Q - National Healthcare Properties,

Previous wording

These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of our control, which could cause actual results to differ materially from the results contemplated by the forward-looking statements. These risks and uncertainties include the risks associated with the internalization of our property management and advisory functions; the geopolitical instability due to the ongoing military conflicts between Russia and Ukraine, including related impact on us, our tenants, operators and the global economy and financial markets; the increased economic and political uncertainties due to the tariffs imposed by, or imposed on, the United States and its trading relationships; and that our ongoing or potential future transactions are subject to market conditions and capital availability and may not be identified or completed on favorable terms, or at all. Some of the additional risks and uncertainties, although not all risks and uncertainties, that could cause our actual results to differ materially from those presented in our forward-looking statements are set forth in the Risk Factors section of our Annual Report on Form 10-K for the year ended December 31, 2024 as well as Part II — Other Information, Item IA — Risk Factors below.

Current wording

These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of our control, which could cause actual results to differ materially from the results contemplated by the forward-looking statements. These risks and uncertainties include the risks associated with the internalization of our property management and advisory functions; the geopolitical instability due to the ongoing military conflicts between Russia and Ukraine, including related impact on us, our tenants, operators and the global economy and financial markets; the increased economic and political uncertainties due to the tariffs imposed by, or imposed on, the United States and its trading relationships; and that our ongoing or potential future transactions are subject to market conditions and capital availability and may not be identified or completed on favorable terms, or at all. Some of the additional risks and uncertainties, although not all risks and uncertainties, that could cause our actual results to differ materially from those presented in our forward-looking statements are set forth in the Risk Factors section of our Annual Report on Form 10-K for the year ended December 31, 2024, in Part II — Other Information, Item IA — Risk Factors of this Quarterly Report on Form 10-Q and as described from time to time in our other filings with the Securities and Exchange Commission.

Previous wording

We are a real estate investment trust (“REIT”) for U.S. federal income tax purposes. We acquire, own and manage a diversified portfolio of healthcare-related real estate focused on outpatient medical facilities and senior housing operating properties. As of March 31, 2025, we owned 181 properties (including one land parcel) located in 30 states and comprised of 7.6 million rentable square feet.

Current wording

We are a real estate investment trust (“REIT”) for U.S. federal income tax purposes. We acquire, own and manage a diversified portfolio of healthcare-related real estate focused on outpatient medical facilities (“OMFs”) and senior housing operating properties (“SHOPs”). As of June 30, 2025, we owned 175 properties (including one land parcel) located in 30 states and comprised of 7.3 million rentable square feet.

Previous wording

We operate in two reportable business segments for management and financial reporting purposes: outpatient medical facilities (“OMFs”) and senior housing operating properties (“SHOPs”). All of our properties across both business segments are located throughout the United States. In our OMF operating segment, we own, manage and lease single- and multi-tenant OMFs where tenants are required to pay their pro rata share of property operating expenses, which may be subject to expense exclusions and floors, in addition to base rent. Our Property Manager or third-party managers manage our OMFs. In our SHOP segment, we invest in seniors housing properties through the REIT Investment Diversification and Empowerment Act of 2007 structure. As of March 31, 2025, we had four eligible independent contractors operating 44 SHOPs.

Current wording

We operate in two reportable business segments for management and financial reporting purposes: OMFs and SHOPs. All of our properties across both business segments are located throughout the United States. In our OMF operating segment, we own, manage and lease single- and multi-tenant OMFs where tenants are generally required to pay their pro rata share of property operating expenses, which may be subject to expense exclusions and floors, in addition to base rent. Our Property Manager or third-party managers manage our OMFs. In our SHOP segment, we invest in seniors housing properties through the REIT Investment Diversification and Empowerment Act of 2007 structure. As of June 30, 2025, we had four eligible independent contractors operating 41 SHOPs.

Previous wording

(3)Gross asset value represents total real estate investments, at cost($2.3 billion total as of March 31, 2025) net of gross market lease intangible liabilities ($20.0 million total as of March 31, 2025). Cumulative impairment charges are reflected within gross asset value.

Current wording

(3)Gross asset value represents total real estate investments, at cost($2.2 billion total as of June 30, 2025) net of gross market lease intangible liabilities ($19.9 million total as of June 30, 2025). Cumulative impairment charges are reflected within gross asset value.

