Brookdale Senior Living Inc.
For the period ended Mar 31, 2026. Filed May 7, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 7, 2026
BKD$9.01-16.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-07.
0001332349-25-000143
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-07.
0001332349-26-000048
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 155 previous paragraphs and 113 current paragraphs.
69 unchanged; 32 reworded; 12 added; 40 removed; 14 previous and 0 current paragraphs rearranged.
Tables are not compared: 16 previous and 10 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (12)
Current report
The decrease in resident fees was primarily attributable to the disposition of communities since the beginning of the prior year period, which resulted in $93.1 million less in resident fees during the three months ended March 31, 2026 compared to the prior year period. The decrease was partially offset by a 5.5% increase in same community RevPAR, comprised of a 3.4% increase in same community RevPOR and a 170 basis point increase in same community weighted average occupancy.
Current report
The decrease in facility operating expense was primarily attributable to the disposition of communities since the beginning of the prior year period, which resulted in $72.0 million less in facility operating expense during the three months ended March 31, 2026 compared to the prior year period. The decrease was partially offset by a 5.9% increase in same community facility operating expense primarily due to increases in wage rates, increases in estimated insurance expense, and increases in utilities and maintenance expenses associated with winter storm activity.
Current report
The decrease in the segment's resident fees was primarily attributable to the disposition of communities since the beginning of the prior year period, which resulted in $45.1 million less in resident fees during the three months ended March 31, 2026 compared to the prior year period. The decrease was partially offset by an increase in the segment's same community RevPAR, comprised of a 5.2% increase in same community RevPOR and a 160 basis point increase in same community weighted average occupancy. The increase in the segment's same community RevPOR was primarily the result of the current year annual rate increase.
Current report
The decrease in the segment's facility operating expense was primarily attributable to the disposition of communities since the beginning of the prior year period, which resulted in $29.9 million less in facility operating expense during the three months ended March 31, 2026 compared to the prior year period. The decrease was partially offset by an increase in the segment's same community facility operating expense primarily resulting from increases in wage rates and increases in estimated insurance expense.
Current report
The decrease in the segment's resident fees was primarily attributable to the disposition of communities since the beginning of the prior year period, which resulted in $39.7 million less in resident fees during the three months ended March 31, 2026 compared to the prior year period. The decrease was partially offset by an increase in the segment's same community RevPAR, comprised of a 3.2% increase in same community RevPOR and a 170 basis point increase in same community weighted average occupancy. The increase in the segment's same community RevPOR was primarily the result of the current year annual rate increase.
Current report
The decrease in the segment's facility operating expense was primarily attributable to the disposition of communities since the beginning of the prior year period, which resulted in $34.1 million less in facility operating expense during the three months ended March 31, 2026 compared to the prior year period. The decrease was partially offset by an increase in the segment's same community facility operating expense primarily resulting from increases in wage rates, increases in estimated insurance expense, and increases in utilities and maintenance expenses associated with winter storm activity.
Current report
The decrease in the segment's facility operating expense was primarily attributable to the disposition of communities since the beginning of the prior year period, which resulted in $8.0 million less in facility operating expense during the three months ended March 31, 2026 compared to the prior year period. The decrease was partially offset by an increase in the segment's same community facility operating expense primarily resulting from increases in wage rates and increases in utilities and maintenance expenses associated with winter storm activity.
Current report
Management fees. The increase in management fees was primarily attributable to $2.5 million of management termination fee revenue recognized during the three months ended March 31, 2026. Management fees of $5.4 million for the three months ended March 31, 2026 include $4.7 million of management fees attributable to communities for which our management agreements were terminated during such period or subsequent to March 31, 2026.
Current report
Asset Impairment. The increase in asset impairment was primarily due to changes in estimates of fair value for certain communities planned for disposition.
Current report
Loss (gain) on sale of communities, net. The increase in gain on sale of communities is driven by the sale of seven communities for proceeds of $22.1 million, net of transaction costs in the three months ended March 31, 2026.
Current report
The decrease in net cash provided by operating activities was primarily attributable to an increase in the use of cash for changes in accrued expenses.
Current report
Total liquidity of $368.7 million as of March 31, 2026 included $265.2 million of unrestricted cash and cash equivalents (excluding restricted cash of $68.4 million), $4.9 million of marketable securities, and $98.6 million of availability on our secured credit facility. Subsequent to March 31, 2026, we completed the sale of three owned communities (545 units) for cash proceeds of $88 million, net of transaction costs, which further enhanced our liquidity subsequent to March 31, 2026.
Removed paragraphs (40)
Previous report
Community Acquisitions
Previous report
In September 2024, we entered into a definitive agreement to acquire 25 senior living communities (875 units) that were leased by us from Diversified Healthcare Trust for a purchase price of $135.0 million. Effective February 27, 2025, we successfully closed the acquisition, which was funded with proceeds from mortgage financings and cash on hand. Previously, these communities were held in a triple-net lease with annualized cash rent payments of $10.2 million and an initial maturity of December 31, 2032.
Previous report
In September 2024, we entered into a definitive agreement to acquire five senior living communities (686 units) that were leased by us from Welltower Inc. for a purchase price of $175.0 million. Effective February 27, 2025, we successfully closed the acquisition, which was funded through proceeds from mortgage financings and cash on hand. Previously, these communities were held in a triple-net lease with annualized cash rent payments of $13.7 million. For the three months ended March 31, 2025, we recognized a $32.8 million loss on extinguishment of the financing obligation for the amount by which the repurchase price exceeded the previously recognized financing obligation for three communities previously subject to sale-leaseback transactions.
Previous report
In December 2024, we and certain of our subsidiaries, and Ventas, Inc. ("Ventas") and certain of its subsidiaries, amended the existing master lease arrangement pursuant to which we, at the time of the amendment, leased 120 communities (10,180 units). Beginning January 1, 2026, we will continue to lease 65 communities (4,055 units) under the master lease arrangement, which was extended through December 31, 2035 with one 10-year extension option remaining. The remaining 55 communities (6,127 units) that were not renewed are either being sold by Ventas or transitioned, with such transitions commencing on September 1, 2025. During the three months ended September 30, 2025, the lease terminated on 13 of such communities (1,412 units).
