National Healthcare Properties, Inc.

Note 1 —Organization

National Healthcare Properties, Inc. (including, as required by context, National Healthcare Properties Operating Partnership, L.P. (the “OP”) and its subsidiaries, the “Company”) is a real estate investment trust (“REIT”) for U.S. federal income tax purposes. The Company acquires, owns and manages a diversified portfolio of healthcare-related real estate focused on senior housing operating properties (“SHOP”) and outpatient medical facilities (“OMF”). Substantially all of the Company’s business is conducted through the OP and its wholly-owned subsidiaries, which include certain taxable REIT subsidiaries (“TRSs”).

As of March 31, 2026, the Company owned 168 properties (includingone land parcel) located in 29 states, consisting of 37 senior housing communities, with 3,615 units, and 130 outpatient medical facilities, with approximately 3.7 million square feet of gross leasable area.

The Company operatestwo operating and reportable business segments: SHOP and OMF. In the SHOP segment, the Company invests in senior housing communities through the REIT Investment Diversification and Empowerment Act of 2007 (“RIDEA”) structure. Under RIDEA, a REIT may lease “qualified healthcare properties” on an arm’s length basis to a TRS if the property is operated on behalf of such subsidiary by a person who qualifies as an “eligible independent contractor.” As of March 31, 2026, the Company hadthree eligible independent contractors operating 37 senior housing communities. In the OMF segment, the Company owns, manages and leases single and multi-tenant OMFs where, in addition to base rent, tenants are required to pay their pro rata share of property operating expenses and certain capital expenditures, which may be subject to expense exclusions and floors. As of March 31, 2026, the Company managed all OMFs directly, without the use of third party service providers.

On April 23, 2026, pursuant to a Registration Statement filed with the United States Securities and Exchange Commission (the “SEC”) on Form S-11, as amended, the Company completed its public offering (the “Offering”) and issued an aggregate of 44,275,000 shares of Class A common stock, $0.01 par value per share (“Class A common stock”) (which included shares issued pursuant to the underwriters’ exercise of their overallotment option on April 28, 2026), for aggregate gross offering proceeds of approximately $531.3 million. In connection with the Offering, the Class A common stock became listed on The Nasdaq Global Market under the symbol “NHP” and began trading on April 22, 2026. Each share of Class A common stock will automatically convert into one share of the Company’s existing common stock, $0.01 par value per share, on October 19, 2026 and all shares of common stock will subsequently be listed and freely tradeable on The Nasdaq Global Market under the symbol “NHP.”

Note 2 —Summary of Significant Accounting Policies

The accompanying unaudited consolidated financial statements of the Company included herein were prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to this Quarterly Report on Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The information furnished includes all adjustments and accruals of a normal recurring nature, which, in the opinion of management, are necessary for a fair statement of results for the interim periods. The results of operations for the three months ended March 31, 2026 and 2025 are not necessarily indicative of the results for the entire year or any subsequent interim periods.

These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2025, which are included in the Company’s Annual Report on Form 10-K filed with the SEC on February 20, 2026. Except for those required by new accounting pronouncements discussed below, there have been no significant changes to the Company’s significant accounting policies during the three months ended March 31, 2026.

Principles of Consolidation and Basis of Presentation

The accompanying consolidated financial statements include the accounts of the Company, the OP and its subsidiaries. All intercompany accounts and transactions are eliminated in consolidation. In determining whether the Company has a controlling financial interest in a joint venture and the requirement to consolidate the accounts of that entity, management considers factors such as ownership interest, authority to make decisions and contractual and substantive participating rights of the other partners or members as well as whether the entity is a variable interest entity (“VIE”) for which the Company is the primary beneficiary. The Company has determined the OP is a VIE of which the Company is the primary beneficiary. Substantially all of the Company’s assets and liabilities are held by the OP.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Management makes significant estimates regarding revenue recognition, purchase price allocations to record investments in real estate, impairments, fair value measurements and income taxes, as applicable.

