LTC PROPERTIES INC

LTC Properties, Inc., a health care real estate investment trust (“REIT”), was incorporated on May 12, 1992 in the State of Maryland and commenced operations on August 25, 1992. We invest primarily in seniors housing and health care properties primarily through sale-leasebacks, mortgage financing, joint ventures and structured finance solutions including preferred equity and mezzanine lending. Additionally, during the second quarter of 2025, we began utilizing the structure authorized by the REIT Investment Diversification and Empowerment Act of 2007 (Commonly referred to as “RIDEA”) as permitted by the Housing and Economic Recovery Act of 2008.

Our primary seniors housing and health care property classifications include skilled nursing centers (“SNF”), independent living communities (“ILF”), assisted living communities (“ALF”), memory care communities (“MC”) and combinations thereof. Independent living communities, assisted living communities, memory care communities and combinations thereof are included in the seniors housing communities classification (“SH”). We also invest in other (“OTH”) types of properties, such as land parcels, projects under development (“UDP”) and behavioral health care hospitals.

Our primary objectives are to create, sustain and enhance stockholder equity value and provide current income for distribution to stockholders through real estate investments in seniors housing and health care properties managed by experienced operators. To meet these objectives, we attempt to invest in properties that provide an opportunity for additional value and current returns to our stockholders and diversify our investment portfolio by geographic location, operator, property classification and form of investment.

Basic of Presentation

We have prepared consolidated financial statements included herein without audit and in the opinion of management have included all adjustments necessary for a fair presentation of the consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and note disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to rules and regulations governing the presentation of interim financial statements.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of our company and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. The results of operations for the three and nine months ended September 30, 2025 and 2024 are not necessarily indicative of the results for a full year.

Segments

As explained above, we began utilizing the RIDEA structure in the second quarter of 2025, and established a seniors housing operating portfolio (“SHOP”) segment. Accordingly, effective in the second quarter of 2025, we conduct and manage our business astwo operating segments, for reporting and decision-making purposes: real estate investments and SHOP. SeeNote 16 to our consolidated financial statements for more information.

Our real estate investments segment consists of owned properties that are leased pursuant to non-cancelable triple-net operating (“NNN” or “Triple-Net”) leases, financing receivables, mortgage loans, notes receivable and unconsolidated joint ventures.

During 2025, we terminated the Anthem Memory Care, LLC (“Anthem”) and New Perspective Senior Living, LLC. (“New Perspective”) Triple-Net master leases and converted the 13 communities covered under the master leases into our new SHOP segment. Additionally, we acquired eight seniors housing communities within our SHOP segment during the third quarter of 2025. Accordingly, as of September 30, 2025, our SHOP segment is comprised of 21 ILF, ALF and MC that are managed on behalf of LTC byfive independent operators pursuant to the terms of separate management agreements.

Revenue Recognition-SHOP

Resident fees and services represent all amounts earned from residents within our SHOP segment, as outlined in individual resident agreements. Fees are billed monthly based on contracted rates in the resident agreements, or where applicable, reimbursement rates established by Medicaid and Medicare. Resident fees and services revenue is derived from amounts paid by residents and/or third-party payors. Resident agreements typically vary in duration. Revenue is recognized in accordance with Accounting Standards Codification (“ASC”) 606,Revenue from Contracts with Customers (“ASC 606”) when performance obligations are satisfied.

Independent living communities, assisted living communities, memory care communities and combinations thereof are included in the seniors housing communities classification (“SH”).

Any reference to the number of properties or facilities, number of units, number of beds, number of operators and yield on investments in real estate are unaudited and outside the scope of our independent registered public accounting firm’s review of our consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board.

