National Healthcare Properties (Nasdaq: NHP) raises $531.3M and cuts quarterly loss
Rhea-AI Filing Summary
National Healthcare Properties, Inc., a healthcare-focused REIT, generated Q2 2026 revenue from tenants of 87,530 (in thousands), up 2.6% year over year. Net loss attributable to common stockholders narrowed to 8,141 (in thousands), or $0.13 per share, from 24,189 (in thousands), or $0.85 per share, driven mainly by a 75.2% reduction in impairment charges and a 19.7% decline in interest expense. Operating income reached 5,086 (in thousands) versus a 5,518 (in thousands) loss a year earlier, and first-half operating cash flow improved to 30,620 (in thousands) from a use of 13,177 (in thousands).
In the senior housing operating portfolio (SHOP), NOI rose 27.0% to 13,013 (in thousands) on higher average occupancy of 84.1% and average monthly revenue per occupied room of $6,391. Outpatient medical facilities (OMF) NOI declined 2.4% to 20,398 (in thousands), though occupancy increased to 93.1%. As of June 30, 2026, the company owned 39 SHOP communities and 130 OMFs with gross asset value of approximately $2.3 billion.
Capital structure and growth activity were significant. In April 2026 the company issued 44,275,000 Class A common shares for aggregate gross proceeds of approximately $531.3 million, using part of the proceeds to repay $186.0 million outstanding on its revolving facility and boosting total stockholders’ equity to 1,054,124 (in thousands). It agreed to sell a portfolio of 86 OMFs for approximately $528.2 million, including about 278.0 million of secured debt to be defeased or assumed, and to sell one non-core SHOP community for approximately $42.0 million. Subsequent to quarter-end, it expanded unsecured credit facilities from $550 million to $1.2 billion, prepaid Fannie Mae Secured Debt, announced multiple SHOP acquisitions totaling $64.0 million, $117.6 million and $120.3 million, and approved full redemption of its Series A and B preferred shares for approximately $153.5 million.
Positive
- $531.3 million Class A equity raise in April 2026 significantly increased stockholders’ equity to 1,054,124 (in thousands) and funded full repayment of $186.0 million outstanding under the revolving credit facility, improving leverage and liquidity.
- Q2 2026 net loss attributable to common stockholders narrowed to 8,141 (in thousands) from 24,189 (in thousands) as impairment charges fell 75.2% and interest expense declined 19.7%, indicating markedly better bottom-line performance.
Negative
- None.
Filing Explained
The completed Class A issuance expands the common equity base; conversion is scheduled for October 18, while debt refinancing is complete.
The unaudited Form 10-Q reports National Healthcare Properties’s financial position and subsequent events through the filing. The April 23 offering was completed, with 44,275,000 Class A common shares issued for approximately
Those Class A shares remain issued and outstanding as a separate class until their automatic one-for-one conversion into existing common stock on
The August 3 credit-facility recast is reported as completed: total lender commitments increased to
The June preferred tender offer was completed, leaving 3.29 million Series A shares and 2.85 million Series B shares outstanding. The later full-redemption announcement remains scheduled for
Key Figures
Revenue from tenants Q2 2026: 87,530 (in thousands)
Net loss to common stockholders Q2 2026: 8,141 (in thousands)
Net cash from operating activities H1 2026: 30,620 (in thousands)
+5 more
8 metrics
Revenue from tenants Q2 2026
87,530 (in thousands)
Three months ended June 30, 2026; up 2.6% from 85,332 (in thousands) in Q2 2025
Net loss to common stockholders Q2 2026
8,141 (in thousands)
Three months ended June 30, 2026; improved from 24,189 (in thousands) in Q2 2025
Net cash from operating activities H1 2026
30,620 (in thousands)
Six months ended June 30, 2026; versus (13,177) (in thousands) in prior-year period
Total assets
1,976,269 (in thousands)
Consolidated balance sheet as of June 30, 2026
Total liabilities
919,050 (in thousands)
Consolidated balance sheet as of June 30, 2026
Class A shares issued in April 2026
44,275,000 shares
Public offering completed April 23, 2026 under Form S-11
Gross proceeds from Class A offering
$531.3 million
Aggregate gross offering proceeds from April 2026 Class A issuance
OMF portfolio sale price
$528.2 million
Agreed sale price for 86 outpatient medical facilities in May 2026, before adjustments
Key Terms
senior housing operating portfolio, REIT Investment Diversification and Empowerment Act of 2007 ("RIDEA"), Fannie Mae Secured Debt, net operating income ("NOI"), +2 more
6 terms
senior housing operating portfolio financial
"portfolio of healthcare-related real estate focused on senior housing operating portfolio"
A senior housing operating portfolio is a group of residential properties and the ongoing businesses that provide housing, care, and daily services to older adults — think of it like a chain of hotels tailored for seniors that are actively managed to serve residents’ needs. Investors care because the portfolio’s financial value depends on occupancy, fees for housing and care, staffing and maintenance costs, and regulatory rules; these factors drive cash flow, risk, and long-term returns.
REIT Investment Diversification and Empowerment Act of 2007 ("RIDEA") regulatory
"In the SHOP segment, we invest in senior housing communities through the REIT Investment Diversification and Empowerment Act of 2007 ("RIDEA") structure"
Fannie Mae Secured Debt financial
"together with the KeyBank Secured Debt, "Fannie Mae Secured Debt""
net operating income ("NOI") financial
"The CODM evaluates performance of each segment using net operating income ("NOI")"
Net operating income (NOI) is the money a property or business generates from its regular operations after paying ordinary running costs like maintenance, utilities, and management fees, but before interest, taxes, depreciation and major one‑time repairs. For investors it’s a basic measure of how well an asset produces steady cash—think of it as the “pocket cash” a rental property earns each year, used to compare value, set prices and estimate returns.
delayed draw term loan facility financial
"a new $150 million delayed draw term loan facility being added"
A delayed draw term loan facility is a committed loan that a borrower can tap in one or more installments at specified future times after meeting agreed conditions, rather than receiving the full amount upfront. For investors it matters because it provides a ready source of cash that can change a company’s financial strength, leverage and interest costs when drawn—similar to having a reserved credit line you can use later, which affects liquidity and the risk profile of the business.
eligible independent contractor regulatory
"operated on behalf of such subsidiary by a person who qualifies as an "eligible independent contractor""
AI-generated analysis. How Rhea-AI works. Not financial advice.
FAQ
How did National Healthcare Properties (NHP) perform financially in Q2 2026?
National Healthcare Properties reported Q2 2026 revenue from tenants of 87,530 (in thousands), up 2.6% year over year. Net loss attributable to common stockholders narrowed to 8,141 (in thousands), or $0.13 per share, compared with 24,189 (in thousands), or $0.85 per share, in Q2 2025.
How did NHP’s SHOP and OMF segments perform in Q2 2026?
In Q2 2026, SHOP segment NOI increased 27.0% to 13,013 (in thousands), with average occupancy of 84.1% and monthly revenue per occupied room of $6,391. OMF segment NOI declined 2.4% to 20,398 (in thousands), while occupancy improved to 93.1%.
What major equity and debt capital actions has NHP taken in 2026?
In April 2026, NHP issued 44,275,000 Class A common shares for gross proceeds of approximately $531.3 million, repaying $186.0 million on its revolver. In August 2026, it recast its credit facilities, expanding total commitments from $550 million to $1.2 billion and extending maturities.
What acquisitions and dispositions has NHP announced around mid-2026?
By June 30, 2026, NHP acquired two SHOP communities for $98.0 million and agreed to sell 86 OMFs for about $528.2 million plus one SHOP asset for $42.0 million. Subsequent July deals include SHOP acquisitions of $64.0 million, $117.6 million and pending purchases of $120.3 million.
What is NHP’s debt profile and upcoming maturities?
As of June 30, 2026, total debt was 856,892 (in thousands), including mortgage notes, Fannie Mae Secured Debt and an unsecured term loan. Scheduled maturities include 332,304 (in thousands) in 2026, primarily Fannie Mae Secured Debt, and 236,722 (in thousands) in 2028, including the term loan.
What dividends is National Healthcare Properties (NHP) paying on common stock?
On July 1, 2026, NHP’s board declared a quarterly dividend of $0.075 per share on its common stock, including Class A shares. The dividend was paid in cash on July 30, 2026 to stockholders of record as of the close of business on July 15, 2026.
How large is NHP’s real estate portfolio as of June 30, 2026?
As of June 30, 2026, NHP owned 170 properties (including one land parcel) across 29 states, comprising 39 senior housing communities with 3,616 units and 130 outpatient medical facilities with about 3.7 million square feet, with gross asset value of approximately $2.3 billion.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended June 30, 2026
| OR | |||||
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from _________ to __________
Commission file number: 001-39153
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||||||||||||||
| (Address of principal executive offices) | (Zip Code) | |||||||
Registrant’s telephone number, including area code: (332 ) 258-8770
| Securities registered pursuant to section 12(b) of the Act: | ||||||||||||||
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
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. Yes ☒ No ☐
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). Yes ☒ No ☐
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.
| Large accelerated filer | ☐ | 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 is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No
As of July 30, 2026, the registrant had 28,629,876 shares of common stock outstanding and 44,275,000 shares of Class A common stock outstanding.
1
NATIONAL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
| Page | |||||
PART I - FINANCIAL INFORMATION | |||||
Item 1. Financial Statements. | |||||
Consolidated Balance Sheets as of June 30, 2026 and December 31, 2025 (Unaudited) | 3 | ||||
Consolidated Statements of Operations and Comprehensive Loss for the Three and Six Months Ended June 30, 2026 and 2025 (Unaudited) | 4 | ||||
Consolidated Statements of Changes in Equity for the Three and Six Months Ended June 30, 2026 and 2025 (Unaudited) | 5 | ||||
Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2026 and 2025 (Unaudited) | 9 | ||||
Notes to Consolidated Financial Statements (Unaudited) | 11 | ||||
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations | 29 | ||||
Item 3. Quantitative and Qualitative Disclosures About Market Risk | 45 | ||||
Item 4. Controls and Procedures | 45 | ||||
PART II - OTHER INFORMATION | 46 | ||||
Item 1. Legal Proceedings | 46 | ||||
Item 1A. Risk Factors | 46 | ||||
Item 2. Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities | 46 | ||||
Item 3. Defaults Upon Senior Securities | 46 | ||||
Item 4. Mine Safety Disclosures | 46 | ||||
Item 5. Other Information | 47 | ||||
Item 6. Exhibits | 47 | ||||
Signatures | 48 | ||||
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Table of Contents
Part I — FINANCIAL INFORMATION
Item 1. Financial Statements.
NATIONAL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
(Unaudited)
| June 30, 2026 | December 31, 2025 | |||||||||||||
| ASSETS | ||||||||||||||
| Real estate investments, at cost: | ||||||||||||||
| Land | $ | $ | ||||||||||||
| Buildings, fixtures and improvements | ||||||||||||||
| Acquired intangible assets | ||||||||||||||
| Construction in progress | ||||||||||||||
| Total real estate investments, at cost | ||||||||||||||
| Less: accumulated depreciation and amortization | ( | ( | ||||||||||||
| Total real estate investments, net | ||||||||||||||
| Cash and cash equivalents | ||||||||||||||
| Restricted cash | ||||||||||||||
| Derivative assets, at fair value | ||||||||||||||
| Straight-line rent receivable, net | ||||||||||||||
| Operating lease right-of-use assets | ||||||||||||||
| Prepaid expenses and other assets, net | ||||||||||||||
| Accounts receivable, net | ||||||||||||||
| Deferred costs, net | ||||||||||||||
| Total assets | $ | $ | ||||||||||||
| LIABILITIES AND EQUITY | ||||||||||||||
| Liabilities | ||||||||||||||
| Mortgage notes payable, net | $ | $ | ||||||||||||
| Fannie Mae secured debt | ||||||||||||||
| Revolving credit facility | ||||||||||||||
| Term loan, net | ||||||||||||||
| Market lease intangible liabilities, net | ||||||||||||||
| Derivative liabilities, at fair value | ||||||||||||||
| Accounts payable and accrued expenses | ||||||||||||||
| Operating lease liabilities | ||||||||||||||
| Deferred rent | ||||||||||||||
| Distributions payable | ||||||||||||||
| Total liabilities | ||||||||||||||
| Commitments and Contingencies | ||||||||||||||
| Equity | ||||||||||||||
Common stock, $ | ||||||||||||||
Class A common stock, $ | ||||||||||||||
| Additional paid-in capital | ||||||||||||||
| Accumulated other comprehensive income | ||||||||||||||
| Distributions in excess of accumulated earnings | ( | ( | ||||||||||||
| Total stockholders’ equity | ||||||||||||||
| Non-controlling interests | ||||||||||||||
| Total equity | ||||||||||||||
| Total liabilities and equity | $ | $ | ||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
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Table of Contents
NATIONAL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(In thousands, except per share data)
(Unaudited)
| Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Revenue from tenants | $ | $ | $ | $ | ||||||||||||||||||||||
| Operating expenses: | ||||||||||||||||||||||||||
| Property operating and maintenance | ||||||||||||||||||||||||||
| Impairment charges | ||||||||||||||||||||||||||
| Acquisition and transaction related | ||||||||||||||||||||||||||
| General and administrative | ||||||||||||||||||||||||||
| Depreciation and amortization | ||||||||||||||||||||||||||
| Total expenses | ||||||||||||||||||||||||||
| Operating income (loss) before gain (loss) on sale of real estate investments | ( | ( | ||||||||||||||||||||||||
| Gain (loss) on sale of real estate investments | ( | |||||||||||||||||||||||||
| Operating income (loss) | ( | |||||||||||||||||||||||||
| Other income (expense): | ||||||||||||||||||||||||||
| Interest expense | ( | ( | ( | ( | ||||||||||||||||||||||
| Interest and other income, net | ||||||||||||||||||||||||||
| Gain on extinguishment of debt | ||||||||||||||||||||||||||
| (Loss) gain on non-designated derivatives | ( | |||||||||||||||||||||||||
| Total other expenses, net | ( | ( | ( | ( | ||||||||||||||||||||||
| Loss before income taxes | ( | ( | ( | ( | ||||||||||||||||||||||
| Income tax (expense) benefit | ( | ( | ||||||||||||||||||||||||
Net loss | ( | ( | ( | ( | ||||||||||||||||||||||
| Net loss (income) attributable to non-controlling interests | ( | |||||||||||||||||||||||||
| Allocation for preferred stock | ( | ( | ( | ( | ||||||||||||||||||||||
Net loss attributable to common stockholders | ( | ( | ( | ( | ||||||||||||||||||||||
Other comprehensive loss: | ||||||||||||||||||||||||||
Unrealized loss on designated derivatives | ( | ( | ( | ( | ||||||||||||||||||||||
Comprehensive loss attributable to common stockholders | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
Weighted-average shares outstanding — Basic and Diluted (1) | ||||||||||||||||||||||||||
Net loss per share attributable to common stockholders — Basic and Diluted (1) | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
____________
(1) Potential common shares are not included in the computation of diluted earnings per share (“EPS”) when a net loss exists as the effect would be an antidilutive per share amount.
The accompanying notes are an integral part of these unaudited consolidated financial statements.