Recently Issued Accounting Pronouncements

Adopted

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2023-09, Improvements to Income Tax Disclosures (“ASU 2023-09”), which requires public entities on an annual basis to (i) disclose specific categories in the rate reconciliation and (ii) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than five percent of the amount computed by multiplying pretax income or loss by the applicable statutory income tax rate). During the year ended December 31, 2025, the Company adopted ASU 2023-09 prospectively and disclosed a new rate reconciliation table and an income tax payment schedule. The adoption did not have an impact on the Company’s consolidated financial position, results of operations or cash flows.

Not yet adopted

In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses(“ASU 2024-03”). ASU 2024-03 requires public business entities (PBEs) to provide disaggregated disclosure in tabular format in the notes to financial statements of specific expenses, including but not limited to: (i) employee compensation, (ii) depreciation, and (iii) intangible asset amortization. In January 2025, the FASB issued ASU No. 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date, to clarify that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted. The Company is evaluating the impact of the adoption of these ASUs on its consolidated financial statements.

Reclassifications

Certain 2025 amounts have been reclassified from general and administrative to property operating and maintenance on the Company’s consolidated statements of operations and comprehensive loss to align with the current period presentation. This reclassification did not affect the total assets, total liabilities, stockholder’s equity, net loss or earnings per share in any of the periods reported. Certain 2025 amounts have been reclassified on the Company’s consolidated statements of cash flows to align with current period presentation.

Note 3 —Real Estate Investments, Net

Property Acquisitions

There wereno property acquisitions during the three months ended March 31, 2026 and 2025.

In February 2026, the Company, through a joint venture with Discovery Senior Living, entered into a definitive purchase and sale agreement to purchase 13 senior living communities for approximately $64.0 million. The Company expects to own approximately 98.5% of the joint venture. As part of this transaction, the Company holds a right of first refusal and purchase option on an additional 13 senior living communities managed by Discovery Senior Living. Closing of the acquisition is subject to closing conditions and applicable regulatory approvals as specified in the purchase and sale agreement.

Concentration Risk

As of March 31, 2026, the Company had one tenant (including for this purpose, all affiliates of such tenant) in the OMF segment whose annualized rental income on a straight-line basis represented 10% or greater of total annualized rental income for the segment on a straight-line basis. As of March 31, 2025, the Company had no tenants in the OMF segment whose annualized rental income on a straight-line basis represented 10% or greater of total annualized rental income for the segment on a straight-line basis.

Annualized rental income for the Company consists of: (i) for the OMF segment, annualized March 31, 2026 rental income on a straight-line basis for the leases in place as of March 31, 2026, which includes tenant concessions such as free rent, as applicable, and (ii) for the SHOP segment, annualized gross revenue for the quarter ended March 31, 2026.

The following table lists the states where the Company had concentrations of properties where annualized rental income on a straight-line basis represented 10% or more of total annualized rental income on a straight-line basis for all properties as of March 31, 2026 and 2025.

Intangible Assets and Liabilities

The following table discloses amounts recognized within the consolidated statements of operations and comprehensive loss related to amortization of in-place lease intangible and other intangible assets, amortization and accretion of above- and below-market lease intangible assets and liabilities, net and the amortization and accretion of above- and below-market ground leases, net, for the periods presented (dollars in thousands):

(1)Reflected within depreciation and amortization expense.

(2)Reflected within revenue from tenants.

(3)Reflected within property operating and maintenance expense.

Dispositions

During the three months ended March 31, 2026, the Company didnot dispose of any properties.

During thethree months ended March 31, 2025, the Company disposed of 12 held-for-use OMFs 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 the Company’s consolidated statements of operations and comprehensive loss for thethree months ended March 31, 2025.

Assets Held-for-Sale

There wereno properties classified as held-for-sale as of March 31, 2026 or December 31, 2025.

