Healthcare REIT Sila Realty Trust (SILA) expands assets, credit lines and buyback
Filing Impact
Filing Sentiment
Form Type
10-K
Rhea-AI Filing Summary
Sila Realty Trust, Inc. files its annual report outlining a healthcare-focused real estate portfolio and key 2025 actions. The company operates as an internally managed REIT, owning 140 healthcare properties and three land parcels across the U.S., primarily under net leases.
During 2025, Sila acquired six operating healthcare properties totaling about $148.9 million, fully funded two mezzanine loans of $12.543 million and $5 million, and put in place a senior unsecured revolving credit facility with commitments up to $600 million, expandable to $1.5 billion, maturing in 2029.
The board authorized a share repurchase program of up to $75 million over three years and established an ATM program to sell up to $250 million of common stock. Tenant concentration is notable, with PAM Health–related leases providing 16.1% of 2025 rental revenue. Sila highlights REIT tax requirements, regulatory risks in healthcare, leverage and interest rate exposure, and ESG and human capital initiatives, including 47 employees and a values-driven culture.
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________________________
FORM 10-K
(Mark One)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||||||
For the fiscal year ended December 31 , 2025
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: 001-42129
(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) | |||||||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||||||||
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒
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.
☒ | Accelerated filer | ☐ | ||||||||||||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||||||||
| Emerging growth company | ||||||||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
The aggregate market value of the shares of common stock held by non-affiliates of the registrant, computed by reference to the closing sales price on the New York Stock Exchange as of the last business day of the registrant’s most recently completed second fiscal quarter was $1,294,636,000 .
As of February 18, 2026, there were 55,246,390 shares of common stock of Sila Realty Trust, Inc. outstanding.
Documents Incorporated by Reference
The information called for by Part III will be included in an amendment to this Form 10-K or incorporated by reference from the registrant’s definitive Proxy Statement to be filed pursuant to Regulation 14A.
SILA REALTY TRUST, INC.
(A Maryland Corporation)
TABLE OF CONTENTS
| Page | ||||||||
PART I | ||||||||
| Item 1. | Business | 2 | ||||||
| Item 1A. | Risk Factors | 8 | ||||||
| Item 1B. | Unresolved Staff Comments | 21 | ||||||
Item 1C. | Cybersecurity | 21 | ||||||
| Item 2. | Properties | 22 | ||||||
| Item 3. | Legal Proceedings | 26 | ||||||
| Item 4. | Mine Safety Disclosures | 26 | ||||||
PART II | ||||||||
| Item 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 26 | ||||||
| Item 6. | [Reserved] | 28 | ||||||
| Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 28 | ||||||
| Item 7A. | Quantitative and Qualitative Disclosures About Market Risk | 40 | ||||||
| Item 8. | Financial Statements and Supplementary Data | 40 | ||||||
| Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | 40 | ||||||
| Item 9A. | Controls and Procedures | 40 | ||||||
| Item 9B. | Other Information | 41 | ||||||
| Item 9C. | Disclosure Regarding Foreign Jurisdictions that Prevent Inspections | 41 | ||||||
PART III | ||||||||
| Item 10. | Directors, Executive Officers and Corporate Governance | 42 | ||||||
| Item 11. | Executive Compensation | 42 | ||||||
| Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 42 | ||||||
| Item 13. | Certain Relationships and Related Transactions, and Director Independence | 42 | ||||||
| Item 14. | Principal Accounting Fees and Services | 42 | ||||||
PART IV | ||||||||
| Item 15. | Exhibits and Financial Statement Schedules | 43 | ||||||
| Item 16. | Form 10-K Summary | |||||||
SIGNATURES | ||||||||
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements contained in this Annual Report on Form 10-K of Sila Realty Trust, Inc., other than historical facts, may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. We intend for all such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Securities Act and the Exchange Act, as applicable by law. Such statements include, in particular, liquidity and capital resources, capital expenditures, material cash requirements, debt service requirements, macroeconomic factors, including expected interest rates, interest rate hedging impacts and practices and inflation, the ability of our tenants to satisfy their rent and other obligations under their leases, tariffs and changes in other governmental policies, including the impacts of government shutdowns, term loan requirements, share repurchases, our acquisitions and dispositions, leases, dividends, distributions, strategies, transactions, plans, goals, objectives and prospects, and are subject to certain risks and uncertainties, including known and unknown risks, which could cause actual results to differ materially from those projected or anticipated. Therefore, such statements are not intended to be a guarantee of our performance in future periods. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as “may,” “will,” “would,” “could,” “should,” “expect,” “intend,” “anticipate,” “estimate,” “believe,” “continue,” “seek,” “endeavor,” or other similar words. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date this Annual Report on Form 10-K is filed with the U.S. Securities and Exchange Commission, or SEC. We make no representation or warranty (express or implied) about the accuracy of any such forward-looking statements contained in this Annual Report on Form 10-K, and we do not undertake to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
Forward-looking statements that were true at the time made may ultimately prove to be incorrect or false. We caution investors not to place undue reliance on forward-looking statements, which reflect our management’s view only as of the date of this Annual Report on Form 10-K. 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. The forward-looking statements should be read in light of the risk factors identified in the Item 1A. Risk Factors section of this Annual Report on Form 10-K.
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PART I.
Item 1. Business.
General Description of Business and Operations
Sila Realty Trust, Inc. is a Maryland corporation that was formed on January 11, 2013, headquartered in Tampa, Florida, that has elected, and conducts its operations so as to qualify, to be taxed as a real estate investment trust, or a REIT, under the Internal Revenue Code of 1986, as amended, or the Code, for federal income tax purposes. Substantially all of Sila Realty Trust, Inc.’s business is conducted through Sila Realty Operating Partnership, LP, a Delaware limited partnership, or the Operating Partnership. Sila Realty Trust, Inc. is the sole general partner of the Operating Partnership and directly and indirectly owns 100% of the Operating Partnership. Except as the context otherwise requires, “we,” “our,” “us,” and the “Company” refer to Sila Realty Trust, Inc., our Operating Partnership and all wholly-owned subsidiaries.
We are an internally managed company primarily focused on investing in the growing and resilient healthcare sector. We invest in high quality net lease healthcare facilities across the continuum of care, in the pursuit of generating predictable, durable and growing income streams. Our properties include, among others, medical outpatient buildings, inpatient rehabilitation facilities and surgical and specialty facilities. We may also make other real estate related investments, which may include equity or debt interests in other real estate entities.
On June 13, 2024, our common stock, par value $0.01 per share, or our Common Stock, was listed and began trading on the New York Stock Exchange, or the NYSE, under the ticker symbol “SILA”.
As of December 31, 2025, we owned 140 real estate healthcare properties and three undeveloped land parcels, including the Stoughton Healthcare Facility which has been taken out of service and is being demolished.
Key Developments During 2025
•We purchased six operating healthcare properties, comprising approximately 241,000 rentable square feet for an aggregate purchase price of approximately $148,877,000.
•We fully funded two mezzanine loans for the development of an inpatient rehabilitation facility and a behavioral healthcare facility in Lynchburg, Virginia, or the Mezzanine Loans. The Mezzanine Loans have total loan amounts of $12,543,000 and $5,000,000, respectively, and a maturity date of November 5, 2029.
•We entered into a senior unsecured revolving line of credit with Bank of America, N.A., as Administrative Agent for the lenders, or the 2029 Revolving Credit Agreement, for aggregate commitments available of up to $600,000,000, which may be increased, subject to lender approval, through incremental term loans and/or revolving loan commitments in an aggregate amount not to exceed $1,500,000,000. The maturity date for the 2029 Revolving Credit Agreement is February 16, 2029, which, at the Company’s election, may be extended for a period of six-months on no more than two occasions, subject to certain conditions, including a payment of an extension fee.
•On August 4, 2025, the board of directors, or the Board, authorized a share repurchase program of up to $75,000,000 in gross purchase proceeds for a period of three-years from August 4, 2025, subject to the limitation of $25,000,000 in gross purchase proceeds in any twelve-month period.
•Filed with the Securities and Exchange Commission, or the SEC, an automatic shelf registration statement on Form S-3 that is effective for a term of three years, covering future offerings of an indeterminate amount of our Common Stock, preferred stock, depositary shares, warrants, purchase contracts and units.
•Entered into an ATM Equity Offering Sales Agreement through which, from time to time, we may offer and sell shares of Common Stock having an aggregate offering price of up to $250,000,000.
Investment Objectives and Policies
Our primary investment objectives at this time are to:
•acquire high quality net lease healthcare properties leased to tenants along the continuum of care;
•pay regular cash distributions to stockholders;
•preserve, protect and return capital contributions to stockholders;
•realize appreciated growth in the value of our investments upon the sale of such investments in whole or in part; and
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•be prudent, patient and deliberate with respect to the purchase and sale of our investments considering current and projected real estate and financial markets.
We cannot assure stockholders that we will attain these objectives or that the value of our assets will not decrease. Furthermore, within our investment objectives and policies, we have substantial discretion with respect to the selection of specific investments and the purchase and sale of our assets, subject to the approval of the Board, as applicable. The Board may revise our investment objectives and policies if it determines that it is in the best interest of our stockholders.
Investment Strategy
We focus our investment activities on acquiring properties, preferably on a net-leased basis, that are primarily in the healthcare sector. We currently expect that most of our properties will continue to be located throughout the continental United States; however, we may purchase properties in other jurisdictions. We may also invest in real estate related debt and equity securities that meet our investment strategy and return criteria. We evaluate our assets in an effort to avoid any investments that would cause us to fail to maintain our REIT status or cause us or any of our subsidiaries to be an investment company under the Investment Company Act of 1940.
We seek to obtain investments that are (i) essential to the successful business operations of the tenants; (ii) leased to creditworthy and investment grade tenants, preferably on a net-leased basis; (iii) leased to tenants on a long-term basis, which typically include annual or periodic fixed rental increases; and (iv) located in geographically diverse, established markets with superior access and visibility.
We may acquire properties in various stages of development or that require substantial refurbishment or renovation. This determination is made based upon a variety of factors, including the available risk-adjusted returns for such properties when compared with other available properties, the effect such properties would have on the diversification of our portfolio, and our investment objectives of realizing both current income and capital appreciation upon the sale of such properties.
We endeavor to achieve a well-balanced portfolio of real estate investments that is diversified by tenancy, geographic location, age and lease maturities. We seek to acquire properties primarily in the high-growth healthcare sector with tenants that are diversified among national, regional and local entities.
Creditworthy Tenants
We expect the tenants and/or sponsors of the tenants of our healthcare properties to be creditworthy national, regional or local companies generally with high net worth and high operating income.
A tenant is considered creditworthy if it has a financial profile that we believe meets our criteria. In evaluating the creditworthiness of a current tenant or a prospective tenant, we consider various factors, including, but not limited to, the proposed terms of the property acquisition, the financial condition of the tenant and/or the sponsor, the operating history of the property with the tenant, the tenant’s market share and track record within its industry segment, the general health and outlook of the tenant’s industry segment, and the lease length and other lease terms at the time of the property acquisition.
We monitor the credit of our tenants in an effort to stay abreast of any material changes in credit quality. We monitor tenant credit by: (i) reviewing the credit ratings of tenants (or their parent companies) that are rated by nationally recognized rating agencies; (ii) reviewing financial statements that are publicly available or that are required to be delivered to us under the applicable lease; (iii) monitoring industry reports and other available information regarding our tenants and their underlying businesses; (iv) monitoring the timeliness of rent collections; and (v) conducting periodic inspections of our properties to ascertain patient utilization and proper maintenance, repair and upkeep.
Investment Decisions
In evaluating investments in properties, we consider various factors, including, but not limited to, to the extent such information is available with respect to such property, the following:
•proposed purchase price, terms and conditions;
•physical condition, age, and environmental reports;
•location, visibility and access;
•historical financial performance;
•tenants in place and tenant creditworthiness;
•lease terms, including rent, rent increases, length of lease term, specific tenant and landlord responsibilities, renewal, expansion, termination, purchase options, exclusive and permitted uses provisions, assignment and sublease provisions, and co-tenancy requirements;
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•local market economic conditions, demographics and population growth patterns;
•neighboring properties; and
•potential for new property construction in the area.
Investing in and Originating Loans
Our criteria for originating or acquiring loans are substantially the same as those involved in our investment in properties. We have and may continue to invest in mortgage, bridge or mezzanine loans. Further, we may invest in unsecured loans or loans secured by assets other than real estate.
Our underwriting process typically involves comprehensive financial, structural, operational and legal due diligence.
We may originate loans from mortgage brokers or personal solicitations of suitable borrowers, or we may purchase existing loans that were originated by other lenders. We evaluate all potential loan investments to decide whether the term of the loan, the security for the loan and the loan-to-value ratio meet our investment criteria and objectives.
Investing in Real Estate Securities
We may invest in non-majority owned securities of both publicly-traded and private companies primarily engaged in real estate businesses, including REITs and other real estate operating companies, and securities issued by pass-through entities of which substantially all of the assets consist of qualifying assets or real estate related assets. We may purchase the common stock, preferred stock, debt, or other securities of these entities or options to acquire such securities.
Acquisition Structure
We have and expect to continue to acquire fee interests in properties (a fee interest is the absolute, legal possession and ownership of land, property, or rights), although we may utilize, and we have utilized, other methods of acquiring a property, such as a leasehold interest in the land, if we deem them to be advantageous.
In an effort to achieve our investment objectives, and to further diversify our portfolio, we have invested and expect to continue to invest in properties using various acquisition structures, which could include direct and indirect acquisitions, joint ventures, leveraged investments, issuing units in our Operating Partnership in exchange for properties and making mortgages or other loans secured by the same types of properties which we may acquire.
Joint Ventures
We may enter into joint ventures, partnerships and other co-ownership partnerships for the purpose of making investments. Some of the potential reasons to enter into a joint venture may be to acquire assets we could not otherwise acquire, to reduce our capital commitment to a particular asset, or to benefit from certain expertise a partner might have. In determining whether to invest in a particular joint venture, we evaluate the assets of the joint venture under the investment strategy criteria described above. We also evaluate the terms of the joint venture, as well as the financial condition, operating capabilities and integrity of our partner or partners.
Disposition Policy
We typically intend to hold each asset we acquire for an extended period of time. However, circumstances may arise that could result in the sale of some assets earlier than initially expected. The determination of whether an asset will be sold or otherwise disposed of is made after consideration of relevant factors, including prevailing economic conditions, specific real estate market conditions, tax implications for our stockholders, and other factors. The requirements for qualification as a REIT for federal income tax purposes may put some limits on our ability to sell assets after short holding periods.
Financing Strategy and Policies
We believe that utilizing borrowing is consistent with our investment objectives and has the potential to maximize returns to our stockholders. Financing for acquisitions and investments may be obtained at the time an asset is acquired or an investment is made or at a later time. In addition, debt financing may be used from time to time for property improvements, developments, tenant improvements, leasing commissions and other working capital needs. The form of our indebtedness will vary and could be long-term or short-term, secured or unsecured, or fixed-rate or floating rate. We will not enter into interest rate swaps or caps, or similar hedging transactions or derivative arrangements for speculative purposes, but may do so in order to manage or mitigate our interest rate risk on variable rate debt.
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Distribution Policy
The amount of distributions we pay to our stockholders is determined by the Board and is dependent on a number of factors, including funds available for payment of distributions, our financial condition, the timing of property acquisitions, capital expenditure requirements, annual distribution requirements needed to maintain our status as a REIT under the Code and restrictions imposed by our organizational documents and Maryland law.
We currently pay, and intend to continue to pay, distributions to our stockholders. If we do not have enough cash from operations to fund distributions, we may sell assets or draw on our credit facility in order to fund distributions. We have paid, and may continue to pay, distributions from sources other than from our cash flows from operations.
In accordance with our organizational documents and Maryland law, we may not make distributions that would: (i) cause us to be unable to pay our debts as they become due in the ordinary course of business; (ii) cause our total assets to be less than the sum of our total liabilities plus senior liquidation preferences, if any; or (iii) jeopardize our ability to maintain our qualification as a REIT.
To the extent that distributions to our stockholders are paid out of our current or accumulated earnings and profits, such distributions are taxable as ordinary income. To the extent that our distributions exceed our current and accumulated earnings and profits, such amounts constitute a return of capital to our stockholders for federal income tax purposes, to the extent of their basis in their stock, and thereafter will constitute a capital gain.
Competition
As we purchase properties for our portfolio, we are in competition with other potential buyers (some of whom have more cash, available liquidity, and/or offer competitive advantages versus us in the acquisition of properties) for the same properties and may have to pay more to purchase the property than if there were no other potential acquirers, or we may have to locate another property that meets our investment criteria. Although we generally acquire properties subject to existing leases, the leasing of real estate is highly competitive in the current market, and we may experience competition for tenants from owners and managers of competing projects. As a result, we may have to provide free rent, incur charges for tenant improvements, or offer other inducements, or we might not be able to timely lease the space, all of which may have an adverse impact on our results of operations. At the time we determine to dispose of our properties, we are typically in competition with sellers of similar properties to locate suitable purchasers for our properties.
Concentration of Credit Risk and Significant Tenants
As of December 31, 2025, we had cash on deposit in certain financial institutions that had deposits in excess of current federally insured levels. We limit cash investments to financial institutions with high credit standings; therefore, we do not believe we are exposed to any significant credit risk on our cash deposits. To date, we have not experienced any loss of or lack of access to cash in our accounts.
The following table shows the only tenant that accounted for 10% or more of our rental revenue for the year ended December 31, 2025:
| Tenant | Total Number of Leases | Leased Sq Ft | 2025 Rental Revenue (in thousands) | Percentage of 2025 Rental Revenue | ||||||||||||||||||||||
PAM Health(1) | 15 | 708,817 | $ | 31,622 | 16.1 | % | ||||||||||||||||||||
(1) The leases are with tenants under the common control of PAM Health and its affiliates and have lease expiration dates between November 30, 2044 and December 14, 2045.
We had no exposure to geographic concentrations within a metropolitan statistical area that accounted for 10% or more of our rental revenue for the year ended December 31, 2025.
Compliance with Governmental Regulations
Our real estate properties are subject to various federal, state and local regulatory laws and requirements, including, but not limited to, zoning regulations, building codes and land use laws and building, accessibility, occupancy and other permit requirements. Noncompliance could result in the imposition of governmental fines or an award of damages to private litigants. While we believe that we are currently in material compliance with these regulatory requirements, the requirements may change or new requirements may be imposed that could require significant unanticipated expenditures by us. Significant regulatory requirements include the laws and regulations described below.
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REIT Laws and Regulations
We elected, and conduct our operations so as to qualify, to be taxed as a REIT under Sections 856 through 860 of the Code. To maintain our qualification as a REIT, we must meet certain organizational and operational requirements, including a requirement to currently distribute at least 90% of our REIT taxable income, without regard to the deduction for dividends paid and excluding net capital gain, to our stockholders. As a REIT, we generally will not be subject to federal income tax on taxable income that we distribute to our stockholders.
If we fail to maintain our qualification as a REIT in any taxable year, we would then be subject to federal income taxes on our taxable income at regular corporate rates and would not be permitted to qualify for treatment as a REIT for federal income tax purposes for four years following the year during which qualification is lost, unless the Internal Revenue Service grants us relief under certain statutory provisions. Such an event could have a material adverse effect on our net income and net cash available for distribution to our stockholders.
Healthcare Licensure and Certificate of Need
Our tenants operate healthcare facilities that are subject to federal, state and local licensure, certification and inspection laws and regulations. Many states require certain healthcare providers to obtain a certificate of need, or CON, which requires prior approval for the construction, modification and closure of certain healthcare facilities. The ability to obtain such approval and/or the approval process may impact some of our tenants’ abilities to expand or change their businesses. Any failure to comply with any of these laws, regulations, or standards could result in penalties which may include loss or restriction of license, loss of accreditation, denial of reimbursement, imposition of fines, suspension or decertification from federal and state healthcare programs, or closure of the facility.
Fraud and Abuse Laws
There are various federal and state laws prohibiting fraudulent and abusive business practices by healthcare providers who participate in, receive payments from, or are able to make referrals in connection with, government-sponsored healthcare programs, including the Medicare and Medicaid programs. Our leases with certain tenants may also be subject to these fraud and abuse laws. These laws include, without limitation: (i) the Federal Anti-Kickback Statute, which prohibits, among other things, the offer, payment, solicitation or receipt of any form of remuneration in return for, or to induce, the referral of any U.S. federal or state healthcare program patients; (ii) the Federal Physician Self-Referral Prohibition, which, subject to specific exceptions, restricts physicians who have financial relationships with healthcare providers from making referrals for designated health services for which payment may be made under Medicare or Medicaid programs to an entity with which the physician, or an immediate family member, has a financial relationship; (iii) the False Claims Act, which prohibits any person from knowingly presenting false or fraudulent claims for payment to the federal government, including under the Medicare and Medicaid programs; (iv) the Civil Monetary Penalties Law, which authorizes the Department of Health and Human Services to impose monetary penalties for certain fraudulent acts; and (v) state anti-kickback, anti-inducement, anti-referral and insurance fraud laws which may be generally similar to, and potentially more expansive than, the federal laws set forth above.
Violations of these laws may result in criminal and/or civil penalties that range from punitive sanctions, damage assessments, penalties, imprisonment, denial of Medicare and Medicaid payments and/or exclusion from the Medicare and Medicaid programs. Additionally, certain laws, such as the False Claims Act, allow for individuals to bring whistleblower actions on behalf of the government for violations thereof. Imposition of any of these penalties upon one of our tenants could jeopardize that tenant’s ability to operate or to make rent payments to us.
Privacy, Security and Data Breach Notification Laws
The Health Insurance Portability and Accountability Act of 1996, as amended, or HIPAA regulates the privacy and security of certain health information, or Protected Health Information, and requires entities subject to HIPAA to provide notification of breaches of Protected Health Information. Healthcare providers, including many of our tenants, are subject to HIPAA. Breaches of unsecured Protected Health Information and other violations of HIPAA may have other material adverse consequences including material loss of business, business interruption, loss of patient or other critical data, regulatory enforcement, substantial legal liability and reputational harm. Certain violations of HIPAA can result in criminal penalties and enforcement.
Various other state and federal laws relate to privacy, security and the reporting of data breaches involving personal information, or, together with HIPAA, Privacy Laws. For example, various state laws and regulations may regulate the privacy and security of personal information, and require notification of affected individuals in the event of a data breach involving such individual’s personal information (including an individual’s name plus social security number, date of birth or credit card information, for example). Failure of the Company or its tenants to comply with applicable Privacy Laws could have a materially adverse effect on our Company. Failure of our tenants to comply with applicable Privacy Laws could have a material
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adverse effect on their ability to meet their obligations to us. Furthermore, the adoption of new Privacy Laws at the federal and state level could require us or our tenants to incur significant compliance costs.
Americans with Disabilities Act
Under the Americans with Disabilities Act of 1990, as amended, or the ADA, all public accommodations must meet federal requirements for access and use by disabled persons. These laws may require removal of barriers to access by persons with disabilities in certain public areas of our properties where such removal is readily achievable. Under our triple-net lease structure, our tenants would generally be responsible for additional costs that may be required to make our facilities ADA-compliant. Noncompliance with the ADA could result in the imposition of fines or an award of damages to private litigants. Our commitment to make readily achievable accommodations pursuant to the ADA is ongoing, and we continue to assess our properties and make modifications as appropriate in this respect.
Environmental Laws and Regulations
All real estate properties and the operations conducted on the real estate properties are subject to federal, state and local laws and regulations relating to environmental protection and human health and safety. In connection with ownership and operation of real estate, we may be potentially liable for costs and damages related to environmental matters.
We intend to take all reasonable steps to fully comply with environmental laws and regulations for our real estate properties, including obtaining environmental assessments of all properties that we acquire. We obtain Phase I Environmental Assessment Reports, and as needed, conduct further environmental due diligence, including but not limited to Phase II Environmental Assessment Reports, upon each property acquisition, and, if determined necessary, during our period of ownership, to ensure that the properties that we acquire and own are free of environmental contamination and hazardous substances. We also carry environmental liability insurance on our properties, which provides coverage for pollution liability, third-party bodily injury and property damage claims.
Corporate Responsibility
We lease Class A Office space in a tenant focused experiential building that intends to deliver a restorative professional environment that cultivates productivity, collaboration, betterment and balance. The neighborhood in which the office building is located is part of a community that has achieved the WELL Design & Operations designation under the WELL Community Standard, the first neighborhood to do so in North America. The WELL Building Standard takes a holistic approach, offering living workplaces informed by nature and innovation thus creating conditions for personal and professional fulfillment. The building is WELL Gold v2 Certified and LEED Silver Certified.
Social Impact and Community: Our mission is to engage, inspire, and empower our employees to make a positive impact on our community where we work and live. We strive to support each of our employees engaging in the community in areas in which they are passionate and supporting causes that are personally meaningful to them. Employees are encouraged to drive positive change by dedicating their time and talent to non-profit organizations. The Company has a volunteer program whereby employees are provided 24 paid hours each year to use for service to the community. In addition, the Company organizes several group volunteer opportunities each year to support our local communities and foster a culture of giving back. Our social impact programs are in support of several non-profit organizations.
Corporate Culture: Our strong tone at the top begins with the Chief Executive Officer, who has demonstrated his focus on advancing openness, honesty, fairness and integrity within the Company. Ethical behavior is an important cornerstone of our continued success and each of us has an obligation to report any accounting irregularity, theft, discrimination, harassment or other violation of the law. We are committed to creating an open and accountable workplace where employees feel empowered to speak up and raise issues. With this in mind, we provide multiple channels to speak up, ask for guidance, and report concerns. We continue to prioritize having “The Right People, In The Right Places, Doing The Right Things.”
Core Values: We expect that our employees are aligned around core values that inspire our behavior as individuals and as an organization. Our core values are essential to the Company’s culture. These values are critical to the success of the Company and are aligned with the Company’s mission and vision statements. They define expectations for how all employees collaborate, communicate, interact and perform their roles within the Company. They describe for each employee the expectation of a “HI ACT” and that is to act with humility, with integrity, with accountability, with transparent and honest communication and by embracing teamwork.
Human Capital Resources
As of December 31, 2025, we had 47 employees. None of our employees are represented by a labor union or covered by a collective bargaining agreement. We aim to act with the highest integrity and operate with the highest ethical standards as we strive to create and maintain an inclusive work environment that values the uniqueness of each individual and his or her ideas
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and experiences. We endeavor to maintain workplaces that are free from discrimination or harassment on the basis of color, race, sex, national origin, ethnicity, religion, age, disability, sexual orientation, gender identification or expression, or any other status protected by applicable law. We conduct annual training designed to prevent harassment and discrimination and monitor employee conduct year-round. The basis for recruitment, hiring, development, training, compensation and advancement at the Company is qualifications, performance, skills and experience. We believe that our employees are fairly compensated, without regard to race, sex, national origin, ethnicity, religion, age, disability, sexual orientation, gender identification or expression, or any other status protected by applicable law and are routinely recognized for outstanding performance. Our compensation and benefits program is designed to attract and retain talent. We review our compensation and benefits against market and industry benchmarks to ensure they are competitive. Our employees are offered significant flexibility to meet personal and family needs.
Available Information
We electronically file our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all amendments to those reports with the SEC. Copies of our filings with the SEC may be obtained from the SEC’s website, http://www.sec.gov. Access to these filings is free of charge. In addition, we make certain materials that are electronically filed with, or furnished to, the SEC available at www.investors.silarealtytrust.com as soon as reasonably practicable. We routinely post important information on our website at www.silarealtytrust.com in the “Investors” section. We intend to use our website as a means of disclosing material, non-public information and for complying with our disclosure obligations under Regulation FD. Such disclosures will be included on our website under the heading “Investors.” Accordingly, investors should monitor such portion of our website in addition to following our press releases, public conference calls, and filings with the SEC. Our website and the information on our website are not incorporated by reference in this Annual Report on Form 10-K or in any other Securities and Exchange Commission filing we make under the Securities Act or Exchange Act.
Item 1A. Risk Factors
The factors described below represent our principal risks. Other factors may exist that we do not consider to be significant based on information that is currently available or that we are not currently able to anticipate.
Risks Related to Our Business of Investing in Real Estate
We are subject to political, economic and regulatory changes that may have an adverse impact on the global economy or the real estate market in general.
Our operating results are subject to risks generally incident to the ownership of real estate, which may prevent us from being profitable, realizing growth or maintaining the value of our real estate properties, including: changes in general economic or local conditions including inflationary and/or recessionary conditions; tenant turnover, technological changes and changes in supply of or demand for similar or competing properties in an area; changes in the cost or availability of insurance; changes in interest rates and availability of permanent mortgage funds that may render the sale of a property difficult or unattractive; and changes in tax, real estate, environmental and zoning laws. In addition, our business may be adversely affected by market and economic volatility due to, among other things, inflation, increased interest rates, volatility in the equity and debt markets, and economic and other conditions, including pandemics, government shutdowns, geopolitical instability, geopolitical conflicts, terrorist attacks, sanctions, tariffs and other conditions beyond our control.
If a tenant declares bankruptcy, we may be unable to collect balances due under relevant leases, which would reduce our cash flow from operations and the amount available for distributions to our stockholders.
Any of our tenants, or any guarantor of a tenant’s lease obligations, could be subject to a bankruptcy proceeding. Such a bankruptcy filing would bar all efforts by us to collect pre-bankruptcy debts from these entities or their properties, unless we receive an enabling order from the bankruptcy court. Post-bankruptcy debts would be paid currently. If a lease is assumed, all pre-bankruptcy balances owing under it must be paid in full. If a lease is rejected by a tenant in bankruptcy, we would have a general unsecured claim for damages. If a lease is rejected, it is unlikely we would receive any material payments from the tenant because our claim is capped at the rent reserved under the lease, without acceleration, for the greater of one year or 15% of the remaining term of the lease, but not greater than three years, plus rent already due but unpaid. This claim could be paid only if funds were available, and then only in the same percentage as that realized on other unsecured claims.
Sponsors and owners of former tenants at certain of our properties have previously declared and may in the future declare bankruptcy. A tenant or lease guarantor bankruptcy could delay efforts to collect past due balances under the relevant leases, and could ultimately preclude full collection of these sums. Such an event could cause a decrease or cessation of rental payments that would mean a reduction in our cash flow and the amount available for distributions to our stockholders. In the event of a bankruptcy, we cannot give assurance that the tenant or its trustee will assume our lease. If a given lease, or guaranty
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of a lease, is not assumed, our cash flow and the amounts available for distributions to our stockholders may be adversely affected.
We are subject to risks related to tenant concentration, and an adverse development with respect to a large tenant could materially and adversely affect us.
We had one exposure to tenant concentration that accounted for 10.0% or more of rental revenue for the year ended December 31, 2025. The leases with tenants under common control of PAM Health accounted for 16.1% of rental revenue for the year ended December 31, 2025. In the event that a tenant that occupies a significant number of our properties or whose lease payments represent a significant portion of our rental revenue were to experience financial difficulty or file for bankruptcy, it could have a material adverse effect on us.
A concentration of our properties in a particular geographic area would magnify the effects of economic downturns or natural disasters, including severe weather, in that geographic area.
There is a geographic concentration of risk subject to fluctuations in the economies of the various markets in which we own properties. As of December 31, 2025, 9.6%, 6.9%, 5.4%, 4.0% and 3.8% of our annualized December 2025 contractual base rental revenue was generated by properties with markets in Dallas, Oklahoma City, San Antonio, Akron, and Tucson, respectively. Geographic concentration of our properties exposes us to risks related to or arising from economic downturns or natural disasters, including severe weather in the areas where our properties are located. A regional or local recession or a natural disaster or severe weather in any of these areas could adversely affect our ability to generate or increase operating revenues, attract new tenants or dispose of unproductive properties.
In addition, climate change may adversely impact our properties directly and may lead to additional compliance obligations and costs, including insurance premiums, taxes and fees.
We have tenants with below investment grade credit ratings and non-rated tenants that may expose us to a greater risk of default.
As of December 31, 2025, approximately 40.6% of our annualized contractual base rental revenue was derived from tenants, guarantors, or affiliates of our tenants or guarantors, that had an investment grade credit rating from a major ratings agency, approximately 26.3% of our annualized contractual base rental revenue was derived from tenants, guarantors, or affiliates, that were rated but did not have an investment grade credit rating from a major ratings agency, and 33.1% of our annualized contractual base rental revenue was derived from tenants or guarantors that were not rated. Our investments with tenants or guarantors that do not have an investment grade credit rating from a major ratings agency, or are not rated and are not affiliated with companies having an investment grade credit rating may have a greater risk of default and bankruptcy than investments in properties leased exclusively to investment grade tenants or guarantors. When we invest in properties where the tenant or guarantor do not have a publicly available credit rating, we use certain credit assessment tools and rely on our own estimates of the tenant or guarantor’s credit rating which include but are not limited to reviewing the tenant and guarantor’s financial information (i.e., financial ratios, net worth, revenue, cash flows, leverage and liquidity) and monitoring local market conditions. If our lender or a credit rating agency disagrees with our ratings estimates, or our ratings estimates are otherwise inaccurate, we may not be able to obtain our desired level of leverage, or our financing costs may exceed those that we projected. This outcome could have an adverse impact on our returns on that asset and hence our operating results.
If we are unable to renew expiring leases or re-lease such properties to new tenants, our financial results would suffer.
Our financial condition depends, in part, on our ability to lease our space. Among the factors that could impact our financial condition are our inability to renew leases, lease vacant space or re-let space as leases expire, restrictions related to re-leasing space, co-tenancy constraints if co-tenancy clauses are exercised which limit our ability to lease to certain operators and competition for tenancy of our leases.
As of December 31, 2025, 98.7% of our property portfolio was leased and leases representing 22.1% of our annualized base rent are set to expire within 5 years. We cannot assure stockholders that leases will be renewed or that our properties will be re-leased on terms equal to or better than the current terms, or at all. We also may not be able to lease space which is currently not occupied on acceptable terms and conditions, if at all. Portions of our assets may remain vacant for extended periods of time. If the rental rates for our assets decrease, or existing tenants do not renew their leases or we do not re-lease a significant portion of our available space and space for which leases will expire, our financial condition, cash flows and results of operations could be adversely affected.
A property may incur vacancies either by the continued default of tenants under their leases or the expiration of tenant leases. If vacancies continue for an extended period of time, we may suffer reduced revenues, resulting in less cash to be distributed to stockholders. In addition, because properties’ market values depend principally upon the value of the properties’ leases, the resale value of properties with prolonged vacancies could suffer, which could further reduce our stockholders’ return.