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NATIONAL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(In thousands)
(Unaudited)
| Three months ended June 30, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Series A Preferred Stock | Series B Preferred Stock | Common stock | Class A Common Stock | Additional paid-in capital | Accumulated other comprehensive income | Distributions in excess of accumulated earnings | Total stockholders’ equity | Non-controlling interests | Total equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Number of shares | Par value | Number of shares | Par value | Number of shares | Par value | Number of shares | Par value | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, March 31, 2026 | $ | $ | $ | $ | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity-based compensation | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock issuance, net of tax withholdings | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Class A common stock issuance, net of offering costs | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Distributions declared on Series A Preferred Stock, $ | — | — | — | — | — | — | — | — | — | — | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Distributions declared on Series B Preferred Stock, $ | — | — | — | — | — | — | — | — | — | — | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Repurchase of Series A Preferred Stock | ( | ( | — | — | — | — | — | — | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Repurchase of Series B Preferred Stock | — | — | ( | ( | — | — | — | — | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Distributions to non-controlling interest holders | — | — | — | — | — | — | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Acquisition of non-controlling interest | — | — | — | — | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Rebalancing of ownership percentage | — | — | — | — | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Unrealized loss on designated derivatives | — | — | — | — | — | — | — | — | — | ( | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | — | — | — | — | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2026 | $ | $ | $ | $ | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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NATIONAL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(In thousands)
(Unaudited)
| Three months ended June 30, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Series A Preferred Stock | Series B Preferred Stock | Common stock | Class A Common Stock | Additional paid-in capital | Accumulated other comprehensive income | Distributions in excess of accumulated earnings | Total stockholders’ equity | Non-controlling interests | Total equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Number of shares | Par value | Number of shares | Par value | Number of shares | Par value | Number of shares | Par value | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, March 31, 2025 | $ | $ | $ | $ | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity-based compensation | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Distributions declared on Series A Preferred Stock, $ | — | — | — | — | — | — | — | — | — | — | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Distributions declared on Series B Preferred Stock, $ | — | — | — | — | — | — | — | — | — | — | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Distributions to non-controlling interest holders | — | — | — | — | — | — | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Repurchase of Series A Preferred Stock | ( | — | — | — | — | — | — | — | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Repurchase of Series B Preferred Stock | — | — | ( | ( | — | — | — | — | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | — | — | — | — | — | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Unrealized gain on designated derivatives | — | — | — | — | — | — | — | — | — | ( | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Rebalancing of ownership percentage | — | — | — | — | — | — | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2025 | $ | $ | $ | $ | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
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NATIONAL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(In thousands)
(Unaudited)
| Six months ended June 30, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Series A Preferred Stock | Series B Preferred Stock | Common stock | Class A Common Stock | Additional paid-in capital | Accumulated other comprehensive income | Distributions in excess of accumulated earnings | Total stockholders’ equity | Non-controlling interests | Total equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Number of shares | Par value | Number of shares | Par value | Number of shares | Par value | Number of shares | Par value | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2025 | $ | $ | $ | $ | $ | $ | $ | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity-based compensation | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock issuance, net of tax withholdings | — | — | — | — | — | — | — | ( | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Class A common stock issuance, net of offering costs | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Distributions declared on Series A Preferred Stock, $ | — | — | — | — | — | — | — | — | — | — | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Distributions declared on Series B Preferred Stock, $ | — | — | — | — | — | — | — | — | — | — | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Repurchase of Series A Preferred Stock | ( | ( | — | — | — | — | — | — | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Repurchase of Series B Preferred Stock | — | — | ( | ( | — | — | — | — | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Distributions to non-controlling interest holders | — | — | — | — | — | — | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Acquisition of non-controlling interest | — | — | — | — | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Rebalancing of ownership percentage | — | — | — | — | — | — | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Unrealized loss on designated derivatives | — | — | — | — | — | — | — | — | — | ( | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | — | — | — | — | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2026 | $ | $ | $ | $ | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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NATIONAL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(In thousands)
(Unaudited)
| Six months ended June 30, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Series A Preferred Stock | Series B Preferred Stock | Common stock | Class A Common Stock | Additional paid-in capital | Accumulated other comprehensive income | Distributions in excess of accumulated earnings | Total stockholders’ equity | Non-controlling interests | Total equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Number of shares | Par value | Number of shares | Par value | Number of shares | Par value | Number of shares | Par value | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2024 | $ | $ | $ | $ | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity-based compensation | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Distributions declared on Series A Preferred Stock, $ | — | — | — | — | — | — | — | — | — | — | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Distributions declared on Series B Preferred Stock, $ | — | — | — | — | — | — | — | — | — | — | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Distributions to non-controlling interest holders | — | — | — | — | — | — | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Repurchase of Series A Preferred Stock | ( | — | — | — | — | — | — | — | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Repurchase of Series B Preferred Stock | — | — | ( | ( | — | — | — | — | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | — | — | — | — | — | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Unrealized loss on designated derivatives | — | — | — | — | — | — | — | — | — | ( | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Rebalancing of ownership percentage | — | — | — | — | — | — | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2025 | $ | $ | $ | $ | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
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NATIONAL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
| Six months ended June 30, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Cash flows from operating activities: | ||||||||||||||
| Net loss | $ | ( | $ | ( | ||||||||||
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||||||||
| Depreciation and amortization | ||||||||||||||
| Amortization of deferred financing costs and mortgage discounts (premiums) | ||||||||||||||
| Accretion of terminated swap | ( | |||||||||||||
| (Accretion) amortization of market lease and other intangibles, net | ( | |||||||||||||
| Equity-based compensation amortization expense | ||||||||||||||
| Gain on sale of real estate investments | ( | |||||||||||||
| Cash received from non-designated derivative instruments | ||||||||||||||
| Gain on non-designated derivative instruments | ( | ( | ||||||||||||
| Impairment charges | ||||||||||||||
| Gain on extinguishment of debt | ( | |||||||||||||
| Deferred tax valuation allowance | ( | |||||||||||||
| Changes in assets and liabilities: | ||||||||||||||
| Straight-line rent receivable, net | ( | ( | ||||||||||||
| Prepaid expenses and other assets, net | ( | |||||||||||||
| Accounts receivable, net | ||||||||||||||
| Accounts payable, accrued expenses and other liabilities | ( | |||||||||||||
| Deferred leasing costs | ( | ( | ||||||||||||
| Deferred rent | ( | |||||||||||||
| Net cash provided by (used in) operating activities | ( | |||||||||||||
| Cash flows from investing activities: | ||||||||||||||
| Acquisitions of real estate | ( | ( | ||||||||||||
| Capital expenditures | ( | ( | ||||||||||||
| Investments in non-designated interest rate caps, net | ( | |||||||||||||
| Proceeds from sales of real estate, net | ||||||||||||||
| Net cash (used in) provided by investing activities | ( | |||||||||||||
| Cash flows from financing activities: | ||||||||||||||
| Repayments under revolving credit facility and term loan | ( | |||||||||||||
| Repayments of Fannie Mae secured debt | ( | ( | ||||||||||||
| Repayments of mortgage notes payable | ( | ( | ||||||||||||
| Payments of deferred financing costs | ( | ( | ||||||||||||
| Taxes paid for net settlement of equity-based awards | ( | |||||||||||||
| Payment of offering costs | ( | |||||||||||||
| Common stock issuance, net | ||||||||||||||
| Repurchase of Preferred Stock | ( | ( | ||||||||||||
| Dividends paid on Series A Preferred Stock | ( | ( | ||||||||||||
| Dividends paid on Series B Preferred Stock | ( | ( | ||||||||||||
| Distributions to non-controlling interest holders | ( | ( | ||||||||||||
| Purchase of non-controlling interest | ( | |||||||||||||
| Net cash provided by (used in) financing activities | ( | |||||||||||||
| Net change in cash, cash equivalents and restricted cash | ||||||||||||||
| Cash, cash equivalents and restricted cash, beginning of period | ||||||||||||||
| Cash, cash equivalents and restricted cash, end of period | $ | $ | ||||||||||||
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NATIONAL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
| Six months ended June 30, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Supplemental disclosures of cash flow information: | ||||||||||||||
| Cash paid for interest | $ | ( | $ | ( | ||||||||||
Cash paid for taxes, net (1) | ( | ( | ||||||||||||
| Non-cash investing and financing activities: | ||||||||||||||
Preferred stock dividend declared | $ | $ | ||||||||||||
| Mortgage notes payable repaid with proceeds from real estate sales | ( | |||||||||||||
| Net change in accrued capital expenditures for the period | ||||||||||||||
| Assets acquired and liabilities assumed from acquisitions | ||||||||||||||
| Real estate investments | ||||||||||||||
| Prepaid expenses and other assets, net | ||||||||||||||
| Accounts payable and accrued expenses | ( | |||||||||||||
__________
(1) For the six months ended June 30, 2026, relates to cash paid for income taxes, net of refunds. For the six months ended June 30, 2025, relates to cash paid for income and franchise taxes.
The accompanying notes are an integral part of these unaudited consolidated financial statements.
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NATIONAL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2026
(Unaudited)
Note 1 — Organization
National Healthcare Properties, Inc. (including, as required by context, National Healthcare Properties Operating Partnership, L.P. (the “OP”) and its subsidiaries, the “Company”) is a real estate investment trust (“REIT”) for U.S. federal income tax purposes. The Company acquires, owns and manages a diversified portfolio of healthcare-related real estate focused on senior housing operating portfolio (“SHOP”) communities and outpatient medical facilities (“OMF”). Substantially all of the Company’s business is conducted through the OP and its wholly-owned subsidiaries, which include certain taxable REIT subsidiaries (“TRSs”).
As of June 30, 2026, the Company owned 170 properties (including one land parcel) located in 29 states, consisting of 39 senior housing communities, with 3,616 units, and 130 outpatient medical facilities, with approximately 3.7 million square feet of gross leasable area.
The Company operates two three eligible independent contractors operating 39 senior housing communities. In the OMF segment, the Company owns, manages and leases single and multi-tenant OMFs where, in addition to base rent, tenants are required to pay their pro rata share of property operating expenses and certain capital expenditures, which may be subject to expense exclusions and floors. As of June 30, 2026, the Company managed all OMFs directly, without the use of third party service providers.
On April 23, 2026, pursuant to a registration statement on Form S-11 (File No. 333-294895) filed with the United States Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended, the Company completed its public offering (the “Offering”) and issued an aggregate of 44,275,000 shares of Class A common stock, $0.01 par value per share (“Class A common stock”), for aggregate gross offering proceeds of approximately $531.3 million. In connection with the Offering, the Class A common stock became listed on The Nasdaq Global Market (“Nasdaq”) under the symbol “NHP” and began trading on April 22, 2026. Each share of Class A common stock will automatically convert into one share of the Company’s existing common stock, $0.01 par value per share, on October 18, 2026 and all shares of common stock will subsequently be listed and freely tradeable on Nasdaq under the symbol “NHP.”
Note 2 — Summary of Significant Accounting Policies
The accompanying unaudited consolidated financial statements of the Company included herein were prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to this Quarterly Report on Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The information furnished includes all adjustments and accruals of a normal recurring nature, which, in the opinion of management, are necessary for a fair statement of results for the interim periods. The results of operations for the three and six months ended June 30, 2026 and 2025 are not necessarily indicative of the results for the entire year or any subsequent interim periods.
These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2025, which are included in the Company’s Annual Report on Form 10-K filed with the SEC on February 20, 2026. Except for those required by new accounting pronouncements discussed below, there have been no significant changes to the Company’s significant accounting policies during the six months ended June 30, 2026.
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NATIONAL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2026
(Unaudited)
Principles of Consolidation and Basis of Presentation
The accompanying consolidated financial statements include the accounts of the Company, the OP and its subsidiaries. All intercompany accounts and transactions are eliminated in consolidation. In determining whether the Company has a controlling financial interest in a joint venture and the requirement to consolidate the accounts of that entity, management considers factors such as ownership interest, authority to make decisions and contractual and substantive participating rights of the other partners or members as well as whether the entity is a variable interest entity (“VIE”) for which the Company is the primary beneficiary. The Company has determined the OP is a VIE of which the Company is the primary beneficiary. Substantially all of the Company’s assets and liabilities are held by the OP.
Use of Estimates
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Management makes significant estimates regarding revenue recognition, purchase price allocations to record investments in real estate, impairments, fair value measurements and income taxes, as applicable.
Recently Issued Accounting Pronouncements
Adopted
In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2023-09, Improvements to Income Tax Disclosures (“ASU 2023-09”), which requires public entities on an annual basis to (i) disclose specific categories in the rate reconciliation and (ii) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than five percent of the amount computed by multiplying pretax income or loss by the applicable statutory income tax rate). During the year ended December 31, 2025, the Company adopted ASU 2023-09 prospectively and disclosed a new rate reconciliation table and an income tax payment schedule. The adoption did not have an impact on the Company’s consolidated financial position, results of operations or cash flows.
Not yet adopted
In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”). ASU 2024-03 requires public business entities (PBEs) to provide disaggregated disclosure in tabular format in the notes to financial statements of specific expenses, including but not limited to: (i) employee compensation, (ii) depreciation, and (iii) intangible asset amortization. In January 2025, the FASB issued ASU No. 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date, to clarify that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted. The Company is evaluating the impact of the adoption of these ASUs on its consolidated financial statements.
Reclassifications
Certain 2025 amounts have been reclassified from general and administrative to property operating and maintenance on the Company’s consolidated statements of operations and comprehensive loss to align with the current period presentation. This reclassification did not affect the total assets, total liabilities, stockholder’s equity, net loss or earnings per share in any of the periods reported. Certain 2025 amounts have been reclassified on the Company’s consolidated statements of cash flows to align with current period presentation.
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NATIONAL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2026
(Unaudited)
Note 3 — Real Estate Investments, Net
Property Acquisitions
During the six months ended June 30, 2026, the Company acquired two SHOP communities for an aggregate purchase price of $98.0 million under the RIDEA structure, with such communities managed by an existing operating partner of the Company.
Concentration Risk
As of June 30, 2026, the Company had one tenant (including for this purpose, all affiliates of such tenant) in the OMF segment whose annualized rental income on a straight-line basis represented 10 % or greater of total annualized rental income for the segment on a straight-line basis. As of June 30, 2025, the Company had no tenants in the OMF segment whose annualized rental income on a straight-line basis represented 10% or greater of total annualized rental income for the segment on a straight-line basis.
Annualized rental income for the Company consists of: (i) for the OMF segment, annualized June 30, 2026 rental income on a straight-line basis for the leases in place as of June 30, 2026, which includes tenant concessions such as free rent, as applicable, and (ii) for the SHOP segment, annualized gross revenue for the quarter ended June 30, 2026.
The following table lists the states where the Company had concentrations of properties where annualized rental income on a straight-line basis represented 10% or more of total annualized rental income on a straight-line basis for all properties as of June 30, 2026 and 2025.
As of June 30, | ||||||||||||||
| State | 2026 | 2025 | ||||||||||||
| Florida | ||||||||||||||
| Pennsylvania | ||||||||||||||
| Iowa | ||||||||||||||
| Georgia | ||||||||||||||
Intangible Assets and Liabilities
The following table discloses amounts recognized within the consolidated statements of operations and comprehensive loss related to amortization of in-place lease intangible and other intangible assets, amortization and accretion of above- and below-market lease intangible assets and liabilities, net and the amortization and accretion of above- and below-market ground leases, net, for the periods presented (dollars in thousands):
| Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
Amortization of in-place lease and other intangible assets (1) | $ | $ | $ | $ | ||||||||||||||||||||||
Accretion of above- and below-market lease intangibles, net (2) | ( | ( | $ | ( | $ | ( | ||||||||||||||||||||
Amortization of above- and below-market ground leases, net (3) | $ | $ | ||||||||||||||||||||||||
________
(1)Reflected within depreciation and amortization expense.
(2)Reflected within revenue from tenants.
(3)Reflected within property operating and maintenance expense.
Dispositions
During the six months ended June 30, 2026, the Company did not dispose of any properties.
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NATIONAL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2026
(Unaudited)
In May 2026, the Company entered into a definitive purchase and sale agreement with an unaffiliated third party to sell a portfolio of 86 OMFs for approximately $528.2 million (before transaction expenses, property operating prorations and other adjustments), including approximately $278.0 million of secured debt to be defeased or assumed by the purchaser. Closing of the sale is subject to the approval by the lenders of loan assumption and other customary closing conditions as specified in the purchase and sale agreement. In addition, the Company continues to explore strategic opportunities related to the remainder of the OMF portfolio.