Impairment Charges

The following table presents impairment charges by segment recorded during the three months ended March 31, 2026 and 2025 (dollars in thousands):

(1)No impairments were recorded during the three months ended March 31, 2026. Amounts presented for the three months ended March 31, 2025 primarily relate totwo held-for-use SHOPs andone held-for-use OMF. These properties were impaired to their contractual sales price as determined by their purchase and sale agreements and were subsequently sold during 2025.

Note 4 —Leases

Lessor Accounting

The following table summarizes the Company’s lease income (dollars in thousands). Rental income from the OMF operating leases consists of fixed and variable lease payments. The variable payments primarily represent reimbursements of various property-level operating and maintenance expenses that the Company pays on behalf of its tenants. Substantially all of the resident fees and services earned from the SHOP segment represent fixed income from operating leases and have not been included in the table below.

During three months ended March 31, 2026 and 2025, the Company recorded reductions in revenue of $0.7 million and $0.2 million, respectively, related to uncollectible accounts.

Note 5 —Mortgage Notes Payable and Other Debt

The following table reflects the Company’s mortgage notes payable and other debt as of March 31, 2026 and December 31, 2025 (dollars in thousands):

(1)For total gross mortgage notes payable and total Secured Fannie Mae Loan as of March 31, 2026 and December 31, 2025, effective interest rate is calculated on a weighted average basis.

(2)The Secured Fannie Mae Loans have interest rate caps that limit one-month SOFR (as defined below) at 3.50%.

(3)The Term Loan due 2028 has interest rate swaps that convert variable interest rates to fixed interest rates.

Mortgage Notes Payable

As of March 31, 2026, the Company had pledged$683.7 million in total real estate investments, at cost, as collateral for its$375.3 million of gross mortgage notes payable. The collateralized real estate investments are not available to satisfy other debts and obligations unless first satisfying the mortgage notes payable secured by these properties. The Company makes payments of principal and interest, or interest only, depending upon the specific requirements of each mortgage note, on a monthly basis.

Some of the Company’s mortgage note agreements require compliance with certain property-level financial covenants, including debt service coverage ratios. Notably, the Secured Term Loan 4 due 2033 loan agreement requires the OP to comply with certain covenants, including, maintaining combined cash and cash equivalents totaling at least $12.5 million at all times.

Fannie Mae Secured Debt

On October 31, 2016, the Company, through wholly-owned subsidiaries of the OP, entered into a master secured debt agreement with KeyBank (the “KeyBank Secured Debt”) and a master secured debt agreement with Capital One Multifamily Finance LLC, an affiliate of Capital One (the “Capital One Secured Debt” and, together with the KeyBank Secured Debt, “Fannie Mae Secured Debt”). Advances made under these agreements were assigned by Capital One and KeyBank to Fannie Mae at closing for inclusion in Fannie Mae’s Multifamily MBS program.

The Company may request future advances under the Fannie Mae Secured Debt by adding eligible properties to the collateral pool subject to customary conditions, including satisfaction of minimum debt service coverage and maximum loan-to-value tests. Borrowings under the Fannie Mae Secured Debt bore monthly interest equal to the sum of the current SOFR for one-month denominated deposits and a spread of 2.41% and 2.46% for the Capital One Secured Debt and the KeyBank Secured Debt, respectively. The Fannie Mae Secured Debt matures on November 1, 2026. We currently expect to refinance the Fannie Mae Secured Debt on or before the maturity date.

Through March 31, 2026, the Company had provided cash deposits totaling $15.4 million to Fannie Mae because the debt service coverage ratios of the underlying properties of each facility were below the minimum required amounts per the debt agreements. These deposits are recorded as restricted cash on the Company’s consolidated balance sheets and are pledged as additional collateral for the Fannie Mae Secured Debt. These deposits will be refunded upon the earlier of the Company’s achievement of a debt service coverage ratio above the minimum required amount of 1.40 or the maturity or prepayment of the Fannie Mae Secured Debt.