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We may be unable to secure funds for future tenant improvements or capital needs, and we may not control the maintenance of our net leased properties, which could adversely impact our ability to pay cash distributions to our stockholders.
When tenants do not renew their leases or otherwise vacate their space, it is typical that, in order to attract replacement tenants, we expend substantial funds for tenant improvements and tenant refurbishments to the vacated space. In addition, although we expect that our leases with tenants will require tenants to pay routine property maintenance costs, we will likely be responsible for any major structural repairs, such as repairs to the foundation, exterior walls and rooftops. Our leases generally provide that tenants are responsible for some or all of the maintenance and other day-to-day management of the relevant properties or their premises; however if a property is not adequately maintained in accordance with the terms of the applicable lease, we may incur expenses for deferred maintenance or other liabilities, including upon expiration or earlier termination of a lease. We generally visit our properties on a periodic basis, but deferred maintenance items may go unnoticed. In addition, a tenant may refuse or be unable to pay for any required maintenance for a property or its premises, which may result in us needing to cover such costs. While our leases generally provide for protection in these instances, a tenant may defer maintenance and it may be difficult to enforce remedies against such a tenant. If we need additional capital to improve or maintain our properties or for any other reason, we will have to obtain financing from sources such as cash flow from operations, borrowings, property sales or future equity offerings. These sources of funding may not be available on attractive terms or at all. If we cannot procure additional funding for capital improvements, our investments may generate lower cash flows or decline in value, or both.
We or our tenants may experience uninsured or underinsured losses, which could result in a significant loss of the capital we have invested in a property, decrease anticipated future revenues or cause us to incur an unanticipated expense.
Our current lease agreements generally require, and new lease agreements that we enter into are expected to require, that the tenant maintain comprehensive hazard insurance, liability insurance, and other customary commercial lease insurance obligations, or that the tenant self-insure its required insurance obligations. However, we cannot be assured that we will continue to require the same levels of insurance coverage under our lease agreements, that such insurance will be available at a reasonable cost in the future or that the insurance coverage provided will fully cover all losses on our properties upon the occurrence of a catastrophic event, nor can we assure you of the future financial viability of the insurers. Certain types of losses, generally of a catastrophic nature, such as earthquakes, hurricanes and floods, may be uninsurable or not economically insurable by us or by our tenants. Insurance coverage may not be sufficient to pay the full current market value or current replacement cost of a loss. Inflation, changes in building codes and ordinances, environmental considerations and other factors might also make it unfeasible to use insurance proceeds to replace the property after such property has been damaged or destroyed. Under such circumstances, the insurance proceeds received might not be adequate to restore the economic position with respect to such property. While the tenants under our leases generally indemnify, defend and hold us harmless for the foregoing liabilities, there can be no assurance that the respective tenant will have sufficient assets, income or access to financing to enable it to satisfy its payment obligations to us under its lease.
In addition, even if damage to our properties is covered by insurance, a disruption of business caused by a casualty event may result in loss of revenue for our tenants or us. Any business interruption insurance may not fully compensate them or us for such loss of revenue. If one of our tenants experiences such a loss, it may be unable to satisfy its payment obligations to us under its lease with us.
To the extent we are unable to pass along our property operating expenses and taxes to our tenants, our business, financial condition and results of operations may be negatively impacted.
Operating expenses associated with owning a property typically include real estate taxes, insurance, maintenance, repair and renovation costs, the cost of compliance with governmental regulations (including zoning) and the potential for liability under applicable laws. We generally lease our properties to tenants pursuant to triple-net leases that require the tenant to pay their proportionate share of substantially all such property operating expenses; however, if there are operating expenses that we are unable to pass along to our tenants, then our business, financial condition and results of operations could be negatively impacted.
Some local real property tax assessors may seek to reassess certain properties following our acquisition of them. In addition, from time to time our property taxes may increase as property values or assessment rates change or for other reasons deemed relevant by the assessors. An increase in the assessed valuation of a property for real estate tax purposes will result in an increase in the related real estate taxes on that property. Although a substantial portion of our tenant leases may permit us to pass through such tax increases to the tenants for payment, there is no assurance that renewal leases or future leases will be
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negotiated on the same basis. Increases not passed through to tenants will adversely affect our income, cash available for distributions, and the amount of distributions to our stockholders.
Our investments in, and acquisitions of, real property may be unsuccessful or fail to meet our expectations and we may not be successful in identifying attractive acquisition opportunities and consummating these transactions.
We cannot assure our stockholders that we will be able to identify opportunities or complete transactions on commercially reasonable terms or at all or that we will actually realize any anticipated benefits from such acquisitions or investments. We could encounter unanticipated difficulties and expenditures relating to any acquired properties, including contingent liabilities, and acquired properties may require significant management attention that would otherwise be devoted to our ongoing business. Such expenditures may negatively affect our results of operations. Investments in and acquisitions of healthcare related properties entail risks associated with real estate investments generally, including risks that the investment will not achieve expected returns, that the cost estimates for necessary property improvements will prove inaccurate or that the tenant or operator will fail to meet performance expectations. We may not be able to obtain or assume financing for acquisitions on favorable terms or at all and we may be unable to quickly and efficiently integrate new acquisitions into our existing operations, and this could have a material adverse effect on our business. Acquired properties may be located in new markets, either within or outside the US, where we may face risks associated with a lack of market knowledge or understanding of the local economy, lack of business relationships in the area, and unfamiliarity with local governmental and permitting procedures. As a result, we cannot be sure that we will achieve the economic benefit we expect from acquisitions or investments. In such an event, the Company may be required to recognize an impairment which could have a material adverse effect on the Company's consolidated financial condition and results of operations.
In addition, the seller of a property often sells such property in its “as is” condition on a “where is” basis and “with all faults,” without any warranties of merchantability or fitness for a particular use or purpose. In addition, purchase agreements may contain only limited warranties, representations and indemnifications that will only survive for a limited period after the closing. As a result, we may have no recourse or limited recourse against the prior owners with respect to unknown liabilities. The purchase of properties with limited warranties increases the risk that we may lose some or all of our invested capital in the property as well as the loss of rental income from that property.
The Company’s real estate investments are illiquid and the Company may not be able to sell properties strategically targeted for disposition.
Because real estate investments are relatively illiquid, the Company’s ability to adjust its portfolio promptly in response to economic or other conditions is limited. Certain significant expenditures generally do not change in response to economic or other conditions, including debt service (if any), real estate taxes, and operating and maintenance costs. This combination of variable revenue and relatively fixed expenditures may result in reduced earnings and could have an adverse effect on the Company’s financial condition. In addition, the Company may not be able to sell properties targeted for disposition, including properties held for sale, due to adverse market conditions. This may negatively effect, among other things, the Company’s ability to sell properties on favorable terms, execute its operating strategy, repay debt, or pay dividends.
We may not be able to sell a property at a price equal to, or greater than, the price for which we purchased such property, which may lead to a decrease in the value of our assets and a reduction in the value of shares held by our stockholders.
Some of our leases may not contain rental increases over time, the rental increases may be less than the fair market rate at a future point in time, or we may not be able to renew or re-lease space at current rents. Therefore, or for other reasons related to the individual properties or the markets in which they are located, the value of the property to a potential purchaser may not increase over time, which may restrict our ability to sell a property, or if we are able to sell such property, may lead to a sale price less than the price that we paid to purchase the property.
Covenants, conditions and restrictions may restrict our ability to operate our properties.
Some of our properties may be contiguous to other parcels of real property, comprising part of the same commercial center. In connection with such properties, there are significant covenants, conditions and restrictions, or CC&Rs, restricting the operation of such properties and any improvements on such properties, and related to granting easements on such properties. Moreover, the operation and management of the contiguous properties may impact such properties. Compliance with CC&Rs may adversely affect our operating costs and reduce the amount of funds that we have available to pay distributions.
Our operating results may be negatively affected by potential development and construction delays and result in increased costs and risks.
We have acquired and developed properties upon which we will construct improvements. We will be subject to uncertainties associated with re-zoning for development, environmental concerns of governmental entities and/or community groups, and our builder’s ability to build in conformity with plans, specifications, budgeted costs, and timetables. A builder’s performance also may be affected or delayed by conditions beyond the builder’s control. Delays in completion of construction
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could also give tenants the right to terminate preconstruction leases. We may incur additional risks when we make periodic progress payments or other advances to builders before they complete construction. These and other such factors can result in increased costs of a project or loss of our investment. In addition, we will be subject to normal lease-up risks relating to newly constructed projects. We also must rely on rental income and expense projections and estimates of the fair market value of property upon completion of construction when agreeing upon a price at the time we acquire a property. If our projections are inaccurate, we may pay too much for a property, and our return on our investment could suffer.
We may invest in unimproved real property. For purposes of this paragraph, “unimproved real property” is real property which has not been acquired for the purpose of producing rental or other operating income, has no development or construction in process and on which no construction or development is planned in good faith to commence within one year. Returns from development of unimproved properties are also subject to risks associated with re-zoning the land for development and environmental concerns of governmental entities and/or community groups. Although we intend to limit any investment in unimproved property, our stockholders’ investment nevertheless is subject to the risks associated with investments in unimproved real property.
Costs of complying with governmental laws and regulations, including those relating to environmental protection, human health and safety and disability accommodation, may adversely affect our income and the cash available for any distributions.
All real property investments and the operations conducted in connection with such investments are subject to federal, state and local laws and regulations relating to environmental protection, human health and safety and disability accommodation. Some of these laws and regulations may impose joint and several liability on customers, owners or operators for the costs to investigate or remediate contaminated properties, regardless of fault or whether the acts causing the contamination were legal. They also may impose restrictions on the manner in which real property may be used or businesses may be operated. We can provide no assurance that we are aware of all potential environmental or other liabilities or the ultimate cost to address them or that our properties will not be affected by tenants or nearby properties or other unrelated third parties and their future uses or conditions.
In addition, new environmental laws and regulations, or changes to such laws and regulations, may result in additional liabilities. Compliance with environmental, social and governance-related, or ESG-related, laws, regulations, expectations or reporting requirements may result in increased costs, as well as additional scrutiny that could heighten all of the risks associated with environmental, social and sustainability matters.
The costs of complying with these laws and regulations may have a material adverse effect on our business, financial condition and results of operations and ability to make distributions to our stockholders. In addition, if we fail to comply with these new laws, regulations, expectations or reporting requirements, or if we are perceived as failing, our reputation and business could be adversely impacted, which could have a material adverse effect on our financial condition and results of operations.
Our ownership of properties through ground leases exposes us to the loss of such properties upon breach or termination of the ground leases.
We have acquired an interest in certain of our properties by acquiring a leasehold interest in the property on which the building is located, and we may acquire additional properties in the future through the purchase of interests in ground leases. Many of these ground leases impose significant limitations on our uses of the subject properties, restrict our ability to sell or otherwise transfer our interests in the properties or restrict the leasing of the properties. These restrictions may limit our ability to timely sell or exchange the properties, impair the properties’ value or negatively impact our ability to find suitable tenants for the properties. As the lessee under a ground lease, we are exposed to the possibility of losing the property upon termination of the ground lease or an earlier breach of the ground lease by us. In addition, we could be forced to renegotiate such ground leases upon their expiration on terms that are unfavorable to us.
We expect that most of our properties will continue to be located in the continental United States and would be affected by economic downturns, as well as economic cycles and risks inherent to that area.
Our properties are concentrated in, and we expect to continue to acquire commercial real estate located in, the continental United States; however, we may purchase properties in other jurisdictions. Real estate markets are subject to economic downturns, as they have been in the past, and we cannot predict how economic conditions will impact this market in both the short and long term. Declines in the economy or a decline in the real estate market in the continental United States could hurt our financial performance and the value of our properties. The factors affecting economic conditions in the continental United States real estate market include, but are not limited to: financial performance and productivity of, among others, the publishing, advertising, financial, technology, retail, insurance and real estate industries; business layoffs or downsizing; industry slowdowns; potential government shutdowns; relocations of businesses; changing demographics; increased telecommuting and use of alternative workplaces; infrastructure quality; any oversupply of, or reduced demand for, real estate;
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concessions or reduced rental rates under new leases for properties where tenants defaulted; increased insurance premiums; and increased interest rates.
Risks Related to our Business of Investing in the Healthcare Property Sector
Our properties and tenants may be unable to compete successfully, which could result in lower rent payments, reduce our cash flows from operations and the amount available for distributions to our stockholders.
Our current and potential properties and our tenants may face competition from nearby healthcare facilities and other properties that provide comparable services. Some of our competing facilities may be owned by governmental agencies and are supported by tax revenues, and others are owned by non-profit corporations and therefore are supported to a large extent by endowments and charitable contributions and pay little or no taxes. Not all of our properties will be affiliated with non-profit corporations and receive such support. Additionally, the introduction and expansion of new stakeholders competing with traditional providers in the healthcare market and telemedicine are disrupting “agents” in the healthcare industry and could lead to decreased demand for healthcare properties and new trends in payments. The trend of increasing private equity investment in healthcare providers could also increase competition in the healthcare market. Our tenants’ failure to compete successfully with other healthcare providers could adversely affect their ability to make rental payments, which could adversely affect our rental revenues. Further, from time to time and for reasons beyond our control, referral sources, including physicians and managed care organizations, may change their lists of hospitals, physicians or other healthcare providers to which they refer patients or that are permitted to participate in the payer program. This could adversely affect our tenants’ ability to make rental payments, which could adversely affect our rental revenues. Any reduction in rental revenues resulting from the inability of our healthcare properties and our tenants to compete successfully may have an adverse effect on our business, financial condition and results of operations and ability to make distributions to our stockholders.
Compliance with and changes to healthcare laws and regulations could have an adverse effect on the financial condition of our tenants and, consequently, their ability to make rent payments and meet obligations to us.
Tenants of our healthcare properties may be required to hold appropriate licenses and secure regulatory approvals for initial or continued operation. Operators failing to comply with state licensing laws and regulations may face disciplinary actions from state and regulatory agencies, including restrictions or termination of their privilege to operate within the state. Many states regulate the establishment and construction of healthcare facilities and services, and the expansion of existing healthcare facilities and services through CON laws, which may include regulation of certain licenses, medical equipment, and capital expenditures. Additionally, the transfer of healthcare facilities to successor operators may necessitate regulatory approval, and the replacement of a tenant operator could be delayed due to this process. Failure to secure CON approval for a desired project, failure of tenant operators to maintain proper licensing, and delays in transferring properties to successor operators could negatively impact our tenants’ financial conditions, and thus result in an adverse impact on our revenue, operations, and the ability to make distributions to our stockholders.
Our tenants’ operations may become subject to legal claims that their services have resulted in patient injury or other adverse effects in violation of applicable laws. Such claims may cause our tenants to incur punitive damages arising from professional liability and general liability claims and/or become subject to governmental investigations, enforcement actions or litigation. Legal claims against our tenants, including any governmental audits or investigations resulting therefrom, could have a negative impact on their financial condition and ability to pay rent. Consequently, such legal claims against our tenants could have an adverse impact on our revenue, operations, and ability to make stockholder distributions. Our tenants’ businesses are generally influenced by government and private payor rates, and sources of revenue for our tenants typically include the Medicare and Medicaid programs. Healthcare providers continue to face increased government pressure to control or reduce healthcare costs and significant reductions in healthcare reimbursement, including reduced reimbursements and changes to payment methodologies under the Affordable Care Act. The need to control Medicaid expenditures may be exacerbated by the potential for increased enrollment in Medicaid programs due to unemployment and declines in family incomes. Historically, states have often attempted to reduce Medicaid spending by limiting benefits and tightening Medicaid eligibility requirements. Such efforts by Medicare and Medicaid to reduce reimbursements could negatively affect our tenant’s revenues and their ability to pay rent to us.
Reimbursement from Medicare, Medicaid, and other governmental payors may be subject to statutory changes, recovery of overpayments, rate adjustments, administrative decision-making, funding restrictions, and payment delays due to investigations or audits. The effect and timing of any future legislative reforms related to reimbursement to our tenants for their services cannot be ascertained, and we cannot guarantee continued adequate reimbursement levels from either governmental or private payors. Insufficient reimbursement from government and private payors could negatively impact tenants’ finances and rent payments, which could have an adverse effect on our revenue, operations, and ability to make stockholder distributions.
Federal, state, and local laws, statutes, regulatory policies, and any future legislative changes or rulings may impact healthcare providers leasing our properties. These include regulations concerning the quality and medical necessity of care,
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insurance and patient billing, the security and privacy of patient information, healthcare provider financial interests and conflicts of interest, self-referrals, price transparency, corporate practice of medicine and surprise billing. Relevant laws and regulations include, but are not limited to: the Medicare and Medicaid statutes; the Stark Law; the civil False Claims Act; the federal False Claims Law; the federal Anti-Kickback Statute; state law prohibitions against kickbacks, fraud and abuse, patient brokering, advertising and marketing of healthcare items and services and fee splitting; state laws regulating the corporate practice of medicine; the federal Eliminating Kickbacks in Recovery Act; the Program Fraud Civil Remedies Act; the Civil Monetary Penalties Law; the Exclusion Laws; the Emergency Medical Treatment & Labor Act; the Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act; applicable state laws regarding patient privacy and security of patient health information; the Clinical Laboratory Improvement Amendments of 1988; the Travel Act; OIG compliance program elements; and all amendments thereto, including any related regulations or decisions.
Non-compliance with these laws and regulations could have legal and financial consequences that adversely affect our tenants’ ability to make rent payments which could have an adverse effect on our business, financial condition, results of operations, and ability to make distributions to our stockholders.
Adverse trends in healthcare provider operations, including those related to changes in laws and regulations, may negatively affect our lease revenues and our ability to make distributions to our stockholders.
The healthcare industry is currently experiencing, among other things: changes in the demand for and methods of delivering healthcare services, particularly as telemedicine and telehealth continue to gain popularity, as well as continued innovation and integration of technological advancements and artificial intelligence; a shift in the provision of healthcare services from inpatient to outpatient settings; changes in third party reimbursement methods and policies, including an increased focus on value-based reimbursement with downside provider risk; consolidation and pressure to integrate within the healthcare industry through acquisitions, joint ventures and managed service organizations; increased scrutiny of billing, referral, and other practices by U.S. federal and state authorities; consolidation of health insurers; competition among healthcare providers including competition for patients among healthcare providers in areas with significant unused capacity; increased expense for uninsured patients; increased expense arising from an older and sicker patient mix; increased liability insurance expenses; increased emphasis on compliance with privacy and security requirements related to health information; pressures on healthcare providers to control or reduce costs; staffing shortages (particularly nursing staff) and increases in wages as well as inflation in the cost of supplies; regulatory and government reimbursement uncertainty, increased price transparency resulting from the Transparency in Coverage rule and the Consolidated Appropriations Act of 2021, the Hospital Price Transparency regulation of 2021, the No Surprises Act and other healthcare reform laws and court decisions on cases challenging the legality of such laws; federal and state government plans to reduce budget deficits and address debt ceiling limits by lowering healthcare provider Medicaid payment rates (including changes to Medicaid in connection with the One Big Beautiful Bill Act, which is expected to significantly reduce Medicaid funding); increased scrutiny of control over release of confidential patient medical information and increased attention to compliance with regulations designed to safeguard protected health information and cyberattacks on healthcare entities and their business associates (i.e., vendors who handle patient protected health information); and anticipated increased scrutiny and enforcement of anti-trust laws by the Federal Trade Commission and Department of Justice Antitrust Division. These factors may adversely affect demand for healthcare facilities by potential future tenants and/or the economic performance of some or all of our tenants and, in turn, our lease revenues, which may have an adverse effect on our business, financial condition, results of operations, and ability to make distributions to our stockholders. In addition, increased federal and state scrutiny of healthcare provider transactions, including those involving real estate investment trusts and required disclosures thereof, could negatively impact projects or prohibit investment or lead to more oversight of our tenants, thus potentially increasing government enforcement activity against them. For example, following a bankruptcy, there has been and may in the future be substantial negative press attention regarding certain types of corporate operators of healthcare facilities as well as actual and potential legislation, either or both of which could have negative impacts on our current and potential future tenants which could potentially have an adverse effect on our results of operations.
Risks Related to Our Corporate Structure
We are dependent on our key personnel.
As of December 31, 2025, we only had 45 employees and two executive officers. Given the relatively small size of our management team, we are dependent on our Chief Executive Officer, Chief Financial Officer and other key personnel. We believe that our future success depends, in large part, on our ability to retain and hire highly-skilled managerial and operating personnel. Competition for persons with managerial and operational skills is intense, and we cannot assure our stockholders that we will be successful in retaining or attracting skilled personnel. If we lose or are unable to obtain the services of our executive
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officers and other key personnel, or we are unable to establish or maintain the necessary strategic relationships, our ability to operate our business or implement our business strategy could be delayed or hindered.
The limit on the number of shares a person may own may discourage a takeover that could otherwise result in a premium price to our stockholders and may hinder a stockholder’s ability to dispose of his or her shares.
Our charter, with certain exceptions, authorizes our Board to take such actions as are necessary and desirable to preserve our qualification as a REIT. In this respect, among other things, unless exempted (prospectively or retroactively) by the Board, no person (as defined in our charter) may own (i) more than 9.8% in value of the aggregate of our outstanding shares (of any class or series, including common shares or preferred shares) of stock, or (ii) more than 9.8% (in value or number, whichever is more restrictive) of the aggregate of the outstanding shares of only our Common Stock. This restriction may have the effect of delaying, deferring or preventing a change in control of us, including an extraordinary transaction (such as a merger, tender offer or sale of all or substantially all our assets) that might provide a premium price for holders of our Common Stock, and may make it more difficult for a stockholder to sell or dispose of his or her shares.
Our charter permits the Board to classify or reclassify unissued stock with terms that may subordinate the rights of common stockholders or discourage a third party from acquiring us in a manner that might result in a premium price to our stockholders.
Our charter authorizes 610,000,000 shares of stock, of which 510,000,000 shares are classified as Common Stock and 100,000,000 are classified as preferred stock. Currently, we do not have any preferred stock outstanding. The Board, without any action by our stockholders, may amend our charter from time to time to increase or decrease the aggregate number of shares or the number of shares of any class or series of stock that we have authority to issue. The Board may classify or reclassify any unissued Common Stock or preferred stock into other classes or series of stock and establish the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications and terms and conditions of repurchase of any such stock. Thus, if also approved by a majority of our independent directors not otherwise interested in the transaction, who will have access, at our expense, to our legal counsel or independent legal counsel, the Board could authorize the issuance of additional preferred stock with terms and conditions that could have a priority as to distributions and amounts payable upon liquidation over the rights of the holders of our Common Stock. Preferred stock could also have the effect of delaying, deferring or preventing a change in control of us, including an extraordinary transaction (such as a merger, tender offer or sale of all or substantially all our assets) that might provide a premium price for holders of our Common Stock.
We may be unable to maintain cash distributions or increase distributions over time.
There are many factors that can affect the availability and timing of cash distributions to stockholders. The amount of cash available for distributions is affected by many factors, such as our ability to buy properties, rental income from such properties and our operating expense levels, as well as many other variables. Actual cash available for distributions may vary substantially from estimates. We cannot assure our stockholders that we will be able to maintain our current level of distributions or that distributions will increase over time.
Our stockholders are subject to the risk that our business and operating plans may change.
The Board may change our investment objectives, targeted investments, borrowing policies or other corporate policies without stockholder approval. A change in our investment strategy may, among other things, increase our exposure to interest rate risk, default risk, and real property market fluctuations, all of which could materially and adversely affect our ability to achieve our investment objectives.
Provisions of the MGCL, our charter, and our bylaws could deter takeover attempts and have an adverse impact on a stockholder’s ability to exit the investment.
The Maryland General Corporation Law, or the MGCL, our charter, and our bylaws contain provisions that may delay, defer, or prevent a transaction or a change in control of the Company.
We are subject to the Maryland Business Combination Act, which may discourage third parties from trying to acquire control of us and increase the difficulty of consummating such an offer.
In addition, with some exceptions, the Maryland Control Share Acquisition Act, provides that a holder of “control shares” of a Maryland corporation acquired in a control share acquisition has no voting rights, except to the extent approved by a vote of stockholders entitled to cast two-thirds of the votes entitled to be cast on the matter, excluding “control shares” owned by the acquiring person, owned by the Company’s officers, and owned by the Company’s employees who are also directors. As permitted by the MGCL, however, our bylaws exempt the Company from the application of the Maryland Control Share Acquisition Act. If our bylaws are amended to repeal this exemption, the Maryland Control Share Acquisition Act would apply and would very likely make it more difficult for a third party to obtain control of us and increase the difficulty of consummating such an offer. Further, the “unsolicited takeover” provisions of Title 3, Subtitle 8 of the MGCL permit the Board, without
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stockholder approval and regardless of what is provided in our charter or bylaws, to implement certain takeover defenses, including adopting a classified board, increasing the vote required to remove a director, or requiring an affirmative vote of a majority of the remaining directors to fill a vacancy.
These provisions, as well as other provisions of our charter and bylaws, may delay, defer, or prevent a transaction or a change in control that might otherwise be in the best interests of our stockholders.
Risks Associated with Debt Financing and Investments
Interest rate exposure could have a material adverse effect on our results of operations, financial condition and ability to pay distributions to stockholders at our current level.
Our revenues are generated by our leases, which typically have fixed rental rates, subject to periodic rent escalators. The generally fixed nature of revenues and the variable rate of debt obligations and other expenses could create interest rate risk for us. Increases in interest rates may not be matched by increases in our rental income, which could increase our expenses and adversely affect our business, financial condition, results of operations, and ability to make distributions to our stockholders. In addition, during inflationary periods, our expenses may increase faster than our fixed rental increases, which could potentially have an adverse effect on our results of operations.
Hedging activity may expose us to risks, including the risks that a counterparty will not perform and that the hedge will not yield the economic benefits we anticipate, which may adversely affect us.
We manage exposure to interest rate volatility by using interest rate hedging arrangements. These arrangements involve risk, such as the risk that counterparties may fail to honor their obligations under these arrangements, and that these arrangements will not be effective in reducing our exposure to interest rate changes. In addition, interest rates may change in an unexpected manner and therefore significantly reduce the economic benefits of such arrangements. There can be no assurance that our hedging arrangements will qualify for hedge accounting or that our hedging activities will have the desired beneficial impact on our results of operations. Should we terminate a hedging agreement, it may result in significant costs and cash requirements to fulfil our obligations under the hedging arrangement. In addition, failure to effectively hedge against interest rate changes may adversely affect our results of operations.
We have broad authority to incur debt, and high debt levels could hinder our ability to make distributions and could decrease the value of our stockholders’ investments.
As of December 31, 2025, we had approximately $676,000,000 of indebtedness representing the 2029 Revolving Credit Agreement, the 2027 Term Loan Agreement and the 2028 Term Loan Agreement, and we may be able to incur more debt. High debt levels would cause us to incur higher interest charges, would result in higher debt service payments, and could be accompanied by restrictive covenants. These factors could limit the amount of cash we have available to distribute and could result in a decline in the value of our stockholders’ investments.
We incur borrowings, which may increase our business risks, and could hinder our ability to make distributions to our stockholders.
We have obtained credit facilities and may obtain other similar financing arrangements in order to acquire properties. We may also decide to later further leverage our properties. We may pledge all or some of our real properties as security for that debt to obtain funds to acquire real properties. We may borrow if we need funds to pay a desired distribution rate to our stockholders. We may also borrow if we deem it necessary or advisable to ensure that we qualify and maintain our qualification as a REIT for federal income tax purposes. If there is a shortfall between the cash flow from our properties and the cash flow needed to service debt, then the amount available for distribution to our stockholders may be reduced.
Lenders may require us to enter into restrictive covenants relating to our operations, which could limit our ability to make distributions to stockholders at our current level.
When providing financing, a lender could impose restrictions on us that affect our distribution and operating policies, and our ability to incur additional debt. Loan documents we enter into may contain covenants that limit our ability to discontinue insurance coverage. These or other limitations may adversely affect our flexibility and limit our ability to make distributions to stockholders at our current level.
Disruptions in the credit markets could have a material adverse effect on our results of operations, financial condition and ability to pay distributions to stockholders at our current level.
In the past, domestic and international financial markets experienced significant disruptions which were brought about in large part by failures in the U.S. banking system. Additionally, in the past, international conflicts and the resultant U.S. response, including financial sanctions, have disrupted credit markets. These disruptions could severely impact the availability of credit in the market and/or contribute to rising costs associated with obtaining credit. If debt financing is not available on
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terms and conditions we find acceptable, we may not be able to obtain financing for investments. These disruptions in the credit markets have not thus far affected our ability to borrow money to finance the purchase of, or other activities related to, real estate assets, but they may do so in the future. If we are unable to borrow money on terms and conditions that we find acceptable, we may be forced to reduce the number of properties we can purchase and/or dispose of some of our assets. These disruptions could also adversely affect the return on the properties we purchase. In addition, if we pay fees to lock in a favorable interest rate, falling interest rates or other factors could require us to forfeit these fees. All of these events could have a material adverse effect on our results of operations, financial condition and ability to pay distributions to stockholders at our current level.
U.S. Federal Income Tax Risks
Failure to maintain our qualification as a REIT would adversely affect our operations and ability to make distributions.
In order for us to maintain our qualification as a REIT, we must satisfy certain asset, income, organizational, distribution, stockholder ownership and other requirements set forth in the Code and Treasury Regulations on an ongoing basis. We intend to structure our activities in a manner designed to satisfy all of these requirements. However, various factual matters and circumstances relevant to our REIT qualification may not be entirely within our control. If certain of our operations were to be recharacterized by the Internal Revenue Service, or IRS, such recharacterization could jeopardize our ability to satisfy all of the requirements for qualification as a REIT.
If we fail to maintain our qualification as a REIT for any taxable year and we do not qualify for certain statutory relief provisions, we will be subject to U.S. federal income tax on our taxable income at corporate rates. In addition, we would generally be disqualified from treatment as a REIT for the four taxable years following the taxable year in which we lost our REIT status. Losing our REIT status would reduce our net earnings available for investment or distribution to stockholders because of the additional corporate-level tax liability. In addition, distributions to stockholders would no longer qualify for the dividends-paid deduction, and we would no longer be required to make distributions. If this occurs, we might be required to borrow funds or liquidate some investments in order to pay the applicable tax. Our failure to qualify as a REIT would adversely affect the return of stockholders’ investments.
To maintain our qualification as a REIT, we must meet annual distribution requirements, which may result in us distributing amounts that may otherwise be used for our operations and which could result in our forgoing otherwise attractive investment opportunities.
To maintain the favorable tax treatment afforded to REITs under the Code, we generally will be required each year to distribute to our stockholders at least 90% of our REIT taxable income determined without regard to the dividends-paid deduction and excluding net capital gain. To the extent that we do not distribute all of our net capital gains or distribute less than 100% of our REIT taxable income, as adjusted, we will have to pay tax on the undistributed amounts at corporate tax rates. Furthermore, if we fail to distribute during each calendar year at least the sum of: (a) 85% of our ordinary income for that year; (b) 95% of our capital gain net income for that year; and (c) any undistributed taxable income from prior periods, ((a) through (c), collectively referred to as the Required Distribution), we would have to pay a 4% nondeductible excise tax on the excess of the Required Distribution over the sum of (x) the amounts that we actually distributed; and (y) the amounts we retained and upon which we paid income tax at the corporate level. These requirements could cause us to distribute amounts that otherwise would be spent on investments in real estate assets, and it is possible that we might be required to borrow funds, possibly at unfavorable rates, or sell assets to fund these distributions. In addition, we could pay part of these required distributions in shares of our Common Stock, which could result in stockholders having tax liabilities from such distributions in excess of the cash they receive. It is possible the taxable share distribution will not count towards our distribution requirement, in which case adverse consequences could apply. Although we intend to continue to make distributions sufficient to meet the annual distribution requirements and to avoid U.S. federal income and excise taxes, it is possible that we might not always be able to do so.
Certain of our business activities are potentially subject to the prohibited transaction tax, which could reduce the return on our stockholders’ investment.
A REIT will incur a 100% tax on the net income from a “prohibited transaction.” Generally, a prohibited transaction includes a sale or disposition of property held primarily for sale to customers in the ordinary course of business. Our desire to avoid the prohibited transactions tax may cause us to forego disposition opportunities that would otherwise be advantageous if we were not a REIT. While we believe that the dispositions of our assets pursuant to our investment strategy should not be treated as prohibited transactions, whether a particular sale will be treated as a prohibited transaction depends on the underlying facts and circumstances. We have not sought and do not intend to seek a ruling from the IRS regarding any dispositions.
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Accordingly, there can be no assurance that our dispositions of such assets will not be subject to the prohibited transactions tax. Any such taxes we pay would reduce our cash available for distribution to our stockholders.
Even if we qualify as a REIT, we may face other tax liabilities that would reduce our cash available for distribution to our stockholders.
Even if we qualify for taxation as a REIT, we may be subject to U.S. federal, state and local income taxes. For example, we may be subject to the prohibited transactions tax and/or the excise tax for failing to make (or be deemed to have made) sufficient distributions, as described above. We also may decide to retain net capital gain we earn from the sale or other disposition of our property and pay income tax directly on such income. In that event, our stockholders would be treated as if they earned that income and paid the tax on it directly. However, stockholders that are tax-exempt, such as charities or qualified pension plans, would have no benefit from their deemed payment of such tax liability unless they file U.S. federal income tax returns and thereon seek a refund of such tax. We also may be subject to state and local taxes on our income or property, either directly or indirectly through our Operating Partnership or other companies through which we indirectly own assets.
Additionally, some of our assets may need to be owned by, or operations may need to be conducted through, one or more taxable REIT subsidiaries, or TRS. Any of our TRS would be subject to U.S. federal, state and local income tax on its taxable income at applicable corporate rates, reducing the amount available for distribution to us. Further, we would incur a 100% excise tax on transactions with our TRS that are not conducted on an arm’s-length basis. For example, to the extent that the rent paid by one of our TRS exceeds an arm’s-length rental amount, such amount would be potentially subject to a 100% excise tax. While we intend that all transactions between us and our TRS would be conducted on an arm’s-length basis, and therefore, any amounts paid by our TRS to us would not be subject to the excise tax, no assurance can be given that excise tax would not arise from such transactions. Any taxes we pay would reduce our cash available for distribution to our stockholders.
