American Healthcare REIT, Inc.

Previous wording

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to promote understanding of our results of operations and financial condition. Such discussion is provided as a supplement to, and should be read in conjunction with our accompanying consolidated financial statements and notes thereto appearing elsewhere in this Annual Report on Form 10-K. Such consolidated financial statements and information have been prepared to reflect our financial position as of December 31, 2024 and 2023, together with our results of operations and cash flows for the years ended December 31, 2024, 2023 and 2022. This section discusses the results of operations and cash flows for fiscal year 2024 compared to fiscal year 2023. We have omitted the discussion related to the results of operations and changes in financial condition for fiscal year 2023 compared to fiscal year 2022 from this Annual Report on Form 10-K, but such discussion may be found in Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, in our fiscal year 2023 Annual Report Form 10-K, which was filed with the U.S. Securities and Exchange Commission, or the SEC, on March 22, 2024.

Current wording

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to promote understanding of our results of operations and financial condition. Such discussion is provided as a supplement to, and should be read in conjunction with our accompanying consolidated financial statements and notes thereto appearing elsewhere in this Annual Report on Form 10-K. Such consolidated financial statements and information have been prepared to reflect our financial position as of December 31, 2025 and 2024, together with our results of operations and cash flows for the years ended December 31, 2025, 2024 and 2023. This section discusses the results of operations and cash flows for fiscal year 2025 compared to fiscal year 2024. We have omitted the discussion related to the results of operations and changes in financial condition for fiscal year 2024 compared to fiscal year 2023 from this Annual Report on Form 10-K, but such discussion may be found in Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, in our fiscal year 2024 Annual Report Form 10-K, which was filed with the U.S. Securities and Exchange Commission, or the SEC, on February 28, 2025. Our results of operations and financial condition, as reflected in the accompanying consolidated financial statements and related notes, are subject to management’s evaluation and interpretation of business conditions, changing capital market conditions, and other factors that could affect the ongoing operations and occupancy of our tenants and residents.

Previous wording

Certain statements contained in this report, other than historical facts, may be considered forward-looking statements within the meaning of Section 27A of the Securities Act, Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and the Private Securities Litigation Reform Act of 1995 (collectively with the “Securities Act and Exchange Act, or the Acts”). We intend for all such forward-looking statements to be covered by the applicable safe harbor provisions for forward-looking statements contained in the Acts. Such forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “will,” “can,” “expect,” “intend,” “anticipate,” “estimate,” “believe,” “continue,” “possible,” “initiatives,” “focus,” “seek,” “objective,” “goal,” “strategy,” “plan,” “potential,” “potentially,” “preparing,” “projected,” “future,” “long-term,” “once,” “should,” “could,” “would,” “might,” “uncertainty,” or other similar words. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date this report is filed with the United States Securities and Exchange Commission, or SEC.

Current wording

Certain statements contained in this report, other than historical facts, may be considered forward-looking statements within the meaning of Section 27A of the Securities Act, Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and the Private Securities Litigation Reform Act of 1995 (collectively with the “Securities Act and Exchange Act, or the Acts”). We intend for all such forward-looking statements to be covered by the applicable safe harbor provisions for forward-looking statements contained in the Acts. Such forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “will,” “can,” “expect,” “intend,” “anticipate,” “estimate,” “believe,” “continue,” “possible,” “initiatives,” “focus,” “seek,” “objective,” “goal,” “strategy,” “plan,” “potential,” “potentially,” “preparing,” “projected,” “future,” “long-term,” “once,” “should,” “could,” “would,” “might,” “uncertainty,” or other similar words. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date this report is filed with the SEC.

Previous wording

Any such forward-looking statements are based on current expectations, estimates and projections about the industry and markets in which we operate, and beliefs of, and assumptions made by, our management and involve uncertainties that could significantly affect our financial results. Such statements include, but are not limited to: (i) statements about our plans, strategies, initiatives and prospects, including any future capital-raising initiatives and planned or future acquisitions or dispositions of properties and other assets; and (ii) statements about our future results of operations, capital expenditures and liquidity. Such statements are subject to known and unknown risks and uncertainties, which could cause actual results to differ materially from those projected or anticipated, including, without limitation: changes in economic conditions generally and the real estate market specifically; legislative and regulatory changes, including changes to laws governing the taxation of real estate investment trusts, or REITs, and regulations or proposed regulations governing the operations and sales of health care properties; the availability of capital; our ability to pay down, refinance, restructure or extend our indebtedness as it becomes due; our ability to maintain our qualification as a REIT for U.S. federal income tax purposes; changes in interest rates and foreign currency risk; competition in the real estate industry; changes in accounting principles generally accepted in the United States of America, or GAAP, policies and guidelines applicable to REITs; the success of our investment strategy; cybersecurity incidents and information technology failures, including unauthorized access to our computer systems and/or our vendors’ computer systems and our third-party management companies’ computer systems and/or their vendors’ computer systems; our ability to retain our executive officers and key employees; unexpected labor costs and inflationary pressures; and those risks identified in Item 1A, Risk Factors in this Annual Report on Form 10-K. These risks and uncertainties should be considered in evaluating forward-looking statements, and undue reliance should not be placed on such statements. Forward-looking statements in this Annual Report on Form 10-K speak only as of the date on which such statements are made, and undue reliance should not be placed on such statements. We undertake no obligation to update any such statements that may become untrue because of subsequent events. Additional information concerning us and our business, including additional factors that could materially affect our financial results, is included herein and in our other filings with the SEC.