As of March 31, 2026, the Company had pledged $617.0 million in total real estate investments, at cost as collateral under its Fannie Mae Secured Debt. All of the real estate assets pledged to secure borrowings under the Company’s Fannie Mae Secured Debt are not available to satisfy other debts and obligations, or to serve as collateral with respect to new indebtedness, unless, as applicable, the existing indebtedness associated with the property is satisfied or the property is removed from the pledged collateral.

Unsecured Credit Facilities

On December 11, 2025, the Company, as guarantor, the OP, as borrower, and certain indirect subsidiaries of the Company entered into a credit agreement (the “Credit Agreement”) with Wells Fargo Bank, National Association, as administrative agent, and certain lenders party thereto.

The Credit Agreement provides for (i) a $400 million senior unsecured revolving credit facility (the “Revolving Facility”) and (ii) a $150 million senior unsecured term loan facility (the “Term Loan” and, together with the Revolving Facility, the “Credit Facilities”). The Credit Agreement also provides that, subject to customary conditions, including obtaining lender commitments and compliance with its financial maintenance covenants under the Credit Agreement, the OP may seek to increase the lending commitments under the Credit Agreement by up to $450 million of the Revolving Facility and/or the Term Loan.

The Revolving Facility and the Term Loan have a maturity date of December 11, 2028, which, in each case, may be extended fortwo one-year periods subject to customary conditions under the Credit Agreement. The OP may elect at any time and from time to time to prepay all or any portion of the loans under the Credit Facilities prior to maturity without premium or penalty, subject to payment of usual and customary breakage costs.

The interest rates applicable to loans under the Credit Facilities are, at the OP’s option, equal to either a base rate plus a margin ranging from 0.55% to 1.10% per annum or Daily Simple SOFR or Term SOFR plus a margin ranging from 1.55% to 2.10% per annum, in each case based on the Company’s consolidated leverage ratio. In addition, with respect to the Revolving Facility, the OP will pay, if the unused amount is equal to or less than 50%, an unused facility fee of 0.20% per annum, or if the unused amount is greater than 50%, an unused facility fee of 0.15% per annum, in each case on the average daily unused commitments under the Revolving Facility.

The Credit Facilities are guaranteed, jointly and severally, by the Company and certain indirect subsidiaries of the Company. The Credit Agreement contains customary covenants that, among other things, restrict, subject to certain exceptions, the ability of the Company, the OP and certain indirect subsidiaries of the Company to incur indebtedness, grant liens on their assets, make certain types of investments, engage in acquisitions, mergers or consolidations, sell assets, enter into certain transactions with affiliates and pay dividends or make distributions. The Credit Agreement also requires the Company to comply with consolidated financial maintenance covenants to be tested quarterly, including a minimum fixed charge coverage ratio, maximum leverage ratio, minimum tangible net worth, maximum secured leverage ratio, maximum unencumbered leverage ratio, minimum unsecured interest coverage ratio and minimum liquidity requirement.

The Credit Agreement also contains customary events of default, including the failure to make timely payments under the Credit Facilities, any event or condition that makes other material indebtedness due prior to its scheduled maturity, the failure to satisfy certain covenants and specified events of bankruptcy and insolvency. The occurrence of an event of default under the Credit Agreement may result in all loans and other obligations becoming immediately due and payable and the Credit Facilities being terminated and allow the lenders to exercise all rights and remedies available to them.

As of March 31, 2026, the Company had $869.1 million in total real estate investments, at cost as the borrowing base under the Credit Facilities. All of the real estate assets added to the borrowing base under the Credit Facilities are not available to satisfy other debts and obligations, or to serve as collateral with respect to new indebtedness, unless, as applicable, the existing indebtedness associated with the property is satisfied or the property is removed from the pledged collateral.

