NATIONAL HEALTH INVESTORS INC

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)

1 The condensed consolidated balance sheets included the following amounts related to our consolidated variable interest entities: $400.3 million and $505.9 million of real estate properties, net; $7.6 million and $9.7 million of cash and cash equivalents; $0.6 million and $10.0 million of straight-line rents receivable; $5.4 million and $7.5 million of other assets, net; and $5.7 million and $5.7 million of accounts payable and other liabilities as of September 30, 2025 and December 31, 2024, respectively.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited and in thousands)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

(unaudited and in thousands)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Description of the Business

National Health Investors, Inc. (“NHI,” the “Company,” “we,” “us,” or “our”), established in 1991 as a Maryland corporation, is a self-managed real estate investment trust (“REIT”) specializing in sale-leaseback, joint venture, mortgage and mezzanine financing of need-driven and discretionary senior housing and medical facility investments. We operate throughtwo reportable segments: Real Estate Investments and Senior Housing Operating Portfolio (“SHOP”). Our investments in real estate properties include independent living facilities (“ILF”), assisted living facilities (“ALF”), entrance-fee communities (“EFC”), senior living campuses (“SLC”), skilled nursing facilities (“SNF”) and hospitals (“HOSP”). Senior housing properties (“SHO”) are the combination of ILFs, ALFs, EFCs and SLCs and are also referred to as senior housing communities.

As of September 30, 2025, our Real Estate Investments segment consisted of gross real estate investments of $2.5 billion in 174 properties that are located in 32 states and leased primarily under triple-net leases to 30 tenants. These investments included 108 SHOs,65 SNFs andone HOSP. Additionally, our investments included $224.6 million in principal amounts of mortgage and other notes receivable, excluding $15.4 million of credit loss reserves.

As of September 30, 2025, our SHOP segment consisted of gross real estate investments of $551.8 million in 22 senior housing communities located in 12 states and comprised of 17 ILFs, four SLCs andone ALF with a combined total of 2,670 residential units. We outsource the operations at these properties to third-party managers and pay a management fee for these services. As of September 30, 2025,14 of our senior housing communities were held in consolidated partnerships in which the noncontrolling common equity interest is owned by affiliates of the managers.

We classify ILFs, ALFs, EFCs and SLCs as senior housing investments and classify SNFs and HOSPs as medical facility investments. Disclosures in these condensed consolidated financial statements related to property, bed and unit counts are outside the scope of our independent registered accounting firm’s review.

Note 2. Basis of Presentation and Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”) for interim financial statements. In our opinion, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, including normal recurring adjustments, necessary for a fair presentation. Interim results of operations are not necessarily indicative of the results that may be achieved for a full year. The condensed consolidated financial statements and related notes do not include all information and notes required by GAAP for annual reports. These interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes included in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the Securities and Exchange Commission (“SEC”).

Principles of Consolidation

Our condensed consolidated financial statements include the accounts of NHI and our wholly owned subsidiaries, joint ventures and variable interest entities (“VIE”) which we control through voting rights or other means. All intercompany transactions and balances are eliminated in consolidation. Reference Note 16 for additional information on our consolidated VIEs and unconsolidated VIEs.

We use the equity method of accounting when we own an interest in an entity over which we can exert significant influence but cannot control the entity’s operations. We discontinue the equity method of accounting if our investment in an entity, including our net advances to the entity, is reduced to zero, except in those instances in which we have guaranteed the obligations of the entity or are otherwise committed to provide further financial support to the entity. Reference Note 6 for additional information on our equity method investment.

Cash, Cash Equivalents and Restricted Cash

The following table provides a reconciliation of cash, cash equivalents and restricted cash from our condensed consolidated statements of cash flows to the amounts presented on our condensed consolidated balance sheets ($ in thousands):

1 Restricted cash is included in other assets, net, on our condensed consolidated balance sheets.

Concentrations of Credit Risks

We have credit risks related to our tenants, borrowers and managers. Our portfolio, which is comprised of real estate properties and mortgage and other notes receivable, subjects us to the possibility of losses that may result from the failure of other parties to perform according to their contractual obligations with us or may result from a decline in market prices which may make our investments less valuable. Our mortgages and other notes primarily consist of secured loans on healthcare facilities. We require collateral and other protective rights from our borrowers that we continually monitor to reduce our potential risks of incurring losses on these investments. Our management performs periodic reviews of our investments on an individual basis to assess for necessary reserves for potential losses.

We also have credit risks related to our cash and cash equivalents, which are primarily held in bank accounts and overnight investments. We maintain our bank deposit accounts with large financial institutions in amounts that may exceed federally insured limits. We have not experienced any losses in these accounts.

Impairment of Long-Lived Assets

We evaluate the recoverability of the carrying values of our long-lived assets when events or circumstances indicate that the carrying amounts may not be recoverable. We assess whether an impairment charge is needed by comparing the future estimated undiscounted cash flows of the identified asset to its carrying amount. If recognition of an impairment charge is necessary, it is measured as the amount by which the carrying value of the identified asset exceeds its estimated fair value. Impairment charges are included in loan and realty (gains) losses, net, in our condensed consolidated statements of income.

If a real estate property meets the criteria to be classified as an asset held for sale in accordance with GAAP, we measure the amount by which the carrying value exceeds the estimated fair value less cost to sell. We estimate the fair value of a property using a market approach that takes into consideration any recent binding agreements for sales of similar properties and any recent purchase offers we have received for the property, when available, and estimates of the fair value based on broker quotes and third-party valuations.

Fair Value of Financial Instruments

We use the GAAP fair value hierarchy to measure the fair value of our financial instruments. The three levels of inputs in this model are as follows:

•Level 1 utilizes quoted prices in active markets for identical assets or liabilities.

•Level 2 utilizes observable inputs, other than quoted prices described in Level 1 of the hierarchy, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active and other inputs that are observable or can be corroborated by observable market data.

•Level 3 utilizes unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities including, but not limited to, pricing models, discounted cash flow methodologies and other similar techniques.

Noncontrolling Interests

We assess our arrangements with noncontrolling interest holders to determine the appropriate balance sheet classification based on the redemption rights and other rights held by the noncontrolling interest holder. Contingently redeemable noncontrolling interests are initially recognized at the greater of the initial carrying value or the redemption value and subsequently adjusted to reflect contributions and distributions of the noncontrolling interest and its share of the partnership’s net income or loss for each period. In the period in which the contingencies for redemption of the noncontrolling interest’s shares are met or become probable of being met at a future date, we accrete the carrying value to the redemption value over the period until expected redemption through an offsetting adjustment to capital in excess of par value.

Revenue Recognition

Rental Income

We generate rental income from the properties in our Real Estate Investments segment pursuant to operating leases between us and the tenants who operate these properties. These leases are typically triple-net leases with fixed annual escalators. We recognize the contractual amount of base rental income from a tenant lease using the straight-line method over the initial term of the lease, subject to a collectability assessment. Certain of our leases provide for additional contingent rent based on a percentage of the tenant’s revenue in excess of a specified annual or quarterly base amount or other threshold as defined in the lease agreement. We recognize contingent rent as income when the actual results reported by the tenant have exceeded the applicable base amount or threshold. Our schedule of future minimum lease payments due to us on tenant leases excludes any provisions for contingent rent.

At lease inception, we may make certain payments to our tenants that are treated as lease incentives. These amounts are amortized over the respective lease term and recognized as a reduction of rental income in our condensed consolidated statements of income. Lease incentives are included in other assets, net, on our condensed consolidated balance sheets.