In May 2026, the Company entered into a definitive purchase and sale agreement to sell one non-core SHOP community in California for approximately $42.0 million.
Assets Held-for-Sale
There were no
Impairment Charges
The following table presents impairment charges by segment recorded during the three and six months ended June 30, 2026 and 2025 (dollars in thousands):
| Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
OMF | $ | $ | $ | $ | ||||||||||||||||||||||
SHOP | ||||||||||||||||||||||||||
Total impairment charges(1) | $ | $ | $ | $ | ||||||||||||||||||||||
(1)During the six months ended June 30, 2026, impairment is attributed to one held-for-use SHOP community. The community was impaired to its contractual sales price as determined by the purchase and sale agreement executed after the reporting date. Amounts presented for the six months ended June 30, 2025 relate to two held-for-use SHOP communities, two held-for-use OMF and one SHOP community held for sale during this period. These properties were impaired to their contractual sales price as determined by their purchase and sale agreements and were subsequently sold during 2025.
Note 4 — Leases
Lessor Accounting
The following table summarizes the Company’s lease income (dollars in thousands). Rental income from the OMF operating leases consists of fixed and variable lease payments. The variable payments primarily represent reimbursements of various property-level operating and maintenance expenses that the Company pays on behalf of its tenants. Substantially all of the resident fees and services earned from the SHOP segment represent fixed income from operating leases and have not been included in the table below (dollars in thousands):
| Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
Fixed income from operating leases | $ | $ | $ | $ | ||||||||||||||||||||||
Variable income from operating leases | ||||||||||||||||||||||||||
During the three and six months ended June 30, 2026, the Company recorded reductions in revenue of $0.4 million and $1.0 million, respectively, related to uncollectible accounts. During the three and six months ended June 30, 2025, the Company recorded reductions in revenue of $0.4 million and $0.6 million, respectively, related to uncollectable accounts.
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NATIONAL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2026
(Unaudited)
Note 5 — Mortgage Notes Payable and Other Debt
The following table reflects the Company’s mortgage notes payable and other debt as of June 30, 2026 and December 31, 2025 (dollars in thousands):
Encumbered properties at June 30, 2026 | Outstanding balance as of | Effective interest rate as of | ||||||||||||||||||||||||||||||||||||||||||
| June 30, 2026 | December 31, 2025 | June 30, 2026 | December 31, 2025 | Interest rate | Maturity | |||||||||||||||||||||||||||||||||||||||
| Secured Term Loan 1 due 2028 | $ | $ | % | % | Fixed | May 2028 | ||||||||||||||||||||||||||||||||||||||
| Secured Term Loan 3 due 2031 | % | % | Fixed | Dec 2031 | ||||||||||||||||||||||||||||||||||||||||
| Secured Term Loan 4 due 2033 | % | % | Fixed | Jun 2033 | ||||||||||||||||||||||||||||||||||||||||
| Single Property Mortgage 1 due 2047 | % | % | Fixed | May 2047 | ||||||||||||||||||||||||||||||||||||||||
| Single Property Mortgage 2 due 2049 | % | % | Fixed | May 2049 | ||||||||||||||||||||||||||||||||||||||||
| Single Property Mortgage 3 due 2049 | % | % | Fixed | May 2049 | ||||||||||||||||||||||||||||||||||||||||
| Multi Property Mortgage 1 due 2034 | % | % | Fixed | Mar 2034 | ||||||||||||||||||||||||||||||||||||||||
Gross mortgage notes payable (1) | % | % | ||||||||||||||||||||||||||||||||||||||||||
| Deferred financing costs, net | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
| Mortgage premiums and discounts, net | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
| Mortgage notes payable, net | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
| Fannie Mae Secured Debt 1 due 2026 | $ | $ | % | % | Variable | Nov 2026 | ||||||||||||||||||||||||||||||||||||||
| Fannie Mae Secured Debt 2 due 2026 | % | % | Variable | Nov 2026 | ||||||||||||||||||||||||||||||||||||||||
Total Fannie Mae Secured Debt (1)(2) | $ | $ | % | % | ||||||||||||||||||||||||||||||||||||||||
Term Loan due 2028 (3) | $ | $ | % | % | Variable | Dec 2028 | ||||||||||||||||||||||||||||||||||||||
| Deferred financing costs, net | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
| Unsecured term loan, net | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
| Unsecured revolving credit facility | $ | $ | % | % | Variable | Dec 2028 | ||||||||||||||||||||||||||||||||||||||
_____________
(1)For total gross mortgage notes payable and total Fannie Mae Secured Debt as of June 30, 2026 and December 31, 2025, effective interest rate is calculated on a weighted average basis.
(2)The Fannie Mae Secured Debt had interest rate caps that limit one-month SOFR (as defined below) at 3.50 %.
(3)The Term Loan due 2028 has interest rate swaps that convert variable interest rates to fixed interest rates.
Mortgage Notes Payable
As of June 30, 2026, the Company had pledged $684.3 million in total real estate investments, at cost, as collateral for its $375.0 million of gross mortgage notes payable. The collateralized real estate investments are not available to satisfy other debts and obligations unless first satisfying the mortgage notes payable secured by these properties. The Company makes payments of principal and interest, or interest only, depending upon the specific requirements of each mortgage note, on a monthly basis.
Some of the Company’s mortgage note agreements require compliance with certain property-level financial covenants, including debt service coverage ratios. Notably, the Secured Term Loan 4 due 2033 loan agreement requires the OP to comply with certain covenants, including, maintaining combined cash and cash equivalents totaling at least $12.5 million at all times.
Fannie Mae Secured Debt
On October 31, 2016, the Company, through wholly-owned subsidiaries of the OP, entered into a master secured debt agreement with KeyBank (the “KeyBank Secured Debt”) and a master secured debt agreement with Capital One Multifamily
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NATIONAL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2026
(Unaudited)
Finance LLC, an affiliate of Capital One (the “Capital One Secured Debt” and, together with the KeyBank Secured Debt, “Fannie Mae Secured Debt”). Advances made under these agreements were assigned by Capital One and KeyBank to Fannie Mae at closing for inclusion in Fannie Mae’s Multifamily MBS program. Borrowings under the Fannie Mae Secured Debt bore monthly interest equal to the sum of the current SOFR for one-month denominated deposits and a spread of 2.41 % and 2.46 % for the Capital One Secured Debt and the KeyBank Secured Debt, respectively. The Fannie Mae Secured Debt was scheduled to mature on November 1, 2026. The Company fully prepaid the Fannie Mae Secured Debt on August 3, 2026.
Through June 30, 2026, the Company had provided cash deposits totaling $15.4 million to Fannie Mae because the debt service coverage ratios of the underlying properties of each facility were below the minimum required amounts per the debt agreements. These deposits were recorded as restricted cash on the Company’s consolidated balance sheets and were pledged as additional collateral for the Fannie Mae Secured Debt. These deposits were fully refunded upon the prepayment of the Fannie Mae Secured Debt on August 3, 2026 in connection with the recast of the Credit Facilities (as defined below) on August 3, 2026.
As of June 30, 2026, the Company had pledged $597.6 million in total real estate investments, at cost as collateral under its Fannie Mae Secured Debt. All of the real estate assets pledged to secure borrowings under the Fannie Mae Secured Debt were released upon the prepayment of the Fannie Mae Secured Debt on August 3, 2026.
Unsecured Credit Facilities
On December 11, 2025, the Company, as guarantor, the OP, as borrower, and certain indirect subsidiaries of the Company entered into a credit agreement (the “2025 Credit Agreement”) with Wells Fargo Bank, National Association, as administrative agent, and certain lenders party thereto. The 2025 Credit Agreement provided for (i) a $400 million senior unsecured revolving credit facility (the “Revolving Facility”) and (ii) a $150 million senior unsecured term loan facility (the “Term Loan” and, together with the Revolving Facility, the “Credit Facilities”). The Credit Facilities were recast on August 3, 2026. See Note 15 — Subsequent Events for further information.
The Credit Facilities had a maturity date of December 11, 2028. The interest rates applicable to loans under the Credit Facilities were, at the OP’s option, equal to either a base rate plus a margin ranging from 0.55 % to 1.10 % per annum or Daily Simple SOFR or Term SOFR plus a margin ranging from 1.55 % to 2.10 % per annum, in each case based on the Company’s consolidated leverage ratio. The Credit Facilities were guaranteed, jointly and severally, by the Company and certain indirect subsidiaries of the Company. As of June 30, 2026, the Company had $870.4 million in total real estate investments, at cost as the borrowing base under the Credit Facilities.
On April 25, 2026, the Company used a portion of the net proceeds from the Offering to repay in full the $186.0 million of then outstanding indebtedness under its Revolving Facility.
Debt Maturities
As of June 30, 2026, the Company’s indebtedness had the following maturities (dollars in thousands):
| Mortgage notes payable | Fannie Mae Secured Debt | Term Loan | Revolving Facility | Total | ||||||||||||||||||||||||||||
| 2026 | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
| 2027 | ||||||||||||||||||||||||||||||||
| 2028 | ||||||||||||||||||||||||||||||||
| 2029 | ||||||||||||||||||||||||||||||||
| 2030 | ||||||||||||||||||||||||||||||||
| Thereafter | ||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
The Company’s existing principal demands for cash are to fund acquisitions, capital expenditures, the payment of its operating and administrative expenses, debt service obligations (including principal repayment) and distributions to holders of its Series A Preferred Stock, Series B Preferred Stock and common stock. The Company closely monitors its current and anticipated liquidity position relative to its current and anticipated demands for cash and believes that it has sufficient current liquidity to meet its financial obligations for at least the next 12 months. The Company expects to fund its future short-term operating
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2026
(Unaudited)
liquidity requirements, including acquisitions and distributions to holders of its Series A Preferred Stock, Series B Preferred Stock and common stock, through a combination of current cash on hand, net cash provided by its operating activities and property dispositions, future takedowns under the Revolving Facility, issuance of equity securities and potential new financings utilizing certain of its unencumbered properties.
Note 6 — Derivatives and Hedging Activities
Risk Management Objective of Using Derivatives
The Company may use derivative financial instruments, including interest rate swaps, caps, collars, options, floors and other interest rate derivative contracts, to hedge all or a portion of the interest rate risk associated with its borrowings.
The principal objective of such arrangements is to minimize the risks and/or costs associated with the Company’s operating and financial structure as well as to hedge specific anticipated transactions. Additionally, in using interest rate derivatives, the Company aims to add stability to interest expense and to manage its exposure to interest rate movements. The Company does not intend to utilize derivatives for speculative purposes or purposes other than interest rate risk management. The use of derivative financial instruments carries certain risks, including the risk that the counterparties to these contractual arrangements are not able to perform under the agreements. To mitigate this risk, the Company only enters into derivative financial instruments with counterparties with high credit ratings and with major financial institutions with which the Company, and its affiliates, may also have other financial relationships. The Company does not anticipate that any of its counterparties will fail to meet their obligations.
Cash Flow Hedges of Interest Rate Risk
Interest rate swaps designated as cash flow hedges involve the receipt of variable rate amounts from a counterparty in exchange for the Company making fixed rate payments over the life of the agreements without exchange of the underlying notional amount. These derivatives are used to hedge the variable cash flows associated with variable rate debt.
The changes in the fair value of derivatives designated and that qualify as cash flow hedges are recorded in accumulated other comprehensive loss and are subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings.
Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable rate debt. The Company estimates that during the 12 month period from July 1, 2026 through June 30, 2027, $3.7 million of unrealized gain will be reclassified from accumulated other comprehensive income into earnings as a decrease to interest expense.
The following table summarizes the Company’s interest rate swaps, designated as cash flow hedges for interest rate risk (dollars in thousands):
| Number of instruments | Notional amount | Index | Pay rate | Effective date | Maturity date | Fair value | ||||||||||||||||||||||||||||||||||||||
| As of June 30, 2026 | ||||||||||||||||||||||||||||||||||||||||||||
Interest rate “pay-fixed” swap (1) | $ | USD-SOFR with -5 Day Lookback | 12/11/2025 | 12/11/2028 | $ | |||||||||||||||||||||||||||||||||||||||
| As of December 31, 2025 | ||||||||||||||||||||||||||||||||||||||||||||
Interest rate “pay-fixed” swaps (2) | $ | USD-SOFR with -5 Day Lookback | 12/11/2025 | 12/11/2028 | $ | ( | ||||||||||||||||||||||||||||||||||||||
__________
(1)Recorded at fair value in “Derivative assets, at fair value” on the consolidated balance sheets.
(2)Recorded at fair value in “Derivative liabilities, at fair value” on the consolidated balance sheets.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2026
(Unaudited)
The table below details the location in the financial statements of the gain (loss) recognized on interest rate derivatives designated as cash flow hedges for the periods presented (dollars in thousands):
| Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Gain (loss) recognized in accumulated other comprehensive income on interest rate derivatives | $ | $ | $ | $ | ( | |||||||||||||||||||||
| Gain reclassified from accumulated other comprehensive income into income as interest expense | $ | $ | $ | $ | ||||||||||||||||||||||
| Total interest expense presented in the consolidated statements of operations and comprehensive loss | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
Non-Designated Derivatives
The Company had the following interest rate derivatives that were not designated as hedges in qualifying hedging relationships as of June 30, 2026 and December 31, 2025 (dollars in thousands):
| June 30, 2026 | December 31, 2025 | |||||||||||||||||||||||||||||||||||||
| Number of instruments | Notional amount | Fair value | Number of instruments | Notional amount | Fair value | |||||||||||||||||||||||||||||||||
Interest rate caps (1) | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
__________
(1)Recorded at fair value in “Derivative assets, at fair value” on the consolidated balance sheets. Fair and notional values may include contracts acquired but not yet effective as of the dates presented. All of the Company’s interest rate cap agreements limit one-month Secured Overnight Financing Rate (“SOFR”) to 3.50 % with terms through November 2026. The actual one-month SOFR rates during the six months ended June 30, 2026 exceeded the strike price rate of 3.50 % and the Company received payments under these agreements. While the Company does not apply hedge accounting for these interest rate caps, they are economically hedging the Fannie Mae Secured Debt. Changes in the fair market value of these non-designated derivatives, as well as any cash received, are presented within (Loss) gain on non-designated derivatives in the Company’s consolidated statements of operations and comprehensive loss.
Credit-risk-related Contingent Features
Note 7 — Stockholders’ Equity
Common Stock
As of June 30, 2026 and December 31, 2025, the Company had 28.6 28.4
Class A Common Stock
On April 23, 2026, the Company issued an aggregate of 44.3 million shares of Class A common stock in connection with the Offering. Each share of Class A common stock will automatically convert into one share of the Company’s existing common stock on October 18, 2026 and all shares of common stock will subsequently be listed and freely tradeable on Nasdaq under the symbol “NHP.”
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2026
(Unaudited)
Preferred Stock
The Company is authorized to issue up to 50.0 million shares of preferred stock of which 4.1 million shares and 2.9 million shares are authorized and classified as 7.375 % Series A Cumulative Redeemable Perpetual Preferred Stock, $0.01 par value per share (the “Series A Shares”) and 7.125 % Series B Cumulative Redeemable Perpetual Preferred Stock, $0.01 par value per share (the “Series B Shares”), respectively.
In June 2026, the Company completed a tender offer for its Series A Shares and Series B Shares for $22.50 per share in cash. 556,454 Series A Shares and 566,229 Series B Shares were properly tendered for an aggregate purchase price of approximately $25.3 million, excluding fees and expenses relating to the tender offer. The tendered shares were retired, which reduced the authorized share counts. Upon completion of the tender offer, 3.29 million Series A Shares and 2.85 million Series B Shares remained outstanding as of June 30, 2026.