Complying with REIT requirements may force us to forgo and/or liquidate otherwise attractive investment opportunities and limit our expansion opportunities, or otherwise adversely affect our ability to execute our business plan.
To qualify as a REIT for U.S. federal income tax purposes, we must continually satisfy tests concerning, among other things, the sources of our income, the nature and diversification of our assets, the amounts we distribute to our stockholders and the ownership of our stock. In order to meet these tests, we may be required to forgo or liquidate otherwise attractive investments or make distributions to stockholders at disadvantageous times or when we do not have funds readily available for distribution. Thus, compliance with the REIT requirements may hinder our ability to operate solely on the basis of maximizing profits.
The failure of a mezzanine loan to qualify as a real estate asset would adversely affect our ability to qualify as a REIT.
In general, in order for a loan to be treated as a qualifying real estate asset producing qualifying income for purposes of the REIT asset and income tests, the loan must be secured by real property or an interest in real property. We may originate or acquire mezzanine loans that are not directly secured by real property or an interest in real property but instead secured by equity interests in a partnership or limited liability company that directly or indirectly owns real property or an interest in real property. In Revenue Procedure 2003-65, the IRS provided a safe harbor pursuant to which a mezzanine loan that is not secured by real estate would, if it meets each of the requirements contained in the Revenue Procedure 2003-65, be treated by the IRS as a qualifying real estate asset. Although the Revenue Procedure 2003-65 provides a safe harbor on which taxpayers may rely, it does not prescribe rules of substantive tax law and in many cases it may not be possible for us to meet all the requirements of the safe harbor. We cannot provide assurance that any mezzanine loan in which we invest would be treated as a qualifying asset producing qualifying income for REIT qualification purposes. If any such loan fails to be a qualifying real estate asset, we may fail either the REIT income or asset tests, and may be disqualified as a REIT.
Legislative or regulatory action could adversely affect the returns to our investors.
U.S. federal income tax laws governing REITs and other corporations and the administrative interpretations of those laws may be amended at any time, potentially with retroactive effect, which could have a material and adverse effect on us and our stockholders. We cannot predict whether, when, to what extent or with what effective dates new U.S. federal tax laws, regulations, interpretations or rulings will be issued. Prospective investors are urged to consult their tax advisors regarding the effect of potential changes to the U.S. federal tax laws on an investment in our stock.
Dividends payable by REITs generally do not qualify for the preferential tax rates available for some dividends under current law.
The maximum U.S. federal income tax rate for “qualified dividends” payable to U.S. stockholders that are individuals, trusts and estates generally is 20%. Dividends payable by REITs, however, are generally not eligible for the reduced rates for qualified dividends and are taxed at ordinary income rates. However, U.S. stockholders that are individuals, trusts and estates generally may deduct 20% of ordinary dividends from a REIT resulting in a maximum effective U.S. federal income tax rate of
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29.6% on such income. These rules do not adversely affect the taxation of REITs or dividends payable by REITs, to the extent that the reduced rates continue to apply to regular corporate qualified dividends; however, investors that are individuals, trusts and estates may perceive investments in REITs to be relatively less attractive than investments in the stocks of non-REIT corporations that pay dividends, which could materially and adversely affect the value of the shares of REITs, including our Common Stock.
REIT ownership limitations may restrict or prevent you from engaging in certain transfers of our Common Stock.
In order to satisfy the requirements for REIT qualification, no more than 50% in value of all classes or series of our outstanding shares of stock may be owned, actually or constructively, by five or fewer individuals (as defined in the Code to include certain entities) at any time during the last half of each taxable year. Under applicable constructive ownership rules, any shares of stock owned by certain affiliated owners generally would be added together for purposes of the Common Stock ownership limits, and any shares of a given class or series of preferred stock owned by certain affiliated owners generally would be added together for purposes of the ownership limit on such class or series. Our charter provides for ownership limitations that generally restrict shareholders from owning more than 9.8% of our outstanding shares. For additional information, see the risk factor above titled “The limit on the number of shares a person may own may discourage a takeover that could otherwise result in a premium price to our stockholders and may hinder a stockholder’s ability to dispose of his or her shares.”
Risks Related to our Common Stock
The market price and trading volume of shares of our Common Stock may be volatile.
Our Common Stock is listed on the NYSE. A number of factors could negatively affect the price of our Common Stock or result in fluctuations in the price or trading volume of our Common Stock. We cannot assure our stockholders that the market price of our Common Stock will not fluctuate or decline significantly in the future. Factors that could negatively affect our market price include, but are not limited to,
•limited trading volume, which may depress the price of our Common Stock or subject our Common Stock to greater price volatility,
•actual or anticipated declines in our operating results or distributions,
•changes in government regulations or spending (including Medicare spending),
•changes in laws affecting REITs and related tax matters,
•changes in market valuations of similar companies,
•adverse market reaction to any increased indebtedness we may incur in the future,
•issuance of additional equity securities,
•actions by institutional investors,
•changes in law affecting REITs and related tax matters,
•publication of research reports about us or the real estate industry,
•speculation in the press or investment community,
•additions or departures of key management personnel,
•changes in our credit ratings,
•changes in our market expectations of our funds from operations, core funds from operations, and adjusted funds from operations, and
•general market and economic conditions.
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General Risk Factors
Cybersecurity risks and incidents may adversely affect our business by causing a disruption to our operations, a compromise or corruption of our confidential information, and/or damage to our business relationships, all of which could negatively impact our financial results.
We rely extensively on information systems, including systems through vendors and third parties, to operate and manage our business and process transactions, and as a result, our business is at risk from, and may be impacted by, cybersecurity incidents. We consider a cybersecurity incident to be any adverse event that threatens the confidentiality, integrity, or availability of our information systems or data or systems or data on which we rely. These cybersecurity incidents could include attempts to gain unauthorized access to our data and/or information systems, computer viruses, cyberattacks (including ransomware, malware attacks, unauthorized access attempts, and denial of service and other unintentional intrusions or malicious cyberattacks), social engineering or other fraudulent schemes. Cybersecurity incidents may be caused by a third-party or by employee error, negligence or fraud, and may be undertaken by individuals or be highly organized attempts by highly sophisticated organizations. We employ a variety of measures to prevent, detect, and mitigate these threats; however, there is no guarantee that such efforts will be successful in preventing or mitigating a cybersecurity incident. Further, new technologies such as artificial intelligence may be more capable of evading these safeguards, and threat actors may use artificial intelligence tools to automate and enhance cybersecurity attacks against us. We employ measures designed to detect such cybersecurity threats, including AI-based tools, but these threats could become more sophisticated and harder to detect and counteract, which may pose significant risks to the security of our information systems and data.
The result of cybersecurity incidents, or a failure to report such an incident in the timeframe required by law, may include the compromise of confidential information (including the personally identifiable information of our employees, tenants, vendors, and business partners), disruption of the proper functioning of our networks and information systems, disrupted operations, misstated or unreliable financial data, liability for stolen assets or information, increased cybersecurity protection and insurance costs, litigation, regulatory scrutiny or investigations, and damage to our tenant and investor relationships. Furthermore, if our systems, networks, and technology (or those of third parties on which we rely) suffer severe damage, disruption or shutdown and our business continuity plans do not effectively resolve the issues in a timely manner, we could experience delays in reporting our financial results.
As our reliance on technology has increased, so have the risks posed to our information systems, both internal and those we have outsourced. We continue to face ongoing and increasing cybersecurity risks that may materially affect us in the future, and there is no guarantee that any processes, procedures, and internal controls we have implemented, or will implement, will prevent or mitigate cybersecurity incidents that could adversely affect our business, financial condition, and results of operations. Additionally, as increased regulatory compliance for cybersecurity protocols and disclosures are required by state or federal authorities, there is no guarantee that the increased amount of resources, both time and expense, will not adversely affect our business. Additionally, future or past business transactions (such as acquisitions or integrations) could expose us to additional cybersecurity risks and vulnerabilities, as our systems could be negatively affected by vulnerabilities present in acquired or integrated entities’ systems and technologies.
Moreover, data protection laws and regulations in the jurisdictions where we operate often require “reasonable,” “appropriate” or “adequate” technical and organizational cybersecurity measures, and the interpretation and application of those laws and regulations are often uncertain and evolving; there can be no assurance that our cybersecurity measures will be deemed adequate, appropriate or reasonable by a regulator or court. Increased regulation of data collection, use and retention practices, including self-regulation and industry standards, changes in existing laws and regulations, enactment of new laws and regulations, increased enforcement activity, and changes in interpretation of laws, could increase our cost of compliance and operation, limit our ability to grow our business or otherwise harm the Company.
Although we maintain insurance that is designed to cover cybersecurity incidents, our coverage may not sufficiently cover all types of losses or claims that may arise or be subject to exclusions. As cyberattacks increase in frequency and magnitude, we may be unable to obtain insurance in amounts and on terms we view as adequate for our operations.
We are exposed to risks related to the use of artificial intelligence.
We may use artificial intelligence, including generative or agentic artificial intelligence, and/or machine learning (collectively, “AI”) tools in our operations. Some of our competitors may have instituted, or may institute, low-cost, high-speed applications and services based on AI, and new competitors may enter our industry using new platforms based on AI. If our peers use AI tools to optimize operations and we fail to utilize AI tools in a comparable manner, we may be competitively disadvantaged. Additionally, although AI tools may facilitate optimization and operational efficiencies, they also have the potential for inaccuracy, bias, infringement, or misappropriation of intellectual property, as well as risks related to data privacy and cybersecurity. The use of AI tools may introduce errors or inadequacies that are not easily detectable, including deficiencies, inaccuracies, or biases in the data used for AI training, or in the content, analyses, or recommendations generated
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by AI applications. Although we implement measures designed to help prevent such errors or inadequacies, those measures may not always be successful, and the results of such errors or inadequacies may adversely affect our business, financial condition, and results of operations.
The legal requirements relating to AI continue to evolve and remain uncertain, and such legal developments could impact our business and ability to enforce our proprietary rights or protect against infringement of those rights. Additionally, we may need to expend additional resources to modify and maintain our use of AI tools to comply with applicable law, the nature of which continues to evolve and may prevent or limit our ability to use AI in our business, lead to regulatory fines or penalties, or require us to change our business practices.
Additionally, our tenants, vendors, investors, analysts and other of our stakeholders may use AI which may present similar risks to those described above. With respect to our vendors in particular, our vendors may use AI tools in their products or services without our knowledge, and the providers of these tools may not meet the evolving regulatory or industry standards for privacy and data protection. Consequently, this may inhibit our or our vendors’ ability to uphold an appropriate level of service and data privacy. If we, our vendors, or other third parties with which we conduct business experience an actual or perceived cybersecurity incident due to the use of AI, we may be adversely impacted, lose valuable intellectual property or confidential information, and incur harm to our reputation and the public perception of the effectiveness of our cybersecurity measures.
In addition, investors, analysts, and other market participants may use AI tools to process, summarize, or interpret our financial information or other data about us. The use of AI tools in financial and market analysis may introduce risks similar to those described above, including an inaccurate interpretation of our financial or operational performance or market trends or conditions, which in turn could result in inaccurate conclusions or investment recommendations.
Distributions paid from sources other than our cash flows from operations could reduce our available cash and the value of our Common Stock.
We have previously paid, and may pay in the future, distributions from sources other than from our cash flows from operations. We may pay, and have no limits on the amounts we may pay, distributions from any source, such as the sale of assets and the sale of additional securities, which may reduce the amount of capital we ultimately invest in properties or other permitted investments. Funding distributions from the sale of assets may affect our ability to generate cash flows. Funding distributions from the sale of additional securities could dilute stockholders’ interest in us if we sell shares of our Common Stock to third party investors. Funding distributions to our stockholders will result in us having less funds available for acquiring properties or real estate related investments. Our inability to acquire such properties or investments may have a negative effect on our ability to generate sufficient cash flows from operations to pay distributions. As a result, the return investors may realize on their investment may be reduced and investors who invested in us before we generated significant cash flow may realize a lower rate of return than later investors. Payment of distributions from any of the aforementioned sources could restrict our ability to generate sufficient cash flows from operations, affect our profitability and/or affect the distributions payable upon a liquidity event, any or all of which may have an adverse effect on an investment in us.
Item 1B. Unresolved Staff Comments.
None.
Item 1C. Cybersecurity.
Our Cybersecurity Program includes the following processes:
•Conducting annual control reviews, annual policy reviews and annual investments in our security infrastructure;
•Periodically testing our information systems to assess our vulnerability to cyber risk, including targeted penetration testing and vulnerability scanning;
•Collaborating with our internal audit team to evaluate the effectiveness of our Cybersecurity Program and communicating results to our executive officers;
•Providing mandatory cybersecurity training to all employees, including regular phishing awareness campaigns and regular security awareness trainings;
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•Leveraging the NIST Framework for an annual assessment of the Cybersecurity Program;
•Maintaining business continuity, contingency and recovery plans to promptly respond to and recover from cybersecurity incidents;
•Conducting security assessments of third-party service providers with access to personal, confidential or proprietary information before engagement and engaging in ongoing monitoring of such providers;
•Retaining a third-party cybersecurity provider for incident response services for certain cybersecurity incidents and conducting a table top response exercise with the third-party cybersecurity provider and certain company personnel at lease annually; and
•Maintaining cybersecurity risk insurance that could help defray the costs of a cybersecurity incident.
Our Vice President of Information Technology & Corporate Facilities has served in this role since 2018. In this role, he manages and oversees the Company’s network and information systems. Additionally, he works with the executive officers, management representatives and third-party experts to maintain the Company’s Cybersecurity Program. Our Vice President of Information Technology & Corporate Facilities possesses extensive experience in technology and cybersecurity gained over his career spanning more than 25 years, including service as the Executive Director of Business Applications as well as a senior implementer and business consultant.
We face risks from cybersecurity threats that could have a material adverse effect on our business strategy, results of operations or financial conditions. See “Risk Factors – General Risk Factors – Cybersecurity risks and incidents may adversely affect our business by causing a disruption to our operations, a compromise or corruption of our confidential information, and/or damage to our business relationships, all of which could negatively impact our financial results” in Part I, Item 1A of this Annual Report on Form 10-K for a discussion of these risks. As of December 31, 2025 we have not had any known instances of material cybersecurity incidents, including third-party incidents, during any of the prior three fiscal years.
Item 2. Properties.
Our principal executive office is located at 1001 Water Street, Suite 800, Tampa, Florida 33602. As of December 31, 2025, we owned a portfolio of 140 real estate properties, composed of approximately 5,323,000 rentable square feet of commercial spaces, and an additional three undeveloped land parcels, including the Stoughton Healthcare Facility which has been taken out of service and is being demolished. As of December 31, 2025, 124 of our real estate properties were leased to a single-tenant, 14 of our real estate properties were leased to multiple tenants, and two of our real estate properties were vacant. As of December 31, 2025, 98.7% of our rentable square feet was leased, with a weighted average remaining lease term of 10.0 years. As of December 31, 2025, all of our real estate investments are in healthcare properties aside from three undeveloped land parcels, including the Stoughton Healthcare Facility which has been taken out of service and is being demolished. We own fee simple interests in all of our land, buildings and improvements except for 20 properties, for which we own leasehold interests subject to the respective ground leases.
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Property Statistics
The following table shows the property statistics of our real estate portfolio as of December 31, 2025:
| Property Name | MSA/µSA | Date Acquired | Year Constructed | % Leased | Leased Sq Ft | Encumbrances, $ (in thousands) | ||||||||||||||||||||||||||||||||
| Houston Healthcare Facility | Houston-Pasadena-The Woodlands, TX | 07/31/2014 | 1993 | 100% | 13,645 | (1) | ||||||||||||||||||||||||||||||||
| Cincinnati Healthcare Facility | Cincinnati, OH-KY-IN | 10/29/2014 | 2001 | 100% | 14,868 | (1) | ||||||||||||||||||||||||||||||||
| Winston-Salem Healthcare Facility | Winston-Salem, NC | 12/17/2014 | 2004 | 100% | 22,200 | (1) | ||||||||||||||||||||||||||||||||
Stoughton Healthcare Facility(2) | Boston-Cambridge-Newton, MA-NH | 12/23/2014 | 1973 | —% | — | — | ||||||||||||||||||||||||||||||||
| Fort Worth Healthcare Facility | Dallas-Fort Worth-Arlington, TX | 12/31/2014 | 2014 | 100% | 83,464 | (1) | ||||||||||||||||||||||||||||||||
| Fort Worth Healthcare Facility II | Dallas-Fort Worth-Arlington, TX | 12/31/2014 | 2014 | 100% | 8,268 | (1) | ||||||||||||||||||||||||||||||||
| Winter Haven Healthcare Facility | Lakeland-Winter Haven, FL | 01/27/2015 | 2009 | 100% | 7,560 | (1) | ||||||||||||||||||||||||||||||||
| Overland Park Healthcare Facility | Kansas City, MO-KS | 02/17/2015 | 2014 | 100% | 54,568 | (1) | ||||||||||||||||||||||||||||||||
| Clarion Healthcare Facility | Pittsburgh, PA | 06/01/2015 | 2012 | 100% | 33,000 | (1) | ||||||||||||||||||||||||||||||||
| Webster Healthcare Facility | Houston-Pasadena-The Woodlands, TX | 06/05/2015 | 2015 | 100% | 53,514 | (1) | ||||||||||||||||||||||||||||||||
| Augusta Healthcare Facility | Augusta-Waterville, ME (µSA) | 07/22/2015 | 2010 | 100% | 51,000 | (1) | ||||||||||||||||||||||||||||||||
| Cincinnati Healthcare Facility III | Cincinnati, OH-KY-IN | 07/22/2015 | 2014 | 100% | 41,600 | (1) | ||||||||||||||||||||||||||||||||
| Florence Healthcare Facility | Cincinnati, OH-KY-IN | 07/22/2015 | 2014 | 100% | 41,600 | (1) | ||||||||||||||||||||||||||||||||
| Oakland Healthcare Facility | Augusta-Waterville, ME (µSA) | 07/22/2015 | 2004 | 100% | 20,000 | (1) | ||||||||||||||||||||||||||||||||
| Wyomissing Healthcare Facility | Philadelphia-Camden-Wilmington, PA-NJ-DE-MD | 07/24/2015 | 2007 | 100% | 37,117 | (1) | ||||||||||||||||||||||||||||||||
| Luling Healthcare Facility | Austin-Round Rock-San Marcos, TX | 07/30/2015 | 2003 | 100% | 40,901 | (1) | ||||||||||||||||||||||||||||||||
| Omaha Healthcare Facility | Omaha, NE-IA | 10/14/2015 | 2014 | 100% | 40,402 | (1) | ||||||||||||||||||||||||||||||||
| Sherman Healthcare Facility | Sherman-Denison, TX | 11/20/2015 | 2005 | 100% | 57,576 | (1) | ||||||||||||||||||||||||||||||||
| Sherman Healthcare Facility II | Sherman-Denison, TX | 11/20/2015 | 2005 | 100% | 8,055 | (1) | ||||||||||||||||||||||||||||||||
| Fort Worth Healthcare Facility III | Dallas-Fort Worth-Arlington, TX | 12/23/2015 | 1998 | 100% | 36,800 | (1) | ||||||||||||||||||||||||||||||||
| Oklahoma City Healthcare Facility | Oklahoma City, OK | 12/29/2015 | 1985 | 100% | 94,076 | (1) | ||||||||||||||||||||||||||||||||
| Oklahoma City Healthcare Facility II | Oklahoma City, OK | 12/29/2015 | 1994 | 100% | 41,394 | (1) | ||||||||||||||||||||||||||||||||
| Edmond Healthcare Facility | Oklahoma City, OK | 01/20/2016 | 2002 | 100% | 17,700 | (1) | ||||||||||||||||||||||||||||||||
| Oklahoma City Healthcare Facility III | Oklahoma City, OK | 01/27/2016 | 2006 | 100% | 5,000 | (1) | ||||||||||||||||||||||||||||||||
| Oklahoma City Healthcare Facility IV | Oklahoma City, OK | 01/27/2016 | 2007 | 100% | 8,762 | (1) | ||||||||||||||||||||||||||||||||
| Newcastle Healthcare Facility | Oklahoma City, OK | 02/03/2016 | 1995 | 100% | 7,424 | (1) | ||||||||||||||||||||||||||||||||
| Oklahoma City Healthcare Facility V | Oklahoma City, OK | 02/11/2016 | 2008 | 100% | 43,676 | (1) | ||||||||||||||||||||||||||||||||
| Rancho Mirage Healthcare Facility | Riverside-San Bernardino-Ontario, CA | 03/01/2016 | 2018 | 100% | 47,008 | (1) | ||||||||||||||||||||||||||||||||
| Oklahoma City Healthcare Facility VI | Oklahoma City, OK | 03/07/2016 | 2007 | 100% | 14,676 | (1) | ||||||||||||||||||||||||||||||||
| Oklahoma City Healthcare Facility VII | Oklahoma City, OK | 06/22/2016 | 2016 | 100% | 102,978 | (1) | ||||||||||||||||||||||||||||||||
| Las Vegas Healthcare Facility | Las Vegas-Henderson-North Las Vegas, NV | 06/24/2016 | 2017 | 100% | 56,220 | (1) | ||||||||||||||||||||||||||||||||
| Oklahoma City Healthcare Facility VIII | Oklahoma City, OK | 06/30/2016 | 1997 | 100% | 62,857 | (1) | ||||||||||||||||||||||||||||||||
| Marlton Healthcare Facility | Philadelphia-Camden-Wilmington, PA-NJ-DE-MD | 11/01/2016 | 1995 | 100% | 89,139 | (1) | ||||||||||||||||||||||||||||||||
| Grand Rapids Healthcare Facility | Grand Rapids-Wyoming-Kentwood, MI | 12/07/2016 | 2008 | 73% | 78,419 | (1) | ||||||||||||||||||||||||||||||||
| Corpus Christi Healthcare Facility | Corpus Christi, TX | 12/22/2016 | 1992 | 100% | 25,102 | (1) | ||||||||||||||||||||||||||||||||
| Aurora Healthcare Facility | Chicago-Naperville-Elgin, IL-IN | 03/30/2017 | 2002 | 100% | 24,722 | (1) | ||||||||||||||||||||||||||||||||
| Allen Healthcare Facility | Dallas-Fort Worth-Arlington, TX | 03/31/2017 | 2007 | 100% | 42,627 | (1) | ||||||||||||||||||||||||||||||||
| Austin Healthcare Facility | Austin-Round Rock-San Marcos, TX | 03/31/2017 | 2012 | 100% | 66,095 | (1) | ||||||||||||||||||||||||||||||||
| Beaumont Healthcare Facility | Beaumont-Port Arthur, TX | 03/31/2017 | 1991 | 100% | 61,000 | (1) | ||||||||||||||||||||||||||||||||
| San Antonio Healthcare Facility | San Antonio-New Braunfels, TX | 06/29/2017 | 1984 | 100% | 44,746 | (1) | ||||||||||||||||||||||||||||||||
| Silverdale Healthcare Facility | Bremerton-Silverdale-Port Orchard, WA | 08/25/2017 | 2005 | 100% | 26,127 | (1) | ||||||||||||||||||||||||||||||||
| Silverdale Healthcare Facility II | Bremerton-Silverdale-Port Orchard, WA | 09/20/2017 | 2007 | 100% | 19,184 | (1) | ||||||||||||||||||||||||||||||||
| Saginaw Healthcare Facility | Saginaw, MI | 12/21/2017 | 2002 | 100% | 87,843 | (1) | ||||||||||||||||||||||||||||||||
| Carrollton Healthcare Facility | Dallas-Fort Worth-Arlington, TX | 04/27/2018 | 2015 | 100% | 21,990 | (1) | ||||||||||||||||||||||||||||||||
| Katy Healthcare Facility | Houston-Pasadena-The Woodlands, TX | 06/08/2018 | 2015 | 100% | 34,296 | (1) | ||||||||||||||||||||||||||||||||
| Indianola Healthcare Facility | Des Moines-West Des Moines, IA | 09/26/2018 | 2014 | 100% | 18,116 | (1) | ||||||||||||||||||||||||||||||||
| Indianola Healthcare Facility II | Des Moines-West Des Moines, IA | 09/26/2018 | 2011 | 100% | 20,990 | (1) | ||||||||||||||||||||||||||||||||
| Benton Healthcare Facility | Little Rock-North Little Rock-Conway, AR | 10/17/2018 | 1992/1999 | 100% | 104,419 | (1) | ||||||||||||||||||||||||||||||||
| Benton Healthcare Facility II | Little Rock-North Little Rock-Conway, AR | 10/17/2018 | 1983 | 100% | 11,350 | (1) | ||||||||||||||||||||||||||||||||
| Bryant Healthcare Facility | Little Rock-North Little Rock-Conway, AR | 10/17/2018 | 1995 | 100% | 23,450 | (1) | ||||||||||||||||||||||||||||||||
| Hot Springs Healthcare Facility | Little Rock-North Little Rock-Conway, AR | 10/17/2018 | 2009 | 100% | 8,573 | (1) | ||||||||||||||||||||||||||||||||
| Clive Healthcare Facility | Des Moines-West Des Moines, IA | 11/26/2018 | 2008 | 100% | 58,156 | (1) | ||||||||||||||||||||||||||||||||
| Valdosta Healthcare Facility | Valdosta, GA | 11/28/2018 | 2004 | 100% | 24,750 | (1) | ||||||||||||||||||||||||||||||||
| Valdosta Healthcare Facility II | Valdosta, GA | 11/28/2018 | 1992 | 100% | 12,745 | (1) | ||||||||||||||||||||||||||||||||
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| Property Name | MSA/µSA | Date Acquired | Year Constructed | % Leased | Leased Sq Ft | Encumbrances, $ (in thousands) | ||||||||||||||||||||||||||||||||
| Bryant Healthcare Facility II | Little Rock-North Little Rock-Conway, AR | 08/16/2019 | 2016 | 100% | 16,425 | (1) | ||||||||||||||||||||||||||||||||
| Laredo Healthcare Facility | Laredo, TX | 09/19/2019 | 1998 | 100% | 61,677 | (1) | ||||||||||||||||||||||||||||||||
| Laredo Healthcare Facility II | Laredo, TX | 09/19/2019 | 1998 | 100% | 118,132 | (1) | ||||||||||||||||||||||||||||||||
| Poplar Bluff Healthcare Facility | Poplar Bluff, MO (µSA) | 09/19/2019 | 2013 | 100% | 71,519 | (1) | ||||||||||||||||||||||||||||||||
| Tucson Healthcare Facility | Tucson, AZ | 09/19/2019 | 1998 | 100% | 34,009 | (1) | ||||||||||||||||||||||||||||||||
| Akron Healthcare Facility | Akron, OH | 10/04/2019 | 2012 | 100% | 98,705 | (1) | ||||||||||||||||||||||||||||||||
| Akron Healthcare Facility II | Akron, OH | 10/04/2019 | 2013 | 100% | 38,564 | (1) | ||||||||||||||||||||||||||||||||
| Akron Healthcare Facility III | Akron, OH | 10/04/2019 | 2008 | 100% | 54,000 | (1) | ||||||||||||||||||||||||||||||||
| Alexandria Healthcare Facility | Alexandria, LA | 10/04/2019 | 2007 | —% | — | (1) | ||||||||||||||||||||||||||||||||
| Appleton Healthcare Facility | Appleton, WI | 10/04/2019 | 2011 | 100% | 7,552 | (1) | ||||||||||||||||||||||||||||||||
| Austin Healthcare Facility II | Austin-Round Rock-San Marcos, TX | 10/04/2019 | 2006 | 100% | 18,273 | (1) | ||||||||||||||||||||||||||||||||
| Bellevue Healthcare Facility | Green Bay, WI | 10/04/2019 | 2010 | 100% | 5,838 | (1) | ||||||||||||||||||||||||||||||||
| Bonita Springs Healthcare Facility | Cape Coral-Fort Myers, FL | 10/04/2019 | 2002 | 100% | 9,800 | — | ||||||||||||||||||||||||||||||||
| Bridgeton Healthcare Facility | St. Louis, MO-IL | 10/04/2019 | 2012 | 100% | 66,914 | (1) | ||||||||||||||||||||||||||||||||
| Covington Healthcare Facility | New Orleans-Metairie, LA | 10/04/2019 | 1984 | 100% | 43,250 | (1) | ||||||||||||||||||||||||||||||||
| Crestview Healthcare Facility | Crestview-Fort Walton Beach-Destin, FL | 10/04/2019 | 2004 | 100% | 5,685 | — | ||||||||||||||||||||||||||||||||
| Dallas Healthcare Facility | Dallas-Fort Worth-Arlington, TX | 10/04/2019 | 2011 | 100% | 62,390 | (1) | ||||||||||||||||||||||||||||||||
| De Pere Healthcare Facility | Green Bay, WI | 10/04/2019 | 2005 | 100% | 7,100 | (1) | ||||||||||||||||||||||||||||||||
| Denver Healthcare Facility | Denver-Aurora-Centennial, CO | 10/04/2019 | 1962 | 100% | 131,210 | (1) | ||||||||||||||||||||||||||||||||
| El Segundo Healthcare Facility | Los Angeles-Long Beach-Anaheim, CA | 10/04/2019 | 2009 | 100% | 12,163 | — | ||||||||||||||||||||||||||||||||
| Fairlea Healthcare Facility | Hagerstown-Martinsburg, MD-WV | 10/04/2019 | 1999 | 100% | 5,200 | — | ||||||||||||||||||||||||||||||||
| Fayetteville Healthcare Facility | Fayetteville-Springdale-Rogers, AR | 10/04/2019 | 1994 | 100% | 55,740 | (1) | ||||||||||||||||||||||||||||||||
| Fort Walton Beach Healthcare Facility | Crestview-Fort Walton Beach-Destin, FL | 10/04/2019 | 2005 | 100% | 9,017 | — | ||||||||||||||||||||||||||||||||
| Frankfort Healthcare Facility | Lexington-Fayette, KY | 10/04/2019 | 1993 | 100% | 4,000 | — | ||||||||||||||||||||||||||||||||
| Frisco Healthcare Facility | Dallas-Fort Worth-Arlington, TX | 10/04/2019 | 2010 | 100% | 57,051 | (1) | ||||||||||||||||||||||||||||||||
| Goshen Healthcare Facility | Elkhart-Goshen, IN | 10/04/2019 | 2010 | 100% | 15,462 | (1) | ||||||||||||||||||||||||||||||||
| Hammond Healthcare Facility | Hammond, LA | 10/04/2019 | 2006 | 100% | 63,000 | (1) | ||||||||||||||||||||||||||||||||
| Hammond Healthcare Facility II | Hammond, LA | 10/04/2019 | 2004 | 100% | 23,835 | (1) | ||||||||||||||||||||||||||||||||
| Henderson Healthcare Facility | Las Vegas-Henderson-North Las Vegas, NV | 10/04/2019 | 2000 | 100% | 6,685 | — | ||||||||||||||||||||||||||||||||
| Houston Healthcare Facility III | Houston-Pasadena-The Woodlands, TX | 10/04/2019 | 1998 | 100% | 16,217 | (1) | ||||||||||||||||||||||||||||||||
| Howard Healthcare Facility | Green Bay, WI | 10/04/2019 | 2011 | 100% | 7,552 | (1) | ||||||||||||||||||||||||||||||||
| Jacksonville Healthcare Facility | Jacksonville, FL | 10/04/2019 | 2009 | 100% | 13,082 | — | ||||||||||||||||||||||||||||||||
| Lafayette Healthcare Facility | Lafayette, LA | 10/04/2019 | 2004 | 100% | 73,824 | (1) | ||||||||||||||||||||||||||||||||
| Lakewood Ranch Healthcare Facility | North Port-Bradenton-Sarasota, FL | 10/04/2019 | 2008 | 100% | 10,919 | — | ||||||||||||||||||||||||||||||||
| Las Vegas Healthcare Facility II | Las Vegas-Henderson-North Las Vegas, NV | 10/04/2019 | 2007 | 100% | 6,963 | — | ||||||||||||||||||||||||||||||||
| Lehigh Acres Healthcare Facility | Cape Coral-Fort Myers, FL | 10/04/2019 | 2002 | 100% | 5,746 | — | ||||||||||||||||||||||||||||||||
| Lubbock Healthcare Facility | Lubbock, TX | 10/04/2019 | 2003 | 100% | 102,143 | (1) | ||||||||||||||||||||||||||||||||
| Manitowoc Healthcare Facility | Green Bay, WI | 10/04/2019 | 2003 | 100% | 7,987 | (1) | ||||||||||||||||||||||||||||||||
| Manitowoc Healthcare Facility II | Green Bay, WI | 10/04/2019 | 1964 | 100% | 36,090 | (1) | ||||||||||||||||||||||||||||||||
| Marinette Healthcare Facility | Green Bay, WI | 10/04/2019 | 2008 | 100% | 4,178 | (1) | ||||||||||||||||||||||||||||||||
| New Braunfels Healthcare Facility | San Antonio-New Braunfels, TX | 10/04/2019 | 2007 | 100% | 27,971 | (1) | ||||||||||||||||||||||||||||||||
| North Smithfield Healthcare Facility | Providence-Warwick, RI-MA | 10/04/2019 | 1965 | 100% | 92,944 | (1) | ||||||||||||||||||||||||||||||||
| Oklahoma City Healthcare Facility IX | Oklahoma City, OK | 10/04/2019 | 2007 | 100% | 34,970 | (1) | ||||||||||||||||||||||||||||||||
| Oshkosh Healthcare Facility | Oshkosh-Neenah, WI | 10/04/2019 | 2010 | 100% | 8,717 | (1) | ||||||||||||||||||||||||||||||||
| Palm Desert Healthcare Facility | Riverside-San Bernardino-Ontario, CA | 10/04/2019 | 2005 | —% | — | — | ||||||||||||||||||||||||||||||||
| Rancho Mirage Healthcare Facility II | Riverside-San Bernardino-Ontario, CA | 10/04/2019 | 2008 | 100% | 7,432 | — | ||||||||||||||||||||||||||||||||
| San Antonio Healthcare Facility III | San Antonio-New Braunfels, TX | 10/04/2019 | 2012 | 100% | 50,000 | (1) | ||||||||||||||||||||||||||||||||
| San Antonio Healthcare Facility IV | San Antonio-New Braunfels, TX | 10/04/2019 | 1987 | 100% | 113,136 | (1) | ||||||||||||||||||||||||||||||||
| San Antonio Healthcare Facility V | San Antonio-New Braunfels, TX | 10/04/2019 | 2017 | 81% | 47,091 | (1) | ||||||||||||||||||||||||||||||||
| Santa Rosa Beach Healthcare Facility | Crestview-Fort Walton Beach-Destin, FL | 10/04/2019 | 2003 | 100% | 5,000 | — | ||||||||||||||||||||||||||||||||
| Savannah Healthcare Facility | Savannah, GA | 10/04/2019 | 2014 | 100% | 48,184 | — | ||||||||||||||||||||||||||||||||
| Sturgeon Bay Healthcare Facility | Green Bay, WI | 10/04/2019 | 2007 | 100% | 3,100 | (1) | ||||||||||||||||||||||||||||||||
| Victoria Healthcare Facility | Victoria, TX | 10/04/2019 | 2013 | 100% | 34,297 | (1) | ||||||||||||||||||||||||||||||||
| Victoria Healthcare Facility II | Victoria, TX | 10/04/2019 | 1998 | 100% | 28,752 | (1) | ||||||||||||||||||||||||||||||||
| Wilkes-Barre Healthcare Facility | Scranton–Wilkes-Barre, PA | 10/04/2019 | 2012 | 100% | 15,996 | (1) | ||||||||||||||||||||||||||||||||
| Tucson Healthcare Facility II | Tucson, AZ | 12/26/2019 | 2021 | 100% | 60,913 | (1) | ||||||||||||||||||||||||||||||||
| Tucson Healthcare Facility III | Tucson, AZ | 12/27/2019 | 2020 | 100% | 20,000 | (1) | ||||||||||||||||||||||||||||||||
| Grimes Healthcare Facility | Des Moines-West Des Moines, IA | 02/19/2020 | 2018 | 100% | 14,669 | (1) | ||||||||||||||||||||||||||||||||
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Table of Contents
| Property Name | MSA/µSA | Date Acquired | Year Constructed | % Leased | Leased Sq Ft | Encumbrances, $ (in thousands) | ||||||||||||||||||||||||||||||||
| Tampa Healthcare Facility | Tampa-St. Petersburg-Clearwater, FL | 09/08/2020 | 2015 | 94% | 31,674 | (1) | ||||||||||||||||||||||||||||||||
| Tucson Healthcare Facility IV | Tucson, AZ | 12/22/2020 | 2022 | 95% | 42,585 | (1) | ||||||||||||||||||||||||||||||||
| Greenwood Healthcare Facility | Indianapolis-Carmel-Greenwood, IN | 04/19/2021 | 2008 | 100% | 53,560 | (1) | ||||||||||||||||||||||||||||||||
| Clive Healthcare Facility II | Des Moines-West Des Moines, IA | 12/08/2021 | 2008 | 100% | 63,224 | (1) | ||||||||||||||||||||||||||||||||
| Clive Healthcare Facility III | Des Moines-West Des Moines, IA | 12/08/2021 | 2008 | 100% | 33,974 | (1) | ||||||||||||||||||||||||||||||||
| Clive Healthcare Facility IV | Des Moines-West Des Moines, IA | 12/08/2021 | 2009 | 100% | 35,419 | (1) | ||||||||||||||||||||||||||||||||
| Clive Undeveloped Land | Des Moines-West Des Moines, IA | 12/08/2021 | — | —% | — | — | ||||||||||||||||||||||||||||||||
| Clive Undeveloped Land II | Des Moines-West Des Moines, IA | 12/08/2021 | — | —% | — | — | ||||||||||||||||||||||||||||||||
| Yukon Healthcare Facility | Oklahoma City, OK | 03/10/2022 | 2020 | 100% | 45,624 | (1) | ||||||||||||||||||||||||||||||||
| Pleasant Hills Healthcare Facility | Pittsburgh, PA | 05/12/2022 | 2015 | 100% | 33,712 | (1) | ||||||||||||||||||||||||||||||||
| Prosser Healthcare Facility I | Kennewick-Richland, WA | 05/20/2022 | 2020 | 100% | 6,000 | (1) | ||||||||||||||||||||||||||||||||
| Prosser Healthcare Facility II | Kennewick-Richland, WA | 05/20/2022 | 2013 | 100% | 9,230 | (1) | ||||||||||||||||||||||||||||||||
| Prosser Healthcare Facility III | Kennewick-Richland, WA | 05/20/2022 | 2013 | 100% | 5,400 | (1) | ||||||||||||||||||||||||||||||||
| Tampa Healthcare Facility II | Tampa-St. Petersburg-Clearwater, FL | 07/20/2022 | 2022 | 100% | 87,649 | (1) | ||||||||||||||||||||||||||||||||
| Escondido Healthcare Facility | San Diego-Carlsbad, CA | 07/21/2022 | 2021 | 100% | 56,800 | (1) | ||||||||||||||||||||||||||||||||
| West Palm Beach Healthcare Facility | Miami-Fort Lauderdale-West Palm Beach, FL | 06/15/2023 | 1999 | 100% | 25,150 | (1) | ||||||||||||||||||||||||||||||||
| Burr Ridge Healthcare Facility | Chicago-Naperville-Elgin, IL-IN | 09/27/2023 | 2010 | 100% | 104,912 | (1) | ||||||||||||||||||||||||||||||||
| Brownsburg Healthcare Facility | Indianapolis-Carmel-Greenwood, IN | 02/26/2024 | 2023 | 100% | 55,986 | (1) | ||||||||||||||||||||||||||||||||
| Cave Creek Healthcare Facility | Phoenix-Mesa-Chandler, AZ | 03/20/2024 | 2021 | 100% | 32,450 | (1) | ||||||||||||||||||||||||||||||||
| Marana Healthcare Facility | Tucson, AZ | 03/20/2024 | 2020 | 100% | 32,250 | (1) | ||||||||||||||||||||||||||||||||
| Surprise Healthcare Facility | Phoenix-Mesa-Chandler, AZ | 03/20/2024 | 2020 | 100% | 32,450 | (1) | ||||||||||||||||||||||||||||||||
| Tucson Healthcare Facility V | Tucson, AZ | 03/20/2024 | 2020 | 100% | 32,450 | (1) | ||||||||||||||||||||||||||||||||
| Weslaco Healthcare Facility | McAllen-Edinburg-Mission, TX | 03/20/2024 | 2019 | 100% | 28,750 | (1) | ||||||||||||||||||||||||||||||||
| Reading Healthcare Facility | Reading, PA | 05/21/2024 | 2020 | 100% | 30,000 | (1) | ||||||||||||||||||||||||||||||||
| Fort Smith Healthcare Facility | Fort Smith, AR-OK | 07/25/2024 | 2021 | 100% | 62,570 | (1) | ||||||||||||||||||||||||||||||||
| Knoxville Healthcare Facility | Knoxville, TN | 03/04/2025 | 2021 | 100% | 70,005 | — | ||||||||||||||||||||||||||||||||
| Dover Healthcare Facility | Dover, DE | 04/16/2025 | 2018 | 100% | 42,140 | — | ||||||||||||||||||||||||||||||||
| Southlake Healthcare Facility | Dallas-Fort Worth-Arlington, TX | 08/01/2025 | 2011 | 100% | 16,745 | — | ||||||||||||||||||||||||||||||||
| Southlake Healthcare Facility II | Dallas-Fort Worth-Arlington, TX | 08/01/2025 | 2017 | 100% | 11,048 | — | ||||||||||||||||||||||||||||||||
| Peoria Healthcare Facility | Phoenix-Mesa-Chandler, AZ | 09/05/2025 | 2022 | 100% | 49,084 | — | ||||||||||||||||||||||||||||||||
| Plano Healthcare Facility | Dallas-Fort Worth-Arlington, TX | 09/05/2025 | 2023 | 100% | 51,815 | — | ||||||||||||||||||||||||||||||||
| 5,255,473 | — | |||||||||||||||||||||||||||||||||||||
(1)Property is contributed to the pool of unencumbered properties of our unsecured credit facilities. As of December 31, 2025, 119 commercial real estate properties were contributed to the pool of unencumbered properties under our credit facility and we had an outstanding principal balance of $676,000,000.