We assess the collectability of our accounts receivable related to tenant leases on a regular basis taking into account factors such as a change in the tenant’s payment history, the current financial condition of the tenant, other new business or market conditions that may affect the tenant’s operations and changes in economic conditions in the geographical areas where the tenant operates. In the event that we determine the future collectability of substantially all lease payments of a tenant are no longer probable, we write off the related accounts receivable and straight-line rents receivable in the period in which this determination becomes known as a reduction of rental income and begin recognizing rental income from the applicable tenant on a cash basis. Any recoveries of previously written-off accounts receivable are recognized as rental income in the period payment is received. Reference the “Cash Basis Tenants” section in Note 3.

Resident Fees and Services

We generate resident fees and services income from the senior housing communities in our SHOP segment pursuant to independent agreements for each residential unit at these communities. These revenues include resident room and care charges, community fees and other charges for optional services available to the residents.

Residency agreements generally have terms of 30 days toone year and are cancelable by the resident with 30 days’ notice. We typically bill residents a fixed monthly fee at the beginning of each month for room fees, community fees and general care services. Certain of the more individualized need-based and optional services are billed to residents monthly in arrears. We have elected the lessor practical expedient within Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 842, Leases (“ASC 842”), which permits us to combine the lease and non-lease components within our residency agreements as the timing and pattern of transfer of the underlying services to the resident are the same. We have determined that the non-lease component is the predominant component within these contracts in accordance with ASC 842 and therefore recognize the revenues from these contracts under ASC 606, Revenue Recognition from Contracts with Customers (“ASC 606”).

Interest Income from Mortgage and Other Notes Receivable

Interest income is recognized as earned based on the interest rates and principal amounts outstanding on our mortgage and other notes receivable. Accrued interest on mortgage and other notes receivable is included in other assets, net, on our condensed consolidated balance sheets. We assess the collectability of our mortgages and other notes on a regular basis taking into consideration criteria such as the borrower’s timeliness of required payments, the borrower’s current financial condition and the borrower’s compliance with other covenants and provisions of the loan agreement. If we conclude that a loan has become non-performing, we place it on non-accrual status in the period in which it becomes known and probable that the borrower cannot pay the contractual amounts due to us. A non-performing loan is returned to accrual status if the borrower becomes contractually current on payments and management believesall future principal and interest will be received from the tenant in accordance with the terms of the loan agreement. Reference the “Non-Performing Notes” section in Note 4.

Share-Based Compensation Expense

We measure and recognize share-based compensation expense upon issuing stock incentive awards based on the grant date fair value of the award which is amortized over the requisite service period in accordance with the terms of each agreement. The fair values of stock options are estimated on the respective grant dates using the Black-Scholes option pricing model. The fair values of restricted stock awards are determined based on the closing market price of our common stock on the individual dates of grant. Forfeitures of stock incentive awards are recognized as a reduction to share-based compensation expense in the periods in which they occur. Share-based compensation expense is recognized in general and administrative expenses in our condensed consolidated statements of income.

Income Taxes

We intend at all times to qualify as a REIT under Internal Revenue Code Sections 856 through 860. Accordingly, we will generally not be subject to U.S. federal income taxes provided that we continue to qualify as a REIT. A failure to qualify with the applicable REIT rules and regulations would have a material adverse impact on our consolidated financial position, results of operations and cash flows.

Certain activities that we undertake may be conducted by subsidiary entities that have elected to be treated as taxable REIT subsidiaries (“TRS”). TRSs are subject to federal, state, and local income taxes. Accordingly, a provision for income taxes is made in our condensed consolidated financial statements, when applicable.

The One Big Beautiful Bill Act, which passed on July 4, 2025, contains legislation increasing the percentage limit under the REIT asset test applicable to TRSs from 20% to 25%. This change applies to taxable years beginning after December 31, 2025.

Segments

We operate our business through two reportable segments, Real Estate Investments and SHOP. In our Real Estate Investments segment, we invest in (i) senior housing and medical facility properties that we lease to tenants primarily under triple-net leases that obligate the tenant to pay all of the property operating expenses and (ii) mortgages and other notes in which we finance construction, renovation and expansion projects, funding of working capital or corporate needs and the acquisition of real estate properties for our tenants, operators and other third parties. In our SHOP segment, we invest in senior housing communities that are operated on behalf of us by third-party managers pursuant to the terms of the respective management agreements. Reference Note 5 for additional information on our SHOP operations.

We may transfer a real estate property or group of real estate properties from one segment to the other based on our intended future use of the respective properties. The operating results of a transferred property are included in the predecessor segment operating results prior to the effective date of the transfer and in the operating results of the successor segment from the effective date of the transfer to the end of the reporting period. Reference the “Discovery Transitions” section in Note 3 for additional information on our real estate property transitions.

Forward Equity Sales

We have, and may continue to, enter into forward equity sales agreements relating to shares of our common stock, either through our at-the-market (“ATM”) equity program or through underwritten public offerings. These agreements may be physically settled in our common stock, settled in cash or net share settled at our election. The forward sale price that we will receive upon physical settlement of a forward equity sale agreement will be subject to adjustment for (i) a floating interest rate factor equal to a specified daily rate, less a spread adjustment and (ii) scheduled dividends during the term of the forward equity sale agreement. To the extent our forward equity sales agreements do not meet all the criteria to qualify for equity treatment on our consolidated balance sheet under ASC 815, Derivatives and Hedging, we recognize the change in the fair value of the derivative during the period in net income on our condensed consolidated statements of income. As of September 30, 2025 and December 31, 2024, our forward equity sales agreements meet the criteria to be classified in equity on our condensed consolidated balance sheet.

Shares issuable under a forward equity sale agreement are reflected in our diluted earnings per share calculations using the treasury stock method. Under this method, the number of our common shares used in calculating diluted earnings per share for each period is deemed to be increased by the excess, if any, of the number of common shares that would be issued upon full physical settlement of the forward equity sale agreement over the number of common shares that could be purchased by us in the market, as determined based on the average market price during the period, using the proceeds receivable upon full physical settlement, as determined based on the weighted average forward price during the period.

Earnings Per Share

Our unvested restricted stock awards contain non-forfeitable rights to dividends, and accordingly, these awards are deemed to be participating securities. As a result, we apply the two-class method to calculate basic and diluted earnings per share. Under the two-class method, we allocate net income to common stockholders and the holders of unvested restricted stock awards using the weighted-average shares outstanding for each class and based on their respective participation rights to dividends declared and undistributed earnings. The computation of diluted earnings per share also includes the effect of potentially dilutive securities issued.

Recent Accounting Pronouncements

In December 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which includes amendments to the existing guidance that further enhance income tax disclosures, primarily through standardization of income tax rate reconciliation categories and disaggregation of income taxes paid by jurisdiction. This guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted. We are currently evaluating the potential impact of this accounting standard on our consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires public entities to enhance transparency of income statement disclosures on an interim and annual basis by providing additional disaggregated information related to certain costs and expenses. This guidance is effective for annual periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027, with early adoption permitted. We are currently evaluating the potential impact of this accounting standard on our consolidated financial statements and related disclosures.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provides public entities with a practical expedient related to estimating credit losses for accounts receivable and contract assets arising from transactions accounted for under ASC 606. This guidance is effective for annual and interim periods beginning after December 15, 2025, with early adoption permitted. We are currently evaluating the potential impact of this accounting standard on our consolidated financial statements and related disclosures.