Note 8 — Accumulated Other Comprehensive Income
The following table illustrates the changes in accumulated other comprehensive income as of and for the period presented (dollars in thousand):
| Unrealized Gain on Designated Derivative | ||||||||
Balance, December 31, 2025 | $ | |||||||
| Gain recognized in accumulated other comprehensive income on interest rate derivatives | ||||||||
| Gain reclassified from accumulated other comprehensive income | ( | |||||||
Balance, June 30, 2026 | $ | |||||||
Note 9 — Fair Value
GAAP establishes a hierarchy of valuation techniques based on the observability of inputs used in measuring assets and liabilities at fair value. GAAP establishes market-based or observable inputs as the preferred source of values, followed by valuation models using management assumptions in the absence of market inputs. The three levels of the hierarchy are described below:
Level 1 — Quoted prices in active markets for identical assets and liabilities that the reporting entity has the ability to access at the measurement date.
Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset and liability or can be corroborated with observable market data for substantially the entire contractual term of the asset or liability.
Level 3 — Unobservable inputs that reflect the entity’s own assumptions that market participants would use in the pricing of the asset or liability and are consequently not based on market activity, but rather through particular valuation techniques.
The determination of where an asset or liability falls in the hierarchy requires significant judgment and considers factors specific to the asset or liability. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company evaluates its hierarchy disclosures each quarter and depending on various factors, it is possible that an asset or liability may be classified differently from quarter to quarter. However, the Company expects that changes in classifications between levels will be rare.
Financial Instruments Measured at Fair Value on a Recurring Basis
Derivative Instruments
Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with those derivatives utilize Level 3 inputs, such as estimates of
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2026
(Unaudited)
current credit spreads to evaluate the likelihood of default by the Company and its counterparties. However, as of June 30, 2026, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of the Company’s derivatives. As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy.
The valuation of derivative instruments is determined using a discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, as well as observable market-based inputs, including interest rate curves and implied volatilities. In addition, credit valuation adjustments are incorporated into the fair values to account for the Company’s potential nonperformance risk and the performance risk of the counterparties.
The following table presents information about the Company’s financial instruments measured at fair value as of June 30, 2026 and December 31, 2025, aggregated by the level in the fair value hierarchy within which those instruments fall (dollars in thousands).
| Quoted Prices in Active Markets Level 1 | Significant Other Observable Inputs Level 2 | Significant Unobservable Inputs Level 3 | Total | |||||||||||||||||||||||
| June 30, 2026 | ||||||||||||||||||||||||||
| Derivative assets, at fair value (non-designated) | $ | $ | $ | $ | ||||||||||||||||||||||
| Derivative assets, at fair value (designated) | ||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||||||||||||
| December 31, 2025 | ||||||||||||||||||||||||||
| Derivative assets, at fair value (non-designated) | $ | $ | $ | $ | ||||||||||||||||||||||
| Derivative liabilities, at fair value (designated) | ( | ( | ||||||||||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||||||||||||
A review of the fair value hierarchy classification is conducted on a quarterly basis. Changes in the type of inputs may result in a reclassification for certain assets. There has been no transfer into or out of Level 3 financial instruments during the periods presented.
Real Estate Investments Measured at Fair Value on a Non-Recurring Basis
Real Estate Investments - Held-for-Use
The Company may impair real estate investments held-for-use, resulting in a fair value measurement arrived at using either Level 2 or Level 3 inputs. During the six months ended June 30, 2026, one held-for-use SHOP community was impaired to its contractual sales price as determined by the purchase and sale agreement executed after the reporting date.
Real Estate Investments - Held-for-Sale
Real estate investments held-for-sale are carried at fair value less cost costs to sell and are generally measured using Level 2 inputs.
Financial Instruments Not Measured at Fair Value
The Company is required to disclose the fair value of financial instruments for which it is practicable to estimate that value. The fair values of short-term financial instruments such as cash and cash equivalents, restricted cash, straight-line rent receivable, net, prepaid expenses and other assets, deferred costs, net, accounts payable and accrued expenses, deferred rent and distributions payable approximate their carrying value on the consolidated balance sheets due to their short-term nature.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2026
(Unaudited)
The fair values of the Company’s remaining financial instruments that are not reported at fair value on the consolidated balance sheets are as follows (dollars in thousands):
| June 30, 2026 | December 31, 2025 | |||||||||||||||||||||||||||||||
| Level | Carrying amount | Fair value | Carrying amount | Fair value | ||||||||||||||||||||||||||||
| Gross mortgage notes payable and mortgage premium and discounts | 3 | $ | $ | $ | $ | |||||||||||||||||||||||||||
| Fannie Mae Secured Debt | 3 | |||||||||||||||||||||||||||||||
| Unsecured term loan | 3 | |||||||||||||||||||||||||||||||
| Unsecured revolving credit facility | 3 | |||||||||||||||||||||||||||||||
| Total debt | 3 | $ | $ | $ | $ | |||||||||||||||||||||||||||
The fair value of the Company’s indebtedness above is estimated using a discounted cash flow analysis, based on the Company’s experience with similar types of borrowing arrangements, excluding the value of associated derivatives.
Note 10 — Equity-Based Compensation
On April 30, 2026, the Company awarded certain of its directors, executive officers and employees under its 2025 Omnibus Incentive Compensation Plan (the “Equity Incentive Plan”) an aggregate of (i) 995,997 restricted shares of common stock and long term-incentive units of the OP (“LTIP units”) as listing equity awards in connection with the Offering and (ii) 153,123 restricted shares of common stock and LTIP units and 136,457 performance-based restricted stock units (“RSUs”) as part of the Company’s annual long-term incentive equity grants for its employees. On May 15, 2026, the Company further awarded 39,719 LTIP units to its directors for their annual equity retainers.
The listing equity awards are time-based awards that vest on a graded schedule over a period of four years . The fair value of time-based restricted shares is based on the closing market price per share of the Company’s common stock on the date of grant.
The fair value of LTIP units was based on the closing market price per share of the Company’s common stock on the date of the grant and further adjusted by applying an additional discount as the LTIP units were not initially economically equivalent to restricted shares of common stock.
The annual long-term incentive equity grants and annual board equity retainers consist of time-based awards that vest on a graded schedule over a period of one year or three years and performance-based RSUs that vest, if at all, at the end of a three-year performance period subject to continued employment through the performance period and the achievement of performance goals set forth in the related award agreements. The number of performance-based RSUs that ultimately vest can be either 0 % or vary from 50 % to 200 % of target depending on the level of achievement of the performance criteria. The fair value of performance-based RSUs is determined based on the closing market price per share of the Company’s common stock on the date of grant and management’s expectation of the amount of RSUs to be earned and vested at the end of the performance period.
The total grant date fair value of time-based restricted shares, time-based LTIP units and performance-based RSUs granted during the three and six months ended June 30, 2026 was $16.2
Total equity-based compensation expense was $1.6 million and $2.2 million for the three and six months ended June 30, 2026, respectively, which was recognized in general and administrative expense in the Company’s consolidated statements of operations and comprehensive loss. As of June 30, 2026, there was $19.4 million of future expenses related to unvested equity-based compensation arrangements granted under the Equity Incentive Plan, which is expected to be recognized over a weighted average period of 3.1 years.
Equity-based compensation was first granted to the executive officers and certain other employees in May 2025. Total equity-based compensation expense was $0.6
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2026
(Unaudited)
Note 11 — Non-controlling Interests
Non-controlling interests on the Company’s consolidated balance sheets is comprised of the following (dollars in thousands):
| Balance as of | ||||||||||||||
| June 30, 2026 | December 31, 2025 | |||||||||||||
| Series A Preferred Units held by third parties | $ | $ | ||||||||||||
| Common OP Units held by third parties | ||||||||||||||
| Total non-controlling interests in the OP | $ | $ | ||||||||||||
Net income attributable to non-controlling interests on the Company’s consolidated statements of operations and comprehensive loss are comprised of the following (dollars in thousands):
| Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Income attributable to Series A Preferred Units held by third parties | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
| Loss attributable to Common OP Units held by third parties | ||||||||||||||||||||||||||
| Net income attributable to non-controlling interests in the OP | ||||||||||||||||||||||||||
| Income attributable to non-controlling interests in property-owning subsidiaries | ( | ( | ||||||||||||||||||||||||
| Net loss (income) attributable to non-controlling interests | $ | $ | $ | $ | ( | |||||||||||||||||||||
Non-controlling Interests in the OP
Series A Preferred Units
During the three and six months ended June 30, 2026, Series A Preferred Unit holders were paid $46 thousand and $92 thousand in cash distributions, respectively. During the three and six months ended June 30, 2025, Series A Preferred Unit holders were paid $46 thousand and $93 thousand in cash distributions, respectively.
In June 2026, the Company repurchased 50,000 of the 100,000 then outstanding Series A Preferred Units at $22.50 per unit. A holder of Series A Preferred Units has the right to receive cash distributions equivalent to the cash distributions, if any, on the Company’s Series A Shares.
Common OP Units, Class B Units and LTIP Units
As of June 30, 2026, the Company had 234,026 partnership units outstanding in the OP designated as “Common OP Units” and 971,147 LTIP Units outstanding. A holder of Common OP Units has the right to receive cash distributions equivalent to the cash distributions, if any, on the Company’s common stock. After holding the Common OP Units for a period of one year, a holder of Common OP Units has the right to redeem Common OP Units for, at the option of the OP, the corresponding number of shares of the Company’s common stock. Vested LTIP units can be converted to Common OP Units on a one -for-one basis once an equity transaction has occurred that results in the accretion of the member’s capital account to the economic equivalent of a Common Unit. All LTIP units, whether vested or not, receive the same per unit cash distributions as Common OP Units.
Prior to the Offering, the Company had 405,998 Common OP Units and 359,250 Class B Units outstanding. In connection with the Offering, the Class B Units were converted into Common OP Units pursuant to the Class B Unit’s terms and the number of Common OP Units was then consolidated into 234,026 Common OP Units to give effect to adjustments for the impact of the stock dividends from October to 2020 to January 2024 and the September 2024 one-for-four common stock reserve split, so the Common Units are redeemable for the Company’s common stock on a one-for-one basis.
During the three and six months ended June 30, 2026 and 2025, no
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2026
(Unaudited)
Note 12 — Net Loss Per Share
The following is a summary of the net loss per basic and diluted share computation for the periods presented (amounts in thousands, except per share data):
| Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Numerator: | ||||||||||||||||||||||||||
| Net loss attributable to common stockholders | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
| Denominator: | ||||||||||||||||||||||||||
| Denominator for basic net loss attributable to common stockholders per share — weighted-average shares | ||||||||||||||||||||||||||
| Effect of dilutive securities: | ||||||||||||||||||||||||||
Unvested restricted shares, LTIP Units and RSUs (1) | ||||||||||||||||||||||||||
Common OP Units (2)(3) | ||||||||||||||||||||||||||
| Denominator for diluted net loss attributable to common stockholders per share — weighted-average shares | ||||||||||||||||||||||||||
Basic and diluted net loss attributable to common stockholders per share (4) | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
(1)Weighted average number of unvested restricted shares, LTIP Units and RSUs outstanding for the periods presented. There were 1,413,900 and 219,339 unvested restricted shares, LTIP Units and RSUs outstanding as of June 30, 2026 and 2025, respectively.
(2)Weighted average number of Common OP Units presented as shares outstanding for the periods presented, at the current redemption rate. There were 765,248
(3)As of April 30, 2026, the Company’s Class B Units have been converted to Common OP Units. The comparable prior period numbers have been restated to maintain comparability.
(4)Potential common stock equivalents are disregarded in diluted per share calculations when a net loss exists as the effect would be antidilutive. In this case, the diluted per share denominator is equal to the denominator for basic net loss per share.
Note 13 — Segment Reporting
As of June 30, 2026, the Company had two
The SHOP segment consists of direct investments in senior housing properties, primarily providing assisted living, independent living and memory care services, which are operated through engaging independent third-party operators. The OMF segment primarily consists of facilities leased to healthcare-related tenants under long-term leases, which may require such tenants to pay a pro rata share of property-related expenses as well as senior housing properties, hospitals, inpatient rehabilitation facilities and skilled nursing facilities under long-term leases, under which tenants are generally responsible to directly pay property-related expenses.
The Company’s chief operating decision maker (“CODM”) is its Chief Executive Officer. The CODM evaluates performance of the combined properties in each reportable business segment using net operating income (“NOI”), which is defined as total revenues from tenants, less property operating and maintenance expense. The CODM uses NOI to assess and compare property level performance and to make decisions concerning the operation of the properties. The Company believes that NOI is useful as a performance measure because, when compared across periods, NOI reflects the impact on operations from trends in occupancy
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2026
(Unaudited)
rates, rental rates, operating expenses and acquisition activity on an unleveraged basis, providing perspective not immediately apparent from consolidated income (loss) before income taxes.
NOI excludes certain components from consolidated income (loss) before income taxes in order to provide results that are more closely related to a property’s results of operations. For example, interest expense is not necessarily linked to the operating performance of a real estate asset and is often incurred at the corporate level. In addition, depreciation and amortization, because of historical cost accounting and useful life estimates, may distort operating performance at the property level. NOI presented by the Company may not be comparable to NOI reported by other REITs that define NOI differently.
Total assets by reportable business segment is not disclosed as the CODM does not review such information to evaluate business performance and allocate resources.
Reconciliation to Consolidated Financial Information
Summary information by reportable business segment is presented below (dollars in thousands):
| Three months ended June 30, 2026 | ||||||||||||||||||||
| SHOP | OMF | Total | ||||||||||||||||||
| Revenue from tenants | $ | $ | $ | |||||||||||||||||
| Less: | ||||||||||||||||||||
Compensation related expenses (1) | ||||||||||||||||||||
Other segment expenses (2) | ||||||||||||||||||||
| Property operating and maintenance | ||||||||||||||||||||
| NOI | $ | $ | ||||||||||||||||||
| Impairment charges | ( | |||||||||||||||||||
| Acquisition and transaction related | ( | |||||||||||||||||||
| General and administrative | ( | |||||||||||||||||||
| Depreciation and amortization | ( | |||||||||||||||||||
| Interest expense | ( | |||||||||||||||||||
| Interest and other income, net | ||||||||||||||||||||
| Loss on non-designated derivatives | ( | |||||||||||||||||||
| Loss before income taxes | ( | |||||||||||||||||||
| Income tax expense | ( | |||||||||||||||||||
| Net loss | ( | |||||||||||||||||||
| Net income attributable to non-controlling interests | ||||||||||||||||||||
| Allocation for preferred stock | ( | |||||||||||||||||||
| Net loss attributable to common stockholders | $ | ( | ||||||||||||||||||
__________
(1) For the SHOP segment, compensation related expenses include costs incurred for salaries, benefits and other labor related costs.