Debt Maturities

As of March 31, 2026, the Company’s indebtedness had the following maturities (dollars in thousands):

The Company’s existing principal demands for cash are to fund acquisitions, capital expenditures, the payment of its operating and administrative expenses, debt service obligations (including principal repayment) and distributions to holders of its Series A Preferred Stock and Series B Preferred Stock. The Company closely monitors its current and anticipated liquidity position relative to its current and anticipated demands for cash and believes that it has sufficient current liquidity to meet its financial obligations for at least the next 12 months. The Company expects to fund its future short-term operating liquidity requirements, including distributions to holders of Series A Preferred Stock and Series B Preferred Stock, through a combination of current cash on hand, net cash provided by its operating activities and property dispositions, future takedowns under the Revolving Facility and potential new financings utilizing certain of its unencumbered properties.

Note 6 —Derivatives and Hedging Activities

Risk Management Objective of Using Derivatives

The Company may use derivative financial instruments, including interest rate swaps, caps, collars, options, floors and other interest rate derivative contracts, to hedge all or a portion of the interest rate risk associated with its borrowings.

The principal objective of such arrangements is to minimize the risks and/or costs associated with the Company’s operating and financial structure as well as to hedge specific anticipated transactions. Additionally, in using interest rate derivatives, the Company aims to add stability to interest expense and to manage its exposure to interest rate movements. The Company does not intend to utilize derivatives for speculative purposes or purposes other than interest rate risk management. The use of derivative financial instruments carries certain risks, including the risk that the counterparties to these contractual arrangements are not able to perform under the agreements. To mitigate this risk, the Company only enters into derivative financial instruments with counterparties with high credit ratings and with major financial institutions with which the Company, and its affiliates, may also have other financial relationships. The Company does not anticipate that any of its counterparties will fail to meet their obligations.

Cash Flow Hedges of Interest Rate Risk

Interest rate swaps designated as cash flow hedges involve the receipt of variable rate amounts from a counterparty in exchange for the Company making fixed rate payments over the life of the agreements without exchange of the underlying notional amount. These derivatives are used to hedge the variable cash flows associated with variable rate debt.

The changes in the fair value of derivatives designated and that qualify as cash flow hedges are recorded in accumulated other comprehensive loss and are subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings.

Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable rate debt. The Company estimates that during the 12 month period from April 1, 2026 through March 31, 2027, $4.8 million of unrealized gain will be reclassified from accumulated other comprehensive income into earnings as a decrease to interest expense.

The following table summarizes the Company’s interest rate swaps, designated as cash flow hedges for interest rate risk (dollars in thousands):

(1)Recorded at fair value in “Derivative assets, at fair value” on the consolidated balance sheets.

(2)Recorded at fair value in “Derivative liabilities, at fair value” on the consolidated balance sheets.

The table below details the location in the financial statements of the gain (loss) recognized on interest rate derivatives designated as cash flow hedges for the periods presented (dollars in thousands):

Non-Designated Derivatives

The Company had the following interest rate derivatives that were not designated as hedges in qualifying hedging relationships as of March 31, 2026 and December 31, 2025 (dollars in thousands):

(1)Recorded at fair value in “Derivative assets, at fair value” on the consolidated balance sheets. Fair and notional values may include contracts acquired but not yet effective as of the dates presented. All of the Company’s interest rate cap agreements limited one-month Secured Overnight Financing Rate (“SOFR”) to 3.50% with terms through November 2026. The actual one-month SOFR rates during the three months ended March 31, 2026 exceeded the strike price rate of 3.50% and the Company received payments under these agreements. While the Company does not apply hedge accounting for these interest rate caps, they are economically hedging the Fannie Mae Secured Debt. Changes in the fair market value of these non-designated derivatives, as well as any cash received, are presented within gain (loss) on non-designated derivatives in the Company’s consolidated statements of operations and comprehensive loss.

During the three months ended March 31, 2026, the Company paid $0.2 million for an interest rate cap related to the Fannie Mae Secured Debt with a notional amount of $56 million to replace an existing cap set to expire on April 1, 2026.