Note 3. Investment Activity

Asset Acquisitions

During the nine months ended September 30, 2025, we completed the following acquisitions of real estate properties within our Real Estate Investments segment ($ in thousands):

1 This property was acquired in a deed in lieu of foreclosure transaction initiated by Senior Living Management (“SLM”) to satisfy the repayment of its $10.0 million mortgage note with us. Reference the “Senior Living Management” section below.

In January 2025, we acquired a 108-unit SLC in Montrose, Colorado. The acquisition price was $21.2 million, including $0.2 million in closing costs. The property is leased pursuant to a 10-year triple-net lease, which includestwo five-year extension options, an initial lease rate of 8.0% and fixed annual escalators of 2.0%.

In March 2025, we acquired a 120-unit ALF and memory care community in Bergen County, New Jersey. The acquisition price was $46.3 million, including $0.3 million in closing costs. The property is leased pursuant to a 15-year triple-net lease, which includestwo five-year extension options, an initial lease rate of 8.0% and fixed annual escalators of 2.0%. The lease includes a $0.8 million development commitment which will be added to the respective lease base, if funded.

In April 2025, we acquired a portfolio ofsix ALF and memory care communities located in Nebraska for a total purchase price of $63.5 million, including $0.3 million in closing costs. The portfolio of properties is leased pursuant to a 15-year triple-net master lease, which includestwo five-year extension options, an initial lease rate of 8.0% and fixed annual escalators of 2.0%.

Discovery Transitions

Effective August 1, 2025, we terminated a triple-net master lease associated with a portfolio ofsix senior housing properties, consisting offour SLCs, one ILF andone ALF, which were held in a consolidated real estate partnership with Discovery Senior Housing Investor XXIV, LLC (the “Discovery partner”). The tenant of the triple-net master lease was a related party of Discovery Senior Living (“Discovery”). In connection with the lease termination, we received net cash consideration of $3.1 million and other non-cash consideration of $0.6 million from the tenant and wrote off the related straight-line rents receivable of $8.9 million on this lease. Each of these amounts was recognized in rental income in our condensed consolidated statements of income for the three and nine months ended September 30, 2025. Additionally, on August 1, 2025, we entered into a dissolution agreement with the Discovery partner, which provided for the write-off of the remaining partnership liabilities against the equity in the partnership and the Discovery partner contributing its 2.0% noncontrolling common equity interest to us for nominal consideration.

Concurrently with the activities above, we entered into agreements with an affiliate of Sinceri Senior Living (“Sinceri”) to serve as manager of the properties and transitioned the portfolio ofsix senior housing properties from our Real Estate Investments segment into our SHOP segment. As of September 30, 2025, the aggregate net carrying value of this portfolio was $125.3 million. Prior to the transition, we recognized rental income of $0.5 million and $3.2 million during the three and nine months ended September 30, 2025, respectively, and $1.5 million and $4.6 million during the three and nine months ended September 30, 2024, respectively, in our condensed consolidated statements of income related to the triple-net master lease.

Also, effective August 1, 2025, we terminated a triple-net lease with an affiliate of Discovery for an ILF in Oklahoma. In connection with the lease termination, we received $0.8 million in cash consideration and $0.8 million in other non-cash consideration from the tenant and wrote off the related straight-line rent receivable of $3.2 million on this lease. Each of these amounts was recognized in rental income in our condensed consolidated statements of income for the three and nine months ended September 30, 2025. Concurrently with the lease termination, we transitioned this property from our Real Estate Investments segment into our SHOP segment by contributing it to an existing consolidated partnership with DSHI NHI Holiday LLC (the “Discovery member”). As of September 30, 2025, the net carrying value of this property was $28.6 million. Prior to the transition, we recognized rental income of $0.2 million and $1.6 million during the three and nine months ended September 30, 2025, respectively, and $0.7 million and $2.1 million during the three and nine months ended September 30, 2024, respectively, in our condensed consolidated statements of income related to the triple-net lease.

Reference Note 5 for additional information on our SHOP operations. Reference Note 15 for additional information on our segments.

Fourth Quarter 2025 Acquisitions

On October 1, 2025, we acquired a portfolio offour senior housing communities located in Oklahoma and Oregon, consisting oftwo SLCs andtwo ALFs, with a combined total of 344 residential units. The total purchase price of $74.3 million, including $0.5 million in closing costs, was partially funded by the cancellation of a $9.5 million mortgage note with us which had an 8.5% interest rate. This portfolio of properties has been included in our SHOP segment and will continue to be managed by the existing operator, Compass Senior Living.

On October 31, 2025, we acquired a 251-unit continuing care retirement community (“CCRC”) located in South Carolina from Senior Living Communities, LLC (“Senior Living”). The acquisition price of $52.5 million was partially funded by the cancellation of a $32.7 million mortgage note on the property. The property is being leased back to Senior Living pursuant to a 15-year triple-net lease withtwo five-year extension options, an initial lease rate of 8.25% and fixed annual escalators of 2.0%. Concurrently with the acquisition, we executed a $1.5 million revolving line of credit with Senior Living. Reference the “Senior Living Loans” section in Note 4 for additional information on the canceled mortgage note.

Impairment of Long-Lived Assets

During the three and nine months ended September 30, 2025 and the three months ended September 30, 2024, we did not recognize any impairment charges. During the nine months ended September 30, 2024, we recognized an impairment charge of $0.7 million onone property in our Real Estate Investments segment which was reclassified to assets held for sale in the second quarter of 2024. This property was subsequently sold in the fourth quarter of 2024.

Tenant Concentrations

The following table presents information related to concentrations of our tenants, or affiliates of tenants, that exceed 10% of total revenues included in our condensed consolidated statements of income for the periods indicated ($ in thousands):

1 Real estate properties have been stated at their gross carrying values. Total real estate properties, as presented in the table above, exclude $2.6 million related to our corporate office and equipment and exclude $551.8 million related to the properties in our SHOP segment.

2 Mortgages and notes have been stated at their gross carrying values. Mortgages and notes, as presented in the table above, exclude total credit loss reserves of $15.4 million as of September 30, 2025.

3 Revenues, as presented in the table above, include rental income and interest income from assets classified as held for sale, if any.

4 There are no tenant concentrations in revenues from resident fees and services because the residency agreements are between us and the individual residents.

As of September 30, 2025, our real estate properties in South Carolina represented 11.0% of our total real estate properties, net, on our condensed consolidated balance sheet. As of December 31, 2024, our real estate properties in South Carolina and Texas represented 11.6% and 10.1%, respectively, of our total real estate properties, net, on our condensed consolidated balance sheet. There were no other states where our concentration in real estate properties was 10% or greater as of September 30, 2025 and December 31, 2024.

Senior Living

As of September 30, 2025, we leased 10 senior housing properties to Senior Living. We recognized straight-line rent revenue of $(0.5) million and $(0.4) million from Senior Living during the nine months ended September 30, 2025 and 2024, respectively.

Bickford

As of September 30, 2025, we leased 38 properties to Bickford under four master leases. We have been recognizing revenues from Bickford’s leases on a cash basis since the second quarter of 2022 based upon information we obtained from Bickford regarding its financial condition that raised substantial doubt about its ability to continue as a going concern. During the three and nine months ended September 30, 2025, Bickford repaid $1.2 million and $3.8 million, respectively, of its outstanding rent deferrals, which primarily related to past due payments during the COVID-19 pandemic. During the three and nine months ended September 30, 2024, Bickford repaid $1.1 million and $4.0 million, respectively, of its outstanding rent deferrals. As of September 30, 2025, Bickford’s outstanding rent deferrals totaled $9.1 million.