Previous wording

(4)Includes one parcel of land. As of March 31, 2025, we had 3,939 rentable units in our SHOP segment. The SHOP segment excludes one closed SHOP with 39 rentable units and a land parcel.

Current wording

(4)Includes one parcel of land. As of June 30, 2025, we had 3,784 rentable units in our SHOP segment. The SHOP segment excludes one closed SHOP with 39 rentable units.

Previous wording

(5)Percentage leased for the OMF segment is presented as of the end of the period shown; percentage leased for the SHOP segment is presented for the duration of the period shown.

Current wording

(5)Percentage leased for the OMF segment is presented as of the end of the period shown; percentage leased for the SHOP segment represents occupancy as of the end of the period shown.

Previous wording

Net loss attributable to common stockholders was $5.0 million and $19.0 million, respectively, for the three months ended March 31, 2025, and 2024. The following table shows our results of operations for the three months ended March 31, 2025 and 2024 and the period to period change by line item of the consolidated statements of operations:

Current wording

Net loss attributable to common stockholders was $24.2 million and $119.9 million, respectively, for the three months ended June 30, 2025, and 2024. The following table shows our results of operations for the three months ended June 30, 2025 and 2024 and the period to period change by line item of the consolidated statements of operations:

Previous wording

Revenue from tenants primarily reflects contractual rent received from tenants in our OMFs and operating expense reimbursements. These reimbursements generally increase in proportion with the increase in property operating and maintenance expenses in our OMF segment. Pursuant to many of our lease agreements in our OMFs, tenants are required to pay their pro rata share of property operating and maintenance expenses, which may be subject to expense exclusions and floors, in addition to base rent. Property operating and maintenance expenses reflect the costs associated with our OMFs, including real estate taxes, utilities, repairs, maintenance and unaffiliated third-party property management fees.

Current wording

Revenue from tenants primarily reflects contractual rent received from tenants in our OMFs and operating expense reimbursements. These reimbursements generally increase in proportion with the increase in property operating and maintenance expenses in our OMF segment. Pursuant to many of our lease agreements in our OMFs, tenants are generally required to pay their pro rata share of property operating and maintenance expenses, which may be subject to expense exclusions and floors, certain capital expenditures, and salaries in addition to base rent. Property operating and maintenance expenses reflect the costs associated with our OMFs, including real estate taxes, utilities, repairs, maintenance and property management fees.

Previous wording

(1)Includes two and one land parcels for the three months ended March 31, 2025 and 2024, respectively.

Current wording

(1)Includes one and two land parcels for the three months ended June 30, 2025 and 2024, respectively.

Previous wording

The SHOP NOI increase for the three months ended March 31, 2025 over the same period in 2024 was primarily due to positive trends in revenue driven by occupancy gains and continued expense management, partially offset by the disposition of two SHOPs subsequent to March 31, 2024.

Current wording

The SHOP NOI increase for the three months ended June 30, 2025 over the same period in 2024 was primarily due to positive trends in revenue driven by occupancy gains, partially offset by higher operating expenses in 2025, and the disposition of three SHOPs subsequent to June 30, 2024.

Previous wording

We recorded $11.9 million of impairment charges during the three months ended March 31, 2025, related primarily to two held-for-use SHOPs ($11.2 million) and one held-for-use OMF ($0.7 million). These properties were impaired to their contractual sales price as determined by their purchase and sale agreements and were subsequently sold in April 2025 or expected to be sold. See Note 3 — Real Estate Investments, Net to our consolidated financial statements in this Quarterly Report on Form 10-Q for additional information on the impairment charges.

Current wording

We recorded $15.2 million of impairment charges during the three months ended June 30, 2025, related primarily to a held-for-use SHOP ($14.1 million). This property was impaired to its contractual sales price as determined by its purchase and sale agreement and is expected to be sold. See Note 3 — Real Estate Investments, Net to our consolidated financial statements in this Quarterly Report on Form 10-Q for additional information on the impairment charges.

Previous wording

Operating fees to these related parties were 6.4 million for the three months ended March 31, 2024. No operating fees to related parties were incurred during the three months ended March 31, 2025 as a result of the Internalization.

Current wording

Operating fees to these related parties were $6.4 million for the three months ended June 30, 2024. No operating fees to related parties were incurred during the three months ended June 30, 2025 as a result of the Internalization.

