LTC Properties (NYSE: LTC) outlines 2025 SHOP expansion, risks and $2B portfolio mix
Rhea-AI Filing Summary
LTC Properties, Inc. is a health care REIT focused on seniors housing and skilled nursing, with a $2.0 billion investment portfolio at carrying value as of December 31, 2025. The portfolio includes triple-net leased properties, a new SHOP operating segment, mortgage loans, financing receivables, notes receivable and joint ventures.
In 2025 LTC launched a RIDEA-based SHOP segment, which now operates 25 seniors housing communities managed by seven third-party operators and contributed $18.0 million of NOI, or 8.8% of total portfolio NOI. The Real Estate Investments segment, anchored by triple-net leases and financing structures, remains the primary earnings driver.
Management highlights heavy exposure to health care regulation, Medicare and Medicaid reimbursement, operator concentration and financial health, inflation, public health crises, and environmental and cybersecurity risks. LTC also outlines REIT qualification requirements, leverage and covenant constraints, and the need for ongoing access to capital to fund growth and maintain dividends.
Positive
- None.
Negative
- None.
Insights
LTC adds an operating SHOP arm while remaining highly exposed to health-care policy and operator risk.
LTC Properties now runs a two-segment model: a traditional real estate investments segment and a RIDEA-based SHOP operating segment that contributed
The filing underscores dependence on third-party operators, especially three that generated
Leverage of about
Table of Contents
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 AND 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 | |
Commission file number:
(Exact name of registrant as specified in its charter)
|
|
(Address of principal executive offices)
Registrant’s telephone number, including area code: (
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class | Trading symbol | Name of Each Exchange on Which Registered |
Securities registered pursuant to Section 12(g) of the Act: NONE
Indicate by checkmark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Indicate by checkmark 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 Section 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.:
Accelerated filer ☐ | Non-accelerated filer ☐ | Smaller reporting company | 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 Act). Yes
The aggregate market value of voting and non-voting common equity held by non-affiliates of the registrant was approximately $
The number of shares of common stock outstanding as of February 18, 2026 was
DOCUMENTS INCORPORATED BY REFERENCE
Table of Contents
Cautionary Statement on Forward-Looking Statements
This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, adopted pursuant to the Private Securities Litigation Reform Act of 1995. Statements that are not purely historical may be forward-looking. You can identify some of the forward-looking statements by their use of forward-looking words, such as “believes,” “expects,” “may,” “will,” “could,” “would,” “should,” “seeks,” “approximately,” “intends,” “plans,” “estimates” or “anticipates,” or the negative of those words or similar words. Forward-looking statements involve inherent risks and uncertainties regarding events, conditions and financial trends that may affect our future plans of operation, business strategy, results of operations and financial position. A number of important factors could cause actual results to differ materially from those included within or contemplated by such forward- looking statements, including, but not limited to, operational and legal risks and liabilities under our new SHOP segment; our dependence on the ability of our third-party independent operators to successfully manage and operate our SHOP communities; our dependence on our operators for revenue and cash flow; government regulation of the health care industry; changes in federal, state, or local laws limiting REIT investments in the health care sector; federal and state health care cost containment measures including reductions in reimbursement from third-party payors such as Medicare and Medicaid; required regulatory approvals for operation of health care facilities; a failure to comply with applicable law or regulations for the operation of health care facilities; the adequacy of insurance coverage maintained by our operators; our reliance on a few major operators; our ability to find suitable replacement operators for our SHOP communities; our ability to renew leases or enter into favorable terms of renewals or new leases; the impact of inflation; operator financial or legal difficulties; the sufficiency of collateral securing mortgage loans; an impairment of our real estate investments; the relative illiquidity of our real estate investments; our ability to develop and complete construction projects; our ability to invest cash proceeds for health care properties; a failure to qualify as a REIT; our ability to grow if access to capital is limited; and a failure to maintain or increase our dividend. For a discussion of these and other factors that could cause actual results to differ from those contemplated in the forward-looking statements, please see the discussion under “Risk Factors” contained in this report and in other information contained in this report and our publicly available filings with the Securities and Exchange Commission. We do not undertake any responsibility to update or revise any of these factors or to announce publicly any revisions to forward-looking statements, whether as a result of new information, future events or otherwise. Although our management believes that the assumptions and expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. The actual results may differ materially from any forward-looking statements due to the risks and uncertainties of such statements.
2
Table of Contents
LTC Properties, Inc.
Table of Contents
Page | ||
Part I | ||
Item 1. | Business | 4 |
Item 1A. | Risk Factors | 14 |
Item 1B. | Unresolved Staff Comments | 24 |
Item 1C. | Cybersecurity | 24 |
Item 2. | Properties | 25 |
Item 3. | Legal Proceedings | 32 |
Item 4. | Mine Safety Disclosures | 33 |
Part II | ||
Item 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 33 |
Item 6. | [Reserved] | 34 |
Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 35 |
Item 7A. | Quantitative and Qualitative Disclosures About Market Risk | 62 |
Item 8. | Financial Statements | 64 |
Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | 120 |
Item 9A. | Controls and Procedures | 120 |
Item 9B. | Other Information | 124 |
Item 9C. | Disclosure Regarding Foreign Jurisdictions that Prevent Inspections | 124 |
Part III | ||
Item 10. | Directors, Executive Officers and Corporate Governance | 124 |
Item 11. | Executive Compensation | 124 |
Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 124 |
Item 13. | Certain Relationships and Related Transactions, and Director Independence | 125 |
Item 14. | Principal Accountant Fees and Services | 125 |
Part IV | ||
Item 15. | Exhibits and Financial Statement Schedules | 125 |
Item 16. | Form 10-K Summary | 127 |
SIGNATURES | 128 | |
3
Table of Contents
PART I
Item 1. BUSINESS
General
LTC Properties, Inc., a real estate investment trust (“REIT”), was incorporated on May 12, 1992 in the State of Maryland and commenced operations on August 25, 1992. Historically we have invested primarily in seniors housing and health care properties primarily through ownership, sale-leasebacks, mortgage financing, joint ventures, construction financing and structured finance solutions including preferred equity, bridge and mezzanine lending.
Unless otherwise expressly stated or the context otherwise requires, when we refer to “we,” “our,” “us,” “registrant,” “our company,” “the Company” or similar terms in this Annual Report on Form 10-K, we mean LTC Properties, Inc. and its consolidated subsidiaries.
Investment Policies and Strategies
Our investment policy is to invest primarily in seniors housing and health care properties. Over the past three years, we have underwritten investments in seniors housing communities and health care centers for a total of approximately $781.5 million. Additionally, during the past three years, we have disposed of properties for a total sales price of $252.2 million.
Prior to finalizing an investment, we conduct a comprehensive financial due diligence review and property site review to assess the property’s general physical condition.
Historically our investments have consisted of:
| ● | fee ownership of seniors housing and skilled nursing properties that are leased to operators; |
| ● | mortgage loans secured by seniors housing and skilled nursing properties; or |
| ● | participation in such investments indirectly through investments in mezzanine loans and real estate partnerships or other entities that themselves make direct investments in such loans or properties. |
Additionally, during the second quarter of 2025, we began utilizing the structure authorized by the REIT Investment Diversification and Empowerment Act of 2007 (commonly referred to as “RIDEA”) as permitted by the Housing and Economic Recovery Act of 2008 and expect to continue using this investment structure in 2026.
In evaluating potential investments, we consider factors such as:
| ● | type of property; |
| ● | location; |
| ● | competition within the local market and evaluation of the impact resulting from any potential new development projects in construction or anticipated to be approved by local authorities; |
| ● | construction quality, age, condition and design of the property; |
| ● | current and anticipated cash flow of the property and its adequacy to meet operational needs and lease obligations or debt service obligations; |
| ● | experience, reputation and solvency of the operating companies providing services; |
| ● | payor mix of private, managed care, Medicare and Medicaid patients; |
| ● | growth, tax and regulatory environments of the communities in which the properties are located; |
| ● | occupancy and demand for similar properties in the area surrounding the property; |
| ● | Medicaid reimbursement policies and plans of the state in which the property is located; |
4
Table of Contents
| ● | third-party environmental reports, land surveys and market studies (if applicable); |
| ● | energy, water and waste efficiency management practices; and |
| ● | health, safety and wellness practices (air filtration systems, hazardous waste disposal, UV sanitation, etc.). |
We seek to diversify our portfolio by operator and by geography, focusing on newer properties with strong cash flows and experienced operators. Our business development team boasts a seasoned roster with decades of collective experience and deep industry relationships. We strive to remain visible and relevant by supporting trade associations, attending and hosting industry conferences and events, speaking on panels and participating in media interviews. We believe these efforts, coupled with relationships will continue to provide investment opportunities in 2026 and beyond.
Our marketing and business development efforts focus on sourcing relationships with regionally based operators and intermediaries to execute on single property or small portfolio transactions that are not broadly marketed by third-party intermediaries. We take this approach because competition for larger, fully marketed portfolios generally results in increased pricing that produces yields below our investment hurdles. This strategy allows us to invest in properties priced at yields that are accretive to our stockholders.
Property Types
We invest in the following types of properties:
| ● | Independent living communities (“ILF”), also known as retirement communities or senior apartments, offer a sense of community and numerous levels of service, such as laundry, housekeeping, dining options/meal plans, exercise and wellness programs, transportation, social, cultural and recreational activities, on-site security and emergency response programs. Many independent living communities offer on-site conveniences like beauty/barber shops, fitness facilities, game rooms, libraries and activity centers. |
| ● | Assisted living communities (“ALF”) serve people who require assistance with activities of daily living, but do not require the degree of supervision that skilled nursing facilities provide. Services are usually available 24 hours a day and include personal supervision and assistance with eating, bathing, grooming and administering medication. Many assisted living facilities provide a combination of housing, supportive services, personalized assistance and health care designed to respond to individual needs. |
| ● | Memory care communities (“MC”) offer specialized options for people with Alzheimer’s disease and other forms of dementia. These purpose-built, free-standing facilities offer an alternative for private-pay residents affected by memory loss in comparison to other accommodations that typically have been provided within a secured unit of an assisted living or skilled nursing facility. Memory care facilities offer dedicated care, with staff usually available 24 hours a day, and specialized programming for various conditions relating to memory loss in an environment that is typically smaller in scale and more residential in nature than traditional assisted living and skilled nursing facilities. |
| ● | Skilled nursing centers (“SNF”) provide restorative, rehabilitative and nursing care for people not requiring the extensive treatment available at acute care hospitals. Many skilled nursing facilities provide ancillary services that include occupational, speech, physical, respiratory and medical therapies, as well as sub-acute care services which are paid either by the patient, the patient’s family, private health insurance, or through the federal Medicare or state Medicaid programs. |
| ● | Other property types (“OTH”) comprise other types of properties such as land parcels, projects under development (“UDP”) and behavioral health care hospitals. |
We include ILF, ALF, MC and combinations thereof in the seniors housing communities (“SH”) classification in some parts of this Annual Report on Form 10-K.
5
Table of Contents
Sources of Revenues
Substantially all of our revenues and sources of cash flows from operations are derived from rental income from triple net operating leases, resident fees and services, interest earned on financing receivables, interest earned on outstanding mortgage loans receivable, interest earned on outstanding notes receivable and income from investments in unconsolidated joint ventures. We depend upon the performance of our operators with respect to the daily management and marketing of long-term health care services offered at our properties.
Investment Portfolio
See Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Executive Overview—Investment Portfolio Overview for a table that summarizes our investment portfolio as of December 31, 2025.
As of December 31, 2025, our total investment portfolio included $2.0 billion in carrying value of net investments consisting of $693.4 million or 35.0% invested in net carrying value of owned real properties subject to non-cancelable triple-net leases (“NNN” or “Triple-Net Portfolio”), $508.4 million or 25.7% invested in net carrying value of owned seniors housing operating portfolio (“SHOP”), $359.5 million or 18.1% invested in net carrying value of properties we own accounted for as financing receivables, $381.7 million or 19.3% invested in net carrying value of mortgage loans secured by first mortgages, $25.6 million or 1.3% invested in net carrying value of notes receivable and $12.5 million or 0.6% in net carrying value of unconsolidated joint ventures.
Segments
As described above, we began utilizing the RIDEA structure in the second quarter of 2025 and established a SHOP segment. Accordingly, effective in the second quarter of 2025, we conduct and manage our business as two operating segments, for operating and decision-making purposes: i) real estate investments segment (“Real Estate Investments Segment”), which consists of our Triple-Net Portfolio, financing receivables, mortgage loans, notes receivable and unconsolidated joint ventures and ii) SHOP segment.
Our chief operating decision makers (collectively, the “CODM”) evaluate performance of our investments based on net operating income (“NOI”). The following table summarizes information for our investment portfolio for the year ended December 31, 2025 (dollar amounts in thousands):
Number of | ||||||||||||
Number of | SH | SNF | ||||||||||
Segment | NOI (1) | % NOI | Properties | Units | Beds | |||||||
Real Estate Investment Segment: | ||||||||||||
Owned real properties-Triple-Net Portfolio | $ | 105,376 | 51.5 | % | 98 | 3,454 | 5,335 | |||||
Financing receivables | 28,315 | 13.8 | % | 31 | 1,263 | 299 | ||||||
Mortgage loan receivables | 39,023 | 19.1 | % | 26 | 551 | 2,576 | ||||||
Notes receivables | 5,294 | 2.6 | % | 5 | 621 | — | ||||||
Unconsolidated joint ventures | 6,757 | 3.3 | % | 1 | — | 104 | ||||||
Total Real Estate Investment Portfolio | 184,765 | 90.3 | % | 161 | 5889 | 8,314 | ||||||
SHOP Segment: | ||||||||||||
Total SHOP | 18,028 | 8.8 | % | 25 | 2,073 | — | ||||||
Non-segment: | ||||||||||||
Total Non-segment | 1,935 | 0.9 | % | — | — | — | ||||||
Total Investment Portfolio | $ | 204,728 | 100.0 | % | 186 | 7,962 | 8,314 | |||||
| (1) | NOI is a non-generally accepted accounting principles (“GAAP”) financial measure that is calculated as net income (computed in accordance with GAAP) before (i) general and administrative expenses, (ii) transaction costs, (iii) write-off of effective interest, (iv) provision for credit losses, (v) impairment loss, (vi) depreciation and amortization, (vii) interest expense, (viii) gain or loss on sale of real estate and (ix) income tax benefit or expense. See Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations-Non-GAAP Financial Measures for a reconciliation of net income attributable to common stockholders to NOI. |
6
Table of Contents
Real Estate Investments Segment
Triple-Net Portfolio
Our triple-net leases require the lessee to pay all taxes, insurance, maintenance and repairs, capital and non-capital expenditures and other costs necessary in the operations of the facilities. The majority of our leases contain provisions for specified annual increases over the rent of the prior year. At December 31, 2025, our Triple-Net Portfolio included 98 properties located in 22 states and leased to 18 different operators.
Financing Receivables
We have entered into joint ventures (“JV”) and contributed into the JVs for the acquisition of properties through sale and leaseback transactions. Concurrently, each of these JVs leased the acquired properties back to an affiliate of the seller and provided the seller-lessee with purchase options. We determined that each of these sale and leaseback transactions meet the accounting criteria to be presented as Financing receivables on our Consolidated Balance Sheets and recorded the rental revenue from these properties as Interest income from financing receivables on our Consolidated Statements of Income. See Item 8. FINANCIAL STATEMENTS— Note 2. Summary of Significant Accounting Policies within our consolidated financial statements for additional information. At December 31, 2025, our financing receivables included 31 properties located in three states and leased to two operators.
Mortgage Loans Receivable
As part of our strategy of making investments in properties used in the provision of long-term health care services, we provide mortgage financing on such properties based on our established investment underwriting criteria. We have also provided construction loans that by their terms convert into purchase/lease transactions or permanent financing mortgage loans upon completion of construction. In addition to a lien on the mortgaged property, the loans are generally secured by certain non-real estate assets of the properties and contain certain other security provisions in the form of letters of credit and/or security deposits. At December 31, 2025, our mortgage loans were secured by 26 properties located in five states with six borrowers.
Notes Receivable
Our investment in notes receivable consists of a mezzanine loan and two working capital loans.
7
Table of Contents
Unconsolidated Joint Ventures
We have a mortgage loan secured by a skilled nursing center in Texas. This mortgage loan was determined to be an acquisition, development and construction (“ADC”) loan and is accounted for as an unconsolidated joint venture. Subsequent to December 31, 2025, the operator provided notice of its intent to pay off this mortgage loan.
SHOP Segment
As the owner of properties in our SHOP segment, we have certain oversight approval rights and the right to review operational and financial reporting information, but our independent third-party SHOP operators ultimately control the day-to-day operations of the properties, pursuant to the terms of our management agreements. At December 31, 2025, our SHOP segment was comprised of 25 seniors housing communities located in ten states that are managed on our behalf by seven independent operators pursuant to separate management agreements.
Our management agreements typically have fixed terms and are subject to renewal under certain conditions. These agreements may include provisions for termination under specific circumstances, with or without the payment of a fee. The SHOP operators generally receive annual management fees which are calculated based on various performance measures, which may include revenue, NOI and other objective financial metrics. Additionally, incentive fees may be awarded if specified performance targets are met.
Insurance
For properties in our Triple-Net Portfolio, we contractually require that all borrowers of funds from us and lessees of any of our properties maintain comprehensive property and general and professional liability insurance that covers us as well as the borrower and/or lessee. For investments in which we own fee simple title to the property and lease it to a third-party tenant, we are a non-possessory landlord and are generally not responsible for what takes place on such property. Nonetheless, claims including those pertaining to general and professional liability may be asserted against us which may result in costs and exposure for which insurance is not available.
For properties in our SHOP segment, our affiliates are licensed operators and are generally responsible for operational costs and expenses and could be held liable for other risks and liabilities. We maintain and/or contractually require that our third-party SHOP operators maintain comprehensive property and general and professional liability insurance. While our third-party SHOP operators typically indemnify us, pursuant to the terms of management agreements, for certain liabilities arising out of certain of their actions such as gross negligence, fraud or willful misconduct, certain liabilities may not be subject to indemnification, it may be difficult to enforce our rights or we may need to seek alternative solutions to ensure the liability is appropriately addressed.
Although we actively monitor and seek to ensure compliance by our third-party independent operators with our insurance requirements, we may be subject to loss for any number of reasons, such as noncompliance on the part of our third-party operators, losses that exceed covered limits or that are not covered, inability of operators to obtain insurance, bankruptcy of a carrier, or insufficient tail coverage.
Competition
In the health care industry, we compete for real property investments with health care providers, other health care related REITs, real estate partnerships, banks, private equity funds, venture capital funds and other investors. Many of our competitors are significantly larger and have greater financial resources and lower cost of capital than we have available to us. Our ability to compete successfully for real property investments will be determined by numerous factors, including our ability to identify suitable acquisition targets, our ability to negotiate acceptable terms for any such acquisition and the availability and our cost of capital.
Our SHOP operators, lessees and borrowers compete on a local, regional and, in some instances, national basis with other health care providers. The ability of our SHOP operators, lessees or borrowers to compete successfully for patients or residents at our properties depends upon several factors, including the levels of care and services provided by the SHOP operators, lessees or borrowers, the reputation of the providers, physician referral patterns, physical
8
Table of Contents
appearances of the properties, family preferences, financial condition of the operator and other competitive systems of health care delivery within the community, population and demographics.
REIT Tax Status
We have elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended. To maintain our qualification as a REIT, we must meet a number of organizational and operational requirements, including a requirement that we annually distribute to our shareholders at least 90% of our REIT taxable income, determined without regard to the dividends paid deduction and excluding net capital gains. As a REIT, we generally are not subject to U.S. federal income tax on the taxable income we distribute to our shareholders. If we fail to qualify as a REIT in any taxable year, we will be subject to U.S. federal income tax at the generally applicable corporate tax rate. Even if we qualify for taxation as a REIT, we may be subject to U.S. federal income tax provisions on certain specific transactions and property, as well as certain state and local taxes on our income, property or net worth and U.S. federal income and excise taxes on our undistributed income. We made no provision for U.S. federal income tax purposes prior to utilizing the RIDEA structure and establishing our taxable REIT subsidiary (“TRS”) during the second quarter of 2025.
Under RIDEA, a REIT may lease a “qualified healthcare property” on an arm's-length basis to a TRS if the property is operated on behalf of such TRS by a person who qualifies as an “eligible independent operator”. Generally, the rent received from the TRS will meet the related party exception and will be treated as “rents from real property”. Rent revenue received from the TRS lessee and lease expense incurred by the TRS are eliminated in consolidation. A "qualified healthcare property" includes real property and any personal property that 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. Resident fees and services revenue and related operating expenses for these facilities are reported on our Consolidated Statements of Income and are subject to federal, state and local income taxes. As a result, beginning the second quarter of 2025, we now record income tax provision or benefit with respect to our TRS entity which is taxed under provisions similar to those applicable to regular corporations and not under the REIT provisions. Our provision for income taxes for the year ended December 31, 2025, was $179,000. At December 31, 2025, our deferred income tax assets and deferred income tax liabilities with respect to our TRS entity were $729,000 and $695,000, respectively.
Health Care Regulation
Overview
The health care industry is heavily regulated by the government. We and our SHOP operators, borrowers and lessees who operate health care facilities are subject to extensive regulation by federal, state and local governments. These laws and regulations are subject to frequent and substantial changes resulting from legislation, adoption of rules and regulations, and administrative, executive and judicial interpretations of existing law. These changes may have a dramatic effect on the definition of permissible or impermissible activities, the relative costs associated with doing business and the amount of reimbursement by both government and other third-party payors. These changes may be applied retroactively. The ultimate timing or effect of these changes cannot be predicted. The failure of any operator of our SHOP communities, borrower of funds from us or lessee of any of our properties to comply with such laws, requirements and regulations could result in sanctions or remedies such as denials of payment for new Medicare and Medicaid admissions, civil monetary penalties, state oversight and loss of Medicare and Medicaid participation or licensure. Such action could affect our SHOP operator’s, borrower’s or lessee’s ability to operate its facility or facilities and could adversely affect such operator’s, borrower’s or lessee’s ability to meet their contractual obligations to us.
The properties we own and the manner in which they are operated are affected by changes in the reimbursement, licensing and certification policies of federal, state and local governments. Properties may also be affected by changes in accreditation standards or procedures of accrediting agencies. In addition, expansion (including the addition of new beds or services or acquisition of medical equipment) and occasionally the discontinuation of services of health care facilities are, in some states, subjected to state and regulatory approval through “certificate of need” laws and regulations.
9
Table of Contents
Health Care Reform and Other Legislative Developments
Federal health care reform, including the Patient Protection and Affordable Care Act, as amended (the “Affordable Care Act”), has expanded access to health insurance, reduced health care costs, and instituted various health policy reforms. Among other things, the Affordable Care Act: reduced Medicare skilled nursing facility reimbursement by a so-called “productivity adjustment” based on economy-wide productivity gains; required the development of a value-based purchasing program for Medicare skilled nursing facility services; authorized bundled payment programs, which can include post-acute services; and provided incentives to state Medicaid programs to promote community-based care as an alternative to institutional long-term care services. In addition, the Affordable Care Act impacts both us and our SHOP operators, lessees and borrowers as employers, including requirements related to the health insurance we offer to our respective employees. Many aspects of the Affordable Care Act have been implemented through regulations and sub-regulatory guidance. In December 2017, federal legislation repealed the Affordable Care Act’s penalty for individuals who fail to maintain health coverage meeting certain minimum standards. Other changes in the law include expiration of the enhanced Affordable Care Act premium subsidies for individuals enrolling in certain plans. Additional revisions of the Affordable Care Act could be made in future, although the details and timing of any such actions are unknown at this time. There can be no assurance that the implementation of the Affordable Care Act or any subsequent modifications or related legal challenges will not adversely impact the operations, cash flows or financial condition of our SHOP communities and our lessees and borrowers, which subsequently could materially adversely impact our revenue and operations.
President Trump, Congress and state legislatures can be expected to continue to review and assess alternative health care delivery systems and payment methodologies, including potential changes in Medicare and Medicaid payment policy for skilled nursing facility services and other types of post-acute care. Additional changes in laws, new interpretations of existing laws, or other changes in payment methodologies may have a dramatic effect on the definition of permissible or impermissible activities, the relative costs associated with doing business and the amount of reimbursement by the government and other third-party payors. There can be no assurances that enacted or future legislation will not have an adverse impact on the financial condition of our SHOP communities and our borrowers and lessees, which subsequently could materially adversely impact our company.
Reimbursement
The ability of our SHOP operators, borrowers and lessees to generate revenue and profit determines the underlying value of that property to us. Revenues of our SHOP communities and of our borrowers and lessees of skilled nursing centers are generally derived from payments for patient care. Sources of such payments for skilled nursing facilities include the federal Medicare program, state Medicaid programs, private insurance carriers, managed care organizations, preferred provider arrangements, and self-insured employers, as well as the patients themselves.
A significant portion of the revenue of our SHOP communities and of our skilled nursing center borrowers and lessees is derived from governmentally-funded reimbursement programs, such as Medicare and Medicaid. Because of significant health care costs paid by government programs, both federal and state governments have adopted and continue to consider various health care reform proposals to control health care costs. In many instances, revenues from Medicaid programs are insufficient to cover the actual costs incurred in providing care to Medicaid patients. In addition, all states have been making changes to their long-term care delivery systems that emphasize home and community-based long-term care services, in some cases coupled with cost-controls for institutional providers. Increasingly, state Medicaid programs are providing coverage through managed care programs under contracts with private health plans, which is intended to decrease state Medicaid costs. The federal government also has adopted various policies to promote community-based alternatives to institutional services and other initiatives that may impact Medicaid payments. For example, on January 29, 2026, the Centers for Medicare & Medicaid Services (“CMS”) issued a final rule implementing recent federal legislation that tightens the rules under which states can use provider taxes to fund their Medicaid programs. As states and the federal government continue to respond to budget pressures, future reduction in Medicaid payments for skilled nursing facility services could have an adverse effect on the financial condition of our SHOP operators, borrowers and lessees which could, in turn, adversely impact the timing or level of their payments to us.
With regard to the Medicare program, over the years there have been efforts to contain Medicare fee-for-service spending, promote Medicare managed care, and, more recently, tie reimbursement to quality and value of care.
10
Table of Contents
Following prior legislation on Medicare sequestration, which results in automatic reduction in Medicare spending, the Medicare 2% sequestration reduction was suspended through March 31, 2022, and then reduced to 1% from April through June 2022. As of July 1, 2022, cuts of 2% were re-imposed, and will continue under recently-enacted appropriations legislation through February 28, 2033.
CMS annually updates Medicare SNF prospective payment system rates and other policies. On July 31, 2025, CMS issued a final rule to update Medicare payment policies and rates for SNFs under the SNF prospective payment system (“SNF PPS”) for fiscal year (“FY”) 2026. CMS announced that, it was updating SNF PPS rates by 3.2% based on the final SNF market basket of 3.3%, plus a 0.6% market basket forecast error adjustment, and a negative 0.7% productivity adjustment, which amounts to an increase in SNF PPS payments of $1.16 billion compared to payments in FY 2025. CMS stated that its impact figures do not incorporate the SNF Value-Based Purchasing (“VBP”) reductions for certain SNFs subject to the net reduction in payments under the SNF VBP, which are estimated to total $208.36 million in FY 2026. CMS stated that it was finalizing several changes to the PDPM ICD-10-CM code mappings to allow providers to provide more accurate, consistent, and appropriate primary diagnoses that meet the criteria for skilled intervention during a Part A SNF stay. CMS finalized 34 changes to the PDPM ICD-10-CM code mappings to maintain consistency with the latest ICD-10-CM coding guidance. CMS also finalized a series of operational and administrative proposals for the SNF VBP Program. In addition, CMS announced that for the SNF Quality Reporting Program (“QRP”), it was finalizing its proposal to remove four standardized patient assessment data elements from the Minimum Data Set (“MDS”), the SNF resident assessment form, beginning with residents admitted on or after October 1, 2025. CMS also finalized its proposal to amend the reconsideration request policy and process.
In April 2024, CMS issued the Minimum Staffing Standards for Long-Term Care Facilities and Medicaid Institutional Payment Transparency Reporting final rule. The rule set forth new comprehensive minimum staffing requirements, including a total nurse staffing standard of 3.48 hours per resident day (“HPRD”), consisting of at least 0.55 hours per resident day of direct registered nurse care and 2.45 hours per resident day of direct nurse aide care. CMS also finalized enhanced facility assessment requirements and a requirement to have a registered nurse onsite 24 hours a day, seven days a week (“24/7”), to provide skilled nursing care. The final rule also provided a staggered implementation timeframe of the minimum nurse staffing standards and 24/7 registered nurse requirement based on geographic location as well as possible exemptions for qualifying facilities for some parts of these requirements based on workforce unavailability and other factors. The final rule was challenged in federal courts in Texas and Iowa. An April 2025 decision from the U.S. District Court for the Northern District of Texas and a June 2025 decision from the U.S. District Court for the Northern District of Iowa blocked the rule from taking effect. The Texas federal court vacated the rule in full, finding that CMS had exceeded its authority in promulgating it. Meanwhile, the Iowa federal court only vacated the 24/7 registered nurse requirement and the minimum staffing hours requirement, while leaving the rest of the rule in place. CMS appealed the Texas federal court’s decision striking down the entire rule to the U.S. Court of Appeals for the Fifth Circuit, but that appeal was dismissed on September 19, 2025, pursuant to the government’s motion. The Iowa federal court’s decision was also appealed to the U.S. Court of Appeals for the Eighth Circuit, but that appeal was dismissed on October 3, 2025, pursuant to the government’s motion. Thus, both federal district court rulings stand undisturbed. Regardless, however, the 2025 budget reconciliation act (also known as the “One Big Beautiful Bill Act”), signed by President Trump on July 4, 2025, imposed a 10-year moratorium on the implementation and enforcement of various provisions of the minimum staffing rule. Specifically, the law prohibited CMS from implementing or enforcing the requirement for a registered nurse to be onsite 24/7 and the other specific nurse staffing standards until September 30, 2034. On December 3, 2025, CMS issued an interim final rule with comment, which repealed certain provisions of the minimum staffing rule, effective February 2, 2026. CMS explained that the prohibitions of the One Big Beautiful Bill Act rendered portions of the regulations unenforceable and unimplementable during the period before October 1, 2034, and that Congress had thus effectively suspended these provisions for that period. Therefore, CMS stated this prohibition warranted restoration of the previous version of the federal regulations.
On June 18, 2025, CMS issued a Quality, Safety and Oversight memorandum, QSO-25-NH, which outlined updates to how nursing home ratings are calculated and reported on the Nursing Home Care Compare website. According to the QSO memo, as of July 30, 2025, CMS would publish average Five Star ratings and other performance-based information for chains or affiliated entities on the Nursing Home Care Compare website. CMS also stated it would be removing COVID-19 vaccination information from the main profile page of each nursing home on the Care Compare website effective July 30, 2025. CMS also indicated it would be revising the methodology used to calculate Five Star Ratings.
11
Table of Contents
There can be no assurance that these rules or future regulations modifying Medicare skilled nursing facility payment rates or other requirements for Medicare and/or Medicaid participation will not have an adverse effect on the financial condition of our SHOP communities and of our borrowers and lessees which could, in turn, adversely impact the timing or level of their payments to us.
CMS also has, in the past, implemented a variety of Medicare bundled payment programs that seek to promote greater care coordination and more efficient use of resources. Certain of these models, such as the Medicare Comprehensive Care for Joint Replacement model (which ended in December 2024) and Bundled Payments for Care Improvement Advanced model (which ended in December 2025), have impacted post-acute care, including skilled nursing facility services. There can be no assurances that further Medicare payment models will not adversely affect revenues of our SHOP communities and of our skilled nursing center borrowers and lessees and thereby adversely affect their ability to make payments to us.
Moreover, health care facilities continue to experience pressures from private payors attempting to control costs; reimbursement from private payors has in some cases fallen relative to government payors. Governmental and public concern regarding health care costs may result in significant reductions in payment to health care facilities, and there can be no assurance that future payment rates for either governmental or private payors will be sufficient to cover cost increases in providing services to patients. Any changes in reimbursement policies which reduce reimbursement to levels that are insufficient to cover the cost of providing patient care could adversely affect revenues of our SHOP communities and of our skilled nursing center borrowers and lessees and to a much lesser extent our assisted living community borrowers and lessees and thereby adversely affect their ability to make payments to us. Failure of our SHOP communities or borrowers or lessees to make their payments would have a direct and material adverse impact on us.
Fraud and Abuse Enforcement
Various federal and state laws govern financial and other arrangements between health care providers that participate in, receive payments from, or make or receive referrals in connection with government funded health care programs, including Medicare and Medicaid. These laws, known as the fraud and abuse laws, include the federal anti-kickback statute, which prohibits, among other things, knowingly and willfully soliciting, receiving, offering or paying any remuneration directly or indirectly in return for, or to induce, the referral, or arrange for the referral, of an individual to a person for the furnishing of an item or service for which payment may be made under federal health care programs. In addition, the federal physician self-referral law, commonly known as the Stark Law, prohibits physicians and certain other types of practitioners from making referrals for certain designated health services paid in whole or in part by Medicare and Medicaid to entities with which the practitioner or a member of the practitioner’s immediate family has a financial relationship, unless the financial relationship fits within an applicable exception to the Stark Law. The Stark Law also prohibits the entity receiving the referral from seeking payment under the Medicare program for services rendered pursuant to a prohibited referral. Sanctions for violating the Stark Law include civil monetary penalties of up to $30,868 per prohibited service provided, assessments equal to three times the dollar value of each such service provided and exclusion from the Medicare and Medicaid programs. Many states have enacted similar fraud and abuse laws which are not necessarily limited to items and services for which payment is made by federal health care programs. Violations of these laws may result in fines, imprisonment, denial of payment for services, and exclusion from federal and/or other state-funded programs. Other federal and state laws authorize the imposition of penalties, including criminal and civil fines and exclusion from participation in federal health care programs for submitting false claims, improper billing and other offenses. Federal and state government agencies have continued rigorous enforcement of criminal and civil fraud and abuse laws in the health care arena. Our SHOP operators, borrowers and lessees are subject to many of these laws, and some of them could in the future become the subject of a governmental enforcement action.
Environmental Regulation
Under various federal, state and local environmental laws, ordinances and regulations, an owner of real property or a secured lender (such as us) may be liable for the costs of removal or remediation of hazardous or toxic substances at, under or disposed of in connection with such property, as well as other potential costs relating to hazardous or toxic substances (including government fines and damages for injuries to persons and adjacent property). Such laws often impose such liability without regard to whether the owner or secured lender knew of, or was responsible for, the presence or disposal of such substances and may be imposed on the owner or secured lender in connection with the
12
Table of Contents
activities of an operator of the property. The cost of any required remediation, removal, fines or personal or property damages and the owner’s or secured lender’s liability therefore could exceed the value of the property, and/or the assets of the owner or secured lender. In addition, the presence of such substances, or the failure to properly dispose of or remediate such substances, may adversely affect the owner’s ability to sell or rent such property or to borrow using such property as collateral which, in turn, would reduce our revenues.
As the owner of properties in our SHOP segment, we may be liable to such costs resulting from environmental contamination emanating from our properties. For properties in our Triple-Net Portfolio, although the mortgage loans that we provide and leases covering our properties require the borrower and the lessee to indemnify us for certain environmental liabilities, the scope of such obligations may be limited and we cannot assure that any such borrower or lessee would be able to fulfill its indemnification obligations.
Human Capital
LTC recognizes the value of our employees and strives to cultivate a cohesive company culture. We are committed to being a workplace that encourages respect, collaboration, communication, transparency, and integrity. We seek to hire employees with various backgrounds and perspectives.
Our success starts and ends with having the best talent, and as a result, we are focused on attracting, developing and retaining our employees. The average tenure of our employees is more than 12 years with LTC.
We offer employees a competitive and comprehensive benefits package that we believe meets or exceeds market standards. LTC fully pays health care premiums for employees and all eligible dependents. For qualified employees, we offer a 401(k) retirement plan with an employer contribution matching program.
We support employees attending industry conferences. For employees with at least one year of service, we grant up to three days leave to take professional licensing examinations. We also pay their annual renewal fees for professional licenses.
As of December 31, 2025, we employed 25 people. Our employees are not members of any labor union, and we consider our relations with our employees to be excellent.
Investor Information
We make available to the public free of charge through our website our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, including exhibits and amendments to those reports, filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as soon as reasonably practicable after we electronically file such reports with, or furnish such reports to, the Securities and Exchange Commission (“SEC”). We also use the “Investors” portion of our www.LTCreit.com website for purposes of compliance with Regulation FD and as a routine channel for distribution of important information to investors and interested parties, including news releases, analyst presentations, financial information, and corporate governance practices. Accordingly, investors and interested parties should monitor the “Investors” portion of our www.LTCreit.com website for the release of this information. Information on our website is not part of this Annual Report on Form 10-K or any of our filings with the SEC unless specifically incorporated by reference.
The SEC also maintains a website that contains reports, proxy statements and other information we file. The website address of the SEC website is www.sec.gov.
You may contact our Investor Relations Department at:
LTC Properties, Inc.
3011 Townsgate Road, Suite 220
Westlake Village, California 91361
Attn: Investor Relations
(805) 981-8655
13
Table of Contents
Item 1A. RISK FACTORS
This section discusses risk factors that could affect our business, operations, and financial condition. If any of these risks, as well as other risks and uncertainties that we have not yet identified or that we currently believe are not material, actually occur, we could be materially adversely affected and the value of our securities could decline. In addition, these risk factors contain “forward-looking statements” as discussed above under the “Cautionary Statement on Forward-Looking Statements.” The following information should be read in conjunction with Management’s Discussion and Analysis, and the consolidated financial statements and related notes in this Annual Report on Form 10-K.
Risks Related to Our Business and Industry
We are responsible for, and our financial performance will be impacted by, operational and legal risks and liabilities under our new SHOP segment.
During the second quarter of 2025, we began utilizing a structure, as authorized by the REIT Investment Diversification and Empowerment Act of 2007, commonly referred to as “RIDEA”. Under RIDEA, a REIT may lease a qualified healthcare property on an arm's-length basis to a taxable REIT subsidiary (“TRS”) if the property is operated on behalf of such TRS by a person/entity who qualifies as an “eligible independent operator.” Under this structure, the eligible third-party SHOP operator receives a management fee from our TRS for operating the property as an independent third party.
As the owner of a property under a RIDEA structure, we are responsible for, and our financial performance is impacted by, operational and legal risks and liabilities of the property. The income we generate from RIDEA structures in our SHOP segment is subject to a number of operational risks including fluctuations in occupancy levels and resident fee levels, increases in the cost of food, materials, energy, labor or other services, national and regional economic conditions, the imposition of new or increased taxes and regulation, capital expenditure requirements, professional and general liability claims, and the availability and cost of professional and general liability insurance.
We are dependent on the ability of our third- party SHOP operators to successfully manage and operate our SHOP communities.
Although we have some general oversight approval rights and the right to review operational and financial reporting information with respect to a typical RIDEA structure, our independent third-party operators ultimately control the day-to-day business of the property. We rely on the personnel, expertise, resources, good faith, and judgment of our independent third-party operators to set appropriate resident fees, provide accurate property-level financial results for our properties in a timely manner and to otherwise operate properties in our SHOP segment in compliance with the terms of our management agreements and all applicable laws and regulations. While our third-party SHOP operators typically indemnify us, pursuant to the terms of management agreements, for liabilities arising out of certain of their actions such as gross negligence, fraud or willful misconduct, it may be difficult to enforce our rights or we may need to seek alternative solutions to ensure the liability is appropriately addressed.