NHC

As of September 30, 2025, we leased 32 SNFs andthree ILFs to NHC, a publicly held company, under a triple-net master lease. Four of these properties have been subleased to other third parties pursuant to leases in which NHC serves as a guarantor. The triple-net master lease provides for a contingent rent clause that requires NHC to pay additional rent based on 4.0% of the excess, if any, in the annual revenues of the facilities it leases from us over a base amount specified in each lease. During the nine months ended September 30, 2025 and 2024, we recognized straight-line rent revenue of $0.5 million and $0.2 million, respectively, related to NHC.

The following table summarizes the portion of our rental income from NHC that was attributable to contingent rent for the periods indicated ($ in thousands):

1 NHC certifies the annual revenue of its facilities leased from us by March 31 st of the following year.

One of the members of our board of directors is also the chairperson of NHC’s board of directors.

Cash Basis Tenants

We hadtwo tenants, including Bickford, on the cash basis of accounting for revenue recognition during the three and nine months ended September 30, 2025 for their leasing arrangements with us based on our assessment of each tenant’s ability to satisfy its contractual obligations under the terms of the respective leases. During the three and nine months ended September 30, 2024, we hadthree tenants, including Bickford, on the cash basis of accounting for revenue recognition for their leasing arrangements with us.

A summary of lease payments received from cash basis tenants follows ($ in thousands):

Senior Living Management

SLM was a cash basis tenant from 2022 until January 1, 2025 when the remainingtwo properties leased from us were transitioned to a new operator who had been serving as the interim manager at the properties. Concurrently with this transaction, we executed a 15-year triple-net master lease with a new operator which includestwo five-year extension options. This master lease provides for approximately $1.1 million in initial annual contractual lease payments with fixed annual escalators of 2.0%.

In February 2025, we acquired an ALF property in Florida upon the execution of a deed in lieu of foreclosure agreement initiated by SLM to settle its $10.0 million non-performing mortgage note with us. The acquired property was recognized on our condensed consolidated balance sheet at its estimated fair value of $8.6 million, which equaled the net carrying value of the mortgage note. Concurrently, we executed a new lease on this acquired property with the existing operator, Mainstay Healthcare. This lease provides for approximately $0.7 million in annual contractual lease payments.

Tenant Purchase and Sale Agreement

We lease a SLC that is subject to a purchase and sale agreement giving the tenant the option to acquire the property for $39.0 million. The purchase and sale agreement, as amended, expires in November 2025 subject to monthly renewals through March 2026 by the tenant upon payment of a non-refundable fee. The property was included in real estate properties, net, on our condensed consolidated balance sheets as of September 30, 2025 and December 31, 2024. During the three and nine months ended September 30, 2025, we recognized rental income of $0.6 million and $2.0 million, respectively, related to the existing triple-net lease at this property, which expires in July 2027. During the three and nine months ended September 30, 2024, we recognized rental income of $0.7 million and $2.1 million, respectively, related to the lease on this property. The property will be reclassified to assets held for sale when the sale becomes probable, including when the tenant demonstrates its ability to obtain sufficient financing to close on the sale of the property within the terms of the purchase and sale agreement. As of September 30, 2025, the net carrying value of this property was $18.6 million on our condensed consolidated balance sheet.

Tenant Purchase Options

Certain of our tenant leases contain a purchase option clause allowing the tenant to acquire the leased property at a fixed base price, a fixed base price plus a specified share in any appreciation of the property or a price based on a specified fixed minimum internal rate of return on our investment. As of September 30, 2025, tenants had purchase options onfour of our properties, representing an aggregate net carrying value of $75.3 million, which have exercise dates ranging between 2028 and 2031. Rental income from these properties with tenant purchase options totaled $2.5 million and $7.5 million during the three and nine months ended September 30, 2025, respectively, and $2.5 million and $6.3 million during the three and nine months ended September 30, 2024, respectively. As of September 30, 2025, we cannot reasonably estimate the probability that any of these tenant purchase options will be exercised in the future.

Future Minimum Lease Payments

The fixed amounts of future minimum lease payments due to us under our existing tenant leases as of September 30, 2025 were as follows($ in thousands):

Variable Lease Payments

Most of our tenant leases contain annual rent escalators, which may be fixed or variable. Lease payments due to us that are subject to a variable rent escalator are typically determined annually and calculated using a variable index, such as the Consumer Price Index (“CPI”) or an index that is dependent on a future date and indeterminable at the inception of the lease.

The following table provides a summary of our rental income with information on our lease payments received during the respective periods that were subject to fixed and variable rent escalators($ in thousands):

1 Cash and non-cash consideration received by us as a result of the early lease terminations described in the “Discovery Transitions” section above have been included in lease payments based on variable escalators for the three and nine months ended September 30, 2025.

2 The amounts presented for the three and nine months ended September 30, 2025 included the $12.1 million of write-offs of straight-line rents receivable as a result of the early lease terminations described in the “Discovery Transitions” section above.

Note 4. Mortgage and Other Notes Receivable

We enter into financing arrangements with our tenants, operators and other third parties primarily for construction, renovation and expansion projects, funding of working capital or other corporate needs and the acquisition of real estate properties. These investments are primarily secured loans guaranteed by significant parties to the notes or by cross-collateralization of properties with the same owner. Mortgage and other notes receivable are included in the Real Estate Investments segment. As of September 30, 2025, the principal amounts of our mortgage notes totaled $158.4 million and the principal amounts of our other notes, primarily mezzanine loans, totaled $66.2 million. As of December 31, 2024, the principal amounts of our mortgages and other notes totaled $175.8 million and $113.4 million, respectively. We had credit loss reserves of $15.4 million and $20.2 million as of September 30, 2025 and December 31, 2024, respectively, on these investments.

Non-Performing Notes

As of September 30, 2025, we hadtwo loans designated as non-performing notes consisting of an unsecured mezzanine loan with a principal balance of $12.0 million due from affiliates of SLM and an unsecured loan due from Bickford with a principal balance of $1.3 million. As of December 31, 2024, the principal amount due to us on the SLM mezzanine loan was $14.5 million and the principal amount due to us on the Bickford loan was $1.4 million. Reference the “Senior Living Management” section in Note 3 for additional information on the $10.0 million SLM mortgage note settlement in February 2025 which was also a non-performing note at December 31, 2024.

Interest income recognized on a cash basis from non-performing notes was $0.1 million during both the three and nine months ended September 30, 2025 and $0.3 million and $1.3 million during the three and nine months ended September 30, 2024, respectively. Credit loss reserves related to non-performing notes totaled $13.3 million and $16.1 million as of September 30, 2025 and December 31, 2024, respectively.

Senior Living Management Loans

As previously discussed, we acquired a property in Florida in connection with a deed in lieu of foreclosure agreement initiated by SLM to settle its non-performing mortgage note in February 2025. Reference the “Senior Living Management” section in Note 3.

In May 2025, we received $2.5 million as a partial repayment of the unsecured mezzanine loan due from SLM that is classified as non-performing. This repayment resulted in a $1.3 million reduction of the credit loss reserve and related credit loss expense on this loan in the second quarter of 2025. As of September 30, 2025, the remaining principal amount outstanding on this loan was $12.0 million, which is fully covered by the related credit loss reserve.

Vizion Health Loan Amendment

In March 2025, we amended a mezzanine loan agreement with affiliates of Vizion Health to provide for additional funding of $5.4 million and to extend the maturity date to May 2028. The interest rate on the loan escalates on July 1 of each year. As of September 30, 2025, the principal amount outstanding on the loan was $17.2 million and the interest rate was 9.4%.

