whether and when to sell a property, and we have no obligation to sell properties at any particular time or at all. We cannot predict with any certainty the various market conditions affecting real estate investments that will exist at any particular time in the future. As such, we may be purchasing our properties at a time when capitalization rates are at historically low levels and purchase prices are high. In addition, we may be required to expend funds to correct defects or to make improvements before a property can be sold. We may not have adequate funds available to correct such defects or to make such improvements. Moreover, in acquiring a property, we may agree to restrictions that prohibit the sale of that property for a period of time or impose other restrictions, such as a limitation on the amount of debt that can be placed or repaid on that property. We cannot predict the length of time needed to find a willing purchaser and to close the sale of a property. The value of our properties may not increase over time, which may restrict our ability to sell our properties, or in the event we are able to sell such properties, may lead to sale prices less than the prices that we paid to purchase the properties or the price at which we value the property. Additionally, we may incur prepayment penalties in the event we sell a property subject to a mortgage earlier than we otherwise had planned. Accordingly, our ability to realize potential appreciation on our real estate investments and make distributions to our stockholders will, among other things, be dependent upon uncertain market conditions.
Most of our costs, such as operating and general and administrative expenses, interest expense and real estate acquisition and construction costs, are subject to inflation and may not be recoverable.
A significant portion of our operating expenses is sensitive to inflation. These include expenses for property-related costs such as insurance, utilities and repairs and maintenance. We also have ground lease expenses in certain of our properties. Ground lease costs are contractual, but in some cases, lease payments reset every few years based on changes on consumer price indexes.
Operating expenses on our non-RIDEA properties, with the exception of ground lease rental expenses, are typically recoverable through our lease arrangements, which allow us to pass through substantially all expenses associated with property taxes, insurance, utilities, repairs and maintenance and other operating expenses (including increases thereto) to our tenants. As of December 31, 2025, the majority of our existing leases were either triple-net leases or leases that allow us to recover certain operating expenses and certain capital expenditures. Our remaining leases are generally modified gross, or base year, leases, which only provide for recoveries of operating expenses above the operating expenses from the initial year within each lease. During inflationary periods such as those prevailing in recent years, we have historically been able to and expect to recover increases in operating expenses from our triple-net leases and our gross leases. For our RIDEA properties, increases in operating expenses, including labor, that are caused by inflationary pressures will generally be passed through to us and may materially and adversely affect us.
Our general and administrative expenses consist primarily of compensation costs, as well as professional and legal fees. Annually, our employee compensation is adjusted to reflect merit increases; however, in order for us to maintain our ability to successfully compete for the best talent, rising inflation rates in recent years have required, and may continue to require, us to provide compensation increases beyond historical annual merit increases, which may significantly increase our compensation costs. Similarly, professional and legal fees are also subject to the impact of inflation and expected to increase proportionately with increasing market prices for such services. Consequently, inflation is expected to increase our general and administrative expenses over time and may materially and adversely affect us.
Also, during inflationary periods, interest rates have historically increased, which in recent years have increased the interest expense of our borrowings and could do so again. Our exposure to increases in interest rates is limited to our variable-rate borrowings, which consist of borrowings under our credit facilities and variable-rate mortgage loans payable. As of December 31, 2025, we have entered into interest rate swap contracts to hedge an aggregate $550 million of our variable-rate credit facilities. As of December 31, 2025, our outstanding debt aggregated to $1.5 billion, of which all variable-rate debt was hedged. The rise in interest rates has also
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increased our interest expense on future fixed-rate borrowings. Therefore, a significant increase in inflation or interest rates would have a material adverse impact on our financing costs and interest expense.
We have long-term lease agreements with our tenants that contain effective annual rent escalations that were either fixed or indexed based on a consumer price index or other index. We believe our annual lease expirations allow us to reset these leases to market rents upon renewal or re-leasing and that annual rent escalations within our long-term leases are generally sufficient to offset the effect of inflation on non-recoverable costs, such as general and administrative expenses and interest expense. In addition, our leases often obligate the tenants to pay a pro rata share of any increase in operating expenses. However, it is possible that during higher inflationary periods, the impact of inflation will not be adequately offset by the resetting of rents from our renewal and re-leasing activities, our annual rent escalations or the tenants’ pro rata payment of the increase in operating expenses. As a result, during periods when the impact of inflation exceeds the annual rent escalation percentages in our current leases and the percentage increase in rents in new leases, our financial results may be impaired.
Additionally, inflationary pricing may increase the acquisition and construction costs necessary to complete our development and redevelopment projects, including, but not limited to, costs of construction materials, labor and services from third-party contractors and suppliers. Higher acquisition and construction costs could adversely impact our net investments in real estate and expected yields in our development and redevelopment projects, which may make otherwise lucrative investment opportunities less profitable to us. Any of these matters may materially and adversely affect us over time.
Our high concentrations of properties in particular geographic areas magnify the effects of negative conditions affecting those geographic areas.
We have a concentration of properties in particular geographic areas; therefore, any adverse situation that disproportionately effects one of those areas would have a magnified adverse effect on our portfolio. As of December 31, 2025, properties located in Indiana and Ohio accounted for approximately 33.4% and 11.5%, respectively, of our total property portfolio’s annualized base rent or annualized NOI. Accordingly, there is a geographic concentration of risk subject to fluctuations in each state’s economy, real estate and other market conditions, as well as natural disasters or other localized events impacting those regions.
Our real estate investments may be concentrated in senior housing, SNFs, OM buildings or other healthcare-related facilities, making us more vulnerable to negative factors affecting these classes than if our investments were diversified beyond the healthcare industry.
As a REIT, we invest primarily in real estate. Within the real estate industry, we have acquired, developed and owned, and may continue to acquire, or selectively develop and own, senior housing, SNFs, OM buildings and other healthcare-related facilities. As of December 31, 2025, our three major asset class concentrations (based on aggregate contract purchase price) were senior housing 49.1%, SNFs 26.9% and OM buildings 19.8%. We are subject to risks inherent in concentrating investments in real estate. These risks resulting from a lack of diversification become even greater as a result of our business objectives and growth strategies, which involve investing substantially all of our assets in clinical healthcare real estate.
A downturn in the commercial real estate industry generally could significantly adversely affect the value of our properties. A downturn in the healthcare industry could negatively affect our lessees’ ability to make lease payments to us and our operators’ ability to manage our properties efficiently and effectively. These matters could materially and adversely affect us and could be more pronounced than if we diversified our investments outside of real estate or if our portfolio did not include a substantial concentration in senior housing, SNFs, OM buildings or healthcare-related facilities.
Our buildings that are subject to ground leases could restrict our use of such facilities.
Our buildings that are subject to ground leases could restrict our use of such facilities. As of December 31, 2025, we own fee simple interests in all of our land, buildings and campuses, except for the following properties that are located on land that is subject to ground leases: (a) 18 OM buildings; (b) five ISHC; and (c) one SNF, in each case, for which we own fee simple interests in the building and other improvements on such properties. Additionally, we own and operate 15 ISHC that were leased to Trilogy by third parties. These ground leases contain certain restrictions. These restrictions include limits on our use of the facilities and ability to lease, sell or obtain mortgage financing secured by the facilities. There can be no assurance that the ground leases can be extended beyond the stated terms. These restrictions and term limitations could affect our returns on these facilities, which, in turn, could materially and adversely affect us. As a ground lessee, we are also exposed to the risk of reversion of the property upon expiration of the ground lease term or an earlier breach of the ground lease, which could materially and adversely affect us.
Our use of property-level rent coverages to measure our tenant’s ability to make rent payments may not be accurate.
We evaluate a lease’s property-level rent coverage ratio. Our calculations of rent coverage ratios are unaudited and are based on financial information provided to us by our tenants without independent verification on our part, and we must assume the
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appropriateness of estimates and judgments that were made by the party preparing the financial information. Our review of rent coverages may not adequately assess the risk of an investment, and, if our calculations are not accurate, we may be unaware that we have tenants that may be unable to make payments under their leases. If our assessment is inaccurate, our revenues could be materially and adversely affected.
Terrorist attacks, acts of violence or war, political protests and unrest or public health crises have affected and may affect the markets in which we operate and have a material adverse effect on us.
Terrorist attacks, acts of violence or war, political protests and unrest or public health crises (such as the COVID-19 pandemic) have negatively affected, and may in the future affect, our operations and our stockholders’ investments. We have acquired, and may continue to acquire, real estate assets located in areas that are susceptible to terrorist attacks, acts of violence or war, political protests or public health crises. These events may directly impact the value of our assets through damage, destruction, loss or increased security costs. Although we may obtain insurance to mitigate such risks, we may not be able to obtain sufficient coverage to fund any losses we may incur. Further, certain losses resulting from these types of events are uninsurable or not insurable at reasonable costs. In addition, other than any reserves we may establish, we have no source of funding to repair or reconstruct any uninsured damaged property, and we cannot assure our stockholders that any such sources of funding will be available to us for such purposes in the future. Also, to the extent we must pay unexpectedly large amounts for uninsured losses, our cash flows could be impaired in a manner that would result in little or no cash being distributed to our stockholders. More generally, any terrorist attack, other act of violence or war, political protest and unrest or public health crisis could result in increased volatility in, or damage to, the United States and worldwide financial markets and economy, all of which could adversely affect our tenants’ ability to pay rent on their leases with us, our operators’ ability to manage our properties efficiently and effectively and our ability to borrow money or issue capital stock on favorable terms, which could have a material adverse effect on us.
Our business, tenants, residents and operators may face litigation and experience rising liability and insurance costs, which may materially and adversely affect us.
With respect to our SHOP and ISHC, we are ultimately responsible for operational risks and other liabilities of the facility, other than those arising out of certain actions by our operator, such as gross negligence or willful misconduct. As such, operational risks include, and our resulting revenues therefore depend on, the availability and cost of general and professional liability insurance coverage or increases in insurance policy deductibles.
Inaccuracies in our underwriting assumptions and/or delays in the selection, acquisition, expansion or development of real properties may materially and adversely affect us.
Inaccuracies in our underwriting assumptions and/or delays we encounter in the selection, acquisition, expansion and development of real properties could materially and adversely affect us. In deciding whether to acquire, expand or develop a particular property, we make assumptions regarding the expected future performance of that property. In particular, we estimate the return on our investment based on expected construction costs, lease up velocity, occupancy, rental rates, operating expenses, capital costs and future competition. If our financial projections with respect to a new property are inaccurate, the property may fail to perform as we expected in analyzing our investment. Our development/expansion and construction projects are vulnerable to the impact of material shortages and inflation. For example, shortages and fluctuations in the price of lumber or in other important raw materials could result in delays in the start or completion of, or increase the cost of, developing one or more of our projects. Pricing for labor and raw materials can be affected by various national, regional, local, economic and political factors, including changes to immigration laws that impact the availability of labor or tariffs on imported construction materials.
In connection with our development, expansion and related construction activities, we may be unable to obtain, or suffer delays in obtaining, necessary zoning, land-use, building, occupancy and other required governmental permits and authorizations, or satisfactory tax rates, incentives or abatements. Operators of new facilities we construct may need to obtain Medicare and Medicaid certification and enter into Medicare and Medicaid provider agreements and/or third-party payor contracts. In the event that the operator is unable to obtain the necessary licensure, certification, provider agreements or contracts after the completion of construction, there is a risk that we will not be able to earn any revenues on the facility until either the initial operator obtains a license or certification to operate the new facility and the necessary provider agreements or contracts or we find and contract with a new operator that is able to obtain a license to operate the facility for its intended use and the necessary provider agreements or contracts.
One of our growth strategies is to develop new and expand existing clinical healthcare real estate; we may do this directly or indirectly through joint ventures. Expanding and, in particular, developing properties exposes us to increased risks beyond those associated with investing in stabilized, cash flowing real estate. For example, actual costs could significantly exceed estimates (particularly during periods of rapid inflation), construction and stabilization (i.e., substantial lease-up) could take longer than expected, and occupancy and/or rental rates could prove to be lower than expected or property operating expenses could be higher. Any of these events could materially reduce any returns we achieve, or result in losses, on expansion or development projects. For the developments we have completed to date, the time to stabilization has varied, in some cases significantly, and certain developments have not yet stabilized. There can be no assurance that our current or any future development or expansion projects will be completed
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in accordance with our budgeted expectations, that they will achieve our underwritten returns or result in yields on cost similar to those achieved on past investments, that they will be stabilized in accordance with our expectations or at all or that, if stabilization is achieved, such stabilization will be maintained. In addition, development and expansion projects undertaken indirectly through Trilogy are primarily overseen by the Trilogy Manager, and we do not have the same level of day-to-day involvement or control over such projects that we do in a project we undertake directly. Accordingly, with respect to projects undertaken through Trilogy, we rely on the development expertise of the Trilogy Manager.
Where properties are acquired prior to the start of construction or during the early stages of construction or when an existing property is expanded, it will typically take several months to complete construction and lease available space. Development and other construction projects, subject us to uncertainties associated with re-zoning for development, environmental concerns of governmental entities and/or community groups and our builder’s ability to build in conformity with plans, specifications, budgeted costs and timetables. If a builder fails to perform, we may resort to legal action to rescind the purchase or the construction contract or to compel performance. A builder’s performance may also be affected or delayed by conditions beyond the builder’s control. Delays in completion of construction could give tenants the right to terminate preconstruction leases for space at a newly developed project. We may incur additional risks if we make periodic progress payments or other advances to builders prior to completion of construction. These and other such factors can result in increased costs of a project or loss of our investment. In addition, we will be subject to normal lease-up risks relating to newly constructed projects. We also must rely on rental income and expense projections and estimates of the fair market value of property upon completion of construction when agreeing upon a price at the time we acquire the property. If our projections are inaccurate, we may pay too much for a property, and our return on our investment could suffer or result in a loss.
We face possible liability for environmental cleanup costs and damages for contamination related to properties we acquire, which could materially and adversely affect us.
Because we own and operate real estate, we are subject to various international, U.S. federal, state and local environmental laws, ordinances and regulations. Under these laws, ordinances and regulations, a current or previous owner or operator of real estate may be liable for the cost of removal or remediation of hazardous or toxic substances on, under or in such property. The costs of removal or remediation could be substantial. Such laws often impose liability whether or not the owner or operator knew of, or was responsible for, the presence of such hazardous or toxic substances. Under such laws, a current owner or operator of property can be held liable for contamination on the property caused by the former owner or operator. Environmental laws also may impose restrictions on the manner in which property may be used or businesses may be operated, and these restrictions may require substantial expenditures. Environmental laws provide for sanctions in the event of noncompliance and may be enforced by governmental agencies or, in certain circumstances, by private parties. Certain environmental laws and common law principles could be used to impose liability for release of and exposure to hazardous substances, including the release of asbestos-containing materials into the air, and third parties may seek recovery from owners or operators of real estate for personal injury or property damage associated with exposure to released hazardous substances. In addition, new or more stringent laws or stricter interpretations of existing laws could change the cost of compliance or liabilities and restrictions arising out of such laws. The cost of defending against these claims, complying with environmental regulatory requirements, conducting remediation of any contaminated property, or of paying personal injury claims could be substantial and could materially and adversely affect us. In addition, the presence of hazardous substances on a property or the failure to meet environmental regulatory requirements may materially impair our ability to use, lease or sell a property, or to use the property as collateral for borrowing.
Our current and future properties and our tenants may be unable to compete successfully, which could result in lower rent payments and could materially and adversely affect us.
Our current and future properties often will face competition from nearby properties that provide comparable services. Some of those competing properties are owned by governmental agencies and supported by tax revenues, and others are owned by nonprofit corporations and may be supported to a large extent by endowments and charitable contributions. These types of support are not available to our properties. Operators of competing properties may provide superior services than those provided by our operators, which could reduce the competitiveness of our properties, which could have a material adverse effect on us.
Similarly, our OM building and senior housing — leased tenants face competition from other medical practices in nearby hospitals and other medical facilities, and their failure to compete successfully with these other practices could adversely affect their ability to make rental payments to us, which could materially and adversely affect us. Further, from time to time and for reasons beyond our control, referral sources, including physicians and managed care organizations, may change their lists of hospitals or physicians to which they refer patients or that are permitted to participate in the payor program. This could also adversely affect our tenants’ ability to make rental payments to us, which could materially and adversely affect us.
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Ownership of property outside the United States may subject us to different or greater risks than those associated with our domestic operations.
International development, ownership and operating activities involve risks that are different from those we face with respect to our domestic development, ownership and operating activities. For example, we have limited investing experience in international markets. As of December 31, 2025, we have investments in the United Kingdom, or the UK, and the Isle of Man that represent 1.1% of our portfolio, based on our aggregate purchase price of real estate investments. If we are unable to successfully manage the risks associated with international expansion and operations, we may be adversely affected.
Additionally, our ownership of properties in the UK and the Isle of Man currently subjects us to fluctuations in the exchange rates between U.S. dollars and the UK Pound Sterling, which may, from time to time, impact our financial condition, cash flows and results of operations. Revenues generated from any properties or other real estate-related investments we acquire or ventures we enter into relating to transactions involving assets located in markets outside the United States likely will be denominated in the local currency. Therefore, any investments we make outside the United States will subject us to foreign currency risk due to potential fluctuations in exchange rates between foreign currencies and the U.S. dollar, and there can be no assurance that any attempt to mitigate foreign currency risk through hedging transactions or otherwise will be successful. As a result, changes in exchange rates of any such foreign currency to U.S. dollars may materially and adversely affect us and the book value of our assets. In addition, changes in foreign currency exchange rates used to value a REIT’s foreign assets may be considered changes in the value of the REIT’s assets. These changes may adversely affect our status as a REIT. Further, bank accounts in a foreign currency which are not considered cash or cash equivalents may adversely affect our status as a REIT. In addition, international operations subject us to regulatory requirements that are different from, and in some cases may conflict with, domestic regulatory requirements, as well as increasing the cost of our compliance.
Acquired properties may expose us to unknown liability.
We may acquire properties or invest in joint ventures that own properties subject to liabilities and without any recourse, or with only limited recourse, against the prior owners or other third parties with respect to unknown liabilities. As a result, if a liability were asserted against us based upon ownership of those properties, we might have to pay substantial sums to settle or contest it, which could adversely affect our results of operations and cash flow. Unknown liabilities with respect to acquired properties might include liabilities for clean-up of undisclosed environmental contamination, claims by tenants, vendors or other persons against the former owners of the properties, liabilities incurred in the ordinary course of business, and claims for indemnification by general partners, directors and others indemnified by the former owners of the properties.
Severe weather events, natural disasters and the effects of climate change and regulatory and societal responses thereto could materially and adversely affect us.
Natural disasters and severe weather events, including earthquakes, wildfires, storms, tornados, floods, hurricanes, snow and freezing temperatures could cause significant damage to our properties and the surrounding environment or area. Climate change is causing such events to become more frequent and increasingly severe in their effects, which could increase the costs to and impact on us, our tenants and our operators over time, including physical damage to or a decrease in demand for properties located in these areas or affected by these conditions.
Such natural disasters and severe weather events could cause increased operational costs, as well as substantial damages or losses to our properties that could exceed our, our tenants’ or operators’ property insurance coverage. If we incur a loss greater than insured limits, or if for any reason insurance coverage is unavailable, we could lose our capital invested in the affected property, as well as anticipated future revenue from that property. Climate change and natural disasters may also have indirect effects on our business by increasing the cost of (or making unavailable) property insurance on terms we find acceptable.
Additionally, we are subject to transition risk from international, governmental and societal responses to climate change that may materially and adversely affect us, our tenants or our operators, including through shifts in fuel sources leading to short- or long-term increases in energy costs and new and more stringent building codes pertaining to energy efficiency, reduced emissions or weather resistance that may be more costly to comply with, any of which could increase our building costs and our and our operators’ capital expenditures, maintenance and operating costs. Also, we are or may become subject to regulatory uncertainty, as well as new laws and market expectations with respect to disclosure requirements, and this may result in additional investments and implementation of new practices and reporting processes, all entailing additional compliance costs and risk. For example, the EU has adopted the Corporate Sustainability Reporting Directive that imposes disclosure of the risks and opportunities arising from social and environmental issues and of the impact of companies’ activities on people and the environment. Similarly, the State of California recently passed the Climate Corporate Data Accountability Act and the Climate-Related Financial Risk Act that will impose broad climate-related disclosure obligations on companies doing business in California. These rules have been challenged in court, and enforcement of the Climate-Related Financial Risk Act has been stayed by the Ninth Circuit, which is also considering whether any relief should extend to the Climate Corporate Data Accountability Act. The SEC also adopted rules mandating certain climate change disclosures in 2024, but the rules have been subject to litigation, and, in 2025, the SEC voted to end its defense of the rules, which
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never went into effect. Additional changes in international, federal, state or local regulation, regulatory uncertainty and societal expectations could materially and adversely affect us directly or indirectly through the impact on our operators.
Risks Related to Real Estate-Related Investments
Mortgage, mezzanine and bridge loans that we may invest in, or have invested in the past, may involve greater risks of loss and negatively impact the value of our investment.
Our investment strategy is primarily focused on investments in healthcare real estate; however, we may make limited investments in mortgage loans, mezzanine loans and bridge loans that are secured by, or relate to, healthcare properties. These investments are subject to credit risk, and the value of our loan investments and the income derived from them may be adversely affected by the financial condition and performance of the borrowers.
The ability of borrowers to repay these loans may be impaired by, among other things, declines in property cash flows, increased operating costs, changes in reimbursement rates, regulatory developments affecting healthcare operators, or general economic and capital market conditions. In the event of a default, foreclosure or restructuring, we may be unable to recover all or a portion of the outstanding loan balance, particularly if the value of the underlying collateral declines.
Mezzanine and bridge loans generally involve greater risk of loss than senior mortgage loans because they are often subordinate to senior indebtedness and may be secured by equity interests rather than direct interests in real property. In addition, these loans may be illiquid, may not have an established secondary market and may be more difficult to value than equity investments, especially during periods of market volatility.
Although investments in mortgage, mezzanine and bridge loans currently represent, and are expected to continue to represent, a small portion of our overall portfolio, adverse developments related to these investments could negatively impact our results of operations, cash flows and financial condition.
Risks Related to the Healthcare Industry
The healthcare industry is heavily regulated and new laws or regulations, changes to existing laws or regulations, loss of licensure or failure to obtain licensure could result in the inability of our tenants to make rent payments to us or adversely affect our operators’ ability to operate facilities held in RIDEA structures.
The healthcare industry is heavily regulated by federal, state and local governmental bodies. The tenants and operators of our healthcare facilities generally will be subject to laws and regulations covering, among other things, licensure, certification for participation in government programs and relationships with physicians and other referral sources. Changes in these laws and regulations, or a tenant’s or operator’s failure to comply with these laws and regulations, could adversely affect us. For example, such non-compliance could materially and adversely affect a tenant’s ability to make rent payments to us. Similarly, were an operator of a facility held in a RIDEA structure (where we benefit from positive operating performance, if any, at such facilities) to fail to comply with a regulatory obligation, it could adversely affect the operating performance of the facility and our participation therein.
Many of our healthcare facilities and their tenants and operators require a license or certificate of need, or CON, in order to operate in certain states. Failure to obtain a license or CON, or the loss of a required license or CON, would prevent a facility from operating in the manner intended by the tenant or operator. These events could materially and adversely affect a tenant’s ability to make rent payments to us or for an operator to operate a facility held in a RIDEA structure efficiently, either of which could have a material adverse effect on us. Similarly, state and local laws also may regulate expansion, including the addition of new beds/units or services or the acquisition of medical equipment at a facility, and the construction of healthcare-related facilities, by requiring a CON or other similar approval. State CON laws and other similar laws are not uniform throughout the United States and are subject to change. Restrictions on the expansion of our facilities could materially and adversely affect a tenant’s ability to make rent payments to us or for an operator to operate a facility held in a RIDEA structure efficiently, either of which could have a material adverse effect on us. We cannot predict the impact of state CON laws or similar laws on our development or expansion of facilities or the operations of our tenants or operators.
In addition, in certain areas, state CON laws materially limit the ability of competitors to enter into the markets served by our facilities, thereby limiting competition. The repeal of such CON laws could allow competitors to freely operate in previously closed markets. Any such increased competition could materially and adversely affect a tenant’s ability to make rent payments to us or for an operator to operate a facility held in a RIDEA structure efficiently, either of which could have a material adverse effect on us. These CON laws could also restrict our own ability to expand in new markets.
In certain circumstances, loss of state licensure or certification or closure of a facility could ultimately result in loss of authority to operate the facility or provide services at the facility and require new CON authorization, licensure and/or authorization or potential authorization from CMS to re-institute operations. As a result, the value of the facility may be reduced, which could materially and adversely affect us.
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Reimbursement rates from third-party payors, including Medicare and Medicaid, that do not rise as quickly, or at all, compared to the rate of inflation and the cost of providing items and services, could adversely affect our tenants’ operations and ability to make rental payments to us or our profitability from operating facilities held in RIDEA structures.
Sources of revenue for our tenants and operators may include the federal Medicare program, state Medicaid programs, private insurance carriers and health maintenance organizations, among others. Efforts by such payors to reduce healthcare costs will likely continue, which may result in the slower growth in reimbursement rates for certain services provided by some of our tenants and operators, which could have a material adverse effect on us. In addition, the healthcare billing rules and regulations are complex, and the failure of any of our tenants or operators to comply with various laws and regulations could jeopardize their ability to continue participating in Medicare, Medicaid, and other government sponsored payment programs. Moreover, the state and federal governmental healthcare payment programs are subject to state and federal legislative and administrative actions, and changes in reimbursement models may reduce our tenants’ and operators’ revenues and adversely affect our tenants’ ability to make rent payments to us or our operators’ ability to operate facilities held in RIDEA structures efficiently, either of which could have a material adverse effect on us. Recently, federal policymakers have announced proposals that may result in significant changes to the healthcare system in the United States, including with respect to government funding of or from Medicaid, which could impact us and certain of our tenants.
The healthcare industry continues to face various challenges, including increased government and private payor pressure on healthcare providers to control or reduce costs. It is possible that our tenants and operators will continue to experience a shift in payor mix away from fee-for-service payors, resulting in an increase in the percentage of revenues attributable to reimbursement based upon value-based principles and quality driven managed care programs, and general industry trends that include pressures to control healthcare costs. The combination of these general industry trends and a shift away from traditional health insurance reimbursement based upon a fee for service payment towards payment based upon quality outcomes have increased the uncertainty of payments.
In addition, the Patient Protection and Affordable Care Act of 2010, or the Healthcare Reform Act, was passed with an intent to reduce the number of individuals in the United States without health insurance and implement other significant changes to the ways in which healthcare is organized, delivered and reimbursed. Included within the legislation is a limitation on physician-owned hospitals from expanding facility capacity, unless the facility satisfies very narrow federal exceptions to this limitation. Therefore, if our tenants are physicians that own and refer to a hospital, the hospital may be limited in its operations and expansion potential, which may limit the hospital’s services and resulting revenues and may impact the owner’s ability to make rental payments.
Furthermore, the Healthcare Reform Act included new payment models with new shared savings programs and demonstration programs that include bundled payment models and payments contingent upon reporting on satisfaction of quality benchmarks. The new payment models will likely change how physicians are paid for services. These changes could negatively affect some of our tenants and operators, which could have a material adverse effect on us.
On December 22, 2017, the Tax Cuts and Jobs Act of 2017 was signed into law and repealed the individual mandate financial penalty portion of the Healthcare Reform Act beginning in 2019. With the elimination of the individual mandate enforcement mechanism, several states brought suit seeking to invalidate the entire Healthcare Reform Act. On June 17, 2021, the U.S. Supreme Court dismissed this lawsuit without specifically ruling on the constitutionality of the law. However, challenges to the Healthcare Reform Act may continue. If any portion of the Healthcare Reform Act is eventually ruled unconstitutional, our tenants and operators may have more patients and residents who do not have insurance coverage, which may adversely impact the tenants’ and operators’ collections and revenues. CMS has also taken steps to strengthen accountability for nursing homes participating in the Special Focus Facilities, or SFF, an oversight program designed to monitor poor-performing nursing homes. These measures include increased penalties for SFF nursing homes that fail to improve, additional safety standards that SFF nursing homes must implement, increased communication between CMS and SFF nursing homes and monthly public updates to CMS’s SFF List, which highlights facilities with a history of serious quality of care issues. The financial impact of these and any future administrative actions on our tenants and operators could adversely affect a tenant’s ability to make rent payments to us or an operator’s ability to operate facilities held in RIDEA structures efficiently, either of which could have a material adverse effect on us.
In addition, other legislative changes have been proposed and adopted since the ACA was enacted. These changes included aggregate reductions to Medicare payments to providers of 2% per fiscal year, which went into effect on April 1, 2013, and, due to subsequent legislative amendments to the statute, some of which have changed the 2% amount for specific years or suspended the 2% for specific years, will remain in effect through the first eleven months of the President’s fiscal year 2032 sequestration order, unless additional Congressional action is taken. Future governmental actions, including changes to the ACA or a reduction in support for Medicare, Medicaid and other government sponsored payment programs, are difficult to predict and could have a material adverse effect on our financial condition and results of operations, while increased regulatory uncertainty could raise our compliance costs. The financial impact on our tenants and operators could adversely affect a tenant’s ability to make rent payments to us or an operator’s ability to operate facilities efficiently, either of which could have a material adverse effect on us.
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In addition, because we and our tenants may rely on government programs or agencies as a source of funding, we and our tenants may be adversely affected by changes in government spending and funding priorities. Funding from government agencies and reimbursement programs such as Medicare and Medicaid, including overall funding availability and reimbursement rates under these programs, often fluctuates and is subject to unpredictable political processes. For example, federal policymakers have announced proposals to reduce overall healthcare spending, including with respect to Medicaid funding, which could impact our healthcare provider tenants and borrowers. Additionally, in November 2025, the Centers of Medicare and Medicaid Services, or CMS, announced several changes to existing Medicare payment policies, including revisions intended to reduce reimbursement for certain products and services furnished in the outpatient setting beginning in 2026. Any reduction in the availability or rate of funding or reimbursement, or delays surrounding the approval of such funding or reimbursement, may adversely impact our tenants’ operations or may cause our tenants to cease making rent payment payments to us or delay or forgo leasing space in our properties, which in turn may negatively impact our business, financial condition, or results of operations. In addition, such developments could adversely impact the overall demand for space in our properties.
We cannot predict the ultimate content, timing or effect of any further healthcare reform legislation or the impact of potential legislation on us. We expect that additional state and federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare services, which may adversely impact our tenants’ ability to make rental payments to us or our operators’ ability to operate facilities held in RIDEA structures efficiently, either of, which could have a material adverse effect on us.
Events that adversely affect the ability of seniors and their families to afford resident fees at our senior housing facilities could cause our occupancy rates and revenues to decline, which could have a material adverse effect on us.
Costs to seniors associated with independent and assisted living services are generally not reimbursable under Medicare, and the scope of services that may be covered by Medicaid varies by state. In many cases, only seniors with income or assets meeting or exceeding the comparable median in the regions where our facilities are located typically will be able to afford to pay the entrance fees and monthly resident fees, and a weak economy, depressed housing market or changes in demographics could adversely affect their continued ability to do so. If our tenants and operators are unable to retain and attract seniors with sufficient income, assets or other resources required to pay the fees associated with independent and assisted living services and other services provided by our tenants and operators at our healthcare facilities, our occupancy rates and revenues could decline, which could, in turn, materially and adversely affect us.
Some tenants and operators of our facilities will be subject to fraud and abuse laws, the violation of which could materially and adversely affect a tenant’s ability to make rent payments to us or an operator’s ability to operate a facility held in a RIDEA structure efficiently, either of which could have a material adverse effect on us.
There are various federal, foreign and state laws prohibiting fraudulent and abusive business practices by healthcare providers who participate in, receive payments from, or are in a position to make referrals in connection with government-sponsored healthcare programs, including Medicare and Medicaid. Our contractual arrangements with tenants and operators may also be subject to these fraud and abuse laws, including federal laws such as the Anti-Kickback Statute and the Stark Law. Moreover, our agreements with tenants and operators may be required to satisfy individual state law requirements that vary from state to state, which impacts the terms and conditions that may be negotiated in such agreements.
These federal and foreign laws include:
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Each of these laws includes criminal and/or civil penalties for violations that range from punitive sanctions, damage assessments, penalties, imprisonment, denial of Medicare and Medicaid payments and/or exclusion from the Medicare and Medicaid programs. Monetary penalties associated with violations of these laws have been increased in recent years. Certain laws, such as the False Claims Act, allow for individuals to bring whistleblower actions on behalf of the government for violations thereof. Additionally, states in which the facilities are located may have similar fraud and abuse laws. Investigation by a federal or state governmental body for violation of fraud and abuse laws or imposition of any of these penalties upon one of our tenants or operators or a settlement relating to such matters could materially and adversely affect a tenant’s ability to make rent payments to us or an operator’s ability to operate a facility held in a RIDEA structure efficiently, either of which could have a material adverse effect on us.
Efforts to ensure compliance with applicable healthcare laws and regulations may cause our tenants and operators to incur substantial costs that could materially and adversely affect a tenant’s ability to make rent payments to us or an operator’s ability to operate a facility held in a RIDEA structure efficiently, either of which could have a material adverse effect on us.
Adverse trends in healthcare provider operations may materially and adversely affect us.
The healthcare industry is currently experiencing:
Additionally, in connection with the COVID-19 pandemic, many governmental entities relaxed certain licensure and other regulatory requirements relating to telemedicine, allowing more patients to virtually access care without having to visit a healthcare facility. Despite the end of the COVID-19 public health emergency, if governmental and regulatory authorities continue to allow for increased virtual healthcare, this may affect the demand for some of our properties, such as OM buildings.
These factors may negatively affect the economic performance of some or all of our tenants and operators, which could have a material adverse effect on us.
Our tenants and operators may be affected by the financial deterioration, insolvency and/or bankruptcy of other companies in the healthcare industry.
Certain companies in the healthcare industry, including some key senior housing operators, are experiencing considerable financial, legal and/or regulatory difficulties which have resulted or may result in financial deterioration and, in some cases, insolvency and/or bankruptcy. The adverse effects on these companies could have a significant impact on the industry as a whole, including but not limited to negative public perception by investors, lenders, patients and residents. As a result, our tenants and properties managed by our operators could experience the damaging financial effects of a weakened industry sector driven by negative headlines, and we could be materially and adversely affected.
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Our tenants and operators may be subject to significant legal and regulatory actions that could subject them to increased operating costs and substantial uninsured liabilities, which could have a material adverse effect on us.
Our tenants and operators may become subject to claims that their services have resulted in patient injury or other adverse effects. Healthcare providers have experienced an increasing trend in the frequency and severity of professional liability and general liability insurance claims, employment-related claims and litigation asserted against them. The insurance coverage maintained by our tenants and operators may be uninsurable, may not cover all claims made against them nor continue to be available at a reasonable cost, if at all. In some states, insurance coverage for the risk of punitive damages arising from professional liability and general liability claims and/or litigation may not, in certain cases, be available to our tenants and operators due to state law prohibitions or limitations of availability. As a result, tenants and operators of our senior housing, SNFs, OM buildings and other healthcare-related facilities operating in these states may be liable for punitive damage awards that are either not covered or are in excess of their insurance policy limits. We also believe that there has been, and will continue to be, an increase in regulatory or other governmental investigations of certain healthcare providers, particularly in the area of Medicare/Medicaid false claims, as well as an increase in enforcement actions resulting from these investigations. Insurance may not always be available to cover such losses, and certain claims may not be insurable at all. Any adverse determination or settlement in a legal proceeding or regulatory or other governmental investigation, whether currently asserted or arising in the future, could negatively affect a tenant’s or operator’s business and financial strength. If a tenant or operator is unable to insure a claim or obtain or maintain insurance coverage, if judgments are obtained in excess of the insurance coverage, if uninsured punitive damages are required to be paid, or if an uninsurable government enforcement action is brought, the tenant or operator could be exposed to substantial additional liabilities, which may affect the tenant’s ability to pay rent to us or the operator’s ability to manage our properties efficiently and effectively, which could have a material adverse effect on us.
We, our tenants and our operators for our senior housing facilities and SNFs may be subject to various government reviews, audits and investigations that could materially and adversely affect us, including an obligation to refund amounts previously paid to us, potential criminal charges, the imposition of fines and/or the loss of the right to participate in Medicare and Medicaid programs.
We, our tenants and our operators for our senior housing facilities and SNFs are subject to various governmental reviews, audits and investigations to verify compliance with the Medicaid and Medicare programs and applicable laws and regulations. We, our tenants and our operators for our senior housing facilities and SNFs are also subject to audits under various government programs, including Recovery Audit Contractors, Unified Program Integrity Contractors, and other third party audit programs, in which third-party firms engaged by CMS conduct extensive reviews of claims data and medical and other records to identify potential improper payments under the Medicare and Medicaid programs. Private pay sources also reserve the right to conduct audits. An adverse review, audit or investigation could result in:
While we, our tenants and our operators for our senior housing facilities and SNFs have always been subject to post-payment audits and reviews, more intensive “probe reviews” appear to be a permanent procedure with our fiscal intermediaries. If the government or a court were to conclude that such errors, deficiencies or disagreements constituted criminal violations or were to conclude that such errors, deficiencies or disagreements resulted in the submission of false claims to federal healthcare programs, or if the government were to discover other problems in addition to the ones identified by the probe reviews that rose to actionable levels, we, our officers and our tenants and operators and their officers might face potential criminal charges and/or civil claims, administrative sanctions and penalties for amounts that could be material to us. In addition, we, our officers and other key personnel and our tenants and operators and their officers and other key personnel could be temporarily or permanently excluded from future participation in state and federal healthcare reimbursement programs such as Medicaid and Medicare. In any event, it is likely that a governmental investigation alone, regardless of its outcome, would divert material time, resources and attention from our management team and our staff or those of our tenants and our operators and could materially and adversely affect us during and after any such investigation or proceedings.
In cases where claim and documentation review by any CMS contractor results in repeated poor performance, a facility can be subjected to protracted oversight. This oversight may include repeat education and re-probe, extended pre-payment review, referral to recovery audit or integrity contractors, or extrapolation of an error rate to other reimbursement outside of specifically reviewed claims. Sustained failure to demonstrate improvement towards meeting all claim filing and documentation requirements could ultimately lead to Medicare and Medicaid decertification, which materially and adversely affects us. Adverse actions by CMS may also cause
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third-party payor or licensure authorities to audit our tenants or operators. These additional audits could result in termination of third-party payor agreements or licensure of the facility, which could have a material adverse effect on us.
The Healthcare Reform Act and similar foreign laws impose additional requirements regarding compliance and disclosure.
The Healthcare Reform Act requires SNFs to have a compliance and ethics program that is effective in preventing and detecting criminal, civil and administrative violations and in promoting quality of care as a condition of participation in Medicare and Medicaid. Additionally, in November 2024, the U.S. Department of Health & Human Services, Office of the Inspector General published industry segment-specific compliance program guidance for SNFs and nursing facilities that identifies key risk areas for the industry and provides recommendations for minimizing conflicts of interest in nursing facility pharmaceutical decisions. CMS also continues to require the disclosure of certain ownership and managerial information regarding Medicare SNFs and Medicaid SNFs, including updates to identify REIT ownership of SNFs. If our operators fall short in their compliance and ethics programs and quality assurance and performance improvement programs, if and when required, their reputations and ability to attract patients and residents could be adversely affected, which could have a material adverse effect on us.