Previous wording

Interest expense decreased by $1.9 million to $14.5 million for the three months ended March 31, 2025 from $16.4 million for the three months ended March 31, 2024. The decrease in interest expense was mainly due to lower average balances of our indebtedness and lower weighted average interest rates during the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, and the proceeds of $1.5 million in connection to the partial unwind of an interest rate swap. In conjunction with the partial unwind, the Company accelerated the reclassification of gains of $1.5 million from other comprehensive income to earnings as a result of the hedged forecasted transactions becoming probable not to occur. This gain was recorded as a reduction in interest expense on itsconsolidated statements of operations and comprehensive lossfor the three months ended March 31, 2025.

Current wording

Interest expense decreased by $1.9 million to $15.8 million for the three months ended June 30, 2025 from $17.8 million for the three months ended June 30, 2024. The decrease in interest expense was mainly due to lower average balances of our indebtedness and lower weighted average interest rates during the three months ended June 30, 2025, as compared to the three months ended June 30, 2024.

Previous wording

Allocation for preferred stock was $3.5 million for each of the three months ended March 31, 2025 and 2024. These amounts represent the allocation of our net loss that is attributable to holders of Series A Preferred Stock and Series B Preferred Stock.

Current wording

Allocation for preferred stock was $3.4 million for each of the three months ended June 30, 2025 and 2024. These amounts represent the allocation of our net loss that is attributable to holders of Series A Preferred Stock and Series B Preferred Stock.

Previous wording

The OMF net operating income (“NOI”) decrease for the three months ended March 31, 2025 over the same period in 2024 was primarily driven by the disposition of 24 OMFs subsequent to March 31, 2024.

Current wording

The OMF NOI decrease for the six months ended June 30, 2025 over the same period in 2024 was primarily driven by the disposition of 27 OMFs subsequent to June 30, 2024, which was partially offset by positive trends in revenue driven by occupancy gains.

Previous wording

Depreciation and amortization expense increased by$3.0 million to $23.7 million for the three months ended March 31, 2025 from $20.7 million for the three months ended March 31, 2024. The increase was primarily attributable to amortization of deferred leasing commissions.

Current wording

Depreciation and amortization expense decreased by $0.4 million to $42.2 million for thesix months ended June 30, 2025 as compared with $42.7 million for thesix months ended June 30, 2024. The decrease was primarily attributable to property dispositions subsequent to the second quarter of 2024, which was partly offset by amortization of deferred leasing commissions.

Previous wording

Interest and other (expense) income includes income from our investment securities and interest income earned on cash and cash equivalents held during the period. Interest and other (expense) income was relatively flat for the three months ended March 31, 2025 and 2024.

Current wording

Interest and other income includes income from our investment securities and interest income earned on cash and cash equivalents held during the period. Interest and other income decreased by $0.3 million to $0.2 million for the six months ended June 30, 2025 from $0.5 million. This decrease isdue to excess insurance reimbursement in June 30, 2024, partially offset by higher interest rates on, and balances of, our cash accounts.

Previous wording

The following table presents a reconciliation of our net cash provided by operations from our net loss for the three months ended March 31, 2025 and 2024:

Current wording

The following table presents a reconciliation of our net cash provided by operations from our net loss for the six months ended June 30, 2025 and 2024:

Previous wording

Cash flows provided by operating activities decreased by $23.8 million during the three months ended March 31, 2025 compared to the same period in 2024, primarily due to full repayment of the $30.3 million promissory note issued to the Advisor Parent in connection with the Internalization, which was repaid in full in January 2025.

Current wording

Cash flows provided by operating activities decreased by $22.1 million during the six months ended June 30, 2025 compared to the same period in 2024, primarily due to full repayment of the $30.3 million promissory note issued to the Advisor Parent in connection with the Internalization, which was repaid in full in January 2025. This was partially offset by a lower net loss in 2025 due to higher NOI generated by our properties.

Previous wording

Cash flows provided by investing activities increased by $90.3 million during the three months ended March 31, 2025 compared to the same period in 2024, primarily due to proceeds from the sale of 12 held-for-use OMFs during the three months ended March 31, 2025.

Current wording

Cash flows provided by investing activities increased by $91.7 million during the six months ended June 30, 2025 compared to the same period in 2024, primarily due to proceeds from the sale of 15 held-for-use OMFs during thesix months ended June 30, 2025.