Construction Loan

In May 2025, we entered into a construction loan agreement to fund up to $28.0 million for the development of an 84-unit ALF and memory care facility in Michigan which will be operated by Encore Senior Living upon completion. The loan agreement provides for an annual interest rate of 9.0% and a maturity date in April 2030. As of September 30, 2025, the principal amount outstanding on this construction loan was $2.8 million.

Montecito Medical Real Estate Loan

As of September 30, 2025, the principal amount outstanding on the loan was $6.6 million, which relates tofour medical office buildings (“MOB”) with a combined purchase price of approximately $48.3 million. During the three and nine months ended September 30, 2025, we recognized interest income of $0.5 million and $1.2 million, respectively, related to this loan. During the three and nine months ended September 30, 2024, we recognized interest income of $0.4 million and $1.4 million, respectively.

Bickford Construction Loan and Mortgage Note

As of September 30, 2025, we hadone fully funded construction loan with Bickford that had a principal balance of $14.7 million. This construction loan is secured by a first mortgage lien on substantially all of the related real and personal property as well as a pledge of any and all leases or other agreements which may grant a right of use to the property. The loan provides for an annual interest rate of 9.0% and a maturity date in July 2026. The loan agreement contains usual and customary covenants and requires the borrower to pay property insurance and taxes. We hold a fair value purchase option under the loan agreement to purchase the property upon stabilization of the underlying operations.

As of September 30, 2025, we held an $11.9 million second mortgage note as a component of the purchase price consideration in connection with the sale ofsix properties to Bickford in 2021. This second mortgage note bears a 10.0% annual interest rate and matures in April 2026. We did not include this note receivable in the determination of the initial gain recognized on the sale of this portfolio ofsix properties and this mortgage note is not reflected in mortgage and other notes receivable, net, on the condensed consolidated balance sheets as of September 30, 2025 and December 31, 2024. During the three and nine months ended September 30, 2025, we recognized interest income related to this mortgage note of $0.3 million and $0.9 million, respectively. During the three and nine months ended September 30, 2024, we recognized interest income related to this mortgage note of $0.3 million and $1.0 million, respectively. Bickford repaid $0.1 million and $0.3 million on this mortgage note during the three and nine months ended September 30, 2025, respectively, which was included in gains on sales of real estate properties, net, in our condensed consolidated statements of income.

Senior Living Loans

We provided a $15.0 million revolving line of credit to Senior Living which is available for working capital needs and to finance construction projects within Senior Living’s portfolio, including projects to build additional units at existing facilities. The revolving line of credit matures in December 2031 concurrent with the maturity of the Senior Living leases. As of September 30, 2025, the outstanding balance on the Senior Living revolving line of credit was $6.8 million and the interest rate was 8.0%.

As of September 30, 2025, we had a $32.7 million mortgage due from Senior Living related to a 251-unit CCRC in South Carolina. As previously discussed, in October 2025, the outstanding principal on this mortgage note was applied to the consideration paid when we acquired this property. Concurrently with this acquisition, we executed a triple-net lease with Senior Living and provided a new $1.5 million revolving line of credit which bears an initial annual interest rate of 8.25%. Reference the “Fourth Quarter 2025 Acquisitions” section in Note 3 for additional information.

Credit Loss Reserves

Our principal measures of credit quality, except for construction loans, are debt service coverage for amortizing loans and interest or fixed charge coverage for non-amortizing loans (collectively, “Coverage”). A Coverage ratio provides a measure of the borrower’s ability to make scheduled principal and interest payments. The Coverage ratios presented in the table below have been calculated utilizing the most recent date for which data is available, June 30, 2025, using EBITDARM (earnings before interest, taxes, depreciation, amortization, rent and management fees) and the requisite debt service, interest service or fixed charges, as defined in the applicable loan agreement. We categorize Coverage into three levels: (i) more than 1.5x, (ii) between 1.0x and 1.5x, and (iii) less than 1.0x. We update our calculations of Coverage on a quarterly basis. Coverage is not a meaningful credit quality indicator for construction loans as these developments are typically not generating any operating income, or they have insufficient operating income because occupancy levels necessary to stabilize the properties have not yet been achieved. We measure credit quality for these mortgages by considering the construction and stabilization timelines and the financial condition of the borrower, as well as economic and market conditions. We consider the guidance in ASC 310-20, Receivables - Nonrefundable Fees and Other Costs, when determining whether a modification, extension or renewal constitutes a current period origination.

The following table summarizes the credit quality indicators related to the principal amounts due to us from mortgage and other notes receivable as of September 30, 2025 ($ in thousands):

Our methodology for estimating credit loss reserves on non-performing notes incorporates considerations of the sufficiency of the underlying collateral, current economic conditions and forecasts of future economic conditions that may impact the collectability of these loans, including qualitative factors, which may differ from conditions existing in the historical periods. Due to the continuing challenges in the U.S. financial markets and the potential impact on the collectability of our mortgage and other notes receivable, we forecasted a 20% increase in the probability of a default and a 20% increase in the amount of estimated loss from a default on all loans, other than those designated as non-performing notes, resulting in an effective adjustment of 4.5% as of September 30, 2025.

The following table provides a summary of the changes in our credit loss reserves for the nine months ended September 30, 2025 ($ in thousands):

Note 5. Senior Housing Operating Portfolio

As of September 30, 2025, we owned 22 senior housing communities, consisting of 17 ILFs, four SLCs, one ALF. We outsource the operations at these properties to third-party managers pursuant to individual management agreements. The operations have been structured to comply with the requirements of the REIT Investment Diversification and Empowerment Act of 2007 (“RIDEA”) and to utilize our TRS for activities that would otherwise be non-qualifying for REIT purposes. The third-party managers receive a management fee from us for the services they provide.

In October 2025, we acquired a portfolio offour senior housing communities located in Oklahoma and Oregon, consisting oftwo SLCs andtwo ALFs, with a combined total of 344 residential units. The properties will be managed by the existing operator Compass Senior Living. Reference the “Fourth Quarter 2025 Acquisitions” section in Note 3 for additional information.

Merrill Managed Portfolio

As of September 30, 2025, we had a portfolio ofsix ILFs located in California and Washington that are held in a consolidated partnership with Merrill Gardens, LLC. (“Merrill”), which owns a 20.0% common equity interest in the partnership. We own 100% of the preferred equity interest and 80% of the common equity interest in the partnership. The operating agreement for the partnership provides for contingent distributions to the members based on the attainment of certain yields on the investment calculated on an annual basis. Merrill serves as the manager of these properties. Pursuant to the management agreement, as amended, which expires in March 2032, Merrill is paid a management fee based on 5.0% of net revenues. Additionally, Merrill is entitled to a real estate services fee for projects it manages based on 5.0% of the related costs, as defined in the management agreement, incurred in any calendar year that exceed $1,000 times the number of units at each property. The noncontrolling interest associated with this partnership is contingently redeemable. Reference Note 10 for additional information on the redemption features.

Discovery Managed Portfolio

As of September 30, 2025, we had a portfolio of 10 ILFs located in Arkansas, Georgia, Ohio, Oklahoma, New Jersey and South Carolina that are held in a consolidated partnership with the Discovery member, which owns a 2.0% common equity interest in the partnership. We own 100% of the preferred equity interest and 98.0% of the common equity interest in the partnership. On August 1, 2025, we transitioned a property in Oklahoma from our Real Estate Investment segment into this portfolio. The operating agreement for the partnership provides for contingent distributions to the members based on the attainment of certain yields on the investment calculated on an annual basis. The properties are managed by a related party of Discovery pursuant to separate management agreements for each property, each of which has an initial term through March 2032. The managers are paid a management fee based on 5.0% of net revenues. Reference the “Discovery Transitions” section in Note 3 for additional information on the transitioned property.