Current wording

Any such forward-looking statements are based on current expectations, estimates and projections about the industry and markets in which we operate, and beliefs of, and assumptions made by, our management and involve uncertainties that could significantly affect our financial results. Such statements include, but are not limited to: (i) statements about our plans, strategies, initiatives and prospects, including any future capital-raising initiatives and planned or future acquisitions or dispositions of properties and other assets; and (ii) statements about our future results of operations, capital expenditures and liquidity. Such statements are subject to known and unknown risks and uncertainties, which could cause actual results to differ materially from those projected or anticipated, including, without limitation: changes in economic conditions generally and the real estate market specifically; legislative and regulatory changes, including changes to laws governing the taxation of real estate investment trusts, or REITs, and regulations or proposed regulations governing the operations and sales of health care properties; the availability of capital; our ability to pay down, refinance, restructure or extend our indebtedness as it becomes due; our ability to maintain our qualification as a REIT for U.S. federal income tax purposes; changes in interest rates and foreign currency risk; competition in the real estate industry; changes in accounting principles generally accepted in the United States of America, or GAAP, policies and guidelines applicable to REITs; the success of our investment strategy; cybersecurity incidents and information technology failures, including unauthorized access to our computer systems and/or our vendors’ computer systems and our third-party management companies’ computer systems and/or their vendors’ computer systems; our ability to retain our executive officers and key employees; unexpected labor costs and inflationary pressures; changing macroeconomic, domestic legal and fiscal policies and geopolitical conditions; and those risks identified in Item 1A, Risk Factors in this Annual Report on Form 10-K. These risks and uncertainties should be considered in evaluating forward-looking statements, and undue reliance should not be placed on such statements. Forward-looking statements in this Annual Report on Form 10-K speak only as of the date on which such statements are made, and undue reliance should not be placed on such statements. We undertake no obligation to update any such statements that may become untrue because of subsequent events. Additional information concerning us and our business, including additional factors that could materially affect our financial results, is included herein and in our other filings with the SEC.

Previous wording

American Healthcare REIT, Inc., a Maryland corporation, is a self-managed REIT that acquires, owns and operates a diversified portfolio of clinical healthcare real estate properties, focusing primarily on outpatient medical, or OM, buildings, senior housing, skilled nursing facilities, or SNFs, and other healthcare-related facilities. We have built a fully-integrated management platform, with approximately 114 employees, that operates clinical healthcare properties throughout the United States, the United Kingdom and the Isle of Man. We own and operate our integrated senior health campuses and senior housing operating properties, or SHOP, utilizing the structure permitted by the REIT Investment Diversification and Empowerment Act of 2007, which is commonly referred to as a “RIDEA” structure. We have also originated and acquired secured loans and may acquire other real estate-related investments in the future on an infrequent and opportunistic basis. We generally seek investments that produce current income; however, we have selectively developed, and may continue to selectively develop, healthcare real estate properties. We have elected to be taxed as a REIT for U.S. federal income tax purposes. We believe that we have been organized and operated, and we intend to continue to operate, in conformity with the requirements for qualification and taxation as a REIT under the Code.

Current wording

Act of 2007, which is commonly referred to as a “RIDEA” structure. We have also originated and acquired secured loans and may acquire other real estate-related investments in the future on an infrequent and opportunistic basis. We generally seek investments that produce current income; however, we have selectively developed, and may continue to selectively develop, healthcare real estate properties. We have elected to be taxed as a REIT for U.S. federal income tax purposes. We believe that we have been organized and operated, and we intend to continue to operate, in conformity with the requirements for qualification and taxation as a REIT under the Internal Revenue Code of 1986, or the Code.

Previous wording

We conduct substantially all of our operations through American Healthcare REIT Holdings, LP, or our operating partnership, and we are the sole general partner of our operating partnership. As of December 31, 2023, we owned 95.0% of the operating partnership units, or OP units, in our operating partnership, and the remaining 5.0% OP units were owned by the following limited partners: (i) AHI Group Holdings, LLC, which is owned and controlled by Jeffrey T. Hanson, the non-executive Chairman of our board of directors, or our board, Danny Prosky, our Chief Executive Officer, President and director, and Mathieu B. Streiff, one of our non-executive directors; (ii) Platform Healthcare Investor T-II, LLC; (iii) Flaherty Trust; and (iv) a wholly owned subsidiary of Griffin Capital Company, LLC, or Griffin Capital. On August 19, 2024 and October 18, 2024, Platform Healthcare Investor T-II, LLC and Flaherty Trust, respectively, redeemed all of their OP units in exchange for 1,216,571 shares and 211,306 shares, respectively, of our Common Stock on a one-for-one basis and, as a result, are no longer limited partners of our operating partnership. On December 6, 2024, Griffin Capital redeemed a portion of its OP units in exchange 69,882 shares of our Common Stock on a one-for-one basis. As of December 31, 2024, we owned 98.7% of the OP units in our operating partnership, and the remaining 1.3% of the OP units were owned by the remaining limited partners. See Note 12, Redeemable Noncontrolling Interests, and Note 13, Equity — Noncontrolling Interests in Total Equity, to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K, for a further discussion of the ownership in our operating partnership.

Current wording

We conduct substantially all of our operations through American Healthcare REIT Holdings, LP, or our operating partnership, and we are the sole general partner of our operating partnership. As of December 31, 2025 and 2024, we owned 99.0% and 98.7%, respectively, of the operating partnership units, or OP units, in our operating partnership, and the remaining 1.0% and 1.3% of the OP units, respectively, were owned by the following limited partners: (i) AHI Group Holdings, LLC, which is owned and controlled by Jeffrey T. Hanson, our Chairman of the Board of Directors and Interim Chief Executive Officer and President, Danny Prosky, our Chief Executive Officer, President and director, who, as previously disclosed, is currently taking a leave of absence from his executive role for medical reasons, and Mathieu B. Streiff, one of our non-executive directors; and (ii) a wholly-owned subsidiary of Griffin Capital Company, LLC or Griffin Capital. See Note 11, Redeemable Noncontrolling Interests, and Note 12, Equity — Noncontrolling Interests in Total Equity, to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K, for a further discussion of the ownership in our operating partnership.