Similar requirements also apply to healthcare properties in the UK under national law and guidance. The Health & Care Professions Council, the regulator of health, psychological and care professionals in the UK, requires a qualification to demonstrate standards of proficiency and also set standards, hold a register, quality assure education and investigate complaints. They have set out an ethical framework with standards of conduct, performance and ethics including restrictions on confidentiality and the use of social media. If any of our operators in the UK fall short in their obligations, their reputations and ability to attract patients and residents may be adversely affect which might have a material adverse effect on their business and by extension us.
Changes in federal, state or local laws or regulations may limit our opportunities to participate in the ownership of, or investment in, healthcare real estate.
Changes in federal, state, or local laws or regulations, including changes limiting REIT investment in the healthcare sector, reducing healthcare-related tax benefits for REITs, or requiring additional approvals for healthcare entities to transact with REITs, could have a material adverse effect on our ability to participate in the ownership of or invest in healthcare providers and healthcare real estate. Such legislation or similar laws or regulations, if enacted, could have a material adverse impact on our business.
Risks Related to Joint Ventures
When we serve as a managing member, general partner or controlling party with respect to investments or joint ventures, we may be subject to risks and liabilities that we would not otherwise face.
In certain circumstances, we may serve as a managing member, general partner or controlling party with respect to investments and joint ventures. In such instances, we may face additional risks including, among others, the following:
Risks Related to Debt Financing
We may incur additional indebtedness in the future, which could materially and adversely affect us.
As of December 31, 2025, we had indebtedness of $1.5 billion, which is comprised of $550 million in unsecured debt under our lines of credit and $986 million in secured mortgage loans payable. Although our overall leverage was lower than 30.0% of our combined market capitalization and outstanding indebtedness as of December 31, 2025, our organizational documents do not place a limitation on the amount of leverage that we may incur, and we could incur leverage substantially in excess of this amount.
We expect to fund a portion of our cash needs, including funding of investment activity, with our operating cash flows, issuances of additional equity, additional indebtedness or a combination of the foregoing. Our ability to access additional debt capital will be significantly influenced by our operating performance and our creditworthiness, as well as by general economic and market
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conditions. Significant unsecured and secured indebtedness adversely affects our creditworthiness and would adversely affect our ability to access additional debt capital and increase the cost of any debt capital that is available to us and may require us to accept restrictive covenants. A reduction in our access to debt capital, an increase in the cost thereof or our acceptance of restrictive covenants could limit our ability to achieve our business objectives and pursue our growth strategies.
Additionally, rising interest rates have significantly increased our interest costs in recent years. Expensive debt could reduce or limit our available cash flow to fund working capital, capital expenditures, acquisitions and development projects, reduce cash available for distributions to stockholders, hinder our ability to meet certain debt service ratios under our credit agreements or impose restrictions on our ability to incur additional debt for so long as certain debt service ratios are not met.
We may also incur mortgage debt and other property-level debt on properties that we already own in order to obtain funds to acquire additional properties or make other capital investments. In addition, we may borrow as necessary or advisable to ensure that we maintain our qualification as a REIT for U.S. federal income tax purposes, including borrowings to satisfy the REIT requirement that we distribute at least 90.0% of our annual REIT taxable income to our stockholders. However, we cannot guarantee that we will be able to obtain any such borrowings on favorable terms or at all.
If we mortgage a property and there is a shortfall between the cash flows from that property and the cash flows needed to service mortgage debt on that property, our financial results would be negatively affected, and the amount of cash available for distributions to stockholders would be reduced. In addition, incurring mortgage debt increases the risk of loss of a property since defaults on indebtedness secured by a property may result in lenders initiating foreclosure actions. If any mortgages contain cross-collateralization or cross-default provisions, a default on a single property could affect multiple properties. In addition, lenders may have recourse to assets other than those specifically securing the repayment of indebtedness. For tax purposes, a foreclosure on any of our properties will be treated as a disposition of the property, which could cause us to recognize taxable income on foreclosure, without receiving corresponding cash proceeds. We may give full or partial guarantees to lenders of mortgage debt on behalf of the entities that own our properties. When we give a guaranty on behalf of an entity that owns one of our properties, we will be responsible to the lender for satisfaction of the debt if it is not paid by such entity.
A significant amount of debt subjects us to many risks that, if realized, would materially and adversely affect us, including the risk that:
To the extent we borrow at fixed rates or enter into fixed interest rate swaps, we will not benefit from reduced interest expense if interest rates decrease.
We are exposed to the effects of interest rate changes primarily as a result of borrowings we have used to maintain liquidity and fund expansion and refinancing of our real estate investment portfolio and operations. To limit the impact of interest rate changes on earnings, prepayment penalties and cash flows and to lower overall borrowing costs while taking into account variable interest rate risk, we have borrowed, and may continue to borrow, at fixed rates or variable rates depending upon prevailing market conditions. We have and may also continue to enter into derivative financial instruments such as interest rate swaps and caps in order to mitigate our interest rate risk on a related financial instrument. Therefore, to the extent we borrow at fixed rates or enter into fixed interest rate swaps, we will not benefit from reduced interest expense if interest rates decrease in the future below our borrowing rates.
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Hedging activity may expose us to risks.
We have used, and may continue to use, derivative financial instruments to hedge our exposure to changes in exchange rates and interest rates. If we use derivative financial instruments to hedge against exchange rate or interest rate fluctuations, we will be exposed to credit risk and legal enforceability risks. In this context, credit risk is the failure of the counterparty to perform under the terms of the derivative contract. If the fair value of a derivative contract is positive, the counterparty owes us, which creates credit risk for us. Legal enforceability risks encompass general contractual risks, including the risk that the counterparty will breach the terms of, or fail to perform its obligations under, the derivative contract. These derivative instruments are speculative in nature and there is no guarantee that they will be effective. If we are unable to manage these risks effectively, we could be materially and adversely affected.
Lenders may require us to enter into restrictive covenants that could adversely affect our business.
When providing financing, a lender may impose restrictions on us that affect our ability to incur additional debt, make distributions to our stockholders and operate our business. We have entered into, and may continue to enter into, loan documents that contain covenants that limit our ability to further mortgage the property or discontinue insurance coverage. These or other limitations may adversely affect our flexibility and our ability to achieve our business objectives.
Risks Related to Our Corporate Structure and Organization
Our charter imposes a limit on the percentage of shares of our common stock or capital stock that any person may own, and such limit may discourage a takeover or business combination that may have benefited our stockholders.
Our charter restricts the direct or indirect ownership by one person or entity to no more than 9.9% of the value of shares of our then outstanding capital stock (which includes common stock and any preferred stock we may issue) and no more than 9.9% of the value or number of shares, whichever is more restrictive, of our then outstanding common stock. This restriction may discourage a change of control of us and may deter individuals or entities from making tender offers for shares of our stock on terms that might be financially attractive to our stockholders or which may cause a change in our management. This ownership restriction may also prohibit business combinations that would have otherwise been approved by our board and our stockholders. In addition to deterring potential transactions that may be favorable to our stockholders, these provisions may also decrease our stockholders’ ability to sell their shares of our common stock.
Our stockholders’ ability to control our operations is severely limited.
Our board determines our major strategies, including our strategies regarding investments, financing, growth, capitalization, REIT qualification and distributions. Our board may amend or revise these and other strategies without a vote of the stockholders. Under our charter and Maryland law, our stockholders have a right to vote only on the following matters:
All other matters are subject to the sole discretion of our board.
Conflicts of interest could arise as a result of our officers’ other positions and/or interests outside of our company.
We rely on our management for implementation of our policies and our day-to-day operations. Although a majority of their business time is spent working for our company, they may engage in other investment and business activities in which we have no economic interest. Their responsibilities to these other entities could result in action or inaction that is detrimental to our business, which could harm the implementation of our growth strategies and achievement of our business strategies. They may face conflicts of interest in allocating time among us and their other business ventures and in meeting obligations to us and those other entities.
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Certain provisions of Maryland law may make it more difficult for us to be acquired and may limit or delay our stockholders’ ability to dispose of their shares of our common stock.
Certain provisions of the Maryland General Corporation Law, or MGCL, such as the business combination statute and the control share acquisition statute, are designed to prevent, or have the effect of preventing, someone from acquiring control of us. The MGCL prohibits “business combinations” between a Maryland corporation and an interested stockholder or an affiliate of an interested stockholder.
An “interested stockholder” is defined generally as:
These prohibitions last for five years after the most recent date on which the interested stockholder became an interested stockholder. Thereafter, any business combination with the interested stockholder or an affiliate of the interested stockholder must be recommended by the corporation’s board and approved by the affirmative vote of at least 80.0% of the votes entitled to be cast by holders of outstanding shares of voting stock of the corporation and two-thirds of the votes entitled to be cast by holders of voting stock of the corporation other than shares held by the interested stockholder. These requirements could have the effect of inhibiting a change in control even if a change in control were in the best interests of our stockholders.
The control share acquisition statute of the MGCL provides that, subject to certain exceptions, holders of “control shares” of a Maryland corporation (defined as voting shares of stock that, if aggregated with all other such shares of stock owned by the acquiror or in respect of which the acquiror can exercise or direct voting power (except solely by virtue of a revocable proxy), would entitle the acquiror to exercise voting power in electing directors within specified ranges of voting power) acquired in a “control share acquisition” (defined as the acquisition of issued and outstanding control shares) have no voting rights except to the extent approved by our stockholders by the affirmative vote of at least two-thirds of all the votes entitled to be cast on the matter. Shares of stock owned by the acquiror, by our officers or by our employees who are also our directors are excluded from shares entitled to vote on the matter.
Pursuant to the MGCL, our bylaws contain a provision exempting from the control share acquisition provisions of the MGCL any and all acquisitions by any person of shares of our stock, which eliminates voting rights for certain levels of shares that could exercise control over us, and our board has adopted a resolution providing that any business combination between us and any other person is exempted from the business combination statute, provided that such business combination is first approved by our board. However, if the bylaws provision exempting us from the control share acquisition statute or our board resolution opting out of the business combination statute were repealed in whole or in part at any time, these provisions of the MGCL could delay or prevent offers to acquire us and increase the difficulty of consummating any such offers, even if such a transaction would be in the best interests of our stockholders.
The MGCL and our organizational documents limit our stockholders’ right to bring claims against our officers and directors.
The MGCL provides that a director has no liability in such capacity if he or she performs his or her duties in good faith, in a manner he or she reasonably believes to be in the corporation’s best interests and with the care that an ordinarily prudent person in a like position would use under similar circumstances. Our charter requires us, to the maximum extent permitted by Maryland law, to indemnify and advance expenses to our directors and officers and our subsidiaries’ directors and officers. Additionally, our charter limits, to the maximum extent permitted by Maryland law, the liability of our directors and officers to us and our stockholders for monetary damages. Moreover, we have entered into separate indemnification agreements with each of our directors and executive officers and intend to enter into indemnification agreements with each of our future directors and executive officers. Although our charter does not limit the liability of our directors and officers or allow us to indemnify our directors and officers to a greater extent than permitted under Maryland law, we and our stockholders may have more limited rights against our directors and officers than might otherwise exist under common law, which could reduce our stockholders’ and our recovery against them. In addition, we may be obligated to fund the defense costs incurred by our directors and officers in some cases, which would decrease the cash otherwise available for distribution to our stockholders.
Our structure may result in potential conflicts of interest with limited partners in our operating partnership whose interests may not be aligned with those of our stockholders.
Our directors and officers have duties to us and our stockholders under Maryland law and our charter in connection with their management of us. At the same time, the general partner of our operating partnership, of which we are the sole owner, has fiduciary duties under Delaware law to our operating partnership and to the limited partners in connection with the management of our operating partnership. The duties of the general partner to our operating partnership and its partners may come into conflict with the
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duties of our directors and officers to us and our stockholders. Under Delaware law, a general partner of a Delaware limited partnership owes its limited partners the duties of good faith and fair dealing. Other duties, including fiduciary duties, may be modified or eliminated in the partnership agreement. If there is a conflict in the fiduciary duties owed by us (as the sole member of the general partner) to our stockholders on one hand and by the general partner to any limited partners on the other, we shall be entitled to resolve such conflict in favor of our stockholders.
Additionally, the partnership agreement expressly limits our liability by providing that we and our officers, directors, stockholders, trustees, representatives, agents and employees will not be liable or accountable to our operating partnership for (i) any act or omission performed or failed to be performed, or for any losses, claims, costs, damages, or liabilities arising from any such act or omission, (ii) any tax liability imposed on our operating partnership or (iii) any losses due to the misconduct, negligence (gross or ordinary), dishonesty or bad faith of any agents of our operating partnership, if we or any such person acted consistent with the obligation of good faith and fair dealing and with applicable duties of care and loyalty. In addition, our operating partnership is required to indemnify us and our officers, directors, employees and designees to the extent permitted by applicable law from and against any and all claims arising from operations of our operating partnership, unless it is established that: (i) the act or omission was material to the matter giving rise to the proceeding and either was committed in bad faith or was the result of active and deliberate dishonesty; (ii) the indemnified party received an improper personal benefit, in money, property or services; or (iii) in the case of a criminal proceeding, the indemnified person had reasonable cause to believe that the act or omission was unlawful. The provisions of Delaware law that allow the fiduciary duties of a general partner to be modified by a partnership agreement have not been tested in a court of law, and we have not obtained an opinion of counsel covering the provisions set forth in the partnership agreement that purport to waive or restrict our fiduciary duties.
Risks Related to Taxes and Our REIT Status
Failure to maintain our qualification as a REIT for U.S. federal income tax purposes would subject us to U.S. federal income tax on our REIT taxable income at the regular corporate rate, which would substantially increase our income tax expenses and reduce our distributions to our stockholders.
We have elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended, or the Code, commencing with our taxable year ended December 31, 2016. We believe that we have been, and, through the time of the merger of Griffin-American Healthcare REIT III, Inc., or GAHR III, into us, on October 1, 2021, GAHR III was organized and operated, and we intend to continue to operate in conformity with the requirements for qualification and taxation as a REIT under the Code. To continue to maintain our qualification as a REIT, we, and our subsidiary REIT, Trilogy Real Estate Investment Trust, or Trilogy REIT, must meet various requirements set forth in the Code concerning, among other things, the ownership of our, or Trilogy REIT’s, outstanding common stock, the nature of our, or Trilogy REIT’s, assets, the sources of our, or Trilogy REIT’s, income, and the amount of our, or Trilogy REIT’s, distributions to stockholders. In addition, if it is determined that GAHR III lost, in any year prior to the merger described above, its qualification as a REIT without being entitled to any relief under the statutory provisions to preserve REIT status, we, as a “successor” to GAHR III under the REIT rules, will not be able to qualify as a REIT to the extent we are unable to avail ourselves of any relief under the statutory provisions to preserve REIT status. The REIT qualification requirements are extremely complex, and interpretations of the U.S. federal income tax laws governing qualification as a REIT are limited. In addition, the determination of various factual matters and circumstances not entirely within our control may affect our ability to continue to qualify as a REIT. Accordingly, we cannot be certain that we, or Trilogy REIT, will be successful in operating in compliance with the REIT rules in such manner as to allow us to maintain our qualification as a REIT. At any time, new laws, interpretations or court decisions may change the U.S. federal tax laws relating to, or the U.S. federal income tax consequences of, qualification as a REIT. It is possible that future economic, market, legal, tax or other considerations may cause our board to determine that it is not in our best interests to maintain our qualification as a REIT, and to revoke our REIT election, which it may do without stockholder approval.
If we fail to maintain our qualification as a REIT for any taxable year, we will be subject to U.S. federal income tax on our REIT taxable income at the corporate rate and could also be subject to increased state and local taxes. In addition, we would generally be disqualified from treatment as a REIT for the four taxable years following the year of losing our REIT status unless the Internal Revenue Services, or IRS, grants us relief under certain statutory provisions. Losing our REIT status would reduce our net earnings available for investment and amounts available for distribution to our stockholders because of the additional tax liability. In addition, distributions would no longer qualify for the distributions paid deduction, and we would no longer be required to make distributions to our stockholders. If this occurs, we might be required to raise debt or equity capital or sell some investments in order to pay the applicable tax.
As a result of all these factors, our failure to maintain our qualification as a REIT could impair our ability to expand our business and raise capital, could materially and adversely affect the trading price of our Common Stock and would substantially reduce our ability to make distributions to our stockholders.
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TRSs are subject to corporate-level taxes and our dealings with TRSs may be subject to a 100% excise tax.
A REIT may own up to 100% of the stock of one or more taxable REIT subsidiaries, or TRSs. Both the subsidiary and the REIT must jointly elect to treat the subsidiary as a TRS. A corporation of which a TRS directly or indirectly owns more than 35.0% of the voting power or value of the stock will automatically be treated as a TRS. Overall, no more than 25.0% (20.0% for taxable years 2018 through 2025) of the gross value of a REIT’s assets may consist of stock or securities of one or more TRSs. A TRS may hold assets and earn income that would not be qualifying assets or income if held or earned directly by a REIT, including gross income from operations pursuant to management contracts. We lease our properties that are “qualified health care properties” to one or more TRSs which, in turn, contract with independent third-party management companies to operate those “qualified health care properties” on behalf of those TRSs. In addition, we may use one or more TRSs generally to hold properties for sale in the ordinary course of a trade or business or to hold assets or conduct activities that we cannot conduct directly as a REIT. A TRS is subject to applicable U.S. federal, state, local and foreign income tax on its taxable income, as well as limitations on the deductibility of its interest expenses. In addition, the Code imposes a 100% excise tax on certain transactions between a TRS and its parent REIT that are not conducted on an arm’s-length basis.
If our “qualified health care properties” are not properly leased to a TRS or the operators of those “qualified health care properties” do not qualify as EIKs, we could fail to qualify as a REIT.
In general, under the REIT rules, we cannot directly operate any properties that are “qualified health care properties” and can only indirectly participate in the operation of “qualified health care properties” on an after-tax basis by leasing those properties to independent health care facility operators or to TRSs. A “qualified health care property” is any real property (and any personal property incident to that real property) which is, or is necessary or incidental to the use of, a hospital, nursing facility, assisted living facility, congregate care facility, qualified continuing care facility or other licensed facility which extends medical or nursing or ancillary services to patients and is operated by a provider of those services that is eligible for participation in the Medicare program with respect to that facility. Furthermore, rent paid by a lessee of a “qualified health care property” that is a “related party tenant” of ours generally will not be qualifying income for purposes of the two gross income tests applicable to REITs. However, a TRS that leases “qualified health care properties” from us will not be treated as a “related party tenant” with respect to our “qualified health care properties” that are managed by an eligible independent contractor, or EIK. This structure, where we lease “qualified health care properties” to a TRS, which in turn contracts with an EIK to operate such properties for a fee, is commonly referred to as the RIDEA structure. If we incorrectly classified a property as a “qualified health care property” and leased it to a TRS under the RIDEA structure, any rental income therefrom would likely not be qualifying income for purposes of the two gross income tests applicable to REITs.
An EIK is an independent contractor that, at the time such contractor enters into a management or other agreement with a TRS to operate a “qualified health care property,” is actively engaged in the trade or business of operating “qualified health care properties” for any person not related to us or the TRS. Among other requirements to qualify as an independent contractor, an operator must not own, directly or indirectly (or applying attribution provisions of the Code), more than 35.0% of the shares of our outstanding stock (by value), and no person or group of persons can own more than 35.0% of the shares of our outstanding stock and 35.0% of the ownership interests of the operator (taking into account only owners of more than 5.0% of our shares and, with respect to ownership interest in such operators that are publicly traded, only holders of more than 5.0% of such ownership interests). The ownership attribution rules that apply for purposes of the 35.0% thresholds are complex. There can be no assurance that the amount of our shares beneficially owned by our operators and their owners will not exceed the above thresholds. If a healthcare facility operator at one of our properties that uses the RIDEA structure was determined to not be an EIK, any rental income we receive from the TRS with respect to such property would likely not be qualifying income for purposes of the two gross income tests applicable to REITs.
To qualify as a REIT, we must satisfy two gross income tests, under which specified percentages of our gross income must be derived from certain sources, such as “rents from real property.” Rent paid to us by TRSs pursuant to the lease of our “qualified health care properties” under the RIDEA structure will constitute a substantial portion of our gross income. For that rent to qualify as “rents from real property” for purposes of the REIT gross income tests, the leases must be respected as true leases for U.S. federal income tax purposes and not be treated as service contracts, joint ventures or some other type of arrangement. If our leases are not respected as true leases for U. S. federal income tax purposes, we may fail to qualify as a REIT.
We may be subject to adverse legislative or regulatory tax changes that could increase our tax liability or reduce our operating flexibility.
In recent years, numerous legislative, judicial and administrative changes have been made in the provisions of U.S. federal and state income tax laws applicable to investments similar to an investment in shares of our Common Stock. Additionally, the healthcare REIT industry recently has been the subject of scrutiny, which, among other things, could result in additional enforcement by the IRS. Additional changes to the tax laws, and administration of those laws by the IRS, are likely to continue to occur, and we cannot assure our stockholders that any such changes will not adversely affect our taxation and our ability to continue to qualify as a REIT or the taxation of a stockholder. Any such changes could have a material adverse effect on an investment in shares of our Common Stock or on the market price thereof or the resale potential of our assets. Our stockholders are urged to consult with their tax advisor with
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respect to the impact of recent legislation on their investment in our stock and the status of legislative, regulatory or administrative developments and proposals and their potential effect on an investment in shares of our Common Stock.
Although REITs generally receive better tax treatment than entities taxed as regular corporations, it is possible that future legislation would result in a REIT having fewer tax advantages, and it could become more advantageous for a company that invests in real estate to elect to be treated for U.S. federal and state income tax purposes as a regular corporation. As a result, our charter provides our board with the power, under certain circumstances, to revoke or otherwise terminate our REIT election and cause us to be taxed as a regular corporation, without the vote of our stockholders. Our board has fiduciary duties to us and our stockholders and could only cause such changes in our tax treatment if it determines in good faith that such changes are in the best interests of our stockholders.
In certain circumstances, we may be subject to U.S. federal, state and foreign income taxes even if we maintain our qualification as a REIT, which would reduce our cash available for distribution to our stockholders.
Even if we maintain our qualification as a REIT, we may be subject to U.S. federal income taxes, state income taxes or foreign income taxes. For example, net income from a “prohibited transaction” will be subject to a 100% tax. We may not be able to make sufficient distributions to avoid excise taxes applicable to REITs. We may also decide to retain capital gains we earn from the sale or other disposition of our property and pay income tax directly on such income. In that event, our stockholders may be treated as if they earned that income and paid the tax on it directly. However, our stockholders that are tax-exempt, such as charities or qualified pension plans, would have no benefit from their deemed payment of such tax liability. We may also be subject to state and local taxes or foreign taxes on our income or property, either directly or at the level of the companies through which we indirectly own our assets. Any U.S. federal, state or foreign taxes we pay will reduce our cash available for distribution to our stockholders.
Dividends payable by REITs generally do not qualify for the reduced tax rates on dividend income as compared to regular corporations, which could adversely affect the value of our shares.
The maximum U.S. federal income tax rate for certain qualified dividends payable to domestic stockholders that are individuals, trusts and estates generally is 20.0%. Dividends payable by REITs, however, are generally not eligible for these reduced rates for qualified dividends except to the extent the REIT dividends are attributable to “qualified dividends” received by the REIT itself. U.S. individuals, trusts and estates are permitted a deduction for certain pass-through business income, including “qualified REIT dividends” (generally, dividends received by a REIT stockholder that are not designated as capital gain dividends or qualified dividend income), allowing them to deduct up to 20.0% of such amounts, subject to certain limitations. Although the reduced U.S. federal income tax rate applicable to dividend income from regular corporate dividends does not adversely affect the taxation of REITs or dividends paid by REITs, the more favorable rates applicable to qualified dividends from C corporations could cause investors who are individuals, trusts and estates to perceive investments in REITs to be relatively less attractive as a U.S. federal income tax matter than investments in the stocks of non-REIT corporations that pay qualified dividends, which could adversely affect the market price of the shares of common stock of REITs, including our shares of Common Stock.
Dividends on, and gains recognized on the sale of, shares by a tax-exempt stockholder may be subject to U.S. federal income tax as unrelated business taxable income.
If (i) we are a “pension-held REIT,” (ii) a tax-exempt stockholder has incurred (or is deemed to have incurred) debt to purchase or hold our shares or (iii) a holder of our shares is a certain type of tax-exempt stockholder, dividends on, and gains recognized on the sale of, shares by such tax-exempt stockholder may be subject to U.S. federal income tax as unrelated business taxable income under the Code.
Complying with the REIT requirements may cause us to forego otherwise attractive opportunities.
To maintain our qualification as a REIT for U.S. federal income tax purposes, we must continually satisfy tests concerning, among other things, the sources of our income, the nature and diversification of our assets, the amounts we distribute to our stockholders and the ownership of shares of our common stock. We may be required to make distributions to our stockholders at disadvantageous times or when we do not have funds readily available for distribution, or we may be required to raise debt or equity capital or forego otherwise attractive investments in order to comply with the REIT tests. We may need to borrow funds to meet the REIT distribution requirements even if market conditions are not favorable for these borrowings. We cannot assure our stockholders that we will have access to such capital on favorable terms at the desired times, or at all. Thus, compliance with the REIT requirements could materially and adversely affect us and may hinder our ability to operate solely on the basis of maximizing our financial results.
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If the operating partnership fails to maintain its status as a partnership and were to be treated as a corporation for U.S. federal income tax purposes, its income may be subject to taxation, which would reduce the cash available for distribution to stockholders and likely result in a loss of our REIT status.
We intend to maintain the status of our operating partnership as a partnership for U.S. federal income tax purposes. However, if the IRS were to successfully challenge the status of our operating partnership as a partnership for such purposes, it would be taxable as a corporation. In such event, this would reduce the amount of distributions that our operating partnership could make to us. This would also likely result in us losing REIT status, and, if so, becoming subject to a corporate level tax on our own income. This would substantially reduce any cash available to pay distributions. In addition, if any of the partnerships or limited liability companies through which our operating partnership owns its properties, in whole or in part, loses its characterization as a partnership and is otherwise not disregarded for U.S. federal income tax purposes, such partnership or limited liability company would be subject to taxation as a corporation, thereby reducing distributions to our operating partnership. Such a recharacterization of an underlying partnership or limited liability company could also threaten our ability to maintain our status as a REIT.
Foreign purchasers of shares of our Common Stock may be subject to FIRPTA tax upon the sale of their shares of our Common Stock or upon the payment of a capital gains dividend.
A foreign person disposing of a U.S. real property interest, including shares of stock of a U.S. corporation whose assets consist principally of U.S. real property interests, is generally subject to withholding pursuant to the Foreign Investment in Real Property Tax Act of 1980, as amended, or FIRPTA, on the amount received from the disposition. However, foreign pension plans and certain foreign publicly traded entities are exempt from FIRPTA withholding. Further, such FIRPTA tax does not apply to the disposition of stock in a REIT if the REIT is “domestically controlled.” A REIT is “domestically controlled” if less than 50.0% of the REIT’s stock, by value, has been owned directly or indirectly by persons who are not qualifying U.S. persons during a continuous five-year period ending on the date of disposition or, if shorter, during the entire period of the REIT’s existence. We cannot assure our stockholders that we will qualify as a “domestically controlled” REIT. If we were to fail to so qualify, amounts received by foreign investors on a sale of shares of our Common Stock would be subject to FIRPTA tax, unless the shares of our Common Stock are regularly traded on an established securities market and the foreign investor did not at any time during a specified period directly or indirectly own more than 10.0% of the value of our outstanding Common Stock. Additionally, a foreign stockholder will likely be subject to FIRPTA upon the payment of any distribution by us that is attributable to gain from sales or exchanges of U.S. real property interests, unless the shares of our Common Stock are regularly traded on a U.S. established securities market and the foreign investor did not own at any time during the 1-year period ending on the date of such distribution more than 10.0% of such class of Common Stock.
Risks Related to Our Common Stock
The market price and trading volume of shares of our Common Stock may be volatile.
The U.S. stock markets, including the NYSE, have experienced significant price and volume fluctuations. As a result, the market price of shares of our Common Stock is likely to be similarly volatile, and investors in shares of our Common Stock may experience a decrease in the value of their shares, including decreases unrelated to our operating performance or prospects. We cannot assure our stockholders that the market price of shares of our Common Stock will not fluctuate or decline significantly in the future.
In addition to the risks listed in this “Risk Factors” section, a number of factors could negatively affect the share price of our Common Stock or result in fluctuations in the price or trading volume of shares of our Common Stock, including:
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In the past, securities class action litigation has often been instituted against companies following periods of volatility in the price of their common stock. This type of litigation could result in substantial costs and divert our management’s attention and resources, which could have a material adverse effect on our cash flows, our ability to execute our business strategy and our ability to make distributions to our stockholders.
Our ability to pay distributions in the future may be limited by agreements relating to our indebtedness and other factors.
Agreements relating to our indebtedness may limit our ability to pay cash distributions on our Common Stock. For example, our credit agreement, as amended, with an aggregate maximum principal amount up to $1.15 billion, or the 2024 Credit Facility, restricts our ability to pay cash distributions on our Common Stock beyond those necessary to maintain our qualification for taxation as a REIT if we default under the 2024 Credit Facility. Other financing agreements or instruments that we enter into or issue (including preferred stock) in the future also may limit our ability to pay cash distributions on our Common Stock. If we default under the 2024 Credit Facility, or if future financing agreements or instruments restrict our ability to pay cash distributions, we will be restricted in our ability to pay cash distributions on our Common Stock unless we can refinance amounts outstanding under those agreements or instruments. Similarly, agreements relating to the indebtedness of certain of our subsidiaries, including Trilogy Holdings, limit such subsidiaries’ ability to make cash distributions to us in the event of a default under such agreements. This would reduce the amount of cash available to us and could adversely affect our ability to pay cash distributions on our Common Stock.
Additionally, our ability to pay distributions may be impaired if any of the risks described in this Annual Report on Form 10-K for the year ended December 31, 2025 were to occur. Payment of future distributions is subject to declaration by our board of directors and depends on a number of factors, including funds available for the payment of distributions, our financial condition, capital expenditure requirements, annual distribution requirements needed to maintain our status as a REIT under the Code, restrictions imposed by our organizational documents and Maryland law and other factors as our board of directors may deem relevant from time to time.
Future offerings of debt securities, which would be senior to our Common Stock, or equity securities, which would dilute our existing stockholders and may be senior to our Common Stock, may adversely affect our stockholders.
We may in the future attempt to increase our capital resources by offering debt or equity securities, including notes and classes of preferred or common stock. Debt securities or shares of preferred stock will generally be entitled to receive interest payments or distributions, both current and in connection with any liquidation or sale, prior to the holders of our Common Stock. We are not required to offer any such additional debt or preferred stock to existing common stockholders on a preemptive basis. Therefore, issuances of common stock or other equity securities, including sales of shares of our Common Stock under an at the market equity offering program, pursuant to any forward sale agreement, or upon conversion or exchange of securities convertible into or exchangeable for Common Stock, will generally dilute the holdings of our existing stockholders. Because we may generally issue any such debt or preferred stock in the future without obtaining the approval of our stockholders, our stockholders will bear the risk of our future issuances reducing the market price of our Common Stock and diluting their proportionate ownership. Because our decision to issue debt or equity securities in any future offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate the form, amount, timing or nature of our future issuances.
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In addition, subject to any limitations set forth under Maryland law, our board may amend our charter to increase or decrease the number of authorized shares of stock, the number of shares of any class or series of stock designated or reclassify any unissued shares into other classes or series of stock without the necessity of obtaining stockholder approval. All such shares may be issued in the sole discretion of our board. In addition, we have granted, and expect to grant in the future, equity awards under our incentive plan to our independent directors and certain of our employees, including our executive officers, which to date have consisted of our restricted stock and RSUs, which are exchangeable into shares of our Common Stock subject to satisfaction of certain conditions. Finally, we have OP units outstanding which are redeemable for cash or, at our election, exchangeable into shares of our Common Stock.
Therefore, existing stockholders will experience dilution of their equity investment in us as we (i) sell additional shares of our Common Stock in the future, (ii) sell securities that are convertible into or exchangeable for shares of our Common Stock, including OP units, (iii) issue restricted shares of our Common Stock, restricted stock units, or RSUs, or other equity-based securities under our incentive plan or (iv) issue shares of our Common Stock in a merger or to sellers of properties acquired by us in connection with an exchange of OP units.
Because the OP units may, at our election, be exchanged for shares of our Common Stock, any merger, exchange or conversion between the operating partnership and another entity ultimately could result in the issuance of a substantial number of shares of our Common Stock, thereby diluting the percentage ownership interest of other stockholders. Because of these and other reasons, our stockholders may experience substantial dilution in their equity investment in us.
If we pay distributions from sources other than our cash flows from operations, we may not be able to sustain our distribution rate, we may have fewer funds available for investment in real estate and other assets and our stockholders’ overall returns may be reduced.
Our organizational documents permit us to pay distributions from any source without limit (other than those limits set forth under Maryland law). To the extent we fund distributions from borrowings, we will have fewer funds available for investment in real estate and other real estate-related assets, and our stockholders’ overall returns may be reduced. At times, we may need to borrow funds to pay distributions, which could increase the costs to operate our business. Furthermore, if we cannot cover our distributions with cash flows from operations, we may be unable to sustain our distribution rate.
Our distributions to stockholders may change, which could adversely affect the market price of shares of our Common Stock.
All distributions will be at the sole discretion of our board and will depend on our actual and projected financial condition, results of operations, cash flows, liquidity, maintenance of our REIT qualification and such other matters as our board may deem relevant from time to time. We intend to evaluate distributions throughout 2026, and it is possible that stockholders may not receive distributions equivalent to those previously paid by us for various reasons, including: (i) we may not have enough cash to pay such distributions due to changes in our cash requirements, indebtedness, capital spending plans, operating cash flows or financial position; (ii) decisions on whether, when and in what amounts to make any future distributions will remain at all times entirely at the discretion of the board, which reserves the right to change our distribution practices at any time and for any reason; (iii) our board may elect to retain cash for investment purposes, working capital reserves or other purposes, or to maintain or improve our credit ratings; and (iv) the amount of distributions that our subsidiaries may distribute to us may be subject to restrictions imposed by state law, state regulators and/or the terms of any current or future indebtedness that these subsidiaries may incur.
Stockholders have no contractual or other legal right to distributions that have not been authorized by our board and declared by us. We may not be able to make distributions in the future or may need to fund such distributions from external sources, as to which no assurances can be given. In addition, as noted above, we may choose to retain operating cash flow, and those retained funds, although increasing the value of our underlying assets, may not correspondingly increase the market price of shares of our Common Stock. Our failure to meet the market's expectations with regard to future cash distributions likely would adversely affect the market price of shares of our Common Stock.
If we fail to maintain an effective system of internal control over financial reporting and disclosure controls, we may not be able to accurately and timely report our financial results.
Effective internal control over financial reporting and disclosure controls are necessary for us to provide reliable financial reports, effectively prevent fraud and operate successfully as a public company. If we cannot provide reliable financial reports or prevent fraud, it could have a material adverse effect on us. We are required to perform system and process evaluation and testing of our internal control over financial reporting to allow management to report on the effectiveness of our internal control over financial reporting, and we are also required to have our independent registered public accounting firm attest to the same, as required by Section 404 of the Sarbanes-Oxley Act of 2002. If a material weakness or significant deficiency was to be identified in the effectiveness of our internal control over financial reporting, we may also identify deficiencies in some of our disclosure controls and procedures that we believe require remediation. If we or our independent registered public accounting firm discover control issues, we will make efforts to improve our internal control over financial reporting and disclosure controls. However, there is no assurance that we will be
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successful. Any failure to maintain effective controls or timely effect any necessary improvement of our internal control over financial reporting and disclosure controls could harm operating results or cause us to fail to meet our reporting obligations, which could affect the listing of our Common Stock on NYSE. Ineffective internal control over financial reporting and disclosure controls could also cause investors to lose confidence in our reported financial information. Any of these matters could cause a significant decline in the market price of our Common Stock.
Item 1B. Unresolved Staff Comments.
Not applicable.
Item 1C. Cybersecurity.
Risk Management and Strategy
In connection with these focus areas, we have implemented a variety of technical, physical and administrative controls to proactively prevent, detect and mitigate cybersecurity threats. These measures are designed to limit the impact of potential breaches by employing advanced logging and monitoring, robust access controls, multifactor authentication, firewalls, anti-malware and antivirus solutions, endpoint detection and response systems, network inspection tools, intrusion prevention mechanisms, content filtering and comprehensive patch and vulnerability management. Endpoints are routinely reviewed and scanned, with our Information Technology team addressing any identified issues to ensure ongoing protection.
Governance
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We maintain and periodically review and update an incident response plan that applies in the event of a cybersecurity threat or incident to provide a standardized framework for responding to cybersecurity incidents. The incident response plan sets out a coordinated approach to investigating, containing, documenting and mitigating incidents, including reporting findings and keeping senior management and other key stakeholders informed and involved as appropriate. The objectives of the incident response plan are to reduce the number of systems and users affected by security incidents, reduce the time a threat actor spends within our network, reduce the damage caused by the breach and reduce the time required to restore normal operations. The incident response plan also specifies the use of third-party experts for legal advice, consulting and cyber incident response.
Item 2. Properties.
As of December 31, 2025, our principal executive offices are located at 18191 Von Karman Avenue, Suite 300, Irvine, California 92612. We believe our existing leased facilities are in good condition and suitable for the conduct of our business.
Real Estate Investments
As of December 31, 2025, we operated through four reportable business segments: ISHC, OM, SHOP and triple-net leased properties. We own and/or operate 100% of our properties as of December 31, 2025, with the exception of our investments in Southlake TX Hospital and Louisiana Senior Housing Portfolio. See Note 11, Redeemable Noncontrolling Interests, and Note 12, Equity — Noncontrolling Interests in Total Equity, to the Consolidated Financial Statements that are part of this Annual Report on Form 10-K, for a further discussion of our noncontrolling interests. The following table presents certain additional information about our real estate investments as of December 31, 2025 (square feet and dollars in thousands):
Reportable Segment |
|
Number of |
|
|
GLA |
|
|
% of |
|
|
Aggregate |
|
|
Annualized |
|
|
% of |
|
|
Leased |
|
|||||||
ISHC |
|
|
147 |
|
|
|
10,916 |
|
|
|
49.3 |
% |
|
$ |
2,453,252 |
|
|
$ |
252,097 |
|
|
|
55.5 |
% |
|
|
90.0 |
% |
SHOP |
|
|
97 |
|
|
|
6,562 |
|
|
|
29.6 |
|
|
|
1,509,107 |
|
|
|
84,912 |
|
|
|
18.7 |
|
|
|
89.5 |
% |
OM |
|
|
74 |
|
|
|
3,685 |
|
|
|
16.6 |
|
|
|
1,090,167 |
|
|
|
85,801 |
|
|
|
18.9 |
|
|
|
88.9 |
% |
Triple-net leased properties |
|
|
19 |
|
|
|
999 |
|
|
|
4.5 |
|
|
|
368,665 |
|
|
|
31,233 |
|
|
|
6.9 |
|
|
|
100 |
% |
Total/weighted average(3) |
|
|
337 |
|
|
|
22,162 |
|
|
|
100 |
% |
|
$ |
5,421,191 |
|
|
$ |
454,043 |
|
|
|
100 |
% |
|
|
91.3 |
% |
We own fee simple interests in all of our land, buildings and campuses, except for the following properties that are located on land that is subject to ground leases: (a) 18 OM buildings; (b) five ISHC; and (c) one SNF, in each case, for which we own fee simple interests in the building and other improvements on such properties. Additionally, we own and operate 15 ISHC that were leased to Trilogy by third parties.