Owned Properties

Our owned property investments include 107 properties leased to 20 different operators under Triple-Net leases, and 21 properties operated on our behalf byfive independent operators pursuant to separate management agreements. The following tables summarize our investments in owned properties at September 30, 2025*(dollar amounts in thousands)*:

During the nine months ended September 30, 2025 and 2024, we invested in the following capital improvement projects in our owned properties (dollar amounts in thousands):

Intangible Assets. We make estimates as part of our allocation of the purchase price of acquisitions to various components of the acquisition based upon the fair value of each component. In determining fair value, we use current appraisals or other third-party opinions of value. The most significant components of our allocations are typically the allocation of fair value to land and buildings, and for certain of our acquisitions, in-place leases and other intangible assets. In the case of the value of in-place leases, we make estimates based on the evaluation of the specific characteristics of each tenant’s lease. Factors considered include estimates of carrying costs during the hypothetical expected lease-up periods, market conditions and costs to execute similar leases. The following is a summary of the carrying amount of intangible assets as of September 30, 2025 and December 31, 2024*(in thousands)*:

The following table provides future amortization expenses related to the intangible assets at September 31, 2025 (in thousands):

Owned Properties- Triple-Net

Our Triple-Net leases require the lessee to pay all taxes, insurance, maintenance and repairs, capital and non-capital expenditures and other costs necessary in the operations of the facilities. Many of the leases contain renewal options. The majority of our leases contain provisions for specified annual increases over the rents of the prior year. Many of our existing leases contain renewal options that, if exercised, could result in the amount of rent payable upon renewal being greater than that currently being paid.

The following table outlines information related to our Triple-Net lease extensions during the nine months ended September 30, 2025 (dollar amounts in thousands):

Additionally, during 2025, we terminatedtwo existing leases with the same operator and combined them into a single master lease. The new master lease has afive-year term withone 1-year extension option andfour 5-year extension options. Annual cash rent is $2,547,000 for the first lease year, escalating by 2% annually thereafter. In connection with the termination of these leases, we wrote-off the related straight-line rent receivable and lease incentive balances during the nine months ended September 30, 2025. See next page for details.

Also, during 2025, we terminated the Anthem Triple-Net master leases and converted the communities covered under the master leases into our SHOP segment. In conjunction with the conversion, during 2025, we wrote-off Anthem’s working capital note of $2,693,000 and the related interest receivable of $371,000. In addition, we terminated our New Perspective Triple-Net lease and converted the community covered under the lease into our SHOP segment. In connection with the conversion, we paid New Perspective a $5,971,000 lease termination fee. For more information regarding these communities, seeOwned Properties-SHOP below.

We monitor the collectability of our receivable balances, including deferred rent receivable balances, on an ongoing basis. We write-off uncollectible operator receivable balances, including straight- line rent receivable and lease incentives balances, as a reduction to rental income in the period such balances are no longer probable of being collected. Therefore, recognition of rental income is limited to the lesser of the amount of cash collected or rental income reflected on a “straight-line” basis for those customer receivable balances deemed uncollectible. During the three months ended September 30, 2025, we wrote-off straight-line rent receivable balance of $1,271,000 in connection with the on-going Genesis Chapter 11 bankruptcy filing. Additionally, during the nine months ended September 30, 2025, we wrote-off straight-line rent receivable and lease incentive balances of $243,000 and $249,000, respectively, in connection with the termination oftwo existing leases with the same operator and combining them into a master lease, as discussed above. During the nine months ended September 30, 2024, we wrote-off a straight-line rent receivable balance of $321,000 as a result of converting a lease to fair-market rent resets and a lease incentive balance of $190,000 as a result of property sales.

We continue to take into account the current financial condition of our operators in our estimation of uncollectible accounts at September 30, 2025. We are closely monitoring the collectability of such rents and will adjust future estimations as appropriate as further information becomes known.