Previous wording

We currently operate through four reportable business segments: integrated senior health campuses, OM, triple-net leased properties and SHOP. See Note 18, Segment Reporting, to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K, for a further discussion. As of December 31, 2024, we owned and/or operated 314 buildings and integrated senior health campuses representing approximately 19,155,000 square feet of gross leasable area, or GLA, for an aggregate contract purchase price of $4,533,212,000. In addition, as of December 31, 2024, we also owned a real estate-related debt investment purchased for $60,429,000.

Current wording

We currently operate through four reportable business segments: ISHC, OM, SHOP and triple-net leased properties. See Note 16, Segment Reporting, to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K, for a further discussion. As of December 31, 2025, we owned and/or operated 337 buildings and ISHC, which represent in total approximately 22,162,000 square feet of gross leasable area, or GLA, for an aggregate contract purchase price of $5,421,191,000. In addition, as of December 31, 2025, we also owned a real estate-related debt investment purchased for $60,429,000.

Previous wording

Our critical accounting estimates have the most impact on the reporting of our financial condition and results of operations and require significant judgments and estimates. We believe that our judgments and estimates are consistently applied and produce financial information that fairly present our financial condition and results of operations. Our critical accounting estimates include (1) real estate investments purchase price allocation, (2) impairment of long-lived assets, (3) goodwill, (4) revenue recognition and (5) resident receivable allowances.

Current wording

Our critical accounting estimates have the most impact on the reporting of our financial condition and results of operations and require significant judgments and estimates. We believe that our judgments and estimates are consistently applied and produce financial information that fairly present our financial condition and results of operations. Our critical accounting estimates include: (i) real estate investments purchase price allocation; (ii) impairment of long-lived assets; (iii) goodwill; and (iv) revenue recognition.

Previous wording

For a discussion of our acquisitions and dispositions of investments in 2024, 2023 and 2022, see Note 2, Summary of Significant Accounting Policies — Properties Held for Sale, Note 3, Real Estate Investments, Net, and Note 4, Business Combinations, to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K.

Current wording

For a discussion of our acquisitions and dispositions of investments in 2025, 2024 and 2023, see Note 2, Summary of Significant Accounting Policies— Properties Held for Sale, and Note 3, Real Estate Investments, to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K.

Previous wording

During the years ended December 31, 2024, 2023 and 2022, inflation has affected our operations. The annual rate of inflation in the United States was 3.0% in January 2025, as measured by the Consumer Price Index. We believe inflation has impacted our operations such that we have experienced, and continue to experience, increases in the cost of labor, services, energy and supplies, and therefore continued inflationary pressures on our integrated senior health campuses and SHOP could continue to impact our profitability in future periods. To offset the impact of inflation on the cost of labor and services, we had our RIDEA managers bill higher than average annual rent and care fee increases for existing residents in 2023 and 2024, as compared to prior years, while adjusting market rates as frequently as needed based on competitor pricing and market conditions. We believe this practice will improve operating performance in our integrated senior health campuses and SHOP, as well as increase rent coverage and the stability of our real estate revenue in our triple-net leased properties over time.

Current wording

During the years ended December 31, 2025 and 2024, inflation has affected our operations. The annual rate of inflation in the United States was 2.4% in January 2026, as measured by the Consumer Price Index. We believe inflation has impacted our operations such that we have experienced, and continue to experience, increases in the cost of labor, services, energy and supplies, and therefore continued inflationary pressures on our ISHC and SHOP could continue to impact our profitability in future periods. To offset the impact of inflation on the cost of labor and services, our RIDEA managers may have billed higher than average annual rent and care fee increases for existing residents in 2024 and 2025, as compared to prior years, while adjusting market rates as frequently as needed based on competitor pricing and market conditions. We believe this practice will improve operating performance in our ISHC and SHOP, as well as increase rent coverage and the stability of our real estate revenue in our triple-net leased properties over time.

Previous wording

Excluding our SHOP and integrated senior health campuses, as of December 31, 2024, our properties were 90.3% leased and, during 2025, 11.9% of the leased GLA is scheduled to expire. Our leasing strategy focuses on negotiating renewals for leases scheduled to expire during the next 12 months. In the future, if we are unable to negotiate renewals, we will try to identify new tenants or collaborate with existing tenants who are seeking additional space to occupy. As of December 31, 2024, our remaining weighted average lease term was 6.8 years, excluding our SHOP and integrated senior health campuses.

Current wording

Excluding our ISHC and SHOP, as of December 31, 2025, our properties were 91.3% leased, and, during 2026, 6.6% of the leased GLA is scheduled to expire. Our leasing strategy focuses on negotiating renewals for leases scheduled to expire during the next 12 months. In the future, if we are unable to negotiate renewals, we will try to identify new tenants or collaborate with existing tenants who are seeking additional space to occupy. As of December 31, 2025, our remaining weighted average lease term was 6.8 years, excluding our ISHC and SHOP.

Previous wording

Our combined SHOP and integrated senior health campuses were 87.2% leased as of December 31, 2024. Substantially all of our leases with residents at such properties are for a term of one year or less.

Current wording

Our combined ISHC and SHOP were 89.8% leased as of December 31, 2025. Substantially all of our leases with residents at such properties are for a term of one year or less.

Previous wording

We segregate our operations into reporting segments in order to assess the performance of our business in the same way that management reviews our performance and makes operating decisions. As of December 31, 2024, we operated through four reportable business segments: integrated senior health campuses, OM, SHOP and triple-net leased properties.