We are dependent on our operators for revenue and cash flow.
Substantially all of our revenue and sources of cash flows are derived from management agreements, operating lease rentals, resident fees and services and interest earned on outstanding financing receivables, loans receivable and income from our preferred equity investments in unconsolidated joint ventures. Our investments in owned real properties, mortgage loans, mezzanine loans, financing receivables and preferred equity investments represent our primary source of liquidity to fund distributions. We do not implement operational decisions with respect to the daily management and marketing of care services offered at our properties. We therefore are dependent upon the performance of our operators for the income and rates we earn on leases and loans. A decrease in occupancy and/or increase in operating costs could have an adverse effect on our SHOP operators, lessees and borrowers. For example, due to the Covid-19 pandemic and related public health measures, our lessees and borrowers experienced a decrease in occupancy and an increase in operating costs. There can be no assurance that our SHOP operators, lessees and borrowers will have sufficient assets, income, and access to financing to enable them to satisfy, in full, their respective obligations to us. Our
14
Table of Contents
financial condition and ability to pay dividends could be adversely affected by financial or operational difficulties experienced by any of our SHOP operators, lessees or borrowers, or in the event any such operator does not renew and/or extend its relationship with us at similar or better financial terms.
We and our operators are subject to risks associated with public health crises, including pandemics.
The existence and effect of public health crises and related government measures to prevent the spread of infectious diseases could adversely impact our company and the financial results of our operators. The operations and occupancy levels at the seniors housing and health care facilities of SHOP communities and of our lessees and borrowers could be adversely affected by a pandemic including future outbreaks of Covid and its variants, especially if there are infections on a large scale at our properties. The impact of another pandemic could include early resident move-outs, our operators delaying accepting new residents due to quarantines, potential occupants postponing moves to our operators’ facilities, and/or hospitals cancelling or significantly reducing elective surgeries thereby reducing the number of people in need of skilled nursing care. Operating costs, such as cost increases in staffing and pay, purchases of additional personal protective equipment (“PPE”), and implementation of additional safety protocols, of our SHOP operators, lessees and borrowers could rise due to a public health crisis such as another pandemic.
Additionally, health orders, rent moratoriums, and other initiatives by federal, state, and local authorities could affect our operators and our ability to collect rent and/or enforce remedies for the failure to pay rent. The extent to which another pandemic could impact our operations, and those of our operators, will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration, spread and severity of the pandemic, the actions taken to contain the pandemic or mitigate its impact, and the direct and indirect economic effects of the pandemic and containment measures. Further, future outbreaks of Covid and its variants, or another pandemic, could generate an adverse trend away from seniors housing and health care facilities to at-home and alternative care services, the occupancy rates of our operators and the value of our real estate investments could be negatively impacted.
The health care industry is heavily regulated by the government and changes in federal, state, or local law could impose negative costs and restrictions on us and our operators.
We and our SHOP operators, borrowers and lessees who operate health care facilities are subject to extensive regulation by federal, state and local governments. These laws and regulations are subject to frequent and substantial changes resulting from proposed and enacted legislation, adoption of rules and regulations, the scope, administration, and enforcement of regulatory frameworks, and judicial interpretations of preexisting and newly adopted law. These changes may have a dramatic effect on the definition of permissible or impermissible activities, the relative costs associated with doing business and the amount of reimbursement by both government and other third-party payors. These changes may be applied retroactively. The ultimate timing or effect of these changes cannot be predicted. The failure of any borrower of funds from us or SHOP operator or lessee of any of our properties to comply with such laws, requirements and regulations could affect its ability to operate its facility or facilities and could adversely affect such SHOP operator’s, lessee’s or borrower’s contractual obligations to us. Further, the ability of our operators to comply with applicable regulations could be adversely impacted by shifts in the labor market and increases in inflation.
Changes in federal, state, or local laws limiting REIT investments in the health care sector may adversely impact our ability to participate in the ownership of and investment in health care real estate.
Legislation potentially impacting REIT ownership and investment in the health care sector has recently been introduced or is under discussion at the federal and state level. These legislative proposals range from additional oversight to prohibitions on investors acquiring or increasing ownership, or operational or financial control, in nursing homes. Such legislation or similar laws or regulations, if enacted, may limit our opportunities to participate in the ownership of, or investment in, certain health care real estate property types. Changes in federal, state, or local laws or regulations limiting REIT investment in the health care sector, reducing health care related benefits for REITs, or requiring additional approvals for health care entities to do business with REITs, could have a material adverse effect on our financial condition and operations.
15
Table of Contents
Federal and state health care cost containment measures including reductions in reimbursement from third-party payors such as Medicare and Medicaid could adversely affect us and the ability of our operators to make payments to us.
The ability of our operators to generate revenue and profit determines the underlying value of that property to us. Revenues of our skilled nursing center lessees are generally derived from payments for patient care. Sources of such payments include the federal Medicare program, state Medicaid programs, private insurance carriers, health care service plans, health maintenance organizations, preferred provider arrangements, self-insured employers, as well as the patients themselves.
The health care industry continues to face increased government and private payor pressure on health care providers to control costs. Federal legislative and regulatory policies have been adopted and may continue to be proposed that would reduce Medicare and/or Medicaid payments to nursing facilities. Moreover, state budget pressures continue to result in adoption of Medicaid provider payment reductions in some states. Increasingly, state Medicaid programs are providing coverage through managed care programs under contracts with private health plans, which is intended to decrease state Medicaid costs. In light of continuing federal and state Medicaid program reforms, budget cuts, and regulatory initiatives, no assurance can be given that the implementation of such regulations and reforms will not have an adverse effect on the financial condition or results of operations of our SHOP operators, lessees and/or borrowers which, in turn, could affect their ability to meet their contractual obligations to us.
Required regulatory approvals could delay operation of health care facilities.
Operators of skilled nursing and other health care facilities must be licensed under applicable state law and, depending upon the type of facility, certified or approved under the Medicare and/or Medicaid programs. A new operator in certain states also must receive change-of-ownership approvals under certificate of need laws. Delays in an operator receiving regulatory approvals from the applicable federal, state, or local government agencies, or the inability of an operator to receive such approvals, could prolong the period during which we are unable to receive lease or loan payments. We also could incur expenses in connection with any licensing, certification, or change-of-ownership proceedings.
Failure to comply with applicable law or regulations could prohibit operation of health care facilities.
The failure of our operators to comply with applicable federal, state, or local law or regulations could result in penalties which could include loss or restriction of license, loss of accreditation, denial of reimbursement, imposition of fines, suspension or decertification from federal and state health care programs, or closure of the facility. In our SHOP segment in particular, we may be held responsible for the failure by one of our third-party SHOP operators to comply with applicable law or regulation, which could subject us to similar penalties. The loss or imposition of restrictions on any required license, registration, certificate of need, provider agreement or certification would prevent a facility from operating in the manner intended by the operator or us. Additionally, failure by any of our operators to comply with applicable laws and regulations could result in adverse publicity and reputational harm, and therefore could harm our business.
Insurance coverage maintained by our operators could be inadequate to protect against contingencies.
Operators of health care facilities may become subject to claims that their services have resulted in injury or other adverse effects. For properties in our SHOP segment, we maintain and/or contractually require that our third-party SHOP operators maintain comprehensive liability insurance. For properties in our Triple-Net Portfolio, as a non-possessory landlord, we contend we are not generally responsible for what takes place at properties we do not possess. Although we require our operators to maintain comprehensive liability insurance that covers us as well as the operator, we could be subject to losses due to noncompliance or insufficient coverage. In addition, certain risks could be uninsurable or unavailable. There can be no assurance that we or our operators will have adequate insurance or funds to cover all contingencies. If an uninsured loss occurs or a loss exceeds policy limits, we could lose both invested capital and anticipated revenue from a property.
16
Table of Contents
We rely on a few major operators.
During the year ended December 31, 2025, approximately 25.3% of our revenues from leases and interest income from real estate investments were generated from three operators. The failure, inability, or unwillingness of any of these operators to meet their obligations to us could materially reduce our cash flow as well as our results of operations.
The extent and pace of inflation could adversely impact our operators’ net income and our results of operations.
Inflation, both real or anticipated as well as any related governmental policies, could adversely affect the economy and the costs of labor, goods and services to our operators. The impact of inflation may increase the costs to manage and make capital improvements at our SHOP communities. Because lessees and borrowers are typically required to pay all property operating expenses, increases in property-level expenses at our leased and mortgaged properties generally do not directly affect us. However, increased operating costs could have an adverse impact on our lessees and borrowers if increases in their operating expenses exceed increases in their revenue, which may adversely affect their ability to pay rent and interest owed to us. An increase in our operators’ expenses and a failure of their revenues to increase at least with inflation could adversely impact their net operating income and our results of operations. In addition, our long-term leases and loans typically contain provisions, such as rent escalators, designed to mitigate the adverse impact of inflation. If the contractual or actual increases in income we receive from our lessees and borrowers do not keep pace with a rise in inflation, our results of operations could be adversely impacted.
We may be unable to find suitable replacement operators for our SHOP communities.
If a third-party operator of a property in our SHOP segment does not renew or terminates its management agreement with us, we would attempt to obtain a replacement operator. However, we may fail to identify a suitable replacement or enter into an agreement with a new operator on a timely basis or on terms as favorable to us as our current agreement, if at all. During the transition period to a new SHOP operator, the attention of an existing operator may be diverted from the performance of our properties, Additionally, our ability to transition our properties to a suitable replacement operator could be significantly delayed or limited by state licensing, certificates of need, change-of-ownership rules, or other legal and regulatory requirements or restrictions. The inability to obtain a suitable replacement operator on a timely or successful basis could have a material adverse effect on our business, financial condition, and results of operations.
We may be unable to renew leases, or the terms of renewals or new leases could be less favorable than current leases.
Approximately 44.2% of our revenue for the year ended December 31, 2025, was derived from operating lease rentals. There can be no assurance that a lessee will operate its lease through expiration or that a lessee will exercise an option to renew its lease upon expiration. In such scenarios, there can be no assurance that we would be able to find a suitable replacement operator, re-lease the property on substantially equivalent or better terms than the prior lease, if at all. Additionally, to retain current or attract new operators, we could be asked to provide rent concessions or undertake capital expenditures to improve properties.
17
Table of Contents
Operator financial or legal difficulties could delay or prevent collection of rent.
If a lessee experiences financial or legal difficulties, it could fail to pay us rent when due, assert counterclaims, or seek bankruptcy protection. In the case of a master lease, this risk is magnified, as a default could reduce or eliminate rental revenue from several properties. Over the past three years, some of our operators have had or continue to have financial or legal difficulties resulting in non-payment of rent. See Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Executive Overview—Portfolio Overview—Update on Certain Operators for further discussion. If an operator is unable to comply with the terms of its leases, we could be asked to defer rent or be forced to modify the leases in ways that are unfavorable to us. Alternatively, the failure of an operator to perform its obligations under a lease or other agreements with us could force us to declare a default and terminate the lease. There can be no assurance that we would be able to find a suitable replacement operator, re-lease the property on substantially equivalent or better terms than the prior lease, if at all. If a lessee seeks bankruptcy protection, it could delay our efforts to collect past due amounts owed to us under the applicable lease and ultimately preclude collection of all or a portion of those amounts.
Collateral securing mortgage loans could be insufficient.
If a borrower defaults under a mortgage loan, we could be obligated to foreclose on or otherwise protect our investment by acquiring title to the property. In such a scenario, the borrower could contest enforcement of foreclosure, assert counterclaims, or seek bankruptcy protection. This could limit or delay our ability to recover unpaid principal and/or interest and exercise other rights and remedies. Declines in the value of the property could prevent us from realizing an amount equal to our investment. Additionally, it could be difficult to expeditiously find a suitable replacement operator, if at all, or otherwise successfully operate or occupy the property, which could adversely affect our ability to recover our investment.
Our real estate investments could become impaired.
We periodically, but not less than quarterly, evaluate our real estate investments and other assets for impairment indicators. The judgment regarding the existence of impairment indicators is based on factors such as market conditions, operator performance, and legal structure. If we determine that an impairment has occurred, we would be required to make an adjustment to the net carrying value of the asset which could have an adverse effect on our results of operations in the period in which the write-off occurs.
Our real estate investments are relatively illiquid and could be difficult to sell for book value.
Real estate investments are relatively illiquid and therefore tend to limit our ability to vary our portfolio promptly in response to changes in economic or other conditions. The real estate market is affected by many factors, such as general economic conditions, availability of financing, interest rates, and other factors, including supply and demand, that are beyond our control. All of our real estate investments are special purpose properties that cannot be readily converted to other health care related services, general residential, retail, or office use. Transfers of operations of health care facilities are subject to regulatory approvals not required for transfers of other types of commercial operations and other types of real estate. If the operation of any of our properties becomes unprofitable or a SHOP operator, lessee or borrower becomes unable to meet its obligations on the lease, mortgage loan, or management agreement, the liquidation value of the property could be substantially less than the net book value or the amount owing on any related mortgage loan than would be the case if the property were readily adaptable to other uses.
Development and construction risks could affect the profitability and completion of properties.
Our business includes development and construction of seniors housing and health care properties. Construction and development projects involve risks such as the following:
| ● | development of a project could be abandoned after expending significant resources resulting in the loss of deposits or failure to recover expenses already incurred; |
18
Table of Contents
| ● | development and construction costs of a project could exceed original estimates due to increased interest rates and higher materials, transportation, labor, leasing, or other costs, which could make completion less profitable; |
| ● | financing for a project could be unavailable on favorable terms or at all; |
| ● | project delays could result in increases in construction costs and debt service expenses as a result of a variety of factors that are beyond our control, including natural disasters, labor conditions, material shortages, and regulatory hurdles; and |
| ● | occupancy rates and rents at a newly completed property could fail to meet expected levels and could be insufficient to make the property profitable. |
We may be unable to invest cash proceeds due to competition for health care properties.
From time to time, we will have cash available from the sale of equity and debt capital, sale of properties, and funds from operations. With these cash proceeds, we may seek to invest in health care properties as part of our business and growth strategy. We compete for health care property investments with developers, public and private REITs, and other investors, some of whom may have greater financial resources than us. The competition for health care properties could affect our ability to make timely investments on acceptable terms, which could adversely affect our ability to grow or acquire properties profitably or with attractive return.
Our operators face competition providing seniors housing and health care services.
The business of providing seniors housing and health care is highly competitive. Our operators compete with other companies providing similar care services or alternatives such as home health agencies, hospices, life care at home, community-based service programs, retirement communities, and convalescent centers. Additionally, our operators are sensitive to changes in the labor market and wages and benefits offered to their employees, which can impact their ability to remain competitive. There can be no assurance that our operators will not encounter increased competition in the future which could limit their ability to attract residents or expand their businesses and therefore adversely affect their ability to manage our SHOP communities or to make their lease or loan payments to us.
Risks Related to Our Status as a REIT
Our failure to qualify as a REIT would have serious adverse consequences to our stockholders.
We intend to operate so as to qualify as a REIT under the Internal Revenue Code of 1986, as amended (“the Code”). We believe that we have been organized and have operated in a manner which would allow us to qualify as a REIT under the Code beginning with our taxable year ended December 31, 1992. However, it is possible that we have been organized or have operated in a manner which would not allow us to qualify as a REIT, or that our future operations could cause us to fail to qualify. Qualification as a REIT requires us to satisfy numerous requirements (some on an annual and quarterly basis) established under highly technical and complex Code provisions for which there are only limited judicial and administrative interpretations, and involves the determination of various factual matters and circumstances not entirely within our control. For example, in order to qualify as a REIT, at least 95% of our gross income in any year must be derived from qualifying sources, and we must pay dividends to stockholders aggregating annually at least 90% of our REIT taxable income (determined without regard to the dividends paid deduction and by excluding capital gains). Legislation, new regulations, administrative interpretations or court decisions could significantly change the tax laws with respect to qualification as a REIT or the federal income tax consequences of such qualification.
If we fail to qualify as a REIT in any taxable year, we will be subject to federal and state income tax (including any applicable alternative minimum tax for taxable years ending prior to January 1, 2018) on our taxable income at regular corporate rates. We note that REITs are specifically excluded from the application of the corporate alternative minimum tax that was enacted as part of the Inflation Reduction Act of 2022. Unless we are entitled to relief under statutory provisions, we would be disqualified from treatment as a REIT for the four taxable years following the year during which we lost qualification. If we lose our REIT status, our net earnings available for investment or distribution to
19
Table of Contents
stockholders would be significantly reduced for each of the years involved. In addition, we would no longer be required to make distributions to stockholders.
Legislation, new regulations, administrative interpretations and/or court decisions could occur at any time and significantly change the tax laws with respect to our qualification as a REIT or the federal income tax consequences of such qualification. We cannot predict if or when any new or amended law, regulation, administrative interpretation, or case will be adopted, promulgated, decided or become effective, and any such change may apply retroactively. The last significant legislation affecting REITs was The Tax Cuts and Jobs Act, effective for tax years beginning in 2018. We and our security holders may be adversely affected by any new or amended law, regulation, administrative interpretation, or case law. Stockholders and prospective investors are urged to consult with their tax advisors with respect to the impact of the Tax Cuts and Jobs Act and any other regulatory, administrative or judicial developments and proposals and their potential effect on an investment in our securities.
Risks Related to Our Capital Structure
Limited access to capital could affect our growth.
As a REIT, we are required to distribute at least 90% of our taxable income. Our growth therefore is generally through the investment of new capital in real estate assets. As of December 31, 2025, we had $14.4 million of cash on hand and $347.1 million available under our unsecured revolving line of credit. We also have the ability to access the capital markets through the issuance of $288.5 million of common stock under our equity distribution agreements and an indeterminate amount through the issuance of debt and/or equity securities under an automatic shelf registration statement. We currently believe our liquidity and various sources of available capital are sufficient to fund operations and development commitments, meet debt service obligations, make dividend distributions, and finance potential investments. In the future, however, our ability to access the equity and/or debt markets could be limited. During such times, most of our available capital would be required to meet existing commitments. Limited access to the equity and/or debt markets could negatively impact our growth if we are unable to obtain additional capital, dispose of assets on favorable terms, or acquire health care properties on a competitive basis.
We could incur more debt.
We operate with a policy of incurring debt when it is advisable in the opinion of our Board of Directors. As of December 31, 2025, our indebtedness represented approximately 34.0% of our gross assets. We could incur additional debt by borrowing under our unsecured revolving line of credit, mortgaging properties we own, and/or issuing debt securities in public offerings or private transactions. The degree of indebtedness could affect our ability to obtain additional financing for working capital, capital expenditures, acquisitions, or other corporate purposes and make us more vulnerable to a downturn in business or the economy generally.
Covenants related to our indebtedness could limit our operations.
The terms of our current indebtedness as well as debt instruments that we enter into in the future are subject to customary financial and operational covenants. These include requiring us to maintain debt service coverage, leverage ratios, and minimum net worth requirements. We may be unable to maintain compliance with these covenants and, if we fail to do so, we may be unable to obtain waivers and/or amend the covenants. If some or all of our debt is accelerated and becomes immediately due and payable, we may be unable to repay or refinance the debt. Our continued ability to incur debt and operate our business is subject to compliance with these covenants, which could limit operational flexibility.
An increase in market interest rates could increase our debt cost and impact our stock price.
We have entered into debt obligations, such as our unsecured revolving line of credit and term loans, with interest and related payments that vary with the movement of certain indices. In the future, we could incur additional indebtedness in connection with the entry into new credit facilities or the financing of acquisitions or development activity. If market interest rates increase, so could our interest costs. This could make the financing of any acquisition more costly. Rising interest rates could limit our ability to refinance existing debt when it matures or cause us to pay
20
Table of Contents
higher interest rates upon refinancing. Further, the dividend yield on our common stock will influence its price. An increase in market interest rates could lead prospective purchasers of our common stock to expect a higher dividend yield, which could adversely affect the market price of our common stock.
Ownership through partnerships and joint ventures could limit property performance.
We have in the past and may in the future develop and/or acquire properties in partnerships and similar joint ventures, including those in which we own a preferred interest, when we believe circumstances warrant this type of investment. Our organizational documents do not limit the amount of available funds that we can invest in partnerships or other joint venture structures. As of December 31, 2025, we had five active joint ventures with a total LTC equity investment of $330.6 million. Investments in partnerships and joint ventures, including limited liability companies, involve risks such as the following:
| ● | our partners could become bankrupt, in which event we and any other remaining partners would generally remain liable for the liabilities of the venture; |
| ● | our partners could have economic or other business interests or goals which are inconsistent with our business objectives; |
| ● | our partners or co-members could be in a position to take action contrary to our instructions, requests or objectives, including our policy with respect to maintaining our qualification as a REIT; and |
| ● | governing agreements often contain restrictions on the transfer of an interest or “buy-sell” or other provisions which could result in a purchase or sale of the interest at a disadvantageous time or on disadvantageous terms. |
We generally seek to maintain sufficient control of a partnership or joint venture to permit us to achieve our business objectives. However, in the event that it fails to meet expectations or becomes insolvent, we could lose our investment in the partnership or joint venture.
Risks Related to Our Stock
A failure to maintain or increase our dividend could reduce the market price of our common stock.
The decision to declare and pay dividends on our common stock, as well as the timing, amount, and composition of any future dividends, will be at the sole discretion of our Board of Directors. The ability to maintain or raise the dividend on our common stock is dependent, to a large part, on growth of funds available for distribution. This growth in turn depends upon increased revenues from additional investments and loans, rental increases, and mortgage rate increases. Any change in our dividend policy could have an adverse effect on the market price of our common stock.
Your ownership percentage in our common stock could be diluted.
From time to time, we could issue additional shares of our common stock in connection with sales under our equity distribution agreements or other capital market transactions. These issuances could cause your percentage ownership in our common stock to be diluted in the future and could have a dilutive effect on our earnings per share and reduce the value of our common stock. Additionally, our charter authorizes us to issue, without the approval of our stockholders, one or more classes or series of preferred stock having such designations, powers, privileges, preferences, including preferences over our common stock respecting dividends and distributions, terms of redemption and relative participation, optional or other rights, if any, of the shares of each such series of preferred stock and any qualifications, limitations or restrictions thereof, as our Board of Directors determines. The terms of one or more classes or series of preferred stock could dilute the voting power or reduce the value of our common stock.
Provisions in our charter limit ownership of shares of our stock.
No more than 50% in value of the outstanding shares of a REIT can be beneficially owned, directly or indirectly, by five or fewer individuals at any time during the last half of each taxable year. To ensure qualification under
21
Table of Contents
this test, our charter provides that, subject to exceptions, no person is permitted to beneficially own more than 9.8% of outstanding shares of any class or series of our stock, including our common stock. Our Board of Directors could decide to exempt a person from the 9.8% ownership limit unless doing so would result in the termination of our status as a REIT. Shares of our stock in excess of the 9.8% ownership limitation that lack an applicable exemption may lose rights to dividends and voting, and may be subject to redemption. Additionally, acquisition of any shares of our stock that would result in our disqualification as a REIT may be limited or void. The 9.8% ownership limitation also could have the effect of delaying, deferring, or preventing a change in control of us, including a merger or acquisition or tender offer that might provide a premium price for holders of our stock.
Maryland law could increase the difficulty of acquiring us.
Provisions of Maryland law, our charter, and our bylaws could have the effect of discouraging, delaying, or preventing transactions that involve an actual or threatened change in control. These provisions include the following:
| ● | The Maryland Business Combination Act provides that unless exempted, a Maryland corporation may not engage in business combinations, including mergers, dispositions of 10% or more of its assets, certain issuances of shares of stock, and other specified transactions, with an “interested stockholder” or an affiliate of an interested stockholder for five years after the most recent date on which the interested stockholder became an interested stockholder, and thereafter unless specified criteria are met. An interested stockholder is generally a person owning or controlling, directly or indirectly, 10% or more of the voting power of the outstanding stock of a Maryland corporation. Our Board of Directors has not exempted us from this statute. |
| ● | The Maryland Control Share Acquisition Act provides that “control shares” of a corporation acquired in a control share acquisition shall have no voting rights except to the extent approved by the stockholders by a vote of two-thirds of the votes eligible to be cast on the matter under the Maryland Control Share Acquisition Act. “Control Shares” means shares of stock that, if aggregated with all other shares of stock previously acquired by the acquiror, would entitle the acquiror to exercise voting power in electing directors within certain ranges. If voting rights of control shares are not approved at a stockholders’ meeting, then subject to certain conditions and limitations, the issuer may redeem any or all of the control shares for fair value. Our bylaws contain a provision by which we have opted-out of the Maryland Control Share Acquisition Act. However, we could, by resolutions adopted by our Board of Directors and without stockholder approval, elect to become subject to the Maryland Control Share Acquisition Act. |
These and other provisions of Maryland law could increase the difficulty of acquiring us, even if the acquisition would be in the best interests of our stockholders.
General Risk Factors
We are dependent on key personnel.
Our six executive officers and other senior officers have a significant role in our success. Our ability to retain our management group or to attract suitable replacements should any member of the management group leave is dependent on the competitive nature of the employment market. The loss of services from key members of the management group or a limitation in their availability could adversely affect our business and could be negatively perceived in the capital markets.
Our investments are concentrated in a single sector.
Our investments are concentrated in health care properties. A downturn in the health care property sector could have a greater adverse effect on our business and financial condition than if we had investments in multiple industries and sectors. A downturn in the health care property sector also could adversely impact the ability of our operators to meet their obligations to us and maintain residents and occupancy rates. Additionally, a downturn in the health care property sector could adversely affect the value of our properties and our ability to sell properties at prices or on terms acceptable to us.
22
Table of Contents
Disruptions in the capital markets could affect the price of our common stock and our ability to obtain financing.
The United States capital markets could experience significant price volatility, dislocations, and liquidity disruptions, due to global trade disputes and tariffs, international geopolitical events, and infectious disease outbreaks. This could cause market prices of many securities, including our common stock, to fluctuate substantially. Uncertainty in the stock and credit markets could negatively impact our ability to access financing at reasonable terms, which could negatively impact our ability to acquire properties and otherwise pursue our investment strategy. A prolonged downturn in the stock or credit markets could cause other unknown negative impacts on us and the economy.
Catastrophic weather and natural disasters could affect our properties.
Some of our properties are located in areas susceptible to catastrophic weather and natural disasters, including fires, snow or ice storms, windstorms or hurricanes, earthquakes, flooding, or other severe conditions. Adverse weather and natural events could cause damage to our properties. If our operators suffer losses from catastrophic weather or natural disasters, we could lose our invested capital and anticipated future revenue from the property.
We could incur costs associated with hazardous substances and contamination.
Under various federal, state, and local environmental laws, owners or operators of real estate could be required to investigate and remediate the effects of contamination of currently or formerly owned real estate by hazardous substances, often regardless of knowledge of or responsibility for the contamination. Although our borrowers and lessees are primarily responsible for the condition of the property they occupy, we also could be held liable to a governmental authority or to third parties for property damage, personal injuries, and for investigation and clean-up costs incurred in connection with the contamination or we could be required to incur additional costs to change how the property is constructed or operated due to presence of such substances. The presence of hazardous substances or a failure to properly remediate any resulting contamination could adversely affect our ability to lease, mortgage, or sell an affected property.
The use of, or inability to take advantage of the benefits of, artificial intelligence by us or our operators presents risks and challenges.
We have begun and may continue to use artificial intelligence and machine learning (collectively, “AI”) in our operations. While AI tools may facilitate optimization and operational efficiencies, they also have the potential for inaccuracy, misapplication, and misappropriation of proprietary information and intellectual property. Additionally, we may be competitively disadvantaged if our peers use AI tools to optimize operations and we fail to utilize AI tools in a comparable manner. Uncertainty around the development and security of new and emerging AI applications may require additional investment which may be costly and could impact our operating results. Our operators and vendors also may incorporate AI without disclosing such use to us or may fail to disclose risks presented by their use of AI. These outcomes could impair our ability to compete effectively, damage our reputation, result in the loss of valuable property or information and adversely affect our business, financial condition, and results of operations.
Information systems failures or data breaches could harm our business.
We and our operators rely on information systems to process, transmit, and store financial transactions and records, operator and lease data, and other confidential information. We are not aware of any material losses to our business or results of operations due to information system failures, data breaches, or cybersecurity incidents. However, information systems are vulnerable to threats, failures, breaches, or incidents due to improper functioning and unauthorized access from physical or electronic break-ins, computer viruses, and similar disruptions, including by hackers, foreign governments, and cyber terrorists. We and our operators rely on information technology and on numerous third-party providers for information technology services, and we and our operators face similar risks relating to these providers. We cannot be certain that their information system and cybersecurity protocols are sufficient to withstand a data breach or cybersecurity incident. The inability to maintain proper function, security, and availability of our and our operators’ information systems and the data maintained in those systems could interrupt our operations, damage our reputation, harm our business relationships, or increase our information systems, cybersecurity and insurance costs. The rapid evolution and increasing prevalence of AI may also increase our and our operators’ risks of information system failures, data breaches, or cybersecurity incidents. Further, an information system or cybersecurity
23
Table of Contents
threat, failure, data breach, or incident on an operator could impact their operations and ability to perform under the terms of their lease with us. While we maintain insurance coverage that may, subject to policy terms and conditions including deductibles, cover specific aspects of information system and cybersecurity risks, such insurance coverage may be insufficient to cover all losses. As information system and cybersecurity risks continue to evolve, we may be required to expend additional resources to continue to enhance our information system and cybersecurity measures and to investigate and remediate any information system and cybersecurity vulnerabilities.
Data privacy security failures or breaches could expose us to regulatory and other liability.
We and our operators are subject to various federal and state laws governing privacy and security of personally identifiable information. Despite safeguards by us and our operators, a data privacy security failure or breach could occur as a result of unintentional or deliberate acts to obtain unauthorized access to information, or to destroy, manipulate, or sabotage data. Further, new technologies such as AI may be more capable of evading safeguards. Information system threats, failures, breaches, or incidents also could result in the loss or release of personally identifiable information. A privacy or cybersecurity failure or breach could cause a loss of business, regulatory enforcement, substantial legal liability, and reputational harm. Where the failure or breach affects an operator, this could jeopardize the operator’s ability to fulfill its obligations to us. Further, the adoption of new privacy and cybersecurity laws at the federal and state level could require us and our operators to incur significant compliance costs.
Item 1B. UNRESOLVED STAFF COMMENTS
None.
Item 1C. CYBERSECURITY
24
Table of Contents
Item 2. PROPERTIES
Here and throughout this Annual Report on Form 10-K wherever we provide details of our properties’ bed/unit count, the number of beds/units applies to skilled nursing, assisted living, independent living, memory care and behavioral health care properties only. This number is based upon unit/bed counts shown on operating licenses provided to us by operators or units/beds as stipulated by lease/mortgage documents. These numbers often differ, usually not materially by property, from units/beds in operation at any point in time. The differences are caused by such things as operators converting a patient/resident room for alternative uses, such as offices or storage, or converting a multi-patient room/unit into a single patient room/unit. We monitor our properties on a routine basis through site visits and reviews of current licenses. In an instance where such change would cause a de-licensing of beds or in our management’s opinion impact the value of the property, we may take action against the operator to preserve the value of the property/collateral.
Investment Portfolio
The following table provides additional information regarding the geographic diversification of our segment properties as of December 31, 2025 (dollar amounts in thousands):
SHOP Segment | Real Estate Investments Segment | |||||||||||||||
| | | | No. of | |
| ||||||||||
No. of | No. of | Gross | No. of | Beds/ | Gross |
| ||||||||||
Location | Properties | Units | Investments | Properties | Units | Investments |
| |||||||||
Alabama |
| — |
| — | $ | — | 1 | 174 | $ | 10,420 | ||||||
Arizona |
| — |
| — | — | 3 | 613 |
| 28,496 | |||||||
California |
| 2 |
| 133 | 48,743 | 4 | 351 |
| 95,163 | |||||||
Colorado |
| 4 |
| 228 | 41,801 | 8 | 429 |
| 61,497 | |||||||
Florida |
| — |
| — | — | 6 | 765 |
| 125,406 | |||||||
Georgia |
| 1 |
| 88 | 23,015 | 1 | 70 |
| 15,148 | |||||||
Illinois |
| 4 |
| 264 | 58,022 | 1 | 154 |
| 40,519 | |||||||
Kansas |
| 2 |
| 114 | 26,241 | 6 | 317 |
| 34,345 | |||||||
Kentucky |
| 2 |
| 158 | 39,763 | 2 | 286 |
| 48,716 | |||||||
Michigan |
| — |
| — | — | 24 | (1) | 2,817 |
| 293,954 | ||||||
Missouri | — | — | — | 3 | 253 | 52,952 | ||||||||||
Montana | — | — | — | 2 | 149 | 5,998 | ||||||||||
Nevada | — | — | — | 1 | 118 | 11,062 | ||||||||||
New Jersey |
| — |
| — | — | 3 | 166 |
| 59,059 | |||||||
New Mexico |
| — |
| — | — | 5 | 608 |
| 42,920 | |||||||
North Carolina |
| — |
| — | — | 33 | 1,473 |
| 303,391 | |||||||
Ohio |
| 1 |
| 60 | 15,024 | 8 | 723 |
| 126,090 | |||||||
Oklahoma |
| — |
| — | — | 4 | 155 |
| 9,052 | |||||||
Oregon |
| 1 |
| 186 | 33,139 | 4 | 571 |
| 24,178 | |||||||
South Carolina |
| — |
| — | — | 5 | 432 |
| 51,127 | |||||||
Tennessee |
| 1 |
| 100 | 31,334 | 2 | 141 |
| 5,275 | |||||||
Texas |
| — |
| — | — | 29 | 2,958 |
| 314,987 | |||||||
Wisconsin |
| 7 |
| 742 | 248,183 | 6 | 480 |
| 71,768 | |||||||
TOTAL |
| 25 |
| 2,073 | $ | 565,265 | 161 | 14,203 | $ | 1,831,523 | (2) | |||||
| (1) | Includes three parcels of land held-for-use. |
| (2) | Excludes two working capital loans totaling $874. |
25
Table of Contents
The following chart represents the 10 states with the highest percentage of gross investment for our investment portfolio as of December 31, 2025:
Owned Real Properties-SHOP
During the second quarter of 2025, we began utilizing the RIDEA structure and established a SHOP segment. Following the establishment of our SHOP segment, we terminated triple-net master leases with three operators and converted the communities covered under the master leases into our SHOP segment. Additionally, we acquired 11 communities within our SHOP segment. As of December 31, 2025, our SHOP segment represented 23.6% of our gross portfolio investments and comprised of 25 seniors housing communities that are managed on our behalf by seven independent operators pursuant to separate management agreements.
26
Table of Contents
The following table presents information related to our SHOP segment as of December 31, 2025 (dollar amounts in thousands):
Average | ||||||||||
Number | Number | Investment | ||||||||
Gross | of | of | per | |||||||
State | Investment | Properties | Beds/Units | Unit | ||||||
Wisconsin | $ | 248,183 | 7 | 742 | $ | 334.48 | ||||
Illinois | 58,022 | 4 | 264 | $ | 219.78 | |||||
California | 48,743 | 2 | 133 | $ | 366.49 | |||||
Colorado | 41,801 | 4 | 228 | $ | 183.34 | |||||
Kentucky | 39,763 | 2 | 158 | $ | 251.66 | |||||
Oregon | 33,139 | 1 | 186 | $ | 178.17 | |||||
Tennessee | 31,334 | 1 | 100 | $ | 313.34 | |||||
Kansas | 26,241 | 2 | 114 | $ | 230.18 | |||||
Georgia | 23,015 | 1 | 88 | $ | 261.53 | |||||
Ohio | 15,024 | 1 | 60 | $ | 250.40 | |||||
Total | $ | 565,265 | (1) | 25 | 2,073 | $ | 272.68 | |||
| (1) | Subsequent to December 31, 2025, we acquired three seniors housing communities within our SHOP segment for $108,000. The communities are located in Georgia with a total of 394 units. In conjunction with the acquisition, we entered into a management agreement with an existing operator. Additionally, we terminated a triple-net master lease and converted two seniors housing communities covered under the master lease to our SHOP segment. Upon conversion, we entered into a management agreement with an operator new to us. The communities have a total of 88 units and a gross book value of $25,981. |
Owned Real Properties-Triple-Net Portfolio
Our Triple-Net Portfolio generally includes triple-net operating leases with an initial term of two to ten years. Each lease is a triple-net lease which requires the lessee to pay all taxes, insurance, maintenance and repairs, capital and non-capital expenditures and other costs necessary in the operations of the facilities. Many of the leases contain renewal options and provide for fixed minimum base rent during the initial and renewal periods. The majority of our leases contain provisions for specified annual increases over the rents of the prior year and that increase is generally computed in one of four ways depending on specific provisions of each lease:
| (i) | a specified percentage increase over the prior year’s rent, generally between 2.0% and 2.5%; |
| (ii) | a calculation based on the Consumer Price Index or Medicare Market Basket Rate; |
| (iii) | a percentage of facility revenues in excess of base amounts; or |
| (iv) | specific dollar increases. |
Our leases that contain fixed annual rental escalations and/or have annual rental escalations that are contingent upon changes in the Consumer Price Index or the Medicare Market Basket Rate, are generally recognized on a straight-line basis over the minimum lease period. Certain leases have annual rental escalations that are contingent upon changes in the gross operating revenues of the property. This revenue is not recognized until the appropriate contingencies have been resolved.
27
Table of Contents
Generally, our leases provide for one or more of the following: security deposits, property tax impounds, repair and maintenance, escrows and credit enhancements such as corporate or personal guarantees or letters of credit. In addition, our leases are typically structured as master leases and multiple master leases with one operator, and are generally cross-defaulted.