(2) For the SHOP segment, other segment expenses include costs incurred for supplies, management fees and overhead. The expense details for the OMF segment provided to the CODM primarily consist of reimbursable expenses which are largely recoverable from tenants. As such, the CODM focuses on monitoring NOI to evaluate performance as a significant portion of the property-level operating expenses is recovered from tenants.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2026
(Unaudited)
| Three months ended June 30, 2025 | ||||||||||||||||||||
| SHOP | OMF | Total | ||||||||||||||||||
| Revenue from tenants | $ | $ | $ | |||||||||||||||||
| Less: | ||||||||||||||||||||
Compensation related expenses (1) | ||||||||||||||||||||
Other segment expenses (2) | ||||||||||||||||||||
Property operating and maintenance (3) | ||||||||||||||||||||
| NOI | $ | $ | ||||||||||||||||||
| Impairment charges | ( | |||||||||||||||||||
| Acquisition and transaction related | ( | |||||||||||||||||||
General and administrative (3) | ( | |||||||||||||||||||
| Depreciation and amortization | ( | |||||||||||||||||||
| Gain on sale of real estate investments | ||||||||||||||||||||
| Interest expense | ( | |||||||||||||||||||
| Interest and other income, net | ||||||||||||||||||||
| Gain on non-designated derivatives | ||||||||||||||||||||
| Gain on extinguishment of debt | ||||||||||||||||||||
| Loss before income taxes | ( | |||||||||||||||||||
| Income tax benefit | ||||||||||||||||||||
| Net loss | ( | |||||||||||||||||||
| Net income attributable to non-controlling interests | ||||||||||||||||||||
| Allocation for preferred stock | ( | |||||||||||||||||||
| Net loss attributable to common stockholders | $ | ( | ||||||||||||||||||
__________
(1) For the SHOP segment, compensation related expenses include costs incurred for salaries, benefits and other labor related costs.
(2) For the SHOP segment, other segment expenses include costs incurred for supplies, management fees and overhead. The expense details for the OMF segment provided to the CODM primarily consist of reimbursable expenses which are largely recoverable from tenants. As such, the CODM focuses on monitoring NOI to evaluate performance as a significant portion of the property-level operating expenses is recovered from tenants.
(3) Certain 2025 amounts have been reclassified from general and administrative to property operating and maintenance to align with the current period presentation.
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NATIONAL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2026
(Unaudited)
| Six months ended June 30, 2026 | ||||||||||||||||||||
| SHOP | OMF | Total | ||||||||||||||||||
| Revenue from tenants | $ | $ | $ | |||||||||||||||||
| Less: | ||||||||||||||||||||
Compensation related expenses (1) | ||||||||||||||||||||
Other segment expenses (2) | ||||||||||||||||||||
| Property operating and maintenance | ||||||||||||||||||||
| NOI | $ | $ | ||||||||||||||||||
| Impairment charges | ( | |||||||||||||||||||
| Acquisition and transaction related | ( | |||||||||||||||||||
| General and administrative | ( | |||||||||||||||||||
| Depreciation and amortization | ( | |||||||||||||||||||
| Loss on sale of real estate investments | ( | |||||||||||||||||||
| Interest expense | ( | |||||||||||||||||||
| Interest and other income, net | ||||||||||||||||||||
| Gain on non-designated derivatives | ||||||||||||||||||||
| Loss before income taxes | ( | |||||||||||||||||||
| Income tax expense | ( | |||||||||||||||||||
| Net loss | ( | |||||||||||||||||||
| Net income attributable to non-controlling interests | ||||||||||||||||||||
| Allocation for preferred stock | ( | |||||||||||||||||||
| Net loss attributable to common stockholders | $ | ( | ||||||||||||||||||
__________
(1) For the SHOP segment, compensation related expenses include costs incurred for salaries, benefits and other labor related costs.
(2) For the SHOP segment, other segment expenses include costs incurred for supplies, management fees and overhead. The expense details for the OMF segment provided to the CODM primarily consist of reimbursable expenses which are largely recoverable from tenants. As such, the CODM focuses on monitoring NOI to evaluate performance as a significant portion of the property-level operating expenses is recovered from tenants.
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NATIONAL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2026
(Unaudited)
| Six months ended June 30, 2025 | ||||||||||||||||||||
| SHOP | OMF | Total | ||||||||||||||||||
| Revenue from tenants | $ | $ | $ | |||||||||||||||||
| Less: | ||||||||||||||||||||
Compensation related expenses (1) | ||||||||||||||||||||
Other segment expenses (2) | ||||||||||||||||||||
Property operating and maintenance (3) | ||||||||||||||||||||
| NOI | $ | $ | ||||||||||||||||||
| Impairment charges | ( | |||||||||||||||||||
| Acquisition and transaction related | ( | |||||||||||||||||||
General and administrative (3) | ( | |||||||||||||||||||
| Depreciation and amortization | ( | |||||||||||||||||||
| Gain on sale of real estate investments | ||||||||||||||||||||
| Interest expense | ( | |||||||||||||||||||
| Interest and other income, net | ||||||||||||||||||||
| Gain on non-designated derivatives | ||||||||||||||||||||
| Gain on extinguishment of debt | ||||||||||||||||||||
| Loss before income taxes | ( | |||||||||||||||||||
| Income tax benefit | ||||||||||||||||||||
| Net loss | ( | |||||||||||||||||||
| Net income attributable to non-controlling interests | ( | |||||||||||||||||||
| Allocation for preferred stock | ( | |||||||||||||||||||
| Net loss attributable to common stockholders | $ | ( | ||||||||||||||||||
__________
(1) For the SHOP segment, compensation related expenses include costs incurred for salaries, benefits and other labor related costs.
(2) For the SHOP segment, other segment expenses include costs incurred for supplies, management fees and overhead. The expense details for the OMF segment provided to the CODM primarily consist of reimbursable expenses which are largely recoverable from tenants. As such, the CODM focuses on monitoring NOI to evaluate performance as a significant portion of the property-level operating expenses is recovered from tenants.
Note 14 — Commitments and Contingencies
Litigation and Regulatory Matters
In the ordinary course of business, the Company may become subject to litigation, claims and regulatory matters. As of June 30, 2026, there are no material legal or regulatory proceedings pending or known to be contemplated against the Company or its properties.
Environmental Matters
In connection with the ownership and operation of real estate, the Company may potentially be liable for costs and damages related to environmental matters. As of June 30, 2026, the Company had not been notified by any governmental authority of any non-compliance, liability or other claim, and is not aware of any other environmental condition that it believes will have a material adverse effect on the results of operations.
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NATIONAL HEALTHCARE PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2026
(Unaudited)
Note 15 — Subsequent Events
The Company has evaluated subsequent events through the filing of this Quarterly Report on Form 10-Q and determined that there have not been any events that have occurred that would require adjustments to disclosures in the consolidated financial statements except for those listed below:
On July 1, 2026, the Company’s Board of Directors declared a quarterly dividend of $0.075 per share of its common stock (including its Class A Common Stock). The dividend was paid in cash on July 30, 2026 to holders of record as of the close of business on July 15, 2026.
In July 2026, the Company, through a joint venture with Discovery Senior Living, acquired 13 SHOP communities for an aggregate purchase price of $64.0 million. The Company owns approximately 98.5 % of the joint venture and, as part of this transaction, the Company holds a right of first refusal and purchase option on an additional 13 senior living communities managed by Discovery Senior Living.
In July 2026, the Company acquired an additional four SHOP communities for an aggregate purchase price of $117.6 million to be managed by existing operating partners.
As of the date of this filing, the Company had entered into definitive agreements to acquire an additional five SHOP communities for approximately $120.3 million. However, the Company can provide no assurances that the acquisitions of these properties will be consummated on the terms and timing the Company expects, or at all.
On August 3, 2026, the Company recast the Credit Facilities by entering into an amended and restated credit agreement (the “2026 Credit Agreement”), which provides for, among other things, (i) increasing total lender commitments from $550 million to $1.2 billion, with the Revolving Facility increasing from $400 million to $750 million, the Term Loan increasing from $150 million to $300 million and a new $150 million delayed draw term loan facility being added, (ii) extending the maturity of the Revolving Facility and the Term Loan (including the delayed draw term loan) to August 2030 and August 2029, respectively, and (iii) reducing the applicable pricing for interest rates based on the Company's corporate leverage ratio. In connection with entering into the 2026 Credit Agreement, the Company also terminated the Fannie Mae Secured Debt and paid off the outstanding amount thereunder and entered into interest rate swaps with an aggregate notional amount of $300.0 million to hedge the variable interest rate exposure on the Term Loan through its initial maturity date.
On August 5, 2026, the Company announced the full redemption of its Series A Shares and Series B Shares for $25.00 153.5 million in total (excluding accrued dividends and transaction costs), with the redemption dates being September 4, 2026 and October 6, 2026, respectively.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis should be read in conjunction with the accompanying consolidated financial statements of National Healthcare Properties, Inc. and the notes thereto. As used herein, the terms the “Company,” “we,” “our” and “us” refer to National Healthcare Properties, Inc., a Maryland corporation, including, as required by context, National Healthcare Properties Operating Partnership, LP (our “OP”), a Delaware limited partnership, and its subsidiaries. Capitalized terms used herein, but not otherwise defined, have the meaning ascribed to those terms in “Part I — Financial Information” included in the notes to the consolidated financial statements and contained herein.
Forward-Looking Statements
This Quarterly Report on Form 10-Q contains “forward-looking statements,” as that term is defined under the Private Securities Litigation Reform Act of 1995 (“PSLRA”), Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements include statements regarding the intent, belief or current expectations of the Company and members of our management team, as well as the assumptions on which such statements are based, and generally are identified by the use of words such as “may,” “will,” “seeks,” “anticipates,” “believes,” “estimates,” “expects,” “plans,”, “projects,” “potential,” “predicts,” “intends,” “would,” “could,” “should” or similar expressions, although not all forward-looking statements contain these identifying words. Actual results may differ materially from those contemplated by such forward-looking statements. We believe these forward-looking statements are reasonable; however, you should not place undue reliance on any forward-looking statements, which are based on current expectations. Further, forward-looking statements speak only as of the date they are made, and we undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time, unless required by law. We intend that all forward-looking statements be subject to the safe-harbor provisions of the PSLRA.
These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of our control, which could cause actual results to differ materially from the results contemplated by the forward-looking statements. These risks and uncertainties include the risks associated with changes in economic cycles generally and in the real estate and healthcare markets specifically; the success of our growth strategy, including our ability to successfully identify, complete and integrate new acquisitions; our ability to complete acquisitions or dispositions on the terms and timing we expect, or at all; changes to inflation and interest rates; competition in the real estate and healthcare markets; our ability to retain certain key personnel; legislative and regulatory changes in the healthcare and real estate industries; reductions or changes in reimbursement from third-party payors, including Medicare and Medicaid; discovery of previously undetected environmentally hazardous conditions; our ability to pay down, refinance, restructure or extend our indebtedness as it becomes due; system failures, cyber incidents or deficiencies in our cybersecurity systems; the availability of capital on favorable terms, or at all; our ability to remain qualified as a REIT and our OP’s ability to remain qualified as a partnership or a disregarded entity for U.S. federal income tax purposes. Some of the additional risks and uncertainties, although not all risks and uncertainties, that could cause our actual results to differ materially from those presented in our forward-looking statements are set forth in the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2025, in Part II — Other Information, Item IA — Risk Factors of this Quarterly Report on Form 10-Q and as described from time to time in our other filings with the Securities and Exchange Commission.
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Overview
National Healthcare Properties, Inc. is a real estate investment trust (“REIT”) for U.S. federal income tax purposes. We acquire, own and manage a diversified portfolio of healthcare-related real estate focused on senior housing operating portfolio (“SHOP”) communities and outpatient medical facilities (“OMF”). Substantially all of our business is conducted through the OP and our wholly-owned subsidiaries, which include certain taxable REIT subsidiaries (“TRSs”).
As of June 30, 2026, we owned 170 properties (including one land parcel) located in 29 states, consisting of 39 senior housing communities, with 3,616 units, and 130 outpatient medical facilities, with approximately 3.7 million square feet of gross leasable area.
We operate two operating and reportable business segments: SHOP and OMF. In the SHOP segment, we invest in senior housing communities through the REIT Investment Diversification and Empowerment Act of 2007 (“RIDEA”) structure. Under RIDEA, a REIT may lease “qualified healthcare properties” on an arm’s length basis to a TRS if the property is operated on behalf of such subsidiary by a person who qualifies as an “eligible independent contractor.” As of June 30, 2026, we had three eligible independent contractors operating 39 senior housing communities. In the OMF segment, we own, manage and lease single and multi-tenant OMFs where, in addition to base rent, tenants are required to pay their pro rata share of property operating expenses and certain capital expenditures, which may be subject to expense exclusions and floors. As of June 30, 2026, we managed all OMFs directly, without the use of third party service providers.
On April 23, 2026, pursuant to a registration statement on Form S-11 (File No. 333-294895) filed with the United States Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended, we completed our public offering (the “Offering”) and issued an aggregate of 44,275,000 shares of Class A common stock, $0.01 par value per share (“Class A common stock”) (which included shares issued pursuant to the underwriters’ exercise of their overallotment option on April 28, 2026) for aggregate gross offering proceeds of approximately $531.3 million. In connection with the Offering, our Class A common stock became listed on The Nasdaq Global Market under the symbol “NHP” and began trading on April 22, 2026. Each share of Class A common stock will automatically convert into one share of our existing common stock, $0.01 par value per share, on October 18, 2026 and all shares of common stock will subsequently be listed and freely tradeable on The Nasdaq Global Market under the symbol “NHP.”
Properties
The following table presents certain additional information about the properties we owned as of June 30, 2026 (dollars in thousands):
| Number of properties | Gross leasable area (sq. ft.) | Available units (1) | Percentage leased or occupied (1) | WALTR (2) (in years) | Gross asset value (3) | |||||||||||||||||||||||||||||||||
SHOP segment (4) | 39 | — | 3,616 | 84.1% | N/A | $ | 1,105,192 | |||||||||||||||||||||||||||||||
| OMF segment | 130 | 3,695,769 | — | 93.1% | 5.3 | 1,173,091 | ||||||||||||||||||||||||||||||||
| Total Portfolio | 169 | 3,695,769 | 3,616 | $ | 2,278,283 | |||||||||||||||||||||||||||||||||
________
(1)Available units and percentage occupied for the SHOP segment represent the average for the three months ended June 30, 2026. Percentage leased for the OMF segment is presented as of the end of the period shown. For the SHOP segment, weighted by unit count. For the OMF segment, weighted by gross leasable area.
(2)WALTR means the average lease term remaining, weighted based on occupied square feet as of June 30, 2026.
(3)Gross asset value represents total real estate investments, at cost ($2.3 billion total as of June 30, 2026) net of gross market lease intangible liabilities ($19.6 million total as of June 30, 2026). Cumulative impairment charges are reflected within gross asset value.
(4)For the SHOP segment, excludes one parcel of land with a total gross asset value of $0.6 million.
N/A — Not applicable
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Significant Accounting Estimates and Critical Accounting Policies
For a discussion about our significant accounting estimates and critical accounting policies, see the “Critical Accounting Policies and Estimates” section of our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on February 20, 2026. Except for those required by new accounting pronouncements discussed below, there have been no material changes from these significant accounting estimates and critical accounting policies.
Recently Issued Accounting Pronouncements
See Note 2 — Summary of Significant Accounting Policies, Recently Issued Accounting Pronouncements of our consolidated financial statements in this Quarterly Report on Form 10-Q for further discussion.
Results of Operations
We, through our chief operating decision maker (“CODM”), evaluate the performance of the combined properties in each segment based on total revenues from tenants, less property operating costs. As such, this excludes all other items of expense and income included in the financial statements in calculating net loss (each item discussed separately in “Other Results of Operations” below). We use net operating income (“NOI”) to assess and compare property level performance and to make decisions concerning the operation of our properties. We believe that NOI is useful as a performance measure because, when compared across periods, NOI reflects the impact on operations from trends in occupancy rates, rental rates, operating expenses and acquisition activity on an unleveraged basis, providing perspective not immediately apparent from consolidated loss before income taxes. NOI presented by us may not be comparable to NOI reported by other REITs that define NOI differently. We believe that in order to facilitate a clear understanding of our operating results, NOI should be examined in conjunction with net income (loss) and net income (loss) attributable to common stockholders (each as determined in accordance with GAAP) as presented in our consolidated financial statements. NOI should not be considered an alternative to net income (loss) and net income (loss) attributable to common stockholders (each as determined in accordance with GAAP) as an indication of our performance or to cash flows as a measure of our liquidity. A reconciliation of NOI to net income (loss) attributable to common stockholders can be found in Note 13 — Segment Reporting to our consolidated financial statements.