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Table of Contents
The following information generally applies to our properties:
For additional information regarding our real estate investments, see Schedule III, Real Estate and Accumulated Depreciation, to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K.
Lease Expirations
Substantially all of our leases with residents at our SHOP and ISHC are for a term of one year or less. The following table presents the sensitivity of our annual base rent due to lease expirations for the next 10 years and thereafter at our properties as of December 31, 2025, excluding our SHOP and ISHC (square feet and dollars in thousands):
Year |
|
Number of |
|
|
Total Sq. |
|
|
% of GLA |
|
|
Annual Base Rent |
|
|
% of Total |
|
|||||
2026 |
|
|
70 |
|
|
|
282 |
|
|
|
6.6 |
% |
|
$ |
5,968 |
|
|
|
4.4 |
% |
2027 |
|
|
57 |
|
|
|
375 |
|
|
|
8.7 |
|
|
|
10,671 |
|
|
|
7.8 |
|
2028 |
|
|
59 |
|
|
|
502 |
|
|
|
11.7 |
|
|
|
14,771 |
|
|
|
10.9 |
|
2029 |
|
|
61 |
|
|
|
500 |
|
|
|
11.6 |
|
|
|
14,115 |
|
|
|
10.4 |
|
2030 |
|
|
53 |
|
|
|
521 |
|
|
|
12.1 |
|
|
|
17,522 |
|
|
|
12.9 |
|
2031 |
|
|
29 |
|
|
|
222 |
|
|
|
5.2 |
|
|
|
6,489 |
|
|
|
4.8 |
|
2032 |
|
|
23 |
|
|
|
397 |
|
|
|
9.2 |
|
|
|
10,079 |
|
|
|
7.4 |
|
2033 |
|
|
15 |
|
|
|
184 |
|
|
|
4.3 |
|
|
|
5,853 |
|
|
|
4.3 |
|
2034 |
|
|
12 |
|
|
|
226 |
|
|
|
5.3 |
|
|
|
5,782 |
|
|
|
4.2 |
|
2035 |
|
|
21 |
|
|
|
179 |
|
|
|
4.2 |
|
|
|
7,571 |
|
|
|
5.6 |
|
Thereafter |
|
|
26 |
|
|
|
911 |
|
|
|
21.1 |
|
|
|
37,115 |
|
|
|
27.3 |
|
Total |
|
|
426 |
|
|
|
4,299 |
|
|
|
100 |
% |
|
$ |
135,936 |
|
|
|
100 |
% |
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Table of Contents
Geographic Diversification/Concentration Table
The following table lists our property locations and provides certain information regarding our portfolio’s geographic diversification/concentration as of December 31, 2025 (square feet and dollars in thousands):
State |
|
Number of |
|
|
GLA (Sq Ft) |
|
|
% of GLA |
|
|
Annualized Base |
|
|
% of Annualized |
|
|||||
Alabama |
|
|
4 |
|
|
|
260 |
|
|
|
1.1 |
% |
|
$ |
4,344 |
|
|
|
1.0 |
% |
Arizona |
|
|
1 |
|
|
|
34 |
|
|
|
0.2 |
|
|
|
925 |
|
|
|
0.2 |
|
Arkansas |
|
|
1 |
|
|
|
51 |
|
|
|
0.2 |
|
|
|
733 |
|
|
|
0.2 |
|
California |
|
|
9 |
|
|
|
475 |
|
|
|
2.1 |
|
|
|
3,169 |
|
|
|
0.7 |
|
Colorado |
|
|
6 |
|
|
|
287 |
|
|
|
1.3 |
|
|
|
6,982 |
|
|
|
1.5 |
|
Connecticut |
|
|
3 |
|
|
|
107 |
|
|
|
0.5 |
|
|
|
2,501 |
|
|
|
0.6 |
|
District of Columbia |
|
|
1 |
|
|
|
134 |
|
|
|
0.6 |
|
|
|
5,235 |
|
|
|
1.2 |
|
Florida |
|
|
1 |
|
|
|
11 |
|
|
|
0.1 |
|
|
- |
|
|
|
0.0 |
|
|
Georgia |
|
|
11 |
|
|
|
458 |
|
|
|
2.1 |
|
|
|
10,090 |
|
|
|
2.2 |
|
Idaho |
|
|
1 |
|
|
|
26 |
|
|
|
0.1 |
|
|
|
(97 |
) |
|
|
0.0 |
|
Illinois |
|
|
7 |
|
|
|
288 |
|
|
|
1.3 |
|
|
|
5,186 |
|
|
|
1.1 |
|
Indiana |
|
|
78 |
|
|
|
5,437 |
|
|
|
24.5 |
|
|
|
151,658 |
|
|
|
33.4 |
|
Iowa |
|
|
1 |
|
|
|
38 |
|
|
|
0.2 |
|
|
|
629 |
|
|
|
0.1 |
|
Kansas |
|
|
1 |
|
|
|
76 |
|
|
|
0.3 |
|
|
|
2,465 |
|
|
|
0.5 |
|
Kentucky |
|
|
21 |
|
|
|
1,740 |
|
|
|
7.9 |
|
|
|
10,464 |
|
|
|
2.3 |
|
Louisiana |
|
|
7 |
|
|
|
257 |
|
|
|
1.2 |
|
|
|
2,089 |
|
|
|
0.5 |
|
Maryland |
|
|
1 |
|
|
|
77 |
|
|
|
0.4 |
|
|
|
1,682 |
|
|
|
0.4 |
|
Massachusetts |
|
|
6 |
|
|
|
473 |
|
|
|
2.1 |
|
|
|
12,435 |
|
|
|
2.7 |
|
Michigan |
|
|
28 |
|
|
|
1,764 |
|
|
|
8.0 |
|
|
|
44,606 |
|
|
|
9.8 |
|
Minnesota |
|
|
6 |
|
|
|
761 |
|
|
|
3.4 |
|
|
|
19,958 |
|
|
|
4.4 |
|
Mississippi |
|
|
2 |
|
|
|
76 |
|
|
|
0.3 |
|
|
|
850 |
|
|
|
0.2 |
|
Missouri |
|
|
2 |
|
|
|
73 |
|
|
|
0.3 |
|
|
|
2,251 |
|
|
|
0.5 |
|
Nebraska |
|
|
2 |
|
|
|
282 |
|
|
|
1.3 |
|
|
|
3,748 |
|
|
|
0.8 |
|
Nevada |
|
|
1 |
|
|
|
191 |
|
|
|
0.9 |
|
|
|
3,534 |
|
|
|
0.8 |
|
New Jersey |
|
|
4 |
|
|
|
162 |
|
|
|
0.7 |
|
|
|
4,212 |
|
|
|
0.9 |
|
New Mexico |
|
|
2 |
|
|
|
272 |
|
|
|
1.2 |
|
|
|
3,310 |
|
|
|
0.7 |
|
New York |
|
|
1 |
|
|
|
91 |
|
|
|
0.4 |
|
|
|
3,178 |
|
|
|
0.7 |
|
North Carolina |
|
|
9 |
|
|
|
431 |
|
|
|
1.9 |
|
|
|
10,255 |
|
|
|
2.3 |
|
Ohio |
|
|
40 |
|
|
|
3,057 |
|
|
|
13.8 |
|
|
|
52,024 |
|
|
|
11.5 |
|
Oregon |
|
|
25 |
|
|
|
667 |
|
|
|
3.0 |
|
|
|
5,805 |
|
|
|
1.3 |
|
Pennsylvania |
|
|
8 |
|
|
|
571 |
|
|
|
2.6 |
|
|
|
14,094 |
|
|
|
3.1 |
|
South Carolina |
|
|
1 |
|
|
|
59 |
|
|
|
0.3 |
|
|
|
1,740 |
|
|
|
0.4 |
|
Tennessee |
|
|
1 |
|
|
|
43 |
|
|
|
0.2 |
|
|
|
841 |
|
|
|
0.2 |
|
Texas |
|
|
21 |
|
|
|
1,399 |
|
|
|
6.3 |
|
|
|
23,201 |
|
|
|
5.1 |
|
Utah |
|
|
3 |
|
|
|
223 |
|
|
|
1.0 |
|
|
|
1,542 |
|
|
|
0.3 |
|
Virginia |
|
|
3 |
|
|
|
910 |
|
|
|
4.1 |
|
|
|
11,555 |
|
|
|
2.5 |
|
Washington |
|
|
7 |
|
|
|
242 |
|
|
|
1.1 |
|
|
|
6,928 |
|
|
|
1.5 |
|
Wisconsin |
|
|
5 |
|
|
|
504 |
|
|
|
2.3 |
|
|
|
14,470 |
|
|
|
3.2 |
|
Total domestic |
|
|
331 |
|
|
|
22,007 |
|
|
|
99.3 |
% |
|
$ |
448,592 |
|
|
|
98.8 |
% |
UK and Isle of Man |
|
|
6 |
|
|
|
155 |
|
|
|
0.7 |
|
|
|
5,451 |
|
|
|
1.2 |
|
Total |
|
|
337 |
|
|
|
22,162 |
|
|
|
100 |
% |
|
$ |
454,043 |
|
|
|
100 |
% |
Indebtedness
For a discussion of our indebtedness, see Note 7, Mortgage Loans Payable, and Note 8, Lines of Credit and Term Loan, to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K.
41
Table of Contents
Item 3. Legal Proceedings.
For a discussion of our legal proceedings, see Note 10, Commitments and Contingencies — Litigation, to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K.
Item 4. Mine Safety Disclosures.
Not applicable.
42
Table of Contents
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
Market Information
Our Common Stock is listed and trades on the NYSE under the ticker symbol “AHR.” As of February 18, 2026, we had approximately 188,028,542 aggregate shares of our Common Stock outstanding, held by approximately 4,815 stockholders of record. This number does not represent the actual number of beneficial owners of our Common Stock because shares of our Common Stock are frequently held in “street name” by securities dealers and others for the beneficial owners who may vote the shares.
Distributions
We qualify, and elect to be taxed, as a REIT under the Code, and we intend to continue to qualify to be taxed as a REIT. To maintain our qualification as a REIT, we must meet certain organizational and operational requirements, including a requirement to distribute to our stockholders a minimum of 90.0% of our annual taxable income, excluding net capital gains. Our board shall authorize distributions, if any, on a quarterly basis, in such amounts as our board shall determine, and each quarterly record date for the purposes of such distributions shall be determined and authorized by our board in the last month of each calendar quarter until such time as our board changes our distribution policy.
Since the first quarter of 2023, our board has authorized a quarterly distribution equal to $0.25 per share to holders of our common stock, which we expect will continue to be paid in the future, though we cannot guarantee that our distributions will continue at the current value or at all. Such quarterly distributions were equal to an annualized distribution rate of $1.00 per share and paid in cash, only from legally available funds. The amount of the quarterly distributions paid to our common stockholders was determined by our board and was dependent on a number of factors, including funds available for payment of distributions, our financial condition, capital expenditure requirements and annual distribution requirements needed to maintain our qualification as a REIT under the Code. As of December 31, 2025, any distributions of amounts in excess of our current and accumulated earnings and profits have resulted in a return of capital to our stockholders, and some portion of a distribution to our stockholders may have been paid from borrowings.
See Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Distributions, for a further discussion of our distributions.
Recent Sales of Unregistered Securities
On December 1, 2025, Griffin Capital redeemed a portion of its OP units in exchange for 67,791 shares of our Common Stock on a one-for-one basis. The issuance of shares of Common Stock was exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended.
On November 10, 2025, we granted 73,734 time-based RSUs to one of our RIDEA managers pursuant to the Manager Equity Plan, or the Manager Plan. See Note 12, Equity — Equity Compensation Plans — Manager Equity Plan. Such time-based RSUs vest in three equal installments on each of March 1, 2026, March 1, 2027 and March 1, 2028 (subject to continuous service through each vesting date), and each such time-based RSU represents the right to receive one share of our common stock upon vesting. The time-based RSUs were issued in transactions exempt from registration pursuant to Section 4(a)(2) of the Securities Act.
On November 10, 2025, we granted 73,734 performance-based RSUs representing the right to receive up to 115,099 shares of our common stock upon vesting (such number of shares assumes that we issue shares of our common stock underlying such nonvested performance-based awards at maximum levels for performance and market conditions that have not yet been achieved; to the extent that performance or market conditions do not meet maximum levels, the actual number of shares of our common stock issued under the Manager Plan would be less than the amount reflected above) to our RIDEA Manager pursuant to the Manager Plan. Such performance-based RSUs will cliff vest on December 31, 2027 (subject to continuous service through that vesting date). The performance-based RSUs were issued in a transaction exempt from registration pursuant to Section 4(a)(2) of the Securities Act.
Performance Graph
The following performance graph and table below compare the cumulative total return (including dividends) of shares of our Common Stock for the period from the listing of our shares on the NYSE on February 7, 2024 through December 31, 2025, with the cumulative returns of the Russell 2000 and the FTSE NAREIT All Equity REITs index, or FNER, over the same period of time. The data are based on the closing prices for the periods presented. The graph assumes that $100 was invested on February 7, 2024 and assumes the reinvestment of any dividends. The shareholder return shown on the graph below is not indicative of future performance. The information in this paragraph and the following performance graph are deemed “furnished”, not “filed”, with the SEC and is not to be incorporated by reference into any of our filings, whether made before or after the date hereof and irrespective of any general incorporation language contained in such filing, except as shall be expressly set forth by specific reference in such filing.
43
Table of Contents
Ticker/Index |
|
2/7/2024 |
|
|
12/31/2024 |
|
|
12/31/2025 |
|
|||
AHR |
|
$ |
100.00 |
|
|
$ |
226.64 |
|
|
$ |
385.26 |
|
Russell 2000 |
|
$ |
100.00 |
|
|
$ |
115.85 |
|
|
$ |
130.68 |
|
FNER |
|
$ |
100.00 |
|
|
$ |
110.71 |
|
|
$ |
113.22 |
|
Item 6. [Reserved].
Not applicable.
44
Table of Contents
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The use of the words “we,” “us” or “our” refers to American Healthcare REIT, Inc. and its subsidiaries, including American Healthcare REIT Holdings, LP, except where otherwise noted.
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to promote understanding of our results of operations and financial condition. Such discussion is provided as a supplement to, and should be read in conjunction with our accompanying consolidated financial statements and notes thereto appearing elsewhere in this Annual Report on Form 10-K. Such consolidated financial statements and information have been prepared to reflect our financial position as of December 31, 2025 and 2024, together with our results of operations and cash flows for the years ended December 31, 2025, 2024 and 2023. This section discusses the results of operations and cash flows for fiscal year 2025 compared to fiscal year 2024. We have omitted the discussion related to the results of operations and changes in financial condition for fiscal year 2024 compared to fiscal year 2023 from this Annual Report on Form 10-K, but such discussion may be found in Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, in our fiscal year 2024 Annual Report Form 10-K, which was filed with the U.S. Securities and Exchange Commission, or the SEC, on February 28, 2025. Our results of operations and financial condition, as reflected in the accompanying consolidated financial statements and related notes, are subject to management’s evaluation and interpretation of business conditions, changing capital market conditions, and other factors that could affect the ongoing operations and occupancy of our tenants and residents.
Forward-Looking Statements
Certain statements contained in this report, other than historical facts, may be considered forward-looking statements within the meaning of Section 27A of the Securities Act, Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and the Private Securities Litigation Reform Act of 1995 (collectively with the “Securities Act and Exchange Act, or the Acts”). We intend for all such forward-looking statements to be covered by the applicable safe harbor provisions for forward-looking statements contained in the Acts. Such forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “will,” “can,” “expect,” “intend,” “anticipate,” “estimate,” “believe,” “continue,” “possible,” “initiatives,” “focus,” “seek,” “objective,” “goal,” “strategy,” “plan,” “potential,” “potentially,” “preparing,” “projected,” “future,” “long-term,” “once,” “should,” “could,” “would,” “might,” “uncertainty,” or other similar words. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date this report is filed with the SEC.
Any such forward-looking statements are based on current expectations, estimates and projections about the industry and markets in which we operate, and beliefs of, and assumptions made by, our management and involve uncertainties that could significantly affect our financial results. Such statements include, but are not limited to: (i) statements about our plans, strategies, initiatives and prospects, including any future capital-raising initiatives and planned or future acquisitions or dispositions of properties and other assets; and (ii) statements about our future results of operations, capital expenditures and liquidity. Such statements are subject to known and unknown risks and uncertainties, which could cause actual results to differ materially from those projected or anticipated, including, without limitation: changes in economic conditions generally and the real estate market specifically; legislative and regulatory changes, including changes to laws governing the taxation of real estate investment trusts, or REITs, and regulations or proposed regulations governing the operations and sales of health care properties; the availability of capital; our ability to pay down, refinance, restructure or extend our indebtedness as it becomes due; our ability to maintain our qualification as a REIT for U.S. federal income tax purposes; changes in interest rates and foreign currency risk; competition in the real estate industry; changes in accounting principles generally accepted in the United States of America, or GAAP, policies and guidelines applicable to REITs; the success of our investment strategy; cybersecurity incidents and information technology failures, including unauthorized access to our computer systems and/or our vendors’ computer systems and our third-party management companies’ computer systems and/or their vendors’ computer systems; our ability to retain our executive officers and key employees; unexpected labor costs and inflationary pressures; changing macroeconomic, domestic legal and fiscal policies and geopolitical conditions; and those risks identified in Item 1A, Risk Factors in this Annual Report on Form 10-K. These risks and uncertainties should be considered in evaluating forward-looking statements, and undue reliance should not be placed on such statements. Forward-looking statements in this Annual Report on Form 10-K speak only as of the date on which such statements are made, and undue reliance should not be placed on such statements. We undertake no obligation to update any such statements that may become untrue because of subsequent events. Additional information concerning us and our business, including additional factors that could materially affect our financial results, is included herein and in our other filings with the SEC.
Overview and Background
American Healthcare REIT, Inc., a Maryland corporation, is a self-managed REIT that acquires, owns and operates a diversified portfolio of clinical healthcare real estate properties, focusing primarily on senior housing, skilled nursing facilities, or SNFs, outpatient medical, or OM, buildings, and other healthcare-related facilities. We have built a fully-integrated management platform, with approximately 121 employees as of December 31, 2025, that operates clinical healthcare properties throughout the United States, and in the United Kingdom and the Isle of Man. We own and operate our integrated senior health campuses, or ISHC, and senior-housing operating properties, or SHOP, utilizing the structure permitted by the REIT Investment Diversification and Empowerment
45
Table of Contents
Act of 2007, which is commonly referred to as a “RIDEA” structure. We have also originated and acquired secured loans and may acquire other real estate-related investments in the future on an infrequent and opportunistic basis. We generally seek investments that produce current income; however, we have selectively developed, and may continue to selectively develop, healthcare real estate properties. We have elected to be taxed as a REIT for U.S. federal income tax purposes. We believe that we have been organized and operated, and we intend to continue to operate, in conformity with the requirements for qualification and taxation as a REIT under the Internal Revenue Code of 1986, or the Code.
Operating Partnership
We conduct substantially all of our operations through American Healthcare REIT Holdings, LP, or our operating partnership, and we are the sole general partner of our operating partnership. As of December 31, 2025 and 2024, we owned 99.0% and 98.7%, respectively, of the operating partnership units, or OP units, in our operating partnership, and the remaining 1.0% and 1.3% of the OP units, respectively, were owned by the following limited partners: (i) AHI Group Holdings, LLC, which is owned and controlled by Jeffrey T. Hanson, our Chairman of the Board of Directors and Interim Chief Executive Officer and President, Danny Prosky, our Chief Executive Officer, President and director, who, as previously disclosed, is currently taking a leave of absence from his executive role for medical reasons, and Mathieu B. Streiff, one of our non-executive directors; and (ii) a wholly-owned subsidiary of Griffin Capital Company, LLC or Griffin Capital. See Note 11, Redeemable Noncontrolling Interests, and Note 12, Equity — Noncontrolling Interests in Total Equity, to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K, for a further discussion of the ownership in our operating partnership.
Public Offering and Listing
On February 9, 2024, pursuant to a Registration Statement filed with the SEC on Form S-11 (File No. 333-267464), as amended, we closed our underwritten public offering, or the February 2024 Offering, through which we issued 64,400,000 shares of Common Stock, for a total of $772,800,000 in gross offering proceeds. Such amounts include the exercise in full of the underwriters’ overallotment option to purchase up to an additional 8,400,000 shares of Common Stock. We listed these shares of Common Stock on the New York Stock Exchange, or NYSE, under the trading symbol “AHR” and began trading on February 7, 2024.
Following the closing of the February 2024 Offering and until August 5, 2024, we presented our Common Stock, Class T common stock and Class I common stock, as separate classes of common stock within our consolidated balance sheets and consolidated statements of equity. Any references to Common Stock in this Annual Report on Form 10-K refer to our NYSE-listed shares of common stock, whereas Class T common stock and Class I common stock refer to our historical non-listed shares of common stock. This applies to all historical periods presented herein. On August 5, 2024, 180 days after the listing of our Common Stock on the NYSE, each share of our Class T common stock and Class I common stock automatically converted into one share of our listed Common Stock.
See Note 12, Equity — Common Stock, to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K, for a further discussion of our public offerings.
Real Estate Investments Portfolio
We currently operate through four reportable business segments: ISHC, OM, SHOP and triple-net leased properties. See Note 16, Segment Reporting, to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K, for a further discussion. As of December 31, 2025, we owned and/or operated 337 buildings and ISHC, which represent in total approximately 22,162,000 square feet of gross leasable area, or GLA, for an aggregate contract purchase price of $5,421,191,000. In addition, as of December 31, 2025, we also owned a real estate-related debt investment purchased for $60,429,000.
Key Developments
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Table of Contents
Critical Accounting Estimates
Our critical accounting estimates have the most impact on the reporting of our financial condition and results of operations and require significant judgments and estimates. We believe that our judgments and estimates are consistently applied and produce financial information that fairly present our financial condition and results of operations. Our critical accounting estimates include: (i) real estate investments purchase price allocation; (ii) impairment of long-lived assets; (iii) goodwill; and (iv) revenue recognition.
These critical accounting estimates may require complex judgment in their application and are evaluated on an ongoing basis using information that is available as well as various other assumptions believed to be reasonable under the circumstances. However, if our judgment or interpretation of the facts and circumstances relating to various transactions or other matters had been different, we may have applied a different accounting treatment, resulting in a material adverse impact to our consolidated financial condition and results of operations or a different presentation of our financial statements. A discussion of our significant accounting policies is included within Note 2, Summary of Significant Accounting Policies, to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K. There have been no significant changes to our critical accounting estimates during 2025. Below is a summary of the key judgments and assumptions used in our critical accounting estimates.
Real Estate Investments Purchase Price Allocation
Upon the acquisition of real estate properties or entities owning real estate properties, we determine whether the transaction is a business combination, which requires that the assets acquired and liabilities assumed constitute a business. If the assets acquired and liabilities assumed are not a business, we account for the transaction as an asset acquisition. Under both methods, we recognize the identifiable assets acquired and liabilities assumed; however, for a transaction accounted for as an asset acquisition, we capitalize transaction costs and allocate the purchase price using a relative fair value method allocating all accumulated costs, whereas, for a transaction accounted for as a business combination, we immediately expense transaction costs incurred associated with the business combination and allocate the purchase price based on the estimated fair value of each separately identifiable asset and liability.
In accounting for asset acquisitions and business combinations, we, with assistance from independent valuation specialists, measure the fair value of tangible and intangible identified assets and liabilities, as applicable, based on their respective fair values for acquired properties, which is then allocated to acquired investments in real estate. The fair value measurement and its allocation require significant judgment and, in some cases, involve complex calculations. Significant assumptions used to determine such fair values include comparable market transactions, capitalization rates, discount rates, property operating data, among other assumptions, all of which can be impacted by expectations about future market or economic conditions. These allocation assessments directly impact our financial statements, such as the amount of depreciation and amortization we record over the estimated useful life of the property or the term of the lease.
Impairment of Long-Lived Assets
We periodically perform an analysis that requires us to judge whether indicators of impairment exist and to estimate likely future cash flows when a review for the recoverability of real estate assets is necessary. Projections of expected future operating cash flows require that we estimate future revenue amounts, future property operating expenses and the number of years the property is held for investment, among other factors. The subjectivity of assumptions used in the future cash flow analysis, including capitalization and growth rates (for estimated future revenues and expenses), period of time we intend to hold and operate the property, general economic conditions and trends, or other available market data such as comparable sales, as applicable, could result in an incorrect assessment of the recoverability of the carrying value of our real estate assets. In the event that a real estate investment fails its recoverability test and our carrying value exceeds our estimated fair value, we would record an impairment loss to the extent the carrying value exceeds the estimated fair value of our real estate investment. Determining the fair value of real estate assets when measuring impairments involves significant judgment and generally utilizes comparable market transactions, negotiations with prospective buyers, or discounted future cash flow analyses subject to the capitalization and growth rates and other assumptions discussed above, as well the application of market discount rates to such cash flows. Our ability to accurately predict future operating
47
Table of Contents
results and resulting cash flows, and estimate fair values, impacts the timing and recognition of impairments. While we believe our assumptions are reasonable, changes in these assumptions may have a material impact on our consolidated financial statements.
Goodwill
Goodwill represents the excess of consideration paid over the fair value of underlying identifiable net assets of a business acquired. This allocation is based upon our determination of the value of the acquired assets and assumed liabilities, which requires judgment and some of the estimates involve complex calculations. These allocation assessments have a direct impact on our financial statements. Our goodwill has an indeterminate life and is not amortized but is tested for impairment on an annual basis, or more frequently if events or changes in circumstances indicate that the asset might be impaired. Such evaluation could involve estimated future cash flows, which is highly subjective, and is based in part on assumptions regarding future events. We take a qualitative approach, as applicable, to consider whether an impairment of goodwill exists prior to quantitatively determining the fair value of the reporting unit in step one of the impairment test. When step one of the impairment test is utilized, we compare the fair value of the reporting unit with its carrying amount. We recognize an impairment loss to the extent the carrying value of goodwill exceeds the implied value in the current period.
Revenue Recognition
A significant portion of resident fees and services revenue represents healthcare service revenue that is reported at the amount that we expect to be entitled to in exchange for providing patient care. These amounts are due from patients, third-party payors (including health insurers and government programs), other healthcare facilities and others and include variable consideration for retroactive revenue adjustments due to settlement of audits, reviews and investigations. Such variable consideration is included in the determination of the estimated transaction price for providing care. These settlements include estimates based on the terms of the payment agreement with the payor, correspondence from the payor and our historical settlement activity, including an assessment to ensure that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the retroactive adjustment is subsequently resolved. Estimated settlements are adjusted in future periods as adjustments become known (that is, new information becomes available), or as years are settled or are no longer subject to such audits, reviews and investigations.
Recently Issued Accounting Pronouncements
For a discussion of recently issued accounting pronouncements, see Note 2, Summary of Significant Accounting Policies— Recently Issued Accounting Pronouncements, to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K.
Acquisitions and Dispositions in 2025, 2024 and 2023
For a discussion of our acquisitions and dispositions of investments in 2025, 2024 and 2023, see Note 2, Summary of Significant Accounting Policies— Properties Held for Sale, and Note 3, Real Estate Investments, to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K.
Factors Which May Influence Results of Operations
Other than the effects of inflation discussed below, as well as other national economic conditions affecting real estate generally, and as otherwise disclosed in our risk factors, we are not aware of any material trends or uncertainties that may reasonably be expected to have a material impact, favorable or unfavorable, on revenues or income from the acquisition, disposition, management and operation of our properties. For a further discussion of these and other factors that could impact our future results or performance, see Part I, Item 1A, Risk Factors, of this Annual Report on Form 10-K.
Inflation
During the years ended December 31, 2025 and 2024, inflation has affected our operations. The annual rate of inflation in the United States was 2.4% in January 2026, as measured by the Consumer Price Index. We believe inflation has impacted our operations such that we have experienced, and continue to experience, increases in the cost of labor, services, energy and supplies, and therefore continued inflationary pressures on our ISHC and SHOP could continue to impact our profitability in future periods. To offset the impact of inflation on the cost of labor and services, our RIDEA managers may have billed higher than average annual rent and care fee increases for existing residents in 2024 and 2025, as compared to prior years, while adjusting market rates as frequently as needed
48
Table of Contents
based on competitor pricing and market conditions. We believe this practice will improve operating performance in our ISHC and SHOP, as well as increase rent coverage and the stability of our real estate revenue in our triple-net leased properties over time.
For properties that are not operated under a RIDEA structure, there are provisions in the majority of our tenant leases that help us mitigate the impact of inflation. These provisions include negotiated rental increases, which historically range from 2% to 3% per year, reimbursement billings for operating expense pass-through charges and real estate tax and insurance reimbursements. However, due to the long-term nature of existing leases, among other factors, the leases may not reset frequently enough to cover inflation.
In addition, inflation has also caused an increase in the cost of our variable-rate debt due to historically rising interest rates. See Item 7A, Quantitative and Qualitative Disclosures About Market Risk — Interest Rate Risk, for a further discussion.
Scheduled Lease Expirations
Excluding our ISHC and SHOP, as of December 31, 2025, our properties were 91.3% leased, and, during 2026, 6.6% of the leased GLA is scheduled to expire. Our leasing strategy focuses on negotiating renewals for leases scheduled to expire during the next 12 months. In the future, if we are unable to negotiate renewals, we will try to identify new tenants or collaborate with existing tenants who are seeking additional space to occupy. As of December 31, 2025, our remaining weighted average lease term was 6.8 years, excluding our ISHC and SHOP.
Our combined ISHC and SHOP were 89.8% leased as of December 31, 2025. Substantially all of our leases with residents at such properties are for a term of one year or less.
Results of Operations
Comparison of the Years Ended December 31, 2025 and 2024
Our operating results are primarily comprised of income derived from our portfolio of properties and expenses in connection with the acquisition and operation of such properties. Our primary sources of revenue include rent generated by our leased, non-RIDEA properties and resident fees and services revenue from our RIDEA properties. Our primary expenses include property operating expenses and rental expenses. In general, we expect such revenues and expenses related to our portfolio of RIDEA properties to increase in the future due to an overall increase in occupancies, resident fees and pricing of care services provided.
We segregate our operations into reporting segments in order to assess the performance of our business in the same way that management reviews our performance and makes operating decisions. As of December 31, 2025, we operated through four reportable business segments: ISHC, OM, SHOP and triple-net leased properties.
The most significant drivers behind changes in our consolidated results of operations for the year ended December 31, 2025, as compared to the year ended December 31, 2024, were primarily due to: our acquisitions and dispositions of investments during 2025; our increase in resident occupancies and billing rates; and the adverse impact of inflation, which resulted in increases in the cost of labor, services, energy and supplies. Additional information behind the changes in our consolidated results of operations is discussed in more detail below. See Note 3, Real Estate Investments, to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K, for a further discussion of our acquisitions and dispositions during 2025 and 2024. As of December 31, 2025 and 2024, we owned and/or operated the following types of properties (dollars in thousands):
|
|
December 31, |
|
|||||||||||||||||||||
|
|
2025 |
|
|
2024 |
|
||||||||||||||||||
|
|
Number of |
|
|
Aggregate |
|
|
Leased |
|
|
Number of |
|
|
Aggregate |
|
|
Leased |
|
||||||
ISHC |
|
|
147 |
|
|
$ |
2,453,252 |
|
|
|
90.0 |
% |
|
|
126 |
|
|
$ |
2,020,596 |
|
|
|
88.0 |
% |
SHOP |
|
|
97 |
|
|
|
1,509,107 |
|
|
|
89.5 |
% |
|
|
84 |
|
|
|
934,306 |
|
|
|
85.4 |
% |
OM |
|
|
74 |
|
|
|
1,090,167 |
|
|
|
88.9 |
% |
|
|
84 |
|
|
|
1,205,145 |
|
|
|
87.9 |
% |
Triple-net leased properties |
|
|
19 |
|
|
|
368,665 |
|
|
|
100 |
% |
|
|
20 |
|
|
|
373,165 |
|
|
|
100 |
% |
Total/weighted average(2) |
|
|
337 |
|
|
$ |
5,421,191 |
|
|
|
91.3 |
% |
|
|
314 |
|
|
$ |
4,533,212 |
|
|
|
90.3 |
% |
49
Table of Contents
Revenues
Our primary sources of revenue include resident fees and services revenue generated by our RIDEA properties and rent from our leased, non-RIDEA properties. For the years ended December 31, 2025 and 2024, resident fees and services revenue primarily consisted of rental fees related to resident leases, extended health care fees and other ancillary services, and real estate revenue primarily consisted of base rent and expense recoveries. The amount of revenues generated by our RIDEA properties depends principally on our ability to maintain resident occupancy rates. The amount of revenues generated by our non-RIDEA properties is dependent on our ability to maintain tenant occupancy rates of currently leased space and to lease available space at the then existing rental rates. Revenues by reportable segment consisted of the following for the periods presented below (in thousands):
|
|
Year Ended December 31, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Resident Fees and Services Revenue |
|
|
|
|
|
|
||
ISHC |
|
$ |
1,763,935 |
|
|
$ |
1,619,812 |
|
SHOP |
|
|
330,571 |
|
|
|
263,986 |
|
Total resident fees and services revenue |
|
|
2,094,506 |
|
|
|
1,883,798 |
|
Real Estate Revenue |
|
|
|
|
|
|
||
OM |
|
|
126,078 |
|
|
|
134,740 |
|
Triple-net leased properties |
|
|
39,539 |
|
|
|
52,130 |
|
Total real estate revenue |
|
|
165,617 |
|
|
|
186,870 |
|
Total revenues |
|
$ |
2,260,123 |
|
|
$ |
2,070,668 |
|
Resident Fees and Services Revenue
For our ISHC segment, we increased resident fees and services revenue by $144,123,000 for the year ended December 31, 2025, as compared to the year ended December 31, 2024, primarily due to: (i) increased resident occupancy, a more favorable payor mix and higher resident fees as a result of an increase in billing rates and levels of care service; (ii) an increase of $26,432,000 due to the acquisition in July 2025 of five senior housing properties located in Ohio and Michigan; (iii) an increase of $9,180,000 due to the acquisition in July 2025 of four senior housing properties located in Kentucky; and (iv) an increase of $6,110,000 due to the acquisition in December 2025 of 14 senior housing properties located in Ohio, Indiana, New Mexico and North Carolina.
For our SHOP segment, we increased resident fees and services revenue by $66,585,000 for the year ended December 31, 2025, as compared to the year ended December 31, 2024, primarily due to: (i) an increase of $5,267,000 due to the acquisition of 14 senior housing properties in Oregon in February 2024; (ii) an increase of $13,717,000 due to the acquisition of five senior housing properties in Washington in September 2024; (iii) an increase of $2,524,000 due to the acquisition of one senior housing property in Georgia in October 2024; (iv) an increase of $8,991,000 due to the acquisition of one senior housing property in Virginia in April 2025; (v) an increase of $6,527,000 due to the acquisition of three senior housing properties in Minnesota and Idaho in the third quarter of 2025; (vi) an increase of $12,821,000 due to the acquisition of 10 senior housing properties in California, Minnesota, Pennsylvania, Utah and Wisconsin in the fourth quarter of 2025; and (vii) increased resident occupancy and higher resident fees as a result of an increase in billing rates.
Real Estate Revenue
For our triple-net leased properties segment, real estate revenue decreased $12,591,000 for the year ended December 31, 2025, as compared to the year ended December 31, 2024, primarily due to a decrease of $9,235,000 related to the disposition of eight triple-net leased properties in Missouri in December 2024.
Real estate revenue for our OM segment decreased $8,662,000 for the year ended December 31, 2025, as compared to the year ended December 31, 2024, primarily due to dispositions of OM buildings in 2024 and 2025, partially offset by contractual rent escalations and increased occupancy.
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Property Operating Expenses and Rental Expenses
ISHC and SHOP typically have a higher percentage of direct operating expenses to revenue than OM buildings and triple-net leased properties due to the nature of RIDEA-type facilities where we conduct day-to-day operations. Property operating expenses and property operating expenses as a percentage of resident fees and services revenue, as well as rental expenses and rental expenses as a percentage of real estate revenue, by reportable segment consisted of the following for the periods presented below (dollars in thousands):
|
|
Year Ended December 31, |
||||||||
|
|
|
2025 |
|
|
2024 |
||||
Property Operating Expenses |
|
|
|
|
|
|
|
|
|
|
ISHC |
|
$ |
1,526,933 |
|
86.6% |
|
$ |
1,430,539 |
|
88.3% |
SHOP |
|
|
266,598 |
|
80.6% |
|
|
223,354 |
|
84.6% |
Total property operating expenses |
|
$ |
1,793,531 |
|
85.6% |
|
$ |
1,653,893 |
|
87.8% |
|
|
|
|
|
|
|
|
|
|
|
Rental Expenses |
|
|
|
|
|
|
|
|
|
|
OM |
|
$ |
48,662 |
|
38.6% |
|
$ |
50,885 |
|
37.8% |
Triple-net leased properties |
|
|
2,770 |
|
7.0% |
|
|
2,354 |
|
4.5% |
Total rental expenses |
|
$ |
51,432 |
|
31.1% |
|
$ |
53,239 |
|
28.5% |
For our ISHC segment, total property operating expenses increased by $96,394,000 for the year ended December 31, 2025, as compared to the year ended December 31, 2024, primarily due to: (i) increased resident occupancy and levels of care services at the facilities within such segment, thereby increasing labor costs and other operating expenses; (ii) an increase of $24,655,000 due to the acquisition in July 2025 of five senior housing properties located in Ohio and Michigan; (iii) an increase of $7,417,000 due to the acquisition in July 2025 of four senior housing properties located in Kentucky; and (iv) an increase of $5,239,000 due to the acquisition in December 2025 of 14 senior housing properties located in Ohio, Indiana, New Mexico and North Carolina.
For our SHOP segment, total property operating expenses increased by $43,244,000 for the year ended December 31, 2025, as compared to the year ended December 31, 2024, primarily due to: (i) an increase of $5,658,000 due to the acquisition of 14 senior housing properties in Oregon in February 2024; (ii) an increase of $10,334,000 due to the acquisition of five senior housing properties in Washington in September 2024; (iii) an increase of $2,355,000 due to the acquisition of one senior housing property in Georgia in October 2024; (v) an increase of $4,868,000 due to the acquisition of one senior housing property located in Virginia in April 2025; (vi) an increase of $4,887,000 due to the acquisitions of three senior housing properties in Minnesota and Idaho in the third quarter of 2025; (vii) an increase of $9,109,000 due to the acquisition of 10 senior housing properties in California, Minnesota, Pennsylvania, Utah and Wisconsin in the fourth quarter of 2025; and (viii) increased occupancy at the facilities within such segment, thereby increasing labor costs and other operating expenses.