Previous report
The increase in resident fees was primarily attributable to a 5.3% increase in same community RevPAR, comprised of a 2.0% increase in same community RevPOR and a 260 basis point increase in same community weighted average occupancy. The increase was partially offset by the disposition of communities since the beginning of the prior year period, which resulted in $7.3 million less in resident fees during the three months ended September 30, 2025 compared to the prior year period.
Previous report
The increase in facility operating expense was primarily attributable to a 5.1% increase in same community facility operating expense primarily resulting from increases in wage rates, estimated group health insurance expense, and utilities expense. The increase was partially offset by the disposition of communities since the beginning of the prior year period, which resulted in $6.4 million less in facility operating expense during the three months ended September 30, 2025 compared to the prior year period.
Previous report
The increase in net loss was primarily attributable to a $61.8 million increase in non-cash impairment charges, primarily related to the planned disposition of certain underperforming communities resulting in a change in their intended holding periods, the increase in facility operating expense, a $5.1 million increase in transaction, legal, and organizational restructuring costs, and an increase in depreciation and amortization expense, partially offset by the increase in resident fees.
Previous report
The increase in the segment's resident fees was primarily attributable to an increase in the segment's same community RevPAR, comprised of a 3.0% increase in same community RevPOR and a 180 basis point increase in same community weighted average occupancy. The increase in the segment's same community RevPOR was primarily the result of the current year annual rate increase. The increase was partially offset by the disposition of communities since the beginning of the prior year period, which resulted in $1.3 million less in resident fees during the three months ended September 30, 2025 compared to the prior year period.
Previous report
The increase in the segment's facility operating expense was primarily attributable to an increase in the segment's same community facility operating expense primarily resulting from increases in wage rates, estimated group health insurance expense, and utilities expense. The increase was partially offset by the disposition of communities since the beginning of the prior year period, which resulted in $1.1 million less in facility operating expense during the three months ended September 30, 2025 compared to the prior year period.
Previous report
The increase in the segment's resident fees was primarily attributable to an increase in the segment's same community RevPAR, comprised of a 280 basis point increase in same community weighted average occupancy and a 1.9% increase in same community RevPOR. The increase in the segment's same community RevPOR was primarily the result of the current year annual rate increase. The increase was partially offset by the disposition of communities since the beginning of the prior year period, which resulted in $6.0 million less in resident fees during the three months ended September 30, 2025 compared to the prior year period.
Previous report
The increase in the segment's facility operating expense was primarily attributable to an increase in the segment's same community facility operating expense primarily resulting from increases in wage rates, estimated group health insurance expense, and utilities expense. The increase was partially offset by the disposition of communities since the beginning of the prior year period, which resulted in $5.3 million less in facility operating expense during the three months ended September 30, 2025 compared to the prior year period.
Previous report
Asset Impairment. During the three months ended September 30, 2025, we recorded $62.7 million of non-cash impairment charges primarily due to the planned disposition of certain underperforming communities resulting in a change in their intended holding periods. During the three months ended September 30, 2024, we recorded $0.9 million of non-cash impairment charges due to property damage sustained at certain communities.
Previous report
Loss (gain) on facility operating lease termination, net. During the three months ended September 30, 2025, we recognized a $4.5 million loss on facility operating lease termination, net, as a result of the termination of leases. During the three months ended September 30, 2025, we terminated the leases for 14 communities.
Previous report
Other Non-operating Income (Loss). The decrease in other non-operating income is due to decreased income recognized for insurance recoveries from our property and casualty insurance policies.
Previous report
Benefit (Provision) for Income Taxes. The difference between our effective tax rate for the three months ended September 30, 2025 and 2024 was primarily due to an increase in the benefit recorded on operating losses during the three months ended September 30, 2025.
Previous report
We recorded an aggregate deferred federal, state, and local tax benefit of $27.8 million for the three months ended September 30, 2025, which was partially offset by an increase in the valuation allowance of $27.5 million. We recorded an aggregate deferred federal, state, and local tax benefit of $12.2 million for the three months ended September 30, 2024, which was offset by an increase to the valuation allowance of $12.5 million.
Previous report
We evaluate our deferred tax assets each quarter to determine if a valuation allowance is required based on whether it is more likely than not that some portion of the deferred tax asset would not be realized. Our valuation allowance as of September 30, 2025 and December 31, 2024 was $572.0 million and $521.5 million, respectively.
Previous report
Comparison of Nine Months Ended September 30, 2025 and 2024
Previous report
Summary Operating Results
Previous report
The increase in resident fees was primarily attributable to a 4.9% increase in same community RevPAR, comprised of a 2.4% increase in same community RevPOR and a 190 basis point increase in same community weighted average occupancy. The increase was partially offset by the disposition of communities since the beginning of the prior year period, which resulted in $9.2 million less in resident fees during the nine months ended September 30, 2025 compared to the prior year period.
Previous report
The increase in facility operating expense was primarily attributable to a 4.5% increase in same community facility operating expense, primarily resulting from increases in wage rates, utilities expense, repairs and maintenance expense, and estimated group health insurance expense. The increase was partially offset by the disposition of communities since the beginning of the prior year period, which resulted in $8.6 million less in facility operating expense during the nine months ended September 30, 2025 compared to the prior year period.
Previous report
The increase in Adjusted EBITDA was primarily attributable to the increase in resident fees and a decrease in cash facility operating lease payments, partially offset by the increase in facility operating expense.
Previous report
Operating Results - Senior Housing Segments
Previous report
Independent Living Segment
Previous report
The increase in the segment's resident fees was primarily attributable to an increase in the segment's same community RevPAR, comprised of a 3.0% increase in same community RevPOR and a 130 basis point increase in same community weighted average occupancy. The increase in the segment's same community RevPOR was primarily the result of the current year annual rate increase.
Previous report
The increase in the segment's facility operating expense was primarily attributable to an increase in the segment’s same community facility operating expense, primarily resulting from increases in wage rates, repairs and maintenance expense, utilities expense, and estimated group health insurance expense.
Previous report
The increase in the segment's resident fees was primarily attributable to an increase in the segment's same community RevPAR, comprised of a 2.5% increase in same community RevPOR and a 200 basis point increase in same community weighted average occupancy. The increase in the segment's same community RevPOR was primarily the result of the current year annual rate increase. The increase in the segment's resident fees was partially offset by the disposition of communities since the beginning of the prior year period, which resulted in $8.5 million less in resident fees during the nine months ended September 30, 2025 compared to the prior year period.