Current wording

We segregate our operations into reporting segments in order to assess the performance of our business in the same way that management reviews our performance and makes operating decisions. As of December 31, 2025, we operated through four reportable business segments: ISHC, OM, SHOP and triple-net leased properties.

Previous wording

The most significant drivers behind changes in our consolidated results of operations for the year ended December 31, 2024, as compared to the year ended December 31, 2023, were primarily due to: the increase in resident occupancies and billing rates, partially offset by the adverse effect of inflation, which resulted in increases in the cost of labor, services, energy and supplies; our acquisitions and dispositions of investments subsequent to December 31, 2023; and the transition of the operations of certain leased senior housing and skilled nursing facilities from triple-net leased properties to a managed portfolio utilizing a RIDEA structure. Additional information behind the changes in our consolidated results of operations is discussed in more detail below. See Note 2, Summary of Significant Accounting Policies — Properties Held for Sale, Note 3, Real Estate Investments, Net, and Note 4, Business Combinations, to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K, for a further discussion of our acquisitions and dispositions during 2024 and 2023.

Current wording

The most significant drivers behind changes in our consolidated results of operations for the year ended December 31, 2025, as compared to the year ended December 31, 2024, were primarily due to: our acquisitions and dispositions of investments during 2025; our increase in resident occupancies and billing rates; and the adverse impact of inflation, which resulted in increases in the cost of labor, services, energy and supplies. Additional information behind the changes in our consolidated results of operations is discussed in more detail below. See Note 3, Real Estate Investments, to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K, for a further discussion of our acquisitions and dispositions during 2025 and 2024. As of December 31, 2025 and 2024, we owned and/or operated the following types of properties (dollars in thousands):

Previous wording

(1)Leased percentage includes all third-party leased space at our non-RIDEA properties (including master leases), except for our SHOP and integrated senior health campuses where leased percentage represents resident occupancy on the available units/beds therein.

Current wording

Leased percentage includes all third-party leased space at our non-RIDEA properties (including master leases), except for our ISHC and SHOP where leased percentage represents resident occupancy of the available units/beds therein.

Previous wording

(2)Weighted average leased percentage excludes our SHOP and integrated senior health campuses.

Current wording

Weighted average leased percentage excludes our ISHC and SHOP.

Previous wording

Our primary sources of revenue include resident fees and services revenue generated by our RIDEA properties and rent from our leased, non-RIDEA properties. For the years ended December 31, 2024 and 2023, resident fees and services revenue primarily consisted of rental fees related to resident leases, extended health care fees and other ancillary services, and real estate revenue primarily consisted of base rent and expense recoveries. The amount of revenues generated by our RIDEA properties depends principally on our ability to maintain resident occupancy rates. The amount of revenues generated by our non-RIDEA properties is dependent on our ability to maintain tenant occupancy rates of currently leased space and to lease available space at the then existing rental rates. We also received grant income during 2023. Revenues and grant income by reportable segment consisted of the following for the periods presented below (in thousands):

Current wording

Our primary sources of revenue include resident fees and services revenue generated by our RIDEA properties and rent from our leased, non-RIDEA properties. For the years ended December 31, 2025 and 2024, resident fees and services revenue primarily consisted of rental fees related to resident leases, extended health care fees and other ancillary services, and real estate revenue primarily consisted of base rent and expense recoveries. The amount of revenues generated by our RIDEA properties depends principally on our ability to maintain resident occupancy rates. The amount of revenues generated by our non-RIDEA properties is dependent on our ability to maintain tenant occupancy rates of currently leased space and to lease available space at the then existing rental rates. Revenues by reportable segment consisted of the following for the periods presented below (in thousands):

Previous wording

For our SHOP segment, we increased resident fees and services revenue by $77,124,000 for the year ended December 31, 2024, as compared to the year ended December 31, 2023, primarily due to: (i) an increase of $43,750,000 due to the acquisition of 14 senior housing properties in Oregon in February 2024; (ii) an increase of $13,929,000 due to the transitioning of leased senior housing facilities in our Michigan ALF Portfolio to a managed portfolio utilizing a RIDEA structure in November 2023; (iii) an increase of $6,389,000 due to the acquisition of five senior housing properties in Washington in September 2024; (iv) an increase of $1,174,000 due to the acquisition of one senior housing property in Georgia in October 2024; and (v) increased resident occupancy and higher resident fees as a result of an increase in billing rates. Additionally, $6,026,000 of the increase in resident fees and services revenue for our SHOP segment for the year ended December 31, 2024, as compared to the year ended December 31, 2023, was primarily due to transitioning SNFs in our Central Wisconsin Senior Care Portfolio from triple-net leased properties to a managed portfolio utilizing a RIDEA structure in March 2023. Such increases in resident fees and services revenue in our SHOP segment were partially offset by a decrease of $12,599,000 due to real estate dispositions within our SHOP segment in 2023 and 2024.

Current wording

For our SHOP segment, we increased resident fees and services revenue by $66,585,000 for the year ended December 31, 2025, as compared to the year ended December 31, 2024, primarily due to: (i) an increase of $5,267,000 due to the acquisition of 14 senior housing properties in Oregon in February 2024; (ii) an increase of $13,717,000 due to the acquisition of five senior housing properties in Washington in September 2024; (iii) an increase of $2,524,000 due to the acquisition of one senior housing property in Georgia in October 2024; (iv) an increase of $8,991,000 due to the acquisition of one senior housing property in Virginia in April 2025; (v) an increase of $6,527,000 due to the acquisition of three senior housing properties in Minnesota and Idaho in the third quarter of 2025; (vi) an increase of $12,821,000 due to the acquisition of 10 senior housing properties in California, Minnesota, Pennsylvania, Utah and Wisconsin in the fourth quarter of 2025; and (vii) increased resident occupancy and higher resident fees as a result of an increase in billing rates.