The following table summarizes components of our rental income for the three and nine months ended September 30, 2025 and 2024*(in thousands):*

Some of our lease agreements provide purchase options allowing the lessees to purchase the properties they currently lease from us. The following table summarizes information about purchase options included in our lease agreements*(dollar amounts in thousands):*

*Properties Held -for-Sale.*The following summarizes our held-for-sale properties as of September 30, 2025 and December 31, 2024 (dollar amounts in thousands):

Acquisitions.The following table summarizes our acquisitions within our Triple-Net segment for the nine months ended September 30, 2025 and 2024(dollar amounts in thousands):

Properties Sold. During the nine months ended September 30, 2025 we recognized a net loss on sale of real estate of $235,000. During the nine months ended September 30, 2024, we recognized a net gain on sale of real estate of $6,882,000. The following table summarizes property sales during the nine months ended September 30, 2025 and 2024* (dollar amounts in thousands):*

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Owned Properties-SHOP

As discussed above, during the second quarter of 2025, we terminated the Anthem and New Perspective Triple-Net master leases and converted the communities covered under the master leases into our new SHOP segment. Additionally, during the third quarter of 2025, we acquired eight seniors housing communities within our SHOP segment. Accordingly, as of September 30, 2025, our SHOP segment is comprised of 21 seniors housing communities that are managed on behalf of LTC byfive independent operators pursuant to the terms of separate management agreements.

The following table summarizes acquisitions within our SHOP segment during the nine months ended September 30, 2025 (dollar amounts in thousands):

The following table presents the total acquisition costs allocated to assets acquired (in thousands):

The following table provides information regarding our SHOP segment as of September 30, 2025*(dollar amounts in thousands):*

Financing Receivables

As part of our acquisitions, we may invest in sale and leaseback transactions. In accordance with the accounting guidance, we must determine whether each sale and leaseback transaction qualifies as a sale. Generally, an option for the seller-lessee to repurchase a real estate asset precludes accounting for the transfer of the asset as a sale and the purchased assets should be presented as financing receivables.

We have entered into joint venture agreements and contributed into these JVs for the purchase of properties through sale and leaseback transactions. Concurrently, each of these JVs leased the purchased properties back to an affiliate of the seller and provided the seller-lessee with purchase options. Accordingly, these sale and leaseback transactions meet the accounting criteria to be presented as financing receivables. Furthermore, we determined that we exercise power over and receive benefits from each of these joint ventures. Therefore, we consolidated the joint ventures asFinancing Receivables on ourConsolidated Balance Sheets and recorded the rental revenue from these joint ventures asInterest income from financing receivables on ourConsolidated Statements of Income.

The following tables provide information regarding our investments in financing receivables at September 30, 2025 (dollar amounts in thousands):

Mortgage Loans

The following table sets forth information regarding our investments in mortgage loans secured by first mortgages at September 30, 2025*(dollar amounts in thousands)*:

As noted in the table above, we modified the Prestige$180,388,000 mortgage loan to increase the current interest paid by the borrower from 8.5% to the full contractual interest rate of 11.14% escalated annually. The modification was effective July 1, 2025. Additionally, the modification provides Prestige an option to prepay their mortgage loan at par and without penalty within a 12-month window beginning in July 2026. In evaluating the impact of the prepayment provisions allowing the borrower to settle the obligation at an amount less than amounts previously accrued under the effective interest method, we wrote-off$41,455,000 of interest receivable previously accrued related to this mortgage loan during the three months ended September 30, 2025.

The following table summarizes our mortgage loan activity for the nine months ended September 30, 2025 and 2024*(in thousands):*

We have a preferred equity investments in one joint venture and an acquisition, development and construction (“ADC”) loan. We determined that each of these JVs meet the accounting criteria to be considered a variable interest entity (“VIE”). We are not the primary beneficiary of the JVs as we do not have both: 1) the power to direct the activities that most significantly affect the JVs’ economic performance, and 2) the right to receive benefits from the VIE or the obligation to absorb losses of the VIE that could be significant to the VIE. However, we do have significant influence over the JVs. Therefore, we have accounted for the JVs using the equity method of accounting. During 2025, we received $15,962,000, which includes a 13% exit IRR of $2,962,000, from the redemption of our preferred equity investment in a joint venture that owns a 267-unit independent and assisted living community in Washington. The following table provides information regarding our unconsolidated joint venture investments at September 30, 2025*(dollar amounts in thousands):*

The following table summarizes our capital contributions, income recognized, and cash interest received related to our investments in unconsolidated joint ventures during the nine months ended September 30, 2025 and 2024*(in thousands):*