Previous report
The increase in the segment's facility operating expense was primarily attributable to an increase in the segment's same community facility operating expense, primarily resulting from increases in wage rates, utilities expense, and estimated group health insurance expense. The increase in the segment's facility operating expense was partially offset by the disposition of communities since the beginning of the prior year period, which resulted in $7.8 million less in facility operating expense during the nine months ended September 30, 2025 compared to the prior year period. The segment's same community facility operating expense for the nine months ended September 30, 2025 and 2024 excludes $1.2 million and $2.9 million, respectively, of natural disaster expense.
Previous report
CCRCs Segment
Previous report
The increase in the segment's facility operating expense was primarily attributable to an increase in the segment's same community facility operating expense, primarily resulting from an increase in wage rates and food costs.
Previous report
Depreciation and Amortization. The increase in depreciation and amortization expense was primarily due to the acquisition of 36 communities previously subject to operating leases and the completion of capital expenditures at leased communities since the beginning of the prior year period.
Previous report
Asset Impairment. During the nine months ended September 30, 2025, we recorded $65.1 million of non-cash impairment charges, primarily related to the planned disposition of certain underperforming communities resulting in a change in their intended holding periods. During the nine months ended September 30, 2024, we recorded $2.6 million of non-cash impairment charges primarily due to non-cash impairment charges for property damage sustained at certain communities.
Previous report
Loss (gain) on facility operating lease termination, net. During the nine months ended September 30, 2025, we recognized a $4.5 million loss on facility operating lease termination, net, as a result of the termination of leases. During the nine months ended September 30, 2025, we terminated the leases for 15 communities.
Previous report
Other Non-operating Income (Loss). The decrease in other non-operating income is due to decreased income recognized for insurance recoveries from our property and casualty insurance policies.
Previous report
Benefit (Provision) for Income Taxes. The difference between our effective tax rate for the nine months ended September 30, 2025 and 2024 was primarily due to an increase in the benefit recorded on operating losses during the nine months ended September 30, 2025.
Previous report
We recorded an aggregate deferred federal, state, and local tax benefit of $52.7 million for the nine months ended September 30, 2025, which was partially offset by an increase in the valuation allowance of $50.5 million. We recorded an aggregate deferred federal, state, and local tax benefit of $28.9 million for the nine months ended September 30, 2024, which was partially offset by an increase to the valuation allowance of $28.8 million.
Previous report
The increase in net cash provided by operating activities was primarily attributable to an increase in resident fees, a $22.6 million decrease in cash facility operating lease payments, and a $12.1 million increase in lessor reimbursements for capital expenditures for operating leases compared to the prior year period, partially offset by an increase in facility operating expense compared to the prior year period.
Previous report
Total liquidity of $351.6 million as of September 30, 2025 included $253.4 million of unrestricted cash and cash equivalents (excluding restricted cash of $77.9 million) and $98.1 million of availability on our secured credit facility (excluding $16.1 million of availability on our separate letter of credit facilities, which can be drawn only as letters of credit). Total liquidity as of September 30, 2025 decreased $37.7 million from total liquidity of $389.3 million as of December 31, 2024. The decrease was primarily attributable to cash paid for acquisitions, net of financing proceeds, and the repayment of mortgage debt, partially offset by $45.5 million of Adjusted Free Cash Flow and a $37.6 million increase in availability on our secured credit facility during the period.
Previous report
(2)Amount is included in Adjusted Free Cash Flow.
Previous report
In the aggregate, we expect our full-year 2025 non-development capital expenditures, net of anticipated lessor reimbursements and property and casualty insurance proceeds, to be $170.0 million to $175.0 million. We anticipate that our 2025 capital expenditures will be funded from cash on hand, cash equivalents, cash flows from operations, and reimbursements from lessors.
Reworded paragraphs (32)
Previous wording
Certain statements in this Quarterly Report on Form 10-Q may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to various risks and uncertainties and include all statements that are not historical statements of fact and those regarding our intent, belief, or expectations. Forward-looking statements are generally identifiable by use of forward-looking terminology such as "may," "will," "should," "could," "would," "potential," "intend," "expect," "endeavor," "seek," "anticipate," "estimate," "believe," "project," "predict," "continue," "plan," "target," "annualized," or other similar words or expressions, and include statements regarding our expected financial and operational results. These forward-looking statements are based on certain assumptions and expectations, and our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Although we believe that expectations reflected in any forward-looking statements are based on reasonable assumptions, we can give no assurance that our assumptions or expectations will be attained and actual results and performance could differ materially from those projected. Factors which could have a material adverse effect on our operations and future prospects or which could cause events or circumstances to differ from the forward-looking statements include, but are not limited to, events which adversely affect the ability of seniors to afford resident fees, including downturns in the economy, housing market, consumer confidence, or the equity markets and unemployment among resident family members; the effects of senior housing construction and development, lower industry occupancy, and increased competition; conditions of housing markets, regulatory changes, acts of nature, and the effects of climate change in geographic areas where we are concentrated; terminations of our resident agreements and vacancies in the living spaces we lease; changes in reimbursement rates, methods, or timing under governmental reimbursement programs including the Medicare and Medicaid programs; failure to maintain the security and functionality of our information systems, to prevent a cybersecurity attack or breach, or to comply with applicable privacy and consumer protection laws, including HIPAA; our ability to complete our capital expenditures in accordance with our plans; our ability to identify and pursue development, investment, and acquisition opportunities and our ability to successfully integrate acquisitions; competition for the acquisition of assets; our ability to complete pending or expected disposition, acquisition, or other transactions on agreed upon terms or at all, including in respect of the satisfaction of closing conditions, the risk that regulatory approvals are not obtained or are subject to unanticipated conditions, and uncertainties as to the timing of closing…
Excerpt shortened here; the source contains the full paragraph.