Previous wording

Real estate revenue for our OM segment decreased $11,328,000 for year ended December 31, 2024, as compared to the year ended December 31, 2023, primarily due to dispositions of OM buildings during 2023 and 2024 and a slight decrease in occupancy.

Current wording

Real estate revenue for our OM segment decreased $8,662,000 for the year ended December 31, 2025, as compared to the year ended December 31, 2024, primarily due to dispositions of OM buildings in 2024 and 2025, partially offset by contractual rent escalations and increased occupancy.

Previous wording

Integrated senior health campuses and SHOP typically have a higher percentage of direct operating expenses to revenue and grant income than OM buildings and triple-net leased properties due to the nature of RIDEA-type facilities where we conduct day-to-day operations. Property operating expenses and property operating expenses as a percentage of resident fees and services revenue and grant income, as well as rental expenses and rental expenses as a percentage of real estate revenue, by reportable segment consisted of the following for the periods presented below (dollars in thousands):

Current wording

ISHC and SHOP typically have a higher percentage of direct operating expenses to revenue than OM buildings and triple-net leased properties due to the nature of RIDEA-type facilities where we conduct day-to-day operations. Property operating expenses and property operating expenses as a percentage of resident fees and services revenue, as well as rental expenses and rental expenses as a percentage of real estate revenue, by reportable segment consisted of the following for the periods presented below (dollars in thousands):

Previous wording

For the year ended December 31, 2024, as compared to the year ended December 31, 2023, total property operating expenses for our SHOP segment increased primarily due to: (i) an increase of $38,646,000 due to the acquisition of 14 senior housing properties in Oregon in February 2024; (ii) an increase of $15,102,000 due to the transitioning of the senior housing facilities in our Michigan ALF Portfolio from triple-net leased properties to a managed portfolio utilizing a RIDEA structure in November 2023; (iii) an increase of $4,536,000 due to the acquisition of five senior housing properties in Washington in September 2024; (iv) an increase of $1,071,000 due to the acquisition of one senior housing property in Georgia in October 2024; and (v) increased resident occupancy at the facilities within such segment. Additionally, $5,165,000 of the increase in total property operating expenses for our SHOP segment for the year ended December 31, 2024, as compared to the year ended December 31, 2023, was primarily due to transitioning the SNFs in our Central Wisconsin Senior Care Portfolio from triple-net leased properties to a managed portfolio utilizing a RIDEA structure in March 2023. Such increases in total property operating expenses for our SHOP segment were partially offset by a decrease of $14,285,000 due to real estate dispositions within our SHOP segment in 2023 and 2024.

Current wording

For our SHOP segment, total property operating expenses increased by $43,244,000 for the year ended December 31, 2025, as compared to the year ended December 31, 2024, primarily due to: (i) an increase of $5,658,000 due to the acquisition of 14 senior housing properties in Oregon in February 2024; (ii) an increase of $10,334,000 due to the acquisition of five senior housing properties in Washington in September 2024; (iii) an increase of $2,355,000 due to the acquisition of one senior housing property in Georgia in October 2024; (v) an increase of $4,868,000 due to the acquisition of one senior housing property located in Virginia in April 2025; (vi) an increase of $4,887,000 due to the acquisitions of three senior housing properties in Minnesota and Idaho in the third quarter of 2025; (vii) an increase of $9,109,000 due to the acquisition of 10 senior housing properties in California, Minnesota, Pennsylvania, Utah and Wisconsin in the fourth quarter of 2025; and (viii) increased occupancy at the facilities within such segment, thereby increasing labor costs and other operating expenses.

Previous wording

For the year ended December 31, 2024, we recognized an aggregate net gain on dispositions of our real estate investments of $5,213,000 primarily related to the sale of four OM buildings, one integrated senior health campus, eight triple-net leased properties and one land easement disposal on one of our OM properties. For the year ended December 31, 2023, we recognized an aggregate net gain on dispositions of our real estate investments of $32,472,000 primarily related to the sale of six SHOP within our Central Florida Senior Housing Portfolio and 16 OM buildings. See Note 2, Summary of Significant Accounting Policies — Properties Held for Sale, and Note 3, Real Estate Investments, Net, to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K.

Current wording

For the year ended December 31, 2025, we recognized an aggregate net loss on dispositions of $2,965,000 primarily related to the sale of one SHOP, two ISHC, 10 OM buildings and one triple-net leased property. For the year ended December 31, 2024, we recognized an aggregate net gain on disposition of our real estate investments of $5,213,000 primarily related to the sale of four OM buildings, one ISHC, eight triple-net leased properties and one land easement disposal on one of our OM properties. See Note 3, Real Estate Investments — Dispositions of Real Estate Investments, to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K, for a further discussion.

Previous wording

For the year ended December 31, 2024, as we continued to evaluate our properties based on their historical operating performance and our expected holding period, we determined that six of our OM, two of our integrated senior health campuses and two of our SHOP were impaired and recognized aggregate impairment charge of $45,755,000. For the year ended December 31, 2023, as we continued to evaluate additional non-strategic properties for sale, we recognized aggregate impairment charges of $13,899,000 for two of our SHOP within the Northern California Senior Housing Portfolio and for one of our OM buildings within the Homewood AL Portfolio. See Note 3, Real Estate Investments, Net— Impairment of Real Estate Investments, to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K, for a further discussion of impairments of such real estate investments.