Credit-risk-related Contingent Features

The Company has agreements in place with each of its derivative counterparties that contain a provision where if the Company either defaults or is capable of being declared in default on any of its indebtedness, then the Company could also be declared in default on its derivative obligations.

Note 7 —Stockholders’ Equity

Common Stock

As of March 31, 2026 and December 31, 2025, the Company had 28.4 million and 28.4 million shares of common stock issued and outstanding, respectively. Except for net shares of restricted stock awarded under the Company’s 2025 Omnibus Incentive Compensation Plan (the “Equity Incentive Plan”), no shares of common stock were issued during the three months ended March 31, 2026.

Preferred Stock

The Company is authorized to issue up to 50.0 million shares of preferred stock of which 4.6 million shares and 3.5 million shares are authorized and classified as Series A Preferred Stock and Series B Preferred Stock, respectively.

During the three months ended March 31, 2026, the Company didnot exercise any share repurchases of its Series A Preferred Stock or Series B Preferred Stock pursuant to the stock repurchase plan authorized on May 2, 2025.

Note 8 —Accumulated Other Comprehensive Income

The following table illustrates the changes in accumulated other comprehensive income as of and for the period presented (dollars in thousand):

Note 9 —Fair Value

GAAP establishes a hierarchy of valuation techniques based on the observability of inputs used in measuring assets and liabilities at fair value. GAAP establishes market-based or observable inputs as the preferred source of values, followed by valuation models using management assumptions in the absence of market inputs. The three levels of the hierarchy are described below:

Level 1 — Quoted prices in active markets for identical assets and liabilities that the reporting entity has the ability to access at the measurement date.

Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset and liability or can be corroborated with observable market data for substantially the entire contractual term of the asset or liability.

Level 3 — Unobservable inputs that reflect the entity’s own assumptions that market participants would use in the pricing of the asset or liability and are consequently not based on market activity, but rather through particular valuation techniques.

The determination of where an asset or liability falls in the hierarchy requires significant judgment and considers factors specific to the asset or liability. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company evaluates its hierarchy disclosures each quarter and depending on various factors, it is possible that an asset or liability may be classified differently from quarter to quarter. However, the Company expects that changes in classifications between levels will be rare.

Financial Instruments Measured at Fair Value on a Recurring Basis

Derivative Instruments

Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with those derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by the Company and its counterparties. However, as of March 31, 2026, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of the Company’s derivatives. As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy.

The valuation of derivative instruments is determined using a discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, as well as observable market-based inputs, including interest rate curves and implied volatilities. In addition, credit valuation adjustments are incorporated into the fair values to account for the Company’s potential nonperformance risk and the performance risk of the counterparties.

The following table presents information about the Company’s financial instruments measured at fair value as of March 31, 2026 and December 31, 2025, aggregated by the level in the fair value hierarchy within which those instruments fall (dollars in thousands).

A review of the fair value hierarchy classification is conducted on a quarterly basis. Changes in the type of inputs may result in a reclassification for certain assets. There has been no transfer into or out of Level 3 financial instruments during the periods presented.

Real Estate Investments Measured at Fair Value on a Non-Recurring Basis

Real Estate Investments - Held-for-Use

The Company may impair real estate investments held-for-use, resulting in a fair value measurement arrived at using either Level 2 or Level 3 inputs.

Real Estate Investments - Held-for-Sale

Real estate investments held-for-sale are carried at fair value less cost costs to sell and are generally measured using Level 2 inputs.

Financial Instruments Not Measured at Fair Value

The Company is required to disclose the fair value of financial instruments for which it is practicable to estimate that value. The fair values of short-term financial instruments such as cash and cash equivalents, restricted cash, straight-line rent receivable, net, prepaid expenses and other assets, deferred costs, net, accounts payable and accrued expenses, deferred rent and distributions payable approximate their carrying value on the consolidated balance sheets due to their short-term nature.