Sinceri Managed Portfolio

As of September 30, 2025, we had a portfolio ofsix senior housing properties, consisting offour SLCs, one ILF andone ALF, that are located in Florida, Indiana, Maryland and Pennsylvania. This portfolio, which is managed by an affiliate of Sinceri, was transitioned on August 1, 2025 out of our Real Estate Investment segment into the SHOP segment. Pursuant to the management agreements which expire in July 2035, Sinceri is paid a base management fee of 5.0% of net revenues. Sinceri may earn an additional incentive management fee based on each property’s annual net operating income (“NOI”) in excess of a specified threshold in the management agreement for each property. If the portfolio is sold to a third party, Sinceri is also entitled to a fee calculated on the excess purchase price over a specified threshold in the management agreements.

Note 6. Equity Method Investment

Concurrently with the acquisition of a CCRC in January 2020 from LCS-Westminster Partnership III, LLP (“Timber Ridge CCRC”), we invested $0.9 million in the operating company, Timber Ridge OpCo, LLC (“Timber Ridge OpCo”), which represented a 25.0% equity interest. This investment is held by our TRS to be compliant with the provisions of RIDEA. As part of our initial investment, we provided Timber Ridge OpCo with a revolving credit facility that has a maximum borrowing capacity of $5.0 million. As of September 30, 2025, no amounts have been drawn on this revolving credit facility.

We account for our investment in Timber Ridge OpCo under the equity method of accounting and decrease the carrying value of our investment for operating losses of the entity and distributions made to us for cumulative amounts up to and including our basis plus any guaranteed or implied commitments to fund operations. Our guaranteed and implied commitments are currently limited to the $5.0 million revolving credit facility and a $2.5 million lease incentive distribution received in February 2023. As of September 30, 2025, we have recognized our share of Timber Ridge OpCo’s operating losses in excess of our initial investment plus guaranteed and implied commitments. These cumulative losses are included in accounts payable and other liabilities on our condensed consolidated balance sheets as of September 30, 2025 and December 31, 2024. Excess unrecognized equity method losses for this investment were $0.5 million and $1.7 million during the three and nine months ended September 30, 2025, respectively, and $0.9 million and $2.1 million during the three and nine months ended September 30, 2024, respectively. As of September 30, 2025, our cumulative unrecognized losses for this investment were $15.9 million. We recognized gains from equity method investment of $0.1 million and $2.0 million during the three and nine months ended September 30, 2025, respectively, and $0.4 million during the nine months ended September 30, 2024 in our condensed consolidated statements of income related to cash distributions received from this investment in these periods. There were no cash distributions from this investment during the three months ended September 30, 2024.

The Timber Ridge OpCo property is subject to early resident mortgages secured by a Deed of Trust and Indenture of Trust (the “Deed and Indenture”). As part of our acquisition, NHI-LCS JV I, LLC (“Timber Ridge PropCo”) acquired the Timber Ridge CCRC property and a subordination agreement was entered into pursuant to which the trustee acknowledged and confirmed that the security interests created under the Deed and Indenture were subordinate to any security interests granted in connection with an $81.0 million loan made by NHI to Timber Ridge PropCo which is eliminated upon consolidation. In addition, under the terms of the resident loan assumption agreements, during the term of theseven-year lease to Timber Ridge OpCo, which includestwo five-year extension options, Timber Ridge OpCo is required to indemnify Timber Ridge PropCo for any repayment by Timber Ridge PropCo of the early resident mortgage liabilities under the guarantee. As a result of the subordination agreement and the resident loan assumption agreements, no liability has been recorded as of September 30, 2025 and December 31, 2024. The balance secured by the Deed and Indenture was $7.7 million as of September 30, 2025.

Note 7. Other Assets, Net

Other assets, net, consisted of the following ($ in thousands):

As of September 30, 2025, real estate investments accounts receivable included $0.7 million that was due from the Discovery tenant pursuant to the lease termination agreement executed on August 1, 2025. There wereno allowances for credit losses recognized against real estate investments accounts receivable as of September 30, 2025 and December 31, 2024. Reference the “Discovery Transitions” section in Note 3 for additional information on the lease terminations on August 1, 2025.

In the first quarter of 2025, we recognized $1.2 million of transaction costs related to an acquisition in our SHOP segment that did not materialize. We had $0.6 million of these costs capitalized in other assets, net, on our condensed consolidated balance sheet as of December 31, 2024.

Note 8. Debt, Net

Our debt consisted of the following ($ in thousands):

A summary of the aggregate principal maturities of our outstanding debt as of September 30, 2025 follows ($ in thousands):

Revolving Credit Facility and Bank Term Loan

We have a $700.0 million unsecured revolving credit facility (the “Credit Facility”), which matures in October 2028, and may be extended by us pursuant to (i) one or both of thetwo six-month extension options or (ii)one 12-month extension option. On October 31, 2025, we amended the Credit Facility to remove the 0.10% credit spread adjustment applicable to the Secured Overnight Financing Rate (“SOFR”) interest rates, which will result in an effective decrease of 0.10% in the applicable interest rates with respect to the Credit Facility. Borrowings under the Credit Facility bear interest, at our election, at one of the following (a) Term SOFR plus a margin ranging from 0.725% to 1.40%, (b) Daily SOFR plus a margin ranging from 0.725% to 1.40% or (c) the base rate plus a margin ranging from 0.00% to 0.40%. In each election, the actual margin is determined according to our credit ratings. The base rate means, for any day, a fluctuating rate per annum equal to the highest of (x) the agent’s prime rate, (y) the federal funds rate on such day plus 0.50% or (z) the adjusted Term SOFR for a one-month tenor in effect on such day plus 1.00%. In addition, the Credit Facility requires a facility fee equal to 0.125% to 0.300%, based on our credit rating on the $700.0 million committed capacity without regard to usage.

As of September 30, 2025, we had $600.0 million available to draw on the Credit Facility, subject to usual and customary covenants. Among other stipulations, our credit agreement requires that we maintain certain financial ratios within limits set by our creditors. As of September 30, 2025, we were in compliance with these covenants.

We have an unsecured bank term loan (the “Bank Term Loan”) that bears interest at a variable rate which is SOFR-based with a margin determined according to our credit ratings. Concurrently with the amendment of the Credit Facility on October 31, 2025, we also amended the Bank Term Loan to remove the 0.10% credit spread adjustment applicable to the SOFR interest rates. In April 2025, we exercised the first oftwo six-month options to extend the maturity date to December 2025. In September 2025, we repaid $75.0 million on the Bank Term Loan. In October 2025, we exercised the remaining six-month option to extend the maturity date on the Bank Term Loan to June 2026.

Pinnacle Bank is a participating member of our banking group. A member of our board of directors, who became the chairman of our board of directors effective in January 2025, is also the chairman of the board of directors of Pinnacle Financial Partners, Inc., the holding company for Pinnacle Bank. Our corporate banking transactions are conducted primarily through Pinnacle Bank.