(2)Property has been taken out of service and is being demolished.
We believe the properties are adequately covered by insurance and are suitable for their respective intended purposes. Real estate assets, other than land, are depreciated on a straight-line basis over each asset’s useful life. Generally, tenant improvements are depreciated on a straight-line basis over 5-20 years.
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Leases
As of December 31, 2025, the weighted average remaining lease term of our properties was 10.0 years. The properties generally are leased under net leases pursuant to which the tenant bears responsibility for substantially all property costs and expenses associated with ongoing maintenance and operation, including utilities, property taxes and insurance. The majority of our leases provide for fixed increases in rent. Generally, the property leases provide the tenant with one or more multi-year renewal options, subject to generally the same terms and conditions as the initial lease term.
Lease expirations of our real properties based on annualized contractual base rent as of December 31, 2025, for each of the next ten years ending December 31 and thereafter, are as follows:
| Year of Lease Expiration | Total Number of Leases | Leased Sq Ft | Annualized Contractual Base Rent (in thousands) (1) | Percentage of Annualized Contractual Base Rent | ||||||||||||||||||||||
| 2026 | 13 | 185,849 | $ | 5,541 | 3.1 | % | ||||||||||||||||||||
| 2027 | 9 | 212,995 | 4,462 | 2.5 | % | |||||||||||||||||||||
| 2028 | 13 | 213,998 | 3,905 | 2.2 | % | |||||||||||||||||||||
| 2029 | 27 | 446,918 | 11,639 | 6.5 | % | |||||||||||||||||||||
| 2030 | 15 | 430,908 | 13,849 | 7.8 | % | |||||||||||||||||||||
| 2031 | 15 | 519,114 | 21,749 | 12.2 | % | |||||||||||||||||||||
| 2032 | 7 | 184,758 | 8,017 | 4.5 | % | |||||||||||||||||||||
| 2033 | 14 | 312,706 | 14,152 | 8.0 | % | |||||||||||||||||||||
| 2034 | 8 | 366,052 | 8,175 | 4.6 | % | |||||||||||||||||||||
| 2035 | 8 | 280,093 | 9,443 | 5.3 | % | |||||||||||||||||||||
| Thereafter | 43 | 2,102,082 | 77,022 | 43.3 | % | |||||||||||||||||||||
| 172 | 5,255,473 | $ | 177,954 | 100.0 | % | |||||||||||||||||||||
(1)Annualized contractual base rent is based on leases in effect as of December 31, 2025.
Item 3. Legal Proceedings.
We are not aware of any material pending legal proceedings to which we are a party or to which our properties are the subject.
Item 4. Mine Safety Disclosures.
Not applicable.
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
Market Information
Our Common Stock trades on the NYSE under the ticker symbol “SILA”. As of February 18, 2026, we had 8,300 stockholders of record.
Distributions
We are taxed and conduct our operations so as to qualify as a REIT for federal income tax purposes. As a REIT, we make distributions each taxable year equal to at least 90% of our REIT taxable income (computed without regard to the dividends paid deduction and excluding capital gains). One of our primary goals is to continue to pay quarterly distributions to our stockholders. On February 23, 2026, the Board approved and authorized a quarterly cash dividend of $0.40 per share of Common Stock payable on March 18, 2026, to our stockholders of record as of the close of business on March 6, 2026. The quarterly cash dividend of $0.40 per share represents an annualized amount of $1.60 per share.
Unregistered Sales of Equity Securities
There were no unregistered sales of equity securities during the quarter ended December 31, 2025.
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Share Repurchases
Share Repurchase Program
On August 4, 2025, the Board authorized a share repurchase program of up to $75,000,000 in gross purchase proceeds for a period of three-years from August 4, 2025, subject to the limitation of $25,000,000 in gross purchase proceeds in any twelve-month period, or the 2025 SRP. Repurchases of Common Stock under the 2025 SRP may be made from time to time in the open market, in privately negotiated purchases, in accelerated share repurchase programs or by any other lawful means. The number of shares of Common Stock purchased and the timing of any purchases will depend on a number of factors, including the price and availability of Common Stock and general market conditions. The 2025 SRP replaced the Company’s prior share repurchase program. The Company did not repurchase any shares under the 2025 SRP during the year ended December 31, 2025.
During the year ended December 31, 2025, 304,878 shares of Common Stock were repurchased for an aggregate purchase price of $7,344,000, excluding all related costs and fees (an average of $24.09 per share) under the Company’s prior share repurchase program.
During the three months ended December 31, 2025, we did not repurchase any equity securities registered pursuant to Section 12 of the Exchange Act and $75,000,000 in gross proceeds remained available under the 2025 SRP as of December 31, 2025.
Performance Graph
The information below shall not be deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A or 14C, other than as provided in Item 201 of Regulation S-K, or to the liabilities of Section 18 of the Exchange Act, except to the extent we specifically request that such information be treated as soliciting material or specifically incorporate it by reference into a filing under the Securities Act or the Exchange Act.
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The following graph compares the total cumulative stockholder return, assuming reinvestment of dividends, of our Common Stock to the Standard & Poor’s 500 Composite Stock Index, or the S&P 500, and the MSCI US REIT Index for the period beginning June 13, 2024 (the date our Common Stock began trading on the NYSE) and ending December 31, 2025. The graph assumes an investment of $100 on June 13, 2024. The historical information set forth on the following performance graph and table below is not necessarily indicative of future stock price performance.
| Period Ending | ||||||||||||||||||||
| Index | 06/13/2024 | 12/31/2024 | 12/31/2025 | |||||||||||||||||
Sila Realty Trust, Inc. | $ | 100.00 | $ | 110.76 | $ | 113.25 | ||||||||||||||
S&P 500 | $ | 100.00 | $ | 109.04 | $ | 128.54 | ||||||||||||||
MSCI US REIT Index | $ | 100.00 | $ | 110.61 | $ | 113.87 | ||||||||||||||
Item 6. [Reserved]
Information pertaining to Item 6 is not presented in accordance with amendments to Item 301 of Regulation S-K.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements, and the notes thereto, and the other financial information appearing elsewhere in this Annual Report on Form 10-K. The discussion contains forward looking statements that involve risks and uncertainties, such as statements of our plans, objectives, expectations and intentions. Our actual results could differ materially from those anticipated in the forward-looking statements as a result of various factors, including those discussed below and elsewhere in this report, particularly under “Risk Factors” and “Forward-Looking Statements.” All forward-looking statements in this document are based on information available to us as of the date hereof, and we assume no obligation to update any such forward-looking statements.
This section of the Annual Report on Form 10-K generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024. A discussion of the changes in our financial condition and results of operations for the years ended December 31, 2024 and 2023 may be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal years ended December 31, 2024 and December 31, 2023.
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Regulation FD Disclosures
We use any of the following to comply with our disclosure obligations under Regulation FD: SEC filings; press releases; public conference calls; or our website. We routinely post important information on our website at www.silarealtytrust.com, including information that may be deemed material. We encourage our shareholders and others interested in our company to monitor these distribution channels for material disclosures. The contents of our website address referenced herein is included in this Annual Report on Form 10-K as a textual reference only and is not incorporated by reference into this Annual Report on Form 10-K.
Overview
We are a net lease REIT with a strategic focus on investing in the growing and resilient healthcare sector. We invest in high quality net lease healthcare facilities along the continuum of care in the pursuit of generating predictable, durable and growing income streams. Our portfolio comprises high quality tenants in geographically diverse facilities, which are positioned to capitalize on the dynamic delivery of healthcare to patients. Our properties include, among others, medical outpatient buildings, inpatient rehabilitation facilities, and surgical and specialty facilities. We may also make other real estate related investments, which may include equity or debt interests in other real estate entities.
As of December 31, 2025, we owned 140 real estate properties and three undeveloped land parcels, including the Stoughton Healthcare Facility which has been taken out of service and is being demolished.
Recent Developments
Share Repurchase Program
On August 4, 2025, the Board authorized a share repurchase program of up to $75,000,000 in gross purchase proceeds for a period of three-years from August 4, 2025, subject to the limitation of $25,000,000 in gross purchase proceeds in any twelve-month period. Repurchases of Common Stock under the 2025 SRP may be made from time to time in the open market, in privately negotiated purchases, in accelerated share repurchase programs or by any other lawful means. The number of shares of Common Stock purchased and the timing of any purchases will depend on a number of factors, including the price and availability of Common Stock and general market conditions. The 2025 SRP replaced the Company’s prior share repurchase program. The Company did not repurchase any shares under the 2025 SRP during the year ended December 31, 2025.
During the year ended December 31, 2025, the Company repurchased 304,878 shares of Common Stock for an aggregate purchase price of $7,344,000, excluding all related costs and fees, under a prior share repurchase program.
Automatic Shelf Registration Statement
On August 12, 2025, we filed with the SEC an automatic shelf registration statement on Form S-3 that is effective for a term of three years, covering future offerings of an indeterminate amount of our Common Stock, preferred stock, depositary shares, warrants, purchase contracts and units. In connection with the filing of the registration statement, on August 12, 2025, we filed a prospectus supplement related to the ATM Program (as defined below), with the SEC.
At-the-Market Program
On August 12, 2025, we entered into an ATM Equity Offering Sales Agreement, or the ATM Program, through which, from time to time, we may offer and sell shares of Common Stock having an aggregate offering price of up to $250,000,000. During the year ended December 31, 2025, no shares were issued under the ATM Program and as of December 31, 2025, we had $250,000,000 in gross sales of available capacity under the ATM Program.
Critical Accounting Estimates
The preparation of our consolidated financial statements in conformity with United States generally accepted accounting principles, or GAAP, requires management to make estimates and assumptions that affect reported amounts of assets, liabilities, revenues and expenses. Changes in these estimates and assumptions could have a significant effect on the financial statements. From time to time, we evaluate our estimates based on historical experience and various assumptions that we believe are reasonable under the circumstances. Although our actual results historically have not deviated materially from those determined using estimates, our results of operations or financial condition could differ materially from these estimates under different assumptions or conditions.
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We consider our critical accounting estimates to be those used in the determination of the reported amounts and disclosure related to the impairment of long-lived assets.
We review our real estate assets on an asset group basis for impairment. Typically, an individual property constitutes an asset group. We identify an asset group based on the lowest level of identifiable cash flows. During the impairment analysis, we must determine whether there are indicators of impairment. For operating properties, these indicators could include a reduction in our expected holding period, a tenant having unpaid rent or a delinquency, a significant decline in a property’s leased percentage, a current period operating loss or negative cash flows combined with a history of losses at the property, a significant decline in lease rates for that property or others in the property’s market, a significant change in the market value of the property, or an adverse change in the financial condition of significant tenants. The length of the expected holding period coupled with these other indicators impact the projected undiscounted cash flows.
If we determine that an asset has indicators of impairment, we then determine whether the undiscounted cash flows associated with the asset group over the expected holding period exceed the carrying amount of the asset group. In calculating the undiscounted cash flows of an asset group, we use considerable judgment to estimate several inputs. We estimate future rental rates, future capital expenditures, future operating expenses, and market capitalization rates for residual values, among other things. In addition, if there are alternative strategies for the future use of the asset, we assess the probability of each alternative strategy and perform a probability-weighted undiscounted cash flow analysis to assess the recoverability of the asset group. If the carrying value of the asset group exceeds the estimated undiscounted cash flows, an impairment loss is recognized to the extent the carrying value exceeds the estimated fair value of the asset group.
In determining the fair value of an asset group, we exercise considerable judgment on several factors. We may determine fair value by using a direct capitalization method, a discounted cash flow method or by utilizing comparable sales information. The direct capitalization method is based on a capitalization rate applied to the underlying asset group’s stabilized next twelve-month net operating income at the measurement date. The discounted cash flow method is based on estimated future cash flow projections utilizing discount rates, terminal capitalization rates, and planned capital expenditures. We use judgment to determine an appropriate discount rate to apply to the cash flows in the discounted cash flow calculation. We also use judgment in analyzing comparable market information because no two real estate assets are identical in location and price.
The estimates and judgments used in the impairment process are highly subjective and susceptible to frequent change. Significant increases or decreases in any of these inputs, particularly with regard to the expected holding period, cash flow projections and discount and capitalization rates, would result in a significantly lower or higher fair value measurement of the real estate assets being assessed. Additionally, changes in economic and operating conditions, including changes in the financial condition of our tenants, and changes to our intent and ability to hold the related asset, that occur after our impairment assessment could impact the assumptions used in that assessment and could result in future charges to earnings if assumptions regarding those investments differ from actual results.
Real Estate Acquisitions in 2025
We purchased six healthcare properties, comprising approximately 241,000 rentable square feet for an aggregate purchase price of approximately $148,877,000.
Factors That May Influence Results of Operations
Economic and Market Conditions
Our operating results have been and will continue to be generally impacted by global and national economic and market conditions and by the local economic conditions where our real estate properties are located. Increased interest rates, persistent elevated prices due to recent inflation, ongoing geopolitical tensions, and increased volatility in public and private equity and fixed income markets have led to increased costs and have limited the availability of capital. Continued elevated interest rates imposed by the Federal Reserve to address potential inflation may adversely impact our borrowing costs and real estate asset values generally, including our real estate properties. In addition, any tariffs imposed by the United States or other countries, as well as any prolonged government shutdown, may cause additional impacts to the economy, including further inflationary pressures. On July 4, 2025, the One Big Beautiful Bill Act, or OBBBA, was signed into law. The OBBBA includes, among other things, changes to Medicaid and health insurance marketplaces that may have an impact on our tenants’ financial position. We continue to evaluate the impacts of the OBBBA.
Most of our lease agreements contain provisions designed to mitigate the adverse impact of inflation, including annual rent increases based on stated increases or consumer price index (CPI) increases, as well as the triple net nature of the leases whereby tenants are responsible for the operating expenses of the properties. To the extent our tenants have experienced difficulties due to the foregoing economic and market conditions, they may be unable or unwilling to make payments or perform their obligations when due.
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Rental Revenue
The amount of rental revenue generated by our properties depends principally on our ability to maintain the occupancy rates of leased space and to lease available space at existing rental rates. Negative trends in one or more of these factors could adversely affect our rental revenue in future periods. We continually monitor our tenants’ ability to meet their lease obligations to determine if any adjustments should be reflected currently. As of December 31, 2025, our properties were 98.7% leased.
Results of Operations
Our results of operations are influenced by the timing of acquisitions and the performance of our real estate properties.
The following table shows the property statistics of our real estate properties as of December 31, 2025 and 2024:
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
Number of real estate properties(1) | 140 | 135 | |||||||||
| Leased square feet | 5,255,000 | 5,050,000 | |||||||||
| Weighted average percentage of rentable square feet leased | 98.7 | % | 96.0 | % | |||||||
(1)As of December 31, 2025 we owned 140 real estate properties and three undeveloped land parcels, including the Stoughton Healthcare Facility which has been taken out of service and is being demolished. As of December 31, 2024, we owned 135 real estate properties and two undeveloped land parcels.
The following table summarizes our real estate activity for the years ended December 31, 2025 and 2024:
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Real estate properties acquired | 6 | 8 | |||||||||
| Real estate properties disposed | — | 4 | |||||||||
Aggregate purchase price of real estate properties acquired(1)(2) | $ | 148,877,000 | $ | 164,053,000 | |||||||
| Net book value of real estate properties disposed | $ | — | $ | 18,099,000 | |||||||
| Leased square feet of real estate property additions | 241,000 | 307,000 | |||||||||
Leased square feet of real estate property dispositions(3) | — | 71,000 | |||||||||
(1)Includes $2,676,000 for additional land purchased to expand the Dover Healthcare Facility for the year ended December 31, 2025.
(2)Includes capitalized acquisition costs associated with transactions determined to be asset acquisitions.
(3)The Fort Myers Healthcare Facility and Fort Myers Healthcare Facility II, or collectively, the Fort Myers Healthcare Facilities, and the Yucca Valley Healthcare Facility were vacant upon disposition on September 25, 2024 and December 10, 2024, respectively.
This section describes and compares our results of operations for the years ended December 31, 2025 and 2024. We generate substantially all of our revenue from property operations. In order to evaluate our overall portfolio, management analyzes the results of our “same store properties.” We define “same store properties” as properties that were owned and operated for the entirety of both calendar periods being compared and exclude properties under development, redevelopment, or classified as held for sale.
By evaluating the results of our same store properties, management is able to monitor the operations of our existing properties for comparable periods to measure the performance of our current portfolio and readily observe the expected effects of our new acquisitions and dispositions on net income.
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Year Ended December 31, 2025 Compared to Year Ended December 31, 2024
The following table details our total revenues for the year ended December 31, 2025, compared to the comparable period in 2024 (amounts in thousands):
| Year Ended December 31, | |||||||||||||||||||||||
| 2025 | 2024 | $ Change | % Change | ||||||||||||||||||||
| Same store rental revenue | $ | 161,924 | $ | 156,524 | $ | 5,400 | 3.4 | % | |||||||||||||||
| Same store tenant reimbursements | 14,797 | 14,579 | 218 | 1.5 | % | ||||||||||||||||||
| Non-same store rental revenue | 19,100 | 15,266 | 3,834 | 25.1 | % | ||||||||||||||||||
| Non-same store tenant reimbursements | 479 | 466 | 13 | 2.8 | % | ||||||||||||||||||
| Other operating income | 4 | 21 | (17) | (81.0) | % | ||||||||||||||||||
| Total rental revenue | 196,304 | 186,856 | 9,448 | 5.1 | % | ||||||||||||||||||
| Real estate related notes receivable interest income | 1,232 | — | 1,232 | n/a | |||||||||||||||||||
| Total revenues | $ | 197,536 | $ | 186,856 | $ | 10,680 | 5.7 | % | |||||||||||||||
•Same store rental revenue increased primarily due to a $5,371,000 increase as a result of new and renewal leasing activity, a $474,000 increase in annual base rent escalations for leases indexed to CPI, a $456,000 increase related to less accelerated amortization of above-market lease intangible assets as a result of lease amendments in the prior year, a $295,000 increase in lease termination income as a result of tenants who vacated their leased space, a $156,000 increase in rent recognized on a cash basis as a result of a tenant with payment uncertainty who was paying less rent in the prior year and had annual base rent escalations in the current year being compared, and a $54,000 increase attributable to the amortization of GenesisCare severance fee income, partially offset by a decrease of $710,000 as a result of properties with tenant vacancies and lease terminations and a decrease of $696,000 as a result of less accelerated amortization of below-market lease intangible liabilities as a result of lease terminations related to GenesisCare in the prior year.
•Same store tenant reimbursements increased primarily due to higher operating costs in the current year, which are generally passed along to our tenants.
•Non-same store rental revenue increased primarily due to a $9,644,000 increase attributable to properties acquired since January 1, 2024, a $2,667,000 increase related to less accelerated amortization of above-market lease intangibles as a result of a lease termination related to GenesisCare in the prior year, and a $112,000 increase related to a property that was under development throughout 2024 and completed in December 2025, partially offset by lease termination income of $4,098,000 recognized in the prior year, a $1,630,000 decrease from properties sold since January 1, 2024, a $1,344,000 decrease resulting from the vacant Stoughton Healthcare Facility due to a lease termination as a result of the Steward Healthcare System LLC, or Steward, bankruptcy in the prior year, a $1,342,000 decrease related to less accelerated amortization of below-market lease intangibles as a result of lease terminations related to GenesisCare in the prior year, and a $175,000 decrease related to a property that was operational for part of 2024, under redevelopment in 2025 and completed and placed in service in December 2025.
•There were no material changes in non-same store rental reimbursements or other operating income.
•Real estate related notes receivable interest income increased due to the funding of the mezzanine loans during the year ended December 31, 2025.
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Changes in our expenses are summarized in the following table (amounts in thousands):
| Year Ended December 31, | |||||||||||||||||||||||
| 2025 | 2024 | $ Change | % Change | ||||||||||||||||||||
| Same store rental expenses | $ | 21,392 | $ | 20,916 | $ | 476 | 2.3 | % | |||||||||||||||
| Non-same store rental expenses | 2,412 | 2,222 | 190 | 8.6 | % | ||||||||||||||||||
| Listing-related expenses | — | 3,012 | (3,012) | n/a | |||||||||||||||||||
| General and administrative expenses | 20,907 | 25,336 | (4,429) | (17.5) | % | ||||||||||||||||||
| Depreciation and amortization | 76,946 | 74,754 | 2,192 | 2.9 | % | ||||||||||||||||||
| Impairment and disposition losses | 9,951 | 1,210 | 8,741 | 722.4 | % | ||||||||||||||||||
| Demolition costs | 1,011 | — | 1,011 | n/a | |||||||||||||||||||
| Total operating expenses | $ | 132,619 | $ | 127,450 | $ | 5,169 | 4.1 | % | |||||||||||||||
•Same store rental expenses, most of which are subject to reimbursement by our tenants, increased primarily due to higher operating costs in the current year.
•Non-same store rental expenses, most of which are subject to reimbursement by our tenants, increased primarily due to a $487,000 increase from properties acquired since January 1, 2024, and a $379,000 increase in non-reimbursable operating costs resulting from the vacant Stoughton Healthcare Facility due to a lease termination in the prior year, partially offset by a $597,000 decrease primarily attributable to properties sold since January 1, 2024 and a $79,000 decrease primarily related to a property that was under redevelopment during the year, which was completed in December 2025.
•Listing-related expenses of $3,012,000 were recorded during the year ended December 31, 2024, and consisted of advisory fees for legal, banking, and other advisory services, related to our listing on the New York Stock Exchange on June 13, 2024, or the Listing.
•General and administrative expenses decreased primarily due to a $2,950,000 decrease in personnel costs primarily attributable to 2024 separation pay and performance bonuses, a $1,051,000 decrease in costs primarily attributable to transfer agent and custodial fees as a result of the Listing, a $917,000 decrease in accelerated stock-based compensation as a result of accelerated awards due to severance, and a $119,000 decrease in stock-based compensation primarily due to forfeitures during the year, partially offset by a $608,000 increase primarily due to an increase in audit fees as a result of the audit of internal controls over financial reporting due to (among other things) the change in our filer status to a large accelerated filer.
•Depreciation and amortization increased primarily due to a $4,181,000 increase due to properties acquired since January 1, 2024, a $3,395,000 increase in depreciation recognized related to the change in estimated useful life at the Stoughton Healthcare Facility, which is being demolished, $1,075,000 of accelerated amortization of in-place lease intangible assets as a result of a lease termination at a property that was subsequently leased to a new tenant and a $372,000 increase due to assets placed in service since January 1, 2024, partially offset by $4,646,000 of accelerated amortization of in-place lease intangible assets as a result of lease amendments and terminations related to GenesisCare in the prior year, a $1,801,000 decrease primarily attributable to fully amortized in-place lease intangible assets and tenant improvements, and a $384,000 decrease from properties sold since January 1, 2024.
•We recorded impairment losses of $9,951,000 during the year ended December 31, 2025, related to the impacts of vacancies and lease terminations at three properties. We recorded impairment and disposition losses in the aggregate amount of $1,210,000 during the year ended December 31, 2024 as a result of tenant related triggering events that occurred at certain properties and costs related to the disposition of the Fort Myers Healthcare Facilities.
•Demolition costs of $1,011,000 were recorded during the year ended December 31, 2025, related to the demolition of the Stoughton Healthcare Facility.
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Changes in other (expense) income are summarized in the following table (amounts in thousands):
| Year Ended December 31, | |||||||||||||||||||||||
| 2025 | 2024 | $ Change | % Change | ||||||||||||||||||||
| Gain on dispositions of real estate | $ | — | $ | 341 | $ | (341) | n/a | ||||||||||||||||
| Interest and other income | 1,169 | 4,130 | (2,961) | (71.7) | % | ||||||||||||||||||
| Interest expense | (32,786) | (21,220) | (11,566) | 54.5 | % | ||||||||||||||||||
| Increase in current expected credit loss reserve | (180) | — | (180) | n/a | |||||||||||||||||||
| Total other (expense) income | $ | (31,797) | $ | (16,749) | $ | (15,048) | 89.8 | % | |||||||||||||||
•During the year ended December 31, 2025, we did not dispose of any real estate properties. During the year ended December 31, 2024, we recognized a gain on disposition on two real estate properties. On January 31, 2024, we sold one property for a sale price of $1,500,000, resulting in a gain on sale of $76,000. On December 10, 2024, we sold one property for a sales price of $1,700,000, resulting in a gain on sale of $265,000.
•Interest and other income decreased primarily due to a decline in dividend income attributable to a lower average investment in money market funds from the deployment of proceeds in the prior year.
•Interest expense increased due to a $10,923,000 increase primarily resulting from a higher weighted average interest rate on our credit facility, driven by higher fixed rates on interest rate swaps entered into to replace five interest rate swaps that matured on December 31, 2024 and higher average borrowings on our variable rate debt, a $638,000 increase in amortization of deferred financing costs, and a $5,000 increase in loss on extinguishment of debt in connection with entering into the 2029 Revolving Credit Agreement (as defined below) to replace the 2026 Revolving Credit Agreement (as defined below).
•The current expected credit loss reserve increased by $180,000 due to the recognition of expected credit losses associated with two mezzanine loans we entered into in November 2024.
Liquidity and Capital Resources
Our principal uses of funds are for acquisitions of real estate and real estate related investments, capital expenditures, operating expenses, distributions to, and share repurchases from, stockholders, and principal and interest payments on current and future indebtedness. Interest rates on variable rate debt increased in recent years and then declined some due to the interest rate cuts by the Federal Reserve in the second half of 2024 and 2025. Future increases or decreases are difficult to predict during the current uncertain macroeconomic environment, particularly given the recent significant changes in U.S. tariffs. That said, we believe our exposure to increased or fluctuating interest rates is limited at this time due to our hedging strategy, which has effectively fixed 78% of our outstanding debt as of December 31, 2025, and therefore allowed us to reasonably project our liquidity needs. Generally, cash for these items is generated from operations of our current and future investments. Our sources of funds are primarily operating cash flows, our credit facility and other potential borrowings.
When we acquire a property, we prepare a capital plan that contemplates the estimated capital needs of that investment. In addition to operating expenses, capital needs may also include, for example, costs of refurbishment, tenant improvements or other major capital expenditures. The capital plan also sets forth the anticipated sources of the necessary capital, which may include a line of credit, operating cash generated by the investment, additional equity investments from us, and when necessary, capital reserves. The capital plan for each investment will be adjusted through ongoing, regular reviews of our portfolio or, as necessary, to respond to unanticipated additional capital needs.