General and Administrative
For the year ended December 31, 2025, general and administrative expenses were $58,735,000, compared to $47,559,000 for the year ended December 31, 2024. The increase of $11,176,000 was primarily due to: (i) a $5,255,000 increase in stock compensation expense; and (ii) a $2,140,000 increase in salaries and benefits expense.
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Interest Expense
Interest expense, including gain or loss in fair value of derivative financial instruments, consisted of the following for the periods presented below (in thousands):
|
|
Year Ended December 31, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Interest expense: |
|
|
|
|
|
|
||
Mortgage loans payable |
|
$ |
41,969 |
|
|
$ |
55,225 |
|
Lines of credit and term loan and derivative financial |
|
|
35,266 |
|
|
|
53,788 |
|
Amortization of deferred financing costs: |
|
|
|
|
|
|
||
Mortgage loans payable |
|
|
1,808 |
|
|
|
2,561 |
|
Lines of credit and term loan |
|
|
1,554 |
|
|
|
2,934 |
|
Amortization of debt discount/premium, net |
|
|
2,021 |
|
|
|
4,944 |
|
Loss (gain) in fair value of derivative financial instruments |
|
|
1,034 |
|
|
|
(1,030 |
) |
Loss on debt and derivative extinguishments |
|
|
1,830 |
|
|
|
5,382 |
|
Interest on finance lease liabilities |
|
|
12 |
|
|
|
567 |
|
Interest expense on financing obligations and other liabilities |
|
|
2,799 |
|
|
|
2,663 |
|
Capitalized interest |
|
|
(1,484 |
) |
|
|
(334 |
) |
Total |
|
$ |
86,809 |
|
|
$ |
126,700 |
|
The decrease in total interest expense for the year ended December 31, 2025, as compared to the year ended December 31, 2024, was primarily due to the $31,778,000 decrease in interest expense and $3,552,000 decrease in loss on debt and derivative extinguishments driven by our decline in debt balances. Such decrease in debt balances was primarily a result of the payoff of all our variable-rate mortgage loans payable and paydown of our variable-rate lines of credit using net proceeds raised from our equity offerings since February 2024 and cash flow from operations.
Gain or Loss on Dispositions of Real Estate Investments
For the year ended December 31, 2025, we recognized an aggregate net loss on dispositions of $2,965,000 primarily related to the sale of one SHOP, two ISHC, 10 OM buildings and one triple-net leased property. For the year ended December 31, 2024, we recognized an aggregate net gain on disposition of our real estate investments of $5,213,000 primarily related to the sale of four OM buildings, one ISHC, eight triple-net leased properties and one land easement disposal on one of our OM properties. See Note 3, Real Estate Investments — Dispositions of Real Estate Investments, to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K, for a further discussion.
Impairment of Real Estate Investments
As we continued to evaluate our properties based on their historical operating performance and our expected holding period, we recognized aggregate impairment charges of $49,935,000 for eight OM buildings and one SHOP for the year ended December 31, 2025. For the year ended December 31, 2024, we recognized aggregate impairment charges of $45,755,000 for six OM buildings, two ISHC and two SHOP. See Note 3, Real Estate Investments — Impairment of Real Estate Investments, to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K, for a further discussion.
Gain on Re-measurement of Previously Held Equity Interests
For the year ended December 31, 2025, we recognized a $14,580,000 gain on re-measurement of the fair value of our previously held equity interest in Trilogy Opportunity Fund I, LLC. For the year ended December 31, 2024, we did not recognize any gain on re-measurement of any previously held equity interest. See Note 3, Real Estate Investments — Acquisitions of Real Estate Investments — Acquisitions Accounted for as Asset Acquisitions, to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K, for a further discussion.
Income Taxes
For the year ended December 31, 2025, as compared to the year ended December 31, 2024, we recognized a change from income tax expense to income tax benefit, which was primarily driven by the increase in taxable income of our taxable REIT subsidiaries, or TRS, within our ISHC segment and one property portfolio within our SHOP. Such increase in taxable income resulted in an aggregate $23,001,000 reversal of all of the valuation allowances recorded against the net deferred tax assets of such TRS. Deferred income tax is generally a function of the period’s temporary differences and the utilization of tax net operating loss generated
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in prior years that may be realized in future periods depending on sufficient taxable income. See Note 14, Income Taxes — Deferred Taxes, to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K, for a further discussion.
Liquidity and Capital Resources
Our principal sources of liquidity are cash flows from operations, net proceeds from the issuances of equity securities, including through the 2025 ATM Offering (as defined and described at Note 12, Equity — Common Stock, to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K), borrowings under our lines of credit and proceeds from the dispositions of real estate investments. For the next 12 months, our principal liquidity needs are to: (i) fund property operating expenses and general and administrative expenses; (ii) meet our debt service requirements (including principal and interest); (iii) fund the acquisition of real estate investments, development activities and capital expenditures; and (iv) make distributions to our stockholders, as required for us to continue to qualify as a REIT. We believe that the sources of liquidity described above will be sufficient to satisfy our cash requirements for the next 12 months and thereafter. We do not have any material off-balance sheet arrangements that we expect would materially affect our liquidity and capital resources.
Material Cash Requirements
Capital Improvement Expenditures
A capital plan for each investment is established upon acquisition that contemplates the estimated capital needs of that investment, including costs of refurbishment, tenant improvements or other major capital expenditures. The capital plan also sets forth the anticipated sources of the necessary capital, which may include operating cash generated by the investment, capital reserves, a line of credit or other loan established with respect to the investment, other borrowings or additional equity investments from us and joint venture partners. The capital plan for each investment is adjusted through ongoing, regular reviews of our portfolio or as necessary to respond to unanticipated additional capital needs. As of December 31, 2025, we had $12,085,000 of restricted cash in loan impounds and reserve accounts to fund a portion of such capital expenditures. Based on the budget for the properties we owned as of December 31, 2025, we estimate that expenditures for capital and tenant improvements as of such date will be approximately $91,816,000 for 2026, although actual expenditures are predominantly discretionary and are dependent on many factors which are not presently known.
Contractual Obligations
The following table provides information with respect to: (i) the maturity and scheduled principal repayment of our secured mortgage loans payable and lines of credit and term loan; (ii) interest payments on our mortgage loans payable and lines of credit and term loan, excluding the effect of our interest rate swaps; (iii) operating lease obligations; and (iv) financing and other obligations as of December 31, 2025 (in thousands):
|
|
Payments Due by Period |
|
|||||||||||||||||
|
|
2026 |
|
|
2027-2028 |
|
|
2029-2030 |
|
|
Thereafter |
|
|
Total |
|
|||||
Principal payments — fixed-rate debt |
|
$ |
159,687 |
|
|
$ |
195,922 |
|
|
$ |
61,695 |
|
|
$ |
568,261 |
|
|
$ |
985,565 |
|
Interest payments — fixed-rate debt |
|
|
34,790 |
|
|
|
55,169 |
|
|
|
45,341 |
|
|
|
298,626 |
|
|
|
433,926 |
|
Principal payments — variable-rate debt |
|
|
— |
|
|
|
550,000 |
|
|
|
— |
|
|
|
— |
|
|
|
550,000 |
|
Interest payments — variable-rate debt (based on rates in |
|
|
27,938 |
|
|
|
1,378 |
|
|
|
— |
|
|
|
— |
|
|
|
29,316 |
|
Operating lease obligations |
|
|
28,106 |
|
|
|
58,525 |
|
|
|
55,236 |
|
|
|
68,862 |
|
|
|
210,729 |
|
Financing and other obligations |
|
|
4,167 |
|
|
|
7,461 |
|
|
|
32,426 |
|
|
|
— |
|
|
|
44,054 |
|
Total |
|
$ |
254,688 |
|
|
$ |
868,455 |
|
|
$ |
194,698 |
|
|
$ |
935,749 |
|
|
$ |
2,253,590 |
|
Distributions
For information on distributions, see Part II, Item 5, Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities — Distributions, and the “Distributions” section below.
Credit Facilities
As of December 31, 2025, we are party to a credit agreement, as amended, with an aggregate maximum principal amount up to $1,150,000,000, or the 2024 Credit Facility. In addition, we are party to an agreement regarding a senior secured revolving credit facility with an aggregate maximum principal amount of $50,000,000, or the 2025 Trilogy Credit Facility. See Note 8, Lines of Credit and Term Loan, to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K, for a further discussion.
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As of December 31, 2025, our aggregate borrowing capacity under the 2024 Credit Facility and the 2025 Trilogy Credit Facility,was $1,200,000,000. As of December 31, 2025, our aggregate borrowings outstanding under our credit facilities was $550,000,000 and we had an aggregate of $650,000,000 available on such facilities. We believe that such resource will be sufficient to satisfy our cash requirements for the next 12 months and the longer term thereafter.
Cash Flows
The following table sets forth changes in cash flows (in thousands):
|
|
Year Ended December 31, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Cash, cash equivalents and restricted cash — beginning of period |
|
$ |
123,301 |
|
|
$ |
90,782 |
|
Net cash provided by operating activities |
|
|
294,441 |
|
|
|
176,087 |
|
Net cash used in investing activities |
|
|
(1,083,292 |
) |
|
|
(8,734 |
) |
Net cash provided by (used in) financing activities |
|
|
817,241 |
|
|
|
(134,743 |
) |
Effect of foreign currency translation on cash, cash equivalents and restricted cash |
|
|
62 |
|
|
|
(91 |
) |
Cash, cash equivalents and restricted cash — end of period |
|
$ |
151,753 |
|
|
$ |
123,301 |
|
The following summary discussion of our changes in our cash flows is based on our accompanying consolidated statements of cash flows and is not meant to be an all-inclusive discussion of the changes in our cash flows for the periods presented below.
Operating Activities
For the years ended December 31, 2025 and 2024, cash flows from operating activities were primarily related to property operations, offset by payments of general and administrative expenses and interest payments on our outstanding indebtedness. In general, cash flows from operating activities are affected by the timing of cash receipts and payments, and have increased since 2024 primarily due to improved resident occupancy, an increase in resident billing rates and expense management at our properties operated under a RIDEA structure, as well as a decrease in interest paid on our outstanding indebtedness as a result of mortgage loan payoffs and paydowns on our lines of credit using net proceeds from our equity offerings in 2025 and 2024. See the “Results of Operations” section above for a further discussion.
Investing Activities
For the year ended December 31, 2025, as compared to the year ended December 31, 2024, the increase in net cash used in investing activities was primarily due to a $824,073,000 increase in cash paid to acquire senior housing properties that are included within our SHOP and ISHC segments, $118,398,000 in cash paid in July 2025 to acquire a 51.0% controlling interest in Trilogy Opportunity Fund I, LLC, which owned and/or operated five ISHC, a $91,059,000 decrease in proceeds from dispositions of real estate investments and a $36,622,000 increase in developments and capital expenditures.
Financing Activities
For the year ended December 31, 2025, as compared to the year ended December 31, 2024, the change from net cash used in financing activities to net cash provided by financing activities, was primarily due to a $829,728,000 decrease in net payments on our lines of credit and mortgage loans payable using the net proceeds from equity offerings and a $62,664,000 decrease in the payment of equity offering costs. Further, in 2024, we paid $258,001,000 to purchase the noncontrolling interest in Trilogy REIT Holdings LLC held by a joint venture partner and paid $36,083,000 to redeem certain equity interests owned in Trilogy Investors, LLC. Such amounts were partially offset by a $207,983,000 decrease in gross equity offering proceeds and a $42,627,000 increase in distributions paid.
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Distributions
The following table reflects the income tax treatment for distributions reportable for the periods presented below (dollars in thousands):
|
|
Year Ended December 31, |
|
|||||||||||||
|
|
2025 |
|
|
2024 |
|
||||||||||
Ordinary income |
|
$ |
50,543 |
|
|
|
31.2 |
% |
|
$ |
89,325 |
|
|
|
74.6 |
% |
Capital gain |
|
|
— |
|
|
|
— |
|
|
|
8,769 |
|
|
|
7.3 |
|
Return of capital |
|
|
111,350 |
|
|
|
68.8 |
|
|
|
21,629 |
|
|
|
18.1 |
|
|
|
$ |
161,893 |
|
|
|
100 |
% |
|
$ |
119,723 |
|
|
|
100 |
% |
Financing
Mortgage Loans Payable, Net
For a discussion of our mortgage loans payable, see Note 7, Mortgage Loans Payable, to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K.
Lines of Credit and Term Loan
For a discussion of our lines of credit and term loan, see Note 8, Lines of Credit and Term Loan, to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K.
REIT Requirements
In order to maintain our qualification as a REIT for U.S. federal income tax purposes, we are required to distribute to our stockholders a minimum of 90.0% of our REIT taxable income. Existing Internal Revenue Service, or IRS, guidance includes a safe harbor pursuant to which publicly offered REITs can satisfy the distribution requirement by distributing a combination of cash and stock to stockholders. In general, to qualify under the safe harbor, each stockholder must elect to receive either cash or stock, and the aggregate cash component of the distribution to stockholders must represent at least 20.0% of the total distribution. In the event that there is a shortfall in net cash available due to factors including, without limitation, the timing of such distributions or the timing of the collection of receivables, we may seek to obtain capital to make distributions by means of unsecured and secured debt financing through one or more unaffiliated third parties. We may also make distributions with cash from capital transactions including, without limitation, the sale of one or more of our properties.
Commitments and Contingencies
For a discussion of our commitments and contingencies, See Note 10, Commitments and Contingencies, to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K.
Debt Service Requirements
A significant liquidity need is the payment of principal and interest on our outstanding indebtedness. As of December 31, 2025, we had $985,565,000 of fixed-rate mortgage loans payable outstanding secured by our properties. As of December 31, 2025, we had $550,000,000 outstanding, and $650,000,000 remained available, under our lines of credit. The weighted average effective interest rate on our outstanding debt, factoring in our interest rate swaps, was 4.34% per annum as of December 31, 2025. See Note 7, Mortgage Loans Payable, and Note 8, Lines of Credit and Term Loan, to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K.
We are required by the terms of certain loan documents to meet various financial and non-financial covenants, such as leverage ratios, net worth ratios, debt service coverage ratios and fixed charge coverage ratios. As of December 31, 2025, we were in compliance with all such covenants and requirements on our mortgage loans payable and our lines of credit and term loan. If any future covenants are violated, we anticipate seeking a waiver or amending the debt covenants with the lenders when and if such event should occur. However, there can be no assurances that management will be able to effectively achieve such plans.
Funds from Operations and Normalized Funds from Operations
Due to certain unique operating characteristics of real estate companies, the National Association of Real Estate Investment Trusts, or NAREIT, an industry trade group, has promulgated a measure known as funds from operations, a non-GAAP financial measure, which we believe to be an appropriate supplemental performance measure to reflect the operating performance of a REIT.
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The use of funds from operations is recommended by the REIT industry as a supplemental performance measure, and our management uses FFO to evaluate our performance over time. FFO is not equivalent to our net income (loss) as determined under GAAP.
We define FFO, a non-GAAP financial measure, consistent with the standards established by the White Paper on funds from operations approved by the Board of Governors of NAREIT, or the White Paper. The White Paper defines funds from operations as net income (loss) computed in accordance with GAAP, excluding gains or losses from sales of certain real estate assets, gains or losses upon consolidation of a previously held equity interest, and impairment writedowns of certain real estate assets and investments, plus depreciation and amortization related to real estate, and after adjustments for unconsolidated partnerships and joint ventures. While impairment charges are excluded from the calculation of FFO as described above, investors are cautioned that impairments are based on estimated future undiscounted cash flows. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect funds from operations. Our FFO calculation complies with NAREIT’s policy described above.
Historical accounting for real estate involves the use of GAAP. Any other method of accounting for real estate such as the fair value method cannot be construed to be any more accurate or relevant than the comparable methodologies of real estate valuation found in GAAP. Nevertheless, we believe that the use of FFO, which excludes the impact of real estate-related depreciation and amortization and impairments, provides a further understanding of our operating performance to investors, industry analysts and our 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 income (loss).
We define normalized FFO attributable to controlling interest, or Normalized FFO, as FFO further adjusted for the following items included in the determination of GAAP net income (loss): transaction, transition and restructuring costs; amounts relating to changes in deferred rent and amortization of above- and below-market leases; the non-cash impact of changes to our equity instruments; non-cash or non-recurring income or expense; the non-cash effect of income tax benefits or expenses; capitalized interest; impairment of intangible assets and goodwill; amortization of closing costs on debt security investments; mark-to-market adjustments included in net income (loss); gains or losses included in net income (loss) from the extinguishment or sale of debt, hedges, foreign exchange, derivatives or securities holdings where trading of such holdings is not a fundamental attribute of the business plan; and after adjustments for consolidated and unconsolidated partnerships and joint ventures, with such adjustments calculated to reflect Normalized FFO on the same basis.
However, FFO and Normalized FFO should not be construed to be more relevant or accurate than the current GAAP methodology in calculating net income (loss) as an indicator of our operating performance, GAAP cash flows from operations as an indicator of our liquidity or indicative of funds available to fund our cash needs, including our ability to make distributions to our stockholders. The method utilized to evaluate the value and performance of real estate under GAAP should be construed as a more relevant measure of operational performance and considered more prominently than the non-GAAP FFO and Normalized FFO measures and the adjustments to GAAP in calculating FFO and Normalized FFO. Presentation of this information is intended to provide useful information to investors, industry analysts and management as they compare the operating performance used by the REIT industry, although it should be noted that not all REITs calculate funds from operations and normalized funds from operations the same way, so comparisons with other REITs may not be meaningful. FFO and Normalized FFO should be reviewed in conjunction with other measurements as an indication of our performance. None of the SEC, NAREIT, or any other regulatory body has passed judgment on the acceptability of the adjustments that we use to calculate FFO or Normalized FFO. In the future, the SEC, NAREIT, or another regulatory body may decide to standardize the allowable adjustments across the REIT industry and we would have to adjust our calculation and characterization of FFO or Normalized FFO.
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The following is a reconciliation of net income or loss, which is the most directly comparable GAAP financial measure, to FFO and Normalized FFO for the periods presented below (in thousands):
|
|
Year Ended December 31, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Net income (loss) |
|
$ |
70,818 |
|
|
$ |
(35,600 |
) |
Depreciation and amortization related to real estate — consolidated properties |
|
|
187,237 |
|
|
|
179,040 |
|
Depreciation and amortization related to real estate — unconsolidated entities |
|
|
1,034 |
|
|
|
1,186 |
|
Impairment of real estate investments — consolidated properties |
|
|
49,935 |
|
|
|
45,755 |
|
Loss (gain) on dispositions of real estate investments, net — consolidated properties |
|
|
2,965 |
|
|
|
(5,213 |
) |
Gain on re-measurement of previously held equity interest |
|
|
(14,580 |
) |
|
|
— |
|
Net income attributable to noncontrolling interests |
|
|
(1,012 |
) |
|
|
(2,212 |
) |
Depreciation, amortization, impairments, net gain/loss on dispositions and gain on |
|
|
(3,063 |
) |
|
|
(17,851 |
) |
NAREIT FFO attributable to controlling interest |
|
$ |
293,334 |
|
|
$ |
165,105 |
|
|
|
|
|
|
|
|
||
Transaction, transition and restructuring costs |
|
$ |
5,103 |
|
|
$ |
7,141 |
|
Amortization of above- and below-market leases |
|
|
1,386 |
|
|
|
1,692 |
|
Amortization of closing costs — debt security investment |
|
|
72 |
|
|
|
324 |
|
Change in deferred rent |
|
|
(2,604 |
) |
|
|
(2,411 |
) |
Non-cash impact of changes to equity instruments |
|
|
14,621 |
|
|
|
9,367 |
|
Capitalized interest |
|
|
(1,484 |
) |
|
|
(334 |
) |
Loss on debt and derivative extinguishments |
|
|
1,830 |
|
|
|
5,382 |
|
Loss (gain) in fair value of derivative financial instruments |
|
|
1,034 |
|
|
|
(1,030 |
) |
Foreign currency (gain) loss |
|
|
(3,175 |
) |
|
|
774 |
|
Non-cash income tax benefit |
|
|
(23,699 |
) |
|
|
— |
|
Adjustments for unconsolidated entities |
|
|
4 |
|
|
|
(320 |
) |
Adjustments for noncontrolling interests |
|
|
67 |
|
|
|
(768 |
) |
Normalized FFO attributable to controlling interest |
|
$ |
286,489 |
|
|
$ |
184,922 |
|
Net Operating Income
Net operating income, or NOI, is a non-GAAP financial measure that is defined as net income (loss), computed in accordance with GAAP, generated from properties before general and administrative expenses, transaction, transition and restructuring costs, depreciation and amortization, interest expense, gain or loss in fair value of derivative financial instruments, gain or loss on dispositions of real estate investments, impairment of real estate investments, impairment of intangible assets and goodwill, income or loss from unconsolidated entities, gain on re-measurement of previously held equity interests, foreign currency gain or loss, other income or expense and income tax benefit or expense.
NOI is not equivalent to our net income (loss) as determined under GAAP and may not be a useful measure in measuring operational income or cash flows. Furthermore, NOI should not be considered as an alternative to net income (loss) as an indication of our operating performance or as an alternative to cash flows from operations as an indication of our liquidity. NOI should not be construed to be more relevant or accurate than the current GAAP methodology in calculating net income (loss). NOI should be reviewed in conjunction with other measurements as an indication of our performance.
We believe that NOI is an appropriate supplemental performance measure to reflect the performance of our operating assets because NOI excludes certain items that are not associated with the operations of our properties. We believe that NOI is a widely accepted measure of comparative operating performance in the real estate community and is useful to investors in understanding the profitability and operating performance of our property portfolio. However, our use of the term NOI may not be comparable to that of other real estate companies as they may have different methodologies for computing this amount.
57
Table of Contents
To facilitate understanding of this financial measure, the following is a reconciliation of net income or loss, which is the most directly comparable GAAP financial measure, to NOI for the periods presented below (in thousands):
|
|
Year Ended December 31, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Net income (loss) |
|
$ |
70,818 |
|
|
$ |
(35,600 |
) |
General and administrative |
|
|
58,735 |
|
|
|
47,559 |
|
Transaction, transition and restructuring costs |
|
|
5,103 |
|
|
|
7,141 |
|
Depreciation and amortization |
|
|
187,559 |
|
|
|
179,192 |
|
Interest expense |
|
|
85,775 |
|
|
|
127,730 |
|
Loss (gain) in fair value of derivative financial instruments |
|
|
1,034 |
|
|
|
(1,030 |
) |
Loss (gain) on dispositions of real estate investments, net |
|
|
2,965 |
|
|
|
(5,213 |
) |
Impairment of real estate investments |
|
|
49,935 |
|
|
|
45,755 |
|
Loss from unconsolidated entities |
|
|
1,967 |
|
|
|
6,868 |
|
Gain on re-measurement of previously held equity interest |
|
|
(14,580 |
) |
|
|
— |
|
Foreign currency (gain) loss |
|
|
(3,175 |
) |
|
|
774 |
|
Other income, net |
|
|
(8,805 |
) |
|
|
(11,353 |
) |
Income tax (benefit) expense |
|
|
(22,171 |
) |
|
|
1,713 |
|
Net operating income |
|
$ |
415,160 |
|
|
$ |
363,536 |
|
Subsequent Event
We announced on February 4, 2026 that Danny Prosky, our then Chief Executive Officer, President and director, is taking a leave of absence, effective February 3, 2026, due to a recent medical event. Our board of directors has appointed Jeffrey T. Hanson, our Chairman of the Board of Directors and our former Chief Executive Officer from 2015 to 2021, to serve as our Interim Chief Executive Officer and President, effective as of February 3, 2026.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
Market risk includes risks that arise from changes in interest rates, foreign currency exchange rates, commodity prices, equity prices and other market changes that affect market sensitive instruments. In pursuing our business plan, we expect that the primary market risk to which we will be exposed is interest rate risk. There were no material changes in our market risk exposures, or in the methods we use to manage market risk, between the years ended December 31, 2025 and 2024.
Interest Rate Risk
We are exposed to the effects of interest rate changes primarily as a result of long-term debt used to acquire and develop properties and other investments. Our interest rate risk is monitored using a variety of techniques. Our interest rate risk management objectives are to limit the impact of interest rate increases on earnings, prepayment penalties and cash flows and to lower overall borrowing costs while taking into account variable interest rate risk. To achieve our objectives, we may borrow or lend at fixed or variable rates.
We have entered into, and may continue to enter into, derivative financial instruments, such as interest rate swaps and interest rate caps, in order to mitigate our interest rate risk on a related financial instrument. We have not elected, and may continue to not elect, to apply hedge accounting treatment to these derivatives; therefore, changes in the fair value of interest rate derivative financial instruments were recorded as a component of interest expense in gain or loss in fair value of derivative financial instruments in our accompanying consolidated statements of operations and comprehensive income (loss). As of December 31, 2025, our interest rate swaps are recorded in other liabilities in our accompanying consolidated balance sheet at their aggregate fair value of $929,000. We do not enter into derivative transactions for speculative purposes. For information on our interest rate swaps, see Note 9, Derivative Financial Instruments, and Note 13, Fair Value Measurements, to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K, for a further discussion.
58
Table of Contents
As of December 31, 2025, the table below presents the principal amounts and weighted average interest rates by year of expected maturity to evaluate the expected cash flows and sensitivity to interest rate changes, excluding the effect of our interest rate swaps (dollars in thousands):
|
|
Expected Maturity Date |
|
|||||||||||||||||||||||||||||
|
|
2026 |
|
|
2027 |
|
|
2028 |
|
|
2029 |
|
|
2030 |
|
|
Thereafter |
|
|
Total |
|
|
Fair Value |
|
||||||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Debt security held-to- |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
93,433 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
93,433 |
|
|
$ |
93,107 |
|
Weighted average interest |
|
|
— |
% |
|
|
— |
% |
|
|
4.24 |
% |
|
|
— |
% |
|
|
— |
% |
|
|
— |
% |
|
|
4.24 |
% |
|
|
— |
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fixed-rate debt — principal |
|
$ |
159,687 |
|
|
$ |
56,182 |
|
|
$ |
139,740 |
|
|
$ |
16,963 |
|
|
$ |
44,732 |
|
|
$ |
568,261 |
|
|
$ |
985,565 |
|
|
$ |
898,892 |
|
Weighted average interest |
|
|
3.04 |
% |
|
|
3.51 |
% |
|
|
4.40 |
% |
|
|
3.36 |
% |
|
|
4.51 |
% |
|
|
3.74 |
% |
|
|
3.73 |
% |
|
|
— |
|
Variable-rate debt — principal |
|
$ |
— |
|
|
$ |
550,000 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
550,000 |
|
|
$ |
549,946 |
|
Weighted average interest |
|
|
— |
% |
|
|
5.01 |
% |
|
|
— |
% |
|
|
— |
% |
|
|
— |
% |
|
|
— |
% |
|
|
5.01 |
% |
|
|
— |
|
Debt Security Investment, Net
As of December 31, 2025, the net carrying value of our debt security investment was $92,136,000. As we expect to hold our debt security investment to maturity and the amounts due under such debt security investment are limited to the outstanding principal balance and any accrued and unpaid interest, we do not expect that fluctuations in interest rates, and the resulting change in fair value of our debt security investment, would have a significant impact on our operations. See Note 13, Fair Value Measurements, to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K, for a discussion of the fair value of our investment in a held-to-maturity debt security. The stated interest rate on our debt security investment was 4.24% per annum as of December 31, 2025.
Mortgage Loans Payable, Net and Lines of Credit and Term Loan
Mortgage loans payable were $985,565,000 ($966,925,000, net of discount/premium and deferred financing costs) as of December 31, 2025. As of December 31, 2025, we had 85 fixed-rate mortgage loans payable with effective interest rates ranging from 2.21% to 5.99% per annum and a weighted average effective interest rate of 3.73%. In addition, as of December 31, 2025, we had $550,000,000 ($549,761,000, net of deferred financing fees) outstanding under our lines of credit and term loan, at a weighted average interest rate of 5.01% per annum.
As of December 31, 2025, the weighted average effective interest rate on our outstanding debt, factoring in our fixed-rate interest rate swaps, was 4.34% per annum. An increase in the variable interest rate on our variable-rate lines of credit and term loan constitutes a market risk. As of December 31, 2025, a 0.50% increase in the market rates of interest would have no impact on our overall annualized interest expense as all variable-rate loan balances as of December 31, 2025 have interest rate swap arrangements in place. See Note 7, Mortgage Loans Payable, and Note 8, Lines of Credit and Term Loan, to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K, for a further discussion.
Other Market Risk
In addition to changes in interest rates and foreign currency exchange rates, the value of our future investments is subject to fluctuations based on changes in local and regional economic conditions and changes in the creditworthiness of tenants and residents, which may affect our ability to refinance our debt if necessary.
59
Table of Contents
Item 8. Financial Statements and Supplementary Data.
See Part IV, Item 15, Exhibits, Financial Statement Schedules.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
None.
Item 9A. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Securities Exchange Act of 1934, as amended, or the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the rules and forms, and that such information is accumulated and communicated to us, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, we recognize that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, as ours are designed to do, and we necessarily are required to apply our judgment in evaluating whether the benefits of the controls and procedures that we adopt outweigh their costs.
As required by Rules 13a-15(b) and 15d-15(b) of the Exchange Act, an evaluation as of December 31, 2025 was conducted under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures, as of December 31, 2025, were effective at the reasonable assurance level.
Management’s Annual Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over our financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Under the supervision, and with the participation, of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control-Integrated Framework issued in 2013 by the Committee of Sponsoring Organizations of the Treadway Commission. Management's assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of a portfolio of 14 integrated senior health campuses that we acquired on December 16, 2025 and constituted 3.7% of our total assets as of December 31, 2025 and 0.3% of our total revenues for the year ended December 31, 2025. Due to the timing of the acquisition, management did not assess the effectiveness of internal control over financial reporting at such campuses.
Based on our evaluation under the Internal Control-Integrated Framework issued in 2013, our management concluded that our internal control over financial reporting was effective as of December 31, 2025.
Changes in Internal Control over Financial Reporting
There were no changes in internal control over financial reporting that occurred during the fiscal quarter ended December 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Attestation Report of the Independent Registered Public Accounting Firm
Deloitte & Touche LLP, an independent registered public accounting firm, has audited our consolidated financial statements and has issued the following report on the effectiveness of our internal control over financial reporting.
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Table of Contents
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and the Board of Directors of American Healthcare REIT, Inc.
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of American Healthcare REIT, Inc. and subsidiaries (the “Company”) as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2025, of the Company and our report dated February 27, 2026, expressed an unqualified opinion on those financial statements.
As described in Management’s Annual Report on Internal Control over Financial Reporting, management excluded from its assessment the internal control over financial reporting at a portfolio of 14 integrated senior health campuses, which was acquired on December 16, 2025, and whose financial statements constitute 3.7% of total assets, and 0.3% of total revenues of the consolidated financial statement amounts as of and for the year ended December 31, 2025. Accordingly, our audit did not include the internal control over financial reporting at such campuses.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Deloitte & Touche LLP
Costa Mesa, California
February 27, 2026
61
Table of Contents
Item 9B. Other Information.
Securities Trading Plans of Directors and Officers
On
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
Not applicable.
PART III
Item 10. Directors, Executive Officers and Corporate Governance.
The information required by this item is incorporated by reference to our definitive proxy statement to be filed within 120 days after the end of fiscal year 2025 with respect to our 2026 annual meeting of stockholders.
Item 11. Executive Compensation.
The information required by this item is incorporated by reference to our definitive proxy statement to be filed within 120 days after the end of fiscal year 2025 with respect to our 2026 annual meeting of stockholders.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The information required by this item is incorporated by reference to our definitive proxy statement to be filed within 120 days after the end of fiscal year 2025 with respect to our 2026 annual meeting of stockholders.
Item 13. Certain Relationships and Related Transactions, and Director Independence.
The information required by this item is incorporated by reference to our definitive proxy statement to be filed within 120 days after the end of fiscal year 2025 with respect to our 2026 annual meeting of stockholders.
Item 14. Principal Accountant Fees and Services.
The information required by this item is incorporated by reference to our definitive proxy statement to be filed within 120 days after the end of fiscal year 2025 with respect to our 2026 annual meeting of stockholders.
62
Table of Contents
PART IV
Item 15. Exhibits, Financial Statement Schedules.
(a)(1) Financial Statements:
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
Page |
Report of Independent Registered Public Accounting Firm (PCAOB ID No. |
|
64 |
Consolidated Balance Sheets as of December 31, 2025 and 2024 |
|
66 |
Consolidated Statements of Operations and Comprehensive Income (Loss) for the Years Ended December 31, 2025, 2024 and 2023 |
|
67 |
Consolidated Statements of Equity for the Years Ended December 31, 2025, 2024 and 2023 |
|
68 |
Consolidated Statements of Cash Flows for the Years Ended December 31, 2025, 2024 and 2023 |
|
69 |
Notes to Consolidated Financial Statements |
|
71 |
(a)(2) Financial Statement Schedule:
The following financial statement schedule for the year ended December 31, 2025 is submitted herewith:
|
|
Page |
Real Estate and Accumulated Depreciation (Schedule III) |
|
112 |
All schedules other than the one listed above have been omitted as the required information is inapplicable or the information is presented in our consolidated financial statements or related notes.
(a)(3) Exhibits:
|
|
Page |
The exhibits listed in this section are included, or incorporated by reference, in this annual report. |
|
125 |
(b) Exhibits:
See Item 15(a)(3) above.
(c) Financial Statement Schedule:
See Item 15(a)(2) above.
63
Table of Contents
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and the Board of Directors of American Healthcare REIT, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of American Healthcare REIT, Inc. and subsidiaries (the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of operations and comprehensive income (loss), equity, and cash flows, for each of the three years in the period ended December 31, 2025, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 27, 2026, expressed an unqualified opinion on the Company’s internal control over financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Impairment of Long-Lived Assets relating to real estate investments, net — Refer to Notes 2 and 3 to the financial statements
Critical Audit Matter Description
The Company periodically evaluates long-lived assets, primarily consisting of investments in real estate that are carried at historical cost less accumulated depreciation, for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable. In performing this evaluation, the Company considers industry or economic trends, significant underperformance of the real estate investments relative to historical or projected future operating results, and significant change in the extent or manner in which the asset is used or significant physical change in the asset.
If indicators of impairment of long-lived assets are present, the Company evaluates the carrying value of the related real estate investment in relation to the future undiscounted cash flow analysis of the underlying operations for recoverability based on underlying management assumptions; including, capitalization rates, estimates for future revenues and operating expenses, the period of time the property is held for investment, among other factors. For the year ended December 31, 2025, impairment indicators arose for certain real estate investments and as a result, recoverability assessments were performed. The Company adjusts the net book value of real estate investments to fair value if the sum of the expected future undiscounted cash flow analysis, including sales proceeds, is less than carrying value. The Company recognizes an impairment loss at the time any such determination is made.
64
Table of Contents
We identified the determination of impairment indicators and management’s use of undiscounted cash flow analysis for the test of recoverability of real estate investments as a critical audit matter because of the significant estimates and assumptions management makes in (i) identifying whether indicators of impairment were present and (ii) determining the undiscounted cash flow analysis for real estate investments when evaluating real estate investments for recoverability. Performing audit procedures to evaluate the reasonableness of significant estimates and assumptions required a high degree of auditor judgment and an increased extent of effort in evaluating the audit evidence related to (1) management’s identification of significant underperformance of real estate investments relative to historical or projected future operating results or significant change in the extent or manner in which the asset is used in determining if indicators of impairment are present and (2) management’s assumptions for capitalization rates and estimates of future revenues and operating expenses, and property holding periods in the undiscounted cash flow analysis used in evaluating recoverability of real estate investments when indicators of impairment are present.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the evaluation of real estate investments, net for impairment included the following, among others:
/s/
February 27, 2026
We have served as the Company's auditor since 2013.
65
Table of Contents
AMERICAN HEALTHCARE REIT, INC.
CONSOLIDATED BALANCE SHEETS
As of December 31, 2025 and 2024
(In thousands, except share and per share amounts)
|
|
December 31, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
ASSETS |
|
|||||||
Real estate investments, net |
|
$ |
|
|
$ |
|
||
Debt security investment, net |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
|
|
|
|
|
||
Restricted cash |
|
|
|
|
|
|
||
Accounts and other receivables, net |
|
|
|
|
|
|
||
Identified intangible assets, net |
|
|
|
|
|
|
||
Goodwill |
|
|
|
|
|
|
||
Operating lease right-of-use assets, net |
|
|
|
|
|
|
||
Other assets, net |
|
|
|
|
|
|
||
Total assets |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY |
|
|||||||
Liabilities: |
|
|
|
|
|
|
||
Mortgage loans payable, net(1) |
|
$ |
|
|
$ |
|
||
Lines of credit and term loan, net(1) |
|
|
|
|
|
|
||
Accounts payable and accrued liabilities(1) |
|
|
|
|
|
|
||
Identified intangible liabilities, net |
|
|
|
|
|
|
||
Financing obligations(1) |
|
|
|
|
|
|
||
Operating lease liabilities(1) |
|
|
|
|
|
|
||
Security deposits, prepaid rent and other liabilities(1) |
|
|
|
|
|
|
||
Total liabilities |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
(Note 10) |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Redeemable noncontrolling interests (Note 11) |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Equity: |
|
|
|
|
|
|
||
Stockholders’ equity: |
|
|
|
|
|
|
||
Preferred stock, $ |
|
|
|
|
|
|||
Common Stock, $ |
|
|
|
|
|
|||
Additional paid-in capital |
|
|
|
|
|
|
||
Accumulated deficit |
|
|
( |
) |
|
|
( |
) |
Accumulated other comprehensive loss |
|
|
( |
) |
|
|
( |
) |
Total stockholders’ equity |
|
|
|
|
|
|
||
Noncontrolling interests (Note 12) |
|
|
|
|
|
|
||
Total equity |
|
|
|
|
|
|
||
Total liabilities, redeemable noncontrolling interests and equity |
|
$ |
|
|
$ |
|
||
The accompanying notes are an integral part of these consolidated financial statements.