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Comparison of the Three Months Ended June 30, 2026 and 2025
The following table shows our results of operations for the three months ended June 30, 2026 and 2025 and the period to period change by line item of the consolidated statements of operations (dollars in thousands) (1):
| Three months ended June 30, | Increase (Decrease) | |||||||||||||||||||||||||
| 2026 | 2025 | $ | % | |||||||||||||||||||||||
| Revenue from tenants | $ | 87,530 | $ | 85,332 | $ | 2,198 | 2.6 | % | ||||||||||||||||||
| Operating expenses: | ||||||||||||||||||||||||||
| Property operating and maintenance | 54,119 | 54,179 | (60) | (0.1) | ||||||||||||||||||||||
| Impairment charges | 3,780 | 15,212 | (11,432) | (75.2) | ||||||||||||||||||||||
| Acquisition and transaction related | 130 | 497 | (367) | (73.8) | ||||||||||||||||||||||
| General and administrative | 6,604 | 5,075 | 1,529 | 30.1 | ||||||||||||||||||||||
| Depreciation and amortization | 17,811 | 18,539 | (728) | (3.9) | ||||||||||||||||||||||
| Total expenses | 82,444 | 93,502 | (11,058) | (11.8) | ||||||||||||||||||||||
| Operating income (loss) before gain on sale of real estate investments | 5,086 | (8,170) | 13,256 | nm | ||||||||||||||||||||||
| Gain on sale of real estate investments | — | 2,652 | (2,652) | (100.0) | ||||||||||||||||||||||
| Operating income (loss) | 5,086 | (5,518) | 10,604 | nm | ||||||||||||||||||||||
| Other income (expense): | ||||||||||||||||||||||||||
| Interest expense | (12,723) | (15,836) | (3,113) | (19.7) | ||||||||||||||||||||||
| Interest and other income, net | 2,345 | 231 | 2,114 | nm | ||||||||||||||||||||||
| Gain on extinguishment of debt | — | 257 | (257) | (100.0) | ||||||||||||||||||||||
| (Loss) gain on non-designated derivatives | (47) | 32 | (79) | nm | ||||||||||||||||||||||
| Total other expenses, net | (10,425) | (15,316) | (4,891) | (31.9) | ||||||||||||||||||||||
| Loss before income taxes | (5,339) | (20,834) | (15,495) | (74.4) | ||||||||||||||||||||||
| Income tax expense | (47) | — | (47) | nm | ||||||||||||||||||||||
Net loss | (5,386) | (20,834) | 15,448 | 74.1 | ||||||||||||||||||||||
| Net loss attributable to non-controlling interests | 30 | 31 | (1) | 3.2 | ||||||||||||||||||||||
| Allocation for preferred stock | (2,785) | (3,386) | 601 | (17.7) | ||||||||||||||||||||||
Net loss attributable to common stockholders | $ | (8,141) | $ | (24,189) | $ | 16,048 | 66.3 | |||||||||||||||||||
__________
* nm - not meaningful
(1)Certain 2025 amounts have been reclassified from general and administrative to property operating and maintenance to align with the current period presentation.
Segment Results — Senior Housing Operating Portfolio
The following table presents the results of operations and the period-to-period change within our SHOP segment for the three months ended June 30, 2026 and 2025 (dollars in thousands):
| Three months ended June 30, | Increase (Decrease) to NOI | |||||||||||||||||||||||||
| 2026 | 2025 | $ | % | |||||||||||||||||||||||
| Revenue from tenants | $ | 58,348 | $ | 56,080 | $ | 2,268 | 4.0 | % | ||||||||||||||||||
| Less: Property operating and maintenance | 45,335 | 45,835 | (500) | (1.1) | ||||||||||||||||||||||
| NOI | $ | 13,013 | $ | 10,245 | $ | 2,768 | 27.0 | % | ||||||||||||||||||
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| Number of Properties at June 30, | Average monthly revenue per occupied room for the three months ended June 30, | Average occupancy for the three months ended June 30, | ||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||||||||||
Total communities (1) | 39 | 41 | $ | 6,391 | $ | 6,036 | 84.1 | % | 81.4 | % | ||||||||||||||||||||||||||||
(1)Excludes one land parcel for both the three months ended June 30, 2026 and 2025.
Revenues from tenants within our SHOP segment are generated in connection with rent and services offered to residents depending on the level of care required, as well as fees associated with other ancillary services. Property operating and maintenance expense relates to the costs associated with staffing to provide care for the residents, supplies, overhead and management fees paid to our third-party operators as well as costs associated with maintaining the physical site.
The increase in SHOP NOI for the three months ended June 30, 2026 over the same period in 2025 was primarily due to higher average occupancy and revenue per occupied room as well as reduced net operating losses attributed to seven SHOP dispositions during and subsequent to the comparable 2025 period.
Segment Results — Outpatient Medical Facilities
The following table presents the results of operations and the period-to-period change within our OMF segment for the three months ended June 30, 2026 and 2025 (dollars in thousands):
| Three months ended June 30, | Increase (Decrease) to NOI | |||||||||||||||||||||||||
| 2026 | 2025 | $ | % | |||||||||||||||||||||||
| Revenue from tenants | $ | 29,182 | $ | 29,252 | $ | (70) | (0.2) | % | ||||||||||||||||||
| Less: Property operating and maintenance | 8,784 | 8,344 | 440 | 5.3 | ||||||||||||||||||||||
| NOI | $ | 20,398 | $ | 20,908 | $ | (510) | (2.4) | % | ||||||||||||||||||
| Number of properties at June 30, | Occupancy at June 30, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
Total outpatient medical facilities | 130 | 133 | 93.1 | % | 91.0 | % | ||||||||||||||||||||
Revenue from tenants within our OMF segment primarily reflects contractual rent received from tenants and operating expense reimbursements. These reimbursements generally increase in proportion with the increase in property operating and maintenance expenses. Pursuant to many of our lease agreements, tenants are required to pay their pro rata share of such expenses, which may be subject to expense exclusions and floors in addition to base rent. Property operating and maintenance expense reflects the costs associated with our OMFs, including real estate taxes, utilities, repairs, maintenance and unaffiliated third-party property management fees. For the three months ended June 30, 2026, we managed all OMFs directly, without the use of third party service providers.
The decrease in OMF NOI for the three months ended June 30, 2026 over the same period in 2025 was primarily driven by certain nonrecurring revenue recognized only in the prior year period partially offset by the reduced net operating losses attributed to six OMF dispositions during and subsequent to the prior year period.
Corporate Results
Impairment Charges
We recorded $3.8 million of impairment charges during the three months ended June 30, 2026 related to a held-for-use SHOP community. We recorded $15.2 million of impairment charges during the three months ended June 30, 2025 related primarily to a held-for-use SHOP community ($14.1 million). The properties were impaired to their contractual sales price as determined by the purchase and sale agreement.
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Acquisition and Transaction Related
Acquisition and transaction related expenses decreased by $367 thousand to $130 thousand for the three months ended June 30, 2026 from $497 thousand for the three months ended June 30, 2025 primarily due to non-recurring transaction costs paid to the external former advisor in 2025, which did not recur in the current year, and dead deal costs.
General and Administrative Expenses
General and administrative expenses increased by $1.5 million to $6.6 million for the three months ended June 30, 2026 from $5.1 million for the three months ended June 30, 2025 primarily due to equity-based compensation expense incurred in the three months ended June 30, 2026. Equity-based compensation was first granted to the executive officers and certain other employees in May 2025, resulting in a partial period of equity-based compensation expense incurred over the three months ended June 30, 2025. Additional awards were granted to the Company’s executive officers and certain other employees in April 2026 in connection with the Offering and as part of the Company’s annual long-term incentive equity grants.
Depreciation and Amortization Expenses
Depreciation and amortization expense decreased by $0.7 million to $17.8 million for the three months ended June 30, 2026 from $18.5 million for the three months ended June 30, 2025 primarily due to property dispositions during and subsequent to the prior year period.
Gain on Sale of Real Estate Investments
The disposal of three OMFs and three SHOP communities during the three months ended June 30, 2025 resulted in an aggregate gain on sale of real estate investments of $2.7 million for the period compared to no disposition activity recognized for the three months ended June 30, 2026.
Interest Expense
Interest expense decreased by $3.1 million to $12.7 million for the three months ended June 30, 2026 from $15.8 million for the three months ended June 30, 2025 primarily due to a $5.4 million decrease driven by repayment of a $330 million secured term loan in December 2025 and a $1.5 million decrease due to the amortization of a gain on a swap terminated in December 2025. Amortization of a gain on the terminated swap is expected to continue through December 2026. These decreases are partially offset by a $2.8 million increase in interest expense relating to the $150 million Term Loan (as defined below) entered into in December 2025 and a $2.2 million increase in interest expense due to less swap interest proceeds in 2026.
Interest and Other Income, net
Interest and other income, net includes interest income earned on cash and cash equivalents invested in short-term money market funds and expenses not covered by insurance, net of recoveries. Interest and other income, net increased by $2.1 million for the three months ended June 30, 2026 compared to the three months ended June 30, 2025 primarily due to an increase in cash held in money market accounts as a result of our April 2026 Offering.
Gain on Extinguishment of Debt
The gain of $0.3 million recognized in the three months ended June 30, 2025 is in connection with the repayment of a loan prior to maturity in conjunction with the sale of a property. There was no debt extinguished during the three months ended June 30, 2026.
(Loss) Gain on Non-Designated Derivatives
(Loss) gain on non-designated derivative instruments includes mark-to-market adjustments of non-designated interest rate caps designed to protect us from adverse interest rate changes in connection with our Fannie Mae Secured Debt which have variable interest rates.
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The loss of $47 thousand recognized in the three months ended June 30, 2026 reflects a decrease in future expected proceeds on the derivative assets over the current period. The gain of $32 thousand recognized in the three months ended June 30, 2025 reflects an increase in future expected proceeds over the comparative period.
Income Tax Expense
Income taxes generally relate to our SHOP communities, which are leased to our TRSs. We recorded an income tax expense of approximately $47 thousand for the three months ended June 30, 2026. Income tax benefit for the three months ended June 30, 2025 was not material.
Because of our TRSs’ recent operating history of losses and the adverse economic impacts from increases in the rate of inflation in recent years on the results of operations of our SHOP communities, we are not able to conclude that it is more likely than not we will realize the future benefit of our deferred tax assets; thus we have recorded a 100% valuation allowance on our net deferred tax assets through June 30, 2026. If and when we believe it is more likely than not that we will recover our deferred tax assets, we will reverse the valuation allowance as an income tax benefit in our consolidated statements of comprehensive loss.
Allocation for Preferred Stock Distributions
Allocation for preferred stock decreased by $0.6 million to $2.8 million for the three months ended June 30, 2026 from $3.4 million for the three months ended June 30, 2025 due to repurchases and our self-tender offer for preferred stock subsequent to the second quarter of 2025.
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Comparison of the Six Months Ended June 30, 2026 and 2025
The following table shows our results of operations for the six months ended June 30, 2026 and 2025 and the period to period change by line item of the consolidated statements of operations (dollars in thousands)(1):
| Six months ended June 30, | Increase (Decrease) | |||||||||||||||||||||||||
| 2026 | 2025 | $ | % | |||||||||||||||||||||||
| Revenue from tenants | $ | 173,815 | $ | 171,775 | $ | 2,040 | 1.2 | % | ||||||||||||||||||
| Operating expenses: | ||||||||||||||||||||||||||
| Property operating and maintenance | 107,037 | 112,035 | (4,998) | (4.5) | ||||||||||||||||||||||
| Impairment charges | 3,780 | 27,111 | (23,331) | (86.1) | ||||||||||||||||||||||
| Acquisition and transaction related | 183 | 548 | (365) | (66.6) | ||||||||||||||||||||||
| General and administrative | 12,071 | 9,971 | 2,100 | 21.1 | ||||||||||||||||||||||
| Depreciation and amortization | 35,549 | 42,245 | (6,696) | (15.9) | ||||||||||||||||||||||
| Total expenses | 158,620 | 191,910 | (33,290) | (17.3) | ||||||||||||||||||||||
| Operating income (loss) before (loss) gain on sale of real estate investments | 15,195 | (20,135) | 35,330 | nm | ||||||||||||||||||||||
| (Loss) gain on sale of real estate investments | (2) | 27,641 | (27,643) | nm | ||||||||||||||||||||||
| Operating income | 15,193 | 7,506 | 7,687 | 102.4 | ||||||||||||||||||||||
| Other income (expense): | ||||||||||||||||||||||||||
| Interest expense | (27,394) | (30,365) | 2,971 | (9.8) | ||||||||||||||||||||||
| Interest and other income, net | 2,516 | 216 | 2,300 | nm | ||||||||||||||||||||||
| Gain on extinguishment of debt | — | 257 | (257) | (100.0) | ||||||||||||||||||||||
| Gain on non-designated derivatives | 142 | 31 | 111 | nm | ||||||||||||||||||||||
| Total other expenses, net | (24,736) | (29,861) | 5,125 | (17.2) | ||||||||||||||||||||||
| Loss before income taxes | (9,543) | (22,355) | 12,812 | (57.3) | ||||||||||||||||||||||
| Income tax (expense) benefit | (124) | 6 | (130) | nm | ||||||||||||||||||||||
Net loss | (9,667) | (22,349) | 12,682 | (56.7) | ||||||||||||||||||||||
| Net loss (gain) attributable to non-controlling interests | 2 | (23) | 25 | nm | ||||||||||||||||||||||
| Allocation for preferred stock | (6,079) | (6,836) | 757 | (11.1) | ||||||||||||||||||||||
Net loss attributable to common stockholders | $ | (15,744) | $ | (29,208) | $ | 13,464 | (46.1) | |||||||||||||||||||
__________
* nm - not meaningful
(1)Certain 2025 amounts have been reclassified from general and administrative to property operating and maintenance to align with the current period presentation.
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Segment Results — Senior Housing Operating Portfolio
The following table presents the results of operations and the period-to-period change within our SHOP segment for the six months ended June 30, 2026 and 2025 (dollars in thousands):
| Six months ended June 30, | Increase (Decrease) to NOI | |||||||||||||||||||||||||
| 2026 | 2025 | $ | % | |||||||||||||||||||||||
| Revenue from tenants | $ | 115,979 | $ | 111,888 | $ | 4,091 | 3.7 | % | ||||||||||||||||||
| Less: Property operating and maintenance | 90,203 | 92,207 | (2,004) | (2.2) | ||||||||||||||||||||||
| NOI | $ | 25,776 | $ | 19,681 | $ | 6,095 | 31.0 | % | ||||||||||||||||||
| Number of Properties at June 30, | Average monthly revenue per occupied room for the six months ended June 30, | Average occupancy for the six months ended June 30, | ||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||||||||||
Total communities (1) | 39 | 41 | $ | 6,366 | $ | 6,033 | 84.0 | % | 79.0 | % | ||||||||||||||||||||||||||||
(1)Excludes one land parcel at both June 30, 2026 and 2025.
Revenues from tenants within our SHOP segment are generated in connection with rent and services offered to residents depending on the level of care required, as well as fees associated with other ancillary services. Property operating and maintenance expenses relate to the costs associated with staffing to provide care for the residents in our SHOP communities, as well as food, marketing, real estate taxes, management fees paid to our third-party operators and costs associated with maintaining the physical site.
The increase in SHOP NOI for the six months ended June 30, 2026 over the same period in 2025 was primarily due to higher average occupancy and revenue per occupied room as well as reduced net operating losses attributed to seven SHOP dispositions during and subsequent to the prior year period.