Current wording

As we continued to evaluate our properties based on their historical operating performance and our expected holding period, we recognized aggregate impairment charges of $49,935,000 for eight OM buildings and one SHOP for the year ended December 31, 2025. For the year ended December 31, 2024, we recognized aggregate impairment charges of $45,755,000 for six OM buildings, two ISHC and two SHOP. See Note 3, Real Estate Investments — Impairment of Real Estate Investments, to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K, for a further discussion.

Previous wording

For the year ended December 31, 2024, we did not recognize any gain on re-measurement of any previously held equity interest. For the year ended December 31, 2023, we recognized a $726,000 gain on re-measurement of the fair value of our previously held equity interest in Memory Care Partners, LLC. See Note 4, Business Combinations, to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K, for a further discussion of the acquisitions of previously held equity interests.

Current wording

For the year ended December 31, 2025, we recognized a $14,580,000 gain on re-measurement of the fair value of our previously held equity interest in Trilogy Opportunity Fund I, LLC. For the year ended December 31, 2024, we did not recognize any gain on re-measurement of any previously held equity interest. See Note 3, Real Estate Investments — Acquisitions of Real Estate Investments — Acquisitions Accounted for as Asset Acquisitions, to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K, for a further discussion.

Previous wording

Our principal sources of liquidity are cash flows from operations, net proceeds from the issuances of equity securities, including through our ATM Offering, borrowings under our lines of credit and proceeds from the dispositions of real estate investments. For the next 12 months, our principal liquidity needs are to: (i) fund property operating expenses and general and administrative expenses; (ii) meet our debt service requirements (including principal and interest); (iii) fund development activities and capital expenditures; and (iv) make distributions to our stockholders, as required for us to continue to qualify as a REIT. We believe that the sources of liquidity described above will be sufficient to satisfy our cash requirements for the next 12 months and thereafter. We do not have any material off-balance sheet arrangements that we expect would materially affect our liquidity and capital resources.

Current wording

Our principal sources of liquidity are cash flows from operations, net proceeds from the issuances of equity securities, including through the 2025 ATM Offering (as defined and described at Note 12, Equity — Common Stock, to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K), borrowings under our lines of credit and proceeds from the dispositions of real estate investments. For the next 12 months, our principal liquidity needs are to: (i) fund property operating expenses and general and administrative expenses; (ii) meet our debt service requirements (including principal and interest); (iii) fund the acquisition of real estate investments, development activities and capital expenditures; and (iv) make distributions to our stockholders, as required for us to continue to qualify as a REIT. We believe that the sources of liquidity described above will be sufficient to satisfy our cash requirements for the next 12 months and thereafter. We do not have any material off-balance sheet arrangements that we expect would materially affect our liquidity and capital resources.

Previous wording

A capital plan for each investment is established upon acquisition that contemplates the estimated capital needs of that investment, including costs of refurbishment, tenant improvements or other major capital expenditures. The capital plan also sets forth the anticipated sources of the necessary capital, which may include operating cash generated by the investment, capital reserves, a line of credit or other loan established with respect to the investment, other borrowings or additional equity investments from us and joint venture partners. The capital plan for each investment is adjusted through ongoing, regular reviews of our portfolio or as necessary to respond to unanticipated additional capital needs. As of December 31, 2024, we had $14,804,000 of restricted cash in loan impounds and reserve accounts to fund a portion of such capital expenditures. Based on the budget for the properties we owned as of December 31, 2024, we estimated that expenditures for capital and tenant improvements as of such date are approximately $76,968,000 for 2025, although actual expenditures are predominantly discretionary and are dependent on many factors which are not presently known.

Current wording

A capital plan for each investment is established upon acquisition that contemplates the estimated capital needs of that investment, including costs of refurbishment, tenant improvements or other major capital expenditures. The capital plan also sets forth the anticipated sources of the necessary capital, which may include operating cash generated by the investment, capital reserves, a line of credit or other loan established with respect to the investment, other borrowings or additional equity investments from us and joint venture partners. The capital plan for each investment is adjusted through ongoing, regular reviews of our portfolio or as necessary to respond to unanticipated additional capital needs. As of December 31, 2025, we had $12,085,000 of restricted cash in loan impounds and reserve accounts to fund a portion of such capital expenditures. Based on the budget for the properties we owned as of December 31, 2025, we estimate that expenditures for capital and tenant improvements as of such date will be approximately $91,816,000 for 2026, although actual expenditures are predominantly discretionary and are dependent on many factors which are not presently known.

Previous wording

The following table provides information with respect to: (i) the maturity and scheduled principal repayment of our secured mortgage loans payable and lines of credit and term loan; (ii) interest payments on our mortgage loans payable and lines of credit and term loan, excluding the effect of our interest rate swaps; (iii) ground and other lease obligations; and (iv) financing and other obligations as of December 31, 2024 (in thousands):

Current wording

The following table provides information with respect to: (i) the maturity and scheduled principal repayment of our secured mortgage loans payable and lines of credit and term loan; (ii) interest payments on our mortgage loans payable and lines of credit and term loan, excluding the effect of our interest rate swaps; (iii) operating lease obligations; and (iv) financing and other obligations as of December 31, 2025 (in thousands):

Previous wording

See Item 5, Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities — Distributions, for a further discussion of our distributions.

Current wording

For information on distributions, see Part II, Item 5, Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities — Distributions, and the “Distributions” section below.

Previous wording

As of December 31, 2024, we are party to a credit agreement, as amended, with an aggregate maximum principal amount up to $1,150,000,000, or the 2024 Credit Facility. In addition, we are party to an agreement, as amended, regarding a senior secured revolving credit facility with an aggregate maximum principal amount of $400,000,000, or the Trilogy Credit Facility. See Note 9, Lines of Credit and Term Loan, to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K, for a further discussion.