2031 Senior Notes

In January 2021, we issued $400.0 million in aggregate principal amount of 3.00% unsecured senior notes that mature in February 2031 (the “2031 Senior Notes”) and require semi-annual interest payments. The 2031 Senior Notes were sold at an issue price of 99.196% of face value before the underwriters’ discount. The 2031 Senior Notes are subject to affirmative and negative covenants, including financial covenants. As of September 30, 2025, we were in compliance with these covenants.

2033 Senior Notes

On September 22, 2025, we issued $350.0 million in aggregate principal amount of 5.35% unsecured senior notes that mature in February 2033 (the “2033 Senior Notes”). The 2033 Senior Notes were sold at an issue price of 98.903% of face value, before the underwriters’ discount. Our net proceeds from the 2033 Senior Notes offering, after deducting underwriting discounts and expenses, were $342.5 million. We used the net proceeds to repay existing indebtedness. Interest on the 2033 Senior Notes is due semi-annually beginning in February 2026. The 2033 Senior Notes are subject to affirmative and negative covenants, including financial covenants. As of September 30, 2025, we were in compliance with these covenants.

Private Placement Notes

A summary of the principal amounts outstanding on our unsecured private placement notes as of September 30, 2025 follows ($ in thousands):

The private placement notes have a fixed interest rate and require interest only payments up to the respective maturity dates. Covenants pertaining to the private placement notes are generally conformed with those governing our Credit Facility, except for specific debt coverage ratios that are more restrictive. Our private placement notes include a provision that increases the fixed annual interest rate if any rating agency lowers the credit rating on our unsecured senior debt below investment grade and our compliance leverage increases to 50.0% or more.

On November 3, 2025, we repaid $50.0 million of the private placement notes upon maturity.

Fannie Mae Term Loans

In the second quarter of 2025, we repaid all of the Fannie Mae term loans, including accrued interest, which totaled $75.7 million.

Interest Expense

A summary of the components of interest expense follows($ in thousands):

Note 9. Commitments, Contingencies and Uncertainties

In the normal course of business, we enter into a variety of commitments, typically consisting of funding revolving credit arrangements, construction loans and mezzanine loans with our tenants, operators and other third parties. In our leasing operations, we may offer our tenants and the sellers of properties we acquire certain inducements that originate contractually as contingencies, but which may become commitments upon the satisfaction of the contingent event. Any contingent payments made by us are included in the respective lease base when funded.

As of September 30, 2025, we had loan commitments with eight operators or other borrowers totaling $149.7 million of which we had funded $105.5 million toward these commitments.

As of September 30, 2025, we had development commitments with seven tenants totaling $23.6 million of which we had funded $9.9 million toward these commitments.

As of September 30, 2025, we had an aggregate of $12.9 million in remaining contingent lease inducement commitments related tothree operators in which future payments, if any, are contingent on the respective facility operating performance over a specified period.

We provide for expected credit loss liabilities on our unfunded loan commitments based on the estimated amounts we expect to fund using the same methodology as the one applied to provide for credit loss reserves on our mortgages and other notes. The liabilities for expected credit losses on our unfunded loan commitments are included in accounts payable and other liabilities on our condensed consolidated balance sheets. Reference the “Credit Loss Reserves” section in Note 4 for additional information.

The following table provides a summary of the changes in our expected credit loss liabilities for the nine months ended September 30, 2025 ($ in thousands):

Litigation

From time to time, we are party to various lawsuits, investigations, claims and other legal and regulatory proceedings arising in connection with our business. Such claims may include, among other things, professional and general liability claims, as well as regulatory proceedings related to our SHOP segment. Further, from time to time, we are party to certain legal proceedings for which third parties, such as our tenants, managers and borrowers, are contractually obligated to indemnify us from and against various claims, litigation and liabilities arising in connection with their respective businesses. Management believes that the ultimate resolution of all such pending proceedings will have no material adverse effect on our financial condition, results of operations or cash flows.

Note 10. Redeemable Noncontrolling Interest

Certain provisions in the operating agreement related to the Merrill consolidated partnership entitle Merrill to put rights upon certain contingent events that are not solely within our control as the majority equity interest owner. As a result, Merrill’s noncontrolling interest in the partnership was deemed to be contingently redeemable and has been classified in the mezzanine section between liabilities and equity on our condensed consolidated balance sheets as of September 30, 2025 and December 31, 2024. We are required to remeasure the carrying value of the noncontrolling interest to its redemption value in the period it becomes known that a triggering event is probable to occur. As of September 30, 2025 and December 31, 2024, we concluded that the redemption criteria were not met.

The following table provides a summary of the activity in redeemable noncontrolling interest for the nine months ended September 30, 2025 ($ in thousands):

Note 11. Equity and Dividends

Forward Equity Sales Agreements

In August 2024, we entered into forward equity sales agreements with financial institutions to sell up to an aggregate of 2.8 million shares of common stock at an initial forward sales price of $68.40 per common share, pursuant to which the financial institutions borrowed and sold these shares of common stock in a public offering.

In the first quarter of 2025, we settled the remaining 1.0 million shares of common stock related to the August 2024 forward equity sales agreements at a forward price of $68.21 per common share for proceeds of $65.5 million.

As of September 30, 2025, we had no forward equity sales agreements outstanding.

ATM Equity Program

We maintain an ATM equity program which allows us to sell our common stock directly into the market. This program is governed by an ATM equity offering sales agreement which includes a forward sales provision that allows us to sell shares of our common stock to forward purchasers at a predetermined price at a future date. Pursuant to this agreement, we may sell, from time to time, up to an aggregate sales price of $500.0 million of our common stock.

In March 2025, we entered into ATM forward sales agreements with a financial institution to sell shares of our common stock which mature in the first quarter of 2026. Pursuant to these agreements, we sold 0.2 million shares on a forward basis at a weighted average price of $74.39 per common share, net of sales agent fees, which totaled $15.5 million. We did not receive any proceeds from the sale of shares of our common stock to the forward purchasers at the time of the sale.

In the second quarter of 2025, we issued 0.8 million shares of common stock, representing full settlement of the December 2024 ATM forward sales agreements and partial settlement of the March 2025 ATM forward sales agreements at a weighted average forward price of $74.71 per common share for aggregate proceeds of $58.0 million.

In June 2025, we entered into ATM forward sales agreements with a financial institution to sell shares of our common stock which mature in the second quarter of 2026. Pursuant to these agreements, we sold 1.3 million shares on a forward basis at a weighted average price of $71.41 per common share, net of sales agent fees, which totaled $91.8 million. We did not receive any proceeds from the sale of shares of our common stock to the forward purchasers at the time of the sale.

In the third quarter of 2025, we issued 0.2 million shares of common stock, representing full settlement of the remaining March 2025 ATM forward sales agreements at a weighted average forward price of $73.96 per common share for proceeds of $11.4 million.

During the three and nine months ended September 30, 2024, we didnot sell or settle any shares under the ATM equity program.

As of September 30, 2025, we had 1.3 million remaining shares of common stock available under ATM forward sales agreements representing proceeds of $90.6 million at a weighted average price of $70.47 per common share.

Dividends

The following table summarizes dividends declared by our board of directors or paid by us for the periods indicated:

On November 5, 2025, our board of directors declared a $0.92 per common share dividend payable on January 30, 2026 to common stockholders of record as of December 31, 2025.

Note 12. Share-Based Compensation

Our outstanding stock incentive awards have been granted under the 2012 Stock Incentive Plan and the 2019 Stock Incentive Plan, as amended and restated (the “2019 Plan”).