Current wording
Certain statements in this Quarterly Report on Form 10-Q may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to various risks and uncertainties and include all statements that are not historical statements of fact and those regarding our intent, belief, or expectations. Forward-looking statements are generally identifiable by use of forward-looking terminology such as "may," "will," "should," "could," "would," "potential," "intend," "expect," "endeavor," "seek," "anticipate," "estimate," "believe," "project," "predict," "continue," "plan," "target," "annualized," or other similar words or expressions, and include statements regarding our expected financial and operational results. These forward-looking statements are based on certain assumptions and expectations, and our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Although we believe that expectations reflected in any forward-looking statements are based on reasonable assumptions, we can give no assurance that our assumptions or expectations will be attained and actual results and performance could differ materially from those projected. Factors which could have a material adverse effect on our operations and future prospects or which could cause events or circumstances to differ from the forward-looking statements include, but are not limited to, events which adversely affect the ability of seniors to afford resident fees, including downturns in the economy, housing market, consumer confidence, or the equity markets and unemployment among resident family members; the effects of senior housing construction and development, lower industry occupancy, and increased competition; conditions of housing markets, regulatory changes, acts of nature, and the effects of climate change in geographic areas where we are concentrated; terminations of our resident agreements and vacancies in the living spaces we lease; changes in reimbursement rates, methods, or timing under governmental reimbursement programs including the Medicare and Medicaid programs; failure to maintain the security and functionality of our information systems, to prevent a cybersecurity attack or breach, or to comply with applicable privacy and consumer protection laws, including HIPAA; our ability to complete our capital expenditures in accordance with our plans; our ability to identify and pursue development, investment, and acquisition opportunities and our ability to successfully integrate acquisitions; competition for the acquisition of assets; our ability to complete pending or expected disposition, acquisition, or other transactions on agreed upon terms or at all, including in respect of the satisfaction of closing conditions, the risk that regulatory approvals are not obtained or are subject to unanticipated conditions, and uncertainties as to the timing of closing…
Excerpt shortened here; the source contains the full paragraph.
Previous wording
We are the nation's premier operator of senior living communities, operating and managing 623 communities in 41 states as of September 30, 2025, with the ability to serve approximately 57,000 residents. We offer our residents access to a broad continuum of services across the most attractive sectors of the senior living industry. We operate and manage independent living, assisted living, memory care, and continuing care retirement communities ("CCRCs"). As of September 30, 2025, we owned 372 communities (33,487 units), leased 221 communities (15,373 units), and managed 30 communities (4,416 units).
Current wording
We are the nation's premier operator of senior living communities, operating and managing 568 communities in 41 states as of March 31, 2026, with the ability to serve approximately 51,000 residents. We offer our residents access to a broad continuum of services across the most attractive sectors of the senior living industry. We operate and manage independent living, assisted living, memory care, and continuing care retirement communities ("CCRCs"). As of March 31, 2026, we owned 363 communities (32,879 units), leased 176 communities (10,456 units), and managed 29 communities (4,293 units).
Previous wording
We have continued executing on our ongoing capital recycling program through which we have exited non-strategic or underperforming owned assets or leases. Such activities completed during the nine months ended September 30, 2025 included the sale of 10 owned communities (257 units) and the disposal of 15 communities (1,701 units) through lease termination.
Current wording
We have continued executing on our ongoing capital recycling program through which we have exited non-strategic or underperforming owned assets or leases. Such activities completed during the three months ended March 31, 2026 included the sale of seven owned communities (330 units) for proceeds of $22.1 million, net of transaction costs, and the disposal of two communities (152 units) through lease termination. Subsequent to March 31, 2026, we completed the sale of three owned communities (545 units) for cash proceeds of $88 million, net of transaction costs.
Previous wording
During the next twelve months, we expect to close on the disposition of six owned communities (773 units) classified as held for sale as of September 30, 2025. Additionally, we plan to market in 2025 and sell approximately 25 owned communities. The closings of the sales of the communities are subject to the satisfaction of various closing conditions, including (where applicable) the receipt of regulatory approvals. There can be no assurance that the transactions will close or, if they do, when the actual closings will occur.
Current wording
We plan to sell 19 additional owned communities (1,438 units) during 2026. The closings of the expected sales of assets are subject (where applicable) to our successful marketing of such assets on terms acceptable to us. Further, the closings of the expected sales of assets are, or will be, subject to the satisfaction of various conditions, including (where applicable) the receipt of regulatory approvals. There can be no assurance that the transactions will close or, if they do, when the actual closings will occur.
Previous wording
The increase in net loss was primarily attributable to a $62.4 million increase in non-cash impairment charges, primarily related to the planned disposition of certain underperforming communities resulting in a change in their intended holding periods, the increase in facility operating expense, a $32.8 million loss on extinguishment of a financing obligation during the nine months ended September 30, 2025 for the reacquisition of three communities previously subject to sale-leaseback transactions for the amount by which the repurchase price exceeded the previously recognized financing obligation for such three communities, a $16.8 million increase in transaction, legal, and organizational restructuring costs, and an increase in depreciation and amortization expense, partially offset by the increase in resident fees.
Current wording
The decrease in net loss was primarily attributable to a $32.8 million loss on extinguishment of a financing obligation during the prior year period for the reacquisition of three communities previously subject to sale-leaseback transactions and decreases in depreciation and amortization expense and facility operating lease expense due to the disposition of communities since the beginning of the prior year period.
Previous wording
The increase in Adjusted EBITDA was primarily attributable to the increase in resident fees and a decrease in cash facility operating lease payments, partially offset by the increase in facility operating expense.
Current wording
The increase in Adjusted EBITDA was primarily attributable to an increase in same community resident fees partially offset by an increase in same community facility operating expense.
Previous wording
The following table summarizes the operating results and data of our three senior housing segments (Independent Living, Assisted Living and Memory Care, and CCRCs) on a combined basis for the nine months ended September 30, 2025 and 2024 including operating results and data on a same community basis. See management's discussion and analysis of the operating results on an individual segment basis on the following pages.
Current wording
The following table summarizes the consolidated operating results and data of our three senior housing segments (Independent Living, Assisted Living and Memory Care, and CCRCs) for the three months ended March 31, 2026 and 2025, including operating results and data on a same community basis. The same community portfolio excludes 23 communities, including 22 communities that we sold subsequent to March 31, 2026 or that we plan to sell during 2026. See management's discussion and analysis of the operating results on an individual segment basis on the following pages.
