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 portfolio (“SHOP”) communities 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 September 30, 2026, the Company owned 161 properties (includingone land parcel) located in 28 states, consisting of 60 senior housing communities, with 4,813 average available units, and 100 outpatient medical facilities, with approximately 2.8 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 September 30, 2026, the Company hadfour eligible independent contractors operating 60 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 September 30, 2026, the Company managed all OMFs directly, without the use of third party service providers.

On April 23, 2026, pursuant to a registration statement on Form S-11 (File No. 333-294895) filed with the United States Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, 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”), 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 (“Nasdaq”) under the symbol “NHP” and began trading on April 22, 2026. On October 18, 2026, all outstanding shares of the Company’s Class A common stock automatically converted into shares of the Company’s existing common stock, $0.01 par value per share, on aone-for-one basis. On October 19, 2026, all shares of common stock became listed and freely tradeable on Nasdaq 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 and nine months ended September 30, 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 nine months ended September 30, 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.

Acquisition and Transaction Related Expenses

Acquisition and transaction related expenses include professional fees and other costs related to acquisitions, dispositions, operator or ownership transitions for SHOP communities and other investment or strategic transactions.

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, stockholders’ 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

During the nine months ended September 30, 2026, the Company acquired 24 SHOP communities for an aggregate purchase price of $399.8 million under the RIDEA structure, three of which are managed by a new operating partner with the remaining communities managed by existing operating partners of the Company.

Concentration Risk

As of September 30, 2026 and 2025, 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.

Annualized rental income for the Company consists of: (i) for the OMF segment, annualized September 30, 2026 rental income on a straight-line basis for the leases in place as of September 30, 2026, which includes tenant concessions such as free rent, as applicable, and (ii) for the SHOP segment, annualized gross revenue for the quarter ended September 30, 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 September 30, 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 thenine months ended September 30, 2026, the Company disposed ofone SHOP community and 30 OMFs for an aggregate contract sales price of$240.0 million, which resulted in an aggregate net gain on sale of$38.3 million.

In May 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. In September 2026, the Company completed the first tranche of the sale, comprising 30 properties, and in connection therewith repaid in full its Secured Term Loan 1 due 2028 and Secured Term Loan 3 due 2031, totaling $119.0 million. The closing of the remaining 56 OMFs is subject to the approval by the lenders of loan assumption and other customary closing conditions as specified in the purchase and sale agreement.

In September 2026, the Company announced a definitive purchase and sale agreement with an unaffiliated third party to sell a portfolio of 40 OMFs for approximately $531.4 million (before transaction expenses, property operating prorations and capital expenditure and other adjustments). In September 2026, the Company further entered into a definitive purchase and sale agreement to sellone SHOP community in Michigan for approximately $8.5 million. The closing of the dispositions is subject to customary closing conditions as specified in the purchase and sale agreements.

Assets Held-for-Sale

There wereno properties classified as held-for-sale as of September 30, 2026 or December 31, 2025.

The following table presents impairment charges by segment recorded during the three and nine months ended September 30, 2026 and 2025 (dollars in thousands):

(1)During the nine months ended September 30, 2026, impairment is attributed totwo held-for-use SHOP communities andfour held-for-use OMFs, which were impaired to their sales prices as evidenced by their purchase and sale agreements or non-binding letter of intent. Amounts presented for the nine months ended September 30, 2025 are primarily related tofive SHOP communities, one of which was held-for-sale as of September 30, 2025, andfour OMFs. 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 (dollars in thousands):

During the three and nine months ended September 30, 2026, the Company recorded reductions in revenue of $66 thousand and $1.1 million, respectively, related to uncollectible accounts. During the three and nine months ended September 30, 2025, the Company recorded reductions in revenue of $29 thousand and $0.7 million, respectively, related to uncollectable accounts.

Note 5 —Mortgage Notes Payable and Other Debt

The following table reflects the Company’s mortgage notes payable and other debt as of September 30, 2026 and December 31, 2025 (dollars in thousands):

(1)For total gross mortgage notes payable as of September 30, 2026 and December 31, 2025, and total Fannie Mae Secured Debt as of December 31, 2025, effective interest rate is calculated on a weighted average basis.

(2)The Fannie Mae Secured Debt had interest rate caps that limit one-month SOFR (as defined below) at 3.50%. These caps are set to expire in November 2026.

(3)The Term Loan due 2029 has interest rate swaps that convert variable interest rates to fixed interest rates.

Mortgage Notes Payable

As of September 30, 2026, the Company had pledged$458.9 million in total real estate investments, at cost, as collateral for its$256.0 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.

In connection with the disposition of 30 OMFs in September 2026, the Company repaid in full its Secured Term Loan 1 due 2028 and Secured Term Loan 3 due 2031. See Note 3 — Real Estate Investments, Net.

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. 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 was scheduled to mature on November 1, 2026. The Company fully prepaid the Fannie Mae Secured Debt on August 3, 2026 in connection with entry into the 2026 Credit Agreement as described in the following section.

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 “2025 Credit Agreement”) with Wells Fargo Bank, National Association, as administrative agent, and certain lenders party thereto. The 2025 Credit Agreement provided 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 Facilities had a maturity date of December 11, 2028. The interest rates applicable to loans under the Credit Facilities were, 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. The Credit Facilities were guaranteed, jointly and severally, by the Company and certain indirect subsidiaries of the Company. As of September 30, 2026, the Company had $1.8 billion in total real estate investments, at cost as the borrowing base under the Credit Facilities.

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

On August 3, 2026, the Company recast the Credit Facilities by entering into an amended and restated credit agreement (the “2026 Credit Agreement”), which provides for, among other things, (i) increasing total lender commitments from $550 million to $1.2 billion, with the Revolving Facility increasing from $400 million to $750 million, the Term Loan increasing from $150 million to $300 million and a new $150 million delayed draw term loan facility being added, (ii) extending the maturity of the