Restricted Stock Awards

In February 2025, we issued 29,500 restricted stock awards under the 2019 Plan to executive officers with a grant date fair value of $73.34 per share. These restricted stock awards vest over five years, with 20% vesting on each anniversary of the grant date beginning with the grant date and are subject to aone-year post-vesting hold. The holders of restricted stock awards have a non-forfeitable right to dividends or dividend equivalents during the vesting periods. During the nine months ended September 30, 2025,7,200 restricted stock awards vested. As of September 30, 2025, we had 54,100 unvested restricted stock awards outstanding with a weighted average grant date fair value of $64.29 per share.

Stock Options

During the nine months ended September 30, 2025 and 2024, we granted 579,500 stock options with a weighted average grant date fair value of $9.34 per share and 431,000 stock options with a weighted average grant date fair value of $7.36 per share, respectively.

We estimated the fair values of stock options granted at the respective grant dates using the following weighted average assumptions:

A summary of the activity related to our stock options for the nine months ended September 30, 2025 follows:

A summary of the activity related to our stock options for the nine months ended September 30, 2024 follows:

As of September 30, 2025, the intrinsic values of our stock options outstanding and exercisable were $16.7 million and $12.6 million, respectively.

Share-Based Compensation Expense

A summary of share-based compensation expense, net of forfeitures, by award type follows ($ in thousands):

As of September 30, 2025, we had unrecognized share-based compensation expense of $4.1 million that is expected to be recognized over the following periods: remainder of 2025 - $1.0 million, 2026 - $2.0 million, 2027 - $0.7 million, 2028 - $0.3 million and 2029 - $0.1 million.

Note 13. Earnings Per Share

The following table presents the calculations of basic and diluted earnings per share(in thousands, except share and per share amounts):

Note 14. Fair Value of Financial Instruments

A summary of the carrying amounts and fair values of our financial instruments that are not reported at their fair values on our condensed consolidated balance sheets are as follows ($in thousands):

Fixed rate debt is classified as a Level 2 measurement, and the fair values of these debt instruments are based on quoted prices for similar instruments or calculated utilizing model derived valuations in which significant inputs are observable in active markets.

Variable rate debt is classified as a Level 2 measurement, and the fair values of our borrowings under our Credit Facility and Bank Term Loan are estimated at their notional amounts due to the predominance of floating interest rates, which generally reflect market conditions.

Mortgage and other notes receivable, net, are classified as Level 3 measurements, and the fair values are estimated based on credit risk and discount rates that are not observable in the marketplace.

The carrying amounts of cash and cash equivalents, restricted cash, accounts receivable, accounts payable and other liabilities on our condensed consolidated balance sheets as of September 30, 2025 and December 31, 2024 approximate their fair values due to the short-term nature of these financial instruments and are classified as Level 1 measurements.

Note 15. Segment Reporting

We evaluate our business and make resource allocations based ontwo operating segments: Real Estate Investments and SHOP. The Real Estate Investments segment consists of our investments in acquiring senior housing and medical facility properties and providing financing to our tenants, operators or other third parties primarily for construction, renovation and expansion projects, funding of working capital or other corporate needs and the acquisition of real estate properties. We lease these properties primarily under triple-net leases and do not have involvement in the operations at the properties. The types of properties we acquire or finance include ILFs, ALFs, EFCs, SLCs, SNFs and HOSPs. Our SHOP segment consists of senior housing communities we own, which are operated on our behalf by third-party managers in exchange for a management fee. Reference Note 5 for additional information on our SHOP operations.

Our President and Chief Executive Officer serves as our Chief Operating Decision Maker (“CODM”). Our CODM reviews financial and other performance information quarterly based upon segment NOI. We define NOI as total revenues, less tenant reimbursements and property operating expenses. Our CODM evaluates NOI to make decisions about resource allocations to the segments and to assess our property level performance. The CODM evaluates revenue and operating expenses on a comparative basis for each segment, both sequentially and year-over-year, and also evaluates budget-to-actual variances on a quarterly basis. For our SHOP segment, the CODM reviews additional key performance indicators based on the revenues and operating expenses per occupied or available resident unit and based on revenues and functional expenses by resident.

Our non-segment / corporate revenue primarily consists of other income. We do not allocate non-property specific revenues and expenses to our operating segments in determining NOI. Our non-segment / corporate assets primarily include cash and cash equivalents, the corporate office and certain equipment.

On August 1, 2025, we entered into a series of concurrent transactions that included the transition ofseven properties from the Real Estate Investment segment to the SHOP segment. The operating results of these properties have been reflected in the Real Estate Investment segment prior to August 1, 2025 and in the SHOP segment from August 1, 2025 through September 30, 2025. There were no real estate property transitions in the three and nine months ended September 30, 2024. We do not have any other inter-segment transactions. Reference the “Discovery Transitions” section in Note 3 for additional information on the transitioned properties.

On December 31, 2024, we adopted ASU 2023-07, Segment Reporting (TOPIC 280): Improvements to Reportable Segment Disclosures, which required presentation of segment expenses in greater detail. As a result, the segment tables below for the three and nine months ended September 30, 2024 has been recasted to conform with the presentation in the current year tables.

The following tables provide information on our operating segments ($ in thousands):

2 Amounts include investments in acquiring, renovating and expanding real estate properties and purchases of equipment.

2 Amounts include investments in acquiring, renovating and expanding real estate properties and purchases of equipment.

The following table provides a summary of our total assets by segment($ in thousands):

Note 16. Variable Interest Entities

Consolidated Variable Interest Entities

We are the majority equity partner in certain entities that we have deemed to be VIEs. For each of these partnerships, we determined whether either the members as a group lack the characteristics of a controlling financial interest or the total equity at risk in the individual partnership is insufficient to finance the activities of the partnership without additional subordinated financial support. We are deemed the primary beneficiary of these VIEs because we have the ability to direct the activities that most significantly impact the economic performance of these partnerships and also have the obligation to absorb the losses of the partnership or have the right to receive benefits arising from the partnership, subject to limited protective rights extended to our partners for specified business decisions. Reference the “Discovery Transitions” section in Note 3 for information on the dissolution of the Discovery partnership on August 1, 2025.

The following table provides information on the assets and liabilities of our consolidated VIEs($ in thousands):

Unconsolidated Variable Interest Entities

In our Real Estate Investments segment, we have concluded that we are not the primary beneficiary for certain investments where we lack either directly, or through related parties, the power to direct the activities that most significantly impact the economic performance of these entities. We do not have any unconsolidated VIEs in our SHOP segment.

The following table provides a summary of our relationships and sources of exposure as of September 30, 2025 related to our unconsolidated VIEs ($ in thousands):

1 Note, straight-line rents receivable and interest receivable

2 Loan commitment, equity method investment, straight-line rent receivable and unamortized lease incentive

3 Formerly referred to as Watermark Retirement

4 Straight-line rents receivable and unamortized lease incentive

5 Representstwo mezzanine loans originating from the sales of real estate properties

We are not obligated to provide support beyond our stated commitments to these tenants and borrowers whom we classify as VIEs, and accordingly, our maximum exposure to loss as a result of these relationships is limited to the amount of our commitments. Our risk of economic loss on a tenant lease in excess of what is presented in the table above is limited to any future non-payments of rent before we are able to take effective remedial action, as well as any costs incurred to secure a new lease at the property. The potential extent of such losses at a future date would depend upon facts and circumstances unique to each tenant and the related lease and therefore are not included in the table above.

In the future, we may be deemed the primary beneficiary of the operations if the tenants or borrowers do not have adequate liquidity to accept the risks and rewards as the tenants and operators of the properties and we may be required to consolidate the financial position and results of operations of the tenants or borrowers.