Notes receivable consist of working capital loans and a mezzanine loan. The following table summarizes our investments in notes receivable at September 30, 2025 (dollar amounts in thousands):

The following table is a summary of our notes receivable components as of September 30, 2025 and December 31, 2024*(in thousands):*

The following table summarizes our notes receivable activity for the nine months ended September 30, 2025 and 2024*(in thousands):*

Our non-contingent lease incentive balances at September 30, 2025 and December 31, 2024 were $2,717,000 and $3,522,000, respectively. The following table summarizes our lease incentives activity for the nine months ended September 30, 2025 and 2024*(in thousands)*:

Non-contingent lease incentives represent payments made to our lessees for various reasons including entering into a new lease or lease amendments and extensions. Contingent lease incentives represent potential contingent earn-out payments that may be made to our lessees in the future, as part of our lease agreements. From time to time, we may commit to provide contingent payments to our lessees, upon our properties achieving certain rent coverage ratios. Once the contingent payment becomes probable and estimable, the contingent payment is recorded as a lease incentive. Lease incentives are amortized as a yield adjustment to rental income over the remaining life of the lease.

We apply ASC Topic 326,Financial Instruments-Credit Losses (“ASC 326”), which requires a forward-looking “expected loss” model, to estimate our loan losses. We determined ourFinancing receivables,Mortgage loans receivable andNotes receivable line items on ourConsolidated Balance Sheets are within the scope of ASC 326.

Financing receivables. We obtained controlling interests in JVs that acquired properties through sale and leaseback transactions. The JVs concurrently leased the purchased properties to affiliates of sellers and provided the sellers-lessees with purchase options. We consolidated the JVs asFinancing receivables on ourConsolidated Balance Sheets. For more information regarding these transactions See Note 3.Real Estate Investments above. At September 30, 2025, we had investments infour JVs accounted for as financing receivables that owned 31 properties inthree states. In addition to owning the properties through our controlling interests in the JVs, generally, these leases provide one or more of the following: security deposits, property tax impounds, repair and maintenance escrows and other credit enhancements such as corporate or personal guarantees or letters of credit.

Mortgage loans. As part of our strategy of making investments in properties used in the provision of long-term health care services, we provided mortgage loan financing on such properties. At September 30, 2025, we hadten mortgage loans secured by 27 properties infive states withsix borrowers. In addition to a lien on the mortgaged properties, the loans are generally secured by non-real estate assets of the properties and contain certain other security provisions in the form of letters of credit and/or security deposits.

Notes receivable. Our notes receivable consist of working capital notes and a mezzanine loan. Security for these notes can include all or a portion of the following credit enhancements: secured second mortgage, pledge of equity interests and personal/corporate guarantees.

The following table summarizes our financial instruments within the scope of ASC 326 by year of origination (dollar amounts in thousands):

We monitor the credit quality of our financial instruments through a variety of methods determined by the underlying collateral or other protective rights, operator’s payment history and other internal metrics. Our monitoring process includes periodic review of financial statements for each facility, scheduled property inspections and review of covenant compliance, industry conditions and current and future economic conditions. The future economic conditions are based on the economic data from the Federal Reserve and reasonable assumptions for the future economic trends.

In determining the “expected” credit loss reserves on these instruments, we utilize the probability of default and discounted cash flow methods. Further, we stress-test the results to reflect the impact of unknown adverse future events including recessions.

The expected credit losses related to our financial instruments that are within the scope of ASC 326 are as follows (in thousands):

We elected not to measure an allowance for expected credit losses on accrued interest receivable under the expected credit loss standard as we have a policy in place to reserve or write off accrued interest receivable in a timely manner through our quarterly review of the loan and property performance. Therefore, we elected the policy to write off accrued interest receivable by recognizing credit loss expense. As of September 30, 2025, the total balance of accrued interest receivable of $21,535,000 was not included in the measurement of expected credit loss. During the nine months ended September 30, 2025, we wrote-off Anthem’s interest receivable of $371,000 in connection with the conversion of Anthem’s Triple-Net leases to SHOP as explained in Note 3.Real Estate Investments. During the nine months ended September 30, 2024, we wrote-off $613,000 of interest receivable related to a partial paydown of a mortgage loan.