Previous wording
The increase in the segment's resident fees was primarily attributable to an increase in the segment's same community RevPAR, comprised of a 300 basis point increase in same community weighted average occupancy and a 0.6% increase in the segment's same community RevPOR. The increase in the segment's same community RevPOR was primarily the result of the current year annual rate increase, and was partially offset by lower skilled nursing revenue and an occupancy mix shift to more independent living residents.
Current wording
The decrease in the segment's resident fees was primarily attributable to the disposition of communities since the beginning of the prior year period, which resulted in $8.3 million less in resident fees during the three months ended March 31, 2026 compared to the prior year period. The decrease was partially offset by an increase in the segment's same community RevPAR, comprised of a 210 basis point increase in same community weighted average occupancy and a 1.3% increase in the segment's same community RevPOR. The increase in the segment's same community RevPOR was primarily the result of the current year annual rate increase, partially offset by lower skilled nursing revenue and an occupancy mix shift to more independent living residents.
Previous wording
Reimbursed Costs Incurred on Behalf of Managed Communities and Costs Incurred on Behalf of Managed Communities. The decrease in reimbursed costs and costs incurred on behalf of managed communities was primarily attributable to terminations of management agreements subsequent to the beginning of the prior year period.
Current wording
Reimbursed Costs Incurred on Behalf of Managed Communities and Costs Incurred on Behalf of Managed Communities. The increase in reimbursed costs and costs incurred on behalf of managed communities was primarily attributable to management agreements entered into since the beginning of the prior year period.
Previous wording
General and Administrative Expense. The increase in general and administrative expense was primarily attributable to $3.6 million of organizational restructuring costs related to senior leadership changes and our efforts to reduce general and administrative expense as we scaled our general and administrative costs in connection with community dispositions and $1.3 million of transaction costs for stockholder relations advisory matters in the current period. General and administrative expense includes transaction, legal, and organizational restructuring costs of $5.1 million and $0.1 million for the three months ended September 30, 2025 and 2024, respectively. Transaction costs include those directly related to acquisition, disposition, financing, and leasing activity and stockholder relations advisory matters, and are primarily comprised of legal, finance, consulting, professional fees, and other third-party costs. Legal costs include charges associated with putative class action litigation. Organizational restructuring costs include those related to our efforts to reduce general and administrative expense and our senior leadership changes, including severance costs.
Current wording
General and Administrative Expense. The decrease in general and administrative expense was primarily attributable to our efforts to reduce general and administrative expense as we scaled our general and administrative costs in connection with community dispositions and $1.6 million of transaction costs for stockholder relations advisory matters in the prior year period. General and administrative expense includes transaction, legal, and organizational restructuring costs of $0.8 million and $1.7 million for the three months ended March 31, 2026 and 2025, respectively. Transaction costs include those directly related to acquisition, disposition, financing, and leasing activity and stockholder relations advisory matters, and are primarily comprised of legal, finance, consulting, professional fees, and other third-party costs. Legal costs include charges associated with putative class action litigation. Organizational restructuring costs include those related to our efforts to reduce general and administrative expense and our senior leadership changes, including severance costs.
Previous wording
Facility Operating Lease Expense. The increase in facility operating lease expense was primarily due to the extension of the operating lease for 65 communities.
Current wording
Facility Operating Lease Expense. The decrease in facility operating lease expense was primarily due to the termination of community leases subsequent to the prior year period.
Previous wording
Depreciation and Amortization. The increase in depreciation and amortization expense was primarily due to the acquisition of 36 communities previously subject to operating leases and the completion of capital expenditures at leased communities since the beginning of the prior year period.
Current wording
Depreciation and Amortization. The decrease in depreciation and amortization expense was primarily due to the disposition of communities since the beginning of the prior year period.
Previous wording
Interest Expense. The increase in interest expense was primarily due to debt obtained to finance the acquisition of 36 communities previously subject to operating leases subsequent to the prior year period.
Current wording
Interest expense. The decrease in interest expense was primarily due to the acquisition of 36 communities previously subject to financing leases subsequent to the beginning of the prior year period and an increase in the fair value of interest rate derivatives in the current period.
Previous wording
Gain (Loss) on Debt Modification and Extinguishment, Net. The increase in loss on debt modification and extinguishment, net was primarily due to a $32.8 million loss on extinguishment of a financing obligation during the current period for the reacquisition of three communities previously subject to sale-leaseback transactions.
Current wording
Gain (Loss) on Debt Modification and Extinguishment, Net. The decrease in loss on debt modification and extinguishment, net was primarily due to a $32.8 million loss on extinguishment of a financing obligation during the prior year period for the reacquisition of three communities previously subject to sale-leaseback transactions.
Previous wording
The increase in net cash used in investing activities was primarily attributable to $311.0 million of cash paid for the acquisition of formerly leased communities in the current period.
Current wording
The decrease in net cash used in investing activities was primarily attributable to $311.0 million of cash paid for the acquisition of formerly leased communities in the prior year period.
Previous wording
The change in net cash provided by (used in) financing activities was primarily attributable to a $132.0 million decrease in repayment of debt and financing lease obligations compared to the prior year period and a $56.7 million increase in debt proceeds compared to the prior year period.
Current wording
The change in net cash provided by (used in) financing activities was primarily attributable to a $147.6 million increase in repayment of debt compared to the prior year period and a $89.0 million decrease in debt proceeds compared to the prior year period.
Previous wording
The change in Adjusted Free Cash Flow was primarily attributable to the increase in net cash provided by operating activities.
Current wording
The change in Adjusted Free Cash Flow was primarily attributable to a $7.3 million increase in non-development capital expenditures, net and the decrease in net cash provided by operating activities.
Previous wording
We are highly leveraged and have significant debt and lease obligations. As of September 30, 2025, we had $4.3 billion of debt outstanding at a weighted average interest rate of 5.18%. As of such date, 88.1%, or $3.8 billion, of our total debt obligations represented non-recourse property-level mortgage financings.
Current wording
We are highly leveraged and have significant debt and lease obligations. As of March 31, 2026, we had $4.3 billion of debt outstanding at a weighted average interest rate of 5.06%. As of such date, 89.3%, or $3.9 billion, of our total debt obligations represented non-recourse property-level mortgage financings.
Previous wording
As of September 30, 2025, we had $1.2 billion of operating and financing lease obligations, and for the twelve months ending September 30, 2026, we will be required to make approximately $200.0 million of cash lease payments in connection with our existing operating and financing leases (without giving effect to the early termination by Ventas of certain of our community leases with maturity dates of December 31, 2025).