Automatic Shelf Registration Statement
On August 12, 2025, we filed with the SEC an automatic shelf registration statement on Form S-3 that is effective for a term of three years, covering future offerings of an indeterminate amount of our Common Stock, preferred stock, depositary shares, warrants, purchase contracts and units. In connection with the filing of the registration statement, on August 12, 2025, we filed a prospectus supplement related to the ATM Program (as defined below), with the SEC.
ATM Program
On August 12, 2025, we entered into an ATM Equity Offering Sales Agreement, or the ATM Program, through which, from time to time, we may offer and sell shares of Common Stock having an aggregate offering price of up to $250,000,000. During the year ended December 31, 2025, no shares were issued under the ATM Program and as of December 31, 2025, we had $250,000,000 in gross sales of available capacity under the ATM Program.
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Short-term Liquidity and Capital Resources
For at least the next twelve months, we expect our principal demands for funds will be for operating expenses, including our general and administrative expenses, as well as the acquisition of real estate and real estate related investments, and funding of capital improvements, including developments, and tenant improvements, distributions to, and potential stock repurchases from, stockholders, and interest payments on our credit facility. We expect to meet our short-term liquidity requirements through proceeds from cash flows from operations and borrowings on our credit facility and potential other borrowings. Additionally, we may issue our Common Stock within the next twelve months, afterwards, or both to raise funds to meet our liquidity needs.
We believe we will have sufficient liquidity available to meet our obligations in a timely manner, under both normal and stressed conditions, for the next twelve months.
Long-term Liquidity and Capital Resources
Beyond the next twelve months, we expect our principal demands for funds will be for costs to acquire additional real estate properties, interest and principal payments on our credit facility, long-term capital investment demands for our real estate properties and distributions necessary to maintain our REIT status.
We currently expect to meet our long-term liquidity requirements through proceeds from cash flows from operations and borrowings on our credit facility, potential other borrowings and potential equity offerings.
We expect to pay distributions to our stockholders from cash flows from operations; however, we have used, and may in the future use, other sources to fund distributions, as necessary. To the extent cash flows from operations are lower due to lower-than-expected returns on the properties held or the disposition of properties, distributions paid to stockholders may be lower. We currently expect that substantially all net cash flows from our operations will be used to fund acquisitions, certain capital expenditures and tenant improvement allowances identified at acquisition, ongoing capital expenditures, interest and principal payments on outstanding debt and distributions to our stockholders.
Material Cash Requirements
As of December 31, 2025, we had $32,288,000 in cash and cash equivalents. In addition to the cash we need to conduct our normal business operations, we expect to require up to $43,554,000 in cash over the next twelve months, of which $31,673,000 is related to estimated interest payments on our outstanding debt (calculated based on the interest rates in effect as of December 31, 2025), up to $9,069,000 is related to a development to expand the Dover Healthcare Facility, and $2,812,000 is related to our various obligations as lessee. We cannot provide assurances, however, that actual expenditures will not exceed these estimates. In addition, we may provide capital expenditure or tenant improvement allowances in new or renewal leases for the purpose of refurbishing or renovating tenant space. We may also assume tenant improvement obligations included in leases acquired in our real estate acquisitions. Many of these allowances are subject to contingencies that make it difficult to predict when they will be utilized, if at all.
As of December 31, 2025, we had material obligations beyond twelve months in the amount of $818,998,000, inclusive of $707,068,000 related to principal and estimated interest payments on our outstanding debt (calculated based on our effective interest rates as of December 31, 2025) and $111,930,000 related to our various obligations as lessee.
One of our principal liquidity needs is the payment of principal and interest on outstanding indebtedness. As of December 31, 2025, we had $676,000,000 of principal outstanding under our Unsecured Credit Facility (as defined below). We are required by the terms of certain loan documents relating to the Unsecured Credit Facility to meet certain covenants, such as financial ratios and reporting requirements. As of December 31, 2025, we were in compliance with all such covenants and requirements on our Unsecured Credit Facility.
As of December 31, 2025, the aggregate notional amount under our derivative instruments was $525,000,000. We have agreements with each derivative counterparty that contain cross-default provisions; if we default on our indebtedness, then we could also be declared in default on our derivative obligations, resulting in an acceleration of payment of any net amounts due under our derivative contracts. As of December 31, 2025, we were in compliance with all such cross-default provisions.
Debt Service Requirements
Credit Facility
As of December 31, 2025, the maximum commitments available under our senior unsecured revolving line of credit with Bank of America, N.A., as Administrative Agent for the lenders, or the 2029 Revolving Credit Agreement, were $600,000,000, which may be increased, subject to lender approval, through incremental term loans and/or revolving loan commitments in an aggregate amount not to exceed $1,500,000,000. The maturity date for the 2029 Revolving Credit Agreement is February 16, 2029, which, at our election, may be extended for a period of six-months on no more than two occasions, subject to certain
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conditions, including the payment of an extension fee. The 2029 Revolving Credit Agreement was entered into on February 18, 2025, to replace our prior Revolving Credit Agreement with Truist Bank, as Administrative Agent for the Lenders, that had a maturity date of February 15, 2026, or the 2026 Revolving Credit Agreement. Upon closing of the 2029 Revolving Credit Agreement, we extinguished all commitments associated with the 2026 Revolving Credit Agreement. As of December 31, 2025, the 2029 Revolving Credit Agreement had an aggregate outstanding principal balance of $151,000,000.
As of December 31, 2025, the maximum commitments available under our senior unsecured amended and restated term loan agreement with Truist Bank, as Administrative Agent for the lenders, or the 2027 Term Loan Agreement, were $250,000,000, which may be increased, subject to lender approval, to an aggregate amount not to exceed $500,000,000. The 2027 Term Loan Agreement has a maturity date of March 20, 2027, which, at our election, may be extended for a period of one year on no more than two occasions, subject to the satisfaction of certain conditions, including the payment of an extension fee. As of December 31, 2025, the 2027 Term Loan Agreement had an aggregate outstanding principal balance of $250,000,000.
As of December 31, 2025, the maximum commitments available under our senior unsecured term loan with Truist Bank, as Administrative Agent for the lenders, or the 2028 Term Loan Agreement, were $275,000,000, which may be increased, subject to lender approval, to an aggregate amount not to exceed $500,000,000 and has a maturity date of January 31, 2028. The 2028 Term Loan Agreement is pari passu with our 2029 Revolving Credit Agreement and 2027 Term Loan Agreement. As of December 31, 2025, the 2028 Term Loan Agreement had an aggregate outstanding principal balance of $275,000,000.
The 2029 Revolving Credit Agreement, the 2027 Term Loan Agreement and the 2028 Term Loan Agreement, or collectively, the Unsecured Credit Facility, has aggregate commitments available of $1,125,000,000, as of December 31, 2025. Generally, the proceeds of loans made under our Unsecured Credit Facility may be used for acquisition of real estate investments, funding of tenant improvements and leasing commissions with respect to real estate, repayment of indebtedness, funding of capital expenditures with respect to real estate, and general corporate and working capital purposes.
As of December 31, 2025, we had a total pool availability under our Unsecured Credit Facility of $1,125,000,000 and an aggregate outstanding principal balance of $676,000,000; therefore, $449,000,000 was available to be drawn under our Unsecured Credit Facility.
Cash Flows
Year Ended December 31, 2025 Compared to Year Ended December 31, 2024
| Year Ended December 31, | |||||||||||||||||
| (in thousands) | 2025 | 2024 | Change | ||||||||||||||
| Net cash provided by operating activities | $ | 119,145 | $ | 132,847 | $ | (13,702) | |||||||||||
| Net cash used in investing activities | $ | (174,497) | $ | (149,687) | $ | (24,810) | |||||||||||
| Net cash provided by (used in) financing activities | $ | 47,796 | $ | (145,501) | $ | 193,297 | |||||||||||
Operating Activities
•Net cash provided by operating activities decreased primarily due to property dispositions, vacancies, lease terminations, a decrease in lease termination income, a decrease in dividend income from money market funds, and an increase in interest paid on our Unsecured Credit Facility, partially offset by an increase in cash collected for rent resulting from property acquisitions and annual rent increases.
Investing Activities
Significant investing activities included:
•Investment of $148,874,000 to purchase six properties and a land parcel for development during the year ended December 31, 2025, compared to an investment of $164,053,000 to purchase eight properties during the year ended December 31, 2024.
•There were no property dispositions during the year ended December 31, 2025. Received net proceeds of $17,705,000 from the sale of four properties during the year ended December 31, 2024.
•Funded capital expenditures, primarily for tenant improvements, of $8,281,000 during the year ended December 31, 2025, compared to $2,989,000 funded during the year ended December 31, 2024.
•Funded real estate related notes receivable of $17,543,000 during the year ended December 31, 2025.
•Received origination fees on real estate related notes receivable of $351,000 during the year ended December 31, 2025.
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•Paid net deposits for investments in real estate of $150,000 during the year ended December 31, 2025, compared to the payment of net deposits for investments in real estate of $350,000 during the year ended December 31, 2024.
Financing Activities
Significant financing activities included:
•Payment of $88,787,000 in cash distributions to common stockholders, including cash distributions on vested performance-based deferred stock unit awards, during the year ended December 31, 2025, compared to $81,367,000 during the year ended December 31, 2024.
•Repurchase of $8,634,000 of Common Stock for a prior share repurchase program and the net settlement of withholding taxes in connection with the vesting of restricted stock and issuance of performance-based deferred stock unit awards during the year ended December 31, 2025, compared to $61,495,000 of Common Stock repurchased for the tender offer, costs and fees related to the tender offer, our prior share repurchase program and the net settlement of withholding taxes in connection with the vesting of restricted stock and issuance of performance-based deferred stock unit awards during the year ended December 31, 2024.
•Payment of $5,783,000 in deferred financing costs primarily as a result of entering into the 2029 Revolving Credit Agreement during the year ended December 31, 2025, compared to $2,578,000 as a result of entering into the 2027 Term Loan Agreement during the year ended December 31, 2024.
•The following Unsecured Credit Facility related activity during the year ended December 31, 2025:
◦Drew $164,000,000 on the 2029 Revolving Credit Agreement to fund acquisitions and mezzanine loan fundings.
◦Repayment of $13,000,000 on the 2029 Revolving Credit Agreement with cash provided by operations.
•The following Unsecured Credit Facility related activity during the year ended December 31, 2024:
◦Replacement of $250,000,000 on our prior term loan with borrowings from the 2027 Term Loan Agreement.
◦Draw of $20,000,000 on the 2026 Revolving Credit Agreement to fund an acquisition.
◦Repayment of $20,000,000 on the 2026 Revolving Credit Agreement with proceeds from dispositions and cash flows from operations.
Distributions to Stockholders
The amount of distributions payable to our stockholders is determined by the Board and is dependent on a number of factors, including our funds available for distribution, financial condition, lenders’ restrictions and limitations, capital expenditure requirements, corporate law restrictions and the annual distribution requirements needed to maintain our status as a REIT under the Internal Revenue Code of 1986, as amended. The Board must authorize each distribution and may, in the future, authorize lower amounts of distributions or not authorize additional distributions and, therefore, distribution payments are not guaranteed. Additionally, our organizational documents permit us to pay distributions from unlimited amounts of any source, and we may use sources other than operating cash flows to fund distributions, which may reduce the amount of capital we ultimately invest in properties or other permitted investments.
In order to maintain our status as a REIT, we are required to make distributions each taxable year equal to at least 90% of our REIT taxable income, computed without regard to the dividends paid deduction and excluding capital gains.
For the year ended December 31, 2025, we paid approximately $88,787,000 in aggregate ordinary cash distributions on our Common Stock. On February 23, 2026, the Board authorized a quarterly cash dividend of $0.40 per share of Common Stock payable on March 18, 2026, to our stockholders of record as of the close of business on March 6, 2026. To the extent funds are available, we intend to continue to pay regular distributions to stockholders.
For federal income tax purposes, distributions to common stockholders are characterized as ordinary dividends, capital gain distributions, or nontaxable distributions. To the extent that we make a distribution in excess of our current or accumulated earnings and profits, such excess will be a nontaxable return of capital, reducing the tax basis in each U.S. stockholder’s shares. Further, the amount of distributions in excess of a U.S. stockholder’s tax basis in such shares will be taxable as a realized gain.
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The following table shows the character of distributions the Company paid on a percentage basis during the years ended December 31, 2025 and 2024:
| Year Ended December 31, | ||||||||||||||
Character of Distributions(1): | 2025 | 2024 | ||||||||||||
| Ordinary dividends | 73.84 | % | 62.79 | % | ||||||||||
| Capital gain distributions | — | % | — | % | ||||||||||
| Nontaxable distributions | 26.16 | % | 37.21 | % | ||||||||||
| Total | 100.00 | % | 100.00 | % | ||||||||||
(1)Attributable to Common Stock for the year ended December 31, 2025. Attributable to Class A shares, Class I shares, and Class T shares of common stock until the Listing and attributable to Common Stock after the Listing for the year ended December 31, 2024.
Non-GAAP Financial Measures
In the real estate industry, analysts and investors employ certain non-GAAP supplemental financial measures in order to facilitate meaningful comparisons between periods and among peer companies. We believe that these measures are useful to investors to consider because they may assist them to better understand and measure the performance of our business over time and against similar companies. We use the following non-GAAP financial measures: Funds From Operations, or FFO, Core Funds From Operations, or Core FFO, and Adjusted Funds From Operations, or AFFO.
Net Income and FFO, Core FFO and AFFO
A description of FFO, Core FFO, and AFFO and reconciliations of these non-GAAP measures to net income, the most directly comparable GAAP measure, are provided below.
The National Association of Real Estate Investment Trusts, or Nareit, an industry trade group, has promulgated the FFO measure, which we believe is an appropriate additional measure to reflect the operating performance of a REIT. The use of FFO is recommended by the REIT industry as a supplemental performance measure. FFO is not equivalent to our net income as determined under GAAP.
We define FFO, consistent with Nareit’s definition, as net income (calculated in accordance with GAAP), excluding gains and losses from sales of real estate assets, impairment of real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity, and depreciation and amortization of real estate assets. Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect FFO on the same basis. We do not have any investments in unconsolidated partnerships or joint ventures.
We, along with many of our peers in the real estate industry, consider FFO to be an appropriate supplemental measure of a REIT’s operating performance because it is based on a net income analysis of real estate portfolio performance that excludes non-cash items such as real estate depreciation and amortization and real estate impairments. We believe FFO provides investors a useful understanding of our performance to the investors and to our management, and when compared to year over year, FFO reflects the impact on our operations from trends in occupancy.
We calculate Core FFO by adjusting FFO to remove the effect of certain GAAP non-cash income and expense items, unusual and infrequent items that are not expected to impact our operating performance on an ongoing basis, items that affect comparability to prior periods and/or items that are not related to our core real estate operations. We consider it to be a useful supplemental financial performance measure because it provides investors with additional information to understand our sustainable performance. Excluded items include listing-related expenses, severance, write-off of straight-line rent receivables related to prior periods, accelerated stock-based compensation, amortization of above- and below-market lease intangibles (including ground leases), loss on extinguishment of debt, changes in the current expected credit loss reserve and demolition costs.
We calculate AFFO by further adjusting Core FFO for the following items: deferred rent, current period straight-line rent adjustments, amortization of deferred financing costs, amortization of fees on our real estate related notes receivable, and stock-based compensation. We believe AFFO is a supplemental performance measure that provides investors appropriate supplemental information to evaluate our ongoing operations. AFFO is a metric used by management to evaluate our dividend policy.
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Presentation of this information is intended to assist management and investors in comparing the operating performance of different REITs, although it should be noted that not all REITs calculate FFO, Core FFO and AFFO the same way, so comparisons with other REITs may not be meaningful. Furthermore, FFO, Core FFO and AFFO are not necessarily indicative of cash flows available to fund cash needs and should not be considered as an alternative to net income as an indication of our performance or as an indication of our liquidity, including our ability to make distributions to our stockholders. FFO, Core FFO and AFFO may be useful in assisting management and investors in assessing the sustainability of operating performance in future operating periods. All of our non-GAAP financial measures should be reviewed in conjunction with other measurements as an indication of our performance. The method used to evaluate the value and performance of real estate under GAAP should be considered a more relevant measure of operating performance and more prominent than the non-GAAP financial measures presented here.
Reconciliation of Net Income to FFO, Core FFO and AFFO
The following table presents a reconciliation of net income attributable to common stockholders, which is the most directly comparable GAAP financial measure, to FFO, Core FFO and AFFO for the years ended December 31, 2025 and 2024 (amounts in thousands):
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
Net income attributable to common stockholders(1)(2) | $ | 33,120 | $ | 42,657 | |||||||
| Adjustments: | |||||||||||
Depreciation and amortization of real estate assets | 76,838 | 74,660 | |||||||||
| Gain on dispositions of real estate | — | (341) | |||||||||
| Impairment and disposition losses | 9,951 | 1,210 | |||||||||
FFO(1)(2) | $ | 119,909 | $ | 118,186 | |||||||
| Adjustments: | |||||||||||
| Listing-related expenses | — | 3,012 | |||||||||
| Severance | 33 | 1,885 | |||||||||
| Write-off of straight-line rent receivables related to prior periods | 462 | — | |||||||||
| Accelerated stock-based compensation | 19 | 936 | |||||||||
| Amortization of above (below) market lease intangibles, including ground leases, net | 78 | 1,778 | |||||||||
| Loss on extinguishment of debt | 233 | 228 | |||||||||
| Increase in current expected credit loss reserve | 180 | — | |||||||||
| Demolition costs | 1,011 | — | |||||||||
Core FFO(1)(2) | $ | 121,925 | $ | 126,025 | |||||||
| Adjustments: | |||||||||||
Deferred rent(3) | 1,226 | 3,510 | |||||||||
| Straight-line rent adjustments | (9,763) | (5,555) | |||||||||
| Amortization of deferred financing costs | 2,823 | 2,185 | |||||||||
| Amortization of fees on real estate related notes receivable | (94) | — | |||||||||
| Stock-based compensation | 4,796 | 4,914 | |||||||||
AFFO(1)(2) | $ | 120,913 | $ | 131,079 | |||||||
(1)The year ended December 31, 2025 includes $295,000 of lease termination fee income received. The year ended December 31, 2024 includes $4,098,000 of lease termination fee income received.
(2)The year ended December 31, 2025 includes $83,000 of rental revenue received as a result of bankruptcy proceedings from Steward, the sponsor and owner of the former tenant at the Stoughton Healthcare Facility.
(3)The year ended December 31, 2024 includes a $2,000,000 severance fee received from GenesisCare, which is recognized in rental revenues over the remaining GenesisCare amended master lease term. Additionally, the years ended December 31, 2025 and 2024 include a property that was under development. This property was placed in service in December 2025 and therefore, subsequent rent received is reflected in rental revenue and the prior deferred revenue is recognized over time in straight-line rent adjustments within rental revenues.
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Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
Market risk includes risks that arise from changes in interest rates, foreign currency exchange rates, commodity prices, equity prices and other market changes that affect market sensitive instruments. In pursuing our business plan, the primary market risk to which we are exposed is interest rate risk.
We have obtained variable rate debt financing and we are exposed to such changes in the Secured Overnight Financing Rate, or SOFR. Loans under the Unsecured Credit Facility may be made as Base Rate Loans or SOFR Loans, at our election, and all of our interest rate swap agreements are indexed to SOFR. Our objectives in managing interest rate risk are to limit the impact of interest rate fluctuations on operations and cash flows, and to lower overall borrowing costs. To achieve these objectives, we will borrow primarily at interest rates with the lowest margins available and, in some cases, with the ability to convert variable interest rates to fixed rates.
As of December 31, 2025, of our total principal debt outstanding of $676,000,000, $525,000,000 was fixed through 10 interest rate swap agreements, of which six mature on January 31, 2028 and four mature on March 20, 2029. As of December 31, 2024, our total principal debt outstanding of $525,000,000 was fixed through 10 interest rate swap agreements. As of December 31, 2025, the interest rate swap agreements had an aggregate notional amount of $525,000,000 and an aggregate settlement liability value of $819,000. The settlement value of these interest rate swap agreements is dependent upon existing market interest rates and swap spreads. As of December 31, 2025, an increase of 50 basis points in the market rates of interest would have resulted in an increase to the settlement value of these interest rate swaps to an asset value of $5,436,000. As of December 31, 2025, a decrease of 50 basis points in the market rates of interest would have resulted in a decrease to the settlement value of these interest rate swaps to a liability value of $7,194,000. These interest rate swap agreements were designated as cash flow hedging instruments. See Note 10—"Credit Facility" and Note 13—"Derivative Instruments and Hedging Activities" in the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K for more information about the impacts of our interest rate swaps on our outstanding debt and for more information about our interest rate swaps.
As of December 31, 2025, the weighted average interest rate on our total principal debt outstanding was 4.69%, including the impact of our interest rate swap agreements. We have entered, and may continue to enter, into additional derivative financial instruments, such as interest rate swaps, in order to mitigate our interest rate risk on a given variable rate financial instrument. To the extent we do, we are exposed to credit risk and market risk. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is positive, the counterparty owes us, which creates credit risk for us. When the fair value of a derivative contract is negative, we owe the counterparty and, therefore, it does not possess credit risk. Market risk is the adverse effect on the value of a financial instrument that results from a change in interest rates. We manage the market risk associated with interest rate contracts by establishing and monitoring parameters that limit the types and degree of market risk that may be undertaken. We have not entered, and do not intend to enter, into derivative or interest rate swap transactions for speculative purposes. We may also enter into rate-lock arrangements to lock interest rates on future borrowings.
As of December 31, 2025, of the $676,000,000 total principal debt outstanding, $151,000,000 was subject to variable interest rates, indexed to daily SOFR, with an interest rate of 4.91% per annum. As of December 31, 2025, an increase of 50 basis points in the market rates of interest would have resulted in an increase in interest expense of approximately $755,000 per year.
In addition to changes in interest rates, the value of our future investments will be subject to fluctuations based on changes in local and regional economic conditions and changes in the creditworthiness of tenants, which may affect our ability to refinance our debt, if necessary.
We do not have any foreign operations, and thus we are not exposed to foreign currency fluctuation risks.
Item 8. Financial Statements and Supplementary Data.
See the index at Part IV, Item 15. Exhibits and Financial Statement Schedules
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
None.
Item 9A. Controls and Procedures
(a) Evaluation of disclosure controls and procedures. We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports pursuant to the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the rules and forms, and that such information is accumulated and
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communicated to us, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, we recognize that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, as ours are designed to do, and we necessarily were required to apply our judgment in evaluating whether the benefits of the controls and procedures that we adopt outweigh their costs.
As required by Rules 13a-15(b) and 15d-15(b) of the Exchange Act, we conducted an evaluation as of December 31, 2025, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures, as of December 31, 2025, were effective at a reasonable assurance level.
(b) Management’s Report on Internal Control over Financial Reporting. Our management is responsible for establishing and maintaining adequate internal control over our financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Internal control over financial reporting is a process to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Because of its inherent limitations, internal control is not intended to provide absolute assurance that a misstatement of our financial statements would be prevented or detected. Under the supervision, and with the participation, of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control-Integrated Framework issued in 2013 by the Committee of Sponsoring Organizations of the Treadway Commission, or the Original Framework. Based on our evaluation under the Original Framework, our management concluded that our internal control over financial reporting was effective as of December 31, 2025.
KPMG LLP, an independent registered public accounting firm, has audited the Company’s consolidated financial statements included in this Annual Report on Form 10-K and, as part of its audit, has issued its report, included herein on page F-4, on the effectiveness of our internal control over financial reporting.
(c) Changes in internal control over financial reporting. There have been no changes in our internal controls over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that occurred during the three months ended December 31, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Item 9B. Other Information.
Insider trading arrangements and policies. During the three months ended December 31, 2025, none of the Company’s officers or directors adopted terminated
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
Not applicable.
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PART III
Item 10. Directors, Executive Officers and Corporate Governance.
The information required by this Item will be included in an amendment to this Form 10-K or incorporated by reference from the registrant’s definitive Proxy Statement to be filed pursuant to Regulation 14A.
The Board has adopted a Code of Business Conduct and Ethics that is applicable to all members of the Board, our officers and our employees. The policy may be located on our Investor website at https://investors.silarealtytrust.com by hovering over “Governance,” and then clicking on “Governance Documents.” If, in the future, we amend, modify or waive a provision in the Code of Business Conduct and Ethics, we may, rather than filing a Current Report on Form 8-K, satisfy the disclosure requirement by posting such information on our website as necessary.
We have adopted insider trading policies and procedures governing the purchase, sale and/or other dispositions of the Company’s securities by our directors, officers and employees. The Company believes that its insider trading policy is reasonably designed to promote compliance with insider trading laws, rules and regulations and listing standards applicable to the Company. A copy of the Company’s insider trading policy is filed as Exhibit 19.1 to this Form 10-K.
Item 11. Executive Compensation.
The information required by this Item will be included in an amendment to this Form 10-K or incorporated by reference from the registrant’s definitive Proxy Statement to be filed pursuant to Regulation 14A.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The information required by this Item will be included in an amendment to this Form 10-K or incorporated by reference from the registrant’s definitive Proxy Statement to be filed pursuant to Regulation 14A.
Item 13. Certain Relationships and Related Transactions, and Director Independence.
The information required by this Item will be included in an amendment to this Form 10-K or incorporated by reference from the registrant’s definitive Proxy Statement to be filed pursuant to Regulation 14A.
Item 14. Principal Accounting Fees and Services.
The information required by this Item will be included in an amendment to this Form 10-K or incorporated by reference from the registrant’s definitive Proxy Statement to be filed pursuant to Regulation 14A.
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PART IV
Item 15. Exhibits and Financial Statement Schedules.
The following documents are filed as part of this Annual Report:
(a)(1) Consolidated Financial Statements:
The index of the consolidated financial statements contained herein is set forth on page F-1 hereof.
(a)(2) Financial Statement Schedules:
The financial statement schedules are listed in the index of the consolidated financial statements on page F-1 hereof.
No additional financial statement schedules are presented since the required information is not present or not present in amounts sufficient to require submission of the schedule or because the information required is disclosed in the Consolidated Financial Statements and notes thereto.
(a)(3) Exhibits:
The exhibits listed on the Exhibit Index are included, or incorporated by reference, in this Annual Report.
(b) Exhibits:
See Item 15(a)(3) above.
(c) Financial Statement Schedules:
See Item 15(a)(2) above.
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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
OF SILA REALTY TRUST, INC.
| Page | ||||||||
| Consolidated Financial Statements | ||||||||
Reports of Independent Registered Public Accounting Firm (KPMG LLP, Tampa, FL, Auditor ID: | F-2 | |||||||
Consolidated Balance Sheets as of December 31, 2025 and 2024 | F-6 | |||||||
Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2025, 2024 and 2023 | F-7 | |||||||
Consolidated Statements of Stockholders' Equity for the Years Ended December 31, 2025, 2024 and 2023 | F-8 | |||||||
Consolidated Statements of Cash Flows for the Years Ended December 31, 2025, 2024 and 2023 | F-9 | |||||||
Notes to Consolidated Financial Statements | F-10 | |||||||
| Financial Statement Schedules | ||||||||
Schedule III — Real Estate Assets and Accumulated Depreciation | S-1 | |||||||
F-1
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Report of Independent Registered Public Accounting Firm
To the Stockholders and Board of Directors
Sila Realty Trust, Inc.:
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of Sila Realty Trust, Inc. and subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated statements of comprehensive income, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2025, and the related notes and financial statement schedule III - Real Estate Assets and Accumulated Depreciation (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 25, 2026 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Evaluation of expected holding periods for real estate, net
As discussed in note 2 to the consolidated financial statements, the Company continually monitors events and changes in circumstances, including a shortening of the expected holding periods for real estate, that could indicate that the carrying amount of real estate may not be recoverable. The Company had $1.8 billion of real estate as of December 31, 2025.
We identified the assessment of the Company's evaluation of the expected holding periods of real estate as a critical audit matter. Subjective auditor judgment was required to assess the relevant events or changes in circumstances that the Company used to evaluate its expected holding periods. A shortening of the expected holding periods could indicate a potential impairment.
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The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of an internal control related to the Company's process to evaluate potential changes in the expected holding periods of real estate. We assessed the relevant events and circumstances that the Company used to evaluate its expected holding periods by:
•inquiring of Company officials, including those that are responsible for and have the authority over potential disposition activities, regarding changes to the expected holding periods
•obtaining written representations regarding potential plans to dispose of real estate
•reading minutes of the Company’s Board of Directors
•reading external communications with investors.
/s/ KPMG LLP
We have served as the Company’s auditor since 2014.
February 25, 2026
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Report of Independent Registered Public Accounting Firm
To the Stockholders and Board of Directors
Sila Realty Trust, Inc.:
Opinion on Internal Control Over Financial Reporting
We have audited Sila Realty Trust, Inc. and subsidiaries' (the Company) internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2025 and 2024, the related consolidated statements of comprehensive income, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2025, and the related notes and financial statement schedule III - Real Estate Assets and Accumulated Depreciation (collectively, the consolidated financial statements), and our report dated February 25, 2026 expressed an unqualified opinion on those consolidated financial statements.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ KPMG LLP
We have served as the Company’s auditor since 2014.
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February 25, 2026
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SILA REALTY TRUST, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data and per share amounts)
| December 31, 2025 | December 31, 2024 | ||||||||||
| ASSETS | |||||||||||
| Real estate: | |||||||||||
| Land | $ | $ | |||||||||
Buildings and improvements, less accumulated depreciation of $ | |||||||||||
| Total real estate, net | |||||||||||
| Cash and cash equivalents | |||||||||||
Real estate related notes receivable, net of current expected credit loss reserve of $ | |||||||||||
Intangible assets, less accumulated amortization of $ | |||||||||||
| Goodwill | |||||||||||
| Right-of-use assets - operating leases | |||||||||||
| Right-of-use assets - finance lease | |||||||||||
| Other assets | |||||||||||
| Total assets | $ | $ | |||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
| Liabilities: | |||||||||||
Credit facility, net of deferred financing costs of $ | $ | $ | |||||||||
| Accounts payable and other liabilities | |||||||||||
Intangible liabilities, less accumulated amortization of $ | |||||||||||
| Operating lease liabilities | |||||||||||
| Finance lease liabilities | |||||||||||
| Total liabilities | |||||||||||
| Stockholders’ equity: | |||||||||||
Preferred stock, $ | |||||||||||
Common stock, $ | |||||||||||
| Additional paid-in capital | |||||||||||
| Distributions in excess of accumulated earnings | ( | ( | |||||||||
| Accumulated other comprehensive (loss) income | ( | ||||||||||
| Total stockholders’ equity | |||||||||||
| Total liabilities and stockholders’ equity | $ | $ | |||||||||
The accompanying notes are an integral part of these consolidated financial statements.
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SILA REALTY TRUST, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands, except share data and per share amounts)
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Revenue: | |||||||||||||||||
| Rental revenue | $ | $ | $ | ||||||||||||||
| Real estate related notes receivable interest income | |||||||||||||||||
| Total revenues | |||||||||||||||||
| Expenses: | |||||||||||||||||
| Rental expenses | |||||||||||||||||
Listing-related expenses | |||||||||||||||||
| General and administrative expenses | |||||||||||||||||
| Depreciation and amortization | |||||||||||||||||
| Impairment and disposition losses | |||||||||||||||||
| Demolition costs | |||||||||||||||||
| Total operating expenses | |||||||||||||||||
Other income (expense): | |||||||||||||||||
| Gain on dispositions of real estate | |||||||||||||||||
| Interest and other income | |||||||||||||||||
| Interest expense | ( | ( | ( | ||||||||||||||
| Increase in current expected credit loss reserve | ( | ||||||||||||||||
| Total other expense | ( | ( | ( | ||||||||||||||
| Net income attributable to common stockholders | $ | $ | $ | ||||||||||||||
| Other comprehensive loss - unrealized loss on interest rate swaps, net | ( | ( | ( | ||||||||||||||
| Comprehensive income attributable to common stockholders | $ | $ | $ | ||||||||||||||
| Weighted average number of common shares outstanding: | |||||||||||||||||
Basic(1) | |||||||||||||||||
Diluted(1) | |||||||||||||||||
| Net income per common share attributable to common stockholders: | |||||||||||||||||
Basic(1) | $ | $ | $ | ||||||||||||||
Diluted(1) | $ | $ | $ | ||||||||||||||
(1)2023 amounts have been retroactively adjusted for the effects of the Reverse Stock Split (see Note 1—"Organization and Business Operations" for additional information).
The accompanying notes are an integral part of these consolidated financial statements.
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SILA REALTY TRUST, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(in thousands, except share data)
| Common Stock | |||||||||||||||||||||||||||||||||||
No. of Shares | Par Value | Additional Paid-in Capital | Distributions in Excess of Accumulated Earnings | Accumulated Other Comprehensive Income (Loss) | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||
| Balance, December 31, 2024 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
Vesting of restricted common stock and issuance of performance-based deferred stock unit awards | — | — | — | — | — | ||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | ||||||||||||||||||||||||||||||||
Repurchases of common stock | ( | ( | ( | — | — | ( | |||||||||||||||||||||||||||||
Distributions to common stockholders | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
| Net income | — | — | — | — | |||||||||||||||||||||||||||||||
| Balance, December 31, 2025 | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||
| Common Stock | |||||||||||||||||||||||||||||||||||
No. of Shares(1) | Par Value(1) | Additional Paid-in Capital(1) | Distributions in Excess of Accumulated Earnings | Accumulated Other Comprehensive Income | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||
| Balance, December 31, 2023 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
| Issuance of common stock under the distribution reinvestment plan | — | — | |||||||||||||||||||||||||||||||||
Vesting of restricted common stock and issuance of performance-based deferred stock unit awards | — | — | — | — | — | ||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | ||||||||||||||||||||||||||||||||
| Other offering costs | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||
Repurchases of common stock | ( | ( | ( | — | — | ( | |||||||||||||||||||||||||||||
| Distributions to common stockholders | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||
| Balance, December 31, 2024 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
| Common Stock | |||||||||||||||||||||||||||||||||||
No. of Shares(1) | Par Value(1) | Additional Paid-in Capital(1) | Distributions in Excess of Accumulated Earnings | Accumulated Other Comprehensive Income | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||
| Balance, December 31, 2022 | ( | ||||||||||||||||||||||||||||||||||
| Issuance of common stock under the distribution reinvestment plan | — | — | |||||||||||||||||||||||||||||||||
Vesting of restricted common stock and issuance of performance-based deferred stock unit awards | — | — | — | — | — | ||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
| Other offering costs | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||
Repurchases of common stock | ( | ( | ( | — | — | ( | |||||||||||||||||||||||||||||
Distributions to common stockholders | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||
| Balance, December 31, 2023 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
(1)2022 and 2023 amounts have been retroactively adjusted for the effects of the Reverse Stock Split (see Note 1—"Organization and Business Operations" for additional information).