Previous wording

As of March 31, 2025, we had $71.4 million of cash and cash equivalents. The Barclays OMF Loan Agreement requires us to maintain a minimum balance of cash and cash equivalents of $12.5 million at all times.

Current wording

As of June 30, 2025, we had $47.1 million of cash and cash equivalents. The Barclays OMF Loan Agreement requires us to maintain a minimum balance of cash and cash equivalents of $12.5 million at all times.

Previous wording

As of March 31, 2025, our total debt leverage ratio (total debt divided by total gross asset value) was approximately 44.6%. Net debt totaled $1.0 billion, which represents gross debt ($1.1 billion) less cash and cash equivalents ($71.4 million). Gross asset value totaled $2.3 billion, which represents total real estate investments, at cost ($2.3 billion) net of gross market lease intangible liabilities ($20.0 million). Cumulative impairment charges are reflected within gross asset value.

Current wording

As of June 30, 2025, our total debt leverage ratio (total debt divided by total gross asset value) was approximately 44.9%. Net debt totaled $1.0 billion, which represents gross debt ($1.0 billion) less cash and cash equivalents ($47.1 million). Gross asset value totaled $2.2 billion, which represents total real estate investments, at cost ($2.2 billion) net of gross market lease intangible liabilities ($19.9 million). Cumulative impairment charges are reflected within gross asset value.

Previous wording

As of March 31, 2025, we had total gross borrowings of $1.1 billion, at a weighted-average interest rate of 5.40% and a weighted-average remaining term of 3.9 years. The weighted-average interest rate includes the impact of “pay-fixed” swaps that are designated as hedging instruments on a portion of our variable-rate debt, but does not include the impact of our non-designated interest rate caps (discussed below). Inclusive of our non-designated interest rate caps, the weighted-average economic interest rate on our total gross borrowings was 5.1% as of March 31, 2025.

Current wording

As of June 30, 2025, we had total gross borrowings of $1.0 billion, at a weighted-average interest rate of 5.36% and a weighted-average remaining term of 3.7 years. The weighted-average interest rate includes the impact of “pay-fixed” swaps that are designated as hedging instruments on a portion of our variable-rate debt, but does not include the impact of our non-designated interest rate caps (discussed below). Inclusive of our non-designated interest rate caps, the weighted-average economic interest rate on our total gross borrowings was 5.04% as of June 30, 2025.

Previous wording

As of March 31, 2025, the carrying value of our real estate investments, at cost was $2.3 billion, with $1.2 billion of this asset value pledged as collateral for mortgage notes payable and $655.1 million of this asset value pledged to secure advances under our credit facilities. These real estate assets are not available to satisfy other debts and obligations, or to serve as collateral with respect to new indebtedness, as applicable, unless the existing indebtedness associated with the property is satisfied or the property is removed from the borrowing base of the credit facilities, which would impact availability thereunder.

Current wording

As of June 30, 2025, the carrying value of our real estate investments, at cost was $2.2 billion, with $1.2 billion of this asset value pledged as collateral for mortgage notes payable and $623.5 million of this asset value pledged to secure advances under our credit facilities. These real estate assets are not available to satisfy other debts and obligations, or to serve as collateral with respect to new indebtedness, as applicable, unless the existing indebtedness associated with the property is satisfied or the property is removed from the borrowing base of the credit facilities, which would impact availability thereunder.

Previous wording

Unencumbered real estate investments, at cost as of March 31, 2025 was $427.0 million. There can be no assurance as to the amount of liquidity we would be able to generate from leveraging these unencumbered real estate investments, if we are able to leverage them at all.

Current wording

Unencumbered real estate investments, at cost as of June 30, 2025 was $431.6 million. There can be no assurance as to the amount of liquidity we would be able to generate from leveraging these unencumbered real estate investments, if we are able to leverage them at all.

Previous wording

As of March 31, 2025, we had $721.0 million in mortgage notes payable outstanding, all of which is either fixed-rate or effectively fixed through our interest rate swap at a weighted-average annual interest rate of 4.63% and a weighted-average remaining term of 5.1 years.

Current wording

As of June 30, 2025, we had $706.2 million in mortgage notes payable outstanding, all of which is either fixed-rate or effectively fixed through our interest rate swap at a weighted-average annual interest rate of 4.64% and a weighted-average remaining term of 4.9 years.