Current wording

As of December 31, 2025, we are party to a credit agreement, as amended, with an aggregate maximum principal amount up to $1,150,000,000, or the 2024 Credit Facility. In addition, we are party to an agreement regarding a senior secured revolving credit facility with an aggregate maximum principal amount of $50,000,000, or the 2025 Trilogy Credit Facility. See Note 8, Lines of Credit and Term Loan, to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K, for a further discussion.

Previous wording

As of December 31, 2024, our borrowing capacity under the 2024 Credit Facility was $1,150,000,000. As of December 31, 2024, our borrowings outstanding under such credit facility was $689,000,000 and we had $461,000,000 available on such facility. We believe that such resource will be sufficient to satisfy our cash requirements for the next 12 months and the longer term thereafter.

Current wording

As of December 31, 2025, our aggregate borrowing capacity under the 2024 Credit Facility and the 2025 Trilogy Credit Facility,was $1,200,000,000. As of December 31, 2025, our aggregate borrowings outstanding under our credit facilities was $550,000,000 and we had an aggregate of $650,000,000 available on such facilities. We believe that such resource will be sufficient to satisfy our cash requirements for the next 12 months and the longer term thereafter.

Previous wording

For the years ended December 31, 2024 and 2023, cash flows provided by operating activities were primarily related to property operations, offset by payments of general and administrative expenses and interest payments on our outstanding indebtedness. In general, cash flows from operating activities are affected by the timing of cash receipts and payments, and have increased since 2022 primarily due to improved resident occupancy and expense management at our properties operated under a RIDEA structure. The increase in net cash provided by operating activities for the year ended December 31, 2024, as compared to the year ended December 31, 2023, was primarily driven by the increase in operating performance of our real estate investments in our integrated senior health campuses and SHOP segments, as well as a decrease in interest paid on our outstanding indebtedness as a result of mortgage payoffs and paydowns on our lines of credit using net proceeds from the February 2024 Offering, September 2024 Offering and ATM Offering. See the “Results of Operations” section above for further discussion.

Current wording

For the years ended December 31, 2025 and 2024, cash flows from operating activities were primarily related to property operations, offset by payments of general and administrative expenses and interest payments on our outstanding indebtedness. In general, cash flows from operating activities are affected by the timing of cash receipts and payments, and have increased since 2024 primarily due to improved resident occupancy, an increase in resident billing rates and expense management at our properties operated under a RIDEA structure, as well as a decrease in interest paid on our outstanding indebtedness as a result of mortgage loan payoffs and paydowns on our lines of credit using net proceeds from our equity offerings in 2025 and 2024. See the “Results of Operations” section above for a further discussion.

Previous wording

Offering for such payments; (ii) a $258,001,000 in cash paid to purchase the noncontrolling interest in Trilogy REIT Holdings LLC held by a joint venture partner; (iii) a $71,234,000 increase in the payment of offering costs primarily due to our equity offering activity in 2024 noted above; (iv) a $44,611,000 increase in distributions paid to common stockholders resulting from the increase in shares issued during 2024; and (v) a $18,933,000 increase in cash paid to redeem certain equity interests owned in Trilogy Investors, LLC.

Current wording

For the year ended December 31, 2025, as compared to the year ended December 31, 2024, the change from net cash used in financing activities to net cash provided by financing activities, was primarily due to a $829,728,000 decrease in net payments on our lines of credit and mortgage loans payable using the net proceeds from equity offerings and a $62,664,000 decrease in the payment of equity offering costs. Further, in 2024, we paid $258,001,000 to purchase the noncontrolling interest in Trilogy REIT Holdings LLC held by a joint venture partner and paid $36,083,000 to redeem certain equity interests owned in Trilogy Investors, LLC. Such amounts were partially offset by a $207,983,000 decrease in gross equity offering proceeds and a $42,627,000 increase in distributions paid.

Previous wording

For a discussion of our mortgage loans payable, see Note 8, Mortgage Loans Payable, Net, to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K.

Current wording

For a discussion of our mortgage loans payable, see Note 7, Mortgage Loans Payable, to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K.

Previous wording

A significant liquidity need is the payment of principal and interest on our outstanding indebtedness. As of December 31, 2024, we had $1,004,724,000 of fixed-rate and variable-rate mortgage loans payable outstanding secured by our properties. As of December 31, 2024, we had $689,032,000 outstanding and $860,968,000 remained available under our lines of credit. The weighted average effective interest rate on our outstanding debt factoring in our interest rate swaps was 4.41% per annum. See Note 8, Mortgage Loans Payable, Net, and Note 9, Lines of Credit and Term Loan, to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K, for a further discussion.

Current wording

A significant liquidity need is the payment of principal and interest on our outstanding indebtedness. As of December 31, 2025, we had $985,565,000 of fixed-rate mortgage loans payable outstanding secured by our properties. As of December 31, 2025, we had $550,000,000 outstanding, and $650,000,000 remained available, under our lines of credit. The weighted average effective interest rate on our outstanding debt, factoring in our interest rate swaps, was 4.34% per annum as of December 31, 2025. See Note 7, Mortgage Loans Payable, and Note 8, Lines of Credit and Term Loan, to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K.

Previous wording

Due to certain unique operating characteristics of real estate companies, the National Association of Real Estate Investment Trusts, or NAREIT, an industry trade group, has promulgated a measure known as funds from operations, a non-GAAP financial measure, which we believe to be an appropriate supplemental performance measure to reflect the operating performance of a REIT. The use of funds from operations is recommended by the REIT industry as a supplemental performance measure, and our management uses FFO to evaluate our performance over time. FFO is not equivalent to our net income (loss) as determined under GAAP.