The accompanying notes are an integral part of these consolidated financial statements.
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SILA REALTY TRUST, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Cash flows from operating activities: | |||||||||||||||||
| Net income attributable to common stockholders | $ | $ | $ | ||||||||||||||
| Adjustments to reconcile net income attributable to common stockholders to net cash provided by operating activities: | |||||||||||||||||
| Depreciation and amortization | |||||||||||||||||
| Amortization of deferred financing costs | |||||||||||||||||
| Amortization of above- and below-market leases, net | ( | ||||||||||||||||
| Amortization of fees on real estate related notes receivable | ( | ||||||||||||||||
| Other amortization expenses | |||||||||||||||||
| Increase in current expected credit loss reserve | |||||||||||||||||
| Gain on dispositions of real estate | ( | ( | |||||||||||||||
| Loss on extinguishment of debt | |||||||||||||||||
| Impairment and disposition losses | |||||||||||||||||
| Straight-line rent adjustments, net of write-offs | ( | ( | ( | ||||||||||||||
| Stock-based compensation | |||||||||||||||||
| Changes in operating assets and liabilities: | |||||||||||||||||
| Accounts payable and other liabilities | |||||||||||||||||
| Other assets | ( | ( | ( | ||||||||||||||
| Net cash provided by operating activities | |||||||||||||||||
| Cash flows from investing activities: | |||||||||||||||||
| Investments in real estate | ( | ( | ( | ||||||||||||||
| Net proceeds from real estate dispositions | |||||||||||||||||
| Capital expenditures and other costs | ( | ( | ( | ||||||||||||||
| Net payments of deposits for investments in real estate | ( | ( | |||||||||||||||
| Fundings of real estate related notes receivable | ( | ||||||||||||||||
| Fees received on real estate related notes receivable | |||||||||||||||||
| Net cash (used in) provided by investing activities | ( | ( | |||||||||||||||
| Cash flows from financing activities: | |||||||||||||||||
| Proceeds from credit facility | |||||||||||||||||
| Payments on credit facility | ( | ( | ( | ||||||||||||||
| Payments of deferred financing costs | ( | ( | ( | ||||||||||||||
| Repurchases of common stock | ( | ( | ( | ||||||||||||||
| Offering costs on issuance of common stock | ( | ( | |||||||||||||||
| Distributions to common stockholders | ( | ( | ( | ||||||||||||||
| 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 year | |||||||||||||||||
| Cash, cash equivalents and restricted cash - End of year | $ | $ | $ | ||||||||||||||
| Supplemental cash flow disclosure: | |||||||||||||||||
Interest paid, net of interest capitalized of $ | $ | $ | $ | ||||||||||||||
| Supplemental disclosure of non-cash transactions: | |||||||||||||||||
| Common stock issued through distribution reinvestment plan | $ | $ | $ | ||||||||||||||
| Change in accrued distributions related to common stock and performance-based deferred stock unit awards | $ | $ | ( | $ | |||||||||||||
| Change in accrued capital expenditures and other costs | $ | $ | $ | ( | |||||||||||||
| Change in accrued acquisition costs related to investments in real estate | $ | $ | $ | ||||||||||||||
| Right-of-use assets obtained in exchange for new operating lease liabilities | $ | $ | $ | ||||||||||||||
| Right-of-use assets obtained in exchange for new finance lease liabilities | $ | $ | $ | ||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
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SILA REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025
Note 1—Organization and Business Operations
Sila Realty Trust, Inc., or the Company, is a Maryland corporation, headquartered in Tampa, Florida, that has elected, and conducts its operations so as to qualify, to be taxed as a real estate investment trust, or a REIT, under the Internal Revenue Code of 1986, as amended, or the Code, for federal income tax purposes. The Company is primarily focused on investing in high quality net lease healthcare facilities across the continuum of care, which the Company believes typically generate predictable, durable and growing income streams. The Company may also make other real estate related investments, which may include equity or debt interests in other real estate entities.
Substantially all of the Company’s business is conducted through Sila Realty Operating Partnership, LP, a Delaware limited partnership, or the Operating Partnership. The Company is the sole general partner of the Operating Partnership and directly and indirectly owns 100 % of the Operating Partnership. Except as the context otherwise requires, the “Company” refers to Sila Realty Trust, Inc., the Operating Partnership and their wholly-owned subsidiaries.
The Company’s common stock, par value $0.01 per share, or the Common Stock, is the sole class of stock traded on the New York Stock Exchange, or the NYSE, under the ticker symbol “SILA.”
On April 8, 2024, prior to listing and being traded on the NYSE under the ticker symbol “SILA”, or the Listing, the Company amended its charter to effect a one-for-four reverse stock split, or the Reverse Stock Split, of each issued and outstanding share of each class of Common Stock of the Company, effective May 1, 2024, and the Company also amended its charter to decrease the par value of each issued and outstanding share of the Company’s Common Stock from $0.04 par value per share to $0.01 par value per share immediately after the Reverse Stock Split. In addition, equitable adjustments were made to the maximum number of shares of the Company’s Common Stock that may be issued pursuant to the Company’s Amended and Restated 2014 Restricted Share Plan, or the A&R Incentive Plan, to reflect the Reverse Stock Split. The number of shares of the Company’s Common Stock subject to outstanding awards under the A&R Incentive Plan were also equitably adjusted to reflect the Reverse Stock Split. The Reverse Stock Split affected all record holders of the Company’s Common Stock uniformly and did not affect any record holder’s percentage ownership interest. The Reverse Stock Split did not affect the number of the Company’s authorized shares of Common Stock. All references made to share or per share amounts in the accompanying consolidated financial statements and applicable disclosures have been retroactively adjusted as though the Reverse Stock Split had been effectuated prior to all periods presented.
Distribution Policy
In order to maintain its status as a REIT, the Company is required to make distributions each taxable year equal to at least 90% of its REIT taxable income, computed without regard to the dividends paid deduction and excluding capital gains. To the extent funds are available, the Company intends to continue to pay regular distributions to stockholders. Distributions are paid to stockholders of record as of the applicable record dates. Distributions to stockholders are determined by the board of directors, or the Board, and are dependent upon a number of factors, including funds available for the payment of distributions, any restrictions imposed by the Company's organizational documents and Maryland law, the Company's financial condition, the timing of property acquisitions, capital expenditure requirements, and annual distribution requirements in order to maintain the Company’s status as a REIT.
Note 2—Summary of Significant Accounting Policies
The summary of significant accounting policies presented below is designed to assist in understanding the Company’s consolidated financial statements. Such consolidated financial statements and the accompanying notes thereto are the responsibility of management. These accounting policies conform to U.S. generally accepted accounting principles, or GAAP, in all material respects, and have been consistently applied in preparing the consolidated financial statements.
Principles of Consolidation and Basis of Presentation
The accompanying consolidated financial statements include the accounts of the Company, the Operating Partnership, and their wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.
Use of Estimates
The preparation of the consolidated financial statements and accompanying notes in conformity with GAAP requires the Company to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. These estimates are made and evaluated on an ongoing basis using information that is currently available
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as well as various other assumptions believed to be reasonable under the circumstances. Actual results could differ from those estimates.
Change in Accounting Estimate
On August 4, 2025, the Company committed to a plan to demolish a 180,744 square foot healthcare facility in Boston, MA, or the Stoughton Healthcare Facility. The useful lives of the Stoughton Healthcare Facility depreciable assets have been revised to approximately seven months to coincide with the estimated demolition timeline of the Stoughton Healthcare Facility. The change in the estimated useful lives has been accounted for as a change in accounting estimate. The demolition of the Stoughton Healthcare Facility is expected to be completed in the first quarter of 2026. The change in the estimated useful lives of the Stoughton Healthcare Facility depreciable assets resulted in the recognition of additional depreciation, which reduced net income attributable to common stockholders and comprehensive income attributable to common stockholders by $3,395,000 0.06
The Company recorded $1,011,000 in demolition costs related to the Stoughton Healthcare Facility during the year ended December 31, 2025, which is recorded in demolition costs in the accompanying consolidated statements of comprehensive income.
Cash, Cash Equivalents and Restricted Cash
The following table presents a reconciliation of the beginning of year and end of year cash, cash equivalents and restricted cash reported within the consolidated balance sheets to the totals shown in the consolidated statements of cash flows (amounts in thousands):
| Year Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Beginning of year: | ||||||||||||||||||||
| Cash and cash equivalents | $ | $ | $ | |||||||||||||||||
| Restricted cash | ||||||||||||||||||||
| Cash, cash equivalents and restricted cash | $ | $ | $ | |||||||||||||||||
| End of year: | ||||||||||||||||||||
| Cash and cash equivalents | $ | $ | $ | |||||||||||||||||
| Restricted cash | ||||||||||||||||||||
| Cash, cash equivalents and restricted cash | $ | $ | $ | |||||||||||||||||
Investment in Real Estate
Real estate costs related to the acquisition, development, construction and improvement of properties are capitalized. Repair and maintenance costs are expensed as incurred, and significant replacements and improvements are capitalized. Repair and maintenance costs include all costs that do not extend the useful life of the real estate assets. The Company considers the period of future benefit of an asset in determining the appropriate useful life. Real estate assets, other than land, are depreciated on a straight-line basis over each asset’s useful life. The Company anticipates the estimated useful lives of its assets by class as follows:
| Buildings and improvements | ||||||||
Tenant improvements | ||||||||
| Furniture, fixtures, and equipment | ||||||||
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Allocation of Purchase Price of Real Estate
Upon the acquisition of real estate properties, the Company evaluates whether the acquisition is a business combination or an asset acquisition. For both business combinations and asset acquisitions, the Company allocates the purchase price of properties to acquired tangible assets, consisting of land, buildings and improvements and tenant improvements; intangible assets and liabilities, consisting of the value of above-market and below-market leases, the value of in-place leases, right-of-use assets - finance lease and finance lease liabilities. For asset acquisitions, the Company capitalizes transaction costs and allocates the purchase price using a relative fair value method allocating all accumulated costs. For business combinations, the Company expenses transaction costs incurred and allocates the purchase price based on the estimated fair value of each separately identifiable asset and liability. For the year ended December 31, 2025, all of the Company’s acquisitions were determined to be asset acquisitions.
The fair value of the tangible assets of an acquired property (which includes land, buildings and improvements) is determined by valuing the property as if it were vacant, and the “as-if-vacant” value is then allocated to land and buildings and improvements based on management’s determination of the relative fair value of these assets.
The amount allocated to in-place leases includes an estimate of direct costs associated with obtaining a new tenant and opportunity costs associated with lost rentals that are avoided by acquiring an in-place lease. These in-place lease assets are amortized to depreciation and amortization expense over the remaining terms of the respective leases. If a lease is terminated prior to its stated expiration, all unamortized amounts of in-place lease assets relating to that lease would be expensed.
The amounts allocated to above-market and below-market leases are recorded based on the present value of the difference between: (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) an estimate of current market lease rates for the corresponding leases, measured over a period equal to the remaining non-cancelable term of the lease including any fixed rate bargain renewal periods, with respect to a below-market lease. These above-market and below-market amounts are amortized as an adjustment of rental revenue over the remaining terms of the respective leases. If a lease is terminated, amended or modified prior to its stated expiration, all unamortized amounts of above-market and below-market lease values related to that lease would be recorded as an adjustment to rental revenue.
Held for Sale
The Company classifies a real estate property as held for sale upon satisfaction of all of the following criteria: (i) management commits to a plan to sell the property; (ii) the property is available for immediate sale in its present condition, subject only to terms that are usual and customary for sales of such properties; (iii) there is an active program to locate a buyer; (iv) the sale of the property is probable and transfer of the asset is expected to be completed within one year; (v) the property is being actively marketed for sale; and (vi) actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.
Upon the determination to classify a property as held for sale, the Company ceases depreciation and amortization on the real estate property held for sale, as well as the amortization of any related intangible assets. Such properties are recorded at the lesser of the carrying value or estimated fair value less estimated costs to sell.
Impairments
The Company continually monitors events and changes in circumstances that could indicate that the carrying amounts of its real estate assets may not be recoverable. When indicators of potential impairment suggest that the carrying value of real estate assets may not be recoverable, the Company assesses the recoverability of the asset group by estimating undiscounted future cash flows, including eventual disposition. Based on this analysis, if the Company does not believe that it will be able to recover the carrying value of the asset group, an impairment charge will be recorded to the extent that the carrying value exceeds the estimated fair value of the asset group.
When developing estimates of expected future cash flows, the Company makes certain assumptions for the expected holding periods, future market rental rates subsequent to the expiration of current lease arrangements, property operating expenses, terminal capitalization and discount rates, probability weighting of potential uses of the property, sale prices of comparable properties and required tenant improvements. The use of alternative assumptions in the future cash flow analysis could result in a different determination of the property’s future cash flows and a different conclusion regarding the existence of an impairment, the extent of such loss, if any, as well as the carrying value of the real estate assets.
In addition, the Company determines fair value by using a direct capitalization method, a discounted cash flow method using the assumptions noted above, or by utilizing comparable market information based on the view of a market participant. The use of alternative assumptions in these approaches could result in a different determination of the property’s estimated fair value and a different conclusion regarding the existence of an impairment, the extent of such loss, if any, as well as the carrying value of the real estate assets.
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The Company accounts for goodwill in accordance with Accounting Standards Codification, or ASC, 350, Intangibles - Goodwill and Other, and allocates its goodwill to its reporting units, which have been determined to be at the individual property level. Goodwill has an indefinite life and is not amortized.
The Company evaluates goodwill for impairment at least annually, as of the last day of each year, or upon the occurrence of a triggering event. A triggering event is an event or circumstance that would more-likely-than-not indicate that the fair value of a reporting unit is below its carrying value.
The Company has the option to perform a qualitative assessment to determine if a quantitative impairment test is necessary. Under a qualitative assessment, the impairment analysis for goodwill represents an evaluation of whether it is more-likely-than-not the reporting unit's fair value is less than its carrying value, including goodwill. If a qualitative analysis indicates that it is more-likely-than-not that the estimated carrying value of a reporting unit, including goodwill, exceeds its fair value, the Company performs the quantitative analysis. The quantitative analysis consists of estimating the fair value of each reporting unit using discounted projected future cash flows and comparing those estimated fair values with the carrying values, which include the allocated goodwill. If the estimated fair value is less than the carrying value, the Company would then recognize a goodwill impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, not to exceed the total amount of goodwill allocated to that reporting unit.
Impairment losses on real estate, goodwill impairments and disposition losses, if any, are recorded as impairment and disposition losses in the accompanying consolidated statements of comprehensive income. Accelerated amortization of in-place leases are included in in the accompanying consolidated statements of comprehensive income. Accelerated amortization of above-market leases are recorded as a reduction to in the accompanying consolidated statements of comprehensive income. Accelerated amortization of below-market leases are recorded as an increase to rental revenue in the accompanying consolidated statements of comprehensive income.
Real Estate Related Notes Receivable
Real estate related notes receivable are recorded at stated principal amounts, net of unamortized fees and the current expected credit loss reserve. Interest income from the Company’s real estate related notes receivable is recognized over the life of each loan using the effective interest method and is recorded on the accrual basis. Recognition of fees associated with these notes receivable is deferred and recorded over the term of the loan as an adjustment to yield.
Current Expected Credit Losses Reserve
The Company recognizes and measures the reserve for credit losses under the current expected credit loss, or CECL, model required under ASC 326, Financial Instruments - Credit Losses, or ASC 326, to estimate potential losses from real estate related notes receivable. The measurement of expected credit losses under CECL is applicable to financial assets measured at amortized cost, and off-balance sheet credit exposures such as unfunded loan commitments. The CECL reserve is deducted from the real estate related notes receivable amortized cost basis on the accompanying consolidated balance sheets. The Company records increases and decreases to the CECL reserve in the accompanying consolidated statements of comprehensive income. Other than a few narrow exceptions, ASC 326 requires that all financial instruments subject to the CECL model have some amount of loss reserve to reflect the principle underlying the CECL model that all loans and similar assets have some inherent risk of loss, regardless of credit quality, subordinate capital, or other mitigating factors.
The Company determines the CECL reserve quarterly by using a probability of default/loss given default method. ASC 326 details factors the Company should consider when developing the CECL reserve, including historical loss data, current portfolio and market conditions, and reasonable and supportable forecasts for the duration of each respective loan. Additionally, the Company considers credit quality when developing the CECL reserve, including the borrower credit rating and the underlying collateral and progress of developments, if applicable, among other considerations. The Company considers both of the mezzanine loans as a pool when developing the CECL reserve.
Pursuant to ASC 326, the Company has made an accounting policy election not to measure the CECL reserve for accrued interest receivables, as these will be written off, if deemed uncollectible, in a timely manner. The Company generally suspends the income accrual for loans at the earlier of the date at which payments become 90 days past due or when, in the Company’s opinion, recovery of income and principal becomes doubtful.
Stock-based Compensation
On May 21, 2025, the Company’s stockholders approved the amendment and restatement of the Amended and Restated 2014 Restricted Share Plan, or the A&R Incentive Plan, pursuant to which the Company has the authority and power to grant awards of restricted shares of its Common Stock to its directors, officers and employees. The Company accounts for its stock
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Deferred Financing Costs
Deferred financing costs are loan fees, legal fees and other third-party costs associated with obtaining and further modifying financing. These costs are amortized over the terms of the respective financing agreements using the effective interest method. Deferred financing costs related to the term loan portion of the credit facility are recorded as a reduction of the related debt on the accompanying consolidated balance sheets. Deferred financing costs related to the revolving line of credit are recorded in other assets in the accompanying consolidated balance sheets.
Fair Value
ASC 820, Fair Value Measurements and Disclosures, or ASC 820, defines fair value, establishes a framework for measuring fair value in accordance with GAAP and expands disclosures about fair value measurements. ASC 820 emphasizes that fair value is intended to be a market-based measurement, as opposed to a transaction-specific measurement.
Fair value is defined by ASC 820 as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Depending on the nature of the asset or liability, various techniques and assumptions can be used to estimate the fair value. Assets and liabilities are measured using inputs from three levels of the fair value hierarchy, as follows:
Level 1—Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. An active market is defined as a market in which transactions for the assets or liabilities occur with sufficient frequency and volume to provide pricing information on an ongoing basis.
Level 2—Inputs other than quoted prices for similar assets and liabilities in active markets that are observable for the asset or liability (i.e., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data correlation or other means (market corroborated inputs).
Level 3—Unobservable inputs, only used to the extent that observable inputs are not available, reflect the Company’s assumptions about the pricing of an asset or liability.
Revenue Recognition and Tenant Receivables
The majority of the Company’s revenue is derived from rental revenue, which is accounted for in accordance with ASC 842, Leases, or ASC 842. Under ASC 842, rental revenue is recognized on a straight-line basis over the term of the related lease (including rent holidays). For lease arrangements where it is not probable that the Company will collect all or substantially all of the remaining lease payments under the term of the lease, rental revenue is limited to the lesser of the rental revenue that would be recognized on a straight-line basis or the lease payments that have been collected from the lessee. Differences between rental revenue recognized and amounts contractually due under the lease agreements are credited or charged to straight-line rent receivable. The Company has elected the practical expedient for lessors to account for the lease and nonlease components as a single component pursuant to ASC 842. The Company determined the lease component is predominant, the timing and pattern of transfer are the same, and the lease component would otherwise be treated as an operating lease. Tenant reimbursements, which are comprised of additional amounts recoverable from tenants for common area maintenance expenses and certain other recoverable expenses, are recognized when the services are provided and the performance obligations are satisfied.
Earnings Per Share
The Company calculates basic and diluted earnings per share using the two-class method. Basic earnings per share is computed based on the weighted average shares of the Company’s Common Stock outstanding for the period. Diluted earnings per share is computed based on the weighted average number of shares outstanding and all potentially dilutive securities, which include shares of restricted Common Stock and Performance DSUs. The shares of restricted Common Stock contain non-forfeitable dividend distribution rights and are considered participating securities. The Performance DSUs are also entitled to
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dividend equivalents which are paid to the grantee only in the event that the applicable performance criteria is achieved and the Performance DSUs vest.
Reportable Segments
Derivative Instruments and Hedging Activities
As required by ASC 815, Derivatives and Hedging, or ASC 815, the Company records all derivative instruments at fair value as assets and liabilities on its consolidated balance sheets. The accounting for changes in the fair value of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and further, on the type of hedging relationship. For those derivative instruments that are designated and qualify as hedging instruments, a company must designate the hedging instrument, based upon the exposure being hedged, as a fair value hedge, cash flow hedge or a hedge of a net investment in a foreign operation.
In accordance with the fair value measurement guidance in ASC 820, the Company made an accounting policy election to measure the credit risk of its derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio.
The Company is exposed to variability in expected future cash flows that are attributable to interest rate changes in the normal course of business. The Company’s primary strategy in entering into derivative contracts is to add stability to future cash flows by managing its exposure to interest rate fluctuations. The Company utilizes derivative instruments, including interest rate swaps, to effectively convert its variable rate debt to fixed rate debt. The Company does not enter into derivative instruments for speculative purposes.
Income Taxes
The Company conducts its operations so as to qualify to be taxed as a REIT under Sections 856 through 860 of the Code. Accordingly, it will generally not be subject to corporate U.S. federal or state income tax to the extent that it makes qualifying distributions to stockholders, and provided it satisfies, on a continuing basis, through actual investment and operating results, the REIT requirements, including certain asset, income, distribution and stock ownership tests. If the Company fails to qualify as a REIT, it would be subject to U.S. federal, state and local income taxes and may be precluded from qualifying as a REIT for the subsequent four taxable years following the year in which it lost its REIT qualification, unless the Internal Revenue Service grants the Company relief under certain statutory provisions. Accordingly, failure to qualify as a REIT could have a material adverse impact on the results of operations and amounts available for distribution to stockholders.
The dividends paid deduction of a REIT for qualifying dividends paid to its stockholders is computed using the Company’s taxable income as opposed to net income reported in the consolidated financial statements. Taxable income, generally, will differ from net income reported in the consolidated financial statements because the determination of taxable income is based on tax provisions and not financial accounting principles.
The Company has concluded that there was no impact related to uncertain tax positions from results of operations of the Company for the years ended December 31, 2025, 2024 and 2023. The earliest tax year currently subject to examination is 2022.
Changes in Presentation
Recently Issued Accounting Pronouncements
In November 2024, the FASB issued Accounting Standards Update, or ASU, 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40), Disaggregation of Income Statement Expenses, or ASU 2024-03, to improve disclosures about an entity’s expenses and to provide detailed information about the
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types of expenses in commonly presented expense captions. ASU 2024-03 requires disclosures about specific expense categories including purchases of inventory, employee compensation, depreciation, amortization and selling expenses. Additionally, ASU 2024-03 requires a qualitative description of amounts remaining in relevant expense captions that are not separately disaggregated. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026 and interim periods for fiscal years beginning after December 15, 2027, and should be applied either prospectively for reporting periods after the effective date of ASU 2024-03 or retrospectively to all periods presented. Early adoption is permitted. The Company expects the adoption of this standard to expand its annual and interim expense disclosures, but otherwise to have no impact on the consolidated financial statements.
Note 3—Real Estate
Acquisitions
During the year ended December 31, 2025, the Company purchased six real estate properties in four separate transactions, which were determined to be asset acquisitions, including one that was subject to a ground lease. The Company allocated the purchase price to tangible assets, consisting of land, building and improvements, and tenant improvements; intangible assets, consisting of in-place leases and right-of-use assets - finance lease; and finance lease liabilities, based on the relative fair value method of allocating all accumulated costs. The Company engaged a third-party real estate services firm to assist in performing the purchase price allocation.
The following tables summarize the cash consideration transferred, including acquisition costs, and the purchase price allocation for the acquisitions during the year ended December 31, 2025 (amounts in thousands):
| Property Description | Date Acquired | Ownership Percentage | Cash Consideration Transferred | |||||||||||||||||
| Knoxville Healthcare Facility | 03/04/2025 | $ | ||||||||||||||||||
Dover Healthcare Facility(1) | 04/16/2025 | |||||||||||||||||||
| Southlake Healthcare Facility | 08/01/2025 | |||||||||||||||||||
| Southlake Healthcare Facility II | 08/01/2025 | |||||||||||||||||||
| Peoria Healthcare Facility | 09/05/2025 | |||||||||||||||||||
| Plano Healthcare Facility | 09/05/2025 | |||||||||||||||||||
| Total | $ | |||||||||||||||||||
| Total | ||||||||
| Land | $ | |||||||
| Building and improvements | ||||||||
| Tenant improvements | ||||||||
In-place leases(2) | ||||||||
| Right-of-use assets - finance lease | ||||||||
| Total assets acquired | ||||||||
| Finance lease liabilities | ( | |||||||
| Total liabilities assumed | ( | |||||||
| Net assets acquired | $ | |||||||
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(1)On April 16, 2025, the Company purchased the Dover Healthcare Facility for $24,142,000 , including capitalized acquisition costs. On September 16, 2025, the Company purchased additional land to expand the Dover Healthcare Facility for $2,676,000 , including capitalized acquisition costs.
(2)The in-place leases have a weighted average amortization period of 16.5 years as of the respective acquisition dates.
The Company capitalized acquisition costs of $1,289 ,000, which are included in the allocation of the real estate acquisitions presented above.
Investment Risk Concentrations
As of December 31, 2025, the Company did not have exposure to geographic concentration within a metropolitan statistical area that accounted for at least 10.0% of rental revenue for the year ended December 31, 2025.
As of December 31, 2025, the Company had one exposure to tenant concentration that accounted for at least 10.0% of rental revenue for the year ended December 31, 2025. The leases with tenants at properties under the common control of PAM Health and its affiliates accounted for 16.1 % of rental revenue for the year ended December 31, 2025.
Impairment
During the year ended December 31, 2025, the Company recorded impairment losses on real estate of $9,951,000 , including goodwill impairments of $65,000 . During the year ended December 31, 2024, the Company recorded impairment and disposition losses of $1,210,000 . During the year ended December 31, 2023, the Company recorded impairment losses of $24,252,000 , including of $4,010,000 . Refer below for further details on the impairment losses recorded.
Steward
On May 6, 2024, Steward Health Care System LLC, or Steward, the sponsor and owner of the former tenant at the Stoughton Healthcare Facility, announced that it filed for Chapter 11 bankruptcy protection under the United States Bankruptcy Code. On September 19, 2024, the U.S. Bankruptcy Court for the Southern District of Texas approved Steward’s request to reject the Company’s lease.
During the year ended December 31, 2025, the Company recorded impairment losses on real estate of $3,531,000 attributable to the Stoughton Healthcare Facility. The fair value of the Stoughton Healthcare Facility was measured based on inputs that are derived principally from observable market data related to the marketing for sale of the asset, which resides within Level 2 of the fair value hierarchy. This impairment was allocated to buildings and improvements. On August 4, 2025, the Company committed to a plan to demolish the Stoughton Healthcare Facility. See Note 2—"Summary of Significant Accounting Policies" for additional information about the Stoughton Healthcare Facility. During the year ended December 31, 2023, the Company recorded impairment losses on real estate of $10,945,000 , including goodwill impairments of $350,000 , attributable to the Stoughton Healthcare Facility.
GenesisCare
As disclosed in the Current Report on Form 8-K that the Company filed with the SEC on June 5, 2023, GenesisCare, the sponsor and owner of the tenant in certain of the Company’s real estate properties announced that it filed for Chapter 11 bankruptcy protection under the United States Bankruptcy Code on June 1, 2023. On March 27, 2024, the Company entered into a second amendment to the second amended and restated master lease, or the GenesisCare Amended Master Lease, with GenesisCare in connection with its emergence from bankruptcy on February 16, 2024. The Company received a $2,000,000 severance fee from GenesisCare, or the GenesisCare Severance Fee, on March 27, 2024. The Company recognizes the GenesisCare Severance Fee in rental revenue on a straight-line basis over the remaining GenesisCare Amended Master Lease term. During the years ended December 31, 2025 and 2024, the Company recognized $227,000 and $173,000 , respectively, of amortization of the GenesisCare Severance Fee in rental revenue in the accompanying consolidated statements of comprehensive income.
During the year ended December 31, 2024, the Company recorded impairment and disposition losses of $1,210,000 as a result of triggering events that occurred at certain properties and costs related to the disposition of the Fort Myers Healthcare Facilities.
During the year ended December 31, 2023, the Company recorded impairment losses on real estate of $9,480,000 , including goodwill impairments of $1,238,000 , as a result of GenesisCare announcing it had filed bankruptcy.
Other Impairment Losses and Accelerated Amortization of Intangible Assets
In addition to the impairments disclosed above, the Company recorded $6,420,000 of impairment losses on real estate during the year ended December 31, 2025, which included $65,000 of goodwill impairments. Of this amount, $3,261,000 was recognized due to a tenant at a single-tenant property vacating its leased space during the year ended December 31, 2025,
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resulting in a book value of $2,300,000 . The remaining $3,159,000 , which includes $65,000 of goodwill impairments, was recognized based on observable market data related to the marketing of an asset for sale, resulting in a book value of $1,550,000 . In addition to the impairments disclosed above, during the year ended December 31, 2023, the Company recorded impairment losses on real estate of $3,827,000 , including goodwill impairments of $2,422,000 , as a result of property sales and tenant related triggering events that occurred at certain properties.
During the year ended December 31, 2025 the Company recorded accelerated amortization of in-place lease intangible assets of $1,075,000 . During the year ended December 31, 2024, the Company recorded accelerated amortization of in-place lease intangible assets, above-market lease intangible assets and below-market lease intangible liabilities of $4,646,000 , $3,123,000 , and $2,038,000 , respectively, primarily due to the GenesisCare Amended Master Lease. During the year ended December 31, 2023, the Company recorded accelerated amortization of in-place lease intangible assets and above-market lease intangible assets of $1,130,000 and $260,000 , respectively related to properties formerly leased to GenesisCare.
The following table summarizes the rollforward of goodwill for the year ended December 31, 2025 and 2024 (amounts in thousands):
| December 31, 2025 | December 31, 2024 | |||||||||||||||||||||||||||||||||||||
Goodwill | Accumulated Impairment Losses | Total | Goodwill | Accumulated Impairment Losses | Total | |||||||||||||||||||||||||||||||||
| Balance at beginning of year | $ | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||
| Goodwill associated with disposed reporting units | — | ( | — | |||||||||||||||||||||||||||||||||||
Impairment charges | — | ( | ( | — | ||||||||||||||||||||||||||||||||||
| Balance at end of year | $ | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||
Note 4—Real Estate Related Notes Receivable
On November 5, 2024, the Company entered into two mezzanine loans for the development of an inpatient rehabilitation facility and a behavioral healthcare facility in Lynchburg, Virginia, or the Mezzanine Loans. The Mezzanine Loans have total loan amounts of $12,543,000 and $5,000,000 , respectively, and a maturity date of November 5, 2029, or the Maturity Date. The Mezzanine Loans bear interest at a rate of 13 % per annum for the period commencing November 5, 2024 through November 4, 2027, and 15 % per annum for the period commencing November 5, 2027 through the Maturity Date. The Company received an upfront fee of 2 % of the total loan amount of the Mezzanine Loans, and will receive an additional 1 % fee if the Mezzanine Loans have not been paid in full before November 5, 2027 and another 1 % fee if the Mezzanine Loans have not been paid in full before November 5, 2028. The Mezzanine Loans include purchase options for the Company for both the inpatient rehabilitation facility and the behavioral healthcare facility upon completion of construction.
For the year ended December 31, 2025, the Company’s real estate related notes receivable activity was as follows (amounts in thousands):
| Principal Balance | Fees | Carrying Value | ||||||||||||||||||
| Real estate related notes receivable, as of December 31, 2024 | $ | — | $ | — | $ | |||||||||||||||
| Fundings of real estate related notes receivable | — | |||||||||||||||||||
| Fees received on notes receivable | — | ( | ( | |||||||||||||||||
| Amortization of fees | — | |||||||||||||||||||
| Real estate related notes receivable, as of December 31, 2025 | $ | $ | ( | $ | ||||||||||||||||
| CECL reserve | ( | |||||||||||||||||||
| Real estate related notes receivable, net, as of December 31, 2025 | $ | |||||||||||||||||||
During the year ended December 31, 2025, the Company recognized interest income related to the real estate related notes receivable of $1,232,000 , including $94 ,000 related to the amortization of fees which is included in real estate related notes receivable interest income in the accompanying consolidated statements of comprehensive income. The Company did not
Current Expected Credit Loss Reserve
As of December 31, 2025, the Company’s CECL reserve balance was $180,000 . During the year ended December 31, 2025, the Company recorded an increase to the CECL reserve of $180,000 . There was no CECL reserve as of December 31, 2024. Refer to Note 2—"Summary of Significant Accounting Policies" for further discussion of the Company’s CECL reserves.
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Note 5—Intangible Assets, Net
Intangible assets, net, consisted of the following as of December 31, 2025 and December 31, 2024 (amounts in thousands, except weighted average remaining life amounts):
| December 31, 2025 | December 31, 2024 | ||||||||||
In-place leases, net of accumulated amortization of $ | $ | $ | |||||||||
Above-market leases, net of accumulated amortization of $ | |||||||||||
| $ | $ | ||||||||||
The aggregate weighted average remaining life of the intangible assets was 7.1 years and 7.3 years as of December 31, 2025 and December 31, 2024, respectively.
Amortization of in-place leases was $19,870,000 , $24,109,000 and $21,539,000 for the years ended December 31, 2025, 2024, and 2023, respectively. Amortization of above-market leases was $731,000 , $4,556,000 and $2,227,000 for the years ended December 31, 2025, 2024, and 2023, respectively. Amortization of in-place leases is included in depreciation and amortization, and amortization of above-market leases is recorded as a reduction to rental revenue, in the accompanying consolidated statements of comprehensive income.