The following is a summary of our prepaid expenses and other assets at September 30, 2025 and December 31, 2024 (dollar amounts in thousands):

*Unsecured Credit Facility.*Through the first quarter of 2024, we had an unsecured credit agreement (the “Original Credit Agreement”) that provided for an aggregate commitment of the lenders of up to $500,000,000 comprising of a $400,000,000 revolving credit facility (the “Revolving Line of Credit”) andtwo $50,000,000 term loans (the “Term Loans”). The Term Loans had maturities of November 19, 2025 and November 19, 2026. The Revolving Line of Credit had a maturity date of November 19, 2025 and provided aone-year extension option at our discretion, subject to customary conditions.

During the first quarter of 2024, we entered into an amendment to the Original Credit Agreement (the “Credit Agreement”) to accelerate ourone-year extension option notice and exercised our option to extend the maturity date to November 19, 2026. Other material terms of the Original Credit Agreement remained unchanged. The Credit Agreement permitted us to request increases to the Revolving Line of Credit and Term Loans commitments up to a total of $1,000,000,000 (the “Accordion”). As permitted under the terms of the Credit Agreement, we exercised $25,000,000 of the available $500,000,000 Accordion feature of the Revolving Line of Credit during the third quarter of 2024. Accordingly, the aggregate commitment of the lenders under the Credit Agreement increased to $525,000,000, with $475,000,000 remaining available under the Accordion. The exercise of the Accordion did not change any other term or condition of the Credit Agreement, including its maturity date or covenant requirements.

During the third quarter of 2025, we entered into a newfour-year unsecured credit agreement (the “New Credit Agreement”) maturing in July 2029, to replace our previous Credit Agreement. The New Credit Agreement increased the aggregate commitment on our revolving line of credit from $425,000,000 to $600,000,000 and provides for the opportunity to increase the total commitment to an aggregate $1,200,000,000. The New Credit Agreement provides for aone-year extension option, subject to customary conditions. Material terms of the New Credit Agreement remain unchanged. In connection with the New Credit Agreement, the Term Loans were rolled into the new revolving line of credit, keeping the interest rate swap agreements intact at an average 2.3% rate, based on current margins. Based on our leverage at September 30, 2025, the facility provides for interest annually at SOFR plus 115 basis points and a facility fee of 20 basis points.

Interest Rate Swap Agreements. In connection with entering into the Term Loans described above, we entered intotwo receive variable/pay fixed interest rate swap agreements (the “Interest Rate Swaps”) with maturities of November 19, 2025 and November 19, 2026, respectively, that effectively locked in the forecasted interest payments on the Term Loans’ borrowings over their four andfive year terms of the loans. The Interest Rate Swaps are considered cash flow hedges and are recorded on ourConsolidated Balance Sheets at fair value inPrepaid expenses and other assets, with cumulative changes in the fair value of these instruments recognized inAccumulated other comprehensive income (loss) on ourConsolidated Balance Sheets. As discussed above, during the three months ended September 30, 2025, the Term Loans were paid off using proceeds from our new revolving line of credit under our New Credit Agreement, keeping the Interest Rate Swaps intact through November 2025 at 2.3% and November 2026 at 2.4%, based on current margins. During the three and nine months ended September 30, 2025, we recorded a decrease of $729,000 and $2,356,000 to the fair value of Interest Rate Swaps, respectively. During the three and nine months ended September 30, 2024, we recorded a decrease of $2,326,000 and $2,471,000 to the fair value of Interest Rate Swaps, respectively.

Information regarding our Interest Rate Swaps measured at fair value, which are classified as Level 2 of the fair value hierarchy is presented below (dollar amounts in thousands):

*Senior Unsecured Notes.*We have senior unsecured notes held by institutional investors with interest rates ranging from 3.66% to 4.50%. The senior unsecured notes mature between 2026 and 2033.