Current wording
As of March 31, 2026, we had $1.2 billion of operating and financing lease obligations, and for the twelve months ending March 31, 2027, we will be required to make approximately $192.2 million of cash lease payments in connection with our existing operating and financing leases.
Previous wording
As of September 30, 2025, our current liabilities exceeded current assets by $100.8 million. Included in our current liabilities is $82.4 million of the current portion of operating and financing lease obligations, for which the associated right-of-use assets are excluded from current assets on our condensed consolidated balance sheets. We currently estimate our historical principal sources of liquidity, primarily our cash flows from operations, together with cash balances on hand and cash equivalents, availability on our secured credit facility, and proceeds from financings and refinancings of various assets will be sufficient to fund our liquidity needs for at least the next 12 months. We continue to focus on increasing our RevPAR, maintaining appropriate expense discipline, continuing to refinance or exercise available extension options for maturing debt, continuing to evaluate our capital structure and the state of debt and equity markets, and monetizing non-strategic or underperforming owned assets. There is no assurance that financing will continue to be available on terms consistent with our expectations or at all, or that our efforts will be successful in monetizing certain assets or exercising extension options.
Current wording
We currently estimate our historical principal sources of liquidity, primarily our cash flows from operations, together with cash balances on hand and cash equivalents, availability on our secured credit facility, and proceeds from financings and refinancings of various assets will be sufficient to fund our liquidity needs for at least the next 12 months. We continue to focus on increasing our RevPAR, maintaining appropriate expense discipline, continuing to refinance or exercise available extension options for maturing debt, continuing to evaluate our capital structure and the state of debt and equity markets, and monetizing non-strategic or underperforming owned assets. There is no assurance that financing will continue to be available on terms consistent with our expectations or at all, or that our efforts will be successful in monetizing certain assets or exercising extension options.
Previous wording
Our actual liquidity and capital funding requirements depend on numerous factors, including our operating results, our actual level of capital expenditures, general economic conditions, and the cost of capital, as well as other factors described in "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the Securities and Exchange Commission ("SEC") on February 19, 2025. Since the amount of mortgage financing available for our communities is generally dependent on their appraised values and performance, decreases in their appraised values, including due to adverse changes in real estate market conditions, or their performance, could result in available mortgage refinancing amounts that are less than the communities’ maturing indebtedness. In addition, our inability to satisfy underwriting criteria for individual communities may limit our access to our historical lending sources for such communities, including Fannie Mae and Freddie Mac. As of September 30, 2025, 9% of our owned communities were unencumbered by mortgage debt.
Current wording
Our actual liquidity and capital funding requirements depend on numerous factors, including our operating results, our actual level of capital expenditures, general economic conditions, and the cost of capital, as well as other factors described in "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the Securities and Exchange Commission ("SEC") on February 19, 2026. Since the amount of mortgage financing available for our communities is generally dependent on their appraised values and performance, decreases in their appraised values, including due to adverse changes in real estate market conditions, or their performance, could result in available mortgage refinancing amounts that are less than the communities’ maturing indebtedness. In addition, our inability to satisfy underwriting criteria for individual communities may limit our access to our historical lending sources for such communities, including Fannie Mae and Freddie Mac. As of March 31, 2026, 11% of our owned communities were unencumbered by mortgage debt.
Previous wording
We have $98.8 million and $227.1 million of mortgage notes payable scheduled to mature in January 2026 and October 2026, respectively, with one-year extension options, exercisable by us subject to the satisfaction of certain conditions. We expect to satisfy the conditions to exercise the options to extend the mortgage notes payable for the additional one-year term. We have completed the refinancing of all of our mortgage debt maturities due in 2025. Our other debt maturities in 2026 are $20.3 million of mortgage debt and the $23.3 million aggregate principal amount of the 2026 Notes. Our inability to obtain refinancing proceeds sufficient to cover 2026 and later maturing indebtedness could adversely impact our liquidity, and may cause us to seek additional alternative sources of financing, which may be less attractive or unavailable. Shortfalls in cash flows from estimated operating results or other principal sources of liquidity may have an adverse impact on our ability to fund our planned capital expenditures or to fund investments to support our strategy. In order to continue some of these activities at historical or planned levels, we may incur additional indebtedness or lease financing to provide additional funding. There can be no assurance that any such additional financing will be available or on terms that are acceptable to us.
Current wording
As of March 31, 2026, the current portion of long-term debt was $82.6 million, which includes $23.3 million of our 2.00% convertible senior notes due October 15, 2026 and $6.2 million of mortgage notes payable secured by assets held for sale. We have completed the refinancing of all of our mortgage debt maturities due in 2026. Our inability to obtain refinancing proceeds sufficient to cover 2027 and later maturing indebtedness could adversely impact our liquidity, and may cause us to seek additional alternative sources of financing, which may be less attractive or unavailable. Shortfalls in cash flows from estimated operating results or other principal sources of liquidity may have an adverse impact on our ability to fund our planned capital expenditures or to fund investments to support our strategy. In order to continue some of these activities at historical or planned levels, we may incur additional indebtedness or lease financing to provide additional funding. There can be no assurance that any such additional financing will be available or on terms that are acceptable to us.
Previous wording
Our capital expenditures are comprised of community-level, corporate, and development capital expenditures. Community-level capital expenditures include maintenance expenditures (including routine maintenance of communities over $1,500 per occurrence), community renovations, unit upgrades (including unit turnovers over $500 per unit), and other major building infrastructure projects (including replacements of major building systems). Corporate capital expenditures include those for information technology systems and equipment and the remediation or replacement of assets as a result of casualty losses. Development capital expenditures include community expansions, major community redevelopment and repositioning projects, and the development of new communities.
Current wording
Our capital expenditures for the three months ended March 31, 2026 are comprised of community-level and corporate capital expenditures. Community-level capital expenditures include maintenance expenditures (including routine maintenance of communities over $1,500 per occurrence), community renovations, unit upgrades (including unit turnovers over $500 per unit), and other major building infrastructure projects (including replacements of major building systems). Corporate capital expenditures include those for information technology systems and equipment and the remediation or replacement of assets as a result of casualty losses.