Estimated amortization of the intangible assets as of December 31, 2025, for each of the next five years ending December 31 and thereafter, is as follows (amounts in thousands):
| Year | In-Place Leases | Above-Market Leases | ||||||||||||
| 2026 | $ | $ | ||||||||||||
| 2027 | ||||||||||||||
| 2028 | ||||||||||||||
| 2029 | ||||||||||||||
| 2030 | ||||||||||||||
| Thereafter | ||||||||||||||
| $ | $ | |||||||||||||
Note 6—Intangible Liabilities, Net
Intangible liabilities, net, consisted of the following as of December 31, 2025 and December 31, 2024 (amounts in thousands, except weighted average remaining life amounts):
| December 31, 2025 | December 31, 2024 | ||||||||||
Below-market leases, net of accumulated amortization of $ | $ | $ | |||||||||
Amortization of below-market leases was $1,260,000 , $3,383,000 and $1,494,000 for the years ended December 31, 2025, 2024, and 2023 respectively. Amortization of below-market leases is recorded as an increase to rental revenue in the accompanying consolidated statements of comprehensive income.
Estimated amortization of the intangible liabilities as of December 31, 2025, for each of the next five years ending December 31 and thereafter, are as follows (amounts in thousands):
| Year | Amount | |||||||
| 2026 | $ | |||||||
| 2027 | ||||||||
| 2028 | ||||||||
| 2029 | ||||||||
| 2030 | ||||||||
| Thereafter | ||||||||
| $ | ||||||||
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Note 7—Leases
Lessor
The Company’s real estate properties are leased to tenants under operating leases with varying terms. Typically, the leases have provisions to extend the terms of the lease agreements. The Company retains substantially all of the risks and benefits of ownership of the real estate properties leased to tenants.
The following table summarizes the Company’s rental revenue from operating leases for the years ended December 31, 2025, 2024 and 2023 (amounts in thousands):
| Year Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
Rental income | $ | $ | $ | |||||||||||||||||
Variable lease income | ||||||||||||||||||||
Total rental revenue | $ | $ | $ | |||||||||||||||||
Future rent to be received from the Company’s investments in real estate assets under the terms of non-cancellable operating leases in effect as of December 31, 2025, for each of the next five years ending December 31, and thereafter, are as follows (amounts in thousands):
December 31, 2025(1) | ||||||||
| 2026 | $ | |||||||
| 2027 | ||||||||
| 2028 | ||||||||
| 2029 | ||||||||
| 2030 | ||||||||
| Thereafter | ||||||||
| Total | $ | |||||||
(1)The table includes payments from a tenant who is on the cash basis of accounting for revenue recognition purposes that has continued to make rental payments as of December 31, 2025.
Lessee
The Company is subject to various non-cancellable operating lease agreements on which certain of its properties reside (ground leases) and for its corporate office. Additionally, the Company has one non-cancellable lease agreement that is classified as a finance lease related to a ground lease of a healthcare property.
The Company’s operating leases and finance lease do not provide implicit interest rates. In order to calculate the present value of the remaining operating and finance lease payments, the Company used incremental borrowing rates, or IBRs, adjusted for a number of factors. The determination of an appropriate IBR involves multiple inputs and judgments. The Company determined its IBRs considering the general economic environment, term of the underlying leases, and various financing and asset specific adjustments to ensure the IBRs are appropriate for the intended use of the underlying operating leases and finance lease.
The effects of the Company’s operating leases are recorded in right-of-use assets - operating leases and operating lease liabilities on the consolidated balance sheets. The effects of the Company’s finance lease are recorded in right-of-use assets - finance lease and finance lease liabilities on the consolidated balance sheets.
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The future rent payments under non-cancellable leases in effect as of December 31, 2025, for each of the next five years ending December 31 and thereafter, are as follows (amounts in thousands):
Operating | Finance | |||||||||||||
| 2026 | $ | $ | ||||||||||||
| 2027 | ||||||||||||||
| 2028 | ||||||||||||||
| 2029 | ||||||||||||||
| 2030 | ||||||||||||||
| Thereafter | ||||||||||||||
| Total undiscounted rental payments | ||||||||||||||
| Less imputed interest | ( | ( | ||||||||||||
| Total lease liabilities | $ | $ | ||||||||||||
The weighted average IBR and weighted average remaining lease term as of December 31, 2025 and December 31, 2024 for the Company’s operating leases are as follows:
| December 31, 2025 | December 31, 2024 | ||||||||||
| Weighted average IBR | % | % | |||||||||
| Weighted average remaining lease term | |||||||||||
The IBR and remaining lease term as of December 31, 2025 and December 31, 2024 for the Company's finance lease is as follows:
| December 31, 2025 | December 31, 2024 | ||||||||||
IBR | % | % | |||||||||
Remaining lease term | — | ||||||||||
The following table provides details of the Company's total lease costs for the years ended December 31, 2025, 2024 and 2023 (amounts in thousands):
| Year Ended December 31, | ||||||||||||||||||||||||||
Location in Consolidated Statements of Comprehensive Income | 2025 | 2024 | 2023 | |||||||||||||||||||||||
Operating lease costs: | ||||||||||||||||||||||||||
Ground lease costs(1) | Rental expenses | $ | $ | $ | ||||||||||||||||||||||
| Corporate operating lease costs | General and administrative expenses | |||||||||||||||||||||||||
Finance lease costs: | ||||||||||||||||||||||||||
| Interest on lease liability | Interest expense | |||||||||||||||||||||||||
| Supplemental disclosure of cash flows information: | ||||||||||||||||||||||||||
Operating cash outflows for operating leases(1)(2) | ||||||||||||||||||||||||||
| Right-of-use assets obtained in exchange for new operating lease liabilities | ||||||||||||||||||||||||||
| Right-of-use assets obtained in exchange for new finance lease liabilities | $ | $ | $ | |||||||||||||||||||||||
(1)The Company receives reimbursements from tenants for certain operating ground leases, which are recorded as rental revenue in the accompanying consolidated statements of comprehensive income.
(2)Amounts are net of reimbursements the Company receives from tenants for certain operating ground leases.
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Note 8—Other Assets
Other assets consisted of the following as of December 31, 2025 and December 31, 2024 (amounts in thousands):
| December 31, 2025 | December 31, 2024 | ||||||||||
Deferred financing costs, related to the revolver portion of the credit facility, net of accumulated amortization of $ | $ | $ | |||||||||
Leasing commissions, net of accumulated amortization of $ | |||||||||||
| Tenant receivables | |||||||||||
| Straight-line rent receivable | |||||||||||
| Real estate deposits | |||||||||||
| Prepaid and other assets | |||||||||||
| Derivative assets - interest rate swaps | |||||||||||
| $ | $ | ||||||||||
Note 9—Accounts Payable and Other Liabilities
Accounts payable and other liabilities consisted of the following as of December 31, 2025 and December 31, 2024 (amounts in thousands):
| December 31, 2025 | December 31, 2024 | ||||||||||
| Accounts payable and accrued expenses | $ | $ | |||||||||
| Accrued interest expense | |||||||||||
| Accrued property taxes | |||||||||||
| Accrued personnel costs | |||||||||||
| Performance DSUs distributions payable | |||||||||||
| Tenant deposits | |||||||||||
| Deferred rental income | |||||||||||
| Derivative liabilities - interest rate swaps | |||||||||||
| $ | $ | ||||||||||
Note 10—Credit Facility
The Company's debt consists of a senior unsecured revolving line of credit with Bank of America, N.A., as Administrative Agent for the lenders, or the 2029 Revolving Credit Agreement, a senior unsecured amended and restated term loan agreement with Truist Bank, as Administrative Agent for the lenders, or the 2027 Term Loan Agreement, and a senior unsecured term loan with Truist Bank, as Administrative Agent for the lenders, or the 2028 Term Loan Agreement, or collectively, the Unsecured Credit Facility. The Unsecured Credit Facility consisted of the following amounts outstanding as of December 31, 2025 and December 31, 2024 (amounts in thousands):
Interest Rate | December 31, 2025 | December 31, 2024 | ||||||||||||||||||
Variable 2029 Revolving Credit Agreement(1) | $ | $ | ||||||||||||||||||
Variable 2027 Term Loan Agreement fixed through interest rate swaps(2) | ||||||||||||||||||||
Variable 2028 Term Loan Agreement fixed through interest rate swaps(3) | ||||||||||||||||||||
| Total Unsecured Credit Facility, principal amount outstanding | ||||||||||||||||||||
| Unamortized deferred financing costs related to Unsecured Credit Facility term loans | ( | ( | ||||||||||||||||||
| Total Unsecured Credit Facility, net of deferred financing costs | $ | $ | ||||||||||||||||||
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(1)Interest rate represents the daily Secured Overnight Financing Rate, or , of 3.66 % in effect on the Company’s revolving line of credit plus the applicable margin of 1.25 % as of December 31, 2025.
(2)Fixed through four interest rate swaps that mature on March 20, 2029.
Significant activities regarding the credit facility during the year ended December 31, 2025 include:
•On February 18, 2025, the Company entered into the 2029 Revolving Credit Agreement for aggregate commitments available of up to $600,000,000 , which may be increased, subject to lender approval, through incremental term loans and/or revolving loan commitments in an aggregate amount not to exceed $1,500,000,000 . The maturity date for the 2029 Revolving Credit Agreement is February 16, 2029, which, at the Company’s election, may be extended for a period of six-months on no more than two occasions, subject to certain conditions, including a payment of an extension fee. The 2029 Revolving Credit Agreement was entered into to replace the Company’s prior $500,000,000 revolving line of credit, which had a maturity date of February 15, 2026, or the 2026 Revolving Credit Agreement, with the option to extend for two six-month periods. The Company did not exercise the option to extend. Upon closing of the 2029 Revolving Credit Agreement, the Company extinguished all commitments associated with the 2026 Revolving Credit Agreement. At the Company’s election, borrowings under the 2029 Revolving Credit Agreement may be made as Base Rate loans or SOFR loans. The applicable margin for loans that are Base Rate loans is adjustable based on a total leverage ratio, ranging from 0.25 % to 0.90 %. The applicable margin for loans that are SOFR loans is adjustable based on a total leverage ratio, ranging from 1.25 % to 1.90 %. In addition to interest, the Company is required to pay a fee on the unused portion of the lenders’ commitments under the 2029 Revolving Credit Agreement at a rate per annum equal to 0.20 % if the average daily amount outstanding under the 2029 Revolving Credit Agreement is less than 50% of the aggregate commitments, or 0.15 % if the average daily amount outstanding under the 2029 Revolving Credit Agreement is equal to or greater than 50% of the aggregate commitments. The unused fee is payable quarterly in arrears and recorded as interest expense in the accompanying consolidated statements of comprehensive income. Additionally, upon closing of the 2029 Revolving Credit Agreement, the Company entered into a First Amendment to the 2027 Term Loan Agreement, and a Second Amendment to the 2028 Term Loan Agreement, to align certain terms and covenants to the 2029 Revolving Credit Agreement.
•In connection with entering into the 2029 Revolving Credit Agreement to replace the 2026 Revolving Credit Agreement, the Company recognized a loss on extinguishment of debt of $233,000 during the year ended December 31, 2025. The loss on extinguishment of debt was recognized in interest expense in the accompanying consolidated statements of comprehensive income.
The principal payments due on the credit facility as of December 31, 2025, for each of the next five years ending December 31 and thereafter, are as follows (amounts in thousands):
| Amount | ||||||||
2026 | $ | |||||||
| 2027 | ||||||||
| 2028 | ||||||||
| 2029 | ||||||||
| 2030 | ||||||||
| Thereafter | ||||||||
| $ | ||||||||
As of December 31, 2025, the maximum commitments available under the 2029 Revolving Credit Agreement were $600,000,000 , which may be increased, subject to lender approval, through incremental term loans and/or revolving loan commitments in an aggregate amount not to exceed $1,500,000,000 . As of December 31, 2025, the maximum commitments available under the 2027 Term Loan Agreement were $250,000,000 , which may be increased, subject to lender approval, to an aggregate amount not to exceed $500,000,000 . As of December 31, 2025, the maximum commitments available under the 2028 Term Loan Agreement were $275,000,000 , which may be increased, subject to lender approval, to an aggregate amount not to exceed $500,000,000 . The Unsecured Credit Facility has aggregate commitments available of $1,125,000,000 as of December 31, 2025. Generally, the proceeds of loans made under the Unsecured Credit Facility may be used for acquisition of real estate investments, funding of tenant improvements, developments, capital expenditures, and leasing commissions with respect to real estate, repayment of indebtedness, and general corporate and working capital purposes.
At the Company’s election, loans under the Unsecured Credit Facility may be made as Base Rate Loans or SOFR Loans. The applicable margin for loans that are Base Rate Loans is adjustable based on a total leverage ratio, ranging from 0.25 % to
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The Unsecured Credit Facility contains customary financial and operating covenants, including covenants relating to a maximum consolidated leverage ratio, maximum secured leverage ratio, fixed charge coverage ratio, unsecured interest coverage ratio, minimum consolidated tangible net worth, maximum distribution/payout ratio, covenants restricting the issuance of debt, imposition of liens, and entering into affiliate transactions.
Note 11—Segment Reporting
The Company’s healthcare properties are aggregated into one
In the healthcare operating segment, the Company generates income from rental revenue from leases and tenant reimbursements, which include additional amounts recoverable from tenants for common area maintenance expenses and certain other recoverable expenses. Additionally, the healthcare operating segment earns interest income from real estate related investments.
The Company’s chief operating decision maker, or CODM, is the Chief Executive Officer, who assesses the performance of the operating segment using net income, which is reported on the consolidated statements of comprehensive income as net income attributable to common stockholders. The CODM assesses net income at least quarterly to review budget-to-actual variances, review quarter-over-quarter actual variances, evaluate the operating performance of the healthcare properties, and allocate resources within the segment. Segment expenses provided to the CODM for budget-to-actual variance review and quarter-over-quarter actual variance review include rental expenses, general and administrative expenses, depreciation and amortization, impairment and disposition losses, demolition costs, and interest expense. Additionally, the CODM considers net income when determining the amount of distributions necessary to maintain the Company’s REIT status.
There were no intersegment sales or transfers during the years ended December 31, 2025, 2024 and 2023. Segment assets are reported on the consolidated balance sheets as total assets while capital expenditures for the reportable segment are reported on the consolidated statements of cash flows as capital expenditures and other costs.
Note 12—Fair Value
Cash and cash equivalents, restricted cash, tenant receivables, prepaid and other assets, accounts payable and other liabilities—The Company considers the carrying values of these financial instruments, assets and liabilities, to approximate fair value because of the short period of time between origination of the instruments and their expected realization.
Real estate related notes receivable—The carrying value of the real estate related notes receivable was $17,106,000 , which approximated fair value as of December 31, 2025. The fair value of the Company’s real estate related notes receivable is estimated using significant unobservable inputs not based on observable market activity, but rather through particular valuation techniques (Level 3). The fair value was measured using a discounted cash flow methodology, taking into consideration various factors including discount rates, credit worthiness of borrowers, availability and cost of financing and other factors.
Credit facility—The outstanding principal of the credit facility was $676,000,000 and $525,000,000 as of December 31, 2025 and December 31, 2024, respectively, which approximated its fair value due to the variable nature of the terms.
The fair value of the Company’s credit facility is estimated based on the interest rates currently offered to the Company by its financial institutions.
Derivative instruments—The Company’s derivative instruments consist of interest rate swaps. These swaps are carried at fair value to comply with the provisions of ASC 820. The fair value of these instruments is determined using interest rate market pricing models. The Company incorporated credit valuation adjustments to appropriately reflect the Company’s nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. The Company determined that the inputs used to value its interest rate swaps, with the exception of the credit valuation adjustment, fall within Level 2 of the fair value hierarchy. The credit valuation adjustments associated with these instruments utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by the Company and the respective counterparty. However, as of December 31, 2025, the Company assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and determined that the credit valuation adjustments are not significant to the overall valuation of its interest rate swaps. As a result, the Company determined that its interest rate swaps valuation in its entirety is classified in Level 2 of the fair value hierarchy.
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Considerable judgment is necessary to develop estimated fair values of financial assets and liabilities. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realize or be liable for on disposition of the financial assets and liabilities.
The following tables show the fair value of the Company’s financial assets and liabilities that are required to be measured at fair value on a recurring basis as of December 31, 2025 and December 31, 2024 (amounts in thousands):
| December 31, 2025 | |||||||||||||||||||||||
| Fair Value Hierarchy | |||||||||||||||||||||||
| Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total Fair Value | ||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Derivative assets - interest rate swaps | $ | $ | $ | $ | |||||||||||||||||||
| Total assets at fair value | $ | $ | $ | $ | |||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||
| Derivative liabilities - interest rate swaps | $ | $ | $ | $ | |||||||||||||||||||
| Total liabilities at fair value | $ | $ | $ | $ | |||||||||||||||||||
| December 31, 2024 | |||||||||||||||||||||||
| Fair Value Hierarchy | |||||||||||||||||||||||
| Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total Fair Value | ||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Derivative assets - interest rate swaps | $ | $ | $ | $ | |||||||||||||||||||
| Total assets at fair value | $ | $ | $ | $ | |||||||||||||||||||
Derivative assets and liabilities are reported in the consolidated balance sheets as other assets and , respectively.
Real Estate Assets—As of December 31, 2025, one real estate asset was measured at fair value, on a non-recurring basis, of $1,550,000 and resulted in the recognition of an impairment loss of $3,159,000 for the year ended December 31, 2025. The fair value was measured based on inputs that are derived principally from observable market data related to the marketing for sale of the asset, which resides within Level 2 of the fair value hierarchy.
As of June 30, 2025, there was one real estate asset measured at fair value, on a non-recurring basis, of $2,300,000 and resulted in the recognition of an impairment loss of $3,261,000 for the year ended December 31, 2025. The fair value was measured based on a discounted cash flow model, which includes significant unobservable inputs that reside within Level 3 of the fair value hierarchy. This cash flow model consisted of unobservable inputs such as forecasted revenues and expenses and estimated net disposition proceeds at the end of the hold period, based on market conditions and expected growth rates. The significant unobservable inputs and assumptions used in the discounted cash flow model to estimate the fair value include a discount rate of 8.06 %, which is considered a Level 3 input per the fair value hierarchy.
As of March 31, 2025, one real estate asset was measured at fair value, on a non-recurring basis, of $7,000,000 and resulted in the recognition of an impairment loss of $3,531,000 for the year ended December 31, 2025. The fair value was measured based on inputs that are derived principally from observable market data related to the marketing for sale of the asset, which resides within Level 2 of the fair value hierarchy.
As of December 31, 2024, there were no real estate assets measured at fair value on a non-recurring basis.
As of June 30, 2024, two real estate assets were measured at an aggregate fair value of $15,500,000 and resulted in the recognition of an impairment loss of $418,000 for the year ended December 31, 2024. The fair value was measured based on a third-party purchase offer for the assets, which resides within Level 2 of the fair value hierarchy. The two real estate assets were sold in 2024 and resulted in aggregate impairment and disposition losses of $1,210,000 .
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Note 13—Derivative Instruments and Hedging Activities
Cash Flow Hedges of Interest Rate Risk
The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish these objectives, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy.
For derivatives designated and qualifying as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in accumulated other comprehensive (loss) income and subsequently reclassified into interest expense in the same period(s) during which the hedged transaction affects earnings. Amounts reported in accumulated other comprehensive (loss) income related to derivatives will be reclassified to interest expense as interest is incurred on the Company’s variable rate debt. During the next twelve months, the Company estimates that an additional $605 ,000 will be reclassified from accumulated other comprehensive (loss) income as a reduction to interest expense. As of December 31, 2025, the Company had 10 interest rate swap agreements, of which six mature on January 31, 2028 and four mature on March 20, 2029.
The following table summarizes the notional amount and fair value of the Company’s derivative instruments (amounts in thousands):
| Derivatives Designated as Hedging Instruments | Weighted Average Fixed Interest Rate | Effective Dates | Maturity Dates | December 31, 2025 | December 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Outstanding Notional Amount | Fair Value of | Outstanding Notional Amount | Fair Value of | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Assets | (Liabilities) | Assets | (Liabilities) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest rate swaps(1) | 05/02/2022 to 05/01/2023 | 01/31/2028 | $ | $ | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
Interest rate swaps(1) | 12/31/2024 | 03/20/2029 | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
The notional amount under the agreements is an indication of the extent of the Company’s involvement in each instrument at the time, but does not represent exposure to credit, interest rate or market risks.
The table below summarizes the amount of income and (loss) recognized on the interest rate derivatives designated as cash flow hedges for the years ended December 31, 2025, 2024 and 2023 (amounts in thousands):
| Derivatives in Cash Flow Hedging Relationships | Amount of (Loss) Income Recognized in Other Comprehensive (Loss) Income on Derivatives | Location of (Loss) Income Reclassified From Accumulated Other Comprehensive (Loss) Income to Net Income | Amount of Income Reclassified From Accumulated Other Comprehensive Income to Net Income | Total Amount of Line Item in Consolidated Statements of Comprehensive Income | ||||||||||||||||||||||
| Year Ended December 31, 2025 | ||||||||||||||||||||||||||
| Interest rate swaps | $ | ( | Interest expense | $ | $ | ( | ||||||||||||||||||||
| Year Ended December 31, 2024 | ||||||||||||||||||||||||||
| Interest rate swaps | $ | Interest expense | $ | $ | ( | |||||||||||||||||||||
| Year Ended December 31, 2023 | ||||||||||||||||||||||||||
| Interest rate swaps | $ | Interest expense | $ | $ | ( | |||||||||||||||||||||
Credit Risk-Related Contingent Features
The Company has agreements with each of its derivative counterparties that contain a provision where if the Company either defaults or is capable of being declared in default on any of its indebtedness, then the Company could also be declared in default on its derivative obligations. The Company records credit risk valuation adjustments on its interest rate swaps based on the respective credit quality of the Company and the counterparty. The Company believes it mitigates its credit risk by entering into agreements with creditworthy counterparties. As of December 31, 2025, the fair value of derivatives related to counterparties that were in a net liability position was $3,499 ,000, inclusive of accrued interest but excluding any adjustment for nonperformance risk related to the agreement. As of December 31, 2024, the Company had no counterparties with fair value of derivatives in a net liability position, inclusive of accrued interest but excluding any adjustment for nonperformance risk related to the agreement. As of both December 31, 2025 and December 31, 2024, there were no termination events or events of default related to the interest rate swaps.
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Tabular Disclosure Offsetting Derivatives
The Company has elected not to offset derivative positions in its consolidated financial statements. The following tables present the effect on the Company’s financial position had the Company made the election to offset its derivative positions as of December 31, 2025 and December 31, 2024 (amounts in thousands):
| Offsetting of Derivative Assets | ||||||||||||||||||||||||||||||||||||||
| Gross Amounts Not Offset in the Balance Sheet | ||||||||||||||||||||||||||||||||||||||
| Gross Amounts of Recognized Assets | Gross Amounts Offset in the Balance Sheet | Net Amounts of Assets Presented in the Balance Sheet | Financial Instruments Collateral | Cash Collateral | Net Amount | |||||||||||||||||||||||||||||||||
| December 31, 2025 | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||
| December 31, 2024 | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
| Offsetting of Derivative Liabilities | ||||||||||||||||||||||||||||||||||||||
| Gross Amounts Not Offset in the Balance Sheet | ||||||||||||||||||||||||||||||||||||||
| Gross Amounts of Recognized Liabilities | Gross Amounts Offset in the Balance Sheet | Net Amounts of Liabilities Presented in the Balance Sheet | Financial Instruments Collateral | Cash Collateral | Net Amount | |||||||||||||||||||||||||||||||||
| December 31, 2025 | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||
| December 31, 2024 | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Note 14—Stockholders' Equity
On April 8, 2024, the Company amended its charter to effect a one-for-four reverse stock split, effective May 1, 2024. On June 13, 2024, authorized but unissued shares of Class I Common Stock, Class T Common Stock and Class T2 Common Stock were reclassified into additional shares of Class A Common Stock and outstanding shares of Class I Common Stock and Class T Common Stock were converted into shares of Class A Common Stock. Class A Common Stock was then immediately renamed “Common Stock” and is the sole class of stock traded on the NYSE.
Distributions Paid and Distributions Payable
The Company paid distributions per share of Common Stock in the amount of $1.60 1.60 , $1.47 , and $1.60 for the years ended December 31, 2025, 2024, and 2023, respectively.
On February 23, 2026, the Board authorized a quarterly cash dividend of $0.40 per share of Common Stock payable on March 18, 2026, to the Company’s stockholders of record as of the close of business on March 6, 2026.
On April 5, 2024, the Board approved the termination of the distribution reinvestment plan, effective May 1, 2024.
At-the-Market Program
On August 12, 2025, the Company entered into an ATM Equity Offering Sales Agreement, or the ATM Program, through which, from time to time, the Company may offer and sell shares of Common Stock having an aggregate offering price of up to $250,000,000 . During the year ended December 31, 2025, no shares were issued under the ATM Program and as of December 31, 2025, the Company had $250,000,000 in gross sales of available capacity under the ATM Program.
Share Repurchases
Share Repurchase Programs
On August 4, 2025, the Board authorized a share repurchase program of up to $75,000,000 in gross purchase proceeds for a period of three-years from August 4, 2025, subject to the limitation of $25,000,000 in gross purchase proceeds in any twelve-month period, or the 2025 SRP. Repurchases of Common Stock under the 2025 SRP may be made from time to time in the open market, in privately negotiated purchases, in accelerated share repurchase programs or by any other lawful means. The number of shares of Common Stock purchased and the timing of any purchases will depend on a number of factors, including the price and availability of Common Stock and general market conditions. The 2025 SRP replaced the Company’s prior share repurchase program. The Company did no t repurchase any shares under the 2025 SRP during the year ended December 31, 2025.
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During the year ended December 31, 2025, 304,878 shares of Common Stock were repurchased for an aggregate purchase price of $7,344,000 , excluding all related costs and fees (an average of $24.09 per share) under one of the Company’s prior share repurchase programs.
During the year ended December 31, 2024, 210,683 Class A shares, Class I shares and Class T shares of Common Stock were repurchased (173,195 Class A shares, 7,574 Class I shares, and 29,914 Class T shares), for an aggregate purchase price of $6,304,000 (an average of $29.92 per share) under one of the Company’s prior share repurchase programs.
Other Repurchases of Common Stock
During the year ended December 31, 2025, the Company repurchased 52,982 shares of Common Stock for the net settlement of withholding taxes in connection with the vesting of restricted stock and performance-based deferred stock unit awards, for an aggregate purchase price of $1,284 ,000 (an average of $24.22 per share). During the year ended December 31, 2024, the Company repurchased 110,714 Class A shares of Common Stock for the net settlement of withholding taxes in connection with the vesting of restricted stock and performance-based deferred stock unit awards, for an aggregate purchase price of $3,098,000 (an average of $27.98 per share). Additionally, during the year ended December 31, 2024, the Company purchased 2,212,389 shares of Common Stock for an aggregate purchase price of $50,000,000 , excluding related costs and fees (an average of $22.60 per share) as a result of a modified “Dutch Auction” tender offer, or the Tender Offer. The Company incurred $2,093,000 of costs and fees related to the Tender Offer.
Accumulated Other Comprehensive (Loss) Income
The following table presents a rollforward of amounts recognized in accumulated other comprehensive (loss) income by component for the years ended December 31, 2025, 2024 and 2023 (amounts in thousands):
| Unrealized Loss on Derivative Instruments | ||||||||
| Balance as of December 31, 2022 | $ | |||||||
| Other comprehensive income before reclassification | ||||||||
| Amount of income reclassified from accumulated other comprehensive income to net income | ( | |||||||
| Other comprehensive loss | ( | |||||||
| Balance as of December 31, 2023 | $ | |||||||
| Other comprehensive income before reclassification | ||||||||
| Amount of income reclassified from accumulated other comprehensive income to net income | ( | |||||||
| Other comprehensive loss | ( | |||||||
| Balance as of December 31, 2024 | $ | |||||||
| Other comprehensive loss before reclassification | ( | |||||||
| Amount of income reclassified from accumulated other comprehensive loss to net income | ( | |||||||
| Other comprehensive loss | ( | |||||||
| Balance as of December 31, 2025 | $ | ( | ||||||
The following table presents reclassifications out of accumulated other comprehensive (loss) income for the years ended December 31, 2025, 2024 and 2023 (amounts in thousands):
| Details about Accumulated Other Comprehensive Income Components | Income Amounts Reclassified from Accumulated Other Comprehensive Income to Net Income | Affected Line Items in the Consolidated Statements of Comprehensive Income | ||||||||||||||||||||||||
| Year Ended December 31, | ||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||||||||
| Interest rate swap contracts | $ | ( | $ | ( | $ | ( | Interest expense | |||||||||||||||||||
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Note 15—Earnings Per Share
The Company calculates basic and diluted earnings per share using the two-class method. Basic earnings per share is computed based on the weighted average shares of the Company’s Common Stock outstanding for the period. Diluted earnings per share is computed based on the weighted average number of shares outstanding and all potentially dilutive securities, which include shares of restricted Common Stock and Performance DSUs. The shares of restricted Common Stock contain non-forfeitable dividend distribution rights and are considered participating securities. The Performance DSUs are entitled to dividend equivalents which are paid to the grantee only in the event that the applicable performance criteria are achieved and the Performance DSUs vest.
The following table is a reconciliation of the numerator and denominator used in the computation of basic and diluted earnings per share using the two-class method (amounts in thousands, except share data and per share amounts):
| Year Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
Earnings: | ||||||||||||||||||||
Net income attributable to common stockholders | $ | $ | $ | |||||||||||||||||
Less: Income allocated to participating securities | ( | ( | ( | |||||||||||||||||
Net income used in basic earnings per share | ||||||||||||||||||||
Add back: Income allocated to participating securities | ||||||||||||||||||||
Net income used in diluted earnings per share | $ | $ | $ | |||||||||||||||||
Weighted Average Shares: | ||||||||||||||||||||
Basic weighted average number of common shares outstanding(1) | ||||||||||||||||||||
Dilutive effect of weighted average shares of non-vested restricted common stock(1) | ||||||||||||||||||||
Dilutive effect of weighted average shares of Performance DSUs(1) | ||||||||||||||||||||
Diluted weighted average number of common shares outstanding(1) | ||||||||||||||||||||
Net income per share attributable to common stockholders: | ||||||||||||||||||||
Basic(1) | $ | $ | ||||||||||||||||||
Diluted(1) | $ | $ | ||||||||||||||||||
Note 16—Stock-based Compensation
On March 6, 2020, the Board approved the A&R Incentive Plan pursuant to which the Company has the authority and power to grant awards of restricted shares of its Common Stock to its directors, executive officers, and employees.
On April 2, 2025, the Board adopted the A&R Incentive Plan. The Company’s stockholders approved the A&R Incentive Plan on May 21, 2025, which, among other things, increased the number of shares authorized for issuance by 1,000,000 shares to 2,250,000 shares.
As of December 31, 2025, there were 1,442,000 shares of Common Stock available for grant under the A&R Incentive Plan. Awards made under the A&R Incentive Plan are subject to certain limited exceptions, restricted stock may not be sold, assigned, transferred, pledged, encumbered, hypothecated or otherwise disposed of and is subject to forfeiture within the vesting period.
During the year ended December 31, 2025, the Company granted time-based awards to its executive officers and certain employees, consisting of 92,543 restricted shares of Common Stock, net of forfeitures, or the Time-Based 2025 Awards. The Time-Based 2025 Awards will vest 25 % annually following the grant date, subject to each executive’s and employee’s employment through the applicable vesting dates, with certain exceptions. As of December 31, 2025, there was $1,713 ,000 of total unrecognized stock-based compensation expense related to these awards, which will be recognized over the vesting period.
Additionally, during the year ended December 31, 2025, the Company’s compensation committee granted Performance DSUs to its executive officers, or the Performance-Based 2025 Awards. The Performance-Based 2025 Awards will be
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measured based on the Company’s market performance over a three-year performance period ending on December 31, 2027. Subject to each executive’s continuous employment through the applicable vesting dates, with certain exceptions, the Performance-Based 2025 Awards, if any, will be issued following the performance period end date. Market-based awards are valued as of the grant date utilizing a Monte Carlo simulation model that assesses the probability of satisfying certain market-based thresholds over a three-year performance period. The number of shares of Common Stock that vest is based on the Company’s total shareholder return, or TSR, relative to that of the MSCI US REIT Index and a Healthcare REIT Peer Group on a percentile basis. As of December 31, 2025, there was $1,421,000 of total unrecognized stock-based compensation expense related to these awards, which will be recognized over the vesting period.
The Time-Based 2025 Awards and the Performance-Based 2025 Awards, or collectively, the 2025 Awards, were granted under and are subject to the terms of the A&R Incentive Plan and award agreements.
During the year ended December 31, 2025, the Company granted an aggregate of 21,300 shares of restricted Common Stock to the Company’s five independent directors in connection with their annual compensation. Each independent director received 4,260 shares of restricted Common Stock that will vest on the date of the Company’s next annual meeting of shareholders, subject to the directors continued service through such vesting date. These awards were granted under and subject to the terms of the A&R Incentive Plan and an award agreement. As of December 31, 2025, there was $227 ,000 of total unrecognized stock-based compensation expense related to these awards, which will be recognized over the vesting period.
The Company recognized total stock-based compensation expense of $4,815,000 , $5,850,000 and $6,284,000 for the years ended December 31, 2025, 2024 and 2023, respectively. The Company recognized accelerated stock-based compensation expense of $19,000 , $936 ,000 and $318,000 for the years ended December 31, 2025, 2024 and 2023, respectively, primarily as a result of the acceleration of award agreements and the acceleration of awards pursuant to severance agreements with departed executive officers. Stock-based compensation expense is reported in general and administrative expenses in the accompanying consolidated statements of comprehensive income, and forfeitures are recorded as they occur.
The total fair value of shares that vested under the A&R Incentive Plan was $3,776,000 , $9,642,000 and $1,335,000 for the years ended December 31, 2025, 2024 and 2023, respectively. As of December 31, 2025 and 2024, there was $6,098 ,000 and $7,113,000 , respectively, of total unrecognized compensation expense related to shares of the Company’s restricted Common Stock and Performance DSUs. This expense is expected to be recognized over a remaining weighted average period of 2.03 years. This expected expense does not include the impact of any future stock-based compensation awards.