The senior unsecured notes and the Credit Agreement, contain financial covenants, which are measured quarterly, that require us to maintain, among other things:

At September 30, 2025, we were in compliance with all applicable financial covenants. These debt obligations also contain additional customary covenants and events of default that are subject to a number of important and significant limitations, qualifications and exceptions.

The following table sets forth information regarding debt obligations by component as of September 30, 2025 and December 31, 2024 (dollar amounts in thousands):

During the nine months ended September 30, 2025 and 2024, our debt borrowings and repayments were as follows (in thousands):

The following is a summary of our accrued expenses and other liabilities (dollar amounts in thousands):

11.

*Non-controlling Interests.*We have entered into partnerships to develop and/or own real estate. Given that our limited members do not have the substantive kick-out rights, liquidation rights, or participation rights, we have concluded that the partnerships are VIEs. As we exercise power over and receive benefits from the VIEs, we are considered the primary beneficiary. Accordingly, we consolidate the VIEs and record the non-controlling interests on the consolidated financial statements.

As of September 30, 2025, we have the following consolidated VIEs*(in thousands):*

During the nine months ended September 30, 2025, we acquired our JV partner’s non-controlling interest in a JV that ownstwo seniors housing communities in Oregon with a total of 186 units for $1,150,000 resulting in us controlling full ownership of these communities. As a result, these VIEs are not listed in the table above.

*Common Stock.*We had separate equity distribution agreements (collectively, the “Original Equity Distribution Agreements”) to offer and sell, from time to time, up to $200,000,000 in aggregate offering price of shares of our common stock. During the fourth quarter of 2024, we terminated our Original Equity Distribution Agreements and entered into a new equity distribution agreement (the “Equity Distribution Agreement”) to offer and sell, from time to time, up to $400,000,000 in aggregate offering price of shares of our common stock. The Equity Distribution Agreement provides for sales of common shares to be made by means of ordinary brokers’ transactions, which may include block trades, or transactions that are deemed to be “at the market” offerings.

During the nine months ended September 30, 2025, we sold 1,655,100 shares of common stock for $59,316,000 in net proceeds under our Equity Distribution Agreement. In conjunction with the sale of common stock, we incurred $353,000 of costs associated with this agreement which have been recorded in additional paid in capital as a reduction of proceeds received. At September 30, 2025, we had $330,271,000 available under the Equity Distribution Agreement. Subsequent to September 30, 2025, we sold 281,400 shares of common stock for $10,260,000 in net proceeds under our Equity Distribution Agreement. Accordingly, we have $319,881,000 available under the Equity Distribution Agreement.

During the nine months ended September 30, 2024, we sold 1,886,900 shares of common stock for $65,629,000 in net proceeds under our Original Equity Distribution Agreements. In conjunction with the sale of common stock, we incurred $119,000 of costs associated with this agreement which have been recorded in additional paid in capital as a reduction of proceeds received.

During the nine months ended September 30, 2025 and 2024, we acquired 151,018 shares and 49,540 shares, respectively, of common stock held by employees who tendered owned shares to satisfy tax withholding obligations.

Available Shelf Registration. We have an automatic shelf registration statement on file with the SEC, and currently have the ability to file additional automatic shelf registration statements, to provide us with capacity to publicly offer an indeterminate amount of common stock, preferred stock, warrants, debt, depositary shares, or units. We may from time to time raise capital under our automatic shelf registration statement in amounts, at prices, and on terms to be announced when and if the securities are offered. The specifics of any future offerings, along with the use of proceeds of any securities offered, will be described in detail in a prospectus supplement, or other offering materials, at the time of the offering. Our shelf registration statement expires in November 2027.

Distributions. We declared and paid the following cash dividends*(in thousands)*:

In October 2025, we declared a monthly cash dividend of $0.19 per share on our common stock for the months of October, November and December 2025, payable on October 31, November 28, and December 31, 2025, respectively, to stockholders of record on October 23, November 20, and December 23, 2025, respectively.