Segment Results — Outpatient Medical Facilities
The following table presents the results of operations and the period-to-period change within our OMF segment for the six months ended June 30, 2026 and 2025 (dollars in thousands):
| Six months ended June 30, | Increase (Decrease) to NOI | |||||||||||||||||||||||||
| 2026 | 2025 | $ | % | |||||||||||||||||||||||
| Revenue from tenants | $ | 57,836 | $ | 59,887 | $ | (2,051) | (3.4) | % | ||||||||||||||||||
| Less: Property operating and maintenance | 16,834 | 19,828 | (2,994) | (15.1) | ||||||||||||||||||||||
| NOI | $ | 41,002 | $ | 40,059 | $ | 943 | 2.4 | % | ||||||||||||||||||
| Number of Properties at June 30, | Occupancy at June 30, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Total outpatient medical facilities | 130 | 133 | 93.1 | % | 91.0 | % | ||||||||||||||||||||
Revenue from tenants within our OMF segment primarily reflects contractual rent received from tenants and operating expense reimbursements. These reimbursements generally increase in proportion with the increase in property operating and maintenance expenses. Pursuant to many of our lease agreements, tenants are required to pay their pro rata share of such expenses, which may be subject to expense exclusions and floors in addition to base rent. Property operating and maintenance expense reflects the costs associated with our OMFs, including real estate taxes, utilities, repairs, maintenance and unaffiliated third-party property management fees. For the six months ended June 30, 2026, we managed all OMFs directly, without the use of third party service providers.
The increase in OMF NOI for the six months ended June 30, 2026 over the same period in 2025 was primarily driven by reduced net operating losses attributed to 18 OMF dispositions during and subsequent to the prior year period.
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Corporate Results
Impairment Charges
We recorded $3.8 million of impairment charges during the six months ended June 30, 2026 related to a held-for-use SHOP community. We recorded $27.1 million of impairment charges during the six months ended June 30, 2025 on three held-for-use SHOP communities and two held-for-use OMFs. These properties were impaired to their contractual sales price as determined by their purchase and sale agreements.
Acquisition and Transaction Related
Acquisition and transaction related expenses decreased by $365 thousand to $183 thousand for the six months ended June 30, 2026 from $548 thousand for the six months ended June 30, 2025 primarily due to non-recurring transaction costs paid to the external former advisor in 2025, which did not recur in the current year, and dead deal costs.
General and Administrative Expenses
General and administrative expenses increased by $2.1 million to $12.1 million for the six months ended June 30, 2026 from $10.0 million for the six months ended June 30, 2025 primarily due to equity-based compensation expense incurred in the six months ended June 30, 2026. Equity-based compensation was first granted to the executive officers and certain other employees in May 2025, resulting in a partial period of equity-based compensation expense incurred during the six months ended June 30, 2025. Additional awards were granted to the Company’s executive officers and certain other employees in April 2026 in connection with the Offering and as part of the Company’s annual long-term incentive equity grants.
Depreciation and Amortization Expenses
Depreciation and amortization expense decreased by $6.7 million to $35.5 million for the six months ended June 30, 2026 from $42.2 million for the six months ended June 30, 2025 primarily due to property dispositions during and subsequent to the prior year period.
(Loss) Gain on Sale of Real Estate Investments
The disposal of 15 OMFs and three SHOP communities during the six months ended June 30, 2025 resulted in an aggregate gain on sale of real estate investments of $27.6 million for the period compared to no disposition activity recognized during the six months ended June 30, 2026.
Interest Expense
Interest expense decreased by $3.0 million to $27.4 million for the six months ended June 30, 2026 from $30.4 million for the six months ended June 30, 2025 primarily due to a $11.3 million decrease driven by repayment of a $330 million secured term loan in December 2025, a $1.8 million decrease attributed to declining variable rates on the Fannie Mae Secured Debt and a $3.0 million decrease due to the amortization of a gain on a swap terminated in December 2025. Amortization of the gain on the terminated swap is expected to continue through December 2026. The decreases in interest expense is partially offset by a $7.5 million increase in interest expense relating to the $150 million Term Loan entered into in December 2025 and a $5.8 million increase in interest expense due to less swap interest proceeds in 2026.
Interest and Other Income, Net
Interest and other income, net includes interest income earned on cash and cash equivalents invested in short-term money market funds and expenses not covered by insurance, net of recoveries. Interest and other income, net increased by $2.3 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 primarily due to an increase in cash held in money market accounts as a result of our April 2026 Offering.
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Gain on Extinguishment of Debt
The gain of $0.3 million recognized in the six months ended June 30, 2025 is in connection with the repayment of a loan prior to maturity in conjunction with the sale of a property. There was no debt extinguished during the six months ended June 30, 2026.
Gain on Non-Designated Derivatives
Gain on non-designated derivative instruments includes mark-to-market adjustments of non-designated interest rate caps designed to protect us from adverse interest rate changes in connection with our Fannie Mae Secured Debt which have variable interest rates.
The gain of $0.1 million recognized in the six months ended June 30, 2026 reflects an increase in future expected proceeds on the derivative assets over the current period. The gain of $31 thousand recognized in the six months ended June 30, 2025 reflects an increase in the future expected proceeds on the derivative assets over the comparative period.
Income Tax (Expense) Benefit
Income taxes generally relate to our SHOP communities, which are leased to our TRSs. We recorded an income tax expense of approximately $0.1 million for the six months ended June 30, 2026. Income tax benefit for the six months ended June 30, 2025 was not material.
Because of our TRSs’ recent operating history of losses and the adverse economic impacts from increases in the rate of inflation in recent years on the results of operations of our SHOP communities, we are not able to conclude that it is more likely than not we will realize the future benefit of our deferred tax assets; thus we have recorded a 100% valuation allowance on our net deferred tax assets through June 30, 2026. If and when we believe it is more likely than not that we will recover our deferred tax assets, we will reverse the valuation allowance as an income tax benefit in our consolidated statements of comprehensive loss.
Allocation for Preferred Stock Distributions
Allocation for preferred stock decreased by $0.8 million to $6.1 million for the six months ended June 30, 2026 from $6.8 million for the six months ended June 30, 2025 due to repurchases and our self-tender offer for preferred stock subsequent to the second quarter of 2025.
Cash Flows
The following table presents a reconciliation of our net cash provided by operations from our net loss for the six months ended June 30, 2026 and 2025 (dollars in thousands):
| Six months ended June 30, | Change | |||||||||||||||||||||||||
| 2026 | 2025 | $ | % | |||||||||||||||||||||||
| Cash, cash equivalents and restricted cash, beginning of period | $ | 108,452 | $ | 74,095 | $ | 34,357 | 46.4 | % | ||||||||||||||||||
| Net cash provided by (used in) operating activities | 30,620 | (13,177) | 43,797 | nm | ||||||||||||||||||||||
| Net cash (used in) provided by investing activities | (108,794) | 76,144 | (184,938) | nm | ||||||||||||||||||||||
| Net cash provided by (used in) financing activities | 272,098 | (33,892) | 305,990 | nm | ||||||||||||||||||||||
| Cash, cash equivalents and restricted cash, end of period | $ | 302,376 | $ | 103,170 | $ | 199,206 | nm | |||||||||||||||||||
__________
* nm - not meaningful
Cash Flows from Operating Activities
Net cash provided by operating activities increased by $43.8 million for the six months ended June 30, 2026 compared to the same period in 2025 primarily due to a $30.3 million repayment of a promissory note made in 2025 to the former external advisor, which did not recur in 2026, as well as growth in our SHOP segment.
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Cash Flows from Investing Activities
Net cash flows used in investing activities increased by $184.9 million for the six months ended June 30, 2026 compared to the same period in 2025 primarily due to $98.0 million disbursed for the acquisition of two SHOP communities during the six months ended June 30, 2026 and $88.8 million aggregate proceeds received from the sale of 15 OMFs and three SHOP communities during the six months ended June 30, 2025.
Cash Flows from Financing Activities
Cash flows provided by financing activities increased by $306.0 million for the six months ended June 30, 2026 compared to the same period in 2025 primarily due to the $495.5 million cash received, net of offering costs, from the Offering in April 2026, partially offset by the $186.0 million full repayment of the Revolving Facility (as defined below) and $26.7 million paid to repurchase our preferred stock in 2026.
Liquidity and Capital Resources
Our existing principal demands for cash are to fund acquisitions, capital expenditures, the payment of our operating and administrative expenses, debt service obligations (including principal repayment) and distributions to holders of our Series A Preferred Stock, Series B Preferred Stock and common stock. We closely monitor our current and anticipated liquidity position relative to our current and anticipated demands for cash and believe that we have sufficient current liquidity to meet our financial obligations for at least the next 12 months.
Our future liquidity requirements and available liquidity, however, depend on many factors, such as recent and continuing increases in inflation, labor shortages, supply chain disruptions and higher property insurance, property tax and interest rates, all of which have and may continue to have adverse impacts on our results of operations and thus ultimately our liquidity. Moreover, these adverse impacts may also impact our tenant and residents’ ability to pay rent and thus our cash flows.
We expect to fund our future short-term operating liquidity requirements, including acquisitions and distributions to holders of Series A Preferred Stock, Series B Preferred Stock and common stock, through a combination of current cash on hand, net cash provided by our operating activities and property dispositions, future takedowns under our Revolving Facility, issuance of equity securities and potential new financings utilizing certain of our unencumbered properties. In April 2026, we completed the Offering and used the net proceeds to fully repay the outstanding borrowings under our Revolving Facility, which in turn substantially increased our available liquidity.
As of June 30, 2026, we had $529.3 million of total liquidity, comprised of $283.6 million of undrawn and available capacity under the Revolving Facility (pursuant to the terms of the Credit Agreement) and $245.7 million of cash and cash equivalents. The Secured Term Loan 4 due 2033 requires us to maintain a minimum balance of cash and cash equivalents of $12.5 million at all times.
Financings
As of June 30, 2026, our net debt leverage ratio (total debt net of cash and cash equivalents divided by total gross asset value) was approximately 26.8%. Net debt totaled $611.2 million, which represents gross debt ($856.9 million) less cash and cash equivalents ($245.7 million). Gross asset value totaled $2.3 billion, which represents total real estate investments, at cost ($2.3 billion) net of gross market lease intangible liabilities ($19.6 million). Cumulative impairment charges are reflected within gross asset value.
As of June 30, 2026, we had total gross borrowings of $856.9 million, at a weighted-average interest rate of 5.76% and a weighted-average remaining term of 3.6 years. The weighted-average interest rate includes the impact of “pay-fixed” swaps that are designated as hedging instruments on a portion of our variable-rate debt, but does not include the impact of our non-designated interest rate caps (discussed below). Inclusive of our non-designated interest rate caps, the weighted-average economic interest rate on our total gross borrowings was 5.69% as of June 30, 2026.
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As of June 30, 2026, the carrying value of our real estate investments, at cost was $2.3 billion, with $684.3 million of this asset value pledged as collateral for mortgage notes payable, $597.6 million of this asset value pledged to secure advances under our Fannie Mae Secured Debt and $870.4 million of this asset value added to the borrowing base of our Credit Facilities. These real estate assets are not available to satisfy other debts and obligations, or to serve as collateral with respect to new indebtedness, as applicable, unless the existing indebtedness associated with the property is satisfied or the property is removed from the borrowing base of the Fannie Mae Secured Debt, which would impact availability thereunder.
Unencumbered real estate investments, at cost as of June 30, 2026 were $126.0 million. There can be no assurance as to the amount of liquidity we would be able to generate from leveraging these unencumbered real estate investments, if we are able to leverage them at all.
Mortgage Notes Payable
As of June 30, 2026, we had $375.0 million in mortgage notes payable outstanding, all of which are fixed-rate with a weighted-average annual interest rate of 5.53% and a weighted-average remaining term of 6.8 years.
Fannie Mae Secured Debt
As of June 30, 2026, $331.9 million was outstanding under our Fannie Mae Secured Debt, which bore interest at a weighted-average annual rate of 6.22% and had a weighted-average remaining term of 0.3 years. Inclusive of our non-designated interest rate caps, the weighted-average economic interest rate was 6.0% as of June 30, 2026. All of the real estate assets pledged to secure borrowings under the Fannie Mae Secured Debt were released upon the prepayment of the Fannie Mae Secured Debt on August 3, 2026.
Unsecured Credit Facilities
On December 11, 2025, we entered into (i) a $400 million senior unsecured revolving credit facility (the “Revolving Facility”) and (ii) a $150 million senior unsecured term loan facility (the “Term Loan” and, together with the Revolving Facility, the “Credit Facilities”) with Wells Fargo Bank, National Association, as administrative agent, and certain lenders party thereto. As of June 30, 2026, we had zero and $150.0 million outstanding under our Revolving Facility and Term Loan, respectively. The borrowings under our Revolving Facility and Term Loan both bore interest at a weighted-average annual rate of 5.65% and had a weighted-average remaining term of 2.4 years as of June 30, 2026. Inclusive of our interest rate swaps that convert variable interest rates to fixed interest rates, the economic interest rate on our Term Loan was 5.36% as of June 30, 2026.
On April 25, 2026, we used a portion of the net proceeds from the Offering to repay in full the $186.0 million of then outstanding indebtedness under the Revolving Facility.
On August 3, 2026, we recast the Credit Facilities by entering into an amended and restated credit agreement (the “2026 Credit Agreement”), which provides for, among other things, (i) increasing total lender commitments from $550 million to $1.2 billion, with the Revolving Facility increasing from $400 million to $750 million, the Term Loan increasing from $150 million to $300 million and a new $150 million delayed draw term loan facility being added, (ii) extending the maturity of the Revolving Facility and the Term Loan (including the delayed draw term loan) to August 2030 and August 2029, respectively, and (iii) reducing the applicable pricing for interest rates based on our corporate leverage ratio. In connection with entering into the 2026 Credit Agreement, we also terminated the Fannie Mae Secured Debt and paid off the outstanding amount thereunder.
Non-Designated Interest Rate Caps
Our interest rate caps are used to limit our exposure to interest rate movements on our Fannie Mae Secured Debt for economic purposes, however, we do not elect to apply hedge accounting to these instruments. As of June 30, 2026, we had six SOFR-based interest rate caps with an aggregate notional amount of $336 million which limit one-month SOFR to 3.50% and have varying maturities through November 2026. Although these interest rate caps are not designated hedging instruments, we consider them economically related to our variable rate secured debt.
As SOFR has increased beyond 3.50%, we received cash payments of $0.6 million and $1.8 million during the six months ended June 30, 2026 and 2025, respectively.
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Capital Expenditures
During the six months ended June 30, 2026, our aggregate capital expenditures were $10.6 million. We anticipate our annual rate of capital expenditures for the OMF and SHOP segments in 2026 to be relatively consistent with 2025, excluding capital expenditures related to newly acquired communities and redevelopments or savings resulting from the sale of properties.
Subsequent Events
For a discussion of subsequent events, see Note 15 — Subsequent Events to our consolidated financial statements.
Preferred Stock Repurchase Program
On May 2, 2025, our Board authorized a stock repurchase program for up to an aggregate amount of $50.0 million of our Series A Preferred Stock and Series B Preferred Stock. Under the program, which does not have a stated expiration date, we may repurchase shares of Series A Preferred Stock and Series B Preferred Stock from time to time through open market purchases, including pursuant to Rule 10b5-1 pre-set trading plans, block trades, privately negotiated transactions, accelerated share repurchase transactions entered into with one or more counterparties or otherwise, in compliance with applicable securities laws and other legal requirements. The timing, volume, and nature of repurchases are subject to market conditions, applicable securities laws and other factors, and the program may be amended, suspended or discontinued at any time. The program does not obligate us to repurchase any specific number of shares of Series A Preferred Stock and Series B Preferred Stock.