The following table summarizes the activity on restricted Common Stock and Performance DSUs for the year ended December 31, 2025:
| Shares | Weighted-Average Grant-Date Fair Value Per Share(1) | |||||||||||||
Nonvested at December 31, 2024 | $ | |||||||||||||
| Granted | ||||||||||||||
Vested(2) | ( | |||||||||||||
| Forfeited | ( | |||||||||||||
Adjustment to Performance DSUs(3) | ||||||||||||||
Nonvested at December 31, 2025 | $ | |||||||||||||
(1)The weighted-average grant-date fair value only relates to shares granted after the Company’s listing on the NYSE as applicable. Shares granted prior to the Listing are not incorporated in the weighted-average calculation as the Company did not have publicly traded shares.
(2)Shares vested during the year ended December 31, 2025, include 60,344 Performance DSUs that vested but have not yet been issued.
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Note 17—Income Taxes
As a REIT, the Company generally will not be subject to U.S. federal income tax on taxable income that it distributes to the stockholders. For U.S. federal income tax purposes, distributions to stockholders are characterized as either ordinary dividends, capital gain distributions, or nontaxable distributions. Nontaxable distributions will reduce U.S. stockholders’ respective bases in their shares. The following table shows the character of distributions the Company paid on a percentage basis during the years ended December 31, 2025, 2024 and 2023:
| Year Ended December 31, | ||||||||||||||||||||
Character of Distributions(1): | 2025 | 2024 | 2023 | |||||||||||||||||
| Ordinary dividends | % | % | % | |||||||||||||||||
| Capital gain distributions | % | % | % | |||||||||||||||||
| Nontaxable distributions | % | % | % | |||||||||||||||||
| Total | % | % | % | |||||||||||||||||
The Company applies the rules under ASC 740-10, Accounting for Uncertainty in Income Taxes, for uncertain tax positions using a “more likely than not” recognition threshold for tax positions. Pursuant to these rules, the financial statement effects of a tax position are initially recognized when it is more likely than not, based on the technical merits of the tax position, that such a position will be sustained upon examination by the relevant tax authorities. If the tax benefit meets the “more likely than not” threshold, the measurement of the tax benefit will be based on the Company’s estimate of the ultimate tax benefit to be sustained if audited by the taxing authority. The Company concluded there was no
The Company’s policy is to recognize accrued interest related to unrecognized tax benefits as a component of interest expense and penalties related to unrecognized tax benefits as a component of general and administrative expenses. From inception through December 31, 2025, the Company has no t recognized any interest expense or penalties related to unrecognized tax benefits.
Note 18—Commitments and Contingencies
Tenant Improvements
The Company may provide tenant improvement allowances in new or renewal leases for the purpose of refurbishing or renovating tenant space. The Company may also assume tenant improvement obligations included in leases acquired in its real estate acquisitions. Many of these allowances are subject to contingencies that make it difficult to predict when they will be utilized, if at all.
Development
The Company has a remaining commitment to fund a development to expand the Dover Healthcare Facility on the acquired adjacent land for up to $9,069,000 .
Legal Proceedings
In the ordinary course of business, the Company may become subject to litigation or claims. As of December 31, 2025, there were, and currently there are, no material pending legal proceedings to which the Company is a party. While the resolution of a lawsuit or proceeding may have an impact to the Company’s financial results for the period in which it is resolved, the Company believes that the final resolution of the lawsuits or proceedings in which it is currently involved, either individually or in the aggregate, will not have a material adverse effect on its financial position, results of operations or liquidity.
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Note 19—Subsequent Events
Distributions Authorized
On February 23, 2026, the Board authorized a quarterly cash dividend of $0.40 per share of Common Stock payable on March 18, 2026, to the Company’s stockholders of record as of the close of business on March 6, 2026. The quarterly cash dividend of $0.40 per share represents an annualized amount of $1.60 per share.
Acquisition of Oklahoma City Healthcare Facility X
On January 15, 2026, the Company purchased 100 % of the ownership interests in a healthcare property in Oklahoma City, Oklahoma, or the Oklahoma City Healthcare Facility X, for a contract purchase price of $43,128,000 .
Disposition of Saginaw Healthcare Facility
On January 29, 2026, the Company sold the Saginaw Healthcare Facility for $14,500,000 , generating net proceeds of $14,343,000 , after transaction costs, subject to additional transaction costs paid subsequent to the closing date.
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SCHEDULE III — REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION
December 31, 2025
(in thousands)
| Initial Cost | Cost Capitalized Subsequent to Acquisition (2) | Gross Amount Carried at December 31, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property Description | Location | Encumbrances | Land | Buildings and Improvements | Land | Buildings and Improvements (3) | Total | Accumulated Depreciation (4) | Year Constructed | Date Acquired | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Houston Healthcare Facility | Houston, TX | $ | (1) | $ | $ | $ | $ | $ | $ | $ | 1993 | 07/31/2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cincinnati Healthcare Facility | Cincinnati, OH | (1) | 2001 | 10/29/2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Winston-Salem Healthcare Facility | Winston-Salem, NC | (1) | 2004 | 12/17/2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stoughton Healthcare Facility | Stoughton, MA | ( | 1973 | 12/23/2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fort Worth Healthcare Facility | Fort Worth, TX | (1) | 2014 | 12/31/2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fort Worth Healthcare Facility II | Fort Worth, TX | (1) | 2014 | 12/31/2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Winter Haven Healthcare Facility | Winter Haven, FL | (1) | 2009 | 01/27/2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Overland Park Healthcare Facility | Overland Park, KS | (1) | 2014 | 02/17/2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Clarion Healthcare Facility | Clarion, PA | (1) | 2012 | 06/01/2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Webster Healthcare Facility | Webster, TX | (1) | ( | 2015 | 06/05/2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Augusta Healthcare Facility | Augusta, ME | (1) | 2010 | 07/22/2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cincinnati Healthcare Facility III | Cincinnati, OH | (1) | 2014 | 07/22/2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Florence Healthcare Facility | Florence, KY | (1) | 2014 | 07/22/2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Oakland Healthcare Facility | Oakland, ME | (1) | 2004 | 07/22/2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Wyomissing Healthcare Facility | Wyomissing, PA | (1) | 2007 | 07/24/2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Luling Healthcare Facility | Luling, TX | (1) | 2003 | 07/30/2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Omaha Healthcare Facility | Omaha, NE | (1) | 2014 | 10/14/2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sherman Healthcare Facility | Sherman, TX | (1) | 2005 | 11/20/2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sherman Healthcare Facility II | Sherman, TX | (1) | 2005 | 11/20/2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fort Worth Healthcare Facility III | Fort Worth, TX | (1) | 1998 | 12/23/2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Oklahoma City Healthcare Facility | Oklahoma City, OK | (1) | 1985 | 12/29/2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Oklahoma City Healthcare Facility II | Oklahoma City, OK | (1) | 1994 | 12/29/2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Edmond Healthcare Facility | Edmond, OK | (1) | 2002 | 01/20/2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Oklahoma City Healthcare Facility III | Oklahoma City, OK | (1) | 2006 | 01/27/2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Oklahoma City Healthcare Facility IV | Oklahoma City, OK | (1) | 2007 | 01/27/2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Newcastle Healthcare Facility | Newcastle, OK | (1) | 1995 | 02/03/2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Oklahoma City Healthcare Facility V | Oklahoma City, OK | (1) | 2008 | 02/11/2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Rancho Mirage Healthcare Facility | Rancho Mirage, CA | (1) | 2018 | 03/01/2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Oklahoma City Healthcare Facility VI | Oklahoma City, OK | (1) | 2007 | 03/07/2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Oklahoma City Healthcare Facility VII | Oklahoma City, OK | (1) | 2016 | 06/22/2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Las Vegas Healthcare Facility | Las Vegas, NV | (1) | 2017 | 06/24/2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Oklahoma City Healthcare Facility VIII | Oklahoma City, OK | (1) | 1997 | 06/30/2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Marlton Healthcare Facility | Marlton, NJ | (1) | 1995 | 11/01/2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Grand Rapids Healthcare Facility | Grand Rapids, MI | (1) | 2008 | 12/07/2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Corpus Christi Healthcare Facility | Corpus Christi, TX | (1) | 1992 | 12/22/2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Aurora Healthcare Facility | Aurora, IL | (1) | 2002 | 03/30/2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Allen Healthcare Facility | Allen, TX | (1) | 2007 | 03/31/2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Austin Healthcare Facility | Austin, TX | (1) | 2012 | 03/31/2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Initial Cost | Cost Capitalized Subsequent to Acquisition (2) | Gross Amount Carried at December 31, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property Description | Location | Encumbrances | Land | Buildings and Improvements | Cost Capitalized Subsequent to Acquisition (2) | Land | Buildings and Improvements (3) | Total | Accumulated Depreciation (4) | Year Constructed | Date Acquired | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Beaumont Healthcare Facility | Beaumont, TX | (1) | 1991 | 03/31/2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| San Antonio Healthcare Facility | San Antonio, TX | (1) | 1984 | 06/29/2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Silverdale Healthcare Facility | Silverdale, WA | (1) | 2005 | 08/25/2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Silverdale Healthcare Facility II | Silverdale, WA | (1) | 2007 | 09/20/2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Saginaw Healthcare Facility | Saginaw, MI | (1) | 2002 | 12/21/2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Carrollton Healthcare Facility | Carrollton, TX | (1) | 2015 | 04/27/2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Katy Healthcare Facility | Katy, TX | (1) | 2015 | 06/08/2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Indianola Healthcare Facility | Indianola, IA | (1) | 2014 | 09/26/2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Indianola Healthcare Facility II | Indianola, IA | (1) | 2011 | 09/26/2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Benton Healthcare Facility | Benton, AR | (1) | 1992/1999 | 10/17/2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Benton Healthcare Facility II | Benton, AR | (1) | 1983 | 10/17/2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bryant Healthcare Facility | Bryant, AR | (1) | 1995 | 10/17/2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Hot Springs Healthcare Facility | Hot Springs, AR | (1) | 2009 | 10/17/2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Clive Healthcare Facility | Clive, IA | (1) | 2008 | 11/26/2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Valdosta Healthcare Facility | Valdosta, GA | (1) | 2004 | 11/28/2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Valdosta Healthcare Facility II | Valdosta, GA | (1) | 1992 | 11/28/2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bryant Healthcare Facility II | Bryant, AR | (1) | 2016 | 08/16/2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Laredo Healthcare Facility | Laredo, TX | (1) | 1998 | 09/19/2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Laredo Healthcare Facility II | Laredo, TX | (1) | 1998 | 09/19/2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Poplar Bluff Healthcare Facility | Poplar Bluff, MO | (1) | 2013 | 09/19/2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tucson Healthcare Facility | Tucson, AZ | (1) | 1998 | 09/19/2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Akron Healthcare Facility | Green, OH | (1) | 2012 | 10/04/2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Akron Healthcare Facility II | Green, OH | (1) | 2013 | 10/04/2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Akron Healthcare Facility III | Akron, OH | (1) | 2008 | 10/04/2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Alexandria Healthcare Facility | Alexandria, LA | (1) | ( | 2007 | 10/04/2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Appleton Healthcare Facility | Appleton, WI | (1) | 2011 | 10/04/2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Austin Healthcare Facility II | Austin, TX | (1) | ( | 2006 | 10/04/2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bellevue Healthcare Facility | Green Bay, WI | (1) | 2010 | 10/04/2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bonita Springs Healthcare Facility | Bonita Springs, FL | 2002 | 10/04/2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bridgeton Healthcare Facility | Bridgeton, MO | (1) | 2012 | 10/04/2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Covington Healthcare Facility | Covington, LA | (1) | 1984 | 10/04/2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Crestview Healthcare Facility | Crestview, FL | 2004 | 10/04/2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dallas Healthcare Facility | Dallas, TX | (1) | 2011 | 10/04/2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| De Pere Healthcare Facility | De Pere, WI | (1) | 2005 | 10/04/2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Denver Healthcare Facility | Thornton, CO | (1) | 1962 | 10/04/2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| El Segundo Healthcare Facility | El Segundo, CA | 2009 | 10/04/2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fairlea Healthcare Facility | Fairlea, WV | 1999 | 10/04/2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fayetteville Healthcare Facility | Fayetteville, AR | (1) | 1994 | 10/04/2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fort Walton Beach Healthcare Facility | Fort Walton Beach, FL | 2005 | 10/04/2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Frankfort Healthcare Facility | Frankfort, KY | 1993 | 10/04/2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Frisco Healthcare Facility | Frisco, TX | (1) | 2010 | 10/04/2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Goshen Healthcare Facility | Goshen, IN | (1) | 2010 | 10/04/2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Initial Cost | Cost Capitalized Subsequent to Acquisition (2) | Gross Amount Carried at December 31, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property Description | Location | Encumbrances | Land | Buildings and Improvements | Cost Capitalized Subsequent to Acquisition (2) | Land | Buildings and Improvements (3) | Total | Accumulated Depreciation (4) | Year Constructed | Date Acquired | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Hammond Healthcare Facility | Hammond, LA | (1) | 2006 | 10/04/2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Hammond Healthcare Facility II | Hammond, LA | (1) | 2004 | 10/04/2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Henderson Healthcare Facility | Henderson, NV | 2000 | 10/04/2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Houston Healthcare Facility III | Houston, TX | (1) | 1998 | 10/04/2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Howard Healthcare Facility | Howard, WI | (1) | 2011 | 10/04/2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Jacksonville Healthcare Facility | Jacksonville, FL | 2009 | 10/04/2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lafayette Healthcare Facility | Lafayette, LA | (1) | 2004 | 10/04/2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lakewood Ranch Healthcare Facility | Lakewood Ranch, FL | 2008 | 10/04/2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Las Vegas Healthcare Facility II | Las Vegas, NV | 2007 | 10/04/2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lehigh Acres Healthcare Facility | Lehigh Acres, FL | 2002 | 10/04/2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lubbock Healthcare Facility | Lubbock, TX | (1) | 2003 | 10/04/2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Manitowoc Healthcare Facility | Manitowoc, WI | (1) | 2003 | 10/04/2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Manitowoc Healthcare Facility II | Manitowoc, WI | (1) | 1964 | 10/04/2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Marinette Healthcare Facility | Marinette, WI | (1) | 2008 | 10/04/2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| New Braunfels Healthcare Facility | New Braunfels, TX | (1) | 2007 | 10/04/2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| North Smithfield Healthcare Facility | North Smithfield, RI | (1) | 1965 | 10/04/2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Oklahoma City Healthcare Facility IX | Oklahoma City, OK | (1) | 2007 | 10/04/2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Oshkosh Healthcare Facility | Oshkosh, WI | (1) | 2010 | 10/04/2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Palm Desert Healthcare Facility | Palm Desert, CA | ( | 2005 | 10/04/2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Rancho Mirage Healthcare Facility II | Rancho Mirage, CA | ( | 2008 | 10/04/2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| San Antonio Healthcare Facility III | San Antonio, TX | (1) | 2012 | 10/04/2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| San Antonio Healthcare Facility IV | San Antonio, TX | (1) | 1987 | 10/04/2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| San Antonio Healthcare Facility V | San Antonio, TX | (1) | 2017 | 10/04/2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Santa Rosa Beach Healthcare Facility | Santa Rosa Beach, FL | 2003 | 10/04/2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Savannah Healthcare Facility | Savannah, GA | 2014 | 10/04/2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sturgeon Bay Healthcare Facility | Sturgeon Bay, WI | (1) | 2007 | 10/04/2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Victoria Healthcare Facility | Victoria, TX | (1) | 2013 | 10/04/2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Victoria Healthcare Facility II | Victoria, TX | (1) | 1998 | 10/04/2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Wilkes-Barre Healthcare Facility | Mountain Top, PA | (1) | 2012 | 10/04/2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tucson Healthcare Facility II | Tucson, AZ | (1) | 2021 | 12/26/2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tucson Healthcare Facility III | Tucson, AZ | (1) | 2020 | 12/27/2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Grimes Healthcare Facility | Grimes, IA | (1) | 2018 | 02/19/2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tampa Healthcare Facility | Tampa, FL | (1) | 2015 | 09/08/2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tucson Healthcare Facility IV | Tucson, AZ | (1) | 2022 | 12/22/2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Greenwood Healthcare Facility | Greenwood, IN | (1) | 2008 | 04/19/2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Clive Healthcare Facility II | Clive, IA | (1) | 2008 | 12/08/2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Clive Healthcare Facility III | Clive, IA | (1) | 2008 | 12/08/2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Clive Healthcare Facility IV | Clive, IA | (1) | 2009 | 12/08/2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Clive Undeveloped Land | Clive, IA | — | 12/08/2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Clive Undeveloped Land II | Clive, IA | — | 12/08/2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Yukon Healthcare Facility | Yukon, OK | (1) | 2020 | 03/10/2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pleasant Hills Healthcare Facility | Pleasant Hills, PA | (1) | 2015 | 05/12/2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Initial Cost | Cost Capitalized Subsequent to Acquisition (2) | Gross Amount Carried at December 31, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property Description | Location | Encumbrances | Land | Buildings and Improvements | Cost Capitalized Subsequent to Acquisition (2) | Land | Buildings and Improvements (3) | Total | Accumulated Depreciation (4) | Year Constructed | Date Acquired | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Prosser Healthcare Facility I | Prosser, WA | (1) | 2020 | 05/20/2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Prosser Healthcare Facility II | Prosser, WA | (1) | 2013 | 05/20/2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Prosser Healthcare Facility III | Prosser, WA | (1) | 2013 | 05/20/2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tampa Healthcare Facility II | Tampa, FL | (1) | 2022 | 07/20/2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Escondido Healthcare Facility | Escondido, CA | (1) | 2021 | 07/21/2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| West Palm Beach Healthcare Facility | West Palm Beach, FL | (1) | 1999 | 06/15/2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Burr Ridge Healthcare Facility | Burr Ridge, IL | (1) | 2010 | 09/27/2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Brownsburg Healthcare Facility | Brownsburg, IN | (1) | 2023 | 02/26/2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cave Creek Healthcare Facility | Cave Creek, AZ | (1) | 2021 | 03/20/2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Marana Healthcare Facility | Tucson, AZ | (1) | 2020 | 03/20/2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Surprise Healthcare Facility | Surprise, AZ | (1) | 2020 | 03/20/2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tucson Healthcare Facility V | Tucson, AZ | (1) | 2020 | 03/20/2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Weslaco Healthcare Facility | Weslaco, TX | (1) | 2019 | 03/20/2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Reading Healthcare Facility | Reading, PA | (1) | 2020 | 05/21/2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fort Smith Healthcare Facility | Fort Smith, AR | (1) | 2021 | 07/25/2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Knoxville Healthcare Facility | Knoxville, TN | 2021 | 03/04/2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dover Healthcare Facility | Dover, DE | 2018 | 04/16/2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Southlake Healthcare Facility | Southlake, TX | 2011 | 08/01/2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Southlake Healthcare Facility II | Southlake, TX | 2017 | 08/01/2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Peoria Healthcare Facility | Peoria, AZ | 2022 | 09/05/2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Plano Healthcare Facility | Plano, TX | 2023 | 09/05/2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(1)Property is contributed to the pool of unencumbered properties of the Company’s unsecured credit facilities. As of December 31, 2025, 119 commercial real estate properties were contributed to the pool of unencumbered properties under the Company’s credit facility and the Company had an outstanding principal balance of $676,000,000 .
(2)The reduction to costs capitalized subsequent to acquisition primarily include impairment charges, property dispositions and other adjustments.
(3)The aggregated cost for federal income tax purposes is approximately $2,276,599,000 (unaudited).
(4)The Company’s assets are depreciated or amortized using the straight-line method over the useful lives of the assets by class. Generally, buildings and improvements are depreciated over 15 -40 years and tenant improvements are depreciated over 5 -20 years.
S-4
Table of Contents
December 31, 2025
(in thousands)
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Real Estate: | |||||||||||||||||
| Balance at beginning of year | $ | $ | $ | ||||||||||||||
| Additions: | |||||||||||||||||
| Acquisitions | |||||||||||||||||
| Improvements | |||||||||||||||||
| Other adjustments | |||||||||||||||||
| Deductions: | |||||||||||||||||
| Impairment | ( | ( | ( | ||||||||||||||
| Dispositions | ( | ( | |||||||||||||||
| Other adjustments | ( | ||||||||||||||||
| Balance at end of year | $ | $ | $ | ||||||||||||||
| Accumulated Depreciation: | |||||||||||||||||
| Balance at beginning of year | $ | ( | $ | ( | $ | ( | |||||||||||
| Additions: | |||||||||||||||||
| Depreciation | ( | ( | ( | ||||||||||||||
| Deductions: | |||||||||||||||||
| Impairment | |||||||||||||||||
| Dispositions | |||||||||||||||||
| Other adjustments | |||||||||||||||||
| Balance at end of year | $ | ( | $ | ( | $ | ( | |||||||||||
S-5
Table of Contents
EXHIBIT INDEX
| Exhibit No: | ||||||||
| 3.1 | Third Articles of Amendment and Restatement (included as Exhibit 3.1 to the Registrant's Current Report on Form 8-K (File No. 000-55435) filed on August 15, 2022, and incorporated herein by reference). | |||||||
3.1.1 | Articles of Amendment effecting Reverse Stock Split (included as Exhibit 3.1 to the Registrant's Current Report on Form 8-K (File No. 000-55435) filed on April 8, 2024, and incorporated herein by reference). | |||||||
3.1.2 | Articles of Amendment adjusting Par Value (included as Exhibit 3.2 to the Registrant's Current Report on Form 8-K (File No. 000-55435) filed on April 8, 2024, and incorporated herein by reference). | |||||||
3.1.3 | Articles Supplementary reclassifying unissued stock (included as exhibit 3.1.3 to the Registrant's Quarterly Report on Form 10-Q (File No. 001-42129) filed on August 7, 2024, and incorporated herein by reference). | |||||||
3.1.4 | Articles of Amendment renaming Class A Stock to Common Stock (included as exhibit 3.1.4 to the Registrant's Quarterly Report on Form 10-Q (File No. 001-42129) filed on August 7, 2024, and incorporated herein by reference). | |||||||
| 3.2 | Sila Realty Trust, Inc. Amended and Restated Bylaws, as amended November 18, 2024 (included as Exhibit 3.1 to the Registrant's Current Report on Form 8-K (File No. 001-42129) filed on November 19, 2024, and incorporated here by reference). | |||||||
4.1 | Description of Capital Stock Registered under Section 12 of the Securities Exchange Act of 1934, as amended (included as Exhibit 4.1 to the Registrant’s Annual Report on Form 10-K (File No. 001-42129) filed on March 3, 2025 and incorporated here by reference). | |||||||
10.1† | Employment Agreement, by and among Carter Validus Mission Critical REIT II, Inc., Carter Validus Operating Partnership II, LP, CV Manager, LLC and Michael A. Seton, dated as of July 28, 2020 (included as Exhibit 10.1 to the Registrant's Current Report on Form 8-K (File No. 000-55435) filed on July 29, 2020, and incorporated herein by reference). | |||||||
10.1.1† | Amendment to Employment Agreement made and entered into on June 21, 2022, by and between Sila Realty Trust, Inc., Sila Realty Operating Partnership, LP, Sila Realty Management Company, LLC and Michael A. Seton (included as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 000-55435) filed on June 21, 2022, and incorporated herein by reference). | |||||||
10.2† | Employment Agreement, by and among Carter Validus Mission Critical REIT II, Inc., Carter Validus Operating Partnership II, LP, CV Manager, LLC and Kay C. Neely, dated as of July 28, 2020 (included as Exhibit 10.2 to the Registrant's Current Report on Form 8-K (File No. 000-55435) filed on July 29, 2020, and incorporated herein by reference). | |||||||
10.2.1† | Amendment to Employment Agreement made and entered into on June 21, 2022, by and between Sila Realty Trust, Inc., Sila Realty Operating Partnership, LP, Sila Realty Management Company, LLC and Kay C. Neely (included as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K (File No. 000-55435) filed on June 21, 2022, and incorporated herein by reference). | |||||||
10.3† | Form of Deferred Stock Award Agreement (included as Exhibit 10.1 to the Registrant's Current Report on Form 8-K (File No. 000-55435) filed on January 8, 2021, and incorporated herein by reference). | |||||||
| 10.4† | Form of First Amendment to Deferred Stock Award Agreement (included as Exhibit 10.1 to the Registrant's Current Report on Form 8-K (File No. 000-55435) filed on September 10, 2021, and incorporated herein by reference). | |||||||
| 10.5† | Form of 2024 Deferred Stock Award Agreement (included as Exhibit 10.7 to the Registrant's Annual Report on Form 10-K (File No. 001-42129) filed on March 3, 2025, and incorporated herein by reference). | |||||||
10.6†* | Form of 2025 Deferred Stock Award Agreement | |||||||
10.7† | Form of Restricted Stock Award Agreement (Executive Officers) (included as Exhibit 10.8 to the Registrant's Quarterly Report on Form 10-Q (File No. 000-55435) filed on November 16, 2020, and incorporated herein by reference). | |||||||
10.8† | Form of Restricted Stock Award Agreement (Independent Directors) (included as Exhibit 10.9 to the Registrant's Quarterly Report on Form 10-Q (File No. 000-55435) filed on November 16, 2020, and incorporated herein by reference). | |||||||
10.9† | Form of Restricted Stock Award Agreement (Executive Officers) (included as Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q (File No. 001-42129) filed on August 7, 2024. | |||||||
10.10† | Form of Restricted Stock Award Agreement (Directors) (included as Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q (File No. 001-42129) filed on August 7, 2024. | |||||||
10.11† | Form of Restricted Stock Award Agreement (Non-Directors Non-Executive Officers) (included as Exhibit 10.3 to the Registrant’s Quarterly Report on Form 10-Q (File No. 001-42129) filed on August 7, 2024. | |||||||
Table of Contents
10.12 | Term Loan Agreement, dated as of May 17, 2022, by and among Sila Realty Trust, Inc., as Borrower, the lenders from time to time as party to the Term Loan Agreement, Truist Bank, as Administrative Agent, and Truist Securities, Inc., BMO Capital Markets Corp., Capital One, National Association, and Wells Fargo Securities LLC as Joint Lead Arrangers and Joint Book Runners (included as Exhibit 10.1 to the Registrant's Current Report on Form 8-K (File No. 000-55435) filed on May 18, 2022, and incorporated herein by reference). | |||||||
10.12.1 | First Amendment to the Term Loan Agreement (2028 Term Loan Agreement), dated as of December 8, 2023, by and among Sila Realty Trust, Inc., as Borrower, Truist Bank, as Administrative Agent, and the lenders from time to time as party to the Term Loan Agreement (included as Exhibit 10.3 to the Registrant’s Current Report on Form 8-K (File No. 000-55435) filed on December 8, 2023, and incorporated herein by reference). | |||||||
10.12.2 | Second Amendment to Term Loan Agreement, dated as of February 18, 2025, by and among Sila Realty Trust, Inc., as Borrower, Truist Bank, as Administrative Agent, and the lenders from time to time parties thereto (included as Exhibit 10.3 to the Registrant’s Current Report on Form 8-K (File No. 001-42129) filed on February 19, 2025, and incorporated herein by reference). | |||||||
10.13 | Guaranty Agreement, dated as of May 17, 2022, by and among Sila Realty Operating Partnership, LP, Sila Operating Partnership, LP, and Sila REIT, LLC, each a Required Guarantor, and collectively, the Required Guarantors, and each of the subsidiaries of Sila Realty Trust, Inc., as Borrower, that are signatories to the agreement and each additional guarantor that may become a party to the Guaranty Agreement, individually and collectively, jointly and severally, the Guarantors, to and for the benefit of Truist Bank, as Administrative Agent, for itself and the lenders listed in the Guaranty Agreement Runners (included as Exhibit 10.2 to the Registrant's Current Report on Form 8-K (File No. 000-55435) filed on May 18, 2022, and incorporated herein by reference). | |||||||
10.14 | Amended and Restated Term Loan Agreement, dated as of March 20, 2024, by and among Sila Realty Trust, Inc., as Borrower, Truist Bank, as Administrative Agent, and the lenders from time to time as party to the Term Loan Agreement (included as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 000-55435) filed on March 21, 2024, and incorporated herein by reference). | |||||||
10.15 | First Amendment to Amended and Restated Term Loan Agreement, dated as of February 18, 2025, by and among Sila Realty Trust, Inc., as Borrower, Truist Bank, as Administrative Agent, and the lenders from time to time parties thereto (included as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K (File No. 001-42129) filed on February 19, 2025, and incorporated herein by reference). | |||||||
10.16 | Amended and Restated Guaranty Agreement, dated as of March 20, 2024 (included as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K (File No. 000-55435) filed on March 21, 2024, and incorporated herein by reference). | |||||||
10.17 | Credit Agreement, dated as of February 18, 2025, by and among Sila Realty Trust, Inc., as Borrower, Bank of America, N.A., as Administrative Agent, and the lenders from time to time parties thereto (included as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 001-42129) filed on February 19, 2025, and incorporated herein by reference). | |||||||
10.18 | Amended and Restated Restricted Share Plan, dated April 2, 2025 (included as Exhibit 10.1 to the Registrants Current Report on Form 8-K (File No. 001-42129) filed on May 21, 2025, and incorporated here by reference). | |||||||
10.19 | Form of Director and Officer Indemnification Agreement (included as Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q (File No. 001-42129) filed on August 7, 2025, and incorporate here by reference). | |||||||
| 19.1 | Insider Trading Policy (included as Exhibit 19.1 to the Registrant’s Annual Report on Form 10-K (File No. 001-42129) filed on March 3, 2025, and incorporated here by reference). | |||||||
21.1* | List of the Company's Significant Subsidiaries | |||||||
23.1* | Consent of KPMG, LLP, Independent Registered Public Accounting Firm | |||||||
| 31.1* | Certification of Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||||||
| 31.2* | Certification of Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||||||
| 32.1** | Certification of Chief Executive Officer of the Company, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |||||||
| 32.2** | Certification of Chief 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. | |||||||
| 97.1 | Clawback Policy (included as Exhibit 97.1 to the Registrant’s Annual Report on Form 10-K (File No. 001-42129) filed on March 3, 2025, and incorporated here by reference). | |||||||
| 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. | |||||||
Table of Contents
| 101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |||||||
| 104* | Cover Page Interactive Data File (embedded within the Inline XBRL document and contained in Exhibit 101). | |||||||
| * | Filed herewith. | ||||
| ** | Furnished herewith in accordance with Item 601(b)(32) of Regulation S-K, this Exhibit is not deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section. Such certifications will not be deemed incorporated by reference into any filing under the Securities Act, except to the extent that the registrant specifically incorporates it by reference. | ||||
| † | Management contract or compensatory plan. | ||||
Item 16. Form 10-K Summary.
The Company has elected not to provide summary information.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
| SILA REALTY TRUST, INC. | |||||||||||
| (Registrant) | |||||||||||
| Date: February 25, 2026 | By: | /s/ MICHAEL A. SETON | |||||||||
| Michael A. Seton | |||||||||||
| Chief Executive Officer | |||||||||||
| (Principal Executive Officer) | |||||||||||
| Date: February 25, 2026 | By: | /s/ KAY C. NEELY | |||||||||
| Kay C. Neely | |||||||||||
| Chief Financial Officer | |||||||||||
| (Principal Financial Officer and Principal Accounting Officer) | |||||||||||
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| Name | Capacity | Date | ||||||||||||
| /s/ MICHAEL A. SETON | Chief Executive Officer, Director and President | February 25, 2026 | ||||||||||||
| Michael A. Seton | (Principal Executive Officer) | |||||||||||||
| /s/ KAY C. NEELY | Chief Financial Officer, Executive Vice President and Treasurer | February 25, 2026 | ||||||||||||
| Kay C. Neely | (Principal Financial Officer and | |||||||||||||
| Principal Accounting Officer) | ||||||||||||||
| /s/ JONATHAN KUCHIN | Chair of the Board of Directors | February 25, 2026 | ||||||||||||
| Jonathan Kuchin | ||||||||||||||
| /s/ Z. JAMIE BEHAR | Director | February 25, 2026 | ||||||||||||
| Z. Jamie Behar | ||||||||||||||
| /s/ ADRIENNE KIRBY | Director | February 25, 2026 | ||||||||||||
| Adrienne Kirby | ||||||||||||||
| /s/ VERETT MIMS | Director | February 25, 2026 | ||||||||||||
| Verett Mims | ||||||||||||||
| /s/ ROGER PRATT | Director | February 25, 2026 | ||||||||||||
| Roger Pratt | ||||||||||||||
FAQ
What does Sila Realty Trust (SILA) focus its real estate investments on?
Sila Realty Trust focuses on net lease healthcare properties across the care continuum, including medical outpatient buildings, inpatient rehabilitation facilities, and surgical and specialty centers. It aims for predictable, durable, growing income from high-quality healthcare tenants in geographically diverse U.S. markets.
How large is Sila Realty Trust’s healthcare portfolio as of year-end 2025?
As of December 31, 2025, Sila owned 140 healthcare properties and three undeveloped land parcels. The portfolio spans multiple U.S. markets and is 98.7% leased, supporting the company’s strategy of long-term, net-leased healthcare real estate investments generating recurring rental income.
What were Sila Realty Trust’s major capital and financing moves in 2025?
In 2025, Sila acquired six healthcare properties for about $148.9 million, funded two mezzanine loans totaling $17.543 million, and entered a $600 million senior unsecured revolving credit facility, expandable to $1.5 billion, with a maturity in 2029 and extension options.
Does Sila Realty Trust have a share repurchase or ATM equity program?
Yes. In August 2025, the board authorized a $75 million share repurchase program over three years, capped at $25 million per twelve-month period. Sila also entered an ATM program allowing sales of up to $250 million of common stock over time.
How concentrated is Sila Realty Trust’s tenant base in 2025?
Sila has meaningful tenant concentration. Leases with tenants under common control of PAM Health generated $31.622 million of 2025 rental revenue, representing 16.1% of total rental revenue, creating both stable anchor income and exposure to a single operator group.
What is Sila Realty Trust’s approach to distributions as a REIT?
As a REIT, Sila aims to pay regular cash distributions while meeting tax rules requiring high payout of taxable income. The board sets distribution levels based on funds available, capital needs, REIT qualification requirements, and legal constraints under Maryland law and its governing documents.
What key risks does Sila Realty Trust highlight in its 2025 10-K?
Sila cites risks from tenant concentration, healthcare regulatory changes, reimbursement pressures, interest rate and credit market volatility, debt levels, environmental and ESG compliance costs, and potential loss of REIT status, any of which could affect cash flows and future distributions to stockholders.
Sila Realty Trust Inc
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Feb 24, 2026
[8-K] Sila Realty Trust, Inc. Reports Material Event