Stock-Based Compensation. During 2021, we adopted and our shareholders approved the 2021 Equity Participation Plan (“the 2021 Plan”) which replaces the 2015 Equity Participation Plan (“the 2015 Plan”). Under the 2021 Plan,1,900,000 shares of common stock have been authorized and reserved for awards, lessone share for everyone share that was subject to an award granted under the 2015 Plan after December 31, 2020 and prior to adoption. In addition, any shares that are not issued under outstanding awards under the 2015 Plan because the shares were forfeited or cancelled after December 31, 2020 will be added to and again be available for awards under the 2021 Plan. Under the 2021 Plan, the shares were authorized and reserved for awards to officers, employees, non-employee directors and consultants. The

terms of the awards granted under the 2021 Plan and the 2015 Plan are set by our compensation committee at its discretion. Beginning in the first quarter of 2024, we entered into Performance Stock Unit Award Agreements, based upon absolute and relative total shareholder return, under the 2021 Plan.

During the nine months ended September 30, 2025 and 2024, no stock options were granted or exercised. During the nine months ended September 30, 2024,5,000 stock options expired and were cancelled. At September 30, 2025 and 2024, we hadno stock options outstanding and exercisable.

The following table summarizes our restricted stock activity for the nine months ended September 30, 2025 and 2024*:*

During the nine months ended September 30, 2025,182,915 units of performance-based stock units vested, which includes the accelerated vesting of 19,694 performance-based stock units in connection with an employee’s retirement. No performance-based stock units vested during the nine months ended September 30, 2024.

During the nine months ended September 30, 2025 and 2024, we granted restricted stock and performance-based stock units under the 2021 Plan as follows:

Compensation expense recognized related to the vesting of restricted common stock and performance-based stock units for the nine months ended September 30, 2024 was$6,791,000. Compensation expense recognized related to the vesting of restricted common stock and performance-based stock units for the nine months ended September 30, 2025, was$7,188,000, which includes$700,000 of compensation expense related to accelerated vesting of restricted common stock and performance-based stock units in connection with an employee’s retirement. Accordingly, the remaining compensation expense to be recognized related to the future service period of unvested outstanding restricted common stock and performance-based stock units are as follows*(in thousands):*

At September 30, 2025, we had commitments as follows*(in thousands):*

Additionally, some of our lease agreements provide purchase options allowing the lessee to purchase the properties they currently lease from us. SeeNote 3. Real Estate Investments for a table summarizing information about our purchase options.

We are a party from time to time to various general and professional liability claims and lawsuits asserted against the lessees or borrowers of our properties, which in our opinion are not singularly or in the aggregate material to our results of operations or financial condition. These types of claims and lawsuits may include matters involving general or professional liability, which we believe under applicable legal principles are not our responsibility as a non-possessory landlord or mortgage holder. We believe that these matters are the responsibility of our lessees and borrowers pursuant to general legal principles and pursuant to insurance and indemnification provisions in the applicable leases or mortgages. We intend to continue to vigorously defend such claims.

Within our real estate investment segment, two operators each account for approximately 10% or more of ourTotal revenues. Our SHOP segment is not subject to operator concentration, as the communities are operated on our behalf by independent operators under management agreements. In addition, resident agreements are entered into with individual residents. Accordingly, we are not exposed to operator credit risk to the same extent as within our real estate investment segment. The following table presents information regarding our major operators as of September 30, 2025:

Our financial position and ability to make distributions may be adversely affected if Prestige Healthcare, ALG Senior Living or any of our lessees and borrowers face financial difficulties, including any bankruptcies, inability to emerge from bankruptcy, insolvency or general downturn in business of any such operator, or in the event any such operator does not renew and/or extend its relationship with us.

The following table sets forth the computation of basic and diluted net income per share (in thousands, except per share amounts):

In accordance with the accounting guidance regarding the fair value option for financial assets and financial liabilities, entities are permitted to choose to measure certain financial assets and liabilities at fair value, with the change in unrealized gains and losses reported in earnings. We did not elect the fair value option for any of our financial assets and financial liabilities.