The fair values of the Company’s remaining financial instruments that are not reported at fair value on the consolidated balance sheets are as follows (dollars in thousands):

The fair value of the Company’s indebtedness above is estimated using a discounted cash flow analysis, based on the Company’s experience with similar types of borrowing arrangements, excluding the value of associated derivatives.

Note 10 —Stock-Based Compensation

Total stock-based compensation expense was $0.6 million for the three months ended March 31, 2026, which was recognized in general and administrative expense in the Company’s consolidated statements of operations and comprehensive loss. As of March 31, 2026, there was $3.1 million of future expenses related to unvested stock-based compensation arrangements granted under the Plan, which is expected to be recognized over a weighted average period of 1.6 years.

Stock-based compensation for 2025 was granted to the executive officers and certain other employees in May 2025. As such, there wasno stock-based compensation expense incurred during the three months ended March 31, 2025.

Note 11 —Non-controlling Interests

Non-controlling interests on the Company’s consolidated balance sheets is comprised of the following (dollars in thousands):

Net income attributable to non-controlling interests on the Company’s consolidated statements of operations and comprehensive loss are comprised of the following (dollars in thousands):

Non-controlling Interests in the OP

During each of the three months ended March 31, 2026 and 2025, Series A Preferred Unit holders were paid $46 thousand in cash distributions.

During thethree months ended March 31, 2026 and 2025, no cash distributions were paid to Common OP Unit non-controlling interest holders.

Note 12 —Net Loss Per Share

The following is a summary of the net loss per basic and diluted share computation for the periods presented (amounts in thousands, except per share data):

(1)Weighted average number of unvested restricted shares outstanding for the periods presented. There were 116,654 andzero unvested restricted shares outstanding as of March 31, 2026 and 2025, respectively.

(2)Weighted average number of Common OP Units presented as shares outstanding for the periods presented, at the current redemption rate. There were 405,998 Common OP Units outstanding as of March 31, 2026 and 2025.

(3)Weighted average number of Class B Units presented as shares outstanding for the periods presented, at the current redemption rate. There were 359,250 Class B Units outstanding as of March 31, 2026 and 2025.

(4)Potential common stock equivalents are disregarded in diluted per share calculations when a net loss exists as the effect would be antidilutive. In this case the diluted per share denominator is equal to the denominator for basic net loss per share.

Diluted net loss per share assumes the conversion of all common stock equivalents into an equivalent number of shares of common stock, unless the effect is antidilutive. The Company considers unvested restricted shares, Common OP Units and Class B Units to be common stock equivalents. Series A Preferred Units are non-participating.

Note 13 —Segment Reporting

As of March 31, 2026, the Company hadtwo operating and reportable business segments: SHOP and OMF.

The SHOP segment consists of direct investments in senior housing properties, primarily providing assisted living, independent living and memory care services, which are operated through engaging independent third-party operators. The OMF segment primarily consists of facilities leased to healthcare-related tenants under long-term leases, which may require such tenants to pay a pro rata share of property-related expenses as well as senior housing properties, hospitals, inpatient rehabilitation facilities and skilled nursing facilities under long-term leases, under which tenants are generally responsible to directly pay property-related expenses.

The Company’s chief operating decision maker (“CODM”) is its Chief Executive Officer. The CODM evaluates performance of the combined properties in each reportable business segment using net operating income (“NOI”), which is defined as total revenues from tenants, less property operating and maintenance expense. The CODM uses NOI to assess and compare property level performance and to make decisions concerning the operation of the properties. The Company believes that NOI is useful as a performance measure because, when compared across periods, NOI reflects the impact on operations from trends in occupancy rates, rental rates, operating expenses and acquisition activity on an unleveraged basis, providing perspective not immediately apparent from consolidated income (loss) before income taxes.