Current wording

Due to certain unique operating characteristics of real estate companies, the National Association of Real Estate Investment Trusts, or NAREIT, an industry trade group, has promulgated a measure known as funds from operations, a non-GAAP financial measure, which we believe to be an appropriate supplemental performance measure to reflect the operating performance of a REIT.

Previous wording

We define normalized FFO attributable to controlling interest, or Normalized FFO, as FFO further adjusted for the following items included in the determination of GAAP net income (loss): expensed acquisition fees and costs, which we refer to as business acquisition expenses; amounts relating to changes in deferred rent and amortization of above- and below-market leases; the non-cash impact of changes to our equity instruments; non-cash or non-recurring income or expense; the non-cash effect of income tax benefits or expenses; capitalized interest; impairment of intangible assets and goodwill; amortization of closing costs on debt security investments; mark-to-market adjustments included in net income (loss); gains or losses included in net income (loss) from the extinguishment or sale of debt, hedges, foreign exchange, derivatives or securities holdings where trading of such holdings is not a fundamental attribute of the business plan; and after adjustments for consolidated and unconsolidated partnerships and joint ventures, with such adjustments calculated to reflect Normalized FFO on the same basis.

Current wording

We define normalized FFO attributable to controlling interest, or Normalized FFO, as FFO further adjusted for the following items included in the determination of GAAP net income (loss): transaction, transition and restructuring costs; amounts relating to changes in deferred rent and amortization of above- and below-market leases; the non-cash impact of changes to our equity instruments; non-cash or non-recurring income or expense; the non-cash effect of income tax benefits or expenses; capitalized interest; impairment of intangible assets and goodwill; amortization of closing costs on debt security investments; mark-to-market adjustments included in net income (loss); gains or losses included in net income (loss) from the extinguishment or sale of debt, hedges, foreign exchange, derivatives or securities holdings where trading of such holdings is not a fundamental attribute of the business plan; and after adjustments for consolidated and unconsolidated partnerships and joint ventures, with such adjustments calculated to reflect Normalized FFO on the same basis.

Previous wording

However, FFO and Normalized FFO should not be construed to be more relevant or accurate than the current GAAP methodology in calculating net income (loss) as an indicator of our operating performance, GAAP cash flows from operations as an indicator of our liquidity or indicative of funds available to fund our cash needs, including our ability to make distributions to our stockholders. The method utilized to evaluate the value and performance of real estate under GAAP should be construed as a more relevant measure of operational performance and considered more prominently than the non-GAAP FFO and Normalized FFO measures and the adjustments to GAAP in calculating FFO and Normalized FFO.

Current wording

However, FFO and Normalized FFO should not be construed to be more relevant or accurate than the current GAAP methodology in calculating net income (loss) as an indicator of our operating performance, GAAP cash flows from operations as an indicator of our liquidity or indicative of funds available to fund our cash needs, including our ability to make distributions to our stockholders. The method utilized to evaluate the value and performance of real estate under GAAP should be construed as a more relevant measure of operational performance and considered more prominently than the non-GAAP FFO and Normalized FFO measures and the adjustments to GAAP in calculating FFO and Normalized FFO. Presentation of this information is intended to provide useful information to investors, industry analysts and management as they compare the operating performance used by the REIT industry, although it should be noted that not all REITs calculate funds from operations and normalized funds from operations the same way, so comparisons with other REITs may not be meaningful. FFO and Normalized FFO should be reviewed in conjunction with other measurements as an indication of our performance. None of the SEC, NAREIT, or any other regulatory body has passed judgment on the acceptability of the adjustments that we use to calculate FFO or Normalized FFO. In the future, the SEC, NAREIT, or another regulatory body may decide to standardize the allowable adjustments across the REIT industry and we would have to adjust our calculation and characterization of FFO or Normalized FFO.

Previous wording

Net operating income, or NOI, is a non-GAAP financial measure that is defined as net income (loss), computed in accordance with GAAP, generated from properties before general and administrative expenses, business acquisition expenses, depreciation and amortization, interest expense, gain or loss in fair value of derivative financial instruments, gain or loss on dispositions of real estate investments, impairment of real estate investments, impairment of intangible assets and goodwill, income or loss from unconsolidated entities, gain on re-measurement of previously held equity interests, foreign currency gain or loss, other income or expense and income tax benefit or expense.

Current wording

Net operating income, or NOI, is a non-GAAP financial measure that is defined as net income (loss), computed in accordance with GAAP, generated from properties before general and administrative expenses, transaction, transition and restructuring costs, depreciation and amortization, interest expense, gain or loss in fair value of derivative financial instruments, gain or loss on dispositions of real estate investments, impairment of real estate investments, impairment of intangible assets and goodwill, income or loss from unconsolidated entities, gain on re-measurement of previously held equity interests, foreign currency gain or loss, other income or expense and income tax benefit or expense.

Previous wording

We believe that NOI is an appropriate supplemental performance measure to reflect the performance of our operating assets because NOI excludes certain items that are not associated with the operations of the properties. We believe that NOI is a widely accepted measure of comparative operating performance in the real estate community and is useful to investors in understanding the profitability and operating performance of our property portfolio. However, our use of the term NOI may not be comparable to that of other real estate companies as they may have different methodologies for computing this amount.

Current wording

We believe that NOI is an appropriate supplemental performance measure to reflect the performance of our operating assets because NOI excludes certain items that are not associated with the operations of our properties. We believe that NOI is a widely accepted measure of comparative operating performance in the real estate community and is useful to investors in understanding the profitability and operating performance of our property portfolio. However, our use of the term NOI may not be comparable to that of other real estate companies as they may have different methodologies for computing this amount.