The carrying amount of cash and cash equivalents approximates their fair value because of the short-term maturity of these instruments. We do not invest our cash in auction rate securities. The carrying value and estimated fair value of our financial instruments as of September 30, 2025 and December 31, 2024 were as follows (in thousands):

We use the management approach in determining the reportable operating segments. The management approach considers the internal organization and reporting used by our chief operating decision maker (“CODM”) for making operating decisions, allocating resources and assessing performance as the source for determining our reportable segments. In making this determination, we:

During the nine months ended September 30, 2025 and 2024, the CODM has been collectively identified as our Executive Chairman and Co-CEOs, who share the responsibility for allocating resources and assessing segment performance.

During the second quarter of 2025, we began utilizing the RIDEA structure and established our SHOP segment. Accordingly, we conduct and manage our business astwo operating segments: real estate investments and SHOP and our CODM evaluated the performance of our investments based on net operating income (“NOI”). For more information and reconciliation of NOI seeItem 2. Non-GAAP Financial Measures. Summary information by reportable segment for the three and nine months ended September 30, 2025 is as follows*(unaudited, in thousands):*

During the three and nine months ended September 30, 2024, we operated underone reportable segment. Summary information by reportable segment for the three and nine months ended September 30, 2024 is as follows (unaudited, in thousands):

Total assets by reportable business segment and segment-level significant expense categories are not disclosed as our CODM do not review such information to evaluate business performance and allocate resources.

Our Company qualifies as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended. As such, we generally are not taxed on income that is distributed to our stockholders. Under RIDEA, a REIT may lease a "qualified healthcare property" on an arm's-length basis to a taxable REIT subsidiary ("TRS") if the property is operated on behalf of such TRS by a person who qualifies as an “eligible independent operator”. Generally, the rent received from the TRS will meet the related party exception and will be treated as “rents from real property”. A "qualified healthcare property" includes real property and any personal property that is, or is necessary or incidental to the use of, a hospital, nursing facility, assisted living facility, congregate care facility, qualified continuing care facility, or other licensed facility which extends medical or nursing or ancillary services to patients. Resident fees and services revenue and related operating expenses for these facilities are reported on ourConsolidated Statements of Income and are subject to federal, state and local income taxes. Our provision for income taxes for the three and nine months ended September 30, 2025, was an expense of $42,000 and a benefit of $39,000, respectively. At September 30, 2025, our deferred income tax assets and deferred income tax liabilities with respect to our TRS entity were $332,000 and $80,000, respectively.

Subsequent to September 30, 2025, the following events occurred:

Real Estate. We acquired an 88-unit seniors housing community within our SHOP segment in Georgia for $22,900,000. In conjunction with the acquisition, we entered into a management agreement with an operator new to us.

*Property Sales.*We soldtwo skilled nursing centers in Florida totaling 240 beds for $43,000,000. We received $41,900,000 of net proceeds and expect to record a gain on sale of approximately $26,000,000. Additionally, we sold five skilled nursing centers in Virginia (4) and California (1) with a total of 656 beds for an aggregate sales price of $79,950,000. We will use the total proceeds of $78,900,000 in a 1031 exchange for the acquisitions within our SHOP segment and anticipate recording an aggregate gain on sale of approximately $52,000,000. These seven properties had an aggregate gross book value and net book value of $71,742,000 and $42,458,000, respectively.

Debt. We repaid$62,900,000 under our unsecured revolving line of credit. Accordingly, we have $485,550,000 outstanding and $114,450,000 available for borrowing under our unsecured revolving line of credit.

Equity: We sold 281,400 shares of common stock for $10,260,000 in net proceeds under our Equity Distribution Agreements. Accordingly, we have $319,881,000 available under our Equity Distribution Agreements.

Additionally, we declared a monthly cash dividend of $0.19 per share on our common stock for the months of October, November and December 2025, payable on October 31, November 28, and December 31, 2025, respectively to stockholders of record on October 23, November 20, and December 23, 2025, respectively.