NOI excludes certain components from consolidated income (loss) before income taxes in order to provide results that are more closely related to a property’s results of operations. For example, interest expense is not necessarily linked to the operating performance of a real estate asset and is often incurred at the corporate level. In addition, depreciation and amortization, because of historical cost accounting and useful life estimates, may distort operating performance at the property level. NOI presented by the Company may not be comparable to NOI reported by other REITs that define NOI differently.

Total assets by reportable business segment is not disclosed as the CODM does not review such information to evaluate business performance and allocate resources.

Reconciliation to Consolidated Financial Information

Summary information by reportable business segment is presented below (dollars in thousands):

(1) For the SHOP segment, compensation related expenses include costs incurred for salaries, benefits and other labor related costs.

(2) For the SHOP segment, other segment expenses include costs incurred for supplies, management fees and overhead. The expense details for the OMF segment provided to the CODM primarily consist of reimbursable expenses which are largely recoverable from tenants. As such, the CODM focuses on monitoring NOI to evaluate performance as a significant portion of the property-level operating expenses is recovered from tenants.

(1) For the SHOP segment, compensation related expenses include costs incurred for salaries, benefits and other labor related costs.

(2) For the SHOP segment, other segment expenses include costs incurred for supplies, management fees and overhead. The expense details for the OMF segment provided to the CODM primarily consist of reimbursable expenses which are largely recoverable from tenants. As such, the CODM focuses on monitoring NOI to evaluate performance as a significant portion of the property-level operating expenses is recovered from tenants.

(3) Certain 2025 amounts have been reclassified from general and administrative to property operating and maintenance to align with the current period presentation.

Note 14 —Commitments and Contingencies

Litigation and Regulatory Matters

In the ordinary course of business, the Company may become subject to litigation, claims and regulatory matters. As of March 31, 2026, there are no material legal or regulatory proceedings pending or known to be contemplated against the Company or its properties.

Environmental Matters

In connection with the ownership and operation of real estate, the Company may potentially be liable for costs and damages related to environmental matters. As of March 31, 2026, the Company had not been notified by any governmental authority of any non-compliance, liability or other claim, and is not aware of any other environmental condition that it believes will have a material adverse effect on the results of operations.

Note 15 —Subsequent Events

The Company has evaluated subsequent events through the filing of this Quarterly Report on Form 10-Q and determined that there have not been any events that have occurred that would require adjustments to disclosures in the consolidated financial statements except for those listed below:

On April 10, 2026, the Company entered into a definitive purchase and sale agreement to acquire a senior housing community in Oregon for approximately $26.5 million. Closing of the acquisition is subject to closing conditions and applicable regulatory approvals as specified in the purchase and sale agreement.

On April 23, 2026, the Company completed the Offering for aggregate gross proceeds of approximately $531.3 million. See Note 1 — Organization for more details.

On April 25, 2026, the Company used the net proceeds from the Offering to repay $186.0 million of outstanding indebtedness under its Revolving Facility.

On April 30, 2026, the Company awarded certain of its directors, executive officers and employees an aggregate of (i)995,997 shares of common stock and long term-incentive units of the OP (“LTIP units”) as listing equity awards in connection with the Offering and (ii)153,123 shares of common stock and LTIP units and 136,457 performance-based restricted stock units as part of the Company’s annual long-term incentive equity grants under the Equity Incentive Plan.

On May 4, 2026, the Company entered into a definitive purchase and sale agreement with an unaffiliated third party to sell a portfolio of 86 OMFs for approximately $528.2 million (before transaction expenses, property operating prorations and other adjustments), including approximately $278.0 million of secured debt to be defeased or assumed by the purchaser. Closing of the sale is subject to completion by the purchaser of its due diligence, approval by the lenders of loan assumption and other customary closing conditions as specified in the purchase and sale agreement.

On May 13, 2026, the Company entered into a definitive purchase and sale agreement to acquire a senior housing community in Florida for approximately $35 million. Closing of the acquisition is subject to closing conditions and applicable regulatory approvals as specified in the purchase and sale agreement.