Previous wording
The following table summarizes our capital expenditures for the nine months ended September 30, 2025 for our consolidated business.
Current wording
The following table summarizes our capital expenditures for the three months ended March 31, 2026 for our consolidated business.
Previous wording
(1)Reflects the amount invested, net of lessor reimbursements of $20.1 million.
Current wording
(1)Reflects the amount invested, net of lessor reimbursements of $4.8 million.
Previous wording
In December 2023, we amended our revolving credit agreement with Capital One, National Association, as administrative agent and lender and the other lenders from time to time parties thereto. The amended agreement provides an expanded commitment amount of up to $100.0 million which can be drawn in cash or as letters of credit. The credit facility matures in January 2027, and we have the option to extend the facility for two additional terms of approximately one year each subject to the satisfaction of certain conditions. We expect to satisfy the conditions to exercise the option to extend the facility for the first additional term. Amounts drawn under the facility will bear interest at the Secured Overnight Financing Rate ("SOFR") plus an applicable margin ranging from 2.5% to 3.0% based upon the percentage of the total commitment drawn. Additionally, a quarterly commitment fee of 0.25% per annum was applicable on the unused portion of the facility as of September 30, 2025. The revolving credit facility is currently secured by first priority mortgages and negative pledges on certain of our communities. Available capacity under the facility will vary from time to time based upon certain calculations related to the appraised value and performance of the communities securing the credit facility and the variable interest rate of the credit facility.
Current wording
In December 2023, we amended our revolving credit agreement with Capital One, National Association, as administrative agent and lender and the other lenders from time to time parties thereto. The amended agreement provides an expanded commitment amount of up to $100.0 million which can be drawn in cash or as letters of credit. The credit facility matures in January 2027, and we have the option to extend the facility for two additional terms of approximately one year each subject to the satisfaction of certain conditions. We expect to satisfy the conditions to exercise the option to extend the facility for the first additional term. Amounts drawn under the facility will bear interest at the Secured Overnight Financing Rate ("SOFR") plus an applicable margin ranging from 2.5% to 3.0% based upon the percentage of the total commitment drawn. Additionally, a quarterly commitment fee of 0.35% per annum was applicable on the unused portion of the facility as of March 31, 2026. The revolving credit facility is currently secured by first priority mortgages and negative pledges on certain of our communities. Available capacity under the facility will vary from time to time based upon certain calculations related to the appraised value and performance of the communities securing the credit facility and the variable interest rate of the credit facility.
Previous wording
As of September 30, 2025, $1.9 million of letters of credit and no cash borrowings were outstanding under our $100.0 million secured credit facility and the facility had $98.1 million of availability. We also had separate letter of credit facilities providing up to $85.0 million of letters of credit as of September 30, 2025 under which $68.9 million had been issued as of that date.
Current wording
As of March 31, 2026, $1.4 million of letters of credit and no cash borrowings were outstanding under our $100.0 million secured credit facility and the facility had $98.6 million of availability. We also had separate letter of credit facilities providing up to $68.0 million of letters of credit as of March 31, 2026 under which $59.2 million had been issued as of that date.
Previous wording
As of September 30, 2025, we operated 221 communities under long-term leases (212 operating leases and 9 financing leases). The substantial majority of our lease arrangements are structured as master leases. Under a master lease, numerous communities are leased through an indivisible lease. In certain cases, we guarantee the performance and lease payment obligations of our subsidiary lessees under the master leases. Due to the nature of such master leases, it is difficult to restructure the composition of our leased portfolios or economic terms of the leases without the consent of the applicable landlord. In addition, an event of default related to an individual property or limited number of properties within a master lease portfolio may result in a default on the entire master lease portfolio.
Current wording
As of March 31, 2026, we operated 176 communities under long-term leases (167 operating leases and 9 financing leases). The substantial majority of our lease arrangements are structured as master leases. Under a master lease, numerous communities are leased through an indivisible lease. In certain cases, we guarantee the performance and lease payment obligations of our subsidiary lessees under the master leases. Due to the nature of such master leases, it is difficult to restructure the composition of our leased portfolios or economic terms of the leases without the consent of the applicable landlord. In addition, an event of default related to an individual property or limited number of properties within a master lease portfolio may result in a default on the entire master lease portfolio.
Previous wording
The community leases contain other customary terms, which may include assignment and change of control restrictions, maintenance and capital expenditure obligations, termination provisions, and financial covenants, such as those requiring us to maintain prescribed minimum liquidity and net worth and lease coverage ratios. Our lease documents generally contain non-financial covenants, such as those requiring us to comply with Medicare or Medicaid provider requirements and maintain insurance coverage. Certain leases contain cure provisions, which generally allow us to post an additional lease security deposit if the required covenant is not met.
Current wording
The community leases contain other customary terms, which may include assignment and change of control restrictions, maintenance and capital expenditure obligations, termination provisions, and financial covenants, such as those requiring us to maintain prescribed minimum liquidity and net worth levels and lease coverage ratios. Our lease documents generally contain non-financial covenants, such as those requiring us to comply with Medicare or Medicaid provider requirements and maintain insurance coverage. Certain leases contain cure provisions, which generally allow us to post an additional lease security deposit if the required covenant is not met.
Previous wording
For the nine months ended September 30, 2025, our cash lease payments for our operating leases were $177.0 million and for our financing leases were $10.0 million. For the twelve months ending September 30, 2026, we will be required to make approximately $200.0 million of cash lease payments in connection with our existing operating and financing leases (without giving effect to the early termination by Ventas of certain of our community leases with maturity dates of December 31, 2025).
Current wording
For the three months ended March 31, 2026, our cash lease payments for our operating leases were $46.5 million and for our financing leases were $2.0 million. For the twelve months ending March 31, 2027, we will be required to make approximately $192.2 million of cash lease payments in connection with our existing operating and financing leases.
Previous wording
Certain of our long-term debt and lease documents contain restrictions, maintenance and capital expenditure obligations, and financial covenants, such as those requiring us to maintain prescribed minimum liquidity and net worth levels and debt service and lease coverage ratios, and requiring us not to exceed prescribed leverage ratios, in each case on a consolidated, portfolio-wide, multi-community, single-community, and/or entity basis. These covenants include a requirement contained in certain of our long-term debt documents for us to maintain liquidity of at least $130.0 million at each quarter-end determination date. As of September 30, 2025, our liquidity was $351.6 million.