66
Table of Contents
AMERICAN HEALTHCARE REIT, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
For the Years Ended December 31, 2025, 2024 and 2023
(In thousands, except share and per share amounts)
|
|
Year Ended December 31, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Revenues and grant income: |
|
|
|
|
|
|
|
|
|
|||
Resident fees and services |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Real estate revenue |
|
|
|
|
|
|
|
|
|
|||
Grant income |
|
|
|
|
|
|
|
|
|
|||
Total revenues and grant income |
|
|
|
|
|
|
|
|
|
|||
Expenses: |
|
|
|
|
|
|
|
|
|
|||
Property operating expenses |
|
|
|
|
|
|
|
|
|
|||
Rental expenses |
|
|
|
|
|
|
|
|
|
|||
General and administrative |
|
|
|
|
|
|
|
|
|
|||
Transaction, transition and restructuring costs |
|
|
|
|
|
|
|
|
|
|||
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
|||
Total expenses |
|
|
|
|
|
|
|
|
|
|||
Other income (expense): |
|
|
|
|
|
|
|
|
|
|||
Interest expense: |
|
|
|
|
|
|
|
|
|
|||
Interest expense, net |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
(Loss) gain in fair value of derivative financial |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
(Loss) gain on dispositions of real estate investments, net |
|
|
( |
) |
|
|
|
|
|
|
||
Impairment of real estate investments |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Impairment of intangible assets |
|
|
|
|
|
|
|
|
( |
) |
||
Loss from unconsolidated entities |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Gain on re-measurement of previously held equity interests |
|
|
|
|
|
|
|
|
|
|||
Foreign currency gain (loss) |
|
|
|
|
|
( |
) |
|
|
|
||
Other income, net |
|
|
|
|
|
|
|
|
|
|||
Total net other expense |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Income (loss) before income taxes |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Income tax benefit (expense) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Net income (loss) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Net (income) loss attributable to noncontrolling interests |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
Net income (loss) attributable to controlling interest |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
Net income (loss) per share of Common Stock, Class T |
|
|
|
|
|
|
|
|
|
|||
Basic |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
Diluted |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
Weighted average number of shares of Common Stock, |
|
|
|
|
|
|
|
|
|
|||
Basic |
|
|
|
|
|
|
|
|
|
|||
Diluted |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Net income (loss) |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
Other comprehensive income (loss): |
|
|
|
|
|
|
|
|
|
|||
Foreign currency translation adjustments |
|
|
|
|
|
( |
) |
|
|
|
||
Total other comprehensive income (loss) |
|
|
|
|
|
( |
) |
|
|
|
||
Comprehensive income (loss) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Comprehensive (income) loss attributable to noncontrolling |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
Comprehensive income (loss) attributable to controlling |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
The accompanying notes are an integral part of these consolidated financial statements.
67
Table of Contents
AMERICAN HEALTHCARE REIT, INC.
CONSOLIDATED STATEMENTS OF EQUITY
For the Years Ended December 31, 2025, 2024 and 2023
(In thousands, except share and per share amounts)
|
|
Stockholders’ Equity |
|
|
|
|
|
||||||||||||||||||
|
|
Common Stock |
|
Class T |
|
Class I |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
Number |
|
Amount |
|
Number |
|
Amount |
|
Number |
|
Amount |
|
Additional |
|
Accumulated |
|
Accumulated |
|
Total |
|
Non-controlling |
|
Total Equity |
|
BALANCE — December 31, 2022 |
|
— |
|
$— |
|
|
$ |
|
|
$ |
|
$ |
|
$( |
|
$( |
|
$ |
|
$ |
|
$ |
|
||
Issuance of common stock related to equity compensation plans |
|
— |
|
— |
|
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
|
Vested restricted common stock and stock units (1) |
|
— |
|
— |
|
|
— |
|
— |
|
— |
|
( |
|
— |
|
— |
|
( |
|
— |
|
( |
|
|
Amortization related to equity compensation plans |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
|||
Stock based compensation |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
|
|
||
Repurchase of common stock |
|
— |
|
— |
|
( |
|
— |
|
( |
|
— |
|
( |
|
— |
|
— |
|
( |
|
— |
|
( |
|
Distributions to noncontrolling interests |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
( |
|
( |
|
Reclassification of noncontrolling interests to mezzanine equity |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
( |
|
( |
|
Adjustment to value of redeemable noncontrolling interests |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
|
— |
|
— |
|
|
( |
|
|
|||
Distributions declared ($ |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
( |
|
— |
|
( |
|
— |
|
( |
|
Net loss |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
( |
|
— |
|
( |
|
( |
|
( |
(2) |
Other comprehensive income |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
|
|
— |
|
|
|||
BALANCE — December 31, 2023 |
|
— |
|
$— |
|
|
$ |
|
|
$ |
|
$ |
|
$( |
|
$( |
|
$ |
|
$ |
|
$ |
|
||
Issuance of common stock in offerings |
|
|
|
— |
|
— |
|
— |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
|||||
Offering costs — common stock |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
( |
|
— |
|
— |
|
( |
|
— |
|
( |
|
Issuance of common stock from the redemption of partnership units |
|
|
|
— |
|
— |
|
— |
|
— |
|
|
— |
|
— |
|
|
( |
|
— |
|
||||
Issuance of common stock related to equity compensation plans |
|
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
|
Conversion of Class T and Class I common stock |
|
|
|
( |
|
( |
|
( |
|
( |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
||
Vested restricted common stock and stock units (1) |
|
( |
|
|
|
|
— |
|
— |
|
( |
|
— |
|
— |
|
( |
|
— |
|
( |
|
|||
Amortization related to equity compensation plans |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
|||
Stock based compensation |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
|
|
||
Repurchase of common stock |
|
— |
|
— |
|
( |
|
— |
|
— |
|
— |
|
( |
|
— |
|
— |
|
( |
|
— |
|
( |
|
Purchase of noncontrolling interests |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
( |
|
— |
|
— |
|
( |
|
( |
|
( |
|
Distributions to noncontrolling interests |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
( |
|
( |
|
Reclassification of noncontrolling interests from mezzanine |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
|
|
||
Adjustment to value of redeemable noncontrolling interests |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
|
— |
|
— |
|
|
|
|
||||
Distributions declared ($ |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
( |
|
— |
|
( |
|
— |
|
( |
|
Net (loss) income |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
( |
|
— |
|
( |
|
|
( |
(2) |
|
Other comprehensive loss |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
( |
|
( |
|
— |
|
( |
|
BALANCE — December 31, 2024 |
|
|
$ |
|
— |
|
$— |
|
— |
|
$— |
|
$ |
|
$( |
|
$( |
|
$ |
|
$ |
|
$ |
|
|
Issuance of common stock in offerings |
|
|
|
— |
|
— |
|
— |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
|||||
Offering costs — common stock |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
( |
|
— |
|
— |
|
( |
|
— |
|
( |
|
Issuance of common stock from the redemption of partnership units |
|
|
|
— |
|
— |
|
— |
|
— |
|
|
— |
|
— |
|
|
( |
|
— |
|
||||
Issuance of common stock related to equity compensation plans |
|
|
— |
|
— |
|
— |
|
— |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
||||
Vested restricted common stock and stock units (1) |
|
|
|
— |
|
— |
|
— |
|
— |
|
( |
|
— |
|
— |
|
( |
|
— |
|
( |
|
||
Amortization related to equity compensation plans |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
|||
Distributions to noncontrolling interests |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
( |
|
( |
|
Adjustment to value of redeemable noncontrolling interests |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
|||
Distributions declared ($ |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
( |
|
— |
|
( |
|
— |
|
( |
|
Net income |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
|
— |
|
|
|
(2) |
||||
Other comprehensive income |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
|
|
— |
|
|
|||
BALANCE — December 31, 2025 |
|
|
$ |
|
— |
|
$— |
|
— |
|
$— |
|
$ |
|
$( |
|
$( |
|
$ |
|
$ |
|
$ |
|
|
The accompanying notes are an integral part of these consolidated financial statements.
68
Table of Contents
AMERICAN HEALTHCARE REIT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 2025, 2024 and 2023
(In thousands)
|
|
Year Ended December 31, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
|
|
|
|
|
|||
Net income (loss) |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
Adjustments to reconcile net income (loss) to net cash provided by operating |
|
|
|
|
|
|
|
|
|
|||
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
|||
Other amortization |
|
|
|
|
|
|
|
|
|
|||
Deferred rent |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Stock based compensation |
|
|
|
|
|
|
|
|
|
|||
Loss (gain) on dispositions of real estate investments, net |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Impairment of real estate investments |
|
|
|
|
|
|
|
|
|
|||
Impairment of intangible assets |
|
|
|
|
|
|
|
|
|
|||
Loss from unconsolidated entities |
|
|
|
|
|
|
|
|
|
|||
Distributions of earnings from unconsolidated entity |
|
|
|
|
|
|
|
|
|
|||
Deferred income taxes |
|
|
( |
) |
|
|
|
|
|
|
||
Gain on re-measurement of previously held equity interests |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Foreign currency (gain) loss |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Loss on extinguishments of debt |
|
|
|
|
|
|
|
|
|
|||
Change in fair value of derivative financial instruments |
|
|
|
|
|
( |
) |
|
|
|
||
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
|||
Accounts and other receivables |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Other assets |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Accounts payable and accrued liabilities |
|
|
|
|
|
( |
) |
|
|
|
||
Operating lease liabilities |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Security deposits, prepaid rent and other liabilities |
|
|
|
|
|
( |
) |
|
|
|
||
Net cash provided by operating activities |
|
|
|
|
|
|
|
|
|
|||
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
|
|
|
|
|
|||
Developments and capital expenditures |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Acquisitions of real estate investments |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Proceeds from dispositions of real estate investments |
|
|
|
|
|
|
|
|
|
|||
Acquisitions of previously held equity interests |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Investments in unconsolidated entities |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Distributions in excess of earnings from unconsolidated entity |
|
|
|
|
|
|
|
|
|
|||
Issuances of real estate notes receivable |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Principal repayments on real estate notes receivable |
|
|
|
|
|
|
|
|
|
|||
Real estate and other deposits |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Net cash (used in) provided by investing activities |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
|
|
|
|
|
|||
Borrowings under mortgage loans payable |
|
|
|
|
|
|
|
|
|
|||
Payments on mortgage loans payable |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Borrowings under the lines of credit and term loan |
|
|
|
|
|
|
|
|
|
|||
Payments on the lines of credit and term loan |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Borrowings under financing obligations |
|
|
|
|
|
|
|
|
|
|||
Payments on financing and other obligations |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Deferred financing costs |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Debt extinguishment costs |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Proceeds from issuance of common stock in offerings |
|
|
|
|
|
|
|
|
|
|||
Proceeds from issuance of common stock pursuant to employee stock |
|
|
|
|
|
|
|
|
|
|||
Payment of offering costs |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Distributions paid |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Repurchase of common stock |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Payments to taxing authorities in connection with common stock directly |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
69
Table of Contents
AMERICAN HEALTHCARE REIT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS — (Continued)
For the Years Ended December 31, 2025, 2024 and 2023
(In thousands)
|
|
Year Ended December 31, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Purchase of noncontrolling interests |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||
Distributions to noncontrolling interests |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Redemptions of noncontrolling interests |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Security deposits, net |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Net cash provided by (used in) financing activities |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED |
|
|
|
|
|
|
|
|
( |
) |
||
EFFECT OF FOREIGN CURRENCY TRANSLATION ON CASH, CASH |
|
|
|
|
|
( |
) |
|
|
|
||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH — Beginning of |
|
|
|
|
|
|
|
|
|
|||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH — End of period |
|
$ |
|
|
$ |
|
|
$ |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH |
|
|
|
|
|
|
|
|||||
Beginning of period: |
|
|
|
|
|
|
|
|
|
|||
Cash and cash equivalents |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Restricted cash |
|
|
|
|
|
|
|
|
|
|||
Cash, cash equivalents and restricted cash |
|
$ |
|
|
$ |
|
|
$ |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
End of period: |
|
|
|
|
|
|
|
|
|
|||
Cash and cash equivalents |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Restricted cash |
|
|
|
|
|
|
|
|
|
|||
Cash, cash equivalents and restricted cash |
|
$ |
|
|
$ |
|
|
$ |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION |
|
|
|
|
|
|
|
|
|
|||
Cash paid for: |
|
|
|
|
|
|
|
|
|
|||
Interest |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Income taxes |
|
$ |
|
|
$ |
|
|
$ |
|
|||
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING |
|
|
|
|
|
|
|
|
|
|||
Accrued developments and capital expenditures |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Capital expenditures from financing and other obligations |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Tenant improvement overage |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Acquisition of real estate investments with assumed mortgage loans payable, net |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Assumption of mortgage loan payable for development |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Settlement of real estate notes receivable upon acquisition of unconsolidated |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Reclassification of noncontrolling interests from mezzanine equity, net |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Issuance of common stock from the redemption of operating partnership units |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Distributions declared but not paid |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Accrued repurchase of redeemable noncontrolling interest |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Accrued offering costs |
|
$ |
|
|
$ |
|
|
$ |
|
|||
The following represents the net increase (decrease) in certain assets and |
|
|
|
|
|
|
|
|
|
|||
Accounts and other receivables |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
||
Issuance of notes receivable |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Other assets, net |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Accounts payable and accrued liabilities |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
Security deposits and other liabilities |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
The accompanying notes are an integral part of these consolidated financial statements.
70
Table of Contents
AMERICAN HEALTHCARE REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Years Ended December 31, 2025, 2024 and 2023
The use of the words “we,” “us” or “our” refers to American Healthcare REIT, Inc. and its subsidiaries, including American Healthcare REIT Holdings, LP, except where otherwise noted.
1. Organization and Description of Business
Overview and Background
American Healthcare REIT, Inc., a Maryland corporation, is a self-managed real estate investment trust, or REIT, that acquires, owns and operates a diversified portfolio of clinical healthcare real estate properties, focusing primarily on senior housing, skilled nursing facilities, or SNFs, outpatient medical, or OM, buildings and other healthcare-related facilities. We have built a fully-integrated management platform that operates clinical healthcare properties throughout the United States, and in the United Kingdom and the Isle of Man. We own and operate our integrated senior health campuses, or ISHC, and senior housing operating properties, or SHOP, utilizing the structure permitted by the REIT Investment Diversification and Empowerment Act of 2007, which is commonly referred to as a “RIDEA” structure. We have also originated and acquired secured loans and may acquire other real estate-related investments in the future on an infrequent and opportunistic basis. We generally seek investments that produce current income; however, we have selectively developed, and may continue to selectively develop, healthcare real estate properties. We have elected to be taxed as a REIT for U.S. federal income tax purposes. We believe that we have been organized and operated, and we intend to continue to operate, in conformity with the requirements for qualification and taxation as a REIT under the Internal Revenue Code of 1986, or the Code.
Operating Partnership
We conduct substantially all of our operations through American Healthcare REIT Holdings, LP, or our operating partnership, and we are the sole general partner of our operating partnership. As of December 31, 2025 and 2024, we owned
Public Offering and Listing
On February 9, 2024, pursuant to a Registration Statement filed with the United States Securities and Exchange Commission, or SEC, on Form S-11 (File No. 333-267464), as amended, we closed our underwritten public offering, or the February 2024 Offering, through which we issued
Following the closing of the February 2024 Offering and until August 5, 2024, we presented our Common Stock, Class T common stock and Class I common stock, as separate classes of common stock within our consolidated balance sheets and consolidated statements of equity. Any references to Common Stock in this Annual Report on Form 10-K refer to our NYSE-listed shares of common stock, whereas Class T common stock and Class I common stock refer to our historical non-listed shares of common stock. This applies to all historical periods presented herein. On August 5, 2024, 180 days after the listing of our Common Stock on the NYSE, each share of our Class T common stock and Class I common stock automatically converted into one share of our listed Common Stock.
See Note 12, Equity — Common Stock, for a further discussion of our public offerings.
Our Real Estate Investments Portfolio
We currently operate through
71
Table of Contents
AMERICAN HEALTHCARE REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
2. Summary of Significant Accounting Policies
The summary of significant accounting policies presented below is designed to assist in understanding our accompanying consolidated financial statements. Such consolidated financial statements and the accompanying notes thereto are the representations of our management, who are responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America, or GAAP, in all material respects, and have been consistently applied in preparing our accompanying consolidated financial statements.
Basis of Presentation
Our accompanying consolidated financial statements include our accounts and those of our operating partnership, the wholly-owned subsidiaries of our operating partnership and all non-wholly owned subsidiaries in which we have control, as well as any VIEs, in which we are the primary beneficiary. The portion of equity in any subsidiary that is not wholly owned by us is presented in our accompanying consolidated financial statements as a noncontrolling interest. We evaluate our ability to control an entity, and whether the entity is a VIE and we are the primary beneficiary, by considering substantive terms of the arrangement and identifying which enterprise has the power to direct the activities of the entity that most significantly impacts the entity’s economic performance.
We operate and intend to continue to operate in an umbrella partnership REIT structure in which our operating partnership, wholly-owned subsidiaries of our operating partnership and all non-wholly owned subsidiaries of which we have control will own substantially all of the interests in properties acquired on our behalf. We are the sole general partner of our operating partnership and as of December 31, 2025 and 2024, we owned a
Use of Estimates
The preparation of our accompanying consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, as well as the disclosure of contingent assets and liabilities, at the date of our consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant items subject to such estimates and assumptions include, but are not limited to, the initial and recurring valuation of certain assets acquired and liabilities assumed through property acquisitions including through business combinations, goodwill and its impairment, revenues and grant income, allowance for credit losses, impairment of long-lived and intangible assets and contingencies. These estimates are made and evaluated on an on-going basis using information that is currently available as well as various other assumptions believed to be reasonable under the circumstances. Actual results could differ from those estimates, perhaps in material adverse ways, and those estimates could be different under different assumptions or conditions.
Cash, Cash Equivalents and Restricted Cash
Cash and cash equivalents consist of all highly liquid investments with a maturity of three months or less when purchased. Restricted cash primarily comprises lender required accounts for property taxes, tenant improvements, capital improvements and insurance, which are restricted as to use or withdrawal.
Leases
Lessee: We determine if a contract is a lease upon inception of the lease and maintain a distinction between finance and operating leases. Pursuant to Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, Topic 842, Leases, or ASC Topic 842, lessees are required to recognize the following for all leases with terms greater than 12 months at the commencement date: (i) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease; and (ii) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. The lease liability is calculated by using either the implicit rate of the lease or the incremental borrowing rate. The accretion of lease liabilities and amortization expense on right-of-use assets for our operating leases are included in rental expenses, property operating expenses or general and administrative expenses in our accompanying consolidated statements of operations and comprehensive income (loss). Operating lease liabilities are calculated using our incremental borrowing rate based on the information available as of the lease commencement date.
72
Table of Contents
AMERICAN HEALTHCARE REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Lessor: Pursuant to ASC Topic 842, lessors bifurcate lease revenues into lease components and non-lease components and separately recognize and disclose non-lease components that are executory in nature. Lease components continue to be recognized on a straight-line basis over the lease term and certain non-lease components may be accounted for under the revenue recognition guidance in ASC Topic 606, Revenue from Contracts with Customers, or ASC Topic 606. See the “Revenue Recognition” section below. ASC Topic 842 also provides for a practical expedient package that permits lessors to not separate non-lease components from the associated lease component if certain conditions are met. In addition, such practical expedient causes an entity to assess whether a contract is predominately lease- or service-based, and recognize the revenue from the entire contract under the relevant accounting guidance. We recognize revenue for our OM buildings and triple-net leased properties segments as real estate revenue. Minimum annual rental revenue is recognized on a straight-line basis over the term of the related lease (including rent holidays). Differences between real estate revenue recognized and cash amounts contractually due from tenants under the lease agreements are recorded to deferred rent receivable, which is included in other assets, net in our accompanying consolidated balance sheets. Tenant reimbursement revenue, which comprises additional amounts recoverable from tenants for common area maintenance expenses and certain other recoverable expenses, are considered non-lease components and variable lease payments. We qualified for and elected the practical expedient as outlined above to combine the non-lease component with the lease component, which is the predominant component, and therefore the non-lease component is recognized as part of real estate revenue. In addition, as lessors, we exclude certain lessor costs (i.e., property taxes and insurance) paid directly by a lessee to third parties on our behalf from our measurement of variable lease revenue and associated expense (i.e., no gross up of revenue and expense for these costs); and include lessor costs that we paid and are reimbursed by the lessee in our measurement of variable lease revenue and associated expense (i.e., gross up revenue and expense for these costs).
At our RIDEA facilities, we offer residents room and board (lease component), standard meals and healthcare services (non-lease component) and certain ancillary services that are not contemplated in the lease with each resident (i.e., laundry, guest meals, etc.). For our RIDEA facilities, we recognize revenue under ASC Topic 606 as resident fees and services, based on our predominance assessment from electing the practical expedient outlined above. See the “Revenue Recognition” section below.
See Note 15, Leases, for a further discussion of our leases.
Revenue Recognition
Real Estate Revenue
We recognize real estate revenue in accordance with ASC Topic 842. See the “Leases” section above.
Resident Fees and Services Revenue
We recognize resident fees and services revenue in accordance with ASC Topic 606. A significant portion of resident fees and services revenue represents healthcare service revenue that is reported at the amount that we expect to be entitled to in exchange for providing patient care, including ancillary services. These amounts are due from patients, third-party payors (including health insurers and government programs), other healthcare facilities, and others and includes variable consideration for retroactive revenue adjustments due to settlement of audits, reviews, and investigations. Generally, we bill the patients, third-party payors and other healthcare facilities several days after the services are performed. Revenue is recognized as performance obligations are satisfied. Consistent with healthcare industry accounting practices, any changes to these governmental revenue estimates are recorded in the period the change or adjustment becomes known based on final settlement. Any differences between recorded revenues and subsequent adjustments are reflected in operations in the year finalized.
Performance obligations are determined based on the nature of the services provided by us. Revenue for performance obligations satisfied over time is recognized based on actual charges incurred in relation to total expected (or actual) charges. This method provides a depiction of the transfer of services over the term of the performance obligation based on the inputs needed to satisfy the obligation. Generally, performance obligations satisfied over time relate to patients receiving long-term healthcare services, including rehabilitation services. We measure the performance obligation from admission into the facility to the point when we are no longer required to provide services to that patient. Revenue for performance obligations satisfied at a point in time is recognized when goods or services are provided and we do not believe we are required to provide additional goods or services to the patient. Generally, performance obligations satisfied at a point in time relate to sales of our pharmaceuticals business or to sales of ancillary supplies.
73
Table of Contents
AMERICAN HEALTHCARE REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Because all of our performance obligations relate to contracts with a duration of less than one year, we have elected to apply the optional exemption provided in ASC Topic 606 and, therefore, are not required to disclose the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting period. The performance obligations for these contracts are generally completed within months of the end of the reporting period.
We determine the transaction price based on standard charges for goods and services provided, reduced, where applicable, by contractual adjustments provided to third-party payors, implicit price concessions provided to uninsured patients, and estimates of goods to be returned. We also determine the estimates of contractual adjustments based on Medicare and Medicaid pricing tables and historical experience. We determine the estimate of implicit price concessions based on the historical collection experience with each class of payor.
Agreements with third-party payors typically provide for payments at amounts less than established charges. The following is a summary of the payment arrangements with major third-party payors:
Laws and regulations concerning government programs, including Medicare and Medicaid, are complex and subject to varying interpretation. As a result of investigations by governmental agencies, various healthcare organizations have received requests for information and notices regarding alleged noncompliance with those laws and regulations, which, in some instances, have resulted in organizations entering into significant settlement agreements. Compliance with such laws and regulations may also be subject to future government review and interpretation as well as significant regulatory action, including fines, penalties and potential exclusion from the related programs. There can be no assurance that regulatory authorities will not challenge our compliance with these laws and regulations, and it is not possible to determine the impact such claims or penalties would have upon us, if any.
Settlements with third-party payors for retroactive adjustments due to audits, reviews or investigations are considered variable consideration and are included in the determination of the estimated transaction price for providing patient care. These settlements are estimated based on the terms of the payment agreement with the payor, correspondence from the payor and our historical settlement activity, including an assessment to ensure that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the retroactive adjustment is subsequently resolved. Estimated settlements are adjusted in future periods as adjustments become known (that is, new information becomes available), or as years are settled or are no longer subject to such audits, reviews and investigations. Adjustments arising from a change in the transaction price were not significant for the years ended December 31, 2025, 2024 and 2023.
Disaggregation of Resident Fees and Services Revenue
74
Table of Contents
AMERICAN HEALTHCARE REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The following tables disaggregate our resident fees and services revenue by line of business, according to whether such revenue is recognized at a point in time or over time, for the years then ended (in thousands):
|
|
ISHC |
|
|
SHOP(1) |
|
|
Total |
|
|||
2025: |
|
|
|
|
|
|
|
|
|
|||
Over time |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Point in time |
|
|
|
|
|
|
|
|
|
|||
Total resident fees and services |
|
$ |
|
|
$ |
|
|
$ |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
2024: |
|
|
|
|
|
|
|
|
|
|||
Over time |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Point in time |
|
|
|
|
|
|
|
|
|
|||
Total resident fees and services |
|
$ |
|
|
$ |
|
|
$ |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
2023: |
|
|
|
|
|
|
|
|
|
|||
Over time |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Point in time |
|
|
|
|
|
|
|
|
|
|||
Total resident fees and services |
|
$ |
|
|
$ |
|
|
$ |
|
|||
The following tables disaggregate our resident fees and services revenue by payor class for the years then ended (in thousands):
|
|
ISHC |
|
|
SHOP(1) |
|
|
Total |
|
|||
2025: |
|
|
|
|
|
|
|
|
|
|||
Private and other payors |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Medicare |
|
|
|
|
|
|
|
|
|
|||
Medicaid |
|
|
|
|
|
|
|
|
|
|||
Total resident fees and services |
|
$ |
|
|
$ |
|
|
$ |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
2024: |
|
|
|
|
|
|
|
|
|
|||
Private and other payors |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Medicare |
|
|
|
|
|
|
|
|
|
|||
Medicaid |
|
|
|
|
|
|
|
|
|
|||
Total resident fees and services |
|
$ |
|
|
$ |
|
|
$ |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
2023: |
|
|
|
|
|
|
|
|
|
|||
Private and other payors |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Medicare |
|
|
|
|
|
|
|
|
|
|||
Medicaid |
|
|
|
|
|
|
|
|
|
|||
Total resident fees and services |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Accounts Receivable, Net — Resident Fees and Services Revenue
The beginning and ending balances of accounts receivable, net — resident fees and services are as follows (in thousands):
|
|
Private |
|
|
Medicare |
|
|
Medicaid |
|
|
Total |
|
||||
Beginning balance — January 1, 2025 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Ending balance — December 31, 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
(Decrease)/increase |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|||
75
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AMERICAN HEALTHCARE REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Deferred Revenue — Resident Fees and Services Revenue
Deferred revenue is included in security deposits, prepaid rent and other liabilities in our accompanying consolidated balance sheets.
|
|
Total |
|
|
Beginning balance — January 1, 2025 |
|
$ |
|
|
Ending balance — December 31, 2025 |
|
|
|
|
Increase |
|
$ |
|
|
Financing Component
We have elected a practical expedient allowed under ASC Topic 606 and, therefore, we do not adjust the promised amount of consideration from patients and third-party payors for the effects of a significant financing component due to our expectation that the period between the time the service is provided to a patient and the time that the patient or a third-party payor pays for that service will be one year or less.
Contract Costs
We have applied the practical expedient provided by FASB ASC Topic 340, Other Assets and Deferred Costs, and, therefore, all incremental customer contract acquisition costs are expensed as they are incurred since the amortization period of the asset that we otherwise would have recognized is one year or less in duration.
Resident and Tenant Receivables and Allowances
Resident receivables, which are related to resident fees and services revenue, are carried net of an allowance for credit losses. An allowance is maintained for estimated losses resulting from the inability of residents and payors to meet the contractual obligations under their lease or service agreements. Substantially all of such allowances are recorded as direct reductions of resident fees and services revenue as contractual adjustments provided to third-party payors or implicit price concessions in our accompanying consolidated statements of operations and comprehensive income (loss). Our determination of the adequacy of these allowances is based primarily upon evaluations of historical loss experience, the residents’ financial condition, security deposits, cash collection patterns by payor and by state, current economic conditions, future expectations in estimating credit losses and other relevant factors. Tenant receivables, which are related to real estate revenue, and unbilled deferred rent receivables are reduced for amounts where collectability is not probable, which are recognized as direct reductions of real estate revenue in our accompanying consolidated statements of operations and comprehensive income (loss).
The following is a summary of our adjustments to allowances for the periods presented below (in thousands):
|
|
Year Ended December 31, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Beginning balance |
|
$ |
|
|
$ |
|
||
Additional allowances |
|
|
|
|
|
|
||
Write-offs |
|
|
( |
) |
|
|
( |
) |
Recoveries collected or adjustments |
|
|
( |
) |
|
|
( |
) |
Ending balance |
|
$ |
|
|
$ |
|
||
Real Estate Investments Purchase Price Allocation
76
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AMERICAN HEALTHCARE REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
We, with assistance from independent valuation specialists, measure the fair value of tangible and identified intangible assets and liabilities, as applicable, based on their respective fair values for acquired properties. Our method for allocating the purchase price to acquired investments in real estate requires us to make subjective assessments for determining fair value of the assets acquired and liabilities assumed. This includes determining the value of the buildings, land, leasehold interests, furniture, fixtures and equipment, above- or below-market rent, in-place leases, master leases, tenant improvements, above- or below-market debt assumed and noncontrolling interest in the acquiree, if any. These estimates require significant judgment and in some cases involve complex calculations. These allocation assessments directly impact our results of operations, as amounts allocated to certain assets and liabilities have different depreciation or amortization lives. In addition, we amortize the value assigned to above- or below-market rent as a component of revenue, unlike in-place leases and other intangibles, which we include in depreciation and amortization in our accompanying consolidated statements of operations and comprehensive income (loss).
The determination of the fair value of land is based upon comparable sales data. In cases where a leasehold interest in the land is acquired, only the above/below market consideration is necessary where the value of the leasehold interest is determined by discounting the difference between the contract ground lease payments and a market ground lease payment back to a present value as of the acquisition date. The fair value of buildings is based upon our determination of the value under two methods: (i) as if it were to be replaced and vacant using cost data; and (ii) also using a residual technique based on discounted cash flow models, as vacant. Factors considered by us include an estimate of carrying costs during the expected lease-up periods considering current market conditions and costs to execute similar leases. We also recognize the fair value of furniture, fixtures and equipment on the premises, as well as the above- or below-market rent, the value of in-place leases, master leases and above- or below-market debt.
The value of the above- or below-market component of the acquired in-place leases is determined based upon the present value (using a discount rate that reflects the risks associated with the acquired leases) of the difference between: (i) the level payment equivalent of the contract rent paid pursuant to the lease; and (ii) our estimate of market rent payments taking into account the expected market rent growth. In the case of leases with options, a case-by-case analysis is performed based on all facts and circumstances of the specific lease to determine whether the option will be assumed to be exercised. The amounts related to above-market leases are included in identified intangible assets, net in our accompanying consolidated balance sheets and are amortized as a decrease to real estate revenue over the remaining non-cancelable lease term of the acquired leases with each property. The amounts related to below-market leases are included in identified intangible liabilities, net in our accompanying consolidated balance sheets and are amortized as an increase to real estate revenue over the remaining non-cancelable lease term plus any below-market renewal options of the acquired leases with each property.
The value of in-place lease costs are based on management’s evaluation of the specific characteristics of the tenant’s lease and our overall relationship with the tenants. Characteristics considered by us in allocating these values include the nature and extent of the credit quality and expectations of lease renewals, among other factors. The in-place lease intangible represents the value related to the economic benefit for acquiring a property with in-place leases as opposed to a vacant property, which is evaluated based on a review of comparable leases for a similar property, terms and conditions for marketing and executing new leases, and implied in the difference between the value of the whole property “as is” and “as vacant.” The net amounts related to in-place lease costs are included in identified intangible assets, net in our accompanying consolidated balance sheets and are amortized as an increase to depreciation and amortization expense over the average downtime of the acquired leases with each property. The net amounts related to the value of tenant relationships, if any, are included in identified intangible assets, net in our accompanying consolidated balance sheets and are amortized as an increase to depreciation and amortization expense over the average remaining non-cancelable lease term of the acquired leases plus the market renewal lease term. The value of a master lease, if any, in which a previous owner or a tenant is relieved of specific rental obligations as additional space is leased, is determined by discounting the expected real estate revenue associated with the master lease space over the assumed lease-up period.
The value of above- or below-market debt is determined based upon the present value of the difference between the cash flow stream of the assumed mortgage and the cash flow stream of a market rate mortgage at the time of assumption. The net value of above- or below-market debt is included in mortgage loans payable, net in our accompanying consolidated balance sheets and is amortized as an increase or decrease to interest expense, as applicable, over the remaining term of the assumed mortgage.
The values of contingent consideration assets and liabilities are analyzed at the time of acquisition. For contingent purchase options, the fair market value of the acquired asset is compared to the specified option price at the exercise date. If the option price is below market, it is assumed to be exercised and the difference between the fair market value and the option price is discounted to the present value at the time of acquisition. The value of noncontrolling interests are estimated by applying the income approach based on a discounted cash flow analysis.
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AMERICAN HEALTHCARE REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Real Estate Investments, Net
We carry our operating properties at our historical cost less accumulated depreciation. The cost of operating properties includes the cost of land and completed buildings and related improvements, including those related to financing obligations. Expenditures that increase the service life of properties are capitalized and the cost of maintenance and repairs is charged to expense as incurred. The cost of buildings and capital improvements is depreciated on a straight-line basis over the estimated useful lives of the buildings and capital improvements, up to
As part of the leasing process, we may provide the lessee with an allowance for the construction of leasehold improvements. These leasehold improvements are capitalized and recorded as tenant improvements and depreciated over the shorter of the useful life of the improvements or the lease term. If the allowance represents a payment for a purpose other than funding leasehold improvements, or in the event we are not considered the owner of the improvements, the allowance is considered to be a lease inducement and is included in other assets, net in our accompanying consolidated balance sheets. Lease inducement is amortized over the lease term as a reduction of real estate revenue on a straight-line basis. Factors considered during this evaluation include, among other things, who holds legal title to the improvements as well as other controlling rights provided by the lease agreement and provisions for substantiation of such costs (e.g., unilateral control of the tenant space during the build-out process). Determination of the appropriate accounting for the payment of a tenant allowance is made on a lease-by-lease basis, considering the facts and circumstances of the individual tenant lease. Recognition of lease revenue commences when the lessee is given possession of the leased space upon completion of tenant improvements when we are the owner of the leasehold improvements. However, when the leasehold improvements are owned by the tenant, the lease inception date (and the date on which recognition of lease revenue commences) is the date the tenant obtains possession of the leased space for purposes of constructing its leasehold improvements.
Goodwill
Goodwill represents the excess of consideration paid over the fair value of underlying identifiable net assets of a business acquired in a business combination. Our goodwill has an indeterminate life and is not amortized, but is tested for impairment on an annual basis, or more frequently if events or changes in circumstances indicate that the asset might be impaired. We take a qualitative approach, as applicable, to consider whether an impairment of goodwill exists prior to quantitatively determining the fair value of the reporting unit in step one of the impairment test. When step one of the impairment test is utilized, we compare the fair value of a reporting unit with its carrying amount. We recognize an impairment loss to the extent the carrying value of goodwill exceeds the implied value in the current period.
See Note 16, Segment Reporting, for a further discussion of goodwill allocation by segment and impairment of goodwill.
Impairment of Long-Lived Assets and Intangible Assets
We periodically evaluate our long-lived assets, primarily consisting of investments in real estate that we carry at our historical cost less accumulated depreciation, for impairment when events or changes in circumstances indicate that its carrying value may not be recoverable. We consider the following indicators, among others, in our evaluation of impairment:
If indicators of impairment of our long-lived assets are present, we evaluate the carrying value of the related real estate investments in relation to the future undiscounted cash flows of the underlying operations. In performing this evaluation, we consider market conditions and our current intentions with respect to holding or disposing of the asset. We adjust the net book value of properties we lease to others and other long-lived assets to fair value if the sum of the expected future undiscounted cash flows, including sales proceeds, is less than carrying value. We recognize an impairment loss at the time we make any such determination. Determining the fair value of real estate assets when measuring impairments involves significant judgment and generally utilizes comparable market transactions, negotiations with prospective buyers, or discounted future cash flow analyses subject to the capitalization and growth rates and other assumptions discussed above, as well the application of market discount rates to such cash flows. Our ability to accurately predict future operating results and resulting cash flows, and estimate fair values, impacts the timing and recognition of impairments. While we believe our assumptions are reasonable, changes in these assumptions may have a material impact on our consolidated financial statements.
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Table of Contents
AMERICAN HEALTHCARE REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
We test indefinite-lived intangible assets, other than goodwill, for impairment at least annually, and more frequently if indicators arise. We first assess qualitative factors to determine the likelihood that the fair value of the reporting group is less than its carrying value. If the carrying amount of an indefinite-lived intangible asset exceeds its fair value, an impairment loss is recognized. Fair values of other indefinite-lived intangible assets are usually determined based on discounted cash flows or appraised values, as appropriate.
If impairment indicators arise with respect to intangible assets with finite useful lives, we evaluate impairment by comparing the carrying amount of the asset to the estimated future undiscounted net cash flows expected to be generated by the asset. If the estimated future undiscounted net cash flows are less than the carrying amount of the asset, then we estimate the fair value of the asset and compare the estimated fair value to the intangible asset’s carrying value. For all of our reporting units, we recognize any shortfall from carrying value as an impairment loss in the current period.
See Note 3, Real Estate Investments — Impairment of Real Estate Investments, for a further discussion of impairment of long-lived assets. See Note 5, Identified Intangible Assets and Liabilities, for a further discussion of impairment of intangible assets.
Properties Held for Sale
A property or a group of properties is reported in discontinued operations in our consolidated statements of operations and comprehensive income (loss) for current and prior periods if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results when either: (i) the component has been disposed of or (ii) is classified as held for sale. At such time as a property is held for sale, such property is carried at the lower of: (i) its carrying amount or (ii) fair value less costs to sell. In addition, a property being held for sale ceases to be depreciated. We classify operating properties as property held for sale in the period in which all of the following criteria are met:
We did
Debt Security Investment, Net
We classify our marketable debt security investment as held-to-maturity because we have the positive intent and ability to hold the security to maturity, and we have not recorded any unrealized holding gains or losses on such investment. Our held-to-maturity security is recorded at amortized cost and adjusted for the amortization of premiums or discounts through maturity.
See Note 4, Debt Security Investment, for a further discussion.
Derivative Financial Instruments
We are exposed to the effect of interest rate changes in the normal course of business. We seek to mitigate these risks by following established risk management policies and procedures, which include the occasional use of derivatives. Our primary strategy in entering into derivative contracts, such as fixed-rate interest rate swaps and interest rate caps, is to add stability to interest expense and to manage our exposure to interest rate movements by effectively converting a portion of our variable-rate debt to fixed-rate debt. We do not enter into derivative instruments for speculative purposes.
Derivatives are recognized as either other assets or other liabilities in our accompanying consolidated balance sheets and are measured at fair value. We do not designate our derivative instruments as hedge instruments as defined by guidance under ASC Topic
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AMERICAN HEALTHCARE REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
815, Derivatives and Hedges, or ASC Topic 815, which allows for gains and losses on derivatives designated as hedges to be offset by the change in value of the hedged items or to be deferred in other comprehensive income (loss). Changes in the fair value of our derivative financial instruments are recorded as a component of interest expense in gain or loss in fair value of derivative financial instruments in our accompanying consolidated statements of operations and comprehensive income (loss).
See Note 9, Derivative Financial Instruments, and Note 13, Fair Value Measurements, for a further discussion of our derivative financial instruments.
Fair Value Measurements
The fair value of certain assets and liabilities is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, we follow a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of our reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and our reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy).
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access. An active market is defined as a market in which transactions for the assets or liabilities occur with sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability, which are typically based on an entity’s own assumptions, as there is little, if any, related market activity. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.
See Note 13, Fair Value Measurements, for a further discussion.
Other Assets, Net
We report investments in unconsolidated entities using the equity method of accounting when we have the ability to exercise significant influence over the operating and financial policies. Under the equity method, our share of the investee’s earnings or losses is included in our accompanying consolidated statements of operations and comprehensive income (loss). We generally do not recognize equity method losses when such losses exceed our net equity method investment balance unless we have committed to provide such investee additional financial support or guaranteed its obligations. To the extent that our cost basis is different from the basis reflected at the entity level, the basis difference is generally amortized over the lives of the related assets and liabilities, and such amortization is included in our share of equity in earnings of the entity. The initial carrying value of investments in unconsolidated entities is based on the amount paid to purchase the entity interest or the estimated fair value of the assets prior to the sale of interests in the entity. We have elected to follow the cumulative earnings approach when classifying distributions received from equity method investments in our consolidated statements of cash flows, whereby any distributions received up to the amount of cumulative equity earnings will be considered a return on investment and classified in operating activities and any excess distributions would be considered a return of investment and classified in investing activities. We evaluate our equity method investments for impairment based upon a comparison of the estimated fair value of the equity method investment to its carrying value. When we determine a decline in the estimated fair value of such an investment below its carrying value is other-than-temporary, an impairment is recorded.
See Note 6, Other Assets, for a further discussion.
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Table of Contents
AMERICAN HEALTHCARE REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Accounts Payable and Accrued Liabilities
As of December 31, 2025 and 2024, accounts payable and accrued liabilities primarily include reimbursement of payroll-related costs to the managers of our ISHC and SHOP of $
Stock Based Compensation
Transaction, Transition and Restructuring Costs
Transaction, transition and restructuring costs include expenses relating to: (i) the acquisition of real estate properties or entities owning real estate properties that are accounted for as business combinations; (ii) spin-offs or joint ventures; (iii) significant property management arrangements; (iv) the transition and integration expenses incurred by properties that have undergone operator or business model transitions; (v) debt investment conversions or restructuring; and (vi) organizational and other restructuring activities. Transaction, transition and restructuring costs were formerly known as business acquisition expenses in our accompanying consolidated statements of operations and comprehensive income (loss).
Foreign Currency
We have real estate investments in the United Kingdom, or UK, and Isle of Man for which the functional currency is the UK Pound Sterling, or GBP. We translate the results of operations of our foreign real estate investments into United States Dollars, or USD, using the average currency rates of exchange in effect during the period, and we translate assets and liabilities using the currency exchange rate in effect at the end of the period. The resulting foreign currency translation adjustments are included in accumulated other comprehensive income (loss), a component of stockholders’ equity, in our accompanying consolidated balance sheets. Certain balance sheet items, primarily equity and capital-related accounts, are reflected at the historical currency exchange rates. We also have intercompany notes and payables denominated in GBP with our UK subsidiaries. Gains or losses resulting from remeasuring such intercompany notes and payables into USD at the end of each reporting period are reflected in our accompanying consolidated statements of operations and comprehensive income (loss). When such intercompany notes and payables are deemed to be of a long-term investment nature, they will be reflected in accumulated other comprehensive income (loss) in our accompanying consolidated balance sheets.
Gains or losses resulting from foreign currency transactions are remeasured into USD at the rates of exchange prevailing on the date of the transactions. The effects of transaction gains or losses are included in our accompanying consolidated statements of operations and comprehensive income (loss).
Income Taxes
We qualify, and elect to be taxed, as a REIT under the Code, and we intend to continue to qualify to be taxed as a REIT. To maintain our qualification as a REIT, we must meet certain organizational and operational requirements, including a requirement to distribute to our stockholders a minimum of 90.0% of our annual taxable income, excluding net capital gains. We generally will not be subject to U.S. federal income taxes if we distribute 100% of our taxable income each year to our stockholders.
If we fail to maintain our qualification as a REIT in any taxable year, we will then be subject to U.S. federal income taxes on our taxable income at regular corporate rates and will not be permitted to qualify for treatment as a REIT for U.S. federal income tax purposes for four years following the year during which qualification is lost unless the Internal Revenue Service grants us relief under certain statutory provisions. Such an event could have a material adverse effect on our net income and net cash available for distribution to our stockholders.
We may be subject to certain state and local income taxes on our income, property or net worth in some jurisdictions, and, in certain circumstances, we may also be subject to federal excise taxes on undistributed income. In addition, certain activities that we undertake are conducted by subsidiaries, which we elected to be treated as taxable REIT subsidiaries, or TRS, to allow us to provide services that would otherwise be considered impermissible for REITs. Also, we have real estate investments in the UK and Isle of Man, which did not accord REIT status to United States REITs under their tax laws. Accordingly, we recognized an income tax
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Table of Contents
AMERICAN HEALTHCARE REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
benefit or expense for the federal, state and local income taxes incurred by our TRS and foreign income taxes on our real estate investments in the UK and Isle of Man. Effective January 1, 2026, we restructured our real estate investments in the UK to be held by a UK REIT, and as such, we are now subject to withholding tax on the UK REIT’s required minimum distributions rather than income tax. However, the withholding tax will be treated as income taxes for financial statement reporting purposes.
We account for deferred income taxes using the asset and liability method and recognize deferred tax assets and liabilities for the expected future tax consequences of events that have been included in our financial statements or tax returns. Under this method, we determine deferred tax assets and liabilities based on the temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets reflect the impact of the future deductibility of operating loss carryforwards. A valuation allowance is provided if we believe it is more likely than not that all or some portion of the deferred tax asset will not be realized. Any increase or decrease in the valuation allowance that results from a change in circumstances, and that causes us to change our judgment about the realizability of the related deferred tax asset, is included in income tax benefit or expense in our accompanying consolidated statements of operations and comprehensive income (loss) when such changes occur. Any increase or decrease in the deferred tax liability that results from a change in circumstances, and that causes us to change our judgment about expected future tax consequences of events, is recorded in income tax benefit or expense in our accompanying consolidated statements of operations and comprehensive income (loss).
Net deferred tax assets are included in other assets, or net deferred tax liabilities are included in security deposits, prepaid rent and other liabilities, in our accompanying consolidated balance sheets.
See Note 14, Income Taxes, for a further discussion.
Segment Disclosure
We segregate our operations into reporting segments in order to assess the performance of our business in the same way that management reviews our performance, evaluates our business and makes operating decisions. Accordingly, we determined that we operate through
See Note 16, Segment Reporting, for a further discussion.
GLA and Other Measures
GLA and other measures used to describe real estate investments included in our accompanying consolidated financial statements are presented on an unaudited basis.
Recently Issued Accounting Pronouncements
In December 2023, the Financial Accounting Standard Board, or FASB, issued Accounting Standard Update, or ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, or ASU 2023-09, which includes amendments that further enhance income tax disclosures, primarily through standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction. ASU 2023-09 is effective for annual periods beginning after December 15, 2024. Early adoption is permitted and should be applied prospectively; however, retrospective application is permitted. We adopted ASU 2023-09 beginning with this Annual Report on Form 10-K. We provided additional tax disclosures in the notes to our consolidated financial statements and no other changes to our existing disclosures or consolidated financial statements were required as a result of such adoption.
In November 2024, the FASB issued ASU 2024-03, Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, or ASU 2024-03. Further, in January 2025, the FASB issued ASU 2025-01, Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date, or ASU 2025-01. ASU 2024-03 requires new financial statement disclosure to be provided in the notes to the financial statements in a tabular presentation related to the disaggregation of certain expense captions presented on the face of the income statement within continuing operations that include expense categories such as: (i) purchases of inventory; (ii) employee compensation; (iii) depreciation; and (iv) intangible asset amortization. ASU 2024-03 and ASU 2025-01 are effective for annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted and may be applied retrospectively or prospectively. We are currently evaluating this guidance to determine the impact on our consolidated financial statement disclosures beginning with our 2027 Annual Report on Form 10-K.
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AMERICAN HEALTHCARE REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
In May 2025, the FASB issued ASU 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity, or ASU 2025-03. ASU 2025-03 amends the guidance Topic 805 and Topic 810, to improve the determination of the accounting acquirer in business combinations involving VIEs. Under the new guidance, entities are required to apply the general principles in Topic 805 to identify the accounting acquirer when the legal acquiree is a VIE that meets the definition of a business, and the transaction is primarily effected by exchanging equity interests. ASU 2025-03 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. Early adoption is permitted and should be applied prospectively to any acquisition transaction that occurs after the adoption date. We are currently evaluating this guidance to determine the impact on our consolidated financial statement and disclosures beginning with our Quarterly Report on Form 10-Q for the quarterly period ending March 31, 2027.
In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow Scope Improvements, or ASU 2025-11, to update the guidance in ASC Topic 270, Interim Reporting, by improving navigability of the required interim disclosures, clarifying when that guidance is applicable and adding a principle that requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. ASU 2025-11 is effective for interim reporting periods beginning after December 15, 2027. Early adoption is permitted and may be applied retrospectively or prospectively. We are currently evaluating this guidance to determine the impact on our consolidated financial statement disclosures beginning with our Quarterly Report on Form 10-Q for the quarterly period ending March 31, 2028.
3. Real Estate Investments
Our real estate investments, net consisted of the following as of December 31, 2025 and 2024 (in thousands):
|
|
December 31, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Building, improvements and construction in process |
|
$ |
|
|
$ |
|
||
Land and improvements |
|
|
|
|
|
|
||
Furniture, fixtures and equipment |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Less: accumulated depreciation |
|
|
( |
) |
|
|
( |
) |
Total |
|
$ |
|
|
$ |
|
||
Depreciation expense for the years ended December 31, 2025, 2024 and 2023 was $
The following is a summary of our capital expenditures by reportable segment for the periods presented below (in thousands):
|
|
Year Ended December 31, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
ISHC |
|
$ |
|
|
$ |
|
|
$ |
|
|||
SHOP |
|
|
|
|
|
|
|
|
|
|||
OM |
|
|
|
|
|
|
|
|
|
|||
Triple-net leased properties |
|
|
|
|
|
|
|
|
|
|||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Acquisitions of Real Estate Investments
Acquisitions Accounted for as Asset Acquisitions
2025 Asset Acquisitions
For the year ended December 31, 2025, we acquired
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AMERICAN HEALTHCARE REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The following is a summary of such acquisitions (dollars in thousands):
Location |
|
Number of |
|
Type |
|
Date |
|
Contract |
|
|
Line of |
|
||
Evansville, IN |
|
|
ISHC |
|
02/26/25 |
|
$ |
|
|
$ |
|
|||
Fredericksburg, VA |
|
|
SHOP |
|
04/14/25 |
|
|
|
|
|
|
|||
Hillard, Lancaster and Liberty Township, OH and |
|
|
ISHC |
|
07/01/25 |
|
|
|
|
|
|
|||
Saint Paul, MN |
|
|
SHOP |
|
07/01/25 |
|
|
|
|
|
|
|||
Colerain Township, OH |
|
|
ISHC |
|
07/15/25 |
|
|
|
|
|
|
|||
Bardstown, Danville, Shelbyville and Winchester, KY |
|
|
ISHC |
|
07/16/25 |
|
|
|
|
|
|
|||
Hayden, ID |
|
|
SHOP |
|
08/01/25 |
|
|
|
|
|
|
|||
Grand Rapids, MN |
|
|
SHOP |
|
08/15/25 |
|
|
|
|
|
|
|||
Springville and Draper, UT |
|
|
SHOP |
|
10/01/25 |
|
|
|
|
|
|
|||
Murrieta, CA |
|
|
SHOP |
|
10/08/25 |
|
|
|
|
|
|
|||
Sun Prairie, WI |
|
|
SHOP |
|
10/24/25 |
|
|
|
|
|
|
|||
Bloomington, MN |
|
|
SHOP |
|
10/30/25 |
|
|
|
|
|
|
|||
Fresno, CA |
|
|
SHOP |
|
10/31/25 |
|
|
|
|
|
|
|||
Saint Cloud, MN |
|
|
SHOP |
|
11/04/25 |
|
|
|
|
|
|
|||
Woodbury, MN |
|
|
SHOP |
|
12/03/25 |
|
|
|
|
|
|
|||
Minnetonka, MN |
|
|
SHOP |
|
12/08/25 |
|
|
|
|
|
|
|||
Easton, PA |
|
|
SHOP |
|
12/15/25 |
|
|
|
|
|
|
|||
Forth Wayne, IN; Hickory, NC; Santa Fe, NM; |
|
|
ISHC |
|
12/16/25 |
|
|
|
|
|
|
|||
Total |
|
|
|
|
|
|
$ |
|
|
$ |
|
|||
We accounted for such acquisitions of land and real estate investments completed during the year ended December 31, 2025 as asset acquisitions.
|
|
2025 |
|
|
Building and improvements |
|
$ |
|
|
Land |
|
|
|
|
In-place leases |
|
|
|
|
Furniture, fixtures and equipment |
|
|
|
|
Certificates of need |
|
|
|
|
Total assets acquired |
|
$ |
|
|
84
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AMERICAN HEALTHCARE REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
2024 Asset Acquisitions
For the year ended December 31, 2024, we, through Trilogy, acquired
Location |
|
Date |
|
Contract |
|
|
Line of |
|
||
Miami Township, OH |
|
04/17/24 |
|
$ |
|
|
$ |
|
||
Tiffin, OH |
|
04/17/24 |
|
|
|
|
|
|
||
La Grange, KY |
|
04/22/24 |
|
|
|
|
|
|
||
Total |
|
|
|
$ |
|
|
$ |
|
||
We accounted for such acquisitions of land and real estate investments completed during the year ended December 31, 2024 as asset acquisitions.
Location |
|
2024 |
|
|
Building and improvements |
|
$ |
|
|
Land |
|
|
|
|
Total assets acquired |
|
$ |
|
|
2023 Asset Acquisitions
For the year ended December 31, 2023, using cash on hand and debt financing, we, through a majority-owned subsidiary of Trilogy, completed the acquisition of one integrated senior health campus.
Location |
|
Date |
|
Contract |
|
|
Mortgage |
|
||
Louisville, KY |
|
02/15/23 |
|
$ |
|
|
$ |
|
||
In addition, on June 30, 2023, we, through a majority-owned subsidiary of Trilogy, acquired a land parcel in Ohio for a contract purchase price of $
For the year ended December 31, 2023, using cash on hand and debt financing, we, through a majority-owned subsidiary of Trilogy, acquired
Location |
|
Date Acquired |
|
Contract |
|
|
Mortgage |
|
|
Financing |
|
|||
Washington, IN |
|
07/13/23 |
|
$ |
|
|
$ |
|
|
$ |
— |
|
||
Tell City, IN |
|
07/13/23 |
|
|
|
|
|
|
|
|
— |
|
||
New Albany, OH |
|
07/13/23 |
|
|
|
|
|
— |
|
|
|
|
||
Total |
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|||
85
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AMERICAN HEALTHCARE REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
We accounted for such acquisitions of land and real estate investments completed during the year ended December 31, 2023 as asset acquisitions.
|
|
2023 |
|
|
Building and improvements |
|
$ |
|
|
Land |
|
|
|
|
Total assets acquired |
|
$ |
|
|
Acquisitions Accounted for as Business Combinations
2025 Business Combination
We did not acquire any real estate investment for the year ended December 31, 2025 that was accounted for as a business combination.
2024 Business Combinations
On February 1, 2024, we acquired a portfolio of
On September 3, 2024, we acquired a portfolio of
On October 1, 2024, using cash on hand and a borrowing on our line of credit, we completed the acquisition of
2023 Business Combination
On February 15, 2023, we, through Trilogy, acquired from an unaffiliated third party, a
86
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AMERICAN HEALTHCARE REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Based on quantitative and qualitative considerations, our 2024 and 2023 business combinations were not material to us individually or in the aggregate, and therefore, pro-forma financial information was not provided.
|
|
Year Ended December 31, |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Building and improvements |
|
$ |
|
|
$ |
— |
|
|
Land |
|
|
|
|
|
— |
|
|
In-place leases |
|
|
|
|
|
— |
|
|
Goodwill |
|
|
— |
|
|
|
|
|
Furniture, fixtures and equipment |
|
|
— |
|
|
|
|
|
Cash and restricted cash |
|
|
— |
|
|
|
|
|
Accounts receivable |
|
|
|
|
|
— |
|
|
Other assets |
|
|
|
|
|
|
||
Total assets acquired |
|
|
|
|
|
|
||
Mortgage loans payable (including debt discount of $ |
|
|
( |
) |
|
|
— |
|
Accounts payable and accrued liabilities |
|
|
( |
) |
|
|
( |
) |
Financing obligations |
|
|
— |
|
|
|
( |
) |
Security deposits, prepaid rent and other liabilities |
|
|
( |
) |
|
|
( |
) |
Total liabilities assumed |
|
|
( |
) |
|
|
( |
) |
Net assets acquired |
|
$ |
|
|
$ |
|
||
Dispositions of Real Estate Investments
2025 Dispositions of Real Estate Investments
For the year ended December 31, 2025, we disposed of
Location |
|
Number of |
|
Type |
|
Date |
|
Contract |
|
|
Lansing, MI |
|
|
SHOP |
|
02/11/25 |
|
$ |
|
||
Greenville, OH |
|
|
ISHC |
|
03/01/25 |
|
|
|
||
King of Prussia, PA |
|
|
OM |
|
04/08/25 |
|
|
|
||
Chesterfield, MO |
|
|
OM |
|
05/01/25 |
|
|
|
||
Springfield, OH |
|
|
ISHC |
|
05/01/25 |
|
|
|
||
Crown Point, IN |
|
|
OM |
|
05/13/25 |
|
|
|
||
Wichita, KS |
|
|
OM |
|
07/16/25 |
|
|
|
||
Waterloo, IL |
|
|
OM |
|
09/10/25 |
|
|
|
||
Battle Creek, MI |
|
|
OM |
|
09/26/25 |
|
|
|
||
Brighton, MA |
|
|
Triple-net leased property |
|
09/29/25 |
|
|
|
||
Wharton, TX |
|
|
OM |
|
11/24/25 |
|
|
|
||
Joplin, MO |
|
|
OM |
|
12/30/25 |
|
|
|
||
Total |
|
|
|
|
|
|
$ |
|
||
87
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AMERICAN HEALTHCARE REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
2024 Dispositions of Real Estate Investments
For the year ended December 31, 2024, we disposed of
Location |
|
Number of |
|
Type |
|
Date |
|
Contract |
|
|
Marietta, GA |
|
|
OM |
|
01/16/24 |
|
$ |
|
||
Homewood, AL |
|
|
OM |
|
03/18/24 |
|
|
|
||
Middletown, OH |
|
|
OM |
|
10/16/24 |
|
|
|
||
Zanesville, OH |
|
|
ISHC |
|
12/01/24 |
|
|
|
||
Florissant, Kansas City, Milan, Moberly, Salisbury, |
|
|
Triple-net leased properties |
|
12/19/24 |
|
|
|
||
Marysville, OH |
|
|
OM |
|
12/20/24 |
|
|
|
||
Total |
|
|
|
|
|
|
$ |
|
||
2023 Dispositions of Real Estate Investments
For the year ended December 31, 2023, we disposed of
Location |
|
Number of |
|
Type |
|
Date |
|
Contract |
|
|
Pinellas Park, FL |
|
|
SHOP |
|
02/01/23 |
|
$ |
|
||
Olympia Fields, IL |
|
|
OM |
|
04/10/23 |
|
|
|
||
Auburn, CA |
|
|
OM |
|
04/26/23 |
|
|
|
||
Pottsville, PA |
|
|
OM |
|
04/26/23 |
|
|
|
||
New London, CT |
|
|
OM |
|
05/24/23 |
|
|
|
||
Stratford, CT |
|
|
OM |
|
05/24/23 |
|
|
|
||
Westbrook, CT |
|
|
OM |
|
05/24/23 |
|
|
|
||
Lakeland, FL |
|
|
SHOP |
|
06/01/23 |
|
|
|
||
Winter Haven, FL |
|
|
SHOP |
|
06/01/23 |
|
|
|
||
Acworth, GA |
|
|
OM |
|
06/14/23 |
|
|
|
||
Lithonia, GA |
|
|
OM |
|
06/14/23 |
|
|
|
||
Stockbridge, GA |
|
|
OM |
|
06/14/23 |
|
|
|
||
Lake Placid, FL |
|
|
SHOP |
|
06/30/23 |
|
|
|
||
Brooksville, FL |
|
|
SHOP |
|
06/30/23 |
|
|
|
||
Spring Hill, FL |
|
|
SHOP |
|
08/01/23 |
|
|
|
||
Morristown, NJ |
|
|
OM |
|
08/09/23 |
|
|
|
||
Evendale, OH |
|
|
OM |
|
08/29/23 |
|
|
|
||
Longview, TX |
|
|
OM |
|
09/19/23 |
|
|
|
||
Naperville, IL |
|
|
OM |
|
10/03/23 |
|
|
|
||
Total |
|
|
|
|
|
|
$ |
|
||
Impairment of Real Estate Investments
For the year ended December 31, 2025, as we continue to evaluate our properties based on their historical operating performance and our expected holding period, we have determined that
88
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AMERICAN HEALTHCARE REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The fair value of the
For the year ended December 31, 2024, as we continued to evaluate our properties based on their historical operating performance and our expected holding period, we determined that
The fair value of the other
For the year ended December 31, 2023, as we continued to evaluate additional non-strategic properties for sale, we determined that
4. Debt Security Investment
Our investment in a commercial mortgage-backed debt security, or debt security, bears an interest rate on the stated principal amount thereof equal to
On each of February 1, 2024 and September 3, 2024, we acquired a portfolio of
As of December 31, 2025 and 2024, the carrying amount of the debt security investment was $
89
Table of Contents
AMERICAN HEALTHCARE REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
5. Identified Intangible Assets and Liabilities
Identified intangible assets, net and identified intangible liabilities, net consisted of the following as of December 31, 2025 and 2024 (dollars in thousands):
|
|
December 31, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Amortized intangible assets: |
|
|
|
|
|
|
||
In-place leases, net of accumulated amortization of $ |
|
$ |
|
|
$ |
|
||
Above-market leases, net of accumulated amortization of $ |
|
|
|
|
|
|
||
Unamortized intangible assets: |
|
|
|
|
|
|
||
Certificates of need |
|
|
|
|
|
|
||
Trade names |
|
|
|
|
|
|
||
Total identified intangible assets, net |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Amortized intangible liabilities: |
|
|
|
|
|
|
||
Below-market leases, net of accumulated amortization of $ |
|
$ |
|
|
$ |
|
||
Total identified intangible liabilities, net |
|
$ |
|
|
$ |
|
||
Amortization expense on identified intangible assets for the years ended December 31, 2025, 2024 and 2023 was $
For the years ended December 31, 2025 and 2024, we did not recognize any impairment losses with respect to trade name intangible assets. For the year ended December 31, 2023, we recognized an impairment loss of approximately $
Amortization expense on below-market leases for the years ended December 31, 2025, 2024 and 2023 was $
90
Table of Contents
AMERICAN HEALTHCARE REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The aggregate weighted average remaining life of the identified intangible assets was
|
|
Amortization Expense |
|
|||||
Year |
|
Intangible |
|
|
Intangible |
|
||
2026 |
|
$ |
|
|
$ |
( |
) |
|
2027 |
|
|
|
|
|
( |
) |
|
2028 |
|
|
|
|
|
( |
) |
|
2029 |
|
|
|
|
|
( |
) |
|
2030 |
|
|
|
|
|
( |
) |
|
Thereafter |
|
|
|
|
|
( |
) |
|
Total |
|
$ |
|
|
$ |
( |
) |
|
6. Other Assets
Other assets, net consisted of the following as of December 31, 2025 and 2024 (dollars in thousands):
|
|
December 31, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Deferred rent receivables |
|
$ |
|
|
$ |
|
||
Prepaid expenses and other assets |
|
|
|
|
|
|
||
Deferred tax assets, net |
|
|
|
|
|
|
||
Inventory — finished goods |
|
|
|
|
|
|
||
Lease commissions, net of accumulated amortization of $ |
|
|
|
|
|
|
||
Real estate deposits |
|
|
|
|
|
|
||
Investments in unconsolidated entities |
|
|
|
|
|
|
||
Deferred financing costs, net of accumulated amortization of $ |
|
|
|
|
|
|
||
Lease inducement, net of accumulated amortization of $ |
|
|
|
|
|
|
||
Derivative financial instruments |
|
|
|
|
|
|
||
Total |
|
$ |
|
|
$ |
|
||
Deferred financing costs included in other assets were related to the 2023 Trilogy Credit Facility and the 2025 Trilogy Credit Facility, as defined in Note 8, Lines of Credit and Term Loan, as well as the senior unsecured revolving credit facility portions of the 2024 Credit Facility, as defined in Note 8, Lines of Credit and Term Loan, and our previous credit facility, as discussed below. In March 2025, in connection with the termination of the 2023 Trilogy Credit Facility, we incurred a loss on extinguishment of $
91
Table of Contents
AMERICAN HEALTHCARE REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
7. Mortgage Loans Payable
Mortgage loans payable, net consisted of the following as of December 31, 2025 and 2024 (dollars in thousands):
|
|
December 31, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Fixed-rate debt ( |
|
$ |
|
|
$ |
|
||
Less: deferred financing costs, net |
|
|
( |
) |
|
|
( |
) |
Add: premium |
|
|
|
|
|
|
||
Less: discount |
|
|
( |
) |
|
|
( |
) |
Mortgage loans payable, net |
|
$ |
|
|
$ |
|
||
Based on interest rates in effect as of December 31, 2025 and 2024, effective interest rates on mortgage loans payable ranged from
The following table reflects the changes in the carrying amount of mortgage loans payable, net for the periods presented below (in thousands):
|
|
Year Ended December 31, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Beginning balance |
|
$ |
|
|
$ |
|
||
Additions: |
|
|
|
|
|
|
||
Borrowings under mortgage loans payable |
|
|
|
|
|
|
||
Assumption of mortgage loans payable due to acquisition of real estate investments, |
|
|
|
|
|
|
||
Amortization of deferred financing costs |
|
|
|
|
|
|
||
Amortization of discount/premium on mortgage loans payable, net |
|
|
|
|
|
|
||
Deductions: |
|
|
|
|
|
|
||
Scheduled principal payments on mortgage loans payable |
|
|
( |
) |
|
|
( |
) |
Early payoff of mortgage loans payable |
|
|
( |
) |
|
|
( |
) |
Payoff of mortgage loans payable due to dispositions of real estate investments |
|
|
( |
) |
|
|
|
|
Deferred financing costs |
|
|
( |
) |
|
|
( |
) |
Ending balance |
|
$ |
|
|
$ |
|
||
Amortization of deferred financing costs and amortization of discount/premium on mortgage loans payable is included in interest expense in our accompanying consolidated statements of operations and comprehensive income (loss). For the year ended December 31, 2025, we incurred an aggregate net loss on the early extinguishment of mortgage loans payable of $
92
Table of Contents
AMERICAN HEALTHCARE REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
As of December 31, 2025, the principal payments due on our mortgage loans payable for each of the next five years ending December 31, and thereafter were as follows (in thousands):
Year |
|
Amount |
|
|
2026 |
|
$ |
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
2029 |
|
|
|
|
2030 |
|
|
|
|
Thereafter |
|
|
|
|
Total |
|
$ |
|
|
8. Lines of Credit and Term Loan
2024 Credit Facility
We, through our operating partnership, as borrower, and certain of our subsidiaries, or the subsidiary guarantors, collectively, with us, as guarantors, are party to an amended loan agreement, or the 2024 Credit Agreement, with Bank of America, N.A., or Bank of America, KeyBank National Association, or KeyBank, Citizens Bank, National Association and a syndicate of other banks, as lenders, for a credit facility with an aggregate maximum principal amount up to $
Under the terms of the 2024 Credit Agreement, the Revolving Loans mature on February 14, 2028, and may be extended for
At our option, the 2024 Credit Facility bears interest at varying rates based upon (i) Daily SOFR, plus the Applicable Rate for Daily SOFR Rate Loans or (ii) Term SOFR, plus the Applicable Rate for Term SOFR Rate Loans. If, under the terms of the 2024 Credit Agreement, there is an inability to determine the Daily SOFR or the Term SOFR, then the 2024 Credit Facility will bear interest at a rate per annum equal to the Base Rate plus the Applicable Rate for Base Rate Loans. The loans may be repaid in whole or in part without prepayment premium or penalty, subject to certain conditions.
We are required to pay a fee on the unused portion of the lenders’ commitments under the 2024 Credit Agreement computed at (a)
The 2024 Credit Agreement requires us to add additional subsidiaries as guarantors in the event the value of the assets owned by the subsidiary guarantors falls below a certain threshold as set forth in the 2024 Credit Agreement. In the event of default, Bank of America has the right to terminate the commitment of each Lender to make Loans and any obligation of the L/C Issuer to make L/C Credit Extensions under the 2024 Credit Agreement and to accelerate the payment on any unpaid principal amount of all outstanding loans and all interest accrued and unpaid thereon.
93
Table of Contents
AMERICAN HEALTHCARE REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
As of both December 31, 2025 and 2024, our aggregate borrowing capacity under the 2024 Credit Facility was $
2023 Trilogy Credit Facility
We, through our indirect subsidiary, or Trilogy RER, LLC, were party to an amended loan agreement, or the 2023 Trilogy Credit Agreement, by and among certain subsidiaries of Trilogy OpCo, LLC, Trilogy RER, LLC, and Trilogy Pro Services, LLC; KeyBank; CIT Bank, N.A.; Regions Bank; KeyBanc Capital Markets, Inc.; Regions Capital Markets; Bank of America; The Huntington National Bank; and a syndicate of other banks, as lenders named therein, with respect to a senior secured revolving credit facility that had an aggregate maximum principal amount of $
As of December 31, 2024, our aggregate borrowing capacity under the 2023 Trilogy Credit Facility was $
2025 Trilogy Credit Facility
On October 31, 2025, we, through Trilogy RER, LLC, entered into a loan agreement, or the 2025 Trilogy Credit Agreement, with KeyBank, as lender named therein, with respect to a senior secured revolving credit facility that had an aggregate maximum principal amount of $
The 2025 Trilogy Credit Facility is due to mature on October 31, 2028. At our option, the 2025 Trilogy Credit Facility bears interest at per annum rates equal to (a) Daily Simple SOFR, plus the Applicable Margin for SOFR Rate Loans and (b) for Base Rate Loans, the Applicable Margin plus a fluctuating rate per annum equal to the highest of: (i) Federal Funds Effective Rate in effect on such day plus
As of December 31, 2025, our aggregate borrowing capacity under the 2025 Trilogy Credit Facility was $
9. Derivative Financial Instruments
We use derivative financial instruments to manage interest rate risk associated with variable-rate debt. We recorded such derivative financial instruments in our accompanying consolidated balance sheets as either an asset or a liability, as applicable, measured at fair value.
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, |
|
||||||
Instrument |
|
Notional |
|
|
Index |
|
Interest Rate |
|
Effective Date |
|
Maturity Date |
|
2025 |
|
|
2024 |
|
|||
Swap |
|
$ |
|
|
Daily SOFR |
|
|
02/01/23 |
|
01/19/26 |
|
$ |
( |
) |
|
$ |
|
|||
Swap |
|
$ |
|
|
Daily SOFR |
|
|
08/08/23 |
|
01/19/26 |
|
|
( |
) |
|
|
( |
) |
||
Swap |
|
$ |
|
|
Daily SOFR |
|
|
01/20/26 |
|
01/19/27 |
|
|
( |
) |
|
|
|
|||
Swap |
|
$ |
|
|
Daily SOFR |
|
|
01/20/26 |
|
01/19/27 |
|
|
( |
) |
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
( |
) |
|
$ |
|
||
As of both December 31, 2025 and 2024, none of our derivative financial instruments were designated as hedges. Derivative financial instruments not designated as hedges are not speculative and are used to manage our exposure to interest rate movements, but do not meet the strict hedge accounting requirements. On September 20, 2024, we terminated one interest rate swap that would have matured on June 5, 2025 and had a notional amount of $
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AMERICAN HEALTHCARE REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
termination, which is recorded as loss on the early extinguishment of derivatives and included as an increase to interest expense in our accompanying consolidated statements of operations and comprehensive income (loss). For the years ended December 31, 2025, 2024 and 2023, we recorded a net (loss) gain in the fair value of derivative financial instruments of $(
See Note 13, Fair Value Measurements, for a further discussion of the fair value of our derivative financial instruments.
10. Commitments and Contingencies
Litigation
We are not presently subject to any material litigation nor, to our knowledge, is any material litigation threatened against us, which, if determined unfavorably to us, would have a material adverse effect on our consolidated financial position, results of operations or cash flows.
Environmental Matters
We follow a policy of monitoring our properties for the presence of hazardous or toxic substances. While there can be no assurance that a material environmental liability does not exist at our properties, we are not currently aware of any environmental liability with respect to our properties that would have a material adverse effect on our consolidated financial position, results of operations or cash flows. Further, we are not aware of any material environmental liability or any unasserted claim or assessment with respect to an environmental liability that we believe would require additional disclosure or the recording of a loss contingency.
Other
Our other commitments and contingencies include the usual obligations of real estate owners and operators in the normal course of business, which include calls/puts to sell/acquire properties. In our view, these matters are not expected to have a material adverse effect on our consolidated financial position, results of operations or cash flows.
11. Redeemable Noncontrolling Interests
As of December 31, 2025 and 2024, we, through our direct and indirect subsidiaries, owned a
Prior to April 2024, certain members of Trilogy's management and certain members of an advisory committee to Trilogy's board of directors owned outstanding equity interests of Trilogy. We accounted for such equity interests as redeemable noncontrolling interests or other liabilities in our accompanying consolidated balance sheets. In January 2024, we redeemed equity interests in Trilogy that were accounted for as other liabilities and owned by a member of Trilogy’s advisory committee for $
As of December 31, 2024, we owned, through our operating partnership, approximately
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AMERICAN HEALTHCARE REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
We recorded the carrying amount of redeemable noncontrolling interests at the greater of: (i) the initial carrying amount, increased or decreased for the noncontrolling interests’ share of net income or loss and distributions or (ii) the redemption value.
|
|
Year Ended December 31, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Beginning balance |
|
$ |
|
|
$ |
|
||
Reclassification from equity |
|
|
|
|
|
|
||
Reclassification to equity |
|
|
|
|
|
( |
) |
|
Distributions |
|
|
|
|
|
( |
) |
|
Redemption of redeemable noncontrolling interests |
|
|
|
|
|
( |
) |
|
Adjustment to redemption value |
|
|
( |
) |
|
|
( |
) |
Net loss attributable to redeemable noncontrolling interests |
|
|
( |
) |
|
|
( |
) |
Ending balance |
|
$ |
|
|
$ |
|
||
12. Equity
Preferred Stock
Pursuant to our charter, we are authorized to issue
Common Stock
Pursuant to our charter, as amended, we are authorized to issue
Public Offerings and Listing
On February 9, 2024, we closed the February 2024 Offering and issued
Following the closing of the February 2024 Offering and until August 5, 2024, we presented our Common Stock, Class T common stock and Class I common stock, as separate classes of common stock within our consolidated balance sheets and consolidated statements of equity. Any references to Common Stock in this Annual Report on Form 10-K refer to our NYSE-listed shares of common stock, whereas Class T common stock and Class I common stock refer to our historical non-listed shares of common stock. This applies to all historical periods presented herein. On August 5, 2024, 180 days after the listing of our Common Stock shares on the NYSE, each share of our Class T common stock and Class I common stock automatically, and without any stockholder action, converted into
On September 20, 2024, we closed our follow-on underwritten public offering, or the September 2024 Offering, and issued
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AMERICAN HEALTHCARE REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Holdings” section below for a further discussion of the purchase of such joint venture interest. The underwriting discount and other costs related to the September 2024 Offering were offset against gross proceeds received and included as a component of additional paid-in capital in our accompanying consolidated balance sheet as of December 31, 2024.
ATM Direct Share Issuances
On November 18, 2024, we established an at-the-market, or ATM, equity offering program, or the 2024 ATM Offering, pursuant to which we offered to sell shares of our Common Stock, for a maximum gross sales price of up to $
On August 8, 2025, concurrent with the termination of the 2024 ATM Offering, we established a new ATM equity offering program, or the 2025 ATM Offering, pursuant to which we offered to sell shares of our Common Stock for a maximum gross sales price of up to $
Shares sold through our 2024 ATM Offering and 2025 ATM Offering, or our ATM offering programs, were offered and sold in amounts determined by us from time to time, and are sold in negotiated transactions at market prices prevailing at the time of sale in accordance with Rule 415 under the Securities Act of 1933, as amended.
Forward Sale Agreements
Our ATM offering programs allow us to enter into forward sale agreements which give us the ability to lock in a share price on the sale of Common Stock at or shortly after the time the forward sale agreement becomes effective, while postponing the receipt of proceeds from the sale of shares until a future date. Forward sale agreements generally have a maturity of one to two years. At any time during the term of a forward sale agreement, we are able to settle a forward sale agreement by delivery of physical shares of Common Stock to the forward purchaser or, at our election, subject to certain exceptions, settle in cash or by net share settlement. The forward sale price we expect to receive upon settlement of outstanding forward sale agreements is the initial forward price, net of commissions, established on or shortly after the effective date of the relevant forward sale agreement, subject to adjustments for accrued interest, the forward purchasers’ stock borrowing costs, and certain fixed price reductions for expected dividends on our Common Stock during the term of the forward sale agreement. We evaluated our forward sale agreements in accordance with ASC Topic 815-40 and concluded they meet the conditions to be classified within equity as of December 31, 2025. Shares issuable under a forward sale agreement are reflected in the diluted earnings per share calculations for the applicable periods using the treasury stock method.