Preferred Stock Tender Offer
In June 2026, we completed the tender offers for our Series A Preferred Stock and Series B Preferred Stock for $22.50 per share in cash. 556,454 shares of Series A Preferred Stock and 566,229 shares of Series B Preferred Stock were properly tendered for an aggregate purchase price of approximately $25.3 million, excluding fees and expenses relating to the tender offer. The tendered shares were retired, which reduced the authorized share counts. Upon completion of the tender offer, 3,289,061 shares of Series A Preferred Stock and 2,850,427 shares of Series B Preferred Stock remained outstanding as of June 30, 2026.
Commitments and Contingencies
For a discussion of our commitments and contingencies, see Note 14 — Commitments and Contingencies to our consolidated financial statements.
Dividends and Other Distributions
Distributions on our Series A Preferred Stock are declared quarterly in an amount equal to $1.84375 per share each year ($0.460938 per share per quarter), which is equivalent to 7.375% per annum on the $25.00 liquidation preference per share. Distributions on our Series B Preferred Stock are declared quarterly in an amount equal to $1.78125 per share each year ($0.445313 per share per quarter), which is equivalent to 7.125% per annum on the $25.00 liquidation preference per share. Distributions on the Series A Preferred Stock and the Series B Preferred Stock are cumulative and payable quarterly in arrears. Any accrued and unpaid dividends payable with respect to our Series A Preferred Stock or our Series B Preferred Stock become part of the liquidation preference thereof.
In mid-2020, we ceased regular cash dividends on our shares of common stock. We issued stock dividends to the shareholders from October 2020 until January 2024. The stock dividends were declared quarterly using a rate of $3.40 (as adjusted to reflect a reverse stock split effective as of September 30, 2024) per share per year. The number of shares issued with each dividend was based on the estimated per-share net asset value in effect on the applicable date.
On July 1, 2026, our Board of Directors declared a quarterly dividend of $0.075 per share on our common stock (including the Class A Common Stock). The dividend was paid in cash on July 30, 2026 to holders of record as of the close of business on July 15, 2026.
The amount of dividends and other distributions payable to our stockholders is determined by our Board of Directors (“the “Board”) and is dependent on a number of factors, including funds available for distribution, our financial condition, capital expenditure requirements, as applicable, requirements of Maryland law and annual distribution requirements needed to maintain our status as a REIT under the Internal Revenue Code of 1986 (the “Code”). Distribution payments are dependent on the
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availability of funds. The Board may reduce the amount of dividends or distributions paid or suspend dividend or distribution payments at any time and therefore dividend and distribution payments are not assured.
Our ability to pay distributions on our Series A Preferred Stock, Series B Preferred Stock, Series A Preferred Units, common OP units, LTIP units and common stock (including the Class A Common Stock) depends on our ability to increase the amount of cash we generate from property operations which in turn depends on a variety of factors, including but not limited to our ability to complete acquisitions of new properties and our ability to improve operations at our existing properties. There can be no assurance that we will complete acquisitions on a timely basis or on acceptable terms and conditions, if at all. Our ability to improve operations at our existing properties is also subject to a variety of risks and uncertainties, many of which are beyond our control, and there can be no assurance we will be successful in achieving this objective.
On August 5, 2026, we announced the full redemption of our Series A Preferred Stock and Series B Preferred Stock for $25.00 per share at par for approximately $153.5 million in total (excluding accrued dividends and transaction costs), with the redemption dates being September 4, 2026 and October 6, 2026, respectively. As of August 5, 2026, there were 3,289,061 shares of Series A Preferred Stock and 2,850,427 shares of Series B Preferred Stock issued and outstanding.
Non-GAAP Financial Measures
This section discusses certain of the non-GAAP financial measures we use to evaluate our performance, including Funds from Operations (“FFO”) and Normalized Funds from Operations (“Normalized FFO”). A description of these non-GAAP financial measures and reconciliations to the most directly comparable GAAP measure, which is net income (loss) attributable to common stockholders, are provided below.
We consider FFO and Normalized FFO to be useful supplemental measures for reviewing comparative operating and financial performance because, by excluding the applicable items listed below, FFO and Normalized FFO can help investors compare our operating performance between periods or to other companies (though other companies may calculate these measures differently than we do and the value of any such comparison may be limited). While FFO and Normalized FFO are relevant and widely used measures of operating performance of REITs, they do not represent, nor are they meant to replace, cash flows from operations and net income or loss as defined by GAAP, and should not be considered alternatives to those measures in evaluating our liquidity or operating performance. Rather, FFO and Normalized FFO should be reviewed in conjunction with these and other GAAP measurements as an indication of our operational performance and are not necessarily indicative of cash available to fund our future cash requirements, including our ability to pay dividends and other distributions to our stockholders. Additionally, our computation of FFO and Normalized FFO may not be comparable to FFO and Normalized FFO reported by other REITs that do not define FFO in accordance with the current National Association of Real Estate Investment Trusts (“NAREIT”) definition or that interpret the current NAREIT definition or define Normalized FFO differently than we do.
The methods utilized to evaluate the performance of equity REITs under GAAP should be construed as more relevant measures of operational performance and considered more prominently than the non-GAAP measures, FFO and Normalized FFO, and the adjustments to GAAP in calculating FFO and Normalized FFO.
Funds from Operations and Normalized Funds from Operations
Our consolidated financial statements are presented in accordance with GAAP, utilizing historical cost accounting which, among other things, requires depreciation of real estate investments. As a result, our operating results imply that the value of our real estate investments will decrease predictably over a set time period. However, we believe that the value of our real estate investments will fluctuate over time based on various market conditions and as such, depreciation under historical cost accounting may be less informative. FFO is a standard REIT industry metric defined by NAREIT as net income or loss (computed in accordance with GAAP), adjusted for (i) real estate-related depreciation and amortization, (ii) impairment charges on depreciable real property, (iii) gains or losses from sales of depreciable real property and (iv) similar adjustments for non-controlling interests and unconsolidated entities.
We believe that the use of FFO provides a more complete understanding of our operating performance to investors and to management, and when compared year-over-year, reflects the impact on our operations from trends in occupancy rates, rental rates, operating costs, general and administrative expenses and interest costs, which may not be immediately apparent from net loss. We believe that FFO is a recognized measure of operating performance by the REIT industry and is useful in comparing our operating performance with the operating performance of other real estate companies.
We also believe that Normalized FFO is a meaningful supplemental non-GAAP measure of our operating results. We calculate Normalized FFO by further adjusting FFO to reflect the performance of our portfolio for items we believe are not
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directly attributable to our operations. We believe that Normalized FFO is a beneficial indicator of our ongoing portfolio performance and isolates the financial results of our operations. Our adjustments to FFO to arrive at Normalized FFO include removing the impacts of: (i) acquisition and transaction related costs; (ii) termination fees to related parties; (iii) severance and other related costs; (iv) mark-to-market gains and losses on non-designated derivatives and amortization related to terminated derivatives; (v) casualty-related charges, net relating to significantly disruptive events that are infrequent in nature; (vi) gains and losses on extinguishment of debt; (vii) similar adjustments for non-controlling interests; and (viii) certain other items set forth in the Normalized FFO reconciliation included therein. We believe that Normalized FFO is useful because it allows investors, analysts and our management to compare our operating performance across periods on a consistent basis.
The table below reflects the items deducted from or added to net loss attributable to stockholders in our calculation of FFO and Normalized FFO attributable to common stockholders for the periods indicated (dollars in thousands):
| Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Net loss attributable to common stockholders | $ | (8,141) | $ | (24,189) | $ | (15,744) | $ | (29,208) | ||||||||||||||||||
| Depreciation and amortization related to real estate assets | 16,402 | 17,127 | 32,808 | 39,408 | ||||||||||||||||||||||
| Impairment charges | 3,780 | 15,212 | 3,780 | 27,111 | ||||||||||||||||||||||
| Loss (gain) on sale of real estate investments | — | (2,652) | 2 | (27,641) | ||||||||||||||||||||||
| Depreciation on real estate assets related to non-controlling interests | (89) | (146) | (161) | (202) | ||||||||||||||||||||||
| NAREIT FFO attributable to common stockholders | 11,952 | 5,352 | 20,685 | 9,468 | ||||||||||||||||||||||
| Acquisition and transaction related | 130 | 497 | 183 | 548 | ||||||||||||||||||||||
Derivatives mark-to-market and terminations (1) | (1,236) | 813 | (2,625) | 282 | ||||||||||||||||||||||
| Casualty-related charges, net | 7 | 7 | 149 | 122 | ||||||||||||||||||||||
| Gain on extinguishment of debt | — | (257) | — | (257) | ||||||||||||||||||||||
| Normalizing items related to non-controlling interests | (7) | (13) | (11) | (32) | ||||||||||||||||||||||
| Other normalizing items | 21 | — | 21 | — | ||||||||||||||||||||||
| Normalized NFFO attributable to common stockholders | $ | 10,867 | $ | 6,399 | $ | 18,402 | $ | 10,131 | ||||||||||||||||||
_______
(1)For the three and six months ended June 30, 2026 and the six months ended June 30, 2025, include gains reclassified from other comprehensive income to earnings (recorded as a reduction to interest expense) relating to a terminated swap and a partial unwind of a hedge, respectively.
Inflation
Leases with residents at our SHOP communities typically do not have rent escalations, however, we are able to renew leases at market rates as they mature due to their short-term nature. As inflation rates increase or persist at high levels, the cost of providing medical care at our SHOP communities, particularly labor costs, will increase. If we are unable to admit new residents or renew resident leases at market rates, while bearing these increased costs from providing services to our residents, our results of operations may be affected.
We may also be adversely impacted by inflation on the leases with tenants in our OMF segment that do not contain indexed escalation provisions, or those leases which have escalations at rates which do not exceed or approximate current inflation rates. Recent increases in inflation, driven by factors such as labor shortages, supply chain disruptions, higher property insurance, property tax and interest rates and increased economic and political uncertainties due to the tariffs imposed by, or imposed on, the United States, have and may continue to have adverse impacts on our results of operations and our liquidity as well as our tenants’ and residents’ ability to pay rent. As of June 30, 2026, the increase to the 12-month Consumer Price Index for all items, as published by the Bureau of Labor Statistics, was 3.5%. To help mitigate the adverse impact of inflation, most of our leases with our tenants in our OMF segment contain rent escalation provisions which increase the cash that is due under these leases over time. These provisions generally increase rental rates during the terms of the leases either at fixed rates or indexed escalations (based on the Consumer Price Index or other measures). Although most of our leases with tenants in our OMF segment contain rent escalation provisions, these rates are generally below the current rate of inflation.
In addition to base rent, depending on the specific lease, OMF tenants are generally required to pay either (i) their pro rata share of property operating and maintenance expenses, which may be subject to expense exclusions and floors or (ii) their share of
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increases in property operating and maintenance expenses to the extent they exceed the properties’ expenses for the base year of the respective leases. Property operating and maintenance expenses include common area maintenance costs, real estate taxes and insurance. Increased operating costs paid by our tenants under these net leases could have an adverse impact on our tenants if increases in their operating expenses exceed increases in their revenue, which may adversely affect our tenants’ ability to pay rent owed to us or property expenses to be paid, or reimbursed to us, by our tenants. Renewals of leases or future leases for our net lease properties may not be negotiated on a triple-net basis or on a basis requiring the tenants to pay all or some of such expenses, in which event we may have to pay those costs. If we are unable to lease properties on a triple-net basis or on a basis requiring the tenants to pay all or some of such expenses, or if tenants fail to pay required tax, utility and other impositions, we could be required to pay those costs.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
There has been no material change in our exposure to market risk during the six months ended June 30, 2026. For a discussion of our exposure to market risk, refer to Item 7A, “Quantitative and Qualitative Disclosures about Market Risk,” contained in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 20, 2026.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Our Chief Executive Officer and Chief Financial Officer, together with other members of our management, carried out an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures are effective as of June 30, 2026 at a reasonable level of assurance.
Changes in Internal Control Over Financial Reporting
During the three months ended June 30, 2026, there were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II — OTHER INFORMATION
Item 1. Legal Proceedings.
We are not a party to, and none of our properties are subject to, any material pending legal proceedings.
Item 1A. Risk Factors.
There have been no material changes to the risk factors disclosed in Part I — Item 1A “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 20, 2026, and we direct your attention to those risk factors.
Item 2. Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities.
All of the repurchases below were made pursuant to tender offers authorizing the repurchase up to $100 million of our preferred stock. We publicly announced such tender offers on May 18, 2026 (dollars in thousands, except per share information). See Note 7 — Shareholders’ Equity of our consolidated financial statements in this Quarterly Report on Form 10-Q for further information. Pursuant to the tender offers, we repurchased 556,454 shares of Series A Preferred Stock and 566,229 shares of Series B Preferred Stock that were properly tendered at $22.50 per share for an aggregate purchase price of approximately $25.3 million, excluding fees and expenses relating to the tender offers.
During the three months ended June 30, 2026, we did not exercise any share repurchases of our Series A Preferred Stock or Series B Preferred Stock pursuant to the preferred stock repurchase plan authorized on May 2, 2025.
7.375% Series A Cumulative Redeemable Perpetual Preferred Stock
| Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly announced Plans or Programs | Maximum Dollar Value that May Yet be Purchased Under the Plans or Programs | |||||||||||||||||||||||
| April 1, 2026 to April 30, 2026 | — | $— | — | $— | ||||||||||||||||||||||
| May 1, 2026 to May 31, 2026 | — | — | — | — | ||||||||||||||||||||||
| June 1, 2026 to June 30, 2026 | 556,454 | 22.50 | — | — | ||||||||||||||||||||||
| 556,454 | $22.50 | — | $— | |||||||||||||||||||||||
7.125% Series B Cumulative Redeemable Perpetual Preferred Stock
Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly announced Plans or Programs | Maximum Dollar Value that May Yet be Purchased Under the Plans or Programs | |||||||||||||||||||||||
| April 1, 2026 to April 30, 2026 | — | $— | — | $— | ||||||||||||||||||||||
| May 1, 2026 to May 31, 2026 | — | — | — | — | ||||||||||||||||||||||
| June 1, 2026 to June 30, 2026 | 566,229 | 22.50 | — | — | ||||||||||||||||||||||
| 566,229 | $22.50 | — | $— | |||||||||||||||||||||||
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
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Item 5. Other Information.
Trading Plans
During our last fiscal quarter, no director or officer, as defined in Rule 16a-1(f), adopted terminated
Item 6. Exhibits.
The following exhibits are included, or incorporated by reference, in this Quarterly Report on Form 10-Q for the quarter ended June 30, 2026 (and are numbered in accordance with Item 601 of Regulation S-K):
| Exhibit No. | Description | |||||||
2.1 * | Agreement for Purchase and Sale of Real Property, dated May 4, 2026 | |||||||
4.1 | Amended and Restated Agreement of Limited Partnership of the OP, dated as of April 30, 2026 (filed as an exhibit to the Company’s Quarterly Report on Form 10-Q filed with the SEC on May 14, 2026 and incorporated by reference herein) | |||||||
31.1 * | Certification of the Principal Executive Officer of the Company pursuant to Securities Exchange Act Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |||||||
31.2 * | Certification of the Principal Financial Officer of the Company pursuant to Securities Exchange Act Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |||||||
32 ** | Written statements of the Principal Executive Officer and Principal Financial Officer of the Company pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |||||||
| 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 - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |||||||
* Filed herewith.
** Furnished herewith.
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Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| NATIONAL HEALTHCARE PROPERTIES, INC. | ||||||||
| By: | /s/ Michael Anderson | |||||||
| Michael Anderson | ||||||||
Chief Executive Officer, President and Director (Principal Executive Officer) | ||||||||
| By: | /s/ Andrew T. Babin | |||||||
Andrew T. Babin | ||||||||
| Chief Financial Officer and Treasurer (Principal Financial Officer) | ||||||||
Dated: August 6, 2026
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