The following table summarizes our investment in our Triple-Net Portfolio at December 31, 2025 (dollar amounts in thousands):
Average | |||||||||||||||
Percentage | Number | Number of | Investment | ||||||||||||
Gross | of | of | SNF | SH | per | ||||||||||
Type of Property | Investment | Investment | Properties (1) | Beds | Units | Bed/Unit | |||||||||
Seniors Housing | $ | 505,473 | 48.4 | % | 54 | — | 3,218 | $ | 157.08 | ||||||
Skilled Nursing | 527,922 | 50.5 | % | 43 | 5,453 | — | $ | 96.81 | |||||||
Other (2) | 12,005 | 1.1 | % | 1 | 118 | — | $ | 101.74 | |||||||
Total | $ | 1,045,400 | 100.0 | % | 98 | 5,571 | 3,218 | $ | 118.94 | ||||||
| (1) | We have investments in 22 states leased to 18 different operators. |
| (2) | Includes three parcels of land held-for-use and one behavioral health care hospital. |
The following table summarizes the concentration of our top ten operators of Triple-Net Portfolio for 2025 and percentage of rental revenue, excluding rental income from properties converted to SHOP, variable rental income due to lessee reimbursement of real estate taxes, and $1,514 write-off of straight-line rent receivable:
Percent of | ||||||||
Rental Revenue | ||||||||
Lessee | Property Type | | 2025 | | 2024 |
| ||
HMG Healthcare, LLC | SNF | 12.5 | % | 9.8 | % | |||
Carespring Healthcare Management, LLC | SNF | 11.9 | % | 9.9 | % | |||
Encore Senior Living | SH | 11.0 | % | 8.6 | % | |||
Brookdale Senior Living Communities, Inc. | SH | 11.0 | % | 8.8 | % | |||
Genesis Healthcare, Inc. (1) | SH/SNF | 9.8 | % | 8.1 | % | |||
Fundamental Long Term Care Company | SNF/OTH | 9.0 | % | 7.0 | % | |||
Ignite Medical Resorts | SNF | 8.6 | % | 7.0 | % | |||
Juniper Communities, LLC | SH | 7.2 | % | 6.0 | % | |||
Oxford Senior Living | SH | 5.2 | % | 4.2 | % | |||
Navion Senior Solutions | SH | 3.8 | % | 3.1 | % | |||
| (1) | During 2025, Genesis Healthcare, Inc. (“Genesis”) filed for Chapter 11 bankruptcy. Subsequent to December 31, 2025, a federal bankruptcy judge approved the sale of Genesis’ assets to a newly formed investment group. Affiliates of Genesis lease six SNFs in New Mexico (five) and Alabama (one) with a total of 782 beds under a master lease with LTC. Genesis has paid their contractual rent through February 2026. We will continue to monitor the status of Genesis’ bankruptcy-related developments. |
28
Table of Contents
The following table provides information regarding our Triple-Net Portfolio by state (dollar amounts in thousands):
Remaining | |||||||||||||
No. of | No. of | Lease | Gross | ||||||||||
Location | SH | SNF | OTH | Beds/Units | Term (1) | Investment | |||||||
Alabama | — | 1 | — | 174 | 64 | $ | 10,420 | ||||||
Arizona | — | 3 | — | 613 | 44 | 28,496 | |||||||
California | 2 | — | — | 180 | 14 | 39,182 | |||||||
Colorado | 8 | — | — | 429 | 39 | 61,497 | |||||||
Florida | — | 2 | — | 216 | 35 | 8,963 | |||||||
Georgia | 1 | — | — | 70 | 12 | 15,148 | |||||||
Illinois | 1 | — | — | 154 | 5 | 32,725 | |||||||
Kansas | 6 | — | — | 317 | 29 | 34,345 | |||||||
Kentucky | — | 2 | — | 286 | 96 | 48,716 | |||||||
Michigan | 2 | — | — | (2) | 156 | 5 | 22,866 | ||||||
Missouri | 1 | 2 | — | 253 | 54 | 52,952 | |||||||
Nevada | — | — | 1 | 118 | 50 | 11,062 | |||||||
New Jersey | 3 | — | — | 166 | 24 | 59,059 | |||||||
New Mexico | — | 5 | — | 608 | 64 | 42,920 | |||||||
North Carolina | 5 | — | — | 210 | 49 | 15,239 | |||||||
Ohio | 6 | 2 | — | 723 | 82 | 126,090 | |||||||
Oklahoma | 4 | — | — | 155 | 10 | 9,052 | |||||||
Oregon | — | 1 | — | 99 | 30 | 5,176 | |||||||
South Carolina | 2 | 2 | — | 387 | 27 | 41,986 | |||||||
Tennessee | — | 2 | — | 141 | 12 | 5,275 | |||||||
Texas | 8 | 20 | — | 2,854 | 43 | 302,463 | |||||||
Wisconsin | 5 | 1 | — | 480 | 60 | 71,768 | |||||||
TOTAL | 54 | 43 | 1 | 8,789 | 47 | $ | 1,045,400 | ||||||
| (1) | Weighted average remaining months in lease term as of December 31, 2025. |
| (2) | Includes three parcels of land held-for-use. |
The following table sets forth certain information regarding our lease expirations for our Triple-Net Portfolio as of December 31, 2025 (dollar amounts in thousands):
| | | | | | Annualized | | % of Annualized | ||||||||
No. of | No. of | No. of | No. of | No. of | Rental | Rental Income | ||||||||||
Year | SHs | SNFs | OTHs | Beds/Units | Operators | Income (1) | Expiring | |||||||||
2026 | 16 | 2 | — | 1,091 | 5 | $ | 6,751 | 7.1 | % | |||||||
2027 |
| 10 |
| — |
| — |
| 704 |
| 3 | 11,631 |
| 12.2 | % | ||
2028 |
| — |
| 14 |
| — |
| 1,759 |
| 3 | 12,687 |
| 13.3 | % | ||
2029 |
| 17 |
| 5 |
| — |
| 1,657 |
| 3 | 14,472 |
| 15.2 | % | ||
2030 |
| 5 |
| 5 |
| 1 |
| 966 |
| 3 | 13,859 |
| 14.6 | % | ||
2031 |
| 5 |
| 8 |
| — |
| 1,367 |
| 3 | 14,449 |
| 15.2 | % | ||
2032 |
| — |
| 5 |
| — |
| 429 |
| 1 | 6,417 |
| 6.7 | % | ||
2033 |
| 1 |
| 4 |
| — |
| 816 |
| 2 | 14,942 |
| 15.7 | % | ||
TOTAL |
| 54 | 43 | 1 |
| 8,789 | $ | 95,208 | 100.0 | % | ||||||
| (1) | Represents annualized contractual GAAP rent for leased properties, excluding variable rental income from lessee reimbursement of our real estate taxes, for the month of December 2025 for investments as of December 31, 2025. |
29
Table of Contents
Financing Receivables
We have entered into joint ventures (“JV”) and contributed into the JVs for the acquisition of properties through sale and leaseback transactions. Concurrently, each of these JVs leased the acquired properties back to an affiliate of the seller and provided the seller-lessee with purchase options. We determined that each of these sale and leaseback transactions meet the accounting criteria to be presented as Financing receivables on our Consolidated Balance Sheets and recorded the rental revenue from these properties as Interest income from financing receivables on our Consolidated Statements of Income. See Note 2. Summary of Significant Accounting Policies within our consolidated financial statements for more information. The following tables provide information regarding our financing receivables at December 31, 2025 (dollar amounts in thousands):
Purchase | Investment | |||||||||||||
Interest | Investment | Gross | Option | per | ||||||||||
Rate | Year | Maturity | State | Investments | Window | Bed/Unit | ||||||||
7.75% | (1) | 2022 | 2032 | FL | $ | 76,545 | 2025-2027 | $ | 256.00 | |||||
7.50% | (2) | 2023 | 2033 | NC | 123,083 | 2025-2029 | $ | 235.34 | ||||||
7.25% | (3) | 2024 | 2034 | NC/SC | 122,460 | 2024-2028 | $ | 234.15 | ||||||
7.25% | (4) | 2024 | 2034 | NC | 41,000 | 2024-2028 | $ | 188.94 | ||||||
Total | $ | 363,088 |
| (1) | The purchase option is available to the seller-lessee with an exit internal rate of return (“IRR”) of 8.5%. During the fourth quarter of 2025, the lessee provided notice of its intent to exercise its purchase option. |
| (2) | The seller-lessee has the option to buy the properties in multiple tranches and in serial closings approved by LTC with an exit IRR of 9.0% on any portion of the properties being purchased. |
| (3) | During the second quarter of 2024, we funded an additional $5,546 under a mortgage loan receivable due from an ALG affiliate secured by 13 SHs located in North Carolina (12) and South Carolina (1). We then entered into a newly formed $122,460 JV with ALG, whereby we exchanged our $64,450 mortgage loan receivable for a 53% controlling interest in the JV. Concurrently, ALG contributed these properties to the joint venture for a 47% non-controlling interest. The JV leased the properties to an ALG affiliate under a 10-year master lease, with two five-year renewal options, and provided the seller-lessee with a purchase option exercisable with an exit IRR of 8.0%. |
| (4) | During the second quarter of 2024, we funded an additional $2,766 under a mortgage loan receivable due from an ALG affiliate secured by four SHs located in North Carolina. We then entered into a newly formed $41,000 JV with ALG, whereby we exchanged $37,985 mortgage loan receivables for a 93% controlling interest in the JV. Concurrently, ALG contributed these properties and a parcel of land to the joint venture for a 7% non-controlling interest. The JV leased the properties to an ALG affiliate under a 10-year master lease, with two five-year renewal options, and provided the seller-lessee with a purchase option exercisable with an exit IRR of 8.0%. |
Type | Number | Number | Average | Annualized Interest | |||||||||||||||||
of | of | of | Contractual | Months | Gross | LTC | Income from | ||||||||||||||
State | Properties | Properties | Beds/Units | Cash Yield | to Maturity | Investments | Contributions | Financing Rec | |||||||||||||
Florida | SNF | 3 | 299 | 7.75 | % | 80 | $ | 76,545 | $ | 62,220 | $ | 6,025 | |||||||||
North Carolina | SH | 11 | 523 | 7.50 | % | 85 | 123,083 | 120,167 | 9,848 | ||||||||||||
North Carolina/South Carolina | SH | 13 | 523 | 7.25 | % | 101 | 122,460 | 64,450 | 9,502 | ||||||||||||
North Carolina | SH | 4 | 217 | 7.25 | % | 101 | 41,000 | 37,985 | 3,181 | ||||||||||||
31 | 1,562 | $ | 363,088 | $ | 284,822 | $ | 28,556 |
30
Table of Contents
Mortgage Loans
We provide mortgage financing for health care properties based on our established investment underwriting criteria. We have also provided construction loans that by their terms convert into purchase/lease transactions or permanent financing mortgage loans upon completion of construction. The following table summarizes our investments in mortgage loans secured by first mortgages at December 31, 2025 (dollar amounts in thousands):
Type | Percentage | Number of | Investment | ||||||||||||||||||||
Gross | of | of | SNF | SH | per |
| |||||||||||||||||
Interest Rate | Maturity | State | Investment | Property | Investment | Loans (1) | Properties (1) | Beds | Units | Bed/Unit |
| ||||||||||||
11.3% | (2) | 2043 | MI | $ | 179,885 | SNF | 46.7 | % | 1 | 14 | 1,749 | — | $ | 102.85 | |||||||||
8.3% | 2030 | CA | 55,981 | SH | 14.5 | % | 1 | 2 | — | 171 | $ | 327.37 | |||||||||||
8.5% | 2030 | FL | 39,897 | SH | 10.3 | % | 1 | 1 | — | 250 | $ | 159.59 | |||||||||||
10.2% | (3) | 2045 | MI | 39,650 | SNF | 10.3 | % | 1 | 4 | 480 | | — | $ | 82.60 | |||||||||
10.5% | (3) | 2045 | MI |
| 19,650 | SNF | 5.1 | % | 1 | 2 | 201 |
| — | $ | 97.76 | ||||||||
8.8% | 2026 | MI | 17,104 | SH | 4.5 | % | 1 | 1 | — | 85 | $ | 201.22 | |||||||||||
10.8% | (3) | 2045 | MI | 14,800 | SNF | 3.8 | % | 1 | 1 | 146 | — | $ | 101.37 | ||||||||||
7.3% | 2026 | NC | 10,750 | SH | 2.8 | % | 1 | 1 | — | 45 | $ | 238.89 | |||||||||||
9.0% | (4) | 2030 | IL | 7,794 | UDP | 2.0 | % | 1 | — | — | — | $ | — | ||||||||||
Total | $ | 385,511 | (1) | 100.0 | % | 9 | 26 | 2,576 |
| 551 | $ | 123.28 | |||||||||||
| (1) | Our mortgage loans are secured by properties located in five states with six borrowers. Additionally, some loans contain certain guarantees and/or provide for certain facility fees. Gross investment shown above excludes the impact of credit loss reserve. |
| (2) | During 2025, we modified the mortgage loan with Prestige Healthcare (“Prestige”), the borrower, to increase the current interest paid by the borrower from 8.5% to the full contractual interest rate of 11.14%, escalating annually. The modification was effective July 1, 2025. Additionally, the modification provides Prestige an option to prepay their mortgage loan at par without penalty within a 12-month window beginning in July 2026. Under the modification, Prestige agreed to provide us with at least a 90-day notice of its intention to exercise the option, and the ability for Prestige to exercise the pre-payment option is contingent on several factors including Prestige being current and in good standing on all its mortgage loans with LTC and obtaining replacement financing. In conjunction with the loan modification and the penalty-free early payoff option, we wrote-off $41,455 of effective interest previously accrued related to this mortgage loan. For more information related to the effective interest write-off see additional discussion below. |
| (3) | Mortgage loans provide for 2.25% annual increases in the interest rate after a certain time period. |
| (4) | During 2024, we committed to fund a $26,120 mortgage loan for the construction of a 116-unit SH located in Illinois. The borrower contributed $12,300 of equity which initially funded the construction. During the third quarter of 2025, we began funding the commitment. The loan bears interest at a current rate of 9.0% and an IRR of 9.5%. |
In general, the mortgage loans may not be prepaid except in the event of the sale of the collateral property to a third-party that is not affiliated with the borrower, although partial prepayments (including any prepayment premium) are often permitted where a mortgage loan is secured by more than one property upon a sale of one or more, but not all, of the collateral properties to a third-party which is not an affiliate of the borrower. The terms of the mortgage loans generally impose a premium upon prepayment of the loans depending upon the period in which the prepayment occurs, whether such prepayment was permitted or required, and certain other conditions such as upon the sale of the property under a pre-existing purchase option, destruction or condemnation, or other circumstances as approved by us. The prepayment premium is based on a yield maintenance formula. In addition to a lien on the mortgaged property, the loans are generally secured by certain non-real estate assets of the properties and contain certain other security provisions in the form of letters of credit and/or security deposits.
As noted in the table above, during the year ended December 31, 2025, we modified a $179.9 million mortgage loan with Prestige, the borrower, to increase the current interest paid by the borrower from 8.5% to the full contractual interest rate of 11.14%, escalating annually. The modification was effective July 1, 2025. Additionally, the modification provides Prestige an option to prepay their mortgage loan at par and without penalty within a 12-month window beginning in July 2026. In evaluating the impact of the prepayment provisions allowing the borrower to settle the obligation at an amount less than amounts previously accrued under the effective interest method, we wrote-off $41.5 million of effective interest receivable previously accrued related to this mortgage loan during the third quarter of 2025. Subsequent to December 31, 2025, Prestige provided notice of its intent to repay its $179.9 million mortgage loan. Prestige is current on their contractual loan obligations through February 2026.
31
Table of Contents
The following table sets forth certain information regarding our mortgage loans as of December 31, 2025 (dollar amounts in thousands):
| | | | | Average | | Original | | | Current |
| |||||||||
No. of | No. of | No. of | Interest | Months to | Face Amount | Gross | Annual Debt |
| ||||||||||||
Location | SNFs (1) | SHs (1) | Beds/ Units | Rate | Maturity | of Mortgage Loans | Investments | Service (2) |
| |||||||||||
California | — | 2 | 171 | 8.25% | 56 | $ | 55,350 | $ | 55,981 | $ | 4,683 | |||||||||
Florida | — | 3 | 204 | 8.5% | 53 | 39,331 | 39,897 | 3,438 | ||||||||||||
Illinois | 1 | — | 150 | 9.0% | 55 | 1,177 | 7,794 | 697 | ||||||||||||
Michigan |
| 21 |
| 1 |
| 2,661 |
| 8.8%-11.3% | 207 | 281,930 | 271,089 | 29,555 | ||||||||
North Carolina | — | 1 | 45 | 7.25% | 5 | 10,750 | 10,750 | 790 | ||||||||||||
TOTAL |
| 22 |
| 7 |
| 3,231 | 160 | $ | 388,538 | $ | 385,511 | $ | 39,163 | |||||||
| (1) | Includes nine mortgage loans in five states with six borrowers. |
| (2) | Includes principal and interest payments. |
Notes Receivable
Our investment in notes receivable consists of a mezzanine loan and working capital notes. The following table summarizes our investments in notes receivable at December 31, 2025 (dollar amounts in thousands):
Interest | Type of | Gross | Type of | |||||||||||||
Rate | IRR | Maturity | Loan | Investment | # of loans | Property | ||||||||||
9.0% | — | 2026 | Working capital | $ | 25 | 1 | SH | |||||||||
8.0% | 11.0 | % | 2027 | Mezzanine | 25,000 | 1 | SH | |||||||||
0.0% | — | 2028 | Working capital | 849 | 1 | SNF | ||||||||||
$ | 25,874 | (1) | 3 | |||||||||||||
| (1) | Excludes the impact of credit loss reserve. |
Investments in Unconsolidated Joint Ventures
We have an ADC loan that meets the accounting criteria to be considered a variable interest entity (“VIE”). We are not the primary beneficiary of the VIE as we do not have both: 1) the power to direct the activities that most significantly affect the VIE’s economic performance, and 2) the right to receive benefits from the VIE or the obligation to absorb losses of the VIE that could be significant to the VIE. However, we do have significant influence over the VIE. Therefore, we account for the investment as a joint venture using the equity method of accounting. The following table provides information regarding our investment in unconsolidated joint ventures at December 31, 2025 (dollar amounts in thousands):
Total | Contractual | Type | Number | ||||||||||||
Preferred | Cash | of | of | Carrying | Type of | ||||||||||
Return | Portion | State | Investment | Beds | Value | Property | |||||||||
9.2% | 9.2% | TX | Senior Loan | (1) | 104 | $ | 12,524 | (1) | SNF | ||||||
| (1) | Represents a $12,700 mortgage loan, which is comprised of $11,164 funded at origination during 2024, an interest reserve of $750 and a capital expenditure reserve of $786. In accordance with GAAP, this mortgage loan was determined to be an ADC loan and is accounted for as an unconsolidated JV. The five-year mortgage loan is interest-only. Subsequent to December 31, 2025, the operator provided notice of its intent to pay off this mortgage loan. |
Item 3. LEGAL PROCEEDINGS
From time to time, we are and may become a party to various claims and lawsuits arising in the ordinary course of our business asserted against our company and our properties and against our third-party SHOP operators, lessees and borrowers. None of such claims or lawsuits singularly or in aggregate, in our management’s opinion, are or are anticipated to be material to our business, results of operations or financial condition. These claims and lawsuits may include matters involving general or professional liability attributable to our SHOP operators, lessees and borrowers pursuant to general legal principles and pursuant to insurance and indemnification provisions in the applicable
32
Table of Contents
management agreements, leases or mortgages. However, regardless of the merits of particular claims or lawsuits, we may be forced to expend significant financial resources to defend and resolve these matters.
Item 4. MINE SAFETY DISCLOSURES
Not applicable
PART II
Item 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Market Information
Our common stock is listed on the New York Stock Exchange (the “NYSE”) under the symbol “LTC”.
Holders
As of February 18, 2026, we had approximately 396 holders of our common stock, as determined by counting our record holders and the number of participants reflected in a security position listing provided to us by the Depository Trust Company. Because such “DTC participants” are brokers and other institutions holding shares of our common stock on behalf of their customers, we do not know the actual number of unique stockholders represented by these record holders.
Dividend
We declared and paid total cash distributions on common stock as set forth below:
Declared | Paid |
| |||||||||||
2025 | 2024 | 2025 | 2024 |
| |||||||||
First quarter | | $ | 0.57 | | $ | 0.57 | | $ | 0.57 | | $ | 0.57 | |
Second quarter | $ | 0.57 | $ | 0.57 | $ | 0.57 | $ | 0.57 | |||||
Third quarter | $ | 0.57 | $ | 0.57 | $ | 0.57 | $ | 0.57 | |||||
Fourth quarter | $ | 0.57 | $ | 0.57 | $ | 0.57 | $ | 0.57 | |||||
$ | 2.28 | $ | 2.28 | $ | 2.28 | $ | 2.28 | ||||||
We intend to distribute to our stockholders an amount at least sufficient to satisfy the distribution requirements of a REIT. Cash flows from operating activities available for distribution to stockholders will be derived primarily from interest and rental payments from our real estate investments. All distributions will be made subject to approval of our Board of Directors and will depend on our earnings, our financial condition and such other factors as our Board of Directors deems relevant. In order to qualify for the beneficial tax treatment accorded to REITs by Sections 856 through 860 of the Internal Revenue Code, we are required to make distributions to holders of our shares equal to at least 90% of our REIT taxable income.
Issuer Purchases of Equity Securities
None.
33
Table of Contents
Stock Performance Graph
The National Association of Real Estate Investment Trusts (“Nareit”), an organization representing U.S. REITs and publicly traded real estate companies, classifies a company with 50% or more of assets directly or indirectly in the equity ownership of real estate as an equity REIT. Accordingly, LTC is considered an equity REIT.
This graph compares the cumulative total stockholder return on our common stock from December 31, 2020, to December 31, 2025, with the cumulative stockholder total return of (1) the Standard & Poor’s 500 Stock Index and (2) the Nareit Equity REIT Index. The comparison assumes $100 was invested on December 31, 2020, in our common stock and in each of the foregoing indices and assumes the reinvestment of dividends.
Period Ending |
| ||||||||||||
Index | 12/31/20 | 12/31/21 | 12/31/22 | 12/31/23 | 12/31/24 | 12/31/25 |
| ||||||
LTC Properties, Inc. | $ | 100.00 | $ | 93.23 | $ | 103.05 | $ | 99.70 | $ | 114.59 | $ | 121.66 | |
FTSE NAREIT Equity REITs Index | $ | 100.00 | $ | 143.24 | $ | 108.34 | $ | 123.21 | $ | 133.97 | $ | 137.83 | |
S&P 500 | $ | 100.00 | $ | 128.71 | $ | 105.40 | $ | 133.10 | $ | 166.40 | $ | 196.16 | |
The stock performance depicted in the above graph is not necessarily indicative of future performance.
The stock performance graph shall not be deemed incorporated by reference into any filing by us under the Securities Act of 1933 or the Securities Exchange Act of 1934 except to the extent that we specifically incorporate such information by reference and shall not otherwise be deemed filed under such Acts.
Item 6. [Reserved]
34
Table of Contents
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Executive Overview
Business and Investment Strategy
We are a real estate investment trust (“REIT”) that invests in seniors housing and health care properties through sale-leasebacks, financing leases, mortgage financing, joint ventures and structured finance solutions including preferred equity and mezzanine lending. Additionally, during the second quarter of 2025, we began utilizing the structure authorized by the REIT Investment Diversification and Empowerment Act of 2007 (commonly referred to as “RIDEA”) as permitted by the Housing and Economic Recovery Act of 2008 and established a seniors housing operating portfolio (“SHOP”).
Under a typical RIDEA structure, we have certain oversight approval rights and the right to review operational and financial reporting information, but our independent third-party operators ultimately control the day-to-day operations of the property, pursuant to the terms of our management agreements. Offering RIDEA structures represent a further aspect of our traditional strategy of investing through vehicles such as non-cancelable triple-net operating leases, mortgage loans, and structured finance. We believe that RIDEA structures provide us with additional investment opportunities. We also have identified opportunities to cooperatively convert existing triple-net leases into our new SHOP segment, and in certain instances have completed these conversions. To develop and implement RIDEA structures, we may need to continue to commit financial and operational resources. While we anticipate that adding RIDEA transactions will be positive for our business model, our ability to succeed in this new segment will be determined by numerous factors, including our ability to identify suitable investments and our relationship with operators of our SHOP communities. We rely on the SHOP operator’s personnel, expertise, resources, good faith, and judgement to manage our SHOP communities efficiently and effectively. We also rely on the SHOP operators to set appropriate resident fees, provide accurate property-level financial results for our properties in a timely manner, and otherwise operate our SHOP communities in compliance with the terms of our management agreements and all applicable laws and regulations.
We seek to create, sustain and enhance stockholder equity value and provide current income for distribution to stockholders through real estate investments in seniors housing and health care properties managed by experienced operators. Our primary seniors housing and health care property classifications include skilled nursing facilities (“SNF”), assisted living facilities (“ALF”), independent living facilities (“ILF”), memory care communities (“MC”) and combinations thereof. We also invest in other (“OTH”) types of properties, such as land parcels, projects under development (“UDP”) and behavioral health care hospitals. To meet these objectives, we attempt to invest in properties that provide opportunity for additional value and current returns to our stockholders and diversify our investment portfolio by geographic location, operator, property classification and form of investment.
We conduct and manage our business as two operating segments for internal reporting and internal decision-making purposes: real estate investments (“Real Estate Investments”) segment which consists of our portfolio of owned real properties subject to non-cancelable triple-net leases (“NNN” or “Triple-Net Portfolio”), financing receivables, mortgage loan receivables, notes receivable and unconsolidated joint ventures, and our SHOP segment consists of seniors housing communities that are managed on our behalf by independent operators pursuant to the terms of separate management agreements. For purposes of this Annual Report on Form 10-K and other presentations, we generally include ALF, ILF, and MC in the seniors housing communities (“SH”) property classification. We have been operating since August 1992.
35
Table of Contents
The following graph summarizes our gross investments as of December 31, 2025:
Substantially all of our revenues and sources of cash flows from operations are derived from operating lease rentals, resident fees and services, interest earned on financing receivables, interest earned on outstanding mortgage loans receivable, interest earned on outstanding notes receivable and income from investments in unconsolidated joint ventures. Our investments in owned real properties, financing leases, mortgage loans, mezzanine loans and preferred equity investments represent our primary source of liquidity to fund distributions and are dependent upon the performance of the operators on their lease and loan obligations and the rates earned thereon. To the extent that the operators experience operating difficulties and are unable to generate sufficient cash to make payments to us, there could be a material adverse impact on our consolidated results of operations, liquidity and/or financial condition. To mitigate this risk, we monitor our investments through a variety of methods determined by property type and operator. Our monitoring process includes periodic review of financial income statements for each facility, periodic review of operator credit, scheduled property inspections and review of covenant compliance.
In addition to our monitoring and research efforts, we also structure our investments to help mitigate payment risk. Some operating leases, financing leases and loans are credit-enhanced by guaranties, security deposits and/or letters of credit. Furthermore, operating leases are typically structured as master leases and loans are generally cross-defaulted and cross-collateralized with other loans, operating leases or agreements between us and the operator and its affiliates.
Depending upon the availability and cost of external capital, we anticipate making additional investments in health care related properties. New investments are generally funded from cash on hand, temporary borrowings under our unsecured revolving line of credit, asset sales and internally generated cash flows. Our investments generate internal cash from rent and interest receipts and principal payments on mortgage loans receivable. Permanent financing for future investments, which replaces funds drawn under our unsecured revolving line of credit, is expected to be provided through a combination of public and private offerings of debt and equity securities and secured and unsecured debt financing. The timing, source and amount of cash flows provided by financing activities and used in investing activities are sensitive to the capital markets’ environment, especially to changes in interest rates. Changes in the capital markets’ environment may impact the availability of cost-effective capital.
We believe our business model has enabled and will continue to enable us to maintain the integrity of our property investments, including in response to financial difficulties that may be experienced by operators. We have traditionally taken and will continue to take a conservative approach to managing our business, choosing to maintain liquidity and exercise patience until favorable investment opportunities arise.
36
Table of Contents
Investment Portfolio Overview
The following tables summarize our real estate investment portfolio as of December 31, 2025 (dollar amounts in thousands):
Twelve Months Ended | ||||||||||||||||||||
December 31, 2025 | ||||||||||||||||||||
Number of | Percentage | Rental Income | Percentage | |||||||||||||||||
Number of | SNF | SH | Gross | of | and Resident | of Total | ||||||||||||||
Owned Properties | Properties (1) | Beds (2) | Units (2) | Investments | Investments | Fees and Services | Revenues | |||||||||||||
Triple-Net Portfolio: | ||||||||||||||||||||
Seniors Housing | 54 | — | 3,218 | $ | 505,473 | 21.1 | % | $ | 38,040 | 16.2 | % | |||||||||
Skilled Nursing | 43 | 5,217 | 236 | 527,922 | 22.0 | % | 54,718 | 23.3 | % | |||||||||||
Other (3) | 1 | 118 | — | 12,005 | 0.5 | % | 1,189 | 0.5 | % | |||||||||||
Subtotal: Triple-Net Portfolio | 98 | 5,335 | 3,454 | 1,045,400 | 43.6 | % | 93,947 | (5) | 40.0 | % | ||||||||||
SHOP: | ||||||||||||||||||||
Seniors Housing | 25 | — | 2,073 | 565,265 | 23.6 | % | 72,116 | (6) | 30.7 | % | ||||||||||
Total Owned Properties | 123 | 5,335 | 5,527 | 1,610,665 | 67.2 | % | 166,063 | 70.7 | % | |||||||||||
Number of | Percentage | Interest Income | Percentage | |||||||||||||||||
Number of | SNF | SH | Gross | of | from Financing | of Total | ||||||||||||||
Financing Receivables | Properties (1) | Beds (2) | Units (2) | Investments | Investments | Receivable | Revenues | |||||||||||||
Seniors Housing | 28 | — | 1,263 | 286,543 | 12.0 | % | 22,430 | 9.6 | % | |||||||||||
Skilled Nursing | 3 | 299 | — | 76,545 | 3.2 | % | 5,885 | 2.5 | % | |||||||||||
Total Financing Receivables | 31 | 299 | 1,263 | 363,088 | 15.2 | % | 28,315 | 12.1 | % | |||||||||||
Number of | Percentage | Interest Income | Percentage | |||||||||||||||||
Number of | SNF | SH | Gross | of | from Mortgage | of Total | ||||||||||||||
Mortgage Loans | Properties (1) | Beds (2) | Units (2) | Investments | Investments | Loans | Revenues | |||||||||||||
Seniors Housing | 5 | — | 551 | 123,732 | 5.2 | % | 6,193 | 2.6 | % | |||||||||||
Skilled Nursing | 21 | 2,576 | — | 253,985 | 10.6 | % | 30,144 | 12.9 | % | |||||||||||
Under Development (4) | — | — | — | 7,794 | 0.3 | % | 131 | 0.1 | % | |||||||||||
Total Mortgage Loans | 26 | 2,576 | 551 | 385,511 | 16.1 | % | 36,468 | (7) | 15.6 | % | ||||||||||
Number of | Percentage | Interest | Percentage | |||||||||||||||||
Number of | SNF | SH | Gross | of | and other | of Total | ||||||||||||||
Notes Receivable | Properties (1) | Beds (2) | Units (2) | Investments | Investments | Income | Revenues | |||||||||||||
Seniors Housing | 5 | — | 621 | 25,025 | 1.0 | % | 2,555 | 1.1 | % | |||||||||||
Skilled Nursing | — | — | — | 849 | 0.0 | % | — | 0.0 | % | |||||||||||
Total Notes Receivable | 5 | — | 621 | 25,874 | 1.0 | % | 2,555 | (8) | 1.1 | % | ||||||||||
Number of | Percentage | Income from | Percentage | |||||||||||||||||
Number of | SNF | SH | Gross | of | Unconsolidated | of Total | ||||||||||||||
Unconsolidated Joint Ventures | Properties (1) | Beds (2) | Units (2) | Investments | Investments | Joint Ventures | Revenues | |||||||||||||
Skilled Nursing | 1 | 104 | — | 12,524 | 0.5 | % | 1,178 | 0.5 | % | |||||||||||
Total Unconsolidated Joint Ventures | 1 | 104 | — | 12,524 | 0.5 | % | 1,178 | (9) | 0.5 | % | ||||||||||
Total Portfolio | 186 | 8,314 | 7,962 | $ | 2,397,662 | 100.0 | % | $ | 234,579 | 100.0 | % | |||||||||
Number | Number of | Percentage | |||||||||||
of | SNF | SH | Gross | of | |||||||||
Summary of Properties by Type | Properties (1) | Beds (2) | Units (2) | Investments | Investments | ||||||||
Seniors Housing | 117 | — | 7,726 | $ | 1,506,038 | 62.9 | % | ||||||
Skilled Nursing | 68 | 8,196 | 236 | 871,825 | 36.3 | % | |||||||
Other (3) | 1 | 118 | — | 12,005 | 0.5 | % | |||||||
Under Development (4) | — | — | — | 7,794 | 0.3 | % | |||||||
Total Portfolio | 186 | 8,314 | 7,962 | $ | 2,397,662 | 100.0 | % | ||||||
| (1) | We have investments in owned properties, including NNN and SHOP, properties we own accounted for as financing receivables, mortgage loans, notes receivable and unconsolidated joint ventures in 23 states to 30 different operators. |
| (2) | See Item 2. Properties for discussion of bed/unit count. |
| (3) | Includes three parcels of land held-for-use and one behavioral health care hospital. |
| (4) | We funded $7,794 under a $26,120 mortgage loan commitment for the construction of a 116-unit SH located in Illinois. The loan bears interest at a current rate of 9.0% and an IRR of 9.5%. |
| (5) | Excludes $10,781 variable rental income from lessee reimbursement of our real estate taxes, $12,957 rental income from properties converted to SHOP and the straight-line rent receivable write-off of $1,514. |
37
Table of Contents
| (6) | Resident fees and services include all amounts earned from residents, based on individual resident agreements, at our SHOP communities. |
| (7) | Excludes $2,555 of interest income related to mortgage loans receivable that have been paid off. |
| (8) | Included in the Interest and other income line item of our Consolidated Statements of Income. Excludes $2,739 interest income from loans that have been paid off. |
| (9) | Excludes $5,578 income from the redemption of our preferred equity investments in two joint ventures. Subsequent to December 31, 2025, the operator provided notice of its intent to pay off this mortgage loan. |
As of December 31, 2025, we had $2.0 billion in net carrying value of investments as follows (dollar amounts in thousands):
Percentage | ||||||
Carrying | of | |||||
Value | Investments | |||||
Triple-Net Portfolio | $ | 693,409 | 35.0 | % | ||
SHOP | 508,350 | 25.7 | % | |||
Financing receivables | 359,457 | 18.1 | % | |||
Mortgage loans | 381,662 | 19.3 | % | |||
Notes receivable | 25,615 | 1.3 | % | |||
Unconsolidated joint ventures | 12,524 | 0.6 | % | |||
$ | 1,981,017 | 100.0 | % | |||
38
Table of Contents
The following table provides details on the components of revenues and related net operating income (“NOI”) across our portfolio for the year ended December 31, 2025 (in thousands):
Amount | |||
Real Estate Investment segment: | |||
Triple-Net Portfolio | |||
Contractual cash rental income | $ | 109,471 | |
Variable cash rental income | 10,781 | ||
Straight-line rent adjustment (1) | (1,631) | ||
Adjustment of lease incentives and rental income | (1,514) | ||
Amortization of lease incentives | (936) | ||
Rental income | 116,171 | ||
Financing Receivables: | |||
Cash interest income from financing receivables | 26,912 | ||
Effective interest income (2) | 1,403 | ||
Interest income from financing receivables | 28,315 | ||
Mortgage loans receivable: | |||
Cash interest received | 36,352 | ||
Effective interest income (3) | 2,671 | ||
Interest income from mortgage loans | 39,023 | ||
Other notes receivable: | |||
Interest income-other notes | 6,464 | ||
Effective interest adjustment (4) | (1,170) | ||
Interest income from notes receivable | 5,294 | ||
Unconsolidated joint ventures | |||
Income from unconsolidated joint ventures | 6,757 | ||
Total revenue-Real Estate Investments segment | 195,560 | ||
Property level expenses-real estate investments | (10,795) | ||
NOI-Real Estate Investment Segment (5) | $ | 184,765 | |
SHOP segment: | |||
Resident fees and services: | $ | 72,116 | |
Property level expenses-SHOP | (54,088) | ||
NOI-SHOP Segment (5) | $ | 18,028 | |
| (1) | At December 31, 2025, the Straight-line rent receivable balance on our Consolidated Balance Sheets was $17,949. |
| (2) | At December 31, 2025, the financing receivables effective interest receivable balance which is included in the Interest receivable line item on our Consolidated Balance Sheets was $6,899. |
| (3) | At December 31, 2025, the mortgage loans receivable effective interest receivable balance which is included in the Interest receivable line item on our Consolidated Balance Sheets was $14,052. |
| (4) | At December 31, 2025, the other notes receivable effective interest receivable balance which is included in the Interest receivable line item on our Consolidated Balance Sheets was $74. |
| (5) | See Non-GAAP Financial Measures below for additional information and reconciliation. |
Update on Certain Operators
ALG Senior Living
We hold controlling interest in three joint ventures with ALG Senior Living (“ALG”). The joint ventures own 28 assisted living and memory care communities in North Carolina (27) and South Carolina (1) with a total of 1,263 units. The joint ventures lease these communities to affiliates of ALG under three 10-year master leases and have provided the lessee with the option to purchase these communities. In accordance with generally accepted accounting principles (“GAAP”), the communities are recorded as Financing Receivables on our Consolidated Balance Sheets. Additionally, ALG operates a 45-unit assisted living and memory care community in North Carolina under a mortgage loan maturing in May 2026. ALG has paid their contractual rent and interest obligations through February 2026.
39
Table of Contents
Anthem Memory Care
Anthem operated 12 memory care communities located in California, Colorado, Kansas, Illinois and Ohio under triple-net master leases. During the second quarter of 2025, we terminated the Anthem triple-net master leases and converted the 12 memory care communities covered under the master leases into our new SHOP segment. In conjunction with the conversion, we wrote-off Anthem’s working capital note of $2.7 million and the related interest receivable of $0.4 million during the second quarter of 2025.
Genesis Healthcare, Inc.
During the second quarter of 2025, we received written notice from Genesis Healthcare Inc. (“Genesis”) of its exercise of a 5-year extension option, which would extend the term of the lease to April 30, 2031. During the third quarter of 2025, Genesis filed for Chapter 11 bankruptcy. Accordingly, we wrote-off straight-line rent receivable balance of $1.3 million related to Genesis’ master lease. Subsequent to December 31, 2025, a federal bankruptcy judge approved the sale of Genesis’ assets to a newly formed investment group. Affiliates of Genesis lease six skilled nursing centers in New Mexico (five) and Alabama (one) with a total of 782 beds under a master lease with LTC. Genesis has paid its contractual rent through February 2026. We will continue to monitor the status of Genesis’ bankruptcy-related developments.
Prestige Healthcare
Prestige Healthcare (“Prestige”) operates 21 skilled nursing centers located in Michigan secured under four mortgage loans and two skilled nursing centers located in South Carolina under a master lease. Prestige is our largest operator based upon revenues and assets representing 11.9% of our total revenues and 12.6% of our total assets as of December 31, 2025.
Prior to an amendment in July 2025, under Prestige’s $179.9 million mortgage loan secured by 14 properties, the minimum mortgage interest payment due to us was based on an annual current pay rate of 8.5% on the outstanding loan balance. The difference between the contractual interest rate and the current pay interest rate on the outstanding loan balance remained an obligation of Prestige and was payable through the application of security deposits we hold on behalf of Prestige or was payable at maturity. At December 31, 2025, Prestige’s security totaled $6.1 million.
During the third quarter of 2025, Prestige’s $179.9 million mortgage loan was modified to increase the current interest paid by Prestige from 8.5% to the full contractual interest rate of 11.14%, escalating annually. The modification was effective July 1, 2025. Additionally, the modification provides Prestige an option to prepay this mortgage loan at par and without penalty within a 12-month window beginning in July 2026. Prestige is required to provide us with at least a 90-day notice of its intention to exercise the option and the ability for Prestige to exercise the pre-payment option is contingent on several factors including Prestige being current and in good standing on all its mortgage loans with LTC and obtaining replacement financing. In conjunction with the loan amendment that provided the borrower with a penalty-free early payoff option, we wrote-off $41.5 million of interest receivable previously accrued related to this loan during the third quarter of 2025. Subsequent to December 31, 2025, Prestige provided notice of its intent to repay its $179.9 million mortgage loan and we expect them to repay the loan in 2026. Prestige is current on their contractual loan obligations through February 2026.