Previous wording

As of March 31, 2025, $360.8 million was outstanding under our credit facilities, which bore interest at a weighted-average annual rate of 6.93% and had a weighted-average remaining term of 1.6 years. Inclusive of our non-designated interest rate caps, the weighted-average economic interest rate on our credit facilities was 5.95% as of March 31, 2025.

Current wording

As of June 30, 2025, $337.6 million was outstanding under our credit facilities, which bore interest at a weighted-average annual rate of 6.86% and had a weighted-average remaining term of 1.3 years. Inclusive of our non-designated interest rate caps, the weighted-average economic interest rate on our credit facilities was 5.91% as of June 30, 2025.

Previous wording

Our interest rate caps are used to limit our exposure to interest rate movements on our Fannie Mae Master Credit Facilities for economic purposes, however, we do not elect to apply hedge accounting to these instruments. As of March 31, 2025, we had eight SOFR-based interest rate caps with an aggregate notional amount of $369.2 million, which limits one-month SOFR to 3.50% and have varying maturities through January 2027. Although these interest rate caps are not designated hedging instruments, we consider them economically related to our variable-rate credit facility borrowings.

Current wording

Our interest rate caps are used to limit our exposure to interest rate movements on our Fannie Mae Master Credit Facilities for economic purposes, however, we do not elect to apply hedge accounting to these instruments. As of June 30, 2025, we had nine SOFR-based interest rate caps with an aggregate notional amount of $481.3 million, which limits one-month SOFR to 3.50% and have varying maturities through November 2026. Although these interest rate caps are not designated hedging instruments, we consider them economically related to our variable-rate credit facility borrowings.

Previous wording

As SOFR has increased beyond 3.50%, we received cash payments of $0.9 million in the three months ended March 31, 2025. We received $1.8 million of cash payments in the three months ended March 31, 2024.

Current wording

As SOFR has increased beyond 3.50%, we received cash payments of $1.8 million in the six months ended June 30, 2025. We received $3.6 million of cash payments in the six months ended June 30, 2024.

Previous wording

We have five interest rate caps with a notional amount of $289.4 million which mature in 2025, which represents the next maturing interest rate caps.

Current wording

We have three interest rate caps with a notional amount of $138.5 million which mature in July 2025, which represents the next maturing interest rate caps.

Previous wording

In April 2025, the Company terminated two interest rate caps with a notional of $21.7 million.

Current wording

In April 2025, we terminated two interest rate caps with a notional of $21.7 million.

Previous wording

During the three months ended March 31, 2025, our capital expenditures were $5.7 million, of which $3.6 million related to our OMF segment and $2.1 million related to our SHOP segment. We anticipate our quarterly rate of capital expenditures for the OMF and SHOP segments throughout the remainder of 2025 to be relatively stable.

Current wording

During the six months ended June 30, 2025, our aggregate capital expenditures were $12.4 million. We anticipate our quarterly rate of capital expenditures for the OMF and SHOP segments throughout the remainder of 2025 to be relatively stable.

Previous wording

We disposed of 12 held-for-use OMFs during the three months ended March 31, 2025 for an aggregate contract sales price of $168.4 million. These dispositions resulted in an aggregate gain on sale of $25.0 million, which is presented in our consolidated statements of operations and comprehensive loss for the three months ended March 31, 2025.

Current wording

We disposed of three held-for-use OMFs and three held-for-use SHOPs during the three months ended June 30, 2025 for an aggregate contract sales price of $21.4 million. These dispositions resulted in an aggregate gain on sale of $2.7 million, which is presented in our consolidated statements of operations and comprehensive loss for the three months ended June 30, 2025.

Previous wording

For the three months ended March 31, 2025, cash flows used in operations were $21.2 million. We had not historically generated sufficient cash flows from operations to fund the payment of dividends and other distributions at the current rate prior to switching from paying cash dividends to stock dividends on our common stock. As shown in the table above, we funded distributions to holders of Series A Preferred Stock, Series B Preferred Stock and Series A Preferred Units with available cash on hand.

Current wording

For the six months ended June 30, 2025, cash flows used in operations were $13.2 million. We had not historically generated sufficient cash flows from operations to fund the payment of dividends and other distributions at the current rate prior to switching from paying cash dividends to stock dividends on our common stock. As shown in the table above, we funded distributions to holders of Series A Preferred Stock, Series B Preferred Stock and Series A Preferred Units with available cash on hand.