Current wording
Certain of our long-term debt and lease documents contain restrictions, maintenance and capital expenditure obligations, and financial covenants, such as those requiring us to maintain prescribed minimum liquidity and net worth levels and debt service and lease coverage ratios, and requiring us not to exceed prescribed leverage ratios, in each case on a consolidated, portfolio-wide, multi-community, single-community, and/or entity basis. These covenants include a requirement contained in certain of our long-term debt documents for us to maintain liquidity of at least $130.0 million at each quarter-end determination date. As of March 31, 2026, our liquidity was $368.7 million.
Previous wording
Adjusted EBITDA is a non-GAAP performance measure that we define as net income (loss) excluding: benefit/provision for income taxes, non-operating income/expense items, and depreciation and amortization; and further adjusted to exclude income/expense associated with non-cash, non-operational, transactional, legal, cost reduction, or organizational restructuring items that management does not consider as part of our underlying core operating performance and that management believes impact the comparability of performance between periods. For the periods presented herein, such other items include non-cash impairment charges, operating lease expense adjustment, non-cash stock-based compensation expense, gain/loss on sale of communities, gain/loss on facility operating lease termination, and transaction, legal, and organizational restructuring costs. Transaction costs include those directly related to acquisition, disposition, financing, and leasing activity and stockholder relations advisory matters, and are primarily comprised of legal, finance, consulting, professional fees, and other third-party costs. Legal costs include charges associated with putative class action litigation. Organizational restructuring costs include those related to our efforts to reduce general and administrative expense and our senior leadership changes, including severance.
Current wording
Adjusted EBITDA is a non-GAAP performance measure that we define as net income (loss) excluding: benefit/provision for income taxes, non-operating income/expense items, and depreciation and amortization; and further adjusted to exclude income/expense associated with non-cash, non-operational, transactional, legal, cost reduction, or organizational restructuring items that management does not consider as part of our underlying core operating performance and that management believes impact the comparability of performance between periods. For the periods presented herein, such other items include non-cash impairment charges, operating lease expense adjustment, non-cash stock-based compensation expense, gain/loss on sale of communities, and transaction, legal, and organizational restructuring costs. Transaction costs include those directly related to acquisition, disposition, financing, and leasing activity and stockholder relations advisory matters, and are primarily comprised of legal, finance, consulting, professional fees, and other third-party costs. Legal costs include charges associated with putative class action litigation. Organizational restructuring costs include those related to our efforts to reduce general and administrative expense and our senior leadership changes, including severance.
Rearranged previous paragraphs (14)
Previous report — wording carried elsewhere
The following table summarizes the consolidated operating results and data of our three senior housing segments (Independent Living, Assisted Living and Memory Care, and CCRCs) for the three months ended September 30, 2025 and 2024, including operating results and data on a same community basis. The same community portfolio excludes 51 communities, including 42 communities (4,715 units) leased from Ventas with a lease maturity in 2025 and 6 communities (773 units) classified as assets held for sale. See management's discussion and analysis of the operating results on an individual segment basis on the following pages.
Previous report — wording carried elsewhere
The increase in the segment's resident fees was primarily attributable to an increase in the segment's same community RevPAR, comprised of a 300 basis point increase in same community weighted average occupancy and a 1.0% increase in the segment's same community RevPOR. The increase in the segment's same community RevPOR was primarily the result of the current year annual rate increase, partially offset by lower skilled nursing revenue and an occupancy mix shift to more independent living residents.
Previous report — wording carried elsewhere
The increase in the segment's facility operating expense was primarily attributable to an increase in the segment's same community facility operating expense primarily resulting from increases in wage rates.
Previous report — wording carried elsewhere
Interest expense. The decrease in interest expense was primarily due to a decrease in the fair value of interest rate derivatives in the prior period.
Previous report — wording carried elsewhere
Gain (Loss) on Debt Modification and Extinguishment, Net. The decrease in loss on debt modification and extinguishment, net was primarily due to debt modification costs recognized during the three months ended September 30, 2024 for the refinancing of mortgage debt.
Previous report — wording carried elsewhere
The following table summarizes our overall operating results for the nine months ended September 30, 2025 and 2024.
Previous report — wording carried elsewhere
The following table summarizes the operating results and data for our Independent Living segment for the nine months ended September 30, 2025 and 2024, including operating results and data on a same community basis.
Previous report — wording carried elsewhere
Assisted Living and Memory Care Segment
Previous report — wording carried elsewhere
The following table summarizes the operating results and data for our Assisted Living and Memory Care segment for the nine months ended September 30, 2025 and 2024, including operating results and data on a same community basis.
Previous report — wording carried elsewhere
The following table summarizes the operating results and data for our CCRCs segment for the nine months ended September 30, 2025 and 2024, including operating results and data on a same community basis.
Previous report — wording carried elsewhere
Operating Results - Other Income and Expense Items
Previous report — wording carried elsewhere
The following table summarizes other income and expense items in our operating results for the nine months ended September 30, 2025 and 2024.
Previous report — wording carried elsewhere
Reimbursed Costs Incurred on Behalf of Managed Communities and Costs Incurred on Behalf of Managed Communities. The decrease in reimbursed costs and costs incurred on behalf of managed communities was primarily attributable to terminations of management agreements subsequent to the beginning of the prior year period, partially offset by an increase in community costs incurred for communities managed in both periods.
Previous report — wording carried elsewhere
General and Administrative Expense. The increase in general and administrative expense was primarily attributable to $8.8 million of organizational restructuring costs related to senior leadership changes and our efforts to reduce general and administrative expense, as we scaled our general and administrative costs in connection with community dispositions and $8.0 million of transaction costs for stockholder relations advisory matters in the current period. General and administrative expense includes transaction, legal, and organizational restructuring costs of $17.3 million and $0.6 million for the nine months ended September 30, 2025 and 2024, respectively. Transaction costs include those directly related to acquisition, disposition, financing, and leasing activity and stockholder relations advisory matters, and are primarily comprised of legal, finance, consulting, professional fees, and other third-party costs. Legal costs include charges associated with putative class action litigation. Organizational restructuring costs include those related to our efforts to reduce general and administrative expense and our senior leadership changes, including severance costs.