During the year ended December 31, 2025, we entered into forward sale agreements pursuant to our ATM equity offering programs with maturities extending through January 16, 2027. For the year ended December 31, 2025, we settled a total of
On November 24, 2025, we closed our additional follow-on public offering, or the November 2025 Offering, for the sale of
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AMERICAN HEALTHCARE REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Noncontrolling Interests in Total Equity
Membership Interest in Trilogy REIT Holdings
Prior to September 20, 2024, we and an indirect, wholly-owned subsidiary of NorthStar Healthcare Income, Inc., or NHI, indirectly owned a
On September 20, 2024, using the net proceeds from the September 2024 Offering, we exercised our option, pursuant to a membership interest purchase agreement, to purchase the
Other Noncontrolling Interests
In connection with our acquisition and operation of Trilogy, profit interest units in Trilogy, or the Profit Interests, were issued to Trilogy Management Services, LLC and independent directors of Trilogy, both unaffiliated third parties that manage or direct the day-to-day operations of Trilogy. The Profit Interests consisted of time-based or performance-based commitments. The time-based Profit Interests were measured at their grant date fair value and vested in increments of
In April 2024, we redeemed all the remaining Profit Interests for cash. See Note 11, Redeemable Noncontrolling Interests, for a further discussion of our redemption of the Profit Interests. For the years ended December 31, 2024 and 2023, we recognized stock compensation expense related to the time-based Profit Interests of $
One of our consolidated subsidiaries issued non-voting preferred shares of beneficial interests to qualified investors for total proceeds of $
As of both December 31, 2025 and 2024, we owned a
As of both December 31, 2025 and 2024, we owned a
As of both December 31, 2025 and 2024, we owned an
As discussed in Note 1, Organization and Description of Business, as of December 31, 2025 and 2024, we, through our direct and indirect subsidiaries, owned a
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AMERICAN HEALTHCARE REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Capital. Some of the limited partnership units outstanding had redemption features outside of our control and were accounted for as redeemable noncontrolling interests presented outside of permanent equity prior to February 9, 2024. As a result of the closing of the February 2024 Offering and the listing of our Common Stock on the NYSE, such redemption features are no longer outside of our control and we reclassified the remaining carrying amount of such redeemable noncontrolling interests as of such date to noncontrolling interests in total equity. See Note 11, Redeemable Noncontrolling Interests, for a further discussion. On August 19, 2024 and October 18, 2024, Platform Healthcare Investor T-II, LLC and Flaherty Trust, respectively, redeemed all of their OP units in exchange for
Equity Compensation Plans
AHR Incentive Plan
Pursuant to the AHR Incentive Plan, our board (with respect to options and restricted shares of common stock granted to independent directors) or our compensation committee (with respect to any other award) may grant options, restricted shares of common stock, stock purchase rights, stock appreciation rights or other awards to our independent directors, officers, employees and consultants. The AHR Incentive Plan terminates on June 15, 2033, and the maximum number of shares of our common stock that may be issued pursuant to such plan is
Restricted common stock
Pursuant to the AHR Incentive Plan, we may grant shares of our restricted common stock, or RSAs, as defined in the AHR Incentive Plan, to our independent directors in connection with their initial election or re-election to our board or in consideration of their past services rendered, as well as to certain executive officers and key employees. RSAs generally have a vesting period between to
Restricted stock units
Pursuant to the AHR Incentive Plan, we may grant to our executive officers performance-based restricted stock units, or PBUs, representing the right to receive shares of our common stock upon vesting. We may also grant to our executive officers and certain employees time-based restricted stock units, or TBUs, representing the right to receive shares of our common stock upon vesting. PBUs and TBUs are collectively referred to as RSUs. RSUs granted to executive officers and employees generally have a vesting period of up to
RSAs and TBUs are valued based on the closing price of our Common Stock on the date of grant, while market-based PBUs are valued on the date of grant using a Monte Carlo valuation model. The amount of such PBUs that will ultimately vest is dependent on our total shareholder return, or TSR, performance relative to a custom TSR peer group consisting of other publicly traded healthcare REITs and will range from
|
|
Year Ended December 31, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Risk-free interest rate |
|
|
% |
|
|
% |
||
Historical volatility |
|
|
% |
|
|
% |
||
Performance period |
|
|
|
|
||||
Dividend yield |
|
|
% |
|
|
% |
||
Fair value per share at date of grant |
|
$ |
|
|
$ |
|
||
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AMERICAN HEALTHCARE REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The total fair value of the RSAs and RSUs granted pursuant to the AHR Incentive Plan during the years ended December 31, 2025, 2024 and 2023 was $
|
|
Number of |
|
|
|
Weighted |
|
|
Number of |
|
|
|
Weighted |
|
||||
Balance — December 31, 2023 |
|
|
|
|
|
$ |
|
|
|
|
|
|
$ |
|
||||
Granted |
|
|
|
|
|
$ |
|
|
|
|
|
|
$ |
|
||||
Vested |
|
|
( |
) |
(1) |
|
$ |
|
|
|
( |
) |
(1) |
|
$ |
|
||
Forfeited/cancelled |
|
|
( |
) |
|
|
$ |
|
|
|
( |
) |
|
|
$ |
|
||
Balance — December 31, 2024 |
|
|
|
|
|
$ |
|
|
|
|
|
|
$ |
|
||||
Granted |
|
|
|
|
|
$ |
|
|
|
|
|
|
$ |
|
||||
Vested |
|
|
( |
) |
(1) |
|
$ |
|
|
|
( |
) |
(1) |
|
$ |
|
||
Forfeited/cancelled |
|
|
— |
|
|
|
$ |
— |
|
|
|
( |
) |
|
|
$ |
|
|
Balance — December 31, 2025 |
|
|
|
|
|
$ |
|
|
|
|
|
|
$ |
|
||||
Employee Stock Purchase Plan
In November 2024, we adopted the 2024 Employee Stock Purchase Plan, or the ESPP, pursuant to which eligible employees may purchase shares of our Common Stock at a purchase price equal to the lesser of
Manager Equity Plan
In June 2025, we adopted the 2025 Manager Equity Plan, or the Manager Plan, to align the incentives of our external third-party RIDEA managers with the overall success of our business by issuing equity-based incentives to such RIDEA managers. Pursuant to the Manager Plan, we may issue shares of our Common Stock to the RIDEA managers, which they may in turn issue to their directors, officers, employees, advisors or consultants. The maximum number of shares of our Common Stock that may be issued pursuant to the Manager Plan is
The total fair value of the RSUs granted pursuant to the Manager Plan during the year ended December 31, 2025 was $
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AMERICAN HEALTHCARE REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
13. Fair Value Measurements
Assets and Liabilities Reported at Fair Value
The table below presents our assets and liabilities measured at fair value on a recurring basis as of December 31, 2025, aggregated by the level in the fair value hierarchy within which those measurements fall (in thousands):
|
|
Quoted Prices in |
|
|
Significant |
|
|
Significant |
|
|
Total |
|
||||
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Derivative financial instruments |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||
Total liabilities at fair value |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||
The table below presents our assets and liabilities measured at fair value on a recurring basis as of December 31, 2024, aggregated by the level in the fair value hierarchy within which those measurements fall (in thousands):
|
|
Quoted Prices in |
|
|
Significant |
|
|
Significant |
|
|
Total |
|
||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Derivative financial instrument |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Total assets at fair value |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Derivative financial instrument |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||
Total liabilities at fair value |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||
There were no transfers into and out of fair value measurement levels during the years ended December 31, 2025 and 2024.
Derivative Financial Instruments
We entered into interest rate swaps to manage interest rate risk associated with variable-rate debt. The valuation of these instruments was determined using widely accepted valuation techniques including a discounted cash flow analysis on the expected cash flows of each derivative. Such valuation reflected the contractual terms of the derivatives, including the period to maturity, and used observable market-based inputs, including interest rate curves, as well as option volatility. The fair values of our interest rate swaps were determined by netting the discounted future fixed cash payments and the discounted expected variable cash receipts. The variable cash receipts were based on an expectation of future interest rates derived from observable market interest rate curves.
We incorporated credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of our derivative contracts for the effect of nonperformance risk, we considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts and guarantees.
Although we determined that the majority of the inputs used to value our derivative financial instruments fell within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with this instrument utilized Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by us and our counterparty. However, as of December 31, 2025 and 2024, we assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our derivative positions and determined that the credit valuation adjustments were not significant to the overall valuation of our derivatives. As a result, we determined that our derivative valuations in their entirety were classified in Level 2 of the fair value hierarchy.
Financial Instruments Disclosed at Fair Value
Our accompanying consolidated balance sheets include the following financial instruments: debt security investment, cash and cash equivalents, restricted cash, accounts and other receivables, accounts payable and accrued liabilities, mortgage loans payable and borrowings under our lines of credit and term loan.
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AMERICAN HEALTHCARE REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
We consider the carrying values of cash and cash equivalents, restricted cash, accounts and other receivables and accounts payable and accrued liabilities to approximate the fair value for these financial instruments based upon an evaluation of the underlying characteristics and market data, in light of the short period of time between origination of the instruments and their expected realization. The fair values of such financial instruments are classified in Level 2 of the fair value hierarchy.
The fair value of our debt security investment is estimated using a discounted cash flow analysis using interest rates available to us for investments with similar terms and maturities. The fair values of our mortgage loans payable and our lines of credit and term loan are estimated using discounted cash flow analyses using borrowing rates available to us for debt instruments with similar terms and maturities. We have determined that the valuations of our debt security investment, mortgage loans payable and lines of credit and term loan are classified in Level 2 within the fair value hierarchy.
|
|
December 31, |
|
|||||||||||||
|
|
2025 |
|
|
2024 |
|
||||||||||
|
|
Carrying |
|
|
Fair |
|
|
Carrying |
|
|
Fair |
|
||||
Financial Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Debt security investment |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Financial Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Mortgage loans payable |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Lines of credit and term loan |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
14. Income Taxes
As a REIT, we generally will not be subject to U.S. federal income tax on taxable income that we distribute to our stockholders. We have elected to treat certain of our consolidated subsidiaries as TRS pursuant to the Code. TRS may participate in services that would otherwise be considered impermissible for REITs and are subject to federal and state income tax at regular corporate tax rates.
The components of income or loss before taxes for the periods presented below were as follows (in thousands):
|
|
Year Ended December 31, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Domestic |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
Foreign |
|
|
|
|
|
|
|
|
( |
) |
||
Income (loss) before income taxes |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
The components of income tax benefit or expense for the periods presented below were as follows (in thousands):
|
|
Year Ended December 31, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Federal deferred |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
State deferred |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
Federal current |
|
|
|
|
|
|
|
|
|
|||
State current |
|
|
|
|
|
|
|
|
( |
) |
||
Foreign current |
|
|
|
|
|
|
|
|
|
|||
Valuation allowances |
|
|
( |
) |
|
|
|
|
|
|
||
Total income tax (benefit) expense |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
||
Current Income Tax
Federal and state income taxes are generally a function of the level of income recognized by our TRS. Foreign income taxes are generally a function of our income on our real estate located in the UK and Isle of Man.
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AMERICAN HEALTHCARE REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Tax Rate Reconciliation
A reconciliation between the amount of reported income tax benefit and the amount computed by multiplying the income from operations by the applicable statutory federal income tax rate presented below were as follows (dollars in thousands):
|
|
Year Ended December 31, 2025 |
||||
|
|
Percent |
|
|
Amount |
|
Consolidated pretax book income |
|
% |
|
$ |
||
Tax at statutory rate on earnings not subject to |
|
( |
|
|
|
( |
State income tax net of federal benefit (1) |
|
|
|
|
||
Foreign tax effects — UK |
|
|
|
|
||
Foreign tax effects — Isle of Man |
|
|
|
|
||
Tax effect of state rate change |
|
( |
|
|
|
( |
Change in valuation allowance |
|
( |
|
|
|
( |
Nontaxable or nondeductible items |
|
|
|
|
||
Deferred tax true up |
|
( |
|
|
|
( |
Other — Misc |
|
|
|
|
||
Total provision |
|
( |
% |
|
$ |
( |
Income Tax Paid
The following table reflects income taxes paid, net of refunds (in thousands):
|
|
Year Ended December 31, 2025 |
|
|
Federal |
|
$ |
|
|
State |
|
|
|
|
Foreign |
|
|
|
|
Total |
|
$ |
|
|
Income taxes paid are further disaggregated by jurisdiction on the basis of a quantitative threshold of five percent of total income taxes paid, net of refunds, in the following jurisdictions (in thousands):
|
|
Year Ended December 31, 2025 |
|
|
State |
|
|
|
|
Texas |
|
$ |
|
|
|
|
|
|
|
Foreign |
|
|
|
|
United Kingdom |
|
$ |
|
|
Isle of Man |
|
$ |
|
|
Deferred Taxes
Deferred income tax is generally a function of the period’s temporary differences (primarily basis differences between tax and financial reporting for real estate assets and equity investments) and generation of tax net operating loss, or NOL, that may be realized in future periods depending on sufficient taxable income.
We recognize the effects of an uncertain tax position on the financial statements, when it is more likely than not, based on the technical merits of the tax position, that such a position will be sustained upon examination by the relevant tax authorities. If the tax benefit meets the “more likely than not” threshold, the measurement of the tax benefit will be based on our estimate of the ultimate tax benefit to be sustained if audited by the taxing authority. As of both December 31, 2025 and 2024, we did not have any tax benefits or liabilities for uncertain tax positions that we believe should be recognized in our accompanying consolidated financial statements.
103
Table of Contents
AMERICAN HEALTHCARE REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
We assess the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets. A valuation allowance is established if we believe it is more likely than not that all or a portion of the deferred tax assets are not realizable. As of December 31, 2025, our valuation allowance partially reserved our net deferred tax assets, and as of December 31, 2024, our valuation allowance fully reserved our net deferred tax assets due to historical losses and inherent uncertainty of future income. As of December 31, 2025, we determined that there is sufficient positive evidence, including at least
Any increases or decreases to the deferred income tax assets or liabilities are reflected in income tax (expense) benefit in our accompanying consolidated statements of operations and comprehensive income (loss).
|
|
December 31, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Deferred income tax assets: |
|
|
|
|
|
|
||
Fixed assets and intangibles |
|
$ |
|
|
$ |
|
||
Expense accruals and other |
|
|
|
|
|
|
||
Net operating loss and other carry forwards |
|
|
|
|
|
|
||
Reserves and accruals |
|
|
|
|
|
|
||
Allowances for accounts receivable |
|
|
|
|
|
|
||
Investments in unconsolidated entities |
|
|
|
|
|
|
||
Total deferred income tax assets |
|
$ |
|
|
$ |
|
||
Deferred income tax liabilities: |
|
|
|
|
|
|
||
Fixed assets and intangibles |
|
$ |
( |
) |
|
$ |
( |
) |
Other — temporary differences |
|
|
( |
) |
|
|
( |
) |
Total deferred income tax liabilities |
|
$ |
( |
) |
|
$ |
( |
) |
Net deferred income tax assets before valuation allowance |
|
$ |
|
|
$ |
|
||
Valuation allowances |
|
|
( |
) |
|
|
( |
) |
Net deferred income tax assets |
|
$ |
|
|
$ |
|
||
As of December 31, 2025 and 2024, we had a NOL carryforward of $
Tax Treatment of Distributions (Unaudited)
For U.S. federal income tax purposes, distributions to stockholders are characterized as ordinary income, capital gain distributions or nontaxable distributions. Nontaxable distributions will reduce United States stockholders’ basis (but not below zero) in their shares.
|
|
Year Ended December 31, |
|
|||||||||||||||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||||||||||||||
Ordinary income |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
||||||
Capital gain |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Return of capital |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
||||||
Amounts listed above do not include distributions paid on nonvested RSAs and RSUs, which have been separately reported.
104
Table of Contents
AMERICAN HEALTHCARE REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
15. Leases
Lessor
We have operating leases with tenants that expire at various dates through 2050. For the years ended December 31, 2025, 2024 and 2023, we recognized $
As of December 31, 2025, the following table sets forth the undiscounted cash flows for future minimum base rents due under operating leases for each of the next five years ending December 31 and thereafter for properties that we wholly own (in thousands):
Year |
|
Amount |
|
|
2026 |
|
$ |
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
2029 |
|
|
|
|
2030 |
|
|
|
|
Thereafter |
|
|
|
|
Total |
|
$ |
|
|
Lessee
We lease certain land, buildings, campuses, office equipment and automobiles. We have lease agreements with lease and non-lease components, which are generally accounted for separately. Most leases include one or more options to renew, with renewal terms that generally can extend at various dates through 2107, excluding extension options. The exercise of lease renewal options is at our sole discretion. Certain leases also include options to purchase the leased property.
The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. Certain of our lease agreements include rental payments that are adjusted periodically based on the United States Bureau of Labor Statistics’ Consumer Price Index and may also include other variable lease costs (i.e., common area maintenance, property taxes and insurance). Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.
The components of lease costs were as follows (in thousands):
|
|
|
|
Year Ended December 31, |
|
|||||||||
Lease Cost |
|
Classification |
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Operating lease cost(1) |
|
Property operating expenses, rental |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Finance lease cost: |
|
|
|
|
|
|
|
|
|
|
|
|||
Amortization of leased assets |
|
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
|||
Interest on lease liabilities |
|
Interest expense |
|
|
|
|
|
|
|
|
|
|||
Sublease income |
|
Resident fees and services revenue or other |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Total lease cost |
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|||
Additional information related to our leases for the periods presented below was as follows (dollars in thousands):
|
|
December 31, |
|
|||||||||
Lease Term and Discount Rate |
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Weighted average remaining lease term (in years): |
|
|
|
|
|
|
|
|
|
|||
Operating leases |
|
|
|
|
|
|
|
|
|
|||
Finance leases |
|
|
|
|
|
|
|
|
|
|||
Weighted average discount rate: |
|
|
|
|
|
|
|
|
|
|||
Operating leases |
|
|
% |
|
|
% |
|
|
% |
|||
Finance leases |
|
|
% |
|
|
% |
|
|
% |
|||
105
Table of Contents
AMERICAN HEALTHCARE REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
|
|
Year Ended December 31, |
|
|||||||||
Supplemental Disclosure of Cash Flows Information |
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Operating cash outflows related to finance leases |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Financing cash outflows related to finance leases |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Right-of-use assets obtained in exchange for operating lease liabilities |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Operating Leases
As of December 31, 2025, the following table sets forth the undiscounted cash flows of our scheduled obligations for future minimum payments for each of the next five years ending December 31 and thereafter, as well as the reconciliation of those cash flows to operating lease liabilities on our accompanying consolidated balance sheet (in thousands):
Year |
|
Amount |
|
|
2026 |
|
$ |
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
2029 |
|
|
|
|
2030 |
|
|
|
|
Thereafter |
|
|
|
|
Total undiscounted operating lease payments |
|
|
|
|
Less: interest |
|
|
( |
) |
Present value of operating lease liabilities |
|
$ |
|
|
Finance Leases and Financing Obligations
As of December 31, 2025, the following table sets forth the undiscounted cash flows of our scheduled obligations for future minimum payments for each of the next five years ending December 31 and thereafter, as well as a reconciliation of those cash flows to finance lease liabilities and financing obligations (in thousands):
Year |
|
Amount |
|
|
2026 |
|
$ |
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
2029 |
|
|
|
|
2030 |
|
|
|
|
Thereafter |
|
|
|
|
Total undiscounted payments |
|
|
|
|
Less: interest |
|
|
( |
) |
and financing obligations |
|
$ |
|
|
16. Segment Reporting
Our chief operating decision maker, or CODM, who is our , evaluates our business and makes resource allocations based on four operating segments: ISHC, OM, SHOP and triple-net leased properties. These operating segments are also our reportable segments.
Our ISHC each provide a range of independent living, assisted living, memory care, skilled nursing services and certain ancillary businesses that are owned and operated utilizing a RIDEA structure. Our OM buildings are typically leased to multiple tenants under separate leases, thus requiring active management and responsibility for many of the associated operating expenses (much of which are, or can effectively be, passed through to the tenants). Our SHOP segment includes senior housing, which may provide assisted living care, independent living, memory care or skilled nursing services, that are owned and operated utilizing a RIDEA structure. Our triple-net leased properties segment includes senior housing, skilled nursing facilities and hospital investments, which are single-tenant properties for which we lease the properties to unaffiliated tenants under triple-net and generally master leases that transfer the obligation for all property operating costs (including maintenance, repairs, taxes, insurance and capital expenditures) to the tenant. In addition, our triple-net leased properties segment includes our debt security investment.
106
Table of Contents
AMERICAN HEALTHCARE REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Interest expense, depreciation and amortization and other expenses not attributable to individual properties are not allocated to individual segments for purposes of assessing segment performance. Non-segment assets primarily consist of corporate assets, including cash and cash equivalents, deferred financing costs, operating lease right-of-use asset and other assets not attributable to individual properties.
Summary information for our reportable segments, including a summary of segment operating expenses, during the years ended December 31, 2025, 2024 and 2023 was as follows (in thousands):
|
|
ISHC |
|
|
SHOP |
|
|
OM |
|
|
Triple-Net |
|
|
Year Ended |
|
|||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Resident fees and services |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Real estate revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Total revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Less(1): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Compensation expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Controllable expenses(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Non-controllable expenses(3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Facility rental expense(4) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Other segment items(5) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Segment net operating income |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
General and administrative |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|||||
Transaction, transition and restructuring costs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest expense, net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
||||
Loss in fair value of derivative financial instruments |
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
||||||
Loss on dispositions of real estate investments, net |
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
||||||
Impairment of real estate investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
||||
Loss from unconsolidated entities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
||||
Gain on re-measurement of previously held equity interest |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Foreign currency gain |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Other income, net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Income before income taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Income tax benefit |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net income |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|||||
107
Table of Contents
AMERICAN HEALTHCARE REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
|
|
ISHC |
|
|
SHOP |
|
|
OM |
|
|
Triple-Net |
|
|
Year Ended |
|
|||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Resident fees and services |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Real estate revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Total revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Less(1): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Compensation expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Controllable expenses(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Non-controllable expenses(3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Facility rental expense(4) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Other segment items(5) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Segment net operating income |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
General and administrative |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|||||
Transaction, transition and restructuring costs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest expense, net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
||||
Gain in fair value of derivative financial instruments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Gain on dispositions of real estate investments, net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Impairment of real estate investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
||||
Loss from unconsolidated entities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
||||
Foreign currency loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
||||
Other income, net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Loss before income taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
||||
Income tax expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
||||
Net loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
( |
) |
||||
108
Table of Contents
AMERICAN HEALTHCARE REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
|
|
ISHC |
|
|
SHOP |
|
|
OM |
|
|
Triple-Net |
|
|
Year Ended |
|
|||||
Revenues and grant income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Resident fees and services |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Real estate revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Grant income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Total revenues and grant income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Less(1): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Compensation expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Controllable expenses(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Non-controllable expenses(3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Facility rental expense(4) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Other segment items(5) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Segment net operating income |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
General and administrative |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|||||
Transaction, transition and restructuring costs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest expense, net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
||||
Loss in fair value of derivative financial instruments |
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
||||||
Gain on dispositions of real estate investments, net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Impairment of real estate investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
||||
Impairment of intangible assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
||||
Loss from unconsolidated entities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
||||
Gain on re-measurement of previously held equity interest |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Foreign currency gain |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Other income, net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Loss before income taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
||||
Income tax expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
||||
Net loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
( |
) |
||||
|
|
December 31, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
ISHC |
|
$ |
|
|
$ |
|
||
SHOP |
|
|
|
|
|
|
||
OM |
|
|
|
|
|
|
||
Triple-net leased properties |
|
|
|
|
|
|
||
Other |
|
|
|
|
|
|
||
Total assets |
|
$ |
|
|
$ |
|
||
109
Table of Contents
AMERICAN HEALTHCARE REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
As of both December 31, 2025 and 2024, goodwill of $
Our portfolio of properties and other investments are located in the United States, the UK and Isle of Man. Revenues and grant income and assets are attributed to the country in which the property is physically located.
|
|
Year Ended December 31, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Revenues and grant income: |
|
|
|
|
|
|
|
|
|
|||
United States |
|
$ |
|
|
$ |
|
|
$ |
|
|||
International |
|
|
|
|
|
|
|
|
|
|||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|||
The following is a summary of real estate investments, net by geographic regions as of December 31, 2025 and 2024 (in thousands):
|
|
December 31, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Real estate investments, net: |
|
|
|
|
|
|
||
United States |
|
$ |
|
|
$ |
|
||
International |
|
|
|
|
|
|
||
Total |
|
$ |
|
|
$ |
|
||
17. Concentration of Credit Risk
Financial instruments that potentially subject us to a concentration of credit risk are primarily our debt security investment, cash and cash equivalents, restricted cash and accounts and other receivables. We are exposed to credit risk with respect to our debt security investment, but we believe collection of the outstanding amount is probable. Cash and cash equivalents are generally invested in investment-grade, short-term instruments with a maturity of three months or less when purchased. We have cash and cash equivalents in financial institutions that are insured by the Federal Deposit Insurance Corporation, or FDIC. As of December 31, 2025 and 2024, we had cash and cash equivalents in excess of FDIC insured limits. We believe this risk is not significant. Concentration of credit risk with respect to accounts receivable from tenants and residents is limited. We perform credit evaluations of prospective tenants and security deposits are obtained at the time of property acquisition and upon lease execution.
Based on leases as of December 31, 2025, properties in
Based on leases in effect as of December 31, 2025, our ISHC, OM, SHOP and triple-net leased properties accounted for
110
Table of Contents
AMERICAN HEALTHCARE REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
18. Earnings Per Share
The following table presents the amounts used in computing our basic and diluted earnings per share (in thousands, except share and per share amounts):
|
|
Year Ended December 31, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Numerator: |
|
|
|
|
|
|
|
|
|
|||
Net income (loss) attributable to controlling interest |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
Adjustment for net income (loss) attributable to |
|
|
( |
) |
|
|
|
|
|
|
||
Net income (loss) attributable to controlling interest |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
Denominator: |
|
|
|
|
|
|
|
|
|
|||
Denominator for basic earnings per share — |
|
|
|
|
|
|
|
|
|
|||
Effect of dilutive securities: |
|
|
|
|
|
|
|
|
|
|||
Nonvested restricted common stock and stock units |
|
|
|
|
|
|
|
|
|
|||
ESPP |
|
|
|
|
|
|
|
|
|
|||
Denominator for diluted earnings per share — adjusted |
|
|
|
|
|
|
|
|
|
|||
Basic earnings per share: |
|
|
|
|
|
|
|
|
|
|||
Net income (loss) attributable to controlling interest |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
Diluted earnings per share: |
|
|
|
|
|
|
|
|
|
|||
Net income (loss) attributable to controlling interest |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
Basic earnings (loss) per share for all periods presented are computed by dividing net income (loss) applicable to Common Stock by the weighted average number of shares of our Common Stock outstanding during the period. Diluted earnings (loss) per share are computed based on the weighted average number of shares of our Common Stock and all dilutive securities, if any. TBUs, RSAs, limited OP units, as well as Common Stock issued pursuant to the ESPP and forward sale agreements, give rise to potentially dilutive shares of our Common Stock.
The following securities were excluded from the computation of diluted earnings (loss) per share because such securities were anti-dilutive during the periods presented below:
|
|
Year Ended December 31, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Nonvested TBUs |
|
|
|
|
|
|
|
|
|
|||
Nonvested RSAs |
|
|
|
|
|
|
|
|
|
|||
OP units |
|
|
|
|
|
|
|
|
|
|||
Forward sale agreements |
|
|
|
|
|
|
|
|
|
|||
For the years ended December 31, 2025, 2024 and 2023,
111
Table of Contents
AMERICAN HEALTHCARE REIT, INC.
SCHEDULE III — REAL ESTATE AND
ACCUMULATED DEPRECIATION
December 31, 2025
(in thousands)
|
|
|
|
|
|
|
Initial Cost to Company |
|
|
|
|
|
Gross Amount of Which Carried at Close of Period(e) |
|
|
|
|
|
||||||||||||||||||||
Description(a) |
|
|
|
Encumbrances |
|
|
Land and |
|
|
Buildings and |
|
|
Cost |
|
|
Land and |
|
|
Buildings and |
|
|
Total(d) |
|
|
Accumulated |
|
|
Date of |
|
Date |
||||||||
Integrated Senior Health Campuses (ISHC) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Homewood Health Campus |
|
Lebanon, IN |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
2000 |
|
12/01/15 |
|||||||
Ashford Place Health Campus |
|
Shelbyville, IN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2004 |
|
12/01/15 |
|||||||
Mill Pond Health Campus |
|
Greencastle, IN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2005 |
|
12/01/15 |
|||||||
St. Andrews Health Campus |
|
Batesville, IN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2005 |
|
12/01/15 |
|||||||
Hampton Oaks Health Campus |
|
Scottsburg, IN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2006 |
|
12/01/15 |
|||||||
Forest Park Health Campus |
|
Richmond, IN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2007 |
|
12/01/15 |
|||||||
The Maples at Waterford |
|
Goshen, IN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2006 |
|
12/01/15 |
|||||||
Morrison Woods Health Campus |
|
Muncie, IN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2008/2022 |
|
12/01/15, 09/14/16 |
|||||||
Woodbridge Health Campus |
|
Logansport, IN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2003 |
|
12/01/15 |
|||||||
Bridgepointe Health Campus |
|
Vincennes, IN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2002/2022 |
|
12/01/15 |
|||||||
Greenleaf Living Center |
|
Elkhart, IN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2000 |
|
12/01/15 |
|||||||
The Meadows of Kalida Health |
|
Kalida, OH |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2007 |
|
12/01/15 |
|||||||
The Heritage |
|
Findlay, OH |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1975 |
|
12/01/15 |
|||||||
Genoa Retirement Village |
|
Genoa, OH |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1985 |
|
12/01/15 |
|||||||
Waterford Crossing |
|
Goshen, IN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2004 |
|
12/01/15 |
|||||||
St. Elizabeth Healthcare |
|
Delphi, IN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1986 |
|
12/01/15 |
|||||||
Cumberland Pointe |
|
West Lafayette, IN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1980 |
|
12/01/15 |
|||||||
Franciscan Healthcare Center |
|
Louisville, KY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1975 |
|
12/01/15 |
|||||||
Blair Ridge Health Campus |
|
Peru, IN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2001 |
|
12/01/15 |
|||||||
Glen Oaks Health Campus |
|
New Castle, IN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2011 |
|
12/01/15 |
|||||||
Covered Bridge Health Campus |
|
Seymour, IN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2002 |
|
12/01/15 |
|||||||
Stonebridge Health Campus |
|
Bedford, IN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2004 |
|
12/01/15 |
|||||||
RiverOaks Health Campus |
|
Princeton, IN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2004 |
|
12/01/15 |
|||||||
Park Terrace Health Campus |
|
Louisville, KY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1977 |
|
12/01/15 |
|||||||
Cobblestone Crossing |
|
Terre Haute, IN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2008 |
|
12/01/15 |
|||||||
Creasy Springs Health Campus |
|
Lafayette, IN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2010 |
|
12/01/15 |
|||||||
Avalon Springs Health Campus |
|
Valparaiso, IN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2012 |
|
12/01/15 |
|||||||
Prairie Lakes Health Campus |
|
Noblesville, IN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2010 |
|
12/01/15 |
|||||||
RidgeWood Health Campus |
|
Lawrenceburg, IN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2009 |
|
12/01/15 |
|||||||
Westport Place Health Campus |
|
Louisville, KY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2011 |
|
12/01/15 |
|||||||
Amber Manor Care Center |
|
Petersburg, IN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1990 |
|
12/01/15 |
|||||||
The Meadows of Leipsic Health |
|
Leipsic, OH |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1986 |
|
12/01/15 |
|||||||
Springview Manor |
|
Lima, OH |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1978 |
|
12/01/15 |
|||||||
112
Table of Contents
AMERICAN HEALTHCARE REIT, INC.
SCHEDULE III — REAL ESTATE AND
ACCUMULATED DEPRECIATION — (Continued)
December 31, 2025
(in thousands)
|
|
|
|
|
|
|
Initial Cost to Company |
|
|
|
|
|
Gross Amount of Which Carried at Close of Period(e) |
|
|
|
|
|
||||||||||||||||||||
Description(a) |
|
|
|
Encumbrances |
|
|
Land and |
|
|
Buildings and |
|
|
Cost |
|
|
Land and |
|
|
Buildings and |
|
|
Total(d) |
|
|
Accumulated |
|
|
Date of |
|
Date |
||||||||
Willows at Bellevue |
|
Bellevue, OH |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
2008 |
|
12/01/15 |
|||||||
Briar Hill Health Campus |
|
North Baltimore, OH |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1977 |
|
12/01/15 |
|||||||
Cypress Pointe Health Campus |
|
Englewood, OH |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2010 |
|
12/01/15 |
|||||||
The Oaks at NorthPointe Woods |
|
Battle Creek, MI |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2008 |
|
12/01/15 |
|||||||
Westlake Health Campus |
|
Commerce, MI |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2011 |
|
12/01/15 |
|||||||
Springhurst Health Campus |
|
Greenfield, IN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2007 |
|
12/01/15 and 05/16/17 |
|||||||
Glen Ridge Health Campus |
|
Louisville, KY |
|
|
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|
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|
|
|
|
|
|
|
( |
) |
|
2006 |
|
12/01/15 |
|||||||
St. Mary Healthcare |
|
Lafayette, IN |
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
( |
) |
|
1969 |
|
12/01/15 |
|||||||
The Oaks at Woodfield |
|
Grand Blanc, MI |
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
( |
) |
|
2012 |
|
12/01/15 |
|||||||
Stonegate Health Campus |
|
Lapeer, MI |
|
|
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|
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|
|
|
|
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|
|
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|
|
|
( |
) |
|
2012 |
|
12/01/15 |
|||||||
Senior Living at Forest Ridge |
|
New Castle, IN |
|
|
|
|
|
|
|
|
|
|
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|
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|
|
|
|
|
|
|
|
|
( |
) |
|
2005 |
|
12/01/15 |
|||||||
River Terrace Health Campus |
|
Madison, IN |
|
|
|
|
|
|
|
|
|
|
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|
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|
|
|
|
|
|
|
( |
) |
|
2016 |
|
03/28/16 |
|||||||
St. Charles Health Campus |
|
Jasper, IN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2000 |
|
06/24/16 and 06/30/16 |
|||||||
Bethany Pointe Health Campus |
|
Anderson, IN |
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
( |
) |
|
1999 |
|
06/30/16 |
|||||||
River Pointe Health Campus |
|
Evansville, IN |
|
|
|
|
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|
|
|
|
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|
|
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|
|
|
|
|
|
|
|
|
( |
) |
|
1999 |
|
06/30/16 |
|||||||
Waterford Place Health Campus |
|
Kokomo, IN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2000/2022 |
|
06/30/16 |
|||||||
Autumn Woods Health Campus |
|
New Albany, IN |
|
|
|
|
|
|
|
|
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|
|
|
|
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|
|
|
|
|
|
|
|
|
( |
) |
|
2000 |
|
06/30/16 |
|||||||
Oakwood Health Campus |
|
Tell City, IN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2000 |
|
06/30/16 |
|||||||
Cedar Ridge Health Campus |
|
Cynthiana, KY |
|
|
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|
|
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|
|
|
( |
) |
|
2005 |
|
06/30/16 |
|||||||
Aspen Place Health Campus |
|
Greensburg, IN |
|
|
|
|
|
|
|
|
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|
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|
|
|
|
|
|
|
|
|
( |
) |
|
2012 |
|
08/16/16 |
|||||||
The Willows at East Lansing |
|
East Lansing, MI |
|
|
|
|
|
|
|
|
|
|
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|
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|
|
|
|
|
|
|
( |
) |
|
2014 |
|
08/16/16 |
|||||||
The Willows at Howell |
|
Howell, MI |
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
( |
) |
|
2015 |
|
08/16/16 |
|||||||
The Willows at Okemos |
|
Okemos, MI |
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
( |
) |
|
2014 |
|
08/16/16 |
|||||||
Shelby Crossing Health Campus |
|
Macomb, MI |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2013 |
|
08/16/16 |
|||||||
The Oaks at Bethesda |
|
Zanesville, OH |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2013 |
|
08/16/16 |
|||||||
White Oak Health Campus |
|
Monticello, IN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2010 |
|
09/23/16 and 07/30/20 |
|||||||
Woodmont Health Campus |
|
Boonville, IN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2000 |
|
02/01/17 |
|||||||
Silver Oaks Health Campus |
|
Columbus, IN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2001 |
|
02/01/17 |
|||||||
Thornton Terrace Health Campus |
|
Hanover, IN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2003 |
|
02/01/17 |
|||||||
113
Table of Contents
AMERICAN HEALTHCARE REIT, INC.
SCHEDULE III — REAL ESTATE AND
ACCUMULATED DEPRECIATION — (Continued)
December 31, 2025
(in thousands)
|
|
|
|
|
|
|
Initial Cost to Company |
|
|
|
|
|
Gross Amount of Which Carried at Close of Period(e) |
|
|
|
|
|
||||||||||||||||||||
Description(a) |
|
|
|
Encumbrances |
|
|
Land and |
|
|
Buildings and |
|
|
Cost |
|
|
Land and |
|
|
Buildings and |
|
|
Total(d) |
|
|
Accumulated |
|
|
Date of |
|
Date |
||||||||
The Willows at Hamburg |
|
Lexington, KY |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
2012 |
|
02/01/17 |
|||||||
The Willows at Willard |
|
Willard, OH |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2012 |
|
02/01/17 |
|||||||
Westlake Health Campus — |
|
Commerce, MI |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2017 |
|
11/17/17 |
|||||||
Orchard Grove Health Campus |
|
Romeo, MI |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2016 |
|
07/20/18 and 11/30/17 |
|||||||
The Lakes at Monclova |
|
Monclova, OH |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2013 |
|
12/01/17 |
|||||||
The Meadows of Ottawa |
|
Ottawa, OH |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2014 |
|
12/15/17 |
|||||||
Valley View Healthcare Center |
|
Fremont, OH |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2017 |
|
07/20/18 |
|||||||
Novi Lakes Health Campus |
|
Novi, MI |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2016 |
|
07/20/18 |
|||||||
The Willows at Fritz Farm |
|
Lexington, KY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2017 |
|
07/20/18 |
|||||||
Paddock Springs |
|
Warsaw, IN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2019 |
|
02/14/19 |
|||||||
Harrison Springs Health Campus |
|
Corydon, IN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2016/2022 |
|
09/05/19 |
|||||||
The Cloister at Silvercrest |
|
New Albany, IN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1940 |
|
10/01/19 |
|||||||
Scenic Hills at the Monastery |
|
Ferdinand, IN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2019 |
|
11/19/19 |
|||||||
Oaks at Byron Center |
|
Byron Center, MI |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2020 |
|
07/08/20 |
|||||||
Forest Springs Health Campus |
|
Louisville, KY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2015 |
|
07/30/20 |
|||||||
Taylor Springs Health Campus |
|
Gahanna, OH |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2020 |
|
11/13/20 |
|||||||
Gateway Springs Health Campus |
|
Hamilton, OH |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2020 |
|
12/28/20 |
|||||||
Orchard Pointe Health Campus |
|
Kendallville, IN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2016 |
|
01/19/21 |
|||||||
The Meadows of Delphos |
|
Delphos, OH |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2018 |
|
01/19/21 |
|||||||
The Springs of Lima |
|
Lima, OH |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2018 |
|
01/19/21 |
|||||||
Wooded Glen |
|
Springfield, OH |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2018 |
|
01/19/21 |
|||||||
The Lakes of Sylvania |
|
Sylvania, OH |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2017 |
|
01/19/21 |
|||||||
The Glen |
|
Union Township, OH |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2018 |
|
01/19/21 |
|||||||
The Oaks of Belmont |
|
Grand Rapids, MI |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2021 |
|
03/13/21 |
|||||||
Harrison Trial Health Campus |
|
Harrison, OH |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2021 |
|
04/28/21 |
|||||||
Cedar Creek Health Campus |
|
Lowell, IN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2014 |
|
07/07/21 |
|||||||
The Willows at Springhurst |
|
Louisville, KY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1979 |
|
01/01/22 |
|||||||
|
|
Louisville, KY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1979 |
|
01/01/22 |
|||||||
The Willows at Harrodsburg |
|
Harrodsburg, KY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2018 |
|
05/20/22 |
|||||||
North River Health Campus |
|
Evansville, IN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2017 |
|
05/20/22 |
|||||||
The Springs at Stony Brook |
|
Louisville, KY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2018 |
|
05/20/22 |
|||||||
114
Table of Contents
AMERICAN HEALTHCARE REIT, INC.
SCHEDULE III — REAL ESTATE AND
ACCUMULATED DEPRECIATION — (Continued)
December 31, 2025
(in thousands)
|
|
|
|
|
|
|
Initial Cost to Company |
|
|
|
|
|
Gross Amount of Which Carried at Close of Period(e) |
|
|
|
|
|
||||||||||||||||||||
Description(a) |
|
|
|
Encumbrances |
|
|
Land and |
|
|
Buildings and |
|
|
Cost |
|
|
Land and |
|
|
Buildings and |
|
|
Total(d) |
|
|
Accumulated |
|
|
Date of |
|
Date |
||||||||
Pickerington Health Campus |
|
Pickerington, OH |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
2019 |
|
05/20/22 |
|||||||
Mt. Washington Development |
|
Mt. Washington, KY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2020 |
|
05/20/22 |
|||||||
Silvercrest Health Center |
|
New Albany, IN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2013 |
|
08/01/22 |
|||||||
The Springs of Mooresville |
|
Mooresville, IN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2016 |
|
08/01/22 |
|||||||
Hearthstone Health Campus |
|
Bloomington, IN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2014 |
|
08/01/22 |
|||||||
The Legacy at English Station |
|
Louisville, KY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2016 |
|
02/15/23 |
|||||||
The Villages at Oak Ridge |
|
Washington, IN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2015 |
|
07/13/23 |
|||||||
Smith's Mill Health Campus |
|
New Albany, OH |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2019 |
|
07/13/23 |
|||||||
Oakwood Health Center Villas |
|
Tell City, IN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2013 |
|
07/13/23 |
|||||||
The Willows at Tiffin |
|
Tiffin, OH |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2019 |
|
04/17/24 |
|||||||
The Springs at Oldham Reserve |
|
La Grange, KY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2023 |
|
04/22/24 |
|||||||
Vienna Springs Health Campus |
|
Miami Township, OH |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2021 |
|
04/17/24 |
|||||||
Trilogy Real Estate Bowling Green |
|
Bowling Green, OH |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2024 |
|
02/01/24 |
|||||||
West River Health Campus |
|
Evansville, IN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1999 |
|
02/26/25 |
|||||||
Oaks at Jamestown |
|
Hudsonville, MI |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2024 |
|
07/01/25 |
|||||||
Harbor Terrace Senior Living |
|
Muskegon, MI |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2024 |
|
07/01/25 |
|||||||
Norwich Springs Health Campus |
|
Hilliard, OH |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2021 |
|
07/01/25 |
|||||||
The Springs at Wyandot Trail |
|
Lancaster, OH |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2024 |
|
07/01/25 |
|||||||
Liberty Station Health Campus |
|
Liberty Township, OH |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2023 |
|
07/01/25 |
|||||||
Cooper Trail Senior Living |
|
Bardstown, KY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2020 |
|
07/16/25 |
|||||||
Walker's Trail Senior Living |
|
Danville, KY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2021 |
|
07/16/25 |
|||||||
Shelby Farms Senior Living |
|
Shelbyville, KY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2022 |
|
07/16/25 |
|||||||
Boonesboro Trail Senior Living |
|
Winchester, KY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2021 |
|
07/16/25 |
|||||||
Triple Creek Retirement |
|
Colerain Township, OH |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2008 |
|
07/15/25 |
|||||||
Kingston Residence of Hickory |
|
Hickory, NC |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1987 |
|
12/16/25 |
||||||||
Kingston Residence of Santa Fe |
|
Santa Fe, NM |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1990 |
|
12/16/25 |
||||||||
Kingston Care Center of Fort |
|
Fort Wayne, IN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1989 |
|
12/16/25 |
||||||||
115
Table of Contents
AMERICAN HEALTHCARE REIT, INC.
SCHEDULE III — REAL ESTATE AND
ACCUMULATED DEPRECIATION — (Continued)
December 31, 2025
(in thousands)
|
|
|
|
|
|
|
Initial Cost to Company |
|
|
|
|
|
Gross Amount of Which Carried at Close of Period(e) |
|
|
|
|
|
||||||||||||||||||||
Description(a) |
|
|
|
Encumbrances |
|
|
Land and |
|
|
Buildings and |
|
|
Cost |
|
|
Land and |
|
|
Buildings and |
|
|
Total(d) |
|
|
Accumulated |
|
|
Date of |
|
Date |
||||||||
Kingston Residence of Fort |
|
Fort Wayne, IN |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
1983 |
|
12/16/25 |
||||||||
Kingston at Dupont |
|
Fort Wayne, IN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1999 |
|
12/16/25 |
||||||||
Kingston of Ashland |
|
Ashland, OH |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1985 |
|
12/16/25 |
||||||||
Kingston Residence of Marion |
|
Marion, OH |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1986 |
|
12/16/25 |
||||||||
Kingston of Miamisburg |
|
Miamisburg, OH |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1976 |
|
12/16/25 |
||||||||
Kingston Rehabilitation |
|
Perrysburg, OH |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013 |
|
12/16/25 |
||||||||
Kingston Residence of |
|
Perrysburg, OH |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1996 |
|
12/16/25 |
||||||||
Kingston Care Center of |
|
Sylvania, OH |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2004 |
|
12/16/25 |
||||||||
Kingston Residence of |
|
Sylvania, OH |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2001 |
|
12/16/25 |
||||||||
Kingston of Vermilion |
|
Vermilion, OH |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1984 |
|
12/16/25 |
||||||||
Kingston Residence |
|
Vermilion, OH |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1998 |
|
12/16/25 |
||||||||
Leased properties(c) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|||||||
ISHC Total |
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Senior Housing Operating Properties (SHOP) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Delta Valley ALF Portfolio |
|
Springdale, AR |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
1998/2005 |
|
01/08/15 |
||||||
|
|
Batesville, MS |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1999/2005 |
|
09/11/14 |
||||||
|
|
Cleveland, MS |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2004 |
|
09/11/14 |
||||||
North Carolina ALF Portfolio |
|
Clemmons, NC |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2014 |
|
06/29/15 |
||||||
|
|
Garner, NC |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2014 |
|
03/27/19 |
|||||||
|
|
Huntersville, NC |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2015 |
|
01/18/17 |
|||||||
|
|
Matthews, NC |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2017 |
|
08/30/18 |
|||||||
|
|
Mooresville, NC |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2012 |
|
01/28/15 |
|||||||
|
|
Raleigh, NC |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2013 |
|
01/28/15 |
||||||
|
|
Wake Forest, NC |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2014 |
|
06/29/15 |
||||||
Mountain Crest Senior |
|
Elkhart, IN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1997 |
|
05/14/15 |
|||||||
|
|
Elkhart, IN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2000 |
|
05/14/15 |
|||||||
|
|
Hobart, IN |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2008 |
|
05/14/15 |
||||||
|
|
LaPorte, IN |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2008 |
|
05/14/15 |
||||||
116
Table of Contents
AMERICAN HEALTHCARE REIT, INC.
SCHEDULE III — REAL ESTATE AND
ACCUMULATED DEPRECIATION — (Continued)
December 31, 2025
(in thousands)
|
|
|
|
|
|
|
Initial Cost to Company |
|
|
|
|
|
Gross Amount of Which Carried at Close of Period(e) |
|
|
|
|
|
||||||||||||||||||||
Description(a) |
|
|
|
Encumbrances |
|
|
Land and |
|
|
Buildings and |
|
|
Cost |
|
|
Land and |
|
|
Buildings and |
|
|
Total(d) |
|
|
Accumulated |
|
|
Date of |
|
Date |
||||||||
|
|
Mishawaka, IN |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
1978 |
|
07/14/15 |
|||||||
|
|
Niles, MI |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2000 |
|
06/11/15 and 11/20/15 |
|||||||
Nebraska Senior Housing Portfolio |
|
Bennington, NE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2009 |
|
05/29/15 |
|||||||
|
|
Omaha, NE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2000 |
|
05/29/15 |
|||||||
Pennsylvania Senior Housing |
|
Bethlehem, PA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2005 |
|
06/30/15 |
|||||||
|
|
Boyertown, PA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2000 |
|
06/30/15 |
|||||||
|
|
York, PA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1986 |
|
06/30/15 |
|||||||
Richmond VA ALF |
|
North Chesterfield, VA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2009 |
|
09/11/15 |
|||||||
Pennsylvania Senior Housing |
|
Palmyra, PA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2007 |
|
02/01/16 |
|||||||
Lafayette Assisted Living Portfolio |
|
Lafayette, LA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1996 |
|
10/01/21 |
|||||||
|
|
Lafayette, LA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2014 |
|
10/01/21 |
|||||||
Northern California Senior Housing |
|
Belmont, CA |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1958/2000 |
|
10/01/21 |
||||||
Central Wisconsin Senior Care |
|
Sun Prairie, WI |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1960/2006 |
|
10/01/21 |
|||||||
|
|
Waunakee, WI |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1974/2005 |
|
10/01/21 |
|||||||
Pinnacle Beaumont ALF |
|
Beaumont, TX |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2012 |
|
10/01/21 |
||||||
Pinnacle Warrenton ALF |
|
Warrenton, MO |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1986 |
|
10/01/21 |
||||||
Michigan ALF Portfolio |
|
Grand Rapids, MI |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1953/2016 |
|
10/01/21 |
|||||||
|
|
Grand Rapids, MI |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1989 |
|
10/01/21 |
|||||||
|
|
Holland, MI |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2007/2017 |
|
10/01/21 |
|||||||
|
|
Howell, MI |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
2003 |
|
10/01/21 |
|||||||
|
|
Wyoming, MI |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1964/2016 |
|
10/01/21 |
|||||||
Catalina West Haven ALF |
|
West Haven, UT |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2012 |
|
10/01/21 |
|||||||
Louisiana Senior Housing Portfolio |
|
Gonzales, LA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1996 |
|
10/01/21 |
|||||||
|
|
Monroe, LA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1994 |
|
10/01/21 |
|||||||
|
|
New Iberia, LA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1996 |
|
10/01/21 |
|||||||
|
|
Shreveport, LA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1996 |
|
10/01/21 |
|||||||
|
|
Slidell, LA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1996 |
|
10/01/21 |
|||||||
117
Table of Contents
AMERICAN HEALTHCARE REIT, INC.
SCHEDULE III — REAL ESTATE AND
ACCUMULATED DEPRECIATION — (Continued)
December 31, 2025
(in thousands)
|
|
|
|
|
|
|
Initial Cost to Company |
|
|
|
|
|
Gross Amount of Which Carried at Close of Period(e) |
|
|
|
|
|
||||||||||||||||||||
Description(a) |
|
|
|
Encumbrances |
|
|
Land and |
|
|
Buildings and |
|
|
Cost |
|
|
Land and |
|
|
Buildings and |
|
|
Total(d) |
|
|
Accumulated |
|
|
Date of |
|
Date |
||||||||
Catalina Madera ALF |
|
Madera, CA |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
2005 |
|
10/01/21 |
|||||||
AHR Texas ALF Portfolio |
|
Cedar Park, TX |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1998 |
|
12/05/22 |
||||||||
|
|
Corpus Christi, TX |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1997 |
|
12/05/22 |
||||||||
|
|
League City, TX |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1999 |
|
12/05/22 |
|||||||
|
|
Round Rock, TX |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1997 |
|
12/05/22 |
|||||||
|
|
Sugarland, TX |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1999 |
|
12/05/22 |
|||||||
|
|
Temple, TX |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1998 |
|
12/05/22 |
|||||||
|
|
Tyler, TX |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1998 |
|
12/05/22 |
|||||||
Timberwood OR |
|
Albany, OR |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2002 |
|
02/01/24 |
|||||||
Settler's Park OR |
|
Baker City, OR |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1999 |
|
02/01/24 |
|||||||
Lone Oak OR |
|
Eugene, OR |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2000 |
|
02/01/24 |
|||||||
The Suites OR |
|
Grants Pass, OR |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1996 |
|
02/01/24 |
|||||||
Hawks Ridge OR |
|
Hood River, OR |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2001 |
|
02/01/24 |
|||||||
Junction City OR |
|
Junction City, OR |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1981 |
|
02/01/24 |
|||||||
Wildflower Lodge OR |
|
La Grande, OR |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2000 |
|
02/01/24 |
|||||||
Vineyard Heights AL |
|
Mcminnville, OR |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2001 |
|
02/01/24 |
|||||||
Vineyard Heights IL |
|
Mcminnville, OR |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2001 |
|
02/01/24 |
|||||||
Morrow Heights OR |
|
Rogue River, OR |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2000 |
|
02/01/24 |
|||||||
Callahan Court MC |
|
Roseburg, OR |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1999 |
|
02/01/24 |
|||||||
Callahan Village AL |
|
Roseburg, OR |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1999 |
|
02/01/24 |
|||||||
Neawanna OR |
|
Seaside, OR |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1990 |
|
02/01/24 |
|||||||
Silver Creek OR |
|
Woodburn, OR |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1995 |
|
02/01/24 |
|||||||
Mallard Landing WA |
|
Battle Ground, WA |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2002 |
|
09/03/24 |
||||||
Orchard Pointe WA |
|
Port Orchard, WA |
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1999 |
|
09/03/24 |
||||||||
Blossom Valley AL WA |
|
Wenatchee, WA |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2005 |
|
09/03/24 |
||||||
Blossom Creek MC WA |
|
Wenatchee, WA |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2002 |
|
09/03/24 |
||||||
118
Table of Contents
AMERICAN HEALTHCARE REIT, INC.
SCHEDULE III — REAL ESTATE AND
ACCUMULATED DEPRECIATION — (Continued)
December 31, 2025
(in thousands)
|
|
|
|
|
|
|
Initial Cost to Company |
|
|
|
|
|
Gross Amount of Which Carried at Close of Period(e) |
|
|
|
|
|
||||||||||||||||||||
Description(a) |
|
Encumbrances |
|
|
Land and |
|
|
Buildings and |
|
|
Cost |
|
|
Land and |
|
|
Buildings and |
|
|
Total(d) |
|
|
Accumulated |
|
|
Date of |
|
Date |
||||||||||
Eagle Springs |
|
College Place, WA |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
1999 |
|
09/03/24 |
||||||
Regal Pointe |
|
Marietta, GA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1997 |
|
10/01/24 |
|||||||
Chancellor's Village |
|
Fredericksburg, VA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1991 |
|
04/14/25 |
|||||||
Seven Hills |
|
Saint Paul, MN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2019 |
|
07/01/25 |
|||||||
Honeysuckle |
|
Hayden, ID |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1996 |
|
08/01/25 |
|||||||
Pillars of Grand Rapids |
|
Grand Rapids, MN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2022 |
|
08/15/25 |
|||||||
Springville |
|
Draper, UT |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2018 |
|
10/01/25 |
|||||||
|
|
Springville, UT |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2016 |
|
10/01/25 |
|||||||
WellQuest of Murrieta |
|
Murrieta, CA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2016 |
|
10/08/25 |
|||||||
Talamore Sun Prairie |
|
Sun Prairie, WI |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2021 |
|
10/24/25 |
|||||||
Hayden Grove |
|
Bloomington, MN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2021 |
|
10/30/25 |
|||||||
The Grove |
|
Fresno, CA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1998 |
|
10/31/25 |
|||||||
Talamore St. Cloud |
|
Saint Cloud, MN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2020 |
|
11/04/25 |
|||||||
Talamore Woodbury |
|
Woodbury, MN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2023 |
|
12/03/25 |
|||||||
Orchards of Minnetonka |
|
Minnetonka, MN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2019 |
|
12/08/25 |
|||||||
Birches of Lehigh Valley |
|
Easton, PA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2024 |
|
12/15/25 |
|||||||
SHOP Total |
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Outpatient Medical (OM) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Lee’s Summit MO OM |
|
Lee’s Summit, MO |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
2006 |
|
09/18/14 |
|||||||
Carolina Commons OM |
|
Indian Land, SC |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2009 |
|
10/15/14 |
|||||||
Mount Olympia OM Portfolio |
|
Mount Dora, FL |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2009 |
|
12/04/14 |
||||||
East Texas OM Portfolio |
|
Longview, TX |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2008 |
|
12/12/14 |
|||||||
|
|
Longview, TX |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1998 |
|
12/12/14 |
|||||||
|
|
Longview, TX |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2004 |
|
12/12/14 |
|||||||
|
|
Longview, TX |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1956 |
|
12/12/14 |
|||||||
|
|
Longview, TX |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1985/1993/ 2004 |
|
12/12/14 |
|||||||
119
Table of Contents
AMERICAN HEALTHCARE REIT, INC.
SCHEDULE III — REAL ESTATE AND
ACCUMULATED DEPRECIATION — (Continued)
December 31, 2025
(in thousands)
|
|
|
|
|
|
|
Initial Cost to Company |
|
|
|
|
|
Gross Amount of Which Carried at Close of Period(e) |
|
|
|
|
|
||||||||||||||||||||
Description(a) |
|
Encumbrances |
|
|
Land and |
|
|
Buildings and |
|
|
Cost |
|
|
Land and |
|
|
Buildings and |
|
|
Total(d) |
|
|
Accumulated |
|
|
Date of |
|
Date |
||||||||||
|
|
Marshall, TX |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
1970 |
|
12/12/14 |
|||||||
Premier OM |
|
Novi, MI |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2006 |
|
12/19/14 |
|||||||
Independence OM Portfolio |
|
Southgate, KY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1988 |
|
01/13/15 |
|||||||
|
|
Somerville, MA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1985 |
|
01/13/15 |
|||||||
|
|
Verona, NJ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1970 |
|
01/13/15 |
|||||||
|
|
Bronx, NY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1987/1988 |
|
01/26/15 |
|||||||
Orange Star Medical Portfolio |
|
Durango, CO |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2004 |
|
02/26/15 |
|||||||
|
|
Durango, CO |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2004 |
|
02/26/15 |
|||||||
|
|
Friendswood, TX |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2008 |
|
02/26/15 |
||||||||||
|
|
Keller, TX |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2011 |
|
02/26/15 |
||||||||
Kingwood OM Portfolio |
|
Kingwood, TX |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2005 |
|
03/11/15 |
|||||||||||
|
|
Kingwood, TX |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2008 |
|
03/11/15 |
|||||||||||
Mt. Juliet TN OM |
|
Mount Juliet, TN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2012 |
|
03/17/15 |
||||||||
Paoli PA Medical Plaza |
|
Paoli, PA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1951 |
|
04/10/15 |
|||||||
|
|
Paoli, PA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1975 |
|
04/10/15 |
|||||||
Glen Burnie MD OM |
|
Glen Burnie, MD |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1981 |
|
05/06/15 |
|||||||
Marietta GA OM |
|
Marietta, GA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2002 |
|
05/07/15 |
|||||||
Napa Medical Center |
|
Napa, CA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1980 |
|
07/02/15 |
|||||||
Stockbridge GA OM II |
|
Stockbridge, GA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2006 |
|
12/03/15 |
|||||||
Lakeview IN Medical Plaza |
|
Indianapolis, IN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1987 |
|
01/21/16 |
|||||||
Snellville GA OM |
|
Snellville, GA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2005 |
|
02/05/16 |
|||||||
Stockbridge GA OM III |
|
Stockbridge, GA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2007 |
|
03/29/16 |
|||||||
Austell GA OM |
|
Austell, GA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2008 |
|
05/25/16 |
|||||||
Voorhees NJ OM |
|
Voorhees, NJ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2008 |
|
07/08/16 |
|||||||
Norwich CT OM Portfolio |
|
Norwich, CT |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2014 |
|
12/16/16 |
|||||||
|
|
Norwich, CT |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1999 |
|
12/16/16 |
|||||||
Middletown OH OM II |
|
Middletown, OH |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2007 |
|
12/20/17 |
||||||
Charlottesville OM |
|
Charlottesville, VA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2001 |
|
10/01/21 |
|||||||
Rochester Hills OM |
|
Rochester Hills, MI |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1990 |
|
10/01/21 |
|||||||
Cullman OM III |
|
Cullman, AL |
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2010 |
|
10/01/21 |
|||||||
120
Table of Contents
AMERICAN HEALTHCARE REIT, INC.
SCHEDULE III — REAL ESTATE AND
ACCUMULATED DEPRECIATION — (Continued)
December 31, 2025
(in thousands)
|
|
|
|
|
|
|
Initial Cost to Company |
|
|
|
|
|
Gross Amount of Which Carried at Close of Period(e) |
|
|
|
|
|
||||||||||||||||||||
Description(a) |
|
Encumbrances |
|
|
Land and |
|
|
Buildings and |
|
|
Cost |
|
|
Land and |
|
|
Buildings and |
|
|
Total(d) |
|
|
Accumulated |
|
|
Date of |
|
Date |
||||||||||
Iron OM Portfolio |
|
Cullman, AL |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
1994 |
|
10/01/21 |
|||||||
|
|
Cullman, AL |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1998 |
|
10/01/21 |
||||||||||
|
|
Sylacauga, AL |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1997 |
|
10/01/21 |
||||||||||
Mint Hill OM |
|
Mint Hill, NC |
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2007 |
|
10/01/21 |
|||||||||
Reno OM |
|
Reno, NV |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2005 |
|
10/01/21 |
||||||||||
Athens OM Portfolio |
|
Athens, GA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2006 |
|
10/01/21 |
||||||||||
|
|
Athens, GA |
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2006 |
|
10/01/21 |
|||||||
Lawrenceville OM |
|
Lawrenceville, GA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2005 |
|
10/01/21 |
|||||||
Roseburg OM |
|
Roseburg, OR |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2003 |
|
10/01/21 |
|||||||||
Fairfield County OM |
|
Trumbull, CT |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1987 |
|
10/01/21 |
|||||||
Sauk Prairie OM |
|
Prairie du Sac, WI |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2014 |
|
10/01/21 |
|||||||
Surprise OM |
|
Surprise, AZ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2012 |
|
10/01/21 |
|||||||
Southfield OM |
|
Southfield, MI |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1975/2014 |
|
10/01/21 |
|||||||
Grand Junction OM |
|
Grand Junction, CO |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2013 |
|
10/01/21 |
|||||||
Edmonds OM |
|
Edmonds, WA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1991/2008 |
|
10/01/21 |
|||||||
Glendale OM |
|
Glendale, WI |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2004 |
|
10/01/21 |
|||||||
Flemington OM Portfolio |
|
Flemington, NJ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2002 |
|
10/01/21 |
|||||||
|
|
Flemington, NJ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1993 |
|
10/01/21 |
|||||||
Lawrenceville OM II |
|
Lawrenceville, GA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1990 |
|
10/01/21 |
|||||||
Mill Creek OM |
|
Mill Creek, WA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1991 |
|
10/01/21 |
|||||||
Modesto OM |
|
Modesto, CA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1991/2016 |
|
10/01/21 |
|||||||||
Lithonia OM |
|
Lithonia, GA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2015 |
|
10/01/21 |
|||||||
Great Nord OM Portfolio |
|
Tinley Park, IL |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2002 |
|
10/01/21 |
|||||||||
|
|
Chesterton, IN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2007 |
|
10/01/21 |
|||||||
|
|
Plymouth, MN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2014 |
|
10/01/21 |
|||||||
Overland Park OM |
|
Overland Park, KS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2017 |
|
10/01/21 |
|||||||
Bloomington OM |
|
Bloomington, IL |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1990 |
|
10/01/21 |
||||||||
Haverhill OM |
|
Haverhill, MA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1987 |
|
10/01/21 |
|||||||
Fresno OM |
|
Fresno, CA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2007 |
|
10/01/21 |
|||||||||
Colorado Foothills OM Portfolio |
|
Arvada, CO |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1979 |
|
10/01/21 |
||||||||||
121
Table of Contents
AMERICAN HEALTHCARE REIT, INC.
SCHEDULE III — REAL ESTATE AND
ACCUMULATED DEPRECIATION — (Continued)
December 31, 2025
(in thousands)
|
|
|
|
|
|
|
Initial Cost to Company |
|
|
|
|
|
Gross Amount of Which Carried at Close of Period(e) |
|
|
|
|
|
||||||||||||||||||||
Description(a) |
|
Encumbrances |
|
|
Land and |
|
|
Buildings and |
|
|
Cost |
|
|
Land and |
|
|
Buildings and |
|
|
Total(d) |
|
|
Accumulated |
|
|
Date of |
|
Date |
||||||||||
|
|
Centennial, CO |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
1979 |
|
10/01/21 |
|||||||
|
|
Colorado Springs, CO |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1999 |
|
10/01/21 |
||||||||
OM Total |
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Triple-Net Leased Properties |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Southlake TX Hospital |
|
Southlake, TX |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
2013 |
|
12/04/14 |
|||||||
Crown Senior Care Portfolio |
|
Peel, Isle of Man |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2015 |
|
09/15/15 |
||||||||
|
|
St. Albans, UK |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2015 |
|
10/08/15 |
||||||||
|
|
Salisbury, UK |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2015 |
|
12/08/16 |
|||||||||
|
|
Felixstowe, UK |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2010/2011 |
|
11/15/16 |
||||||||||
|
|
Felixstowe, UK |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2010/2011 |
|
11/15/15 |
|||||||||
|
|
Aberdeen, UK |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1986 |
|
10/08/15 |
||||||||
Washington DC SNF |
|
Washington, DC |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1983 |
|
10/29/15 |
|||||||||
Fox Grape SNF Portfolio |
|
Braintree, MA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2015 |
|
07/01/16 |
||||||||
|
|
Duxbury, MA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1983 |
|
07/01/16 |
||||||||
|
|
Hingham, MA |
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1990 |
|
07/01/16 |
|||||||
|
|
Quincy, MA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1995 |
|
11/01/16 |
|||||||
SW Illinois Senior |
|
Columbia, IL |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2007 |
|
10/01/21 |
||||||||
|
|
Columbia, IL |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
1999 |
|
10/01/21 |
|||||||||
|
|
Millstadt, IL |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2004 |
|
10/01/21 |
|||||||||
|
|
Red Bud, IL |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2006 |
|
10/01/21 |
|||||||||
|
|
Waterloo, IL |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2012 |
|
10/01/21 |
|||||||||
West Des Moines SNF |
|
West Des Moines, IA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
2004 |
|
10/01/21 |
|||||||||
Triple-Net Leased Properties Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
|
|
|
|||||||||
122
Table of Contents
AMERICAN HEALTHCARE REIT, INC.
SCHEDULE III — REAL ESTATE AND
ACCUMULATED DEPRECIATION — (Continued)
December 31, 2025
(in thousands)
|
|
|
|
|
|
|
Initial Cost to Company |
|
|
|
|
|
Gross Amount of Which Carried at Close of Period(e) |
|
|
|
|
|
||||||||||||||||||||
Description(a) |
|
Encumbrances |
|
|
Land and |
|
|
Buildings and |
|
|
Cost |
|
|
Land and |
|
|
Buildings and |
|
|
Total(d) |
|
|
Accumulated |
|
|
|
|
|
||||||||||
Summary |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
ISHC |
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
|
|
|
|||||||
SHOP |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|||||||
OM |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|||||||
Triple-Net Leased Properties |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|||||||
Construction in progress |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
||||||||
Total |
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
|
|
|
|||||||
|
|
Amount |
|
|
Balance — December 31, 2022 |
|
$ |
|
|
Acquisitions |
|
|
|
|
Additions |
|
|
|
|
Dispositions and impairments |
|
|
( |
) |
Foreign currency translation adjustment |
|
|
|
|
Balance — December 31, 2023 |
|
$ |
|
|
Acquisitions |
|
$ |
|
|
Additions |
|
|
|
|
Dispositions and impairments |
|
|
( |
) |
Foreign currency translation adjustment |
|
|
( |
) |
Balance — December 31, 2024 |
|
$ |
|
|
Acquisitions |
|
$ |
|
|
Additions |
|
|
|
|
Dispositions and impairments |
|
|
( |
) |
Foreign currency translation adjustment |
|
|
|
|
Balance — December 31, 2025 |
|
$ |
|
|
123
Table of Contents
AMERICAN HEALTHCARE REIT, INC.
SCHEDULE III — REAL ESTATE AND
ACCUMULATED DEPRECIATION — (Continued)
December 31, 2025
(in thousands)
|
|
Amount |
|
|
Balance — December 31, 2022 |
|
$ |
|
|
Additions |
|
|
|
|
Dispositions and impairments |
|
|
( |
) |
Foreign currency translation adjustment |
|
|
|
|
Balance — December 31, 2023 |
|
$ |
|
|
Additions |
|
$ |
|
|
Dispositions and impairments |
|
|
( |
) |
Foreign currency translation adjustment |
|
|
( |
) |
Balance — December 31, 2024 |
|
$ |
|
|
Additions |
|
$ |
|
|
Dispositions and impairments |
|
|
( |
) |
Foreign currency translation adjustment |
|
|
|
|
Balance — December 31, 2025 |
|
$ |
|
|
124
Table of Contents
AMERICAN HEALTHCARE REIT, INC.
EXHIBITS LIST
December 31, 2025
The following exhibits are included, or incorporated by reference, in this Annual Report on Form 10-K for the period ended December 31, 2025 (and are numbered in accordance with Item 601 of Regulation S-K).
2.1 |
Agreement and Plan of Merger, dated June 23, 2021, by and among Griffin-American Healthcare REIT IV, Inc., Griffin-American Healthcare REIT IV Holdings, LP, Continental Merger Sub, LLC, Griffin-American Healthcare REIT III, Inc. and Griffin-American Healthcare REIT III Holdings, LP (included as Exhibit 2.1 to our Current Report on Form 8-K (File No. 000-55775) filed June 24, 2021 and incorporated herein by reference) |
|
|
3.1 |
Fourth Articles of Amendment and Restatement of Griffin-American Healthcare REIT IV, Inc., dated October 1, 2021 (included as Exhibit 3.1 to our Current Report on Form 8-K (File No. 000-55775) filed October 1, 2021 and incorporated herein by reference) |
|
|
3.2 |
Articles of Amendment (Reverse Stock Split) of American Healthcare REIT, Inc., dated November 15 2022 (included as Exhibit 3.1 to our Current Report on Form 8-K (File No. 000-55775) filed November 16. 2022 and incorporated herein by reference) |
|
|
3.3 |
Articles of Amendment (Par Value Decrease) of American Healthcare REIT, Inc., dated November 15 2022 (included as Exhibit 3.2 to our Current Report on Form 8-K (File No. 000-55775) filed November 16. 2022 and incorporated herein by reference) |
|
|
3.4 |
Articles Supplementary (Common Stock Reclassification) of American Healthcare REIT, Inc., dated January 26, 2024 (included as Exhibit 3.1 to our Current Report on Form 8-K (File No. 000-55775) filed January 30, 2024 and incorporated herein by reference) |
|
|
3.5 |
Articles Supplementary (Subtitle 8 Opt-Out) of American Healthcare REIT, Inc., dated February 7, 2024 (included as Exhibit 3.1 to our Current Report on Form 8-K (File No. 001-41951) filed February 12. 2024 and incorporated herein by reference) |
|
|
3.6 |
Second Amended and Restated Bylaws of American Healthcare REIT, Inc. (included as Exhibit 3.1 to our Current Report on Form 8-K (File No. 001-41951) filed February 24, 2025 and incorporated herein by reference) |
|
|
4.1 |
Amended and Restated Distribution Reinvestment Plan of Griffin-American Healthcare REIT IV, Inc. (included as Exhibit 4.6 to our Registration Statement on Form S-3 (File No. 333-229301) filed January 18, 2019 and incorporated herein by reference) |
|
|
4.2* |
Description of Registrant’s Securities |
|
|
4.3 |
Statement regarding restrictions on transferability of shares of common stock (to appear on stock certificate or to be sent upon request and without charge to stockholders issued shares without certificates) (included as Exhibit 4.1 to our Registration Statement on Form S-11 (File No. 333-267464) filed on January 2, 2024 and incorporated herein by reference) |
|
|
10.1† |
American Healthcare REIT, Inc. Second Amended and Restated 2015 Incentive Plan, effective as of June 15, 2023 (included as Exhibit 10.1 to our Quarterly Report on Form 10-Q (File No. 000-55775) filed August 14, 2023 and incorporated herein by reference) |
|
|
10.2† |
Form of Indemnification Agreement (included as Exhibit 10.1 to our Current Report on Form 8-K (File No. 000-55775) filed October 1, 2021 and incorporated herein by reference) |
|
|
10.3 |
Second Amended and Restated Agreement of Limited Partnership of American Healthcare REIT Holdings, LP, dated October 1, 2021 (included as Exhibit 10.1 to our Current Report on Form 8-K (File No. 000-55775) filed October 5, 2021 and incorporated by reference) |
|
|
10.4† |
American Healthcare Opps Holdings, LLC Executive Severance and Change in Control Plan, effective as of November 18, 2021 (included as Exhibit 10.12 to our Annual Report on Form 10-K (File No. 000-55775) filed March 25, 2022 and incorporated herein by reference) |
|
|
125
Table of Contents
AMERICAN HEALTHCARE REIT, INC.
EXHIBITS LIST — (Continued)
December 31, 2025
10.5 |
Eighth Amended and Restated Limited Liability Company Agreement of Trilogy REIT Holdings, LLC dated as of December 31, 2021, entered into by and among Trilogy Real Estate Investment Trust, Trilogy Management Services, LLC and Members, effective as of December 31, 2021 (included as Exhibit 10.13 to our Annual Report on Form 10-K (File No. 000-55775) filed March 25, 2022 and incorporated herein by reference) |
|
|
10.6 |
Second Amended and Restated Credit Agreement, dated February 14, 2024, by and among American Healthcare REIT Holdings, LP, American Healthcare REIT, Inc., and certain subsidiaries and Bank of America, N.A., KeyBank, National Association, Citizens Bank, National Association, Bank of the West, Barclays Banks PLC, Credit Agricole Corporate and Investment Bank, Fifth Third Bank, National Association, Morgan Stanley Bank, N.A., Truist Bank, Regions Bank, Royal Bank of Canada, KeyBanc Capital Markets and BofA Securities, Inc. (included as Exhibit 10.1 to our Current Report on Form 8-K (File No. 001-41951) filed February 21, 2024 and incorporated herein by reference) |
|
|
10.7† |
American Healthcare REIT, Inc. 2024 Employee Stock Purchase Plan, effective as of November 7, 2024 (included as Appendix B to the Registrant’s Definitive Proxy Statement on Form DEF 14A (File No. 001-41951), filed August 28, 2024 and incorporated herein by reference) |
|
|
10.8 |
First Amendment to Second Amended and Restated Credit Agreement, dated December 9, 2024, by and among American Healthcare REIT Holdings, LP, American Healthcare REIT, Inc., and certain subsidiaries and Bank of America, N.A., KeyBank, National Association, Citizens Bank, National Association, Bank of the West, Barclays Banks PLC, Credit Agricole Corporate and Investment Bank, Fifth Third Bank, National Association, Morgan Stanley Bank, N.A., Truist Bank, Regions Bank, Royal Bank of Canada, KeyBanc Capital Markets and BofA Securities, Inc. (included as Exhibit 10.20 to our Annual Report on Form 10-K (File No. 001-41951) filed February 28, 2025 and incorporated herein by reference) |
|
|
19.1 |
|
|
|
21.1* |
Subsidiaries of American Healthcare REIT, Inc. |
|
|
23.1* |
Consent of Deloitte & Touche LLP |
|
|
31.1* |
Certification of Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
|
|
31.2* |
Certification of Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
|
|
32.1** |
Certification of Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002 |
|
|
32.2** |
Certification of Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002 |
|
|
97.1 |
American Healthcare REIT, Inc. Policy on Recoupment of Incentive Compensation (included as Exhibit 97.1 to our Annual Report on Form 10-K (File No. 001-41951) filed March 22, 2024 and incorporated herein by reference) |
|
|
101.INS* |
Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL Document |
|
|
101.SCH* |
Inline XBRL Taxonomy Extension Schema with Embedded Linkbase Documents |
|
|
104* |
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
* Filed herewith.
** Furnished herewith. In accordance with Item 601(b)(32) of Regulation S-K, this Exhibit is not deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section. Such certifications will not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that the registrant specifically incorporates it by reference.
† Management contract or compensatory plan or arrangement.
126
Table of Contents
Item 16. Form 10-K Summary.
None.
127
Table of Contents
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
|
American Healthcare REIT, Inc. (Registrant) |
|
|
|
|
|
|
|
By |
|
/s/ JEFFREY T. HANSON |
|
Interim Chief Executive Officer and President |
|
|
Jeffrey T. Hanson |
|
|
|
|
|
||
Date: February 27, 2026 |
|
|
||
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By |
|
/s/ JEFFREY T. HANSON |
|
Chairman of the Board of Directors and Interim Chief Executive Officer and President |
|
|
Jeffrey T. Hanson |
|
(Principal Executive Officer) |
|
|
|
|
|
Date: February 27, 2026 |
|
|
||
|
|
|
|
|
By |
|
/s/ BRIAN S. PEAY |
|
Chief Financial Officer |
|
|
Brian S. Peay |
|
(Principal Financial Officer and Principal Accounting Officer) |
|
|
|
|
|
Date: February 27, 2026 |
|
|
||
|
|
|
|
|
By |
|
/s/ DANNY PROSKY |
|
Director |
|
|
Danny Prosky |
|
|
|
|
|
|
|
Date: February 27, 2026
|
|
|
||
By |
|
/s/ MATHIEU B. STREIFF |
|
Director |
|
|
Mathieu B. Streiff |
|
|
|
|
|
|
|
Date: February 27, 2026 |
|
|
||
|
|
|
|
|
By |
|
/s/ SCOTT A. ESTES |
|
Independent Director |
|
|
Scott Estes |
|
|
|
|
|
|
|
Date: February 27, 2026 |
|
|
||
|
|
|
|
|
By |
|
/s/ BRIAN J. FLORNES |
|
Independent Director |
|
|
Brian J. Flornes |
|
|
|
|
|
|
|
Date: February 27, 2026 |
|
|
||
|
|
|
|
|
By |
|
/s/ DIANNE HURLEY |
|
Independent Director |
|
|
Dianne Hurley |
|
|
|
|
|
|
|
Date: February 27, 2026 |
|
|
||
|
|
|
|
|
By |
|
/s/ MARVIN R. O’QUINN |
|
Independent Director |
|
|
Marvin R. O’Quinn |
|
|
|
|
|
|
|
Date: February 27, 2026 |
|
|
||
|
|
|
|
|
By |
|
/s/ VALERIE RICHARDSON |
|
Independent Director |
|
|
Valerie Richardson |
|
|
|
|
|
|
|
Date: February 27, 2026 |
|
|
||
|
|
|
|
|
By |
|
/s/ WILBUR H. SMITH III |
|
Independent Director |
|
|
Wilbur H. Smith III |
|
|
|
|
|
|
|
Date: February 27, 2026 |
|
|
||
128
FAQ
What does American Healthcare REIT (AHR) do?
How is American Healthcare REIT (AHR) organized and where does it operate?
What were the key details of American Healthcare REIT’s 2024 stock offering?
How many American Healthcare REIT (AHR) shares are outstanding?
What are the main business segments of American Healthcare REIT (AHR)?
How does American Healthcare REIT (AHR) maintain REIT tax status and distributions?
What human capital initiatives does American Healthcare REIT (AHR) highlight?