Other Operators
We had a JV that owned two assisted living communities with a total of 186 units in Oregon. The communities were leased under two separate leases with the same operator, who was the non-controlling member of the JV. During 2025, we acquired the operator’s $4.0 million non-controlling interest in the JV for $1.2 million and terminated the two existing leases. In connection with the termination of these leases, we wrote-off $0.2 million straight-line rent receivable and $0.3 million lease incentive. Concurrently, we entered into a new combined master lease with the same operator. The new combined master lease had a five-year term with one 1-year extension option and four 5-year extension options. During the fourth quarter of 2025, we terminated the new master lease and converted the senior housing communities covered by the master lease into our SHOP segment. Upon conversion into SHOP, the communities are operating and accounted for as one community. In connection with the conversion, we wrote-off the related working capital note of
40
Table of Contents
$1.0 million during the fourth quarter of 2025.
Subsequent to December 31, 2025, we terminated a triple-net master lease and converted two seniors housing communities covered under the master lease to our SHOP segment. Upon conversion, we entered into a management agreement with an operator new to us. The communities have a total of 88 units and a gross book value of $25.9 million and are located in Texas.
41
Table of Contents
2025 Transactions Overview
The following tables summarize our transactions during the year ended December 31, 2025 (dollar amounts in thousand):
SHOP Segment
During the second quarter of 2025, we began utilizing the RIDEA structure and established a SHOP segment. Following the establishment of SHOP, we terminated triple-net master leases with three operators and converted 15 communities covered under these master leases into our SHOP segment. Upon conversion into the SHOP segment, two of these communities are operating and accounted for as one community. Additionally, we acquired 11 communities within our SHOP segment. As of December 31, 2025, our SHOP segment included 25 seniors housing communities that are managed on our behalf by seven independent operators pursuant to separate management agreements. At December 31, 2025, our SHOP segment represented 23.6% of our gross portfolio investments.
The following table presents information related to our SHOP segment as of December 31, 2025 (dollar amounts in thousands):
Average | ||||||||||
Number | Number | Investment | ||||||||
Gross | of | of | per | |||||||
State | Investment | Properties | Beds/Units | Unit | ||||||
Wisconsin | $ | 248,183 | 7 | 742 | $ | 334.48 | ||||
Illinois | 58,022 | 4 | 264 | $ | 219.78 | |||||
California | 48,743 | 2 | 133 | $ | 366.49 | |||||
Colorado | 41,801 | 4 | 228 | $ | 183.34 | |||||
Kentucky | 39,763 | 2 | 158 | $ | 251.66 | |||||
Oregon | 33,139 | 1 | 186 | $ | 178.17 | |||||
Tennessee | 31,334 | 1 | 100 | $ | 313.34 | |||||
Kansas | 26,241 | 2 | 114 | $ | 230.18 | |||||
Georgia | 23,015 | 1 | 88 | $ | 261.53 | |||||
Ohio | 15,024 | 1 | 60 | $ | 250.40 | |||||
Total | $ | 565,265 | (1) | 25 | 2,073 | $ | 272.68 | |||
| (1) | Subsequent to December 31, 2025, we acquired three seniors housing communities within our SHOP segment for $108,000. The communities are located in Georgia with a total of 394 units. In conjunction with the acquisition, we entered into a management agreement with an existing operator. Additionally, we terminated a triple-net master lease and converted two SHs covered under the master lease to our SHOP segment. Upon conversion, we entered into a management agreement with an operator new to us. The communities have a total of 88 units and a gross book value of $25,981. |
SHOP Acquisitions and Improvement Projects. The following table summarizes our acquisitions within our SHOP segment during the year ended December 31, 2025 (dollar amounts in thousands):
Total | Number | Number |
| |||||||||||||
Purchase | Transaction | Acquisition | of | of |
| |||||||||||
State | Type of Property | Price | Costs | Costs | Properties | Beds/Units |
| |||||||||
California | SH | $ | 35,200 | $ | 283 | $ | 35,483 | 1 | 67 | |||||||
Georgia | SH | 22,900 | 98 | 22,998 | 1 | 88 | ||||||||||
Kentucky | SH | 39,500 | 259 | 39,759 | 2 | 158 | ||||||||||
Tennessee | SH | 31,250 | 81 | 31,331 | 1 | 100 | ||||||||||
Wisconsin | SH | 194,050 | 470 | 194,520 | 5 | 520 | ||||||||||
Wisconsin | SH | 30,000 | 612 | 30,612 | 1 | 122 | ||||||||||
$ | 352,900 | (1) | $ | 1,803 | $ | 354,703 | (2) | 11 | 1,055 | |||||||
| (1) | Subsequent to December 31, 2025, we acquired three seniors housing communities in Georgia within our SHOP segment for $108,000. In conjunction with the acquisition, we entered into a management agreement with an existing operator. |
| (2) | At acquisition, we received property tax prorations credits of $1,116. |
42
Table of Contents
During the year ended December 31, 2025, we funded capital improvement projects of $2.7 million within our SHOP segment.
Triple-Net Portfolio
Lease Extensions. Many of our triple-net operating leases contain renewal options that, if exercised, could result in the amount of rent payable upon renewal being greater than that currently being paid. The following table outlines information related to our Triple-Net lease extensions during the year ended December 31, 2025 (dollar amounts in thousands):
Number | Number | ||||||||||||
Gross | of | of | Original | Extended | |||||||||
Type of Property | Investment | Properties | Beds/Units | State | Maturity | Maturity | |||||||
SH | $ | 68,767 | 7 | 461 | IL, MI, OH | May 31, 2025 | May 31, 2026 | ||||||
SNF | 53,339 | 6 | 782 | AL, NM | April 30, 2026 | (1) | April 30, 2031 | ||||||
SH | 32,361 | 2 | 159 | GA, SC | December 31, 2025 | December 31, 2026 | |||||||
SH | 25,891 | 2 | 88 | TX | February 28, 2025 | February 28, 2026 | |||||||
SNF | 13,053 | 2 | 211 | SC | February 28, 2026 | February 28, 2031 | |||||||
SNF | 5,275 | 2 | 141 | TN | December 31, 2025 | (2) | December 31, 2026 | ||||||
$ | 198,686 | 21 | 1,842 |
| (1) | During the third quarter of 2025, Genesis filed for Chapter 11 bankruptcy. Subsequent to December 31, 2025, a federal bankruptcy judge approved the sale of Genesis’ assets to a newly formed investment group. Genesis has paid its contractual rent through February 2026. We will continue to monitor the status of the bankruptcy-related developments. |
| (2) | The purchase option window provided in the master lease which expired on December 31, 2024, was extended for another year to December 31, 2025. During the third quarter of 2025, the operator provided an election notice to exercise its purchase option. |
Lease Terminations. During 2025, we terminated two existing leases with the same operator and combined them into a single master lease with the same operator. The new master lease had a five-year term. In connection with the termination of these leases, we wrote-off $0.2 million of straight-line rent receivable and $0.3 million of lease incentive balances during the year ended December 31, 2025. During the fourth quarter of 2025, we terminated the new master lease and converted the senior housing communities covered by the master lease into our SHOP segment. The communities are located in Oregon with a total of 186 units. Upon conversion into SHOP, the communities are operating and accounted for as one community. In connection with the conversion, we wrote-off the related working capital note of $1.0 million during the fourth quarter of 2025.
Additionally, during 2025, we terminated the Anthem Memory Care, LLC (“Anthem”) triple-net master leases and converted the communities covered under the master leases into our SHOP segment. In conjunction with the conversion, during 2025, we wrote-off Anthem’s working capital note of $2.7 million and the related interest receivable of $0.4 million. Also, we terminated the New Perspective Senior Living, LLC (“New Perspective”) triple-net lease and converted the community covered under the lease into our SHOP segment. In connection with the conversion, we paid New Perspective $6.0 million lease termination fee.
43
Table of Contents
Triple-Net Portfolio Sales. During the year ended December 31, 2025, we recorded a net gain on sale of real estate of $77.8 million. The following table summarizes property sales during the year ended December 31, 2025 (dollar amounts in thousands):
Type | Number | Number | ||||||||||||||
of | of | of | Sales | Carrying | Net | |||||||||||
State | Properties | Properties | Beds/Units | Price | Value | Gain (Loss) (1) | ||||||||||
California | SNF | 1 | 156 | $ | 29,000 | $ | 12,010 | $ | 16,578 | |||||||
Florida | SNF | 2 | 240 | 43,000 | 16,148 | 25,907 | ||||||||||
Ohio | SH | 1 | 39 | 1,000 | 670 | 236 | ||||||||||
Ohio (2) | N/A | — | — | 1,800 | 1,342 | 340 | ||||||||||
Oklahoma | SH | 1 | 29 | 670 | 670 | (96) | ||||||||||
Texas | N/A | 1 | — | 2,880 | 3,266 | (690) | ||||||||||
Virginia | SNF | 4 | 500 | 51,000 | 14,772 | 35,547 | ||||||||||
10 | 964 | $ | 129,350 | $ | 48,878 | $ | 77,822 |
| (1) | Calculation of net gain (loss) includes cost of sales and write-off of straight-line rent receivable and lease incentives, when applicable. |
| (2) | We sold a parcel of land adjacent to a memory care community within our portfolio. |
Triple-Net Portfolio Improvement Projects. During the year ended December 31, 2025, we invested in improvement projects within our Triple-Net Portfolio as follows (in thousands):
Type of Property | NNN | |||
Seniors Housing Communities | $ | 2,967 | ||
Skilled Nursing Centers | 1,600 | |||
Total | $ | 4,567 | ||
44
Table of Contents
Mortgage Loans Receivable
The following table summarizes our mortgage loans receivable activity for the year ended December 31, 2025 (in thousands):
Amount | ||||
Originations and funding under mortgage loans receivable | $ | 105,845 | (1) | |
Payoffs received | (37,237) | (2) | ||
Application of interest reserve | 2,177 | |||
Scheduled principal payments received | (1,000) | |||
Mortgage loan premium amortization | (9) | |||
Provision for loan loss reserve | (697) | |||
Net increase in mortgage loans receivable | $ | 69,079 | ||
| (1) | Funded the following mortgage loans during 2025: |
| (a) | $55,350 under a $57,550 mortgage loan commitment secured by two SH with a total of 171 units in California. The loan term is five years at a rate of 8.3%; |
| (b) | $38,351 under a $42,300 mortgage loan commitment secured by a 250-unit SH in Florida. The loan term is five years at a fixed rate of 8.5%; |
| (c) | $4,350 under a $19,500 mortgage loan commitment for the construction of an 85-unit SH in Michigan. The borrower contributed $12,100 of equity upon origination in July 2023, which was used to initially fund the construction. Our remaining commitment is $2,396. The interest-only loan term is approximately three years at a rate of 8.75%, and includes two one-year extensions, each of which is contingent on certain coverage thresholds; and |
| (d) | $7,794 under a $26,120 mortgage loan commitment for the construction of a 116-unit SH located in Illinois. The borrower contributed $12,300 of equity which was used to initially fund the construction. During the third quarter of 2025, we began funding this commitment. Our remaining commitment is $18,326. The loan bears interest at a current rate of 9.0% and an IRR of 9.5%. |
| (2) | Received the following payoffs and paydown during 2025: |
| (a) | $16,706 from a mortgage loan payoff secured by a 112-unit SH in Florida; |
| (b) | $16,500 from a mortgage loan payoff secured by a 150-bed SNF in Illinois; |
| (c) | $4,000 from a mortgage loan payoff secured by two SH with a total of 92 units in Florida; and |
| (d) | $31 of partial principal paydown. |
Unconsolidated Joint Ventures
We had preferred equity investments in joint ventures that met the accounting criteria to be considered a variable interest entity (“VIE”). During the year ended December 31, 2025, we received $16.0 million, which includes a 13% exit IRR of $3.0 million, from the redemption of a preferred equity investment in a joint venture that owns a 267-unit seniors housing in Washington. Additionally, during the year ended December 31, 2025, we received $8.1 million, which includes a 12% exit IRR of $1.8 million, from the redemption of a preferred equity investment in a joint venture that owns a 109-unit seniors housing community in Washington.
45
Table of Contents
Notes Receivable
The following table summarizes our notes receivable activity for the year ended December 31, 2025 (dollar amounts in thousands):
Amount | |||||
Advances under notes receivable | | $ | 25 |
| |
Principal payments received under notes receivable | (18,218) | (1) | |||
Write-off of notes receivable | (3,650) | (2) | |||
Recovery of credit losses | 218 | ||||
Net decrease in notes receivable | $ | (21,625) | |||
| (1) | Received the following payoffs and paydown during 2025: |
| (a) | $17,000 from the early payoff of a mezzanine loan. In conjunction with the mezzanine loan payoff, we received 12% exit IRR income of $2,599 recognized as Interest and other income in our Consolidated Statements of Income. The exit IRR income was partially offset by $1,624 of effective interest previously recognized over the term of the mezzanine loan through payoff; |
| (b) | $639 from the payoff of three working capital loans; and |
| (c) | $579 from the paydown of a working capital loan. |
| (2) | Represents the write-off of the Anthem working capital note in connection with terminating Anthem’s master lease and converting the communities covered under the master lease to SHOP. |
Key Performance Indicators, Trends and Uncertainties
We utilize several key performance indicators to evaluate the various aspects of our business. These indicators are discussed below and relate to concentration risk and credit strength. Management uses these key performance indicators to facilitate internal and external comparisons to our historical operating results in making operating decisions and for budget planning purposes.
Concentration Risk. We evaluate by gross real estate investment our concentration risk in terms of asset mix, real estate investment mix, operator mix and geographic mix. Concentration risk is valuable to understand what portion of our real estate investments could be at risk if certain sectors were to experience downturns. Asset mix measures the portion of our real estate investments that are real property or mortgage loans. Investment mix measures the portion of our investments that relate to our various property types. Operator mix measures the portion of our real estate investments that relate to our top five operators. Geographic mix measures the portion of our real estate investment that relate to our top five states.
46
Table of Contents
The following table reflects our recent historical trends of concentration risk (gross investment, in thousands):
12/31/25 | 9/30/25 | 6/30/25 | 3/31/25 | 12/31/24 |
| |||||||||||
Asset mix: | | | | | ||||||||||||
Triple-Net Portfolio | $ | 1,045,400 | $ | 1,149,924 | $ | 1,154,836 | $ | 1,329,856 | $ | 1,333,078 | ||||||
SHOP | 565,265 | 446,527 | 174,847 | — | — | |||||||||||
Financing receivables | 363,088 | 362,201 | 361,438 | 361,460 | 361,482 | |||||||||||
Mortgage loan receivables | 385,511 | 393,587 | 356,815 | 317,527 | 315,734 | |||||||||||
Notes receivable | 25,874 | 27,010 | 44,135 | 44,786 | 47,717 | |||||||||||
Unconsolidated joint ventures | 12,524 | 18,342 | 17,793 | 17,602 | 30,602 | |||||||||||
Real estate investment mix: | ||||||||||||||||
Senior housing communities | $ | 1,506,038 | $ | 1,440,634 | $ | 1,138,799 | $ | 1,100,232 | $ | 1,117,588 | ||||||
Skilled nursing centers | 871,825 | 943,775 | 959,060 | 958,994 | 959,020 | |||||||||||
Other (1) | 12,005 | 12,005 | 12,005 | 12,005 | 12,005 | |||||||||||
Under development |
| 7,794 | 1,177 | — | — | — | ||||||||||
Operator/credit mix: | ||||||||||||||||
ALG Senior Living | $ | 297,292 | $ | 296,405 | $ | 295,628 | $ | 295,629 | $ | 295,629 | ||||||
Prestige Healthcare (1) | 267,982 | 268,534 | 268,567 | 268,896 | 269,022 | |||||||||||
Encore Senior Living | 206,429 | 199,187 | 196,735 | 195,355 | 195,276 | |||||||||||
HMG Healthcare, LLC | 167,737 | 167,917 | 167,202 | 166,976 | 166,716 | |||||||||||
Anthem Memory Care, LLC (2) | — | — | — | 153,714 | 156,407 | |||||||||||
Carespring Health Care Management, LLC | 102,940 | 102,940 | 102,940 | 102,940 | 102,940 | |||||||||||
Remaining operators | 790,017 | 916,081 | 903,945 | 887,721 | 902,623 | |||||||||||
SHOP operators (2) (3) | 565,265 | 446,527 | 174,847 | — | — | |||||||||||
Geographic mix: | ||||||||||||||||
Wisconsin | $ | 319,951 | $ | 288,933 | $ | 94,051 | $ | 93,849 | $ | 93,844 | ||||||
Texas | 314,987 | 314,232 | 319,423 | 318,584 | 318,133 | |||||||||||
North Carolina | 303,391 | 302,504 | 301,727 | 301,650 | 301,468 | |||||||||||
Michigan | 293,954 | 293,889 | 293,189 | 292,396 | 290,450 | |||||||||||
California (4) | 143,906 | 160,780 | 69,717 | 69,717 | 69,717 | |||||||||||
Remaining states (4) | 1,021,473 | 1,037,253 | 1,031,757 | 995,035 | 1,015,001 | |||||||||||
| (1) | As of December 31, 2025, we have three parcels of land. These parcels are located adjacent to properties securing the Prestige Healthcare mortgage loan and are managed by Prestige. Subsequent to December 31, 2025, Prestige provided notice of its intent to repay its $179,885 mortgage loan and we expect them to repay the loan in 2026. |
| (2) | During the second quarter of 2025, we terminated our Anthem triple-net master leases and converted the communities covered under the master leases into our SHOP segment. Accordingly, our “Anthem Memory Care, LLC” were included with “SHOP operators” classification for the third and fourth quarters of 2025. |
| (3) | Our communities within our SHOP segment operated by independent operators on our behalf are classified as “SHOP operators”. Our SHOP segment is not subject to operator/credit concentration risk. |
| (4) | During the three months ended December 31, 2025, we sold two SNFs in Florida with a gross book value of $23,902 for a sales price of $43,000. As a result of this transaction, Florida is no longer a top five state under our geographic mix and is replaced by California. Accordingly, our “California” properties were reclassified from “Remaining states” and our “Florida” properties were reclassified to “Remaining states” for all periods presented. |
Credit Strength. We measure our credit strength both in terms of leverage ratios and coverage ratios. Our leverage ratios include debt to gross asset value and debt to market capitalization. The leverage ratios indicate how much of our Consolidated Balance Sheets capitalization is related to long-term obligations. Our coverage ratios include interest coverage ratio and fixed charge coverage ratio. The coverage ratios indicate our ability to service interest and fixed charges (interest). The coverage ratios are based on earnings before interest, taxes, depreciation and amortization for real estate (“EBITDAre”) as defined by National Association of Real Estate Investment Trusts (“Nareit”). EBITDAre is calculated as net income available to common stockholders (computed in accordance with GAAP) excluding (i) interest expense, (ii) income tax expense, (iii) real estate depreciation and amortization, (iv) impairment write-downs of depreciable real estate, (v) gains or losses on the sale of depreciable real estate, and (vi) adjustments for unconsolidated partnerships and joint ventures. Adjusted EBITDAre is calculated as EBITDAre adjusted for non-recurring items. Leverage ratios and coverage ratios are widely used by investors, analysts and rating agencies in the valuation, comparison, rating and investment recommendations of companies. The following table reflects the recent historical
47
Table of Contents
trends for our credit strength measures:
Balance Sheet Metrics
Year Ended | Quarter Ended | ||||||||||||||||
12/31/25 | 12/31/25 | 9/30/25 | 6/30/25 | 3/31/25 | 12/31/24 | ||||||||||||
Debt to gross asset value | 34.0 | % | 34 | % | (1) | 38.1 | % | (4) | 31.3 | % | 31.1 | % | 31.1 | % | |||
Debt to market capitalization ratio | 33.6 | % | 33.6 | % | (2) | 35.1 | % | (5) | 30.4 | % | (7) | 29.5 | % | (8) | 30.3 | % | |
Interest coverage ratio (10) | 4.8 | x | 4.4 | x | (3) | 4.8 | x | (6 ) | 5.1 | x | 5.0 | x | (9) | 4.7 | x | ||
Fixed charge coverage ratio (10) | 4.8 | x | 4.4 | x | (3) | 4.8 | x | (6 ) | 5.1 | x | 5.0 | x | (9) | 4.7 | x | ||
| (1) | Decreased due to decrease in outstanding debt. |
| (2) | Decreased due to decrease in outstanding debt partially offset by decrease in market capitalization resulting from lower stock price. |
| (3) | Decreased due to increase in interest expense partially offset by increase in net operating income from our SHOP segment. |
| (4) | Increased due to increase in outstanding debt partially offset by increase in gross asset value. |
| (5) | Increased due to increase in outstanding debt partially offset by increase in market capitalization resulting from the sale of common stock under our Equity Distribution Agreement as well as increase in stock price. |
| (6) | Decreased due to increase in interest expense and decrease in rental income partially offset by increase in revenue from resident fees and services and interest and other income. |
| (7) | Increased due to increase in outstanding debt and decrease in market capitalization from lower stock price. |
| (8) | Decreased due to increase in market capitalization due to increase in stock price. |
| (9) | Increased due to decrease in interest expense. |
| (10) | In calculating our interest coverage and fixed charge coverage ratios above, we use EBITDAre, which is a financial measure not derived in accordance with GAAP (non-GAAP financial measure). EBITDAre and Adjusted EBITDAre are not alternatives to net income, operating income or cash flows from operating activities as calculated and presented in accordance with GAAP. You should not rely on EBITDAre and Adjusted EBITDAre as a substitute for any such GAAP financial measures or consider it in isolation, for the purpose of analyzing our financial performance, financial position or cash flows. Net income is the most directly comparable GAAP measure to EBITDAre and Adjusted EBITDAre. |
We evaluate our key performance indicators in conjunction with current expectations to determine if historical trends are indicative of future results. Our expected results may not be achieved and actual results may differ materially from our expectations. This may be a result of various factors, including, but not limited to:
| ● | the status of the economy; |
| ● | the status of capital markets, including prevailing interest rates; |
| ● | compliance with and changes to regulations and payment policies within the health care industry; |
| ● | changes in financing terms; |
| ● | competition within the health care and seniors housing industries; |
| ● | changes in federal, state and local legislation; and |
| ● | the duration, spread and severity of a public health crises such as a pandemic. |
Management regularly monitors the economic and other factors listed above. We develop strategic and tactical plans designed to improve performance and maximize our competitive position. Our ability to achieve our financial objectives is dependent upon our ability to effectively execute these plans and to appropriately respond to emerging economic, health care and company-specific trends.
48
Table of Contents
Operating Results
Year ended December 31, 2025 compared to year ended December 31, 2024 (in thousands):
Year Ended December 31, | ||||||||||
2025 | 2024 | Difference | ||||||||
Revenues: | ||||||||||
Rental income | $ | 116,171 | $ | 132,278 | $ | (16,107) | (1) | |||
Resident fees and services | 72,116 | — | 72,116 | (2) | ||||||
Interest income from financing receivables | 28,315 | 21,663 | 6,652 | (3) | ||||||
Interest income from mortgage loans | 39,023 | 45,216 | (6,193) | (4) | ||||||
Interest and other income | 7,229 | 10,690 | (3,461) | (5) | ||||||
Total revenues | 262,854 | 209,847 | 53,007 | |||||||
Expenses: | ||||||||||
Interest expense | 35,306 | 40,336 | 5,030 | (6) | ||||||
Depreciation and amortization | 37,874 | 36,367 | (1,507) | (7) | ||||||
Seniors housing operating expenses | 54,088 | — | (54,088) | (8) | ||||||
Impairment loss | — | 6,953 | (9) | 6,953 | ||||||
Write-off of effective interest receivable | 41,455 | — | (41,455) | (10) | ||||||
Provision for credit losses | 4,515 | 741 | (3,774) | (11) | ||||||
Transaction costs | 8,221 | 819 | (7,402) | (12) | ||||||
Triple-net lease property tax expense | 10,795 | 12,930 | 2,135 | |||||||
General and administrative expenses | 31,120 | 27,243 | (3,877) | (13) | ||||||
Total expenses | 223,374 | 125,389 | (97,985) | |||||||
Income before unconsolidated joint ventures, real estate dispositions and other items | 39,480 | 84,458 | (44,978) | |||||||
Gain on sale of real estate, net | 77,822 | (14) | 7,979 | (15) | 69,843 | |||||
Income from unconsolidated joint ventures | 6,757 | 2,442 | 4,315 | (16) | ||||||
Income tax provision | (179) | — | (179) | |||||||
Net income | 123,880 | 94,879 | 29,001 | |||||||
Income allocated to non-controlling interests | (5,908) | (3,839) | (2,069) | (3) | ||||||
Net income attributable to LTC Properties, Inc. | 117,972 | 91,040 | 26,932 | |||||||
Income allocated to participating securities | (696) | (682) | (14) | |||||||
Net income available to common stockholders | $ | 117,276 | $ | 90,358 | $ | 26,918 | ||||
| (1) | Decreased primarily due to conversion of 15 communities from triple-net to our SHOP segment, lower rent from property sales and the turnaround impact of a one-time revenue received in 2024 related to the repayment of a $2,377 rent credit, write-off of a straight-line rent receivable balance due to an operator filing for bankruptcy and the write-off of a straight-line rent receivable and lease incentive balance in connection with the termination of two existing leases with the same operator, and combining them into a single master lease. The decreases were partially offset by rent increases from fair-market rent resets, annual escalations and amendments. |
| (2) | Resident fees and services include all amounts earned from residents, based on individual resident agreements, at our SHOP communities. |
| (3) | Increased primarily due to the exchange of two mortgage loan receivables near the end of the second quarter of 2024 for controlling interests in two newly formed JVs that are accounted for as financing receivables. |
| (4) | Decreased primarily due to explanation (3) above, decrease in Prestige effective interest previously accrued, and payoffs partially offset by additional mortgage loan funding. |
| (5) | Decreased due to aggregate one-time income of $4,052 received from two former operators and receipt of insurance proceeds in 2024 compared to one-time income of $600 received from a former operator in 2025. |
| (6) | Decreased due to lower average outstanding balance on our revolving line of credit, scheduled principal paydowns on our senior unsecured notes and lower interest rates. |
| (7) | Increased due to acquisitions within our SHOP segment partially offset by properties sold. |
| (8) | Represents operating expenses related to our new SHOP segment. |
| (9) | Represents the impairment loss in connection with the anticipated closure of two SH communities totaling 95 units in Ohio and Texas and the subsequent sale of a 29-unit SH community located in Oklahoma. |
49
Table of Contents
| (10) | In conjunction with the Prestige mortgage loan modification that provided Prestige a penalty-free early payoff option, we wrote-off interest receivable previously accrued related to this mortgage loan. |
| (11) | Increased due to the write-off of working capital notes and interest receivable in connection with the transition of triple-net leases covering 15 properties to RIDEA. |
| (12) | Increased primarily due to $5,971 lease termination fee paid to New Perspective upon conversion of the community covered under a triple-net lease into our SHOP segment and additional costs associated with the startup of our new RIDEA platform. |
| (13) | Increased primarily due to one-time expenses related to an employee’s retirement and increase in incentive compensation expenses and other corporate expenses. |
| (14) | Represents the gain on sale related to the sale of seven SNFs with a total of 896 units located in California (one), Florida (two) and Virginia (four), one SH and a parcel of land adjacent to an SH within our portfolio located in Ohio partially offset by a net loss on sale related to a closed facility in Texas. |
| (15) | Represents the gain on sale of an 80-unit SH in Texas, a 110-unit community in Wisconsin and three closed properties located in Texas (two) and Colorado (one), partially offset by the aggregate loss on sale of six SHs located in Texas (five) and Florida (one). |
| (16) | Increased due to the aggregate exit IRR of $4,762 received in connection with the redemption of our preferred equity investments in two JVs. |
50
Table of Contents
Year ended December 31, 2024 compared to year ended December 31, 2023 (in thousands):
Year Ended December 31, | ||||||||||
2024 | 2023 | Difference |
| |||||||
Revenues: | | | | | | | ||||
Rental income | $ | 132,278 | $ | 127,350 | $ | 4,928 | (1) | |||
Interest Income from financing receivables | 21,663 | 15,243 | 6,420 | (2) | ||||||
Interest income from mortgage loans |
| 45,216 |
| 47,725 |
| (2,509) | (3) | |||
Interest and other income |
| 10,690 |
| 6,926 |
| 3,764 | (4) | |||
Total revenues |
| 209,847 |
| 197,244 |
| 12,603 | ||||
Expenses: | ||||||||||
Interest expense |
| 40,336 |
| 47,014 |
| 6,678 | (5) | |||
Depreciation and amortization |
| 36,367 |
| 37,416 |
| 1,049 | (6) | |||
Impairment loss |
| 6,953 | (7) |
| 15,775 | (8) |
| 8,822 | ||
Provision for credit losses | 741 | 5,678 | 4,937 | (9) | ||||||
Transaction costs | 819 | 1,144 | 325 | |||||||
Property tax expense | 12,930 | 13,269 | 339 | |||||||
General and administrative expenses |
| 27,243 |
| 24,286 |
| (2,957) | (10) | |||
Total expenses |
| 125,389 |
| 144,582 |
| 19,193 | ||||
Income before unconsolidated joint ventures, real estate dispositions and other items | ||||||||||
Gain on sale of real estate, net | 7,979 | (11) | 37,296 | (12) | (29,317) | |||||
Income from unconsolidated joint ventures | 2,442 | 1,504 | 938 | (13) | ||||||
Net income |
| 94,879 |
| 91,462 |
| 3,417 | ||||
Income allocated to non-controlling interests |
| (3,839) |
| (1,727) |
| (2,112) | (2) | |||
Net income attributable to LTC Properties, Inc. |
| 91,040 |
| 89,735 |
| 1,305 | ||||
Income allocated to participating securities |
| (682) |
| (587) |
| (95) | ||||
Net income available to common stockholders | $ | 90,358 | $ | 89,148 | $ | 1,210 | ||||
| (1) | Increased due to $3,158 one-time additional straight-line rental income related to restoring accrual basis accounting for two master leases, $2,377 repayment of rent credit in connection with the sale of our interest in a consolidated JV, rental income from acquisitions, annual rent escalations, partially offset by portfolio transitions and property sales. |
| (2) | Increased primarily due to exchange of two mortgage loan receivables during the second quarter of 2024 for controlling interests in two newly formed JVs that are accounted for as financing receivables. |
| (3) | Decreased primarily due to explanation (2) above and payoffs, partially offset by mortgage loan originations. |
| (4) | Increased primarily due to aggregate one-time income of $4,052 received from two former operators, partially offset by working capital note payoffs. |
| (5) | Decreased due to lower outstanding balance on our revolving line of credit and scheduled principal paydowns on our senior unsecured notes. |
| (6) | Decreased due to properties sold. |
| (7) | Represents the impairment loss in connection with the anticipated closure of SH totaling 95 units in Ohio and Texas and the subsequent sale of a 29-unit SH located in Oklahoma. |
| (8) | Represents the impairment loss in connection with the negotiations to sell seven SH totaling 248 units in Texas and the impairment loss related to three SH totaling 197 units in Florida and Mississippi due to entering into purchase and sale agreements with sales prices lower than the communities’ carrying values. These properties were sold during 2023 and 2024. |
| (9) | Decreased primarily due to the $3,561 write-off of an uncollectible working capital loan in 2023 and loan and note payoffs, offset by explanation (2) above. |
| (10) | Increased due to higher costs related to properties transitioned to new operators, incentive compensation charges, public company costs and the timing of certain expenditures. |
| (11) | Represents the gain on sale of an 80-unit SH in Texas, a 110-unit community in Wisconsin and three closed properties located in Texas (two) and Colorado (one), partially offset by the aggregate loss on sale of six SHs located in Texas (five) and Florida (one). |
51
Table of Contents
| (12) | Represents the aggregate net gain on sale related to 19 SHs located in Florida (five), Kentucky (one), Mississippi (one), Nebraska (three), New Jersey (one), Oklahoma (one), Pennsylvania (two) and South Carolina (three) and two SNFs in New Mexico during 2023. |
| (13) | Increased due to additional income from origination of a $12,700 mortgage loan receivable secured by a SNF in Texas. In accordance with GAAP, this mortgage loan receivable was determined to be an acquisition, development and construction (“ADC”) loan and is accounted for as an unconsolidated JV. |
Other
Non-GAAP Financial Measures
A non-GAAP financial measure is defined as a numerical measure of a registrant’s historical or future financial performance, financial position or cash flows that excludes or includes amounts that are not excluded from or included in the most directly comparable measure calculated and presented in accordance with GAAP. We consider Funds from Operations (“FFO”), NOI and EBITDAre to be useful supplemental measures of our financial or operating performance.
Funds From Operations
FFO attributable to common stockholders, basic FFO attributable to common stockholders per share and diluted FFO attributable to common stockholders per share are supplemental measures of a REIT’s financial performance that are not defined by GAAP. Real estate values historically rise and fall with market conditions, but cost accounting for real estate assets in accordance with GAAP assumes that the value of real estate assets diminishes predictably over time. We believe that by excluding the effect of historical cost depreciation, which may be of limited relevance in evaluating current performance, FFO facilitates comparisons of operating performance between periods.
We use FFO as a supplemental performance measurement of our cash flow generated by operations. FFO does not represent cash generated from operating activities in accordance with GAAP, and is not necessarily indicative of cash available to fund cash needs and should not be considered an alternative to net income available to common stockholders.
We calculate and report FFO in accordance with the definition and interpretive guidelines issued by Nareit. FFO, as defined by Nareit, means net income available to common stockholders (computed in accordance with GAAP) excluding gains or losses on the sale of real estate and impairment write-downs of depreciable real estate plus real estate depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Our calculation of FFO may not be comparable to FFO reported by other REITs that do not define the term in accordance with the current Nareit definition or that have a different interpretation of the current Nareit definition from us; therefore, caution should be exercised when comparing our FFO to that of other REITs.
52
Table of Contents
The following table reconciles net income available to common stockholders to FFO attributable to common stockholders (unaudited, amounts in thousands, except per share amounts):
For the Year Ended December 31, |
| |||||||||
2025 | 2024 | 2023 |
| |||||||
GAAP net income available to common stockholders | $ | 117,276 | | $ | 90,358 | | $ | 89,148 | ||
Add: Depreciation and amortization |
| 37,874 |
| 36,367 |
| 37,416 | ||||
Add: Impairment loss | — | 6,953 | 15,775 | |||||||
Less: Gain on sale of real estate, net |
| (77,822) |
| (7,979) |
| (37,296) | ||||
Nareit FFO attributable to common stockholders | $ | 77,328 | $ | 125,699 | $ | 105,043 | ||||
Nareit FFO attributable to common stockholders per share: | ||||||||||
Effect of dilutive securities: | ||||||||||
Add: Participating securities | — | 682 | 587 | |||||||
Diluted Nareit FFO attributable to common stockholders | $ | 77,328 | $ | 126,381 | $ | 105,630 | ||||
Weighted average shares used to calculate Nareit FFO per share: | ||||||||||
Shares for basic net income per share | 46,230 | 43,743 | 41,272 | |||||||
Effect of dilutive securities: | ||||||||||
Performance-based stock units | 330 | 498 | 86 | |||||||
Participating securities | — | 296 | 256 | |||||||
Total effect of dilutive securities | 330 | 794 | 342 | |||||||
Shares for diluted FFO per share | 46,560 | 44,537 | 41,614 | |||||||
Net Operating Income
Net operating income or NOI is a non-GAAP financial measure that is calculated as net income (loss) (computed in accordance with GAAP) before (i) general and administrative expenses, (ii) transaction costs, (iii) write-off of effective interest, (iv) provision for credit losses, (v) impairment loss, (vi) depreciation and amortization, (vii) interest expense,(viii) gain or loss on sale of real estate and (ix) income tax benefit or expense. We use NOI to reflect the operating performance of our portfolio because NOI excludes certain items that are not associated with the operations of our properties.
NOI is not equivalent to our net income (loss) as determined under GAAP. Additionally, 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. Therefore, caution should be exercised when comparing our NOI to that of other REITs.
The following is a reconciliation of net income or loss, which is the most directly comparable GAAP financial measure to NOI for the years ended December 31, 2025, 2024 and 2023 (in thousands):
Year Ended December 31, | ||||||||||
2025 | 2024 | 2023 | ||||||||
Net income | $ | 123,880 | $ | 94,879 | $ | 91,462 | ||||
Add: Income tax provision | 179 | — | — | |||||||
Less : Gain on sale of real estate, net | (77,822) | (7,979) | (37,296) | |||||||
Add: General and administrative expense | 31,120 | 27,243 | 24,286 | |||||||
Add: Transaction costs | 8,221 | 819 | 1,144 | |||||||
Add: Write-off of effective interest | 41,455 | — | — | |||||||
Add: Provision for credit losses | 4,515 | 741 | 5,678 | |||||||
Add: Impairment loss | — | 6,953 | 15,775 | |||||||
Add: Depreciation and amortization | 37,874 | 36,367 | 37,416 | |||||||
Add: Interest expense | 35,306 | 40,336 | 47,014 | |||||||
NOI | $ | 204,728 | $ | 199,359 | $ | 185,479 | ||||
53
Table of Contents
Earnings before Interest, Taxes, Depreciation and Amortization for Real Estate
Earnings before interest, taxes, depreciation and amortization for real estate or EBITDAre is calculated as net income available to common stockholders (computed in accordance with GAAP) excluding (i) interest expense, (ii) income tax expense, (iii) real estate depreciation and amortization, (iv) impairment write-downs of depreciable real estate, (v) gains or losses on the sale of depreciable real estate, and (vi) adjustments for unconsolidated partnerships and joint ventures.
EBITDAre is not an alternative to net income, operating income or cash flows from operating activities as calculated and presented in accordance with GAAP. You should not rely on EBITDAre as a substitute for any such GAAP financial measures or consider it in isolation, for the purpose of analyzing our financial performance, financial position or cash flows. Net income is the most directly comparable GAAP measure to EBITDAre.
54
Table of Contents
The following is a reconciliation of net income or loss, which is the most directly comparable GAAP financial measure to EBITDAre for the periods presented below (in thousands):
Year to Date | Three Months Ended | ||||||||||||||||||
12/31/25 | 12/31/25 | 9/30/25 | 6/30/25 | 3/31/25 | 12/31/24 | ||||||||||||||
Net income (loss) | $ | 123,880 | $ | 103,651 | $ | (18,540) | $ | 16,548 | $ | 22,221 | $ | 19,590 | |||||||
Less/Add: (Gain)/loss on sale | (77,822) | (78,057) | 738 | (332) | (171) | (1,097) | |||||||||||||
Add/Less: Income tax provision (benefit) | 179 | 218 | 42 | (81) | — | — | |||||||||||||
Add: Impairment loss | — | — | — | — | — | 6,953 | |||||||||||||
Add: Interest expense | 35,306 | 10,588 | 8,791 | 8,014 | 7,913 | 8,365 | |||||||||||||
Add: Depreciation and amortization | 37,874 | 10,949 | 8,987 | 8,776 | 9,162 | 9,194 | |||||||||||||
EBITDAre | 119,417 | 47,349 | 18 | 32,925 | 39,125 | 43,005 | |||||||||||||
Add/(Less): Non-recurring one-time items | 49,783 | (1) | (1,051) | (2) | 42,418 | (3) | 8,011 | (4) | 405 | (5) | (3,379) | (6) | |||||||
Adjusted EBITDAre | $ | 169,200 | $ | 46,298 | $ | 42,436 | $ | 40,936 | $ | 39,530 | $ | 39,626 | |||||||
Interest expense | $ | 35,306 | $ | 10,588 | $ | 8,791 | $ | 8,014 | $ | 7,913 | $ | 8,365 | |||||||
Interest coverage ratio | 4.8 | x | 4.4 | x | 4.8 | x | 5.1 | x | 5.0 | x | 4.7 | x | |||||||
Interest expense | $ | 35,306 | $ | 10,588 | $ | 8,791 | $ | 8,014 | $ | 7,913 | $ | 8,365 | |||||||
Total fixed charges | $ | 35,306 | $ | 10,588 | $ | 8,791 | $ | 8,014 | $ | 7,913 | $ | 8,365 | |||||||
Fixed charge coverage ratio | 4.8 | x | 4.4 | x | 4.8 | x | 5.1 | x | 5.0 | x | 4.7 | x | |||||||
| (1) | See (2) through (5) below. |
| (2) | Includes $1,800 received in connection with the redemption of our preferred equity investment in a joint venture and $600 of one-time income received from a former operator partially offset by $957 write-off of a working capital note and $392 of one-time transaction costs in connection with the transition to RIDEA. |
| (3) | Includes $41,455 effective interest write-off related to a mortgage loan amendment that permits penalty-free early payoff window within an allowable window, $1,271 straight-line rent receivable write-off due to an operator’s bankruptcy filing, $554 provision for credit losses related to mortgage loan originations and $488 of one-time transaction costs in connection with the transition to RIDEA partially offset by the exit IRR of $975 received in connection with an early payoff of a mezzanine loan and recovery of credit losses of $375 related to loan payoffs. |
| (4) | Includes $5,971termination fee paid to New Perspective, $1,136 one-time costs associated with an employee’s retirement, $520 of one-time RIDEA transaction costs and $384 provision for credit losses related to a mortgage loan origination. |
| (5) | Includes $2,693 write-off of a working capital note, $371 of related interest receivable, and $303 of one-time transaction costs, all in connection with the transition to RIDEA, partially offset by the 13% exit IRR of $2,962 received in connection with the redemption of our preferred equity investment in a JV. |
| (6) | Includes a one-time additional straight-line income of $3,158 related to restoring accrual basis accounting for two master leases, recovery of credit losses of $511 related to a mortgage loan receivable write-off, partially offset by a $290 provision for credit losses related to the write-off of an uncollectible loan receivable. |
Critical Accounting Policies and Estimates
Our accounting policies are more fully described under Item 8. FINANCIAL STATEMENTS—Footnote 2. Summary of Significant Accounting Policies. As discussed in Footnote 2, the preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions about future events that affect the amounts reported in our consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Listed below are those policies and estimates that we believe are critical and require the use of significant judgement in their application.
55
Table of Contents
Impairment of Long-Lived Assets
Assets that are classified as held-for-use are periodically evaluated for impairment when events or changes in circumstances indicate that the asset may be impaired or the carrying amount of the asset may not be recoverable through future undiscounted cash flows. Where indicators of impairment exist, the estimation required in the undiscounted future cash flow assumption includes management’s probability-weighting of various scenarios such as modifying the lease with the existing operator, identifying a replacement operator or sale of the real property investment. In addition, the undiscounted future cash flows include management’s assumptions of rental revenues, net operating income, capitalization rates and expected hold periods. In determining fair value, we use current appraisals or other third-party opinions of value and other estimates of fair value such as estimated discounted future cash flows.
Collectability of operator obligations
We assess the collectability of substantially all our lease, financing receivables and mortgage loan payments through maturity. If collectability is not probable, all or a portion of our straight-line rent receivable, effective interest receivable and other lease receivables may be written-off. In order to assess our payments for collectability, we make assumptions that include evaluating operator’s payment history, the financial strength of the operator, projected future market conditions and contractual amounts and timing of expected payments. Our ability to accurately predict collectability of substantially all of the payments due to us impacts the timing of straight-line rent, effective interest and other lease receivable write-offs, if any. While we believe our assumptions are reasonable, changes in these assumptions may have a material impact on our consolidated financial statements.
Purchase Price Allocation
We evaluate each purchase transaction to determine whether the acquired assets meet the definition of an asset acquisition or a business combination. Transaction costs related to acquisitions that are not deemed to be business combinations are included in the cost basis of the acquired assets, while transaction costs related to acquisitions that are deemed to be business combinations are expensed as incurred.
We make estimates as part of our allocation of the purchase price for asset acquisitions to the various components of the acquisition based upon the relative fair value of each component. The most significant components of our purchase allocations are typically the allocation of fair value to land and building. Our estimates of the fair value of land and building acquired were determined using the sales comparison approach and the income approach, respectively, and include assumptions of comparable land sales, direct capitalization rates and property net operating income.
In the case of the fair value of buildings and the allocation of value to land and other intangibles, the estimates of the values of these components will affect the amount of depreciation and amortization we record over the estimated useful life of the property acquired or the remaining lease term.
Liquidity and Capital Resources
Sources and Uses of Cash
As of December 31, 2025, we had $650.0 million in liquidity as follows (amounts in thousands):
At December 31, 2025 | |||
Cash and cash equivalents | $ | 14,387 | |
Available under unsecured revolving line of credit | 347,137 | (1) | |
Available under Equity Distribution Agreement | 288,509 | (2) | |
Total Liquidity | $ | 650,033 | (3) |
56
Table of Contents
| (1) | Subsequent to December 31, 2025, we borrowed $107,000 under our unsecured revolving line of credit. Accordingly, we have $359,863 outstanding with $240,137 available for borrowing. |
| (2) | Subsequent to December 31, 2025, we sold 71,059 shares of common stock under our Equity Distribution Agreement. Accordingly, we had $285,970 available under the Equity Distribution Agreement. |
| (3) | Subsequent to December 31, 2025, we had $540,494 in Liquidity. See (1) and (2) above. |
We believe that our current cash balance, cash flow from operations available for distribution or reinvestment, our borrowing capacity and our potential ability to access the capital markets are sufficient to provide for payment of our current operating costs, meet debt obligations and pay common dividends at least sufficient to maintain our REIT status and repay borrowings at, or prior to, their maturity. The timing, source and amount of cash flows used by financing and investing activities are sensitive to the capital markets’ environment, especially to changes in interest rates. In addition, inflation has adversely affected our operators’ business, results of operations, cash flows and financial condition which could, in turn, adversely affect our financial position.
The operating results of the properties will be impacted by various factors over which the operators may have no control. Those factors include, without limitation, the health of the economy, inflation pressures, employee availability and cost, changes in supply of or demand for competing seniors housing and health care facilities, ability to hire and maintain qualified staff, ability to control other rising operating costs, the potential for significant reforms in the health care industry, and related occupancy challenges that could be faced by our industry or in the markets where our properties are located. In addition, our future growth in net income and cash flow may be adversely impacted by various proposals for changes in the governmental regulations and financing of the health care industry or the impact of any other infectious disease and epidemic outbreaks. We cannot presently predict what impact these potential events may have, if any. We believe that adequate provisions have been made for the possibility of loans and financing receivables proving uncollectible but we will continually evaluate the financial status of the operations of our seniors housing and health care properties. In addition, we will monitor our borrowers and the underlying collateral for mortgage loans and financing receivables and will make future revisions to the provision, if considered necessary.
Depending on our borrowing capacity, compliance with financial covenants, ability to access the capital markets, and the payment of dividends may be negatively impacted. We continuously evaluate the availability of cost-effective capital and believe we have sufficient liquidity for our current dividend, corporate expenses and additional capital investments in 2026.
Our investments, principally our investments in owned real properties, financing leases and mortgage loans, are subject to the possibility of loss of their carrying values as a result of changes in market prices, interest rates and inflationary expectations. The effects on interest rates may affect our costs of financing our operations and the fair market value of our financial assets. Generally, our leases have agreed upon annual increases and our loans have predetermined increases in interest rates. Inasmuch as we may initially fund some of our investments with variable interest rate debt, we would be at risk of net interest margin deterioration if medium and long-term rates were to increase.
Our primary sources of cash include rent and interest receipts, borrowings under our unsecured credit facility, public and private issuance of debt and equity securities, proceeds from investment dispositions and principal payments on loans receivable. Our primary uses of cash include property operating expenses and recurring capital expenditures within our SHOP segment, dividend distributions, debt service payments (including principal and interest), real property investments (including acquisitions, renovations and other capital improvements and construction advances), loan advances and general and administrative expenses. These sources and uses of cash are reflected in our Consolidated Statements of Cash Flows as summarized below (in thousands):
Year Ended December 31, | Change | |||||||||
Net cash provided by (used in): | 2025 | 2024 | $ | |||||||
Operating activities | $ | 135,977 | $ | 125,875 | $ | 10,102 | ||||
Investing activities | (269,944) | 90,680 | (360,624) | |||||||
Financing activities | 138,940 | (227,427) | 366,367 | |||||||
Increase (decrease) in cash and cash equivalents | 4,973 | (10,872) | 15,845 | |||||||
Cash and cash equivalents, beginning of period | 9,414 | 20,286 | (10,872) | |||||||
Cash and cash equivalents, end of period | $ | 14,387 | $ | 9,414 | $ | 4,973 | ||||
57
Table of Contents
Debt Obligations
Unsecured Credit Facility. We had an unsecured credit agreement that provided for an aggregate commitment of the lenders of up to $525.0 million comprising of a $425.0 million revolving credit facility and two $50.0 million term loans (the “Original Term Loans”). The Original Term Loans had maturities of November 19, 2025 and November 19, 2026. The revolving credit facility had a maturity date of November 19, 2026. The unsecured credit agreement permitted us to request increases to the revolving credit facility and term loans commitments up to a total of $1.0 billion. During the third quarter of 2025, we entered into a new four-year unsecured credit agreement (the “New Credit Agreement”) maturing in July 2029, to replace our previous credit agreement. The New Credit Agreement increased the aggregate commitment on our revolving credit facility from $425.0 million to $600.0 million (the “Revolving Line of Credit”) and provides for the opportunity to increase the total commitment to an aggregate $1.2 billion (the “Accordion”). The New Credit Agreement provides for a one-year extension option, subject to customary conditions. Material terms of the New Credit Agreement remain unchanged. In connection with the New Credit Agreement, the Original Term loans were rolled into the Revolving Line of Credit. During the fourth quarter of 2025, we amended our New Credit Agreement to increase the aggregate commitment of the lenders by $200.0 million to a total of $800.0 million through the exercise of the Accordion and established term loans totaling $200.0 million (the “Term Loans”). The Term Loans consist of $50.0 million, $55.0 million, $55.0 million and $40.0 million borrowings, with contractual maturities of three, four, five and seven years, respectively.
Based on our leverage at December 31, 2025, the Revolving Line of Credit provides for interest annually at Adjusted SOFR plus 110 basis points and a facility fee of 15 basis points and the Term Loans provide for interest annually at SOFR plus 115 basis points for the three, four and five year borrowings and 150 basis points for seven year borrowings.
Interest Rate Swap Agreement. In connection with entering into the Original Term Loans as discussed above, we entered into two receive variable/pay fixed interest rate swap agreements with maturities of November 19, 2025 and November 19, 2026, respectively, that effectively locked-in the forecasted interest payments on the Original Term Loan borrowings over the four and five year terms of the loans. Additionally, during the fourth quarter of 2025, we entered into interest rate swaps with maturities of three, four, five and seven years, respectively (the “Interest Rate Swaps”) to effectively lock-in the forecasted interest payments on the Term Loans. Our interest rate swaps are considered cash flow hedges and are recorded on our Consolidated Balance Sheets at fair value, with changes in the fair value of these instruments recognized in Accumulated other comprehensive income (loss) on our Consolidated Balance Sheets. During the year ended December 31, 2025, we recorded $3.3 million decrease in fair value of interest rate swaps.
The following table sets forth information regarding our interest rate swaps at December 31, 2025 (dollar amounts in thousands):
Notional | Fair Value at | |||||||||||||
Date Entered | Maturity Date | Swap Rate | Rate Index | Amount | December 31, 2025 | |||||||||
November 2021 | November 19, 2025 | N/A | % | (1) | 1-month SOFR | $ | N/A | (1) | $ | — | (1) | |||
November 2021 | November 19, 2026 | 2.46 | % | 1-month SOFR | 50,000 | (2) | 938 | |||||||
December 2025 | December 12, 2028 | 4.61 | % | SOFR with 5-day lookback | 25,000 | (52) | ||||||||
December 2025 | December 12, 2028 | 4.61 | % | SOFR with 5-day lookback | 25,000 | (55) | ||||||||
December 2025 | December 12, 2029 | 4.65 | % | SOFR with 5-day lookback | 55,000 | (136) | ||||||||
December 2025 | December 12, 2030 | 4.68 | % | SOFR with 5-day lookback | 30,000 | (45) | ||||||||
December 2025 | December 12, 2030 | 4.72 | % | SOFR with 5-day lookback | 25,000 | (74) | ||||||||
December 2025 | December 12, 2032 | 5.21 | % | SOFR with 5-day lookback | 27,500 | (45) | ||||||||
December 2025 | December 12, 2032 | 5.25 | % | SOFR with 5-day lookback | 12,500 | (49) | ||||||||
$ | 250,000 | $ | 482 | |||||||||||
| (1) | The interest rate swap, which had a notional amount of $50,000, matured on November 19, 2025. Accordingly, the fair value of the interest rate swap was $0 at December 31, 2025. |
| (2) | During the third quarter of 2025, the interest rate swap was rolled into the Revolving Line of Credit. |
58
Table of Contents
Senior Unsecured Notes. We have senior unsecured notes held by institutional investors with interest rates ranging from 3.66% to 4.5%. The senior unsecured notes mature between 2026 and 2033.
The debt obligations by component as of December 31, 2025 are as follows (dollar amounts in thousands):
Applicable | Available | |||||||
Interest | Outstanding | for | ||||||
Debt Obligations | Rate (1) | Balance | Borrowing | |||||
Revolving line of credit (2) | 4.40% | $ | 252,863 | $ | 347,137 | |||
Term loans, net of debt issue costs | 4.77% | 198,213 | — | |||||
Senior unsecured notes, net of debt issue costs (3) | 4.12% | 391,105 | — | |||||
Total | 4.36% | $ | 842,181 | $ | 347,137 | |||
| (1) | Represents weighted average of interest rate as of December 31, 2025. |
| (2) | Subsequent to December 31, 2025, we borrowed $107,000 under our unsecured revolving line of credit. Accordingly, we have $359,863 outstanding and $240,137 available for borrowing under our unsecured revolving line of credit. |
| (3) | Subsequent to December 31, 2025, we repaid $5,000 in scheduled principal paydowns on our senior unsecured notes. Accordingly, we have $386,105 outstanding under our senior unsecured notes, net of debt issue costs. |
Our debt borrowings and repayments during the year ended December 31, 2025, are as follows (in thousands):
Debt Obligations | Borrowings | Repayments | |||||
Revolving line of credit | $ | 486,500 | (1) | $ | (377,987) | ||
Term loans | 200,000 | (100,000) | |||||
Senior unsecured notes | — | (49,500) | (2) | ||||
Total | $ | 686,500 | $ | (527,487) |
| (1) | Subsequent to December 31, 2025, we borrowed $107,000 under our unsecured revolving line of credit. Accordingly, we have $359,863 outstanding and $240,137 available for borrowing under our unsecured revolving line of credit. |
| (2) | Subsequent to December 31, 2025, we repaid $5,000 in scheduled principal paydowns on our senior unsecured notes. Accordingly, we have $386,105 outstanding under our senior unsecured notes, net of debt issue costs. |
Equity
At December 31, 2025, we had 48,481,892 shares of common stock outstanding, equity on our balance sheet totaled $1.2 billion and our equity securities had a market value of $1.7 billion. During the year ended December 31, 2025, we declared and paid $107.4 million cash dividends.
Non-controlling Interests. We have entered into partnerships to develop and/or own real estate. Given that our limited members do not have substantive kick-out rights, liquidation rights, or participation rights, we have concluded that the partnerships are VIEs. Since we exercise power over and receive benefits from the VIEs, we are considered the primary beneficiary. Accordingly, we consolidate the VIEs and record the non-controlling interests at cost. As of December 31, 2025, we have the following consolidated VIEs (in thousands):
Gross | |||||||||||||
Investment | Property | Consolidated | Non-Controlling | ||||||||||
Year | Purpose | Type | State | Assets (1) | Interests | ||||||||
2024 | Own real estate | SH | NC/SC | $ | 122,460 | $ | 58,010 | ||||||
2024 | Own real estate | SH | NC | 41,000 | 3,015 | ||||||||
2023 | Own real estate | SH | OH | 54,942 | 9,134 | ||||||||
2023 | Own real estate | SH | NC | 123,082 | 2,916 | ||||||||
2022 | Own real estate | SNF | FL | 76,545 | (2) | 14,325 | |||||||
Total | $ | 418,029 | $ | 87,400 |
| (1) | Includes the total real estate investments and excludes intangible assets. |
| (2) | During the fourth quarter of 2025, the lessee provided notice of intent to exercise the purchase option available with an exit IRR of 8.5%. |
During the year ended December 31, 2025, we acquired our joint venture partner’s non-controlling interests in
59
Table of Contents
the joint ventures that own two seniors housing communities in Oregon with a total of 186 units for $1.2 million. Accordingly, we obtained full ownership and control of these communities. As a result these joint ventures are not listed in the table above.
Common Stock. We have an equity distribution agreement (the “Equity Distribution Agreement”) to offer and sell, from time to time, up to $400.0 million in aggregate offering price of shares of our common stock. The Equity Distribution Agreement provides for sales of common shares to be made by means of ordinary brokers’ transactions, which may include block trades, or transactions that are deemed to be “at the market” offerings.
During the year ended December 31, 2025, we sold 2,804,200 shares of our common stock for $100.6 million in net proceeds under the Equity Distribution Agreement. Accordingly, at December 31, 2025, we had $288.6 million available under the Equity Distribution Agreement. In conjunction with the sale of common stock, we incurred $0.4 million of costs associated with the Equity Distribution Agreement which have been recorded in additional paid in capital as a reduction of proceeds received. Subsequent to December 31, 2025, we sold 71,059 shares of common stock for $2.5 million in net proceeds under our Equity Distribution Agreement.
During 2025, we acquired 151,018 shares of common stock held by employees who tendered owned shares to satisfy tax withholding obligations. Subsequent to December 31, 2025, we declared a monthly cash dividend of $0.19 per share on our common stock for the months of January, February and March 2026, payable on January 30, February 27 and March 31, 2026, respectively, to stockholders of record on January 22, February 20, and March 23, 2026, respectively.
Stock Based Compensation Plans. During 2021, we adopted, and our stockholders approved the 2021 Equity Participation Plan (the “2021 Plan”) which replaced the 2015 Equity Participation Plan (the “2015 Plan”). Under the 2021 Plan, 1,900,000 shares of common stock have been authorized and reserved for awards, less one share for every one share that was subject to an award granted under the 2015 Plan after December 31, 2020 and prior to adoption. In addition, any shares that were not issued under outstanding awards under the 2015 Plan because the shares were forfeited or cancelled after December 31, 2020 were added to and available for awards under the 2021 Plan. Under the 2021 Plan, the shares were authorized and reserved for awards to officers, employees, non-employee directors and consultants. The terms of the awards granted under the 2021 Plan are set by our compensation committee at its discretion. As of December 31, 2025, we had 1,327,393 shares of common stock reserved for awards under the 2021 Plan.
60
Table of Contents
Restricted Stock and Performance-based Stock Units. During 2025, we granted 236,242 shares of restricted common stock and performance-based stock units under the 2021 Plan as follows:
No. of | Price per | ||||||
Shares | Share | Award Type | Vesting Period | ||||
113,790 | $ | 34.88 | Restricted stock | ratably over 3 years | |||
5,626 | $ | 35.55 | Restricted stock | April 30, 2028 | |||
15,625 | $ | 35.20 | Restricted stock | (1) | |||
52,666 | $ | 34.88 | Performance-based stock units | TSR targets (2) | |||
48,535 | $ | 34.88 | Performance-based stock units | TSR targets (3) | |||
236,242 | |||||||
| (1) | The vesting date is the earlier of the one-year anniversary of the award date and the date of the next annual meeting of the stockholders of LTC following the award date. |
| (2) | Vesting is based on achieving certain total shareholder return (“TSR”) targets in 3 years. |
| (3) | Vesting is based on achieving certain TSR targets relative to the TSR of predefined peer group in 3 years. |
At December 31, 2025, the remaining compensation expense to be recognized related to the future service period of unvested outstanding restricted common stock and performance-based stock units are as follows (dollar amounts in thousands):
Remaining | |||
Compensation | |||
Vesting Date | Expense | ||
2026 | $ | 5,887 | |
2027 | 2,899 | ||
2028 | 322 | ||
Total | $ | 9,108 | |
Stock Options. We did not issue any stock options during the year ended December 31, 2025. At December 31, 2025, we had no stock options outstanding and exercisable.
61
Table of Contents
Material Cash Requirements
We monitor our contractual obligations and commitments described above to ensure funds are available to meet obligations when due. The following table represents our long-term contractual obligations (scheduled principal payments and amounts due at maturity) as of December 31, 2025, excluding the effects of interest and debt issue costs (in thousands):
Total | 2026 | 2027 | 2028 | 2029 | 2030 | Thereafter |
| |||||||||||||||
Revolving line of credit | $ | 252,863 | (1) | $ | — | $ | — | $ | 252,863 | $ | — | $ | — | $ | — | |||||||
Term loans | 200,000 | — | — | 50,000 | 55,000 | 55,000 | 40,000 | |||||||||||||||
Senior unsecured notes |
| 392,000 | (2) |
| 51,500 | (2) |
| 54,500 |
| 55,000 |
| 63,000 | 67,000 |
| 101,000 | |||||||
$ | 844,863 | $ | 51,500 | $ | 54,500 | $ | 357,863 | $ | 118,000 | $ | 122,000 | $ | 141,000 | |||||||||
| (1) | Subsequent to December 31, 2025, we borrowed $107,000 under our unsecured revolving line of credit. Accordingly, we have $359,863 outstanding and $240,137 available for borrowing under our unsecured revolving line of credit. |
| (2) | Subsequent to December 31, 2025, we repaid $5,000 in scheduled principal paydowns on our senior unsecured notes. Accordingly, we have $386,105 outstanding under our senior unsecured notes. |
The following table represents our projected interest expense based on current interest rates as of year-end, excluding capitalized interest, amortization of debt issue costs and bank fees, as of December 31, 2025 (in thousands):
| Total | | 2026 | | 2027 | | 2028 | | 2029 | | 2030 | | Thereafter |
| ||||||||
Revolving line of credit | $ | 41,110 | $ | 12,351 | $ | 11,251 | $ | 11,282 | $ | 6,226 | $ | — | $ | — | ||||||||
Term loans | 44,824 | 9,671 | 9,671 | 9,569 | 7,191 | 4,595 | 4,127 | |||||||||||||||
Senior unsecured notes |
| 56,228 |
| 15,218 |
| 13,154 |
| 10,306 |
| 7,995 |
| 5,751 |
| 3,804 | ||||||||
$ | 142,162 | $ | 37,240 | $ | 34,076 | $ | 31,157 | $ | 21,412 | $ | 10,346 | $ | 7,931 | |||||||||
Also, see Item 8. FINANCIAL STATEMENTS— Note 16. Commitments and Contingencies within our consolidated financial statements for additional information regarding our contractual commitments.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements that we expect would materially affect our liquidity and capital resources.
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to market risks associated with changes in interest rates as they relate to our mortgage loans receivable and debt. With the exception of interest rate swaps, we do not utilize derivative financial instruments.
Interest rate risk is sensitive to many factors, including governmental monetary and tax policies, domestic and international economic and political considerations and other factors that are beyond our control. The purpose of the following disclosure is to provide a framework to understand our sensitivity to hypothetical changes in interest rates as of December 31, 2025.
Our future earnings, cash flows and estimated fair values relating to financial instruments are dependent upon prevalent market rates of interest, such as SOFR or term rates of U.S. Treasury Notes. Changes in interest rates generally impact the fair value, but not future earnings or cash flows, of mortgage loans receivable and fixed rate debt. Our mortgage loans receivable and debt, such as our senior unsecured notes, are primarily fixed-rate instruments. Also, we have eight interest rate swap agreements to effectively lock-in the forecasted interest payments on our term loans which are based on SOFR. For variable rate debt, such as our revolving line of credit, changes in interest rates generally do not impact the fair value but do affect future earnings and cash flows. As of December 31, 2025, the interest rates for 70.0% of our consolidated borrowings were fixed or fixed with interest rate swaps. As of December 31, 2025, the interest
62
Table of Contents
expense for our variable rate borrowings that are not hedged would increase by approximately $2.1 million per year for every 1% increase in the related benchmark interest rate.
The following table represents our December 31, 2025 estimated fair value of our financial instruments, using discount rates measured based upon management’s estimates of rates currently prevailing for comparable loans and instruments of comparable maturities, and the impact of a 1% increase or decrease in the estimated discount rate (dollar amounts in thousands):
Change in Fair Value | |||||||||||
Discount | Fair | 1% Increase | 1% Decrease | ||||||||
Financial instrument | Rate | Value | In Discount Rate | ||||||||
Financing receivables, net of credit loss reserve | 7.5% | $ | 367,986 | $ | (8,342) | $ | 8,561 | ||||
Mortgage loans receivable, net of credit loss reserve | 8.8% | (1) | 462,312 | (1) | (13,985) | 15,468 | |||||
Notes receivable, net of credit loss reserve | 7.7% | 29,576 | (395) | 401 | |||||||
Senior unsecured notes, net of debt issue costs | (2) | 372,511 | (11,887) | 12,440 | |||||||
| (1) | Represents the fair value of our mortgage loans, estimated using a discounted cash flow methodology based on expected future cash flows. Subsequent to December 31, 2025, Prestige provided notice of its intent to repay the mortgage loan in 2026. Accordingly, the estimated fair value of this mortgage loan approximated its carrying value. |
| (2) | At December 31, 2025, the discount rate used to value our future cash outflow of our senior unsecured notes was 5.25% for those maturing before year 2030 and 5.5% for those maturing at or beyond year 2030. |
The estimated impact of changes in interest rates discussed above are determined by considering the impact of the hypothetical interest rates on our borrowing costs, lending rates and current U.S. Treasury rates from which our financial instruments may be priced. We do not believe that future market rate risks related to our financial instruments will be material to our financial position or results of operations. These analyses do not consider the effects of industry specific events, changes in the real estate markets, or other overall economic activities that could increase or decrease the fair value of our financial instruments. If such events or changes were to occur, we would consider taking actions to mitigate and/or reduce any negative exposure to such changes. However, due to the uncertainty of the specific actions that would be taken and their possible effects, the sensitivity analysis assumes no changes in our capital structure.
63
Table of Contents
ITEM 8. FINANCIAL STATEMENTS
LTC Properties, Inc.
Index to Consolidated Financial Statements
and Financial Statements Schedules
|
| ||
| Page | ||
Report of Independent Registered Public Accounting Firm (PCAOB ID: | 65 | ||
Consolidated Balance Sheets as of December 31, 2025 and 2024 | 67 | ||
Consolidated Statements of Income for the years ended December 31, 2025, 2024 and 2023 | 68 | ||
Consolidated Statements of Comprehensive Income for the years ended December 31, 2025, 2024 and 2023 | 69 | ||
Consolidated Statements of Equity for the years ended December 31, 2025, 2024 and 2023 | 70 | ||
Consolidated Statements of Cash Flows for the years ended December 31, 2025, 2024 and 2023 | 71 | ||
Notes to Consolidated Financial Statements | 72 | ||
Consolidated Financial Statement Schedules | |||
Schedule II—Valuation and Qualifying Accounts | 112 | ||
Schedule III—Real Estate and Accumulated Depreciation | 113 | ||
Schedule IV—Mortgage Loans Receivable on Real Estate | 118 |
64
Table of Contents
Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of LTC Properties, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of LTC Properties, Inc. (the Company) as of December 31, 2025 and 2024, the related consolidated statements of income, comprehensive income, equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes and financial statement schedules listed in the Index at Item 15(a)(2) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at 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 U.S. generally accepted accounting principles.
We also have 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 issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 24, 2026 expressed an unqualified opinion thereon.
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 the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates.
65
Table of Contents
Purchase Price Accounting | |
Description of the Matter | As explained in Note 5 to the consolidated financial statements, during the year ended December 31, 2025, the Company acquired 11 communities for $354.7 million that were each accounted for as asset acquisitions, and as such, were recorded at the price to acquire the real estate property, including transaction costs. The purchase price for each acquisition was primarily allocated to land and building based upon the relative fair value of the acquired asset. The fair values of the acquired assets were determined by the Company utilizing the sales comparison approach as it relates to land and the income approach as it relates to building. Auditing the Company’s accounting for its acquisitions was complex due to the significance of the real estate investment acquisition in the current year and the estimation subjectivity involved in the allocation of purchase price. The significant estimation was primarily due to the judgmental nature of the inputs to the valuation models used to measure the fair value of the assets. The more significant assumptions utilized included comparable land sales, direct capitalization rate and net operating income. |
How We Addressed the Matter in Our Audit | We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over management’s accounting for the property acquisitions, including controls over the Company’s review of the assumptions underlying the purchase price allocations, the cash flow projections and the accuracy of the underlying data used. For example, we tested controls over the review of the valuation models and the underlying assumptions used to develop such estimates. We also evaluated the significant assumptions and methods used in developing the fair value estimates of the assets acquired. To test the estimated fair value of the land and buildings acquired, we performed audit procedures that included, among other procedures, evaluating the Company’s use of the sales comparison and income approaches in addition to testing the completeness and accuracy of the underlying assumptions and data supporting the significant assumptions (i.e., comparable land sales, direct capitalization rate and net operating income). We involved our valuation specialists to assist in our testing. For example, we along with our valuation specialists used independently identified data sources to evaluate the appropriateness of management’s selected comparable land sales utilized by the Company in determining the fair value of the land and obtained market specific information to evaluate the appropriateness of the direct capitalization rate and net operating income utilized by the Company in determining the fair value of the buildings. |
/s/
We have served as the Company’s auditor since 1992.
February 24, 2026
66
Table of Contents
LTC PROPERTIES, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)
| |
| |||||
| December 31, |
| |||||
2025 | 2024 |
| |||||
ASSETS | |||||||
Investments: | |||||||
Land | $ | | $ | | |||
Buildings and improvements |
| |
| | |||
Properties held-for-sale, net of accumulated depreciation: 2025—$ |
| — |
| | |||
Accumulated depreciation and amortization |
| ( |
| ( | |||
Owned real properties, net |
| |
| | |||
Financing receivables, net of credit loss reserve: 2025—$ | | | |||||
Mortgage loans receivable, net of credit loss reserve: 2025—$ |
| |
| | |||
Real property investments, net |
| |
| | |||
Notes receivable, net of credit loss reserve: 2025—$ |
| |
| | |||
Investments in unconsolidated joint ventures | | | |||||
Investments, net |
| |
| | |||
Other assets: | |||||||
Cash and cash equivalents |
| |
| | |||
Debt issue costs related to revolving line of credit |
| |
| | |||
Interest receivable |
| |
| | |||
Straight-line rent receivable |
| |
| | |||
Prepaid expenses and other assets |
| |
| | |||
Total assets | $ | | $ | | |||
LIABILITIES | |||||||
Revolving line of credit | $ | | $ | | |||
Term loans, net of debt issue costs: 2025—$ | | | |||||
Senior unsecured notes, net of debt issue costs: 2025—$ |
| |
| | |||
Accrued interest |
| |
| | |||
Accrued expenses and other liabilities |
| |
| | |||
Total liabilities |
| |
| | |||
EQUITY | |||||||
Stockholders’ equity: | |||||||
Common stock: $ |
| |
| | |||
Capital in excess of par value |
| |
| | |||
Cumulative net income |
| |
| | |||
Accumulated other comprehensive income |
| |
| | |||
Cumulative distributions |
| ( |
| ( | |||
Total LTC Properties, Inc. stockholders’ equity |
| |
| | |||
Non-controlling interests |
| |
| | |||
Total equity |
| |
| | |||
Total liabilities and equity | $ | | $ | | |||
See accompanying notes.
67
Table of Contents
LTC PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
Year Ended December 31, | ||||||||||
| 2025 | | 2024 | | 2023 |
| ||||
Revenues: | | | ||||||||
Rental income | $ | | $ | | $ | | ||||
Resident fees and services | | — | — | |||||||
Interest income from financing receivables | | | | |||||||
Interest income from mortgage loans |
| |
| |
| | ||||
Interest and other income |
| |
| |
| | ||||
Total revenues |
| |
| |
| | ||||
Expenses: | ||||||||||
Interest expense |
| |
| |
| | ||||
Depreciation and amortization |
| |
| |
| | ||||
Seniors housing operating expenses | | — | — | |||||||
Impairment loss | — | | | |||||||
Write-off of effective interest receivable | | — | — | |||||||
Provision for credit losses |
| |
| |
| | ||||
Transaction costs | | | | |||||||
Triple-net lease property tax expense | | | | |||||||
General and administrative expenses |
| |
| |
| | ||||
Total expenses |
| |
| |
| | ||||
Income before unconsolidated joint ventures, real estate dispositions and other items | | | | |||||||
Gain on sale of real estate, net | | | | |||||||
Income from unconsolidated joint ventures | | | | |||||||
Income tax provision | ( | — | — | |||||||
Net income | | | | |||||||
Income allocated to non-controlling interests |
| ( |
| ( |
| ( | ||||
Net income attributable to LTC Properties, Inc. |
| |
| |
| | ||||
Income allocated to participating securities |
| ( |
| ( |
| ( | ||||
Net income available to common stockholders | $ | | $ | | $ | | ||||
Earnings per common share: | ||||||||||
Basic | $ | | $ | | $ | | ||||
Diluted | $ | | $ | | $ | | ||||
Weighted average shares used to calculate earnings per common share: | ||||||||||
Basic |
| |
| |
| | ||||
Diluted |
| |
| |
| | ||||
See accompanying notes.
68
Table of Contents
LTC PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
Year Ended December 31, |
| ||||||||
2025 | | 2024 | | 2023 |
| ||||
Net income | $ | | $ | | $ | | |||
Unrealized (loss) gain on cash flow hedges before reclassification |
| ( |
| |
| | |||
Gains reclassified from accumulated other comprehensive income to interest expense | ( | ( | ( | ||||||
Comprehensive income | | | | ||||||
Less: Comprehensive income allocated to non-controlling interests |
| ( |
| ( |
| ( | |||
Comprehensive income attributable to LTC Properties, Inc. | $ | | $ | | $ | | |||
69
Table of Contents
LTC PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF EQUITY
(In thousands, except per share amounts)
Capital in | Cumulative | Total | Non- |
| |||||||||||||||||||||||
Common Stock | Excess of | Net | Accumulated | Cumulative | Stockholders’ | controlling | Total |
| |||||||||||||||||||
| shares | | Amount | | Par Value | | Income | | OCI | | Distributions | | Equity | | Interests | | Equity |
| |||||||||
Balance—December 31, 2022 | | | $ | | $ | | $ | | $ | ( | $ | | $ | | $ | | |||||||||||
Issuance of common stock |
| | | | — | — | — |
| |
| — |
| | ||||||||||||||
Issuance of restricted stock |
| | | ( | — | — | — |
| — |
| — |
| — | ||||||||||||||
Net income |
| — | — | — | | — | — |
| |
| |
| | ||||||||||||||
Stock-based compensation expense |
| — | — | | — | — | — |
| |
| — |
| | ||||||||||||||
Non-controlling interest contributions |
| — | — | — | — | — | — |
| — |
| |
| | ||||||||||||||
Non-controlling interest distributions | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||
Common stock cash distributions ($ |
| — | — | — | — | — | ( |
| ( |
| — |
| ( | ||||||||||||||
Cash paid for taxes in lieu of common shares | ( | — | ( | — | — | — | ( | — | ( | ||||||||||||||||||
Fair market valuation adjustment for interest rate swap | — | — | — | — | ( | — | ( | — | ( | ||||||||||||||||||
Other |
| ( | — | — | — | — | — |
| — |
| — |
| — | ||||||||||||||
Balance—December 31, 2023 |
| | | | | | ( | | | | |||||||||||||||||
Issuance of common stock |
| | | | — | — | — |
| |
| — |
| | ||||||||||||||
Issuance of restricted stock |
| | | ( | — | — | — |
| — |
| — |
| — | ||||||||||||||
Net income |
| — | — | — | | — | — |
| |
| |
| | ||||||||||||||
Stock-based compensation expense |
| — | — | | — | — | — |
| |
| — |
| | ||||||||||||||
Vesting of performance-based stock units, | — | — | ( | — | — | ( | — | ( | |||||||||||||||||||
Non-controlling interest contributions |
| — | — | — | — | — | — |
| — |
| |
| | ||||||||||||||
Non-controlling interest distributions | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||
Transfer of joint venture partner's non-controlling interest to LTC |
| — | — | | — | — | — |
| |
| ( |
| — | ||||||||||||||
Common stock cash distributions ($ |
| — | — | — | — | — | ( |
| ( |
| — |
| ( | ||||||||||||||
Cash paid for taxes in lieu of common shares | ( | — | ( | — | — | — | ( | — | ( | ||||||||||||||||||
Fair market valuation adjustment for interest rate swap | — | — | — | — | ( | — | ( | — | ( | ||||||||||||||||||
Balance—December 31, 2024 | | | | | | ( | | | | ||||||||||||||||||
Issuance of common stock |
| | | | — | — | — |
| |
| — |
| | ||||||||||||||
Issuance of restricted stock |
| | | ( | — | — | — |
| — |
| — |
| — | ||||||||||||||
Net income |
| — | — | — | | — | — |
| |
| |
| | ||||||||||||||
Stock-based compensation expense |
| — | — | | — | — | — |
| |
| — |
| | ||||||||||||||
Vesting of performance-based stock units | | | ( | — | — | — | — | — | — | ||||||||||||||||||
Acquisitions of non-controlling interest |
| — | — | | — | — | — |
| |
| ( |
| ( | ||||||||||||||
Non-controlling interest distributions | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||
Common stock cash distributions ($ |
| — | — | — | — | — | ( |
| ( |
| — |
| ( | ||||||||||||||
Cash paid for taxes in lieu of common shares | ( | ( | ( | — | — | — | ( | — | ( | ||||||||||||||||||
Fair market valuation adjustment for interest rate swap | — | — | — | — | ( | — | ( | — | ( | ||||||||||||||||||
Other |
| — | — | ( | — | — | — |
| ( |
| — |
| ( | ||||||||||||||
Balance—December 31, 2025 |
| | $ | | $ | | $ | | $ | | $ | ( | $ | | $ | | $ | | |||||||||
See accompanying notes.
70
Table of Contents
LTC PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Year Ended December 31, |
| |||||||||
| 2025 | | 2024 | | 2023 |
| ||||
OPERATING ACTIVITIES: | | | | |||||||
Net income | $ | | $ | | $ | | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||
Depreciation and amortization |
| |
| |
| | ||||
Stock-based compensation expense |
| |
| |
| | ||||
Impairment loss | — | | | |||||||
Gain on sale of real estate, net |
| ( |
| ( |
| ( | ||||
Income tax provision | | — | ||||||||
Income from unconsolidated joint ventures |
| ( |
| ( |
| ( | ||||
Income distributions from unconsolidated joint ventures | | | | |||||||
Straight-line rental adjustment | |
| ( | | ||||||
Adjustment for collectability of straight-line rental income | | — | ( | |||||||
Adjustment for collectability of lease incentives | | | | |||||||
Amortization of lease incentives | | | | |||||||
Write-off of effective interest receivable | | — | — | |||||||
Provision for credit losses |
| |
| |
| | ||||
Application of interest reserve | — | ( | ( | |||||||
Amortization of debt issue costs | | | | |||||||
Other non-cash items, net |
| |
| |
| | ||||
Change in operating assets and liabilities | ||||||||||
Lease incentives funded | — | ( | ( | |||||||
Increase in interest receivable |
| ( |
| ( |
| ( | ||||
Increase (decrease) in accrued interest payable |
| |
| ( |
| ( | ||||
Net change in other assets and liabilities |
| ( |
| |
| ( | ||||
Net cash provided by operating activities |
| |
| |
| | ||||
INVESTING ACTIVITIES: | ||||||||||
Investment in real estate properties |
| ( |
| ( |
| ( | ||||
Investment in real estate capital improvements |
| ( |
| ( |
| ( | ||||
Proceeds from sale of real estate, net |
| |
| |
| | ||||
Investment in financing receivables | ( | ( | ( | |||||||
Investment in real estate mortgage loans receivable |
| ( |
| ( |
| ( | ||||
Principal payments received on mortgage loans receivable |
| |
| |
| | ||||
Investments in unconsolidated joint ventures |
| ( |
| ( | — | |||||
Proceeds from liquidation of investments in unconsolidated joint ventures | | — | — | |||||||
Advances and originations under notes receivable |
| ( |
| ( |
| ( | ||||
Principal payments received on notes receivable |
| |
| |
| | ||||
Net cash (used in) provided by investing activities |
| ( |
| |
| ( | ||||
FINANCING ACTIVITIES: | ||||||||||
Net borrowings (repayments) under revolving line of credit |
| |
| ( |
| | ||||
Proceeds from debt | | — | — | |||||||
Repayment of debt | ( | ( | ( | |||||||
Proceeds from common stock issued |
| |
| |
| | ||||
Payments of common share issuance costs | ( | ( | ( | |||||||
Distributions paid to stockholders |
| ( |
| ( |
| ( | ||||
Acquisition of and distributions paid to non-controlling interests |
| ( |
| ( |
| — | ||||
Financing costs paid |
| ( |
| ( |
| ( | ||||
Cash paid for taxes in lieu of shares upon vesting of restricted stock | ( | ( | ( | |||||||
Other |
| ( |
| ( |
| — | ||||
Net cash provided by (used in) financing activities |
| |
| ( |
| | ||||
Increase (decrease) in cash and cash equivalents |
| |
| ( |
| | ||||
Cash and cash equivalents, beginning of period |
| |
| |
| | ||||
Cash and cash equivalents, end of period | $ | | $ | | $ | | ||||
Supplemental disclosure of cash flow information: | ||||||||||
Interest paid | $ | | $ | | $ | | ||||
See accompanying notes.
71
Table of Contents
1. The Company
LTC Properties, Inc. (“LTC” or the “Company”) was incorporated on May 12, 1992 in the state of Maryland and commenced operations on August 25, 1992. LTC is a real estate investment trust (“REIT”) that invests primarily in seniors housing and health care properties primarily through ownership, sale-leasebacks, mortgage financing, joint ventures, construction financing and structured finance solutions including preferred equity, bridge and mezzanine lending. During the second quarter of 2025, LTC began utilizing the structure authorized by the REIT Investment Diversification and Empowerment Act of 2007 (commonly referred as “RIDEA”) as permitted by the Housing and Economic Recovery Act of 2008. Our primary objectives are to create, sustain and enhance stockholder equity value and provide current income for distribution to stockholders through real estate investments in seniors housing and health care properties managed by experienced operators. Our primary seniors housing and health care property classifications include skilled nursing centers (“SNF”), assisted living communities (“ALF”), independent living communities (“ILF”), memory care communities (“MC”) and combinations thereof. We also invest in other (“OTH”) types of properties, such as land parcels, projects under development (“UDP”) and behavioral health care hospitals. ILF, ALF, MC and combinations thereof are included in the seniors housing communities (“SH”) classification.
2. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying consolidated financial statements include the accounts of LTC, our wholly-owned subsidiaries, and our consolidated companies. All intercompany investments, accounts and transactions have been eliminated.
Any reference to the number of properties or facilities, number of units, number of beds, number of operators, and yield on investments in real estate are unaudited and outside the scope of our independent registered public accounting firm’s audit of our consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board.
Consolidation
At inception, and on an ongoing basis, as circumstances indicate the need for reconsideration, we evaluate each legal entity that is not wholly-owned by us for consolidation, first under the variable interest entity (“VIE”), then under the voting model. Our evaluation considers all of our variable interests, including common or preferred equity ownership, loans, and other participating instruments. The variable interest model applies to entities that meet certain criteria.
If an entity is determined to be a VIE, we evaluate whether we are the primary beneficiary. The primary beneficiary analysis is a qualitative analysis based on power and benefits. We consolidate a VIE if we have both power and benefits - that is (i) we have the power to direct the activities of a VIE that most significantly impact the VIE's economic performance (power), and (ii) we have the obligation to absorb losses of the VIE that could potentially be significant to the VIE, or the right to receive benefits from the VIE that potentially could be significant to the VIE (benefits). If we have a variable interest in a VIE but we are not the primary beneficiary, we account for our investment using the equity method of accounting.
If a legal entity does not meet the characteristics of a VIE, we evaluate such entity under the voting interest model. Under the voting interest model, we consolidate the entity if we, directly or indirectly, have greater than 50% of the voting shares.
The Financial Accounting Standards Board (the “FASB”) requires the classification of non-controlling interests as a component of consolidated equity in the consolidated balance sheet subject to the provisions of the rules governing classification and measurement of redeemable securities. The guidance requires consolidated net income to be reported at the amounts attributable to both the controlling and non-controlling interests. The calculation of earnings per share will be based on income amounts attributable to the controlling interest.
72
Table of Contents
Use of Estimates
Preparation of the consolidated financial statements in conformity with Generally Accepted Accounting Principles (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Our most significant assumptions and estimates are related to the valuation of real estate, purchase price allocation of acquired assets, revenue recognition including the collectability of tenant receivables and asset impairment.
Segment Disclosures
The FASB requires public companies to disclose more detailed information about their reportable segments, particularly regarding significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”). Significant segment expenses are identified as expenses that are easily computable and regularly provided to the CODM. Additionally, public companies are required to disclose the title and position of the individual or group or committee identified as the CODM.
The Company uses the management approach in determining reportable operating segments. The management approach considers the internal organization and reporting used by its CODM for making operating decisions, allocating resources and assessing performance as the source for determining our reportable segments. In making this determination, the Company:
| i. | determines its CODM; |
| ii. | identifies and analyzes potential business components; |
| iii. | identifies its operating segments; and |
| iv. | determines whether there are multiple operating segments requiring presentation as reportable segment. |
As noted above, we began utilizing the RIDEA structure in the second quarter of 2025. Under RIDEA, REITs are permitted to participate directly in the cash flow of qualified healthcare properties (compared to receiving solely contractual rental income). Accordingly, effective in the second quarter of 2025, we conduct and manage our business as
During the years ended December 31, 2025, 2024 and 2023, the CODM has been collectively identified as our Executive Chairman and Co-CEOs, who share the responsibility for allocating resources and assessing segment performance.
Cash Equivalents
Cash equivalents consist of highly liquid investments with a maturity of three months or less when purchased and are stated at cost which approximates market.
Owned Real Properties
We make estimates as part of our allocation of the purchase price of acquisitions to the various components of the acquisition based upon the fair value of each component. In determining fair value, we use current appraisals or other third-party opinions of value. The most significant components of our allocations are typically the allocation of fair value to land and buildings and, for certain of our acquisitions, in-place leases and other intangible assets. In the case of the fair value of buildings and the allocation of value to land and other intangibles, the estimates of the values of these components will affect the amount of depreciation and amortization we record over the estimated useful life of the property acquired or the remaining lease term. We evaluate each purchase transaction to determine whether the acquired assets meet the definition of an asset acquisition or a business combination. Transaction costs related to acquisitions that
73
Table of Contents
are not deemed to be business combinations are included in the cost basis of the acquired assets, while transaction costs related to acquisitions that are deemed to be business combinations are expensed as incurred.
We capitalize direct construction and development costs, including predevelopment costs, interest, property taxes, insurance and other costs directly related and essential to the acquisition, development or construction of a real estate asset. We capitalize construction and development costs while substantive activities are ongoing to prepare an asset for its intended use. We consider a construction project as substantially complete and held available for occupancy upon the issuance of the certificate of occupancy. Costs incurred after a project is substantially complete and ready for its intended use, or after development activities have ceased, are expensed as incurred. For redevelopment, renovation and expansion of existing operating properties, we capitalize the cost for the construction and improvement incurred in connection with the redevelopment, renovation and expansion. Costs previously capitalized related to abandoned acquisitions or developments are charged to earnings. Expenditures for repairs and maintenance are expensed as incurred.
Depreciation is computed principally by the straight-line method for financial reporting purposes over the estimated useful lives of the assets, which range from
Financing Receivables
As part of our acquisitions, we may from time to time, invest in sale and leaseback transactions. In accordance with Accounting Standards Codification (“ASC”) Topic 842, Leases (“ACS 842”), we are required to determine whether the sale and leaseback transaction qualifies as a sale. ASC 842 clarifies that an option for the seller-lessee to repurchase a real estate asset would generally preclude accounting for the transfer of the asset as a sale. Therefore, a sale and leaseback transaction of real estate that includes a seller-lessee repurchase option is accounted for as a failed sale and leaseback transaction. As a result, the purchased assets of a failed sale and leaseback transaction would be presented as a Financing receivable on our Consolidated Balance Sheets and the rental revenue from these properties is recorded as Interest income from financing receivables on our Consolidated Statements of Income. Furthermore, upon expiration of the purchase option if the purchase option remains unexercised by the seller-lessee, the purchased assets will be reclassified from Financing receivables to Owned real properties on our Consolidated Balance Sheets. Financing receivables are recorded on an amortized cost basis.
Mortgage Loans Receivable, Net of Loan Loss Reserve
The mortgage loans receivable we originate are recorded on an amortized cost basis.
Intangible Assets
As previously discussed, we make estimates as part of our allocation of the purchase price of an acquisition to various components of the acquisition based on the fair market value of each component. Occasionally, we may allocate a portion of the purchase price as in-place leases or other intangibles. In the case of the value of in-place leases, we make the best estimates based on the evaluation of the specific characteristics of each tenant’s lease. Factors considered include estimates of carrying costs during the hypothetical expected lease-up periods, market conditions and costs to execute similar leases.
Working Capital Loans
Our investment in working capital loans consists of loan arrangements with contractual interest ranging between
Mezzanine Loans
Mezzanine financing sits between senior debt and common equity in the capital structure, and typically is used
74
Table of Contents
to finance development projects or value-add opportunities on existing operational properties. We seek market-based, risk-adjusted rates of return typically between
Investments in unconsolidated joint ventures
From time to time, we provide funding to third-party operators for the acquisition, development and construction (“ADC”) of a property. Under an ADC arrangement, we may participate in the residual profits of the project through the sale or refinancing of the property. These ADC arrangements can have characteristics similar to a loan or similar to a JV or partnership such as participating in the risks and rewards of the project as an owner or an investment partner. If the ADC arrangement characteristics are more similar to a jointly-owned investment or partnership, we account for the ADC arrangement as an investment in an unconsolidated JV under the equity method of accounting or a direct investment (consolidated basis of accounting) instead of applying loan accounting.
We evaluate our ADC arrangements first pursuant to ASC Topic 810, Consolidation, to determine whether the ADC arrangement meets the definition of a VIE, as described above, and whether we are the primary beneficiary. If the ADC arrangement is deemed to be a VIE but we are not the primary beneficiary, or if it is deemed to be a voting interest entity but we do not have a controlling financial interest, we account for our investment in the ADC arrangement using the equity method. Under the equity method, we initially record our investment at cost and subsequently recognize our share of net earnings or losses and other comprehensive income or loss, cash contributions made and distributions received, and other adjustments, as appropriate. Allocations of net income or loss may be subject to preferred returns or allocation formulas defined in operating agreements and may not be according to percentage ownership interests. In certain circumstances where we have a substantive profit-sharing arrangement which provides a priority return on our investment, a portion of our equity in earnings may consist of a change in our claim on the net assets of the underlying JV. Distributions of operating profit from the JVs are reported as part of operating cash flows, while distributions related to a capital transaction, such as a refinancing transaction or sale, are reported as investing activities.
We periodically perform evaluation of our investment in unconsolidated JVs to determine whether the fair value of each investment is less than the carrying value, and, if such decrease in value is deemed to be other-than-temporary, we write the investment down to its estimated fair value as of the measurement date.
Loan Loss Reserve
ASC Topic 326, Financial Instruments- Credit Losses (“ASC 326”) requires a forward looking “expected loss” model to be used for receivables, held-to-maturity debt, loans, and other instruments. When shared risk characteristics exist, ASC 326 requires a collective basis measurement of expected credit losses of the financial assets.
We determined our Mortgage loans receivable, Financing receivables and Notes receivable are within the scope of this ASC. We utilize the probability of default and discounted cash flow methods to estimate expected credit losses. Additionally, we stress-test the results to reflect the impact of unknown adverse future events including recessions. For more information on our credit losses see Note 10. Credit Loss Reserve below.
Accrued incentives
As part of our acquisitions and/or amendments, we may commit to provide contingent payments to our sellers or lessees, upon the properties achieving certain rent coverage ratios. Typically, when the contingent incentive payments are funded, cash rent will increase by the amount funded multiplied by a rate stipulated in the agreement. If it is deemed probable, the contingent payment is recorded as a liability at the estimate fair value calculated using a discounted cash flow analysis and accreted to the settlement amount of the estimated payment date. If the contingent payment is provided to the lessee, the payment is recorded as a lease incentive included in the Prepaid expenses and other assets line item on our Consolidated Balance Sheets and is amortized as a yield adjustment over the life of the lease. The fair value of these
75
Table of Contents
contingent liabilities is evaluated on a quarterly basis based on changes in estimates of future operating results and changes in market discount rates. This fair value measurement is based on significant inputs not observable in the market and thus represents a Level 3 measurement.
Impairments
Assets that are classified as held-for-use are periodically evaluated for impairment when events or changes in circumstances indicate that the asset may be impaired or the carrying amount of the asset may not be recoverable through future undiscounted cash flows. Where indicators of impairment exist, the estimation required in the undiscounted future cash flow assumption includes management’s probability-weighting of various scenarios including whether management modifies the lease with the existing operator versus identifying a replacement operator and the assumed market lease rate underlying projected future rental cash flows. In determining fair value, we use current appraisals or other third-party opinions of value and other estimates of fair value such as estimated discounted future cash flows. Based on our assessment, during the years ended December 31, 2025, 2024 and 2023, we recognized impairment losses of $
Properties held-for-sale
Properties classified as held-for-sale on the Consolidated Balance Sheets include only those properties available for immediate sale in their present condition and for which management believes that it is probable that a sale of the property will be completed within one year. Properties held-for-sale are carried at the lower of cost or fair value less estimated selling costs. No depreciation expense is recognized on properties held-for-sale once they have been classified as such. Only disposals representing a strategic shift in operations should be presented as discontinued operations. Those strategic shifts should have a major effect on the organization’s operations and financial results. Examples include the disposal of a major geographic area, a major line of business, or a major equity method investment. We have not reclassified results of operations for properties disposed as discontinued operations as these disposals do not represent strategic shifts in our operations.
Fair Value of Financial Instruments
The FASB requires the disclosure of fair value information about financial instruments for which it is practicable to estimate that value. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. In that regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, could not be realized in immediate settlement of the instrument. Accordingly, the aggregate fair market value amounts presented in the notes to these consolidated financial statements do not represent our underlying carrying value in financial instruments.
The FASB provides guidance for using fair value to measure assets and liabilities, the information used to measure fair value, and the effect of fair value measurements on earnings. The FASB emphasizes that fair value 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, the FASB establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy). Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access. 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).
The fair value guidance issued by the FASB excludes accounting pronouncements that address fair value measurements for purposes of lease classification or measurement. However, this scope exception does not apply to
76
Table of Contents
assets acquired and liabilities assumed in a business combination that are required to be measured at fair value, regardless of whether those assets and liabilities are related to leases.
In accordance with the accounting guidance regarding the fair value option for financial assets and financial liabilities, entities are permitted to choose to measure certain financial assets and liabilities at fair value, with the change in unrealized gains and losses on items for which the fair value option has been elected reported in earnings. We have not elected the fair value option for any of our financial assets or liabilities.
The FASB requires disclosures about the fair value of financial instruments for interim reporting periods of publicly traded companies as well as in annual financial statements. See Note 19. Fair Value Measurements for the disclosure about the fair value of our financial instruments.
Derivative Instruments
We have interest rate swaps that are designated as cash flow hedges of interest rate risk with a total notional amount of $
Revenue Recognition
Rental Income. Rental income from operating leases is generally recognized on a straight-line basis over the terms of the leases. Substantially all of our leases contain provisions for specified annual increases over the rents of the prior year and are generally computed in
| (i) | a specified annual increase over the prior year’s rent, generally between |
| (ii) | a calculation based on the Consumer Price Index or the Medicare Market Basket Rate; |
| (iii) | as a percentage of facility revenues in excess of base amounts; or |
| (iv) | specific dollar increases. |
The FASB does not permit recognition of contingent revenue until the contingencies have been resolved. Historically, we have not included contingent rents as income until received. During the years ended December 31, 2025, 2024 and 2023, we received $
Furthermore, we assess the collectability of substantially all of our lease payments through maturity. Our assessment of collectability of leases includes evaluating the data and assumptions used in determining whether substantially all of the future lease payments were probable based on the lessee’s payment history, the financial strength of the lessees, future contractual rents, and the timing of expected payments. If collectability is not probable, all or a portion of our straight-line rent receivable and other lease receivables may be written off and the rental income during the period would be limited to the lesser of the income that would have been recognized if collection were probable, and the lease payments received. If our conclusion of collectibility changes, we will record the difference between the lease income that would have been recognized on a straight-line basis and cash basis as a current-period adjustment to rental income.
Resident Fees and Services. Resident fees and services represent all amounts earned from residents within our SHOP segment, as outlined in individual resident agreements. Fees are billed monthly based on contracted rates in the resident agreements, or where applicable, reimbursement rates established by Medicaid and Medicare. Resident fees and services revenue is derived from amounts paid by residents and/or third-party payors. Resident agreements typically vary
77
Table of Contents
in duration. Revenue is recognized in accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”) when performance obligations are satisfied.
Interest Income from Financing Receivables. As previously discussed under Financing Receivables above, rental income from properties acquired through a sale leaseback, subject to a seller-lessee repurchase option, is recorded as Interest income from financing receivables on our Consolidated Statements of Income. Interest income on financing receivables is recognized using the effective interest method. The recognition of interest income will stop when the Financing receivables are reclassified to Owned real properties if the purchase options remain unexercised upon expiration of the purchase options.
Interest Income from Mortgage loans, Interest and Other Income and Write-off of Effective Interest Receivable. Interest income on mortgage loans receivable and notes receivable is recognized using the effective interest method. Exit fee income and commitment fee income are also amortized over the life of the related loan under the effective interest method. Effective interest method, as required by GAAP, is a technique for calculating the actual interest rate for the term of a loan based on the initial origination value. When the actual interest rate is higher than the stated interest rate in the early years of the loan, an effective interest receivable asset is created and included in the Interest receivable line item in our Consolidated Balance Sheets and begins reducing down to zero when, at some point during the term of the loan, the stated interest rate is higher than the actual interest rate. We consider a loan to be non-performing after
During the year ended December 31, 2025, we modified a mortgage loan receivable with Prestige Healthcare (“Prestige”), the borrower to increase the current interest paid by the borrower from
Gains on sale of Real Estate, Net
Recognition of gains or losses from sales of owned real property requires that we:
| a) | meet certain revenue recognition criteria in accordance with ASC Topic 610-20, Gains and Losses from the Derecognition of Nonfinancial Assets; and |
| b) | transfer control of the real estate to the buyer. |
The gain or loss recorded is measured as the difference between the sales price, less costs to sell, and the carrying value of the real estate when we sell it.
Federal Income Taxes
The Company qualifies as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended. As such, we made no provision for U.S. federal income tax purposes prior to utilizing the RIDEA structure and establishing our taxable REIT subsidiary (“TRS”) during the second quarter of 2025.
Under RIDEA, a REIT may lease a “qualified healthcare property” on an arm's-length basis to a TRS if the property is operated on behalf of such TRS by a person who qualifies as an “eligible independent operator”. Generally, the rent received from the TRS will meet the related party exception and will be treated as “rents from real property”. Rental revenue received from the TRS lessee and lease expense incurred by the TRS are eliminated in consolidation. A "qualified healthcare property" includes real property and any personal property that is, or is necessary or incidental to
78
Table of Contents
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. Resident fees and services revenue and related operating expenses for these facilities are reported on our Consolidated Statements of Income and are subject to federal, state and local income taxes. As a result, beginning the second quarter of 2025, we now record income tax provision or benefit with respect to our TRS entity which is taxed under provisions similar to those applicable to regular corporations and not under the REIT provisions. Our provision for income taxes for the year ended December 31, 2025, was $
For Federal tax purposes, depreciation for a majority of our assets is generally calculated using the straight-line method over a period
The FASB clarified the accounting for income taxes by prescribing the minimum recognition threshold a tax position is required to meet before being recognized in the financial statements. The guidance utilizes a two-step approach for evaluating tax positions. Recognition (step one) occurs when a company concludes that a tax position, based solely on its technical merits, is more likely than not to be sustained upon examination. Measurement (step two) is only addressed if step one has been satisfied (i.e., the position is more likely than not to be sustained). Under step two, the tax benefit is measured as the largest amount of benefit (determined on a cumulative probability basis) that is more likely than not to be realized upon ultimate settlement. We currently do not have any uncertain tax positions that would not be sustained on its technical merits on a more-likely than not basis.
We may from time to time be assessed interest or penalties by certain tax jurisdictions. In the event we have received an assessment for interest and/or penalties, it has been classified in our Consolidated Statements of Income as General and administrative expenses.
Concentrations of Credit Risk
Financial instruments which potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents, operating leases on owned real property, financing receivables and mortgage loans receivable. Our financial instruments, operating leases, financing receivables and mortgage loans receivable are subject to the possibility of loss of carrying value as a result of the failure of other parties to perform according to their contractual obligations or changes in market prices which may make the instrument less valuable. We obtain various collateral and other protective rights, and continually monitor these rights, in order to reduce such possibilities of loss. In addition, we provide reserves for potential losses based upon management’s periodic review of our portfolio. See Note 3. Major Operators for further discussion of concentrations of credit risk from our tenants.
Net Income Per Share
Basic earnings per share is calculated using the weighted-average shares of common stock outstanding during the period excluding common stock equivalents. Diluted earnings per share includes the effect of all dilutive common stock equivalents. In accordance with the accounting guidance regarding the determination of whether instruments granted in share-based payments transactions are participating securities, we have applied the two-class method of computing basic earnings per share. This guidance clarifies that outstanding unvested share-based payment awards that contain rights to non-forfeitable dividends participate in undistributed earnings with common stockholders and are considered participating securities.
Stock-Based Compensation
The FASB requires all share-based payments to employees, including grants of employee performance-based
79
Table of Contents
stock units and stock options, to be recognized in the income statement based on their fair values. We use the Monte Carlo model to estimate the value of performance-based stock units awarded to employees and the Black-Scholes-Merton formula to estimate the value of stock options granted to employees. These models require management to make certain estimates including stock volatility, expected dividend yield and the expected term. If management incorrectly estimates these variables, the results of operations could be affected. The FASB also requires the benefits of tax deductions in excess of recognized compensation cost to be reported as a financing cash flow. Because we qualify as a REIT under the Internal Revenue Code of 1986, as amended, we are generally not subject to Federal income taxation. Therefore, this reporting requirement does not have an impact on the Consolidated Statements of Cash Flows.
3. Major Operators
We have
Number of | Number of | Percentage of | |||||||||||||
SNF | SH | Total | Total | ||||||||||||
Operator | SNF | SH | Beds | Units | Revenues (1) | Assets (2) | |||||||||
Prestige Healthcare (3) | | — | | | | % | | % | |||||||
| (1) | Includes total revenues for the year ended December 31, 2025. Subsequent to December 31, 2025, Prestige provided notice of its intent to repay its $ |
| (2) | Represents the net carrying value of the mortgage loans and properties we own divided by the Total assets on the Consolidated Balance Sheets. |
| (3) | The majority of the revenue derived from this operator relates to interest income from mortgage loans. |
Our financial position and ability to make distributions may be adversely affected if Prestige Healthcare, or any of our lessees and borrowers face financial difficulties, including any bankruptcies, inability to emerge from bankruptcy, insolvency, or general downturn in business of any such operator, continuing impact upon services or occupancy levels due to infectious disease outbreaks, or in the event any such operator does not renew and/or extend its relationship with us.
4. Supplemental Cash Flow Information
| ||||||||||
Year Ended December 31, |
| |||||||||
| 2025 | | 2024 | | 2023 |
| ||||
(in thousands) |
| |||||||||
Non-cash investing and financing transactions: | | | | |||||||
Contribution of financing receivables from non-controlling interests | $ | — | $ | | $ | | ||||
Investment in financing receivables | — | ( | — | |||||||
Exchange of mortgage loans for controlling interests in joint ventures accounted for as financing receivables | — | | — | |||||||
Seller financing related to property sales | — | — | | |||||||
Exchange of mezzanine loan and related prepayment fee for participating interest in mortgage loan | — | — | ( | |||||||
Reserves withheld at financing and mortgage loan receivable origination | — | — | ( | |||||||
Write-off of notes receivable | ( | ( | ( | |||||||
Accretion of interest reserve recorded as mortgage loan receivable | — | | | |||||||
Change in fair value of interest rate swap agreements | ( | ( | ( | |||||||
Transfer of joint venture partner's non-controlling interest to LTC | | | — | |||||||
Distributions paid to non-controlling interests | ( | ( | ( | |||||||
Distributions paid to non-controlling interests related to property sale and return of capital | ( | ( |
| — | ||||||
80
Table of Contents
5. Owned Real Properties
Our owned real properties include
NNN | SHOP | Total | ||||||||||||||||||||||
Percentage | Number | Percentage | Number | Percentage | Number | |||||||||||||||||||
Gross | of | of | Gross | of | of | Gross | of | of | ||||||||||||||||
Type of Property | Investment | Investment | Properties (1) | Investment | Investment | Properties (1) | Investment | Investment | Properties (1) | |||||||||||||||
Seniors Housing | $ | | % | | $ | | % | | $ | | % | | ||||||||||||
Skilled Nursing | | % | | — | — | % | — | | % | | ||||||||||||||
Other (2) | | % | | — | — | % | — | | % | | ||||||||||||||
Total | $ | | % | | $ | | % | | $ | | % | |||||||||||||
Average |
| ||||||||||
Number of | Investment |
| |||||||||
Gross | SNF | SH | per |
| |||||||
Type of Property | Investment | Beds | Units | Bed/Unit |
| ||||||
Seniors Housing-NNN | $ | | — | | $ | | |||||
Seniors Housing-SHOP | | — | | $ | | ||||||
Seniors Housing | | — | | $ | | ||||||
Skilled Nursing | | | — | $ | | ||||||
Other (2) | | | — | n/a | |||||||
Total | $ | | | | |||||||
| (1) | We own properties in |
| (2) | Includes |
Depreciation expense on buildings and improvements, including properties classified as held-for-sale, was $
Owned Real Properties-SHOP
During the second quarter of 2025, we began utilizing the RIDEA structure and established a SHOP segment. Following the establishment of our SHOP segment, we terminated triple-net master leases with
81
Table of Contents
The following table presents information related to our SHOP segment as of December 31, 2025 (dollar amounts in thousands):
Average | ||||||||||
Number | Number | Investment | ||||||||
Gross | of | of | per | |||||||
State | Investment | Properties | Beds/Units | Unit | ||||||
Wisconsin | $ | | | | $ | |||||
Illinois | | | | $ | ||||||
California | | | | $ | ||||||
Colorado | | | | $ | ||||||
Kentucky | | | | $ | ||||||
Oregon | | | | $ | ||||||
Tennessee | | | | $ | ||||||
Kansas | | | | $ | ||||||
Georgia | | | | $ | ||||||
Ohio | | | | $ | ||||||
Total | $ | | (1) | | | $ | ||||
| (1) | Subsequent to December 31, 2025, we acquired |
Acquisitions
The following table summarizes acquisitions within our SHOP segment during the year ended December 31, 2025 (dollar amounts in thousands):
Total | Number | Number |
| |||||||||||||
Purchase | Transaction | Acquisition | of | of |
| |||||||||||
State | Type of Property | Price | Costs | Costs | Properties | Beds/Units |
| |||||||||
California | SH | $ | | $ | | $ | | |||||||||
Georgia | SH | | | | ||||||||||||
Kentucky | SH | | | | ||||||||||||
Tennessee | SH | | | | ||||||||||||
Wisconsin | SH | | | | ||||||||||||
Wisconsin | SH | | | | ||||||||||||
$ | | (1) | $ | | $ | | (2) | | ||||||||
| (1) | Subsequent to December 31, 2025, we acquired |
| (2) | At acquisition, we received property tax prorations credits of $ |
The total acquisition costs allocated to SHOP assets acquired were as follows (in thousands):
Amount | |||
Land | $ | | |
Buildings and improvements | | ||
Total acquisition costs | $ | | |
Capital Improvement Projects
During the year ended December 31, 2025, we funded capital improvement projects of $
82
Table of Contents
Owned Real Properties -Triple-Net Portfolio
Our Triple-Net Portfolio includes owned properties that are leased pursuant to non-cancelable triple-net operating leases. Triple-net leases require the lessee to pay all taxes, insurance, maintenance and repairs, capital and non-capital expenditures and other costs necessary in the operations of the facilities. The majority of our triple-net leases contain provisions for specified annual increases over the rents of the prior year.
Lease Extensions
Many of the triple-net leases contain renewal options that, if exercised, could result in the amount of rent payable upon renewal being greater than that currently being paid.
Number | Number | ||||||||||||
Gross | of | of | Original | Extended | |||||||||
Type of Property | Investment | Properties | Beds/Units | State | Maturity | Maturity | |||||||
SH | $ | | | IL, MI, OH | May 31, 2025 | May 31, 2026 | |||||||
SNF | | | AL, NM | April 30, 2026 | (1) | April 30, 2031 | |||||||
SH | | | GA, SC | December 31, 2025 | December 31, 2026 | ||||||||
SH | | | TX | February 28, 2025 | February 28, 2026 | ||||||||
SNF | | | SC | February 28, 2026 | February 28, 2031 | ||||||||
SNF | | | TN | December 31, 2025 | (2) | December 31, 2026 | |||||||
$ | | | |||||||||||
SNF/OTH | $ | | | NV, TX, WI | February 28, 2025 | (3) | February 28, 2030 | ||||||
SNF | | | TX | January 31, 2024 | December 31, 2028 | ||||||||
$ | | |
| (1) | During the third quarter of 2025, Genesis Healthcare, Inc. (“Genesis”) filed for Chapter 11 bankruptcy. Subsequent to December 31, 2025, a federal bankruptcy judge approved the sale of Genesis’ assets to a newly formed investment group. Genesis has paid its contractual rent through February 2026. |
| (2) | The purchase option window provided in the master lease which expired on December 31, 2024, was extended for another year to December 31, 2025. During the third quarter of 2025, the operator provided an election notice to exercise its purchase option. |
| (3) | The master lease covers |
Lease Terminations
During 2025, we terminated
Additionally, during 2025, we terminated the Anthem Memory Care, LLC (“Anthem”) triple-net master leases and converted the communities covered under the master leases into our SHOP segment. In conjunction with the conversion, during 2025, we wrote-off Anthem’s working capital note of $
During 2024, an operator notified us of its election not to exercise the renewal option on a master lease that was set to mature in January 2026. The master lease covered
83
Table of Contents
Virginia (
Future Minimum Base Rents
Future minimum base rents receivable under the remaining non-cancelable terms of operating leases excluding the effects of straight-line rent, amortization of lease incentives and renewal options are as follows (in thousands):
| Cash |
| ||
Rent (1) |
| |||
2026 | $ | | ||
2027 |
| | ||
2028 |
| | ||
2029 |
| | ||
2030 |
| | ||
Thereafter |
| | ||
| (1) | Represents contractual cash rent, except for certain master leases which are based on estimated cash. Excludes rent related to subsequent conversion of |
Components of Rental Income
The following table summarizes components of our rental income for the years ended December 31, 2025, 2024 and 2023 (in thousands):
Year Ended December 31, | ||||||||||
Rental Income | 2025 | 2024 | 2023 | |||||||
Contractual cash rental income | $ | | (1) | $ | | (2) | $ | | ||
Variable cash rental income (3) | | | | |||||||
Straight-line rent adjustment | ( | (4) | | (5) | ( | |||||
Adjustment of lease incentives and rental income | ( | (6) | ( | (7) | ( | |||||
Amortization of lease incentives | ( | ( | ( | |||||||
Total | $ | | $ | | $ | | ||||
| (1) | Decreased primarily due to the conversion of |
| (2) | Increased primarily due to the $ |
| (3) | The variable cash rental income for the years ended December 31, 2025, 2024 and 2023 primarily includes reimbursement of real estate taxes by our lessees. Decreased due to property sales. |
| (4) | Straight-line rental income decreased primarily due to (5) below and scheduled annual escalations, partially offset by lease extensions. |
| (5) | Increased primarily due to a one-time additional straight-line rental income recognized in 2024 related to restoring accrual basis accounting for two master leases. |
| (6) | Relates to the write-off of Genesis’ straight-line rent receivable balance of $ |
| (7) | Represents a straight-line rent receivable balance write-off as a result of converting a lease to fair-market rent resets. |
We monitor the collectability of our receivable balances, including deferred rent receivable balances, on an ongoing basis. For leases where we have concluded it is not probable that we will collect substantially all the lease payments under those leases, recognition of rental income is limited to the lesser of the amount of cash collected or rental income reflected on a straight-line basis. We write-off uncollectible operator receivable balances, including straight-line rent receivable and lease incentives balances, as a reduction to rental income in the period such balances are
84
Table of Contents
no longer probable of being collected. We wrote-off straight-line rent receivable and lease incentives balances of $
We continue to take into account the current financial condition of our operators, in our estimation of uncollectible accounts and deferred rents receivable at December 31, 2025. We are closely monitoring the collectability of such rents and will adjust future estimations as appropriate as further information becomes known.
Purchase Options
Some of our triple-net lease agreements provide purchase options allowing the lessees to purchase the properties they currently lease from us.
Type | Number | ||||||||||||
Option | of | of | Gross | Net Book | |||||||||
Window | State | Property | Properties | Investments (1) | Value | ||||||||
2025 | (2) | Tennessee | SNF | $ | | $ | | ||||||
2026 | South Carolina | SH | | | |||||||||
2027 | Georgia/South Carolina | SH | | | |||||||||
2027-2029 | (3) | Oklahoma | SH | | | ||||||||
2027-2029 | (4) | Texas | SNF | | | ||||||||
2029 | Colorado/Kansas/Ohio/Texas | SH | | | |||||||||
2029 | North Carolina | SH | | | |||||||||
Total | $ | | $ | |
| (1) | Gross investments include previously recorded impairment losses, if any. |
| (2) | The purchase option window which expired on December 31, 2024, was extended for another year to December 31, 2025. During the third quarter of 2025, the operator provided an election notice to exercise its purchase option. |
| (3) | The purchase option can be exercised starting in November 2027 through October 2029 if the lessee exercises its |
| (4) | The operator may elect to either receive an earn-out payment or exercise its purchase option. If neither option is elected within the timeframe defined in the lease, both elections are terminated. For more information regarding the earn-out see Note 16. Commitments and Contingencies. |
See Note-6 Financing Receivables for purchase options included in our financing receivable agreements.
85
Table of Contents
Impairment Loss
We performed recoverability analysis on the carrying value of the communities listed in the table below and concluded that their carrying value may not be recoverable through future undiscounted cash flows.
Type | Number | Number | ||||||||||
of | of | of | Impairment | |||||||||
Year | State | Properties | Properties | Beds/Units | Loss | |||||||
2025 | N/A | N/A | — | — | $ | — | ||||||
2024 | Ohio | SH | | | $ | | (1) | |||||
Oklahoma | SH | | | | (2) | |||||||
Texas | SH | | | | (1) | |||||||
| | $ | | |||||||||
2023 | Florida | SH | | | $ | | (3) | |||||
Florida | SH | | | | ||||||||
Mississippi | SH | | | | (4) | |||||||
Texas | SH | | | | ||||||||
| | $ | | |||||||||
| (1) | In conjunction with the anticipated closure, we recorded an impairment loss on the carrying value of these properties. |
| (2) | This community was sold during the first quarter of 2025. See Properties Held-for-Sale below for more information regarding this community. |
| (3) | In conjunction with the ongoing negotiations to sell this community, we recorded a $ |
| (4) | This community was sold during the fourth quarter of 2023 for $ |
Properties Held-for-Sale
The following summarizes our held-for sale properties as of December 31, 2025 and 2024 (dollar amounts in thousands):
Type | Number | Number | |||||||||||||
of | of | of | Gross | Accumulated | |||||||||||
State | Property | Properties | Beds/units | Investment | Depreciation | ||||||||||
At December 31, 2025 | N/A | N/A | — | — | $ | — | $ | — | |||||||
At December 31, 2024 | OK | SH | (1) | | | $ | | $ | ( |
| (1) | This community was sold during the first quarter of 2025. Upon sale, the community was removed from a master lease covering |
86
Table of Contents
Acquisitions
The following table summarizes our acquisitions within our Triple-Net Portfolio for the years ended December 31, 2025, 2024 and 2023 (dollar amounts in thousands):
Non- | Number | Number | |||||||||||||||||||
Assumed | Controlling | Transaction | Assets | of | of | ||||||||||||||||
Year | Type of Property | Investment | Liabilities | Interest | Costs | Acquired | Properties | Beds/Units | |||||||||||||
2025 | N/A | $ | — | $ | — | $ | — | $ | — | $ | — | N/A | N/A | ||||||||
2024 | OTH (1) | | (1) | — | — | — | | (1) | — | — | |||||||||||
2023 | SH(2) | | | | | | (3) | | | ||||||||||||
| (1) | We acquired a parcel of land in Kansas adjacent to an existing community operated by Brookdale Senior Living Communities (“Brookdale”). Rent was increased by |
| (2) | We entered into a $ |
| (3) | Includes $ |
Improvement Projects
Year Ended December 31, | ||||||||||
Type of Property | 2025 | 2024 | 2023 | |||||||
Seniors Housing Communities | $ | | $ | | $ | | ||||
Skilled Nursing Centers | | | | |||||||
Other | — | — | | |||||||
Total | $ | | $ | | $ | | ||||
87
Table of Contents
Property Sales. During the years ended December 31, 2025, 2024 and 2023 we recorded net gain on sale of real estate of $
Type | Number | Number | ||||||||||||||||
of | of | of | Sales | Carrying | Net | |||||||||||||
Year | State | Properties | Properties | Beds/Units | Price | Value | Gain (Loss) (1) | |||||||||||
2025 | California | SNF | | | $ | | $ | | $ | | ||||||||
Florida | SNF | | | | | | ||||||||||||
Ohio | SH | | | | | | ||||||||||||
Ohio (2) | N/A | — | — | | | | ||||||||||||
Oklahoma | SH | | | | | ( | ||||||||||||
Texas | N/A | | — | | | ( | ||||||||||||
Virginia | SNF | | | | | | ||||||||||||
Total | | | $ | | $ | | $ | | ||||||||||
2024 | Colorado | SH | | — | $ | | $ | | $ | |||||||||
Florida | SH | | | | | ( | ||||||||||||
Texas | SH | | | | | ( | ||||||||||||
Texas | SH | | — | | | — | ||||||||||||
Texas | SH | | | | (3) | | | |||||||||||
Wisconsin | SH | | | | (4) | | (4) | | ||||||||||
n/a | N/A | — | — | — | — | ( | (5) | |||||||||||
Total | | | $ | | $ | | $ | | ||||||||||
2023 | Florida | SH | | | $ | | $ | | $ | | ||||||||
Kentucky | SH | | | | | | ||||||||||||
Mississippi | SH | | | | | ( | ||||||||||||
New Jerey | SH | | | | | | ||||||||||||
New Mexico | SNF | | | | | | ||||||||||||
Nebraska | SH | | | | | — | ||||||||||||
Oklahoma | SH | | | | | | ||||||||||||
Pennsylvania | SH | | | | | | ||||||||||||
South Carolina | SH | | | | | | ||||||||||||
Total | | | $ | | $ | | $ | |
| (1) | Calculation of net gain (loss) includes cost of sales and write-off of straight-line rent receivable and lease incentives, when applicable. |
| (2) | We sold a parcel of land adjacent to a memory care community within our portfolio. |
| (3) | As part of the negotiated sale, we received an additional $ |
| (4) | Represents the price to sell our portion of interest in a JV, net of the JV partner’s $ |
| (5) | We recognized additional loss due to additional incurred costs related to properties sold during 2023. |
6. Financing Receivables
We have entered into joint ventures and contributed into the JVs for the acquisition of properties through sale and leaseback transactions. Concurrently, each of these JVs leased the properties acquired back to an affiliate of the seller and provided the seller-lessee with purchase options. We determined that each of these sale and leaseback transactions meet the accounting criteria to be presented as Financing receivables on our Consolidated Balance Sheets and recorded the rental revenue from these properties as Interest income from financing receivables on our Consolidated Statements of Income. See Note 2. Summary of Significant Accounting Policies within our consolidated financial statements for more information.
88
Table of Contents
The following table provides information regarding our investments in financing receivables (dollar amounts in thousands):
Type | Number | Number | Purchase | Investment | ||||||||||||||||||||
Interest | Investment | Gross | LTC | of | of | of | Option | per | ||||||||||||||||
Rate | Year | Maturity | State | Investments | Investment | Properties | Properties | Beds/Units | Window | Bed/Unit | ||||||||||||||
(1) | 2022 | 2032 | FL | $ | | $ | | SNF | 2025-2027 | $ | | |||||||||||||
(2) | 2023 | 2033 | NC | | | SH | 2025-2029 | $ | | |||||||||||||||
(3) | 2024 | 2034 | NC/SC | | | SH | 2024-2028 | $ | | |||||||||||||||
(4) | 2024 | 2034 | NC | | | SH | 2024-2028 | $ | | |||||||||||||||
Total | $ | | $ | | |
| (1) | The purchase option is available to the seller-lessee with an exit IRR of |
| (2) | The seller-lessee has the option to buy the properties in multiple tranches and in serial closings approved by LTC with an exit IRR of |
| (3) | During the second quarter of 2024, we funded an additional $ |
| (4) | During the second quarter of 2024, we funded an additional $ |
The following table summarizes the interest income from our investment in financing receivables during the years ended December 31, 2025, 2024 and 2023 (dollar amounts in thousands):
Type | Interest Income from Financing Receivables | ||||||||||||
Lease | of | Year Ended December 31, | |||||||||||
Maturity | Properties | 2025 | 2024 | 2023 | |||||||||
2032 | (1) | SNF | $ | | $ | | $ | | |||||
2033 | SH | | | | |||||||||
2034 | SH | | | — | |||||||||
$ | | $ | | $ | | ||||||||
| (1) | During the fourth quarter of 2025, the lessee provided notice of its intent to exercise its purchase option. |
At December 31, 2025 and 2024 the carrying value of the financing receivables, net of credit loss reserves were $
89
Table of Contents
7. Mortgage Loans Receivable
Type | Percentage | Number of | Investment | ||||||||||||||||||||
Gross | of | of | SNF | SH | per |
| |||||||||||||||||
Interest Rate | Maturity | State | Investment | Property | Investment | Loans (1) | Properties (1) | Beds | Units | Bed/Unit |
| ||||||||||||
(2) | 2043 | MI | $ | | SNF | | % | | | | — | $ | | ||||||||||
2030 | CA | | SH | | % | | | — | | $ | | ||||||||||||
2030 | FL | | SH | | % | | | — | | $ | | ||||||||||||
(3) | 2045 | MI | | SNF | | % | | | | | — | $ | | ||||||||||
(3) | 2045 | MI |
| | SNF | | % | | | |
| — | $ | | |||||||||
2026 | MI | | SH | | % | | | — | | $ | | ||||||||||||
(3) | 2045 | MI | | SNF | | % | | | | — | $ | | |||||||||||
2026 | NC | | SH | | % | | | — | | $ | | ||||||||||||
(4) | 2030 | IL | | UDP | | % | | — | — | — | $ | — | |||||||||||
Total | $ | | (1) | | % | | | |
| | $ | | |||||||||||
| (1) | Our mortgage loans are secured by properties located in |
| (2) | During 2025, we modified the mortgage loan with Prestige, the borrower, to increase the current interest paid by the borrower from |
| (3) | Mortgage loans provide for |
| (4) | During 2024, we committed to fund a $ |
As noted in the table above, we modified the Prestige $
90
Table of Contents
The following table summarizes our mortgage loan activity for the years ended December 31, 2025, 2024 and 2023 (in thousands):
Year Ended December 31, | ||||||||||
2025 | 2024 | 2023 |
| |||||||
Originations and funding under mortgage loans receivable | $ | | (1) | $ | | (3) | $ | | (6) | |
Exchange of mortgage loans for controlling interests in joint ventures accounted for as financing receivables | — | ( | (4) | — | ||||||
Payoffs received | ( | (2) | ( | (5) | — | |||||
Application of interest reserve | | | | |||||||
Scheduled principal payments received | ( | ( | ( | |||||||
Mortgage loan premium amortization | ( | ( | ( | |||||||
(Provision) recovery for loan loss reserve | ( | | ( | |||||||
Net increase (decrease) in mortgage loans receivable | $ | | $ | ( | $ | | ||||
| (1) | Funded the following mortgage loans during 2025: |
| (a) | $ |
| (b) | $ |
| (c) | $ |
| (d) | $ |
| (2) | Received the following payoffs and paydown during 2025: |
| (a) | $ |
| (b) | $ |
| (c) | $ |
| (d) | $ |
| (3) | Funded the following during 2024: |
| (a) | $ |
| (b) | $ |
| (c) | $ |
| (d) | $ |
| (4) | Exchanged |
| (5) | Received the following payoffs and paydowns during 2024: |
| (a) | $ |
| (b) | $ |
| (c) | $ |
| (d) | $ |
| (6) | Funded the following during 2023: |
| (a) | $ |
91
Table of Contents
| (b) | $ |
| (c) | $ |
| (d) | $ |
| (e) | $ |
At December 31, 2025 and 2024 the carrying values of the mortgage loans, net of credit loss reserves were $
| Scheduled |
| ||
Principal |
| |||
2026 | $ | | ||
2027 |
| | ||
2028 |
| | ||
2029 |
| | ||
2030 |
| | ||
Thereafter |
| | ||
Total | $ | | ||
92
Table of Contents
8. Investments in Unconsolidated Joint Ventures
We have an ADC loan that meets the accounting criteria to be considered a VIE. We are not the primary beneficiary of the VIE as we do not have both: 1) the power to direct the activities that most significantly affect the VIE’s economic performance, and 2) the right to receive benefits from the VIE or the obligation to absorb losses of the VIE that could be significant to the VIE. However, we do have significant influence over the VIE. Therefore, we account for the investment as a joint venture using the equity method of accounting.
The following table provides information regarding our investment in unconsolidated joint ventures at December 31, 2025 (dollar amounts in thousands):
Type | Type | Total | Contractual | Number | ||||||||||||
of | of | Preferred | Cash | of | Carrying | |||||||||||
State | Property | Investment | Return | Portion | Beds | Value | ||||||||||
Texas | SNF | Senior Loan | (1) | % | % | $ | | (1) |
| (1) | Represents a $ |
We also had preferred equity investments that also met the accounting criteria to be considered a VIE based on the same factors discussed above for the ADC loan. During the year ended December 31, 2025, we received $
The following table summarizes our capital contributions, income recognized, and cash interest received related to our investments in unconsolidated joint ventures during the years ended December 31, 2025, 2024 and 2023 (in thousands):
Type | ||||||||||||
of | Income | Cash Income | Non-cash | |||||||||
Year | Properties | Recognized | Earned | Income Accrued | ||||||||
2025 | SNF | $ | | $ | | $ | — | |||||
SH (1) | | (1) | | (1) | — | |||||||
SH (2) | | (2) | | (2) | | |||||||
Total | $ | | $ | | $ | | ||||||
2024 | SNF | $ | | $ | | $ | — | |||||
SH (1) | | | — | |||||||||
SH (2) | | — | | |||||||||
Total | $ | | $ | | $ | | ||||||
2023 | SH (1) | $ | | $ | | $ | | |||||
SH (2) | | — | | |||||||||
Total | $ | | $ | | $ | |
| (1) | During 2025, our preferred equity investment in the JV that owns a |
| (2) | During 2025, our preferred equity investment in the JV that owns a |
93
Table of Contents
9. Notes Receivable
Notes receivable consist of a mezzanine loan and working capital loans. The following table summarizes our investments in notes receivable at December 31, 2025 (dollar amounts in thousands):
Interest | Type of | Gross | Type of | |||||||||||||
Rate | IRR | Maturity | Loan | Investment | # of loans | Property | ||||||||||
— | 2026 | Working capital | $ | | SH | |||||||||||
% | 2027 | Mezzanine | | SH | ||||||||||||
— | 2028 | Working capital | | SNF | ||||||||||||
$ | | (1) | ||||||||||||||
| (1) | Excludes the impact of credit loss reserve. |
The following table is a summary of our notes receivable components at December 31, 2025 and 2024 (in thousands):
At December 31, 2025 | At December 31, 2024 | ||||
Mezzanine loans | $ | | $ | | |
Working capital loans | | | |||
Notes receivable credit loss reserve | ( | ( | |||
Total notes receivable, net of credit loss reserve | $ | | $ | | |
The following table summarizes our notes receivable activity for the years ended December 31, 2025, 2024 and 2023 (in thousands):
Year Ended December 31, | |||||||||
2025 | 2024 | 2023 | |||||||
Advances under notes receivable | $ | | $ | | $ | | (4) | ||
Principal payments received under notes receivable | ( | (1) | ( | (3) | ( | (5) | |||
Write-off of notes receivable | ( | (2) | ( | ( | |||||
Recovery (provision) of credit losses | | | ( | ||||||
Net decrease (increase) in notes receivable | $ | ( | $ | ( | $ | | |||
| (1) | Received the following payoffs and paydown during 2025: |
| (a) | $ |
| (b) | $ |
| (c) | $ |
| (2) | Represents the write-off of working capital notes in connection with terminating master leases and converting the communities covered under the master leases to SHOP. |
| (3) | During 2024, we received $ |
| (4) | Funded the following during 2023: |
| (a) | $ |
| (b) | $ |
94
Table of Contents
| (5) | Received the following payoffs during 2023: |
| (a) | $ |
| (b) | $ |
10. Credit Loss Reserve
We apply ASC Topic 326, Financial Instruments-Credit Losses (“ASC 326”), which requires a forward-looking “expected loss” model, to estimate our loan losses. We determined our Financing receivables, Mortgage loans receivable and Notes receivable line items on our Consolidated Balance Sheets are within the scope of ASC 326.
Financing receivables. We obtained controlling interests in JVs that acquired properties through sale and leaseback transactions. The JVs concurrently leased the properties acquired back to affiliates of sellers and provided the sellers-lessees with purchase options. We consolidated the JVs as Financing receivables on our Consolidated Balance Sheets. For more information regarding these transactions see Note 2. Summary of Significant Accounting Policies above. At December 31, 2025, we had investments in
Mortgage loans. As part of our strategy of making investments in properties used in the provision of long-term health care services, we provided mortgage loan financing on such properties. At December 31, 2025, we had
Notes receivable. Our notes receivable consist of a mezzanine loan and working capital notes. Security for these notes can include all or a portion of the following credit enhancements: secured second mortgage, pledge of equity interests and personal/corporate guarantees.
The following table summarizes our financial instruments within the scope of ASC 326 by year of origination (dollar amounts in thousands):
Year of origination (1) | At December 31, 2025 | |||||||||||||||||||||||
Investment Type: | 2025 | 2024 | 2023 | 2022 | 2021 | Prior | Total | Credit loss reserve | ||||||||||||||||
Financing receivables | $ | — | $ | | $ | | $ | | $ | — | $ | — | $ | | $ | | ||||||||
Mortgage loans receivable | $ | | $ | | $ | | $ | — | $ | — | $ | | $ | | $ | | ||||||||
Mezzanine loans | $ | — | $ | — | $ | — | $ | | $ | — | $ | — | $ | | $ | | ||||||||
Working Capital loans | — | | — | — | | — | | | ||||||||||||||||
Total Notes Receivable | $ | — | $ | | $ | — | $ | | $ | | $ | — | $ | | $ | | ||||||||
| (1) | Excludes paid-off loans. Additional funding, if any, is included in the year of the origination of the initial loan. |
We monitor the credit quality of our financial instruments through a variety of methods determined by the underlying collateral or other protective rights, operator’s payment history and other internal metrics. Our monitoring process includes periodic review of financial statements for each facility, scheduled property inspections and review of covenant compliance, industry conditions and current and future economic conditions. The future economic conditions are based on the economic data from the Federal Reserve and reasonable assumptions for the future economic trends.
In determining the “expected” credit loss reserves on these instruments, we utilize the probability of default and
95
Table of Contents
discounted cash flow methods. Further, we stress-test the results to reflect the impact of unknown adverse future events including recessions.
The expected credit losses related to our financial instruments that are within the scope of ASC 326 are as follows (in thousands):
| Recovery |
| Provision |
| |||||||||
| Balance | due to |
| due to |
| Balance | |||||||
| at | Payoffs/ |
| Originations/ |
| at | |||||||
Description |
| 12/31/2024 | Write-offs |
| additional funding |
| 12/31/2025 | ||||||
Credit Loss Reserve- Financing Receivables |
| $ | | $ | — |
| $ | |
| $ | | ||
Credit Loss Reserve- Mortgage Loans Receivable | | ( | | | |||||||||
Credit Loss Reserve-Notes Receivable |
| | ( |
| — |
| | ||||||
We elected not to measure an allowance for expected credit losses on accrued interest receivable under the expected credit loss standard as we have a policy to reserve or write off accrued interest receivable in a timely manner through our quarterly review of the loan and property performance. Therefore, we elected the policy to write off accrued interest receivable by recognizing credit loss expense. As of December 31, 2025, the total balance of accrued interest receivable of $
11. Prepaid Expenses and Other Assets
The following is a summary of our prepaid expenses and other assets at December 31, 2025 and 2024 (in thousands):
Year Ended December 31, | ||||||
2025 | 2024 | |||||
Intangible assets, net of accumulated amortization: 2025— $ | $ | | $ | | ||
SHOP accounts receivable, net of credit loss reserve: 2025— $ | | — | ||||
Real estate investments, prepaid expenses and other assets | | | ||||
| | |||||
Lease incentives | | | ||||
SHOP prepaid expenses and other assets | | — | ||||
Deferred income tax asset | | — | ||||
Interest rate swap asset | | | ||||
Total | $ | | $ | | ||
96
Table of Contents
12. Intangible Assets
We make estimates in allocating the purchase price of acquisitions to the various components of the acquisition based on the fair value of each component. For certain acquisitions, such components include in-place leases and other intangible assets. In the case of the value of in-place leases, we make estimates based on the evaluation of the specific characteristics of each tenant’s lease. Factors considered include estimates of carrying costs during the hypothetical expected lease-up periods, market conditions and costs to execute similar leases.
December 31, 2025 | December 31, 2024 | |||||||||||||||||||||
Accumulated | Accumulated | |||||||||||||||||||||
Assets | Cost | Amortization | Net | Cost | Amortization | Net | ||||||||||||||||
In-place leases | $ | | (1) | $ | ( | (2) | $ | | $ | | (1) | $ | ( | (2) | $ | | ||||||
Tax abatement intangible | $ | | (3) | $ | ( | (3) | $ | | $ | | (3) | $ | ( | (3) | $ | | ||||||
| (1) | Included in the Buildings and improvements line item in our Consolidated Balance Sheets. Increase relates to acquisition of |
| (2) | Included in the Accumulated depreciation and amortization line item in our Consolidated Balance Sheets. |
| (3) | Included in the Prepaid expenses and other assets line item in our Consolidated Balance Sheets. |
The following table provides future amortization expenses related to the intangible assets at December 31, 2025 (in thousands):
| Total | | 2026 | 2027 | | 2028 | | 2029 | | 2030 | | Thereafter | |||||||||
In-place leases (1) | $ | | $ | | $ | | $ | | $ | | $ | | $ | | |||||||
Tax abatement intangible (2) |
| | |
| |
| |
| |
| |
| | ||||||||
$ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||
| (1) | Recorded as amortization expense included in the Depreciation and amortization line item on our Consolidated Statements of Income. |
| (2) | Recorded as Property tax expense on our Consolidated Statements of Income. |
13. Debt Obligations
Unsecured Credit Facility. We had an unsecured credit agreement (the “Original Credit Agreement”) that provided for an aggregate commitment of the lenders of up to $
During the first quarter of 2024, we entered into an amendment to the Original Credit Agreement (the “Amended Credit Agreement”) to accelerate our
97
Table of Contents
During the third quarter of 2025, we entered into a new
Based on our leverage at December 31, 2025, the Revolving Line of Credit provides for interest annually at plus
Interest Rate Swap Agreements. In connection with entering into the Original Term Loans as discussed above, we entered into
During the year ended December 31, 2025 and 2024, we recorded $
The following table sets forth information regarding our interest rate swaps at December 31, 2025 and 2024 (dollar amounts in thousands):
Notional | Fair Value at | |||||||||||||||||
Date Entered | Maturity Date | Swap Rate | Rate Index | Amount | December 31, 2025 | December 31, 2024 | ||||||||||||
November 2021 | November 19, 2025 | N/A | % | (1) | 1-month SOFR | $ | N/A | (1) | $ | — | (1) | $ | | |||||
November 2021 | November 19, 2026 | % | 1-month SOFR | (2) | | | ||||||||||||
December 2025 | December 12, 2028 | % | SOFR with 5-day lookback | ( | — | |||||||||||||
December 2025 | December 12, 2028 | % | SOFR with 5-day lookback | ( | — | |||||||||||||
December 2025 | December 12, 2029 | % | SOFR with 5-day lookback | ( | — | |||||||||||||
December 2025 | December 12, 2030 | % | SOFR with 5-day lookback | ( | — | |||||||||||||
December 2025 | December 12, 2030 | % | SOFR with 5-day lookback | ( | — | |||||||||||||
December 2025 | December 12, 2032 | % | SOFR with 5-day lookback | ( | — | |||||||||||||
December 2025 | December 12, 2032 | % | SOFR with 5-day lookback | ( | — | |||||||||||||
$ | $ | | $ | | ||||||||||||||
| (1) | The interest rate swap, which had a notional amount of $ |
| (2) | During the third quarter of 2025, the interest rate swap was rolled into the Revolving Line of Credit. |
Senior Unsecured Notes. We have senior unsecured notes held by institutional investors with interest rates ranging from
98
Table of Contents
The senior unsecured notes and Credit Agreement, including the Revolving Line of Credit and the Term Loans, contain financial covenants, which are measured quarterly, require us to maintain, among other things:
| (i) | a ratio of total indebtedness to total asset value not greater than |
| (ii) | a ratio of secured debt to total asset value not greater than |
| (iii) | a ratio of unsecured debt to the value of the unencumbered asset value not greater than |
| (iv) | a ratio of EBITDA, as calculated in the Unsecured Credit Agreement, to fixed charges not less than |
At December 31, 2025, we were in compliance with all applicable financial covenants. These debt obligations also contain additional customary covenants and events of default that are subject to a number of important and significant limitations, qualifications and exceptions.
The following table sets forth information regarding debt obligations by component as of December 31, 2025 and 2024 (dollar amounts in thousands):
At December 31, 2025 | At December 31, 2024 | ||||||||||||||
Applicable | Available | Available | |||||||||||||
Interest | Outstanding | for | Outstanding | for | |||||||||||
Debt Obligations | Rate (1) | Balance | Borrowing | Balance | Borrowing | ||||||||||
Revolving line of credit (2) | $ | | $ | | $ | | $ | | |||||||
Term loans, net of debt issue costs | | — | | — | |||||||||||
Senior unsecured notes, net of debt issue costs (3) | | — | | — | |||||||||||
Total | $ | | $ | | $ | | $ | | |||||||
| (1) | Represents weighted average of interest rate as of December 31, 2025. |
| (2) | Subsequent to December 31, 2025, we borrowed $ |
| (3) | Subsequent to December 31, 2025, we repaid $ |
Our borrowings and repayments for the years ended December 31, 2025, 2024 and 2023 are as follows (in thousands):
Year Ended December 31, | ||||||||||||||||||
2025 | 2024 | 2023 | ||||||||||||||||
Debt Obligations | Borrowings | Repayments | Borrowings | Repayments | Borrowings | Repayments | ||||||||||||
Revolving line of credit | $ | | (1) | $ | ( | $ | | $ | ( | $ | | $ | ( | |||||
Term loans | | ( | — | — | — | — | ||||||||||||
Senior unsecured notes | — | ( | (2) | — | ( | — | ( | |||||||||||
Total | $ | | $ | ( | $ | | $ | ( | $ | | $ | ( | ||||||
| (1) | Subsequent to December 31, 2025, we borrowed $ |
| (2) | Subsequent to December 31, 2025, we repaid $ |
99
Table of Contents
Scheduled Principal Payments.
Total | 2026 | 2027 | 2028 | 2029 | 2030 | Thereafter |
| |||||||||||||||
Revolving line of credit | $ | | (1) | $ | — | $ | — | $ | — | $ | | $ | — | $ | — | |||||||
Term loans | | — | — | | | | | |||||||||||||||
Senior unsecured notes |
| | (2) |
| | (2) |
| |
| |
| | |
| | |||||||
$ | | $ | | $ | | $ | | $ | | $ | | $ | | |||||||||
| (1) | Subsequent to December 31, 2025, we borrowed $ |
| (2) | Subsequent to December 31, 2025, we repaid $ |
14. Accrued Expenses and Other Liabilities
The following is a summary of our accrued expenses and other liabilities (dollar amounts in thousands):
Year Ended December 31, | ||||||
2025 | 2024 | |||||
Impounds | $ | | $ | | ||
Security deposits | | | ||||
Property tax liability | | | ||||
Maintenance and repair reserves | | | ||||
Accounts payable and other accrued liabilities | | | ||||
SHOP liabilities | | — | ||||
Deferred commitments | | | ||||
| | |||||
SHOP deferred revenue | | — | ||||
$ | | $ | | |||
100
Table of Contents
15. Equity
Non-controlling Interests. We have entered into partnerships to develop and/or own real estate. Given that our limited members do not have the substantive kick-out rights, liquidation rights, or participation rights, we have concluded that the partnerships are VIEs. As we exercise power over and receive benefits from the VIEs, we are considered the primary beneficiary. Accordingly, we consolidate the VIEs and record the non-controlling interests on the consolidated financial statements.
Gross | |||||||||||||
Investment | Property | Consolidated | Non-Controlling | ||||||||||
Year | Purpose | Type | State | Assets (1) | Interests | ||||||||
2024 | Own real estate | SH | NC/SC | $ | | $ | | ||||||
2024 | Own real estate | SH | NC | | | ||||||||
2023 | Own real estate | SH | OH | | | ||||||||
2023 | Own real estate | SH | NC | | | ||||||||
2022 | Own real estate | SNF | FL | | (2) | | |||||||
Total | $ | | $ | |
| (1) | Includes the total real estate investments and excludes intangible assets. |
| (2) | During the fourth quarter of 2025, the lessee provided notice of intent to exercise the purchase option available with an exit IRR of |
During the year ended December 31, 2025, we acquired our joint venture partner’s non-controlling interests in the joint ventures that own
Common Stock. We had separate equity distribution agreements (collectively, the “Original Equity Distribution Agreements”) to offer and sell, from time to time, up to $
During the year ended December 31, 2025, we sold
During the year ended December 31, 2024, we sold
During the year ended December 31, 2023, we sold
101
Table of Contents
During the years ended December 31, 2025, 2024 and 2023, we acquired
Shelf Registration Statement. We have an automatic shelf registration statement on file with the SEC, and currently have the ability to file additional automatic shelf registration statements, to provide us with capacity to publicly offer an indeterminate amount of common stock, preferred stock, warrants, debt, depositary shares, or units. We may from time to time publicly raise capital under our automatic shelf registration statement in amounts, at prices, and on terms to be announced when and if the securities are offered. The specifics of any future offerings, along with the use of proceeds of any securities offered, will be described in detail in a prospectus supplement, or other offering materials, at the time of the offering. Our shelf registration statement expires in November 2027.
Distributions. We declared and paid the following cash dividends (in thousands):
Year Ended December 31, |
| |||||||||||||||||||
2025 | 2024 | 2023 |
| |||||||||||||||||
Declared | Paid | Declared | Paid | Declared | Paid |
| ||||||||||||||
Common Stock (1) | $ | | (2) | $ | | (2) | $ | | $ | | $ | | $ | | ||||||
| (1) | Represents $ |
| (2) | Includes $ |
In January 2026, we declared a monthly cash dividend of $
Stock Based Compensation Plans. During 2021, we adopted, and our stockholders approved the 2021 Equity Participation Plan (the “2021 Plan”) which replaced the 2015 Equity Participation Plan (the “2015 Plan”). Under the 2021 Plan,
102
Table of Contents
Restricted Stock and Performance-Based Stock Units. Restricted stock activity for the years ended December 31, 2025, 2024 and 2023 was as follows:
Year Ended December 31, | ||||||||||||||||||
Shares | Weighted Average Price | |||||||||||||||||
2025 | 2024 | 2023 |
| 2025 | 2024 | 2023 | ||||||||||||
Outstanding, January 1 | | | | $ | $ | $ | ||||||||||||
Granted | | | | $ | $ | $ | ||||||||||||
Vested | ( | (1) | ( | ( | $ | $ | $ | |||||||||||
Cancelled | — | — | ( | n/a | n/a | $ | ||||||||||||
Outstanding, December 31 | | | | $ | $ | $ | ||||||||||||
| (1) | Includes the accelerated vesting of |
During the years ended December 31, 2025, 2024 and 2023, we granted
During 2025, 2024 and 2023, we granted
No. of | Price per | |||||||||
Year | Shares/Units | Share | Reward Type | Vesting Period | ||||||
2025 | $ | Restricted stock | ratably over | |||||||
$ | Restricted stock | April 30, 2028 | ||||||||
$ | Restricted stock | (1) | ||||||||
| $ | | Performance-based stock units | TSR targets (2) | ||||||
| $ | | Performance-based stock units | TSR targets (3) | ||||||
2024 | $ | Restricted stock | ratably over | |||||||
| $ | | Performance-based stock units | TSR targets (2) | ||||||
| $ | | Performance-based stock units | TSR targets (3) | ||||||
| $ | | Restricted stock | (1) | ||||||
2023 | $ | | Restricted stock | ratably over | ||||||
| $ | | Performance-based stock units | TSR targets (4) | ||||||
| $ | | Restricted stock | May 24, 2024 | ||||||
| $ | | Restricted stock | July 25, 2024 | ||||||
| (1) | The vesting date is the earlier of the one-year anniversary of the award date or the date of the next annual meeting of the stockholders of LTC following the award date. |
| (2) | Vesting is based on achieving certain total shareholder return (“TSR”) targets in |
| (3) | Vesting is based on achieving certain TSR targets relative to the TSR of a predefined peer group in |
| (4) | Vesting is based on achieving certain total shareholder return (“TSR”) targets in |
103
Table of Contents
At December 31, 2025, the remaining compensation expense to be recognized related to the future service period of unvested outstanding restricted common stock and performance-based stock units are as follows (dollar amount in thousands):
Remaining | |||
Compensation | |||
Vesting Date | Expense | ||
2026 | $ | | |
2027 | | ||
2028 | | ||
Total | $ | | |
Stock Options. During 2025, 2024 and 2023, we did not issue any stock options. Nonqualified stock option activity for the years ended December 31, 2025, 2024 and 2023 was as follows:
Weighted Average |
| |||||||||||||||
Shares | Price |
| ||||||||||||||
2025 | 2024 | 2023 | 2025 | 2024 | 2023 |
| ||||||||||
Outstanding, January 1 | | — | | | | | $ | n/a | $ | | | $ | | |||
Granted |
| — | — |
| — | n/a | n/a | n/a | ||||||||
Exercised |
| — | — |
| — | n/a | n/a | n/a | ||||||||
Canceled |
| — | ( |
| ( | n/a | $ | | $ | | ||||||
Outstanding, December 31 |
| — | — |
| | n/a | n/a | $ | | |||||||
Exercisable, December 31 |
| — | — |
| | n/a | n/a | $ | | |||||||
We use the Black-Scholes-Merton formula to estimate the value of stock options granted to employees. This model requires management to make certain estimates including stock volatility, expected dividend yield and the expected term.
16. Commitments and Contingencies
At December 31, 2025, we had commitments as follows (in thousands):
Total | ||||||||||||
Investment | 2025 | Commitment | Remaining | |||||||||
Commitment | Funding | Funded | Commitment | |||||||||
Triple-Net Portfolio | $ | | (1) | $ | | $ | | $ | | |||
SHOP | | | | | ||||||||
Subtotal: owned real estate properties (Note 5. Owned Real Property Investments) | | | | | ||||||||
Financing receivables (Note 6.Financing Receivables) | | | | | ||||||||
Accrued incentives and earn-out liabilities | | (2) | — | — | | |||||||
Mortgage loans (Note 7. Mortgage Loan Receivables) | | (3) | | | | |||||||
Joint venture investments (Note 8. Investments in Unconsolidated Joint Ventures) | | (4) | | | | |||||||
Notes receivable (Note 9. Notes Receivable) | | (5) | | | | |||||||
Total | $ | | $ | | $ | | $ | | ||||
| (1) | Represents commitments to purchase land and improvements, if applicable, and to develop, re-develop, renovate or expand seniors housing and health care properties. |
| (2) | Includes an earn-out payment of up to $ |
| (3) | Represents $ |
| (4) | Represents expenditure reserve of $ |
| (5) | Represents working capital loan commitments. |
104
Table of Contents
Additionally, some of our lease agreements provide purchase options allowing the lessees to purchase the properties they currently lease from us. See Note 5. Owned Real Properties and Note 6. Financing Receivables for tables summarizing information about our purchase options.
From time to time, we are a party to various claims and lawsuits asserted against our company and our properties and against our third-party SHOP operators, lessees and borrowers. None of such claims or lawsuits singularly or in aggregate, in our management’s opinion, are material to our business, results of operations or financial condition. These claims and lawsuits may include matters involving general or professional liability attributable to our third-party SHOP operators, lessees and borrowers pursuant to general legal principles and pursuant to insurance and indemnification provisions in the applicable management agreements, leases or mortgages. However, regardless of the merits of particular claims or lawsuits, we may be forced to expend significant financial resources to defend and resolve these matters.
17. Distributions
We must distribute at least
For federal tax purposes, distributions to stockholders are treated as ordinary income, capital gains, return of capital or a combination thereof. Distributions for 2025, 2024 and 2023 were cash distributions.
Year Ended December 31, |
| |||||||||
2025 | 2024 | 2023 |
| |||||||
Ordinary taxable distribution | | $ | | | $ | | | $ | | |
Return of capital |
| |
| |
| — | ||||
Unrecaptured Section 1250 gain |
| |
| — |
| | ||||
Long-term capital gain |
| |
| — |
| | ||||
Total | $ | | $ | | $ | | ||||
105
Table of Contents
18. Net Income Per Common Share
Basic and diluted net income per share was as follows (in thousands except per share amounts):
| ||||||||||
Year Ended December 31, |
| |||||||||
2025 | 2024 | 2023 | ||||||||
Net income | $ | | | $ | | | $ | | ||
Less income allocated to non-controlling interests |
| ( |
| ( |
| ( | ||||
Less income allocated to participating securities: | ||||||||||
Non-forfeitable dividends on participating securities |
| ( |
| ( |
| ( | ||||
Income allocated to participating securities |
| ( |
| — |
| — | ||||
Total net income allocated to participating securities |
| ( |
| ( |
| ( | ||||
Net income available to common stockholders |
| |
| |
| | ||||
Effect of dilutive securities: | ||||||||||
Participating securities (1) | — | (1) | — | (2) | — | (2) | ||||
Net (income for diluted net income per share | $ | | $ | | $ | | ||||
Shares for basic net income per share |
| |
| |
| | ||||
Effect of dilutive securities: | ||||||||||
Performance-based stock units | | | | |||||||
Participating securities (1) | — | (2) | — | (2) | — | (2) | ||||
Total effect of dilutive securities |
| |
| |
| | ||||
Shares for diluted net income per share |
| |
| |
| | ||||
Basic net income per share | $ | | $ | | $ | | ||||
Diluted net income per share | $ | | $ | | $ | | ||||
| (1) | For the year ended December 31, 2025, the participating securities were excluded from the computation of diluted net income per share as such inclusion would be anti-dilutive. |
| (2) | For the years ended December 31, 2024, and 2023, the participating securities and stock options were excluded from the computation of diluted net income per share as such inclusion would be anti-dilutive. |
106
Table of Contents
19. Fair Value Measurements
In accordance with the accounting guidance regarding the fair value option for financial assets and financial liabilities, entities are permitted to choose to measure certain financial assets and liabilities at fair value, with the change in unrealized gains and losses reported in earnings. We did not adopt the elective fair market value option for our financial assets and financial liabilities.
The carrying amount of cash and cash equivalents approximates fair value because of the short-term maturity of these instruments. We do not invest our cash in auction rate securities
At December 31, 2025 | At December 31, 2024 | ||||||||||||
Carrying | Fair | Carrying | Fair | ||||||||||
Value | Value | Value | Value | ||||||||||
Financing receivables, net of credit loss reserve | $ | | $ | | (1) | $ | | $ | | (1) | |||
Mortgage loans receivable, net of credit loss reserve | | | (2) | | | (2) | |||||||
Notes receivable, net of credit loss reserve |
| |
| | (3) |
| |
| | (3) | |||
Revolving line of credit |
| | | (4) | | | (4) | ||||||
Term loans, net of debt issue costs | | | (4) | | | (4) | |||||||
Senior unsecured notes, net of debt issue costs |
| | | (5) | | | (5) | ||||||
| (1) | Our investment in financing receivables is classified as Level 3. The fair value is determined using a widely accepted valuation technique, discounted cash flow analysis on the expected cash flows. The discount rate used to value our future cash inflows of the financing receivables at December 31, 2025 and 2024 was |
| (2) | Our investment in mortgage loans receivable is classified as Level 3. The fair value is determined using a widely accepted valuation technique, discounted cash flow analysis on the expected cash flows. Subsequent to December 31, 2025, Prestige provided notice of its intent to repay the mortgage loan in 2026. Accordingly, at December 31. 2025, the estimated fair value of this mortgage loan approximated its carrying value. No such notice had been received as of December 31, 2024. The discount rate is determined using our assumption on market conditions adjusted for market and credit risk and current returns on our investments. The discount rate used to value our future cash inflows of the mortgage loans receivable at December 31, 2025 and 2024 was |
| (3) | Our investments in notes receivable are classified as Level 3. The discount rate is determined using our assumption on market conditions adjusted for market and credit risk and current returns on our investments. The discount rate used to value our future cash flows of the notes receivable at December 31, 2025 and 2024, were |
| (4) | Our revolving line of credit and term loans bear interest at a variable interest rate. The estimated fair value of our revolving line of credit and term loans approximated their carrying values at December 31, 2025 and 2024 based upon prevailing market interest rates for similar debt arrangements. |
| (5) | Our obligation under our senior unsecured notes is classified as Level 3 and thus the fair value is determined using a widely accepted valuation technique, discounted cash flow analysis on the expected cash flows. The discount rate is measured based upon management’s estimates of rates currently prevailing for comparable loans available to us, and instruments of comparable maturities. At December 31, 2025, the discount rate used to value our future cash outflow of our senior unsecured notes was |
107
Table of Contents
20. Segment Information
We use the management approach in determining the reportable operating segments. The management approach considers the internal organization and reporting used by our CODM for making operating decisions, allocating resources and assessing performance as the source for determining our reportable segments. In making this determination, we:
| i. | determine our CODM; |
| ii. | identify and analyze potential business components; |
| iii. | identify our operating segments; and |
| iv. | determine whether there are multiple operating segments requiring presentation as reportable segment. |
During the years ended December 31, 2025, 2024 and 2023, the CODM has been collectively identified as our Executive Chairman and Co-CEOs, who share the responsibility for allocating resources and assessing segment performance.
During the second quarter of 2025, we began utilizing the RIDEA structure and established our SHOP segment. Accordingly, we conduct and manage our business as
Year Ended December 31, 2025 | ||||||||||||
Real estate | Non-segment | |||||||||||
| investment portfolio | | SHOP | | /corporate (1) | | Total | |||||
Revenues: | ||||||||||||
Rental income | $ | | $ | — | $ | — | $ | | ||||
Resident fees and services | — | | — | | ||||||||
Interest income from financing receivables | | — | — | | ||||||||
Interest income from mortgage loans | | — | — | | ||||||||
Interest and other income | | — | | | ||||||||
Total revenues | | | | | ||||||||
Income from unconsolidated joint ventures | | — | — | | ||||||||
Property level expenses | ( | ( | — | ( | ||||||||
NOI | | | | | ||||||||
Interest expense | ( | |||||||||||
Depreciation and amortization | ( | |||||||||||
Write-off of effective interest receivable | ( | |||||||||||
Provision for credit losses | ( | |||||||||||
Transaction costs | ( | |||||||||||
General and administrative expenses | ( | |||||||||||
Gain on sale of real estate, net | | |||||||||||
Income tax provision | ( | |||||||||||
Net income | $ | | ||||||||||
| (1) | The non-segment/corporate category includes income from temporary investments and other corporate-level income not attributable to a reportable segment. |
108
Table of Contents
Year Ended December 31, 2024 | ||||||||||||
Real estate | Non-segment | |||||||||||
| investment portfolio | | SHOP | | /corporate (1) | | Total | |||||
Revenues: | ||||||||||||
Rental income | $ | | $ | — | $ | — | $ | | ||||
Resident fees and services | — | — | — | — | ||||||||
Interest income from financing receivables | | — | — | | ||||||||
Interest income from mortgage loans | | — | — | | ||||||||
Interest and other income | | — | | | ||||||||
Total revenues | | — | | | ||||||||
Income from unconsolidated joint ventures | | — | — | | ||||||||
Property level expenses | ( | — | — | ( | ||||||||
NOI | | — | | | ||||||||
Expenses: | ||||||||||||
Interest Expense | ( | |||||||||||
Depreciation and Amortization | ( | |||||||||||
Impairment Loss | ( | |||||||||||
Transaction costs | ( | |||||||||||
Provision for credit losses | ( | |||||||||||
General and administrative expenses | ( | |||||||||||
Gain on sale of real estate, net | | |||||||||||
Net income | $ | | ||||||||||
| (1) | The non-segment/corporate category includes income from temporary investments and other corporate-level income not attributable to a reportable segment. |
109
Table of Contents
Year Ended December 31, 2023 | ||||||||||||
Real estate | Non-segment | |||||||||||
| investment portfolio | | SHOP | | /corporate (1) | | Total | |||||
Revenues: | ||||||||||||
Rental income | $ | | $ | — | $ | — | $ | | ||||
Resident fees and services | — | — | — | — | ||||||||
Interest income from financing receivables | | — | — | | ||||||||
Interest income from mortgage loans | | — | — | | ||||||||
Interest and other income | | — | | | ||||||||
Total revenues | | — | | | ||||||||
Income from unconsolidated joint ventures | | — | — | | ||||||||
Property level expenses | ( | — | — | ( | ||||||||
NOI | | — | | | ||||||||
Expenses: | ||||||||||||
Interest Expense | ( | |||||||||||
Depreciation and Amortization | ( | |||||||||||
Impairment Loss | ( | |||||||||||
Transaction costs | ( | |||||||||||
Provision for credit losses | ( | |||||||||||
General and administrative expenses | ( | |||||||||||
Gain on sale of real estate, net | | |||||||||||
Net income | $ | | ||||||||||
| (1) | The non-segment/corporate category includes income from temporary investments and other corporate-level income not attributable to a reportable segment. |
Total assets by reportable business segment and segment-level significant expense categories are not listed as our CODM do not review such information to evaluate business performance and allocate resources.
21. Income Taxes
The Company qualifies as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended. As such, we generally are not taxed on income that is distributed to our stockholders. Under RIDEA, a REIT may lease a “qualified healthcare property” on an arm's-length basis to a taxable REIT subsidiary (“TRS”) if the property is operated on behalf of such TRS by a person who qualifies as an “eligible independent operator”. Generally, the rent received from the TRS will meet the related party exception and will be treated as “rents from real property”. A "qualified healthcare property" includes real property and any personal property that 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. Resident fees and services revenue and related operating expenses for these facilities are reported on our Consolidated Statements of Income and are subject to federal, state and local income taxes. Our provision for income taxes for the year ended December 31, 2025, 2024 and 2023 was of $
22. Subsequent Events
The following events occurred subsequent to the balance sheet date:
Real Estate. We acquired within our SHOP segment
Debt. We borrowed $
110
Table of Contents
have $
Equity. We sold
111
Table of Contents
LTC PROPERTIES, INC.
SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS
(in thousands)
Additions |
| |||||||||||||||
(Recovered) |
| |||||||||||||||
Balance at | charged to | Charged to |
| |||||||||||||
beginning of | costs and | other | Balance at end |
| ||||||||||||
Account Description | period | expenses | accounts (1) | Deductions (2) | of period |
| ||||||||||
Year ended December 31, 2023 | | | | | | | | | | | ||||||
Loan loss reserves | $ | | $ | | $ | — | $ | — | $ | | ||||||
Financing receivables loss reserve | | | — | — | | |||||||||||
Other notes receivable allowance | | | | ( | | |||||||||||
$ | | $ | | $ | | $ | ( | $ | | |||||||
Year ended December 31, 2024 | ||||||||||||||||
Loan loss reserves | $ | | $ | ( | $ | — | $ | — | $ | | ||||||
Financing receivables loss reserve | | | — | — | | |||||||||||
Other notes receivable allowance | | ( | — | — | | |||||||||||
$ | | $ | ( | $ | — | $ | — | $ | | |||||||
Year ended December 31, 2025 | ||||||||||||||||
Loan loss reserves | $ | | $ | | $ | — | $ | — | $ | | ||||||
Financing receivables loss reserve | | | — | — | | |||||||||||
Other notes receivable allowance | | | — | ( | | |||||||||||
$ | | $ | | $ | — | $ | ( | $ | | |||||||
| (1) | Represents miscellaneous adjustments. |
| (2) | Deductions represent uncollectible accounts written off. |
112
Table of Contents
LTC PROPERTIES, INC.
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
(in thousands)
Costs |
| ||||||||||||||||||||||||||||
capitalized | Gross amount at which carried at |
| |||||||||||||||||||||||||||
Initial cost to company | subsequent | December 31, 2025 |
| ||||||||||||||||||||||||||
Building and | to | Building and | Accum | Construction/ | Acquisition |
| |||||||||||||||||||||||
Encumbrances | Land | improvements | acquisition | Land | improvements | Total (1) | deprec. | renovation date | date |
| |||||||||||||||||||
Skilled Nursing Properties: | | | | | | | | | | | | | | | | | | | | | |||||||||
218 Albuquerque, NM | $ | — | $ | | $ | | $ | | $ | | $ | | $ | | $ | |
| 2023 |
| 2005 | |||||||||
219 Albuquerque, NM |
| — |
| |
| |
| |
| |
| |
| |
| |
| 1982 |
| 2005 | |||||||||
220 Albuquerque, NM |
| — |
| |
| |
| |
| |
| |
| |
| |
| 1970 |
| 2005 | |||||||||
252 Amarillo, TX |
| — |
| |
| — |
| |
| |
| |
| |
| |
| 2013 |
| 2011 | |||||||||
247 Arlington, TX |
| — |
| |
| |
| |
| |
| |
| |
| |
| 2007 |
| 2011 | |||||||||
325 Austin, TX | — | | | | | | | | 2017 | 2022 | |||||||||||||||||||
319, Blue Springs, MO | — | | | | | | | | 2020 | 2019 | |||||||||||||||||||
007 Bradenton, FL |
| — |
| |
| |
| |
| |
| |
| |
| |
| 2012 |
| 1993 | |||||||||
256 Brownwood, TX |
| — |
| |
| |
| |
| |
| |
| |
| |
| 2011 |
| 2012 | |||||||||
257 Cincinnati, OH |
| — |
| |
| |
| |
| |
| |
| |
| |
| 2009 |
| 2012 | |||||||||
125 Clovis, NM |
| — |
| |
| |
| |
| |
| |
| |
| |
| 2006 |
| 2001 | |||||||||
129 Clovis, NM |
| — |
| |
| |
| |
| |
| |
| |
| |
| 1995 |
| 2001 | |||||||||
267 Cold Spring, KY | — | | | | | | | | 2014 | 2012 | |||||||||||||||||||
246 Crowley, TX |
| — |
| |
| |
| |
| |
| |
| |
| |
| 2007 |
| 2011 | |||||||||
258 Dayton, OH |
| — |
| |
| |
| — |
| |
| |
| |
| |
| 2010 |
| 2012 | |||||||||
196 Dresden, TN |
| — |
| |
| |
| |
| |
| |
| |
| |
| 2014 |
| 2000 | |||||||||
298 Forth Worth, TX | — | | | | | | | | 1998 | 2015 | |||||||||||||||||||
326 Forth Worth, TX | — | | | | | | | | 2017 | 2022 | |||||||||||||||||||
026 Gardendale, AL | — | | | | | | | | 2011 | 1996 | |||||||||||||||||||
248 Granbury, TX |
| — |
| |
| |
| |
| |
| |
| |
| |
| 2008 |
| 2011 | |||||||||
250 Hewitt, TX |
| — |
| |
| |
| |
| |
| |
| |
| |
| 2008 |
| 2011 | |||||||||
318 Kansas City, MO | — | | | | | | | | 2018 | 2019 | |||||||||||||||||||
008 Lecanto, FL |
| — |
| |
| |
| |
| |
| |
| |
| |
| 2012 |
| 1993 | |||||||||
322 Longview, TX | — | | | — | | | | | 2014 | 2020 | |||||||||||||||||||
300 Mansfield, TX | — | | | — | | | | | 2015 | 2016 | |||||||||||||||||||
053 Mesa, AZ |
| — |
| |
| |
| |
| |
| |
| |
| |
| 1996 |
| 1996 | |||||||||
242 Mission, TX |
| — |
| |
| |
| |
| |
| |
| |
| |
| 2004 |
| 2010 | |||||||||
233 Nacogdoches, TX |
| — |
| |
| |
| |
| |
| |
| |
| |
| 1991 |
| 2010 | |||||||||
249 Nacogdoches, TX |
| — |
| |
| |
| |
| |
| |
| |
| |
| 2007 |
| 2011 | |||||||||
245 Newberry, SC | — | | | | | | | | 1995 | 2011 | |||||||||||||||||||
244 Newberry, SC | — | | | | | | | | 2001 | 2011 | |||||||||||||||||||
251 Pasadena, TX |
| — |
| |
| |
| |
| |
| |
| |
| |
| 2005 |
| 2011 | |||||||||
193 Phoenix, AZ |
| — |
| |
| |
| |
| |
| |
| |
| |
| 1985 |
| 2000 | |||||||||
094 Portland, OR |
| — |
| |
| |
| |
| |
| |
| |
| |
| 2007 |
| 1997 | |||||||||
254 Red Oak, TX |
| — |
| |
| |
| |
| |
| |
| |
| |
| 2002 |
| 2012 | |||||||||
197 Ripley, TN |
| — |
| |
| |
| |
| |
| |
| |
| |
| 2014 |
| 2000 | |||||||||
324 San Antonio, TX | — | | | | | | | | 2018 | 2022 | |||||||||||||||||||
281 Slinger, WI | — | | | — | | | | | 2014 | 2015 | |||||||||||||||||||
243 Stephenville, TX | — | | | | | | | | 2009 | 2010 | |||||||||||||||||||
192 Tucson, AZ | — | | | | | | | | 1992 | 2000 | |||||||||||||||||||
113
Table of Contents
LTC PROPERTIES, INC.
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)
(in thousands)
Costs | |||||||||||||||||||||||||||||
capitalized | Gross amount at which carried at | ||||||||||||||||||||||||||||
Initial cost to company | subsequent | December 31, 2025 | |||||||||||||||||||||||||||
Building and | to | Building and | Accum | Construction/ | Acquisition | ||||||||||||||||||||||||
Encumbrances | | Land | improvements | acquisition | Land | improvements | Total (1) | deprec. | | renovation date | | date |
| ||||||||||||||||
305 Union, KY | — | | | — | | | | | 2019 | 2016 | |||||||||||||||||||
299 Weatherford, TX | — | | | | | | | | 1996 | 2015 | |||||||||||||||||||
323 Webster, TX | — | | | | | | | | 2018 | 2022 | |||||||||||||||||||
Skilled Nursing Properties | $ | — |
| $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||||||
Seniors Housing Properties: | |||||||||||||||||||||||||||||
105 Arvada, CO | — |
| | | | | | | | 2014 | 1997 | ||||||||||||||||||
304 Athens, GA | — | | | | | | | | 2016 | 2016 | |||||||||||||||||||
320 Auburn Hills, MI | — | | | | | | | | 1995 | 2019 | |||||||||||||||||||
260 Aurora, CO | — |
| | | | | | | | 1999 | 2012 | ||||||||||||||||||
330 Centerville, OH | — | | | | | | | | 2019 | 2023 | |||||||||||||||||||
263 Chatham, NJ | — |
| | | | | | | | 2002 | 2012 | ||||||||||||||||||
307 Clovis, CA | — | | | | | | | | 2014 | 2017 | |||||||||||||||||||
308 Clovis, CA | — | | | — | | | | | 2016 | 2017 | |||||||||||||||||||
292 De Forest, WI | — | | | | | | | | 2006 | 2015 | |||||||||||||||||||
057 Dodge City, KS | — |
| | | | | | | | 2024 | 1995 | ||||||||||||||||||
083 Durant, OK | — |
| | | | | | | | 1997 | 1997 | ||||||||||||||||||
163 Ft. Collins, CO | — |
| | | | | | | | 2014 | 1999 | ||||||||||||||||||
170 Ft. Collins, CO | — |
| | | | | | | | 2014 | 1999 | ||||||||||||||||||
315 Ft. Worth, TX | — | | | | | | | | 2014 | 2018 | |||||||||||||||||||
314 Frisco, TX | — | | | | | | | | 2015 | 2018 | |||||||||||||||||||
167 Goldsboro, NC | — |
| | | | | | | | 1998 | 1999 | ||||||||||||||||||
056 Great Bend, KS | — |
| | | | | | | | 1995 | 1995 | ||||||||||||||||||
102 Greeley, CO | — |
| | | | | | | | 2024 | 1997 | ||||||||||||||||||
284 Green Bay, WI | — | | | | | | | | 2004 | 2015 | |||||||||||||||||||
286 Greenfield, WI | — | | | | | | | | 2007 | 2015 | |||||||||||||||||||
164 Greenville, NC | — |
| | | | | | | | 1998 | 1999 | ||||||||||||||||||
310 Kansas City, MO | — | | | — | | | | | 2017 | 2017 | |||||||||||||||||||
285 Kenosha, WI | — | | | | | | | | 2008 | 2015 | |||||||||||||||||||
148 Longmont, CO | — | | | | | | | | 2024 | 1998 | |||||||||||||||||||
261 Louisville, CO | — | | | | | | | | 2000 | 2012 | |||||||||||||||||||
114 Loveland, CO | | | | | | | | 1997 | 1997 | ||||||||||||||||||||
293 McHenry, IL | | | | | | | | 2005 | 2015 | ||||||||||||||||||||
114
Table of Contents
LTC PROPERTIES, INC.
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)
(in thousands)
Costs |
| ||||||||||||||||||||||||||||
capitalized | Gross amount at which carried at |
| |||||||||||||||||||||||||||
Initial cost to company | subsequent | December 31, 2025 |
| ||||||||||||||||||||||||||
Building and | to | Building and | Accum | Construction/ | Acquisition |
| |||||||||||||||||||||||
| Encumbrances | | Land | | improvements | | acquisition | | Land | | improvements | | Total (1) | | deprec. | | renovation date | | date |
| |||||||||
058 McPherson, KS | — | | | | | | | | 2024 | 1995 | |||||||||||||||||||
280 Murrells Inlet, SC | — | | | | | | | | 2016 | 2015 | |||||||||||||||||||
166 New Bern, NC | — | | | | | | |
| |
| 1998 | 1999 | |||||||||||||||||
118 Newark, OH | — | | | | | | |
| |
| 2024 | 1997 | |||||||||||||||||
165 Rocky Mount, NC | — | | | | | | |
| |
| 1998 | 1999 | |||||||||||||||||
059 Salina, KS | — | | | | | | |
| |
| 2024 | 1995 | |||||||||||||||||
084 San Antonio, TX | — | | | | | | |
| |
| 1997 | 1997 | |||||||||||||||||
092 San Antonio, TX | — | | | | | | |
| |
| 1997 | 1997 | |||||||||||||||||
288 Sheboygan, WI | — | | | | | | | | 2006 | 2015 | |||||||||||||||||||
149 Shelby, NC | — | | | | | | |
| |
| 1998 | 1998 | |||||||||||||||||
312 Spartanburg, SC | — | | | | | | | | 1999 | 2017 | |||||||||||||||||||
103 Springfield, OH | — | | | | | | |
| |
| 1997 | 1997 | |||||||||||||||||
321 Sterling Heights, MI | — | | | | | | | | 1997 | 2019 | |||||||||||||||||||
098 Tiffin, OH | — | | | | | | |
| |
| 2024 | 1997 | |||||||||||||||||
088 Troy, OH | — | | | | | | |
| |
| 1997 | 1997 | |||||||||||||||||
080 Tulsa, OK | — | | | | | | |
| |
| 1997 | 1997 | |||||||||||||||||
093 Tulsa, OK | — | | | | | | |
| |
| 1997 | 1997 | |||||||||||||||||
075 Tyler, TX | — | | | | | | |
| |
| 2023 | 1996 | |||||||||||||||||
091 Waco, TX | — | | | | | | |
| |
| 2024 | 1997 | |||||||||||||||||
108 Watauga, TX | — | | | | | | |
| |
| 1996 | 1997 | |||||||||||||||||
109 Weatherford, OK | — | | | | | | |
| |
| 1996 | 1997 | |||||||||||||||||
110 Wheelersburg, OH | — | | | | | | |
| |
| 2024 | 1997 | |||||||||||||||||
259 Wichita, KS | — | | — | | | | |
| |
| 2013 | 2012 | |||||||||||||||||
283 Wichita, KS | — | | | — | | | | | 2016 | 2015 | |||||||||||||||||||
076 Wichita Falls, TX | — | | | | | | |
| |
| 1996 | 1996 | |||||||||||||||||
264 Williamstown, NJ | — | | | — | | | |
| |
| 2000 | 2012 | |||||||||||||||||
265 Williamstown, NJ | — | | | — | | | |
| |
| 2000 | 2012 | |||||||||||||||||
Seniors Housing Properties | $ | — | $ | | $ | | $ | | $ | | $ | | $ | | $ | | |||||||||||||
115
Table of Contents
LTC PROPERTIES, INC.
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)
(in thousands)
Costs |
| ||||||||||||||||||||||||||||
capitalized | Gross amount at which carried at |
| |||||||||||||||||||||||||||
Initial cost to company | subsequent | December 31, 2025 |
| ||||||||||||||||||||||||||
Building and | to | Building and | Accum | Construction/ | Acquisition |
| |||||||||||||||||||||||
| Encumbrances | | Land | | improvements | | acquisition | | Land | | improvements | | Total (1) | | deprec. | | renovation date | | date |
| |||||||||
Seniors Housing Operating Properties (SHOP) | |||||||||||||||||||||||||||||
336 Appleton, WI | — | | | | | | | | 2020 | 2025 | |||||||||||||||||||
269 Aurora, CO | — | | | | | | | | 2014 | 2013 | |||||||||||||||||||
341Brentwood, TN | — | | | | | | | | 2022 | 2025 | |||||||||||||||||||
277 Burr Ridge, IL | — | | | | | | | | 2016 | 2014 | |||||||||||||||||||
334 Cedarburg, WI | — | | | | | | | | 2019 | 2025 | |||||||||||||||||||
332 Fort Atkinson, WI | — | | | | | | | | 2019 | 2025 | |||||||||||||||||||
296 Glenview, IL | — | | | | | | | | 2017 | 2015 | |||||||||||||||||||
340 Hobart, WI | — | | | | | | | — | 2017 | 2025 | |||||||||||||||||||
337 Hopkinsville, KY | — | | | | | | | | 2023 | 2025 | |||||||||||||||||||
255 Littleton, CO | — | | | | | | | | 2013 | 2012 | |||||||||||||||||||
268 Littleton, CO | — | | | | | | | | 2014 | 2013 | |||||||||||||||||||
339 Marietta, GA | — | | | | | | | | 2019 | 2025 | |||||||||||||||||||
342 Medford, OR | — | | | | | | | | 2020/2005 | 2018 | |||||||||||||||||||
335 Middleton, WI | — | | | | | | | | 2021 | 2025 | |||||||||||||||||||
331 Morgan Hill, CA | — | | | | | | | | 2019 | 2025 | |||||||||||||||||||
294 Murrieta, CA | — | | | | | | | | 2016 | 2015 | |||||||||||||||||||
289 Neenah, WI | — | | | | | | | | 1991 | 2015 | |||||||||||||||||||
306 Oak Lawn, IL | — | | | | | | | | 2018 | 2016 | |||||||||||||||||||
302 Overland Park, KS | — | | | | | | | | 2013 | 2016 | |||||||||||||||||||
338 Paducah, KY | — | | | | | | | | 2023 | 2025 | |||||||||||||||||||
333 Stoughton, WI | — | | | | | | | | 2019 | 2025 | |||||||||||||||||||
282 Tinley Park, IL | — | | | | | | | | 2016 | 2015 | |||||||||||||||||||
309 West Chester, OH | — | | | | | | | | 2017 | 2017 | |||||||||||||||||||
276 Westminster, CO | — | | | | | | | | 2015 | 2013 | |||||||||||||||||||
303 Wichita, KS | — | | | | | | | | 2011 | 2016 | |||||||||||||||||||
Seniors Housing Operating Properties (SHOP) | — | | | | | | | | |||||||||||||||||||||
Other: | |||||||||||||||||||||||||||||
Properties: | |||||||||||||||||||||||||||||
297 Las Vegas, NV | — | | | | | | | | 1990/1994 | 2015 | |||||||||||||||||||
Properties | — | |
| | | |
| |
| | | ||||||||||||||||||
Land: | |||||||||||||||||||||||||||||
271 Howell, MI | — | |
| — | — | |
| — |
| | — | N/A | 2013 | ||||||||||||||||
272 Milford, MI | — | |
| — | — | |
| — |
| | — | N/A | 2014 | ||||||||||||||||
275 Yale, MI | — | |
| — | — | |
| — |
| | — | N/A | 2013 | ||||||||||||||||
Land | — | |
| — | — | |
| — |
| | — | ||||||||||||||||||
Other Properties | — | |
| | | |
| |
| | | ||||||||||||||||||
$ | — | $ | | $ | | $ | | $ | | $ | | $ | | (2) | $ | | |||||||||||||
| (1) | Depreciation is computed principally by the straight-line method for financial reporting purposes which generally range of a life from |
| (2) | As of December 31, 2025, our aggregate cost for Federal income tax purposes was $ |
116
Table of Contents
LTC PROPERTIES, INC.
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)
(in thousands)
Activity for the years ended December 31, 2025, 2024 and 2023 is as follows:
For the Year Ended December 31, |
| |||||||||
2025 | 2024 | 2023 |
| |||||||
Reconciliation of real estate: | | | | | | | ||||
Carrying cost: | ||||||||||
Balance at beginning of period | $ | | $ | | $ | | ||||
Acquisitions |
| |
| |
| | ||||
Improvements |
| |
| |
| | ||||
Cost of real estate sold |
| ( |
| ( |
| ( | ||||
Impairment loss from real estate investments |
| — |
| ( |
| ( | ||||
Ending balance | $ | | $ | | $ | | ||||
Accumulated depreciation: | ||||||||||
Balance at beginning of period | $ | | $ | | $ | | ||||
Depreciation expense |
| |
| |
| | ||||
Cost of real estate sold |
| ( |
| ( |
| ( | ||||
Ending balance | $ | | $ | | $ | | ||||
117
Table of Contents
LTC PROPERTIES, INC.
SCHEDULE IV
MORTGAGE LOANS RECEIVABLE ON REAL ESTATE
(in thousands)
Principal |
| |||||||||||||||||||||||
Amount of |
| |||||||||||||||||||||||
Carrying | Loans |
| ||||||||||||||||||||||
Current | Amount of | Subject to |
| |||||||||||||||||||||
(Unaudited) | Monthly | Face | Mortgages | Delinquent |
| |||||||||||||||||||
Number of | Final | Balloon | Debt | Amount of | December 31, | Principal or |
| |||||||||||||||||
State | Properties | Units/Beds (1) | Interest Rate (2) | Maturity Date | Amount (3) | Service | Mortgages | 2025 | Interest |
| ||||||||||||||
CA | | | 2030 | $ | | $ | | $ | | $ | | $ | | |||||||||||
FL | | | 2030 | | | | | | ||||||||||||||||
IL | — | — | 2030 | | | | | | ||||||||||||||||
MI | | | 2026 | | | | | | ||||||||||||||||
MI | | | 2043 | | | | | — | ||||||||||||||||
MI |
| |
| | 2045 |
| |
| |
| |
| |
| — | |||||||||
MI | | | 2045 | | | | | | ||||||||||||||||
MI |
| |
| | 2045 |
| |
| |
| |
| |
| — | |||||||||
NC | | | 2026 | | | | | | ||||||||||||||||
| | (4) | | $ | | $ | | $ | | $ | | $ | | |||||||||||
| (1) | This number is based upon unit/bed counts shown on operating licenses provided to us by lessee/borrowers or units/beds as stipulated by lease/mortgage documents. We have found during the years that these numbers often differ, usually not materially, from units/beds in operation at any point in time. The differences are caused by such things as operators converting a patient/resident room for alternative uses, such as offices or storage, or converting a multi-patient room/unit into a single patient room/unit. We monitor our properties on a routine basis through site visits and reviews of current licenses. In an instance where such change would cause a de-licensing of beds or in our management’s opinion impact the value of the property, we would take action against the borrower to preserve the value of the property/collateral. |
| (2) | Represents current stated interest rate. Generally, the loans have principal and interest payable at varying amounts over the life to maturity with annual interest adjustments through specified fixed rate increases effective either on the first anniversary or calendar year of the loan. |
| (3) | Balloon payment is due upon maturity. |
| (4) | Includes |
Number of Loans | | Original loan amounts |
| |
$ | ||||
$ | ||||
$ | ||||
$ | ||||
$ | ||||
$ | ||||
$ | ||||
118
Table of Contents
Mortgage loans receivable activity for the years ended December 31, 2025, 2024 and 2023 is as follows:
Balance— December 31, 2022 | | $ | |
New mortgage loans |
| | |
Other additions |
| | |
Application of interest reserve | | ||
Land conveyance | — | ||
Amortization of mortgage premium |
| ( | |
Collections of principal |
| ( | |
Foreclosures |
| — | |
Loan loss reserve |
| ( | |
Other deductions |
| — | |
Balance— December 31, 2023 |
| | |
New mortgage loans |
| | |
Other additions |
| | |
Application of interest reserve | | ||
Land conveyance | — | ||
Amortization of mortgage premium |
| ( | |
Collections of principal |
| ( | |
Foreclosures |
| — | |
Loan loss reserve |
| | |
Other deductions |
| — | |
Balance— December 31, 2024 |
| | |
New mortgage loans |
| | |
Other additions |
| | |
Application of interest reserve | | ||
Land conveyance | — | ||
Amortization of mortgage premium |
| ( | |
Collections of principal |
| ( | |
Foreclosures |
| — | |
Loan loss reserve |
| ( | |
Other deductions |
| — | |
Balance— December 31, 2025 | $ | |
119
Table of Contents
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
Item 9A. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures.
Our management, with the participation of our co-Chief Executive Officers and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act as of the end of the period covered by this report. Based on such evaluation our co-Chief Executive Officers and Chief Financial Officer concluded that as of the end of the period covered by this report our disclosure controls and procedures were effective.
Internal Control Over Financial Reporting.
The Management Report on Internal Control over Financial Reporting and the Report of Independent Registered Public Accounting Firm thereon are set forth on the following pages.
There has not been any change in our internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(d) and 15d-15(d) under the Exchange Act that occurred during the fiscal quarter ended December 31, 2025 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
120
Table of Contents
Management Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) under the Exchange Act as a process designed by, or under the supervision of, the issuer’s principal executive and principal financial officers and effected by the issuer’s board of directors, management and other personnel, 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 and includes those policies and procedures that:
| ● | Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the issuer; |
| ● | 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 issuer are being made only in accordance with authorizations of management and directors of the issuer; and |
| ● | Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the issuer’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 material misstatements on a timely basis. 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.
Our management, with the participation of our co-Chief Executive Officers and Chief Financial Officer, evaluated the effectiveness of our internal control over financial reporting as of December 31, 2025. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control— Integrated Framework (2013 Framework). Based on this assessment, our management concluded that, as of the end of the fiscal year ended December 31, 2025, our internal control over financial reporting was effective.
The effectiveness of our internal control over financial reporting as of December 31, 2025, has been audited by Ernst &Young LLP, independent registered public accounting firm. Ernst & Young LLP’s report on our internal control over financial reporting appears on the following page.
121
Table of Contents
Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of LTC Properties, Inc.
Opinion on Internal Control Over Financial Reporting
We have audited LTC Properties, Inc.’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, LTC Properties, Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2025 and 2024, the related consolidated statements of income, comprehensive income, equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes and financial statement schedules listed in the Index at Item 15(a)(2) and our report dated February 24, 2026 expressed an unqualified opinion thereon.
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 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.
122
Table of Contents
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/ Ernst & Young LLP
Los Angeles, California
February 24, 2026
123
Table of Contents
Item 9B. OTHER INFORMATION
None.
Rule 10b5-1 Plan Elections
During the fiscal quarter ended December 31, 2025,
Item 9.C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTION
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 for the 2026 Annual Meeting of Stockholders (to be filed with the SEC within 120 days of our December 31, 2025 fiscal year end).
Our company’s Code of Business Conduct and Ethics applicable to the Board and our employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, and persons providing similar functions, is posted on our website at https://ir.ltcreit.com/governance-documents. If we amend or waive the Code of Business Conduct and Ethics with respect to any of our directors or executive officers, we will post the amendment or waiver on our website.
We have
Item 11. EXECUTIVE COMPENSATION
The information required by this item is incorporated by reference to our definitive proxy statement for the 2026 Annual Meeting of Stockholders (to be filed with the SEC within 120 days of our December 31, 2025 fiscal year end).
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 for the 2026 Annual Meeting of Stockholders (to be filed with the SEC within 120 days of our December 31, 2025 fiscal year end).
124
Table of Contents
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 for the 2026 Annual Meeting of Stockholders (to be filed with the SEC within 120 days of our December 31, 2025 fiscal year end).
Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The information required by this item is incorporated by reference to our definitive proxy statement for the 2026 Annual Meeting of Stockholders (to be filed with the SEC within 120 days of our December 31, 2025 fiscal year end).
PART IV
Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a)(1) Financial Statements
The following financial statements of LTC Properties, Inc. are included in Part II, Item 8 of this Annual Report on Form 10-K:
|
| ||
Report of Independent Registered Public Accounting Firm (PCAOB ID:42) | |||
Consolidated Balance Sheets as of December 31, 2025 and 2024 | |||
Consolidated Statements of Income for the years ended December 31, 2025, 2024 and 2023 | |||
Consolidated Statements of Comprehensive Income for the years ended December 31, 2025, 2024 and 2023 | |||
Consolidated Statements of Equity for the years ended December 31, 2025, 2024 and 2023 | |||
Consolidated Statements of Cash Flows for the years ended December 31, 2025, 2024 and 2023 | |||
Notes to Consolidated Financial Statements | |||
(a)(2) Financial Statement Schedules The following financial statement schedules of LTC Properties, Inc. are included in Part II, Item 8 of this Annual Report on Form 10-K: | |||
II. Valuation and Qualifying Accounts | |||
III. Real Estate and Accumulated Depreciation | |||
IV. Mortgage Loans Receivable on Real Estate |
All other schedules are omitted because they are not applicable or not present in amounts sufficient to require submission of the schedule or the required information is shown in the Consolidated Financial Statements and the Notes thereto.
(a)(3) Exhibits
Exhibit | | Description | |
|---|---|---|---|
3.1 | LTC Properties, Inc. Articles of Amendment and Restatement (incorporated by reference to Exhibit 3.1 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2025) | ||
3.2 | Bylaws of LTC Properties, Inc. (incorporated by reference to Exhibit 3.2 to the registrant’s Current Report on Form 8-K filed May 26, 2023) | ||
4.1 | Description of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934 (incorporated by reference to exhibit 4.1 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2024) | ||
10.1 | Note Purchase Agreement dated February 16, 2017 (incorporated by reference to Exhibit 10.7 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2016) |
125
Table of Contents
Exhibit | | Description | |
|---|---|---|---|
10.2 | Note Purchase Agreement dated May 17, 2022 (incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed May 19, 2022) | ||
10.3 | Note Purchase and Private Shelf Agreement between LTC Properties, Inc., and AIG Asset Management (U.S.) LLC dated August 4, 2015 (incorporated by reference to Exhibit 10.4 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015) | ||
10.4 | Amended and Restated Note Purchase and Private Shelf Agreement between LTC Properties, Inc., and AIG Asset Management (U.S.) LLC dated June 2, 2016 (incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed June 6, 2016) | ||
10.5 | Equity Distribution Agreement, dated November 13, 2024, by and among LTC Properties, Inc. and Citizens JMP Securities, LLC, BMO Capital Markets Corp., KeyBanc Capital Markets Inc., Wells Fargo Securities, LLC, Huntington Securities, Inc., and Wedbush Securities Inc., as principals, sales agents and/or (except in the case of Wedbush Securities, Inc.) forward sellers, as applicable, and Citizens JMP Securities, LLC, Bank of Montreal, KeyBanc Capital Markets Inc., Wells Fargo Bank, National Association, and Huntington Securities, Inc., as forward purchasers (incorporated by reference to Exhibit 1.1 to the registrant’s Current Report on Form 8-K filed November 13, 2024) | ||
10.6 | Amendment No. 1 to the Equity Distribution Agreement, dated as of August 5, 2025, by and among LTC Properties, Inc. and Citizens JMP Securities, LLC, KeyBanc Capital Markets Inc., Wells Fargo Securities, LLC, Huntington Securities, Inc., RBC Capital Markets, LLC, and BTIG, LLC, as principals and/or sales agents, Citizens JMP Securities, LLC, KeyBanc Capital Markets Inc., Wells Fargo Securities, LLC, Huntington Securities, Inc., RBC Capital Markets, LLC, and Nomura Securities International, Inc. (acting through BTIG, LLC as agent), as forward sellers, and Citizens JMP Securities, LLC, KeyBanc Capital Markets Inc., Wells Fargo Bank, National Association, Huntington Securities, Inc., Royal Bank of Canada, and Nomura Global Financial Products, Inc., as forward purchasers (incorporated by reference to Exhibit 1.1 to the registrant’s Current Report on Form 8 K filed August 5, 2025) | ||
10.7 | Credit Agreement dated as of July 21, 2025 (incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed July 21, 2025) | ||
10.8 | First Amendment to Credit Agreement entered into as of December 12, 2025 (incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed December 15, 2025) | ||
10.9+ | Employment Agreement of Wendy Simpson, effective as of November 12, 2014 (incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed November 12, 2014) | ||
10.10+ | Side Letter Regarding Annual Compensation and Benefits of Wendy Simpson, entered into as of February 19, 2025 (incorporated by reference to Exhibit 10.10 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2024) | ||
10.11+ | Employment Agreement of Pamela Kessler, effective as of November 12, 2014 (incorporated by reference to Exhibit 10.2 to the registrant’s Current Report on Form 8-K filed November 12, 2014) | ||
10.12+ | Employment Agreement of Clint Malin, effective as of November 12, 2014 (incorporated by reference to Exhibit 10.3 to the registrant’s Current Report on Form 8-K filed November 12, 2014) | ||
10.13+ | Employment Agreement of Caroline Chikhale, effective as of February 19, 2025 (incorporated by reference to Exhibit 10.13 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2024) | ||
10.14+ | Employment Agreement of Dave Boitano, effective as of April 21, 2025 | ||
10.15+ | Employment Agreement of Gibson Satterwhite, effective as of February 19, 2025 | ||
10.16+ | Annual Cash Bonus Incentive Plan, effective as of October 27, 2014 (incorporated by reference to Exhibit 10.9 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2014) | ||
10.17+ | Form of Performance Stock Unit Award Agreement (Absolute Total Shareholder Return) under the 2021 Equity Participation Plan (incorporated by reference to Exhibit 10.1 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2024) | ||
10.18+ | Form of Performance Stock Unit Award Agreement (Relative Total Shareholder Return) under the 2021 Equity Participation Plan (incorporated by reference to Exhibit 10.2 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2024) | ||
10.19+ | The 2021 Equity Participation Plan of LTC Properties, Inc. (incorporated by reference to Exhibit 4.3 to the registrant’s Registration Statement on Form S-8 (File No. 333-256808)) | ||
10.20 | Form of Restricted Stock Agreement under the 2021 Equity Participation Plan (incorporated by reference to Exhibit 10.17 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2023) | ||
10.21+ | Form of Indemnification Agreement dated as of July 30, 2009 between LTC Properties, Inc. and its Directors and Officers (incorporated by reference to Exhibit 10.1 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2009) | ||
19 | LTC Properties, Inc. Insider Trading Policy | ||
21 | List of Subsidiaries | ||
23.1 | Consent of Independent Registered Accounting Firm | ||
31.1 | Certification of the Co-Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | ||
31.2 | Certification of the Co-Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
126
Table of Contents
Exhibit | | Description | |
|---|---|---|---|
31.3 | Certification of the Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | ||
32 | Certifications of the Co-Chief Executive Officers and the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | ||
97 | LTC Properties, Inc. Compensation Recovery Policy (incorporated by reference to Exhibit 97 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2023) | ||
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 Document | ||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | ||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | ||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | ||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | ||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
+ | Management contract or compensatory plan or arrangement in which an executive officer or director of the registrant participates |
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.
LTC PROPERTIES, INC. | ||
Dated: February 24, 2026 | ||
By: | /s/ CAROLINE CHIKHALE CAROLINE CHIKHALE | |
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.
/s/CLINT MALIN | Co-President and Co-Chief Executive Officer | |
CLINT MALIN | (Principal Executive Officer) | February 24, 2026 |
/s/ PAMELA J. KESSLER | Co-President and Co-Chief Executive Officer | |
PAMELA J. KESSLER | (Principal Executive Officer) | February 24, 2026 |
/s/ CAROLINE CHIKHALE CAROLINE CHIKHALE | Executive Vice President, Chief Financial Officer, Treasurer and Corporate Secretary (Principal Financial Officer and Principal Accounting Officer) | February 24, 2026 |
/s/ WENDY L. SIMPSON WENDY L. SIMPSON | Executive Chairman and Director | February 24, 2026 |
/s/ BRADLEY J. PREBER | Director | February 24, 2026 |
BRADLEY J. PREBER | ||
/s/ CORNELLIA CHENG CORNELLIA CHENG | Director | February 24, 2026 |
/s/ DAVID L. GRUBER | Director | February 24, 2026 |
DAVID L. GRUBER | ||
/s/ JEFFREY C. HAWKEN | Director | February 24, 2026 |
JEFFERY C. HAWKEN | ||
/s/ TIMOTHY J. TRICHE TIMOTHY J. TRICHE | Director | February 24, 2026 |
128
FAQ
What is LTC Properties (LTC) and what types of assets does it own?
How is LTC Properties’ (LTC) investment portfolio structured by segment?
What are the key risks LTC Properties (LTC) identifies in its 10-K?
What is LTC Properties’ (LTC) new SHOP segment and why does it matter?
How concentrated is LTC Properties’ (LTC) revenue among its operators?
How does LTC Properties (LTC) maintain its REIT status and what are the implications?
What is LTC Properties’ (LTC) leverage and liquidity position as of 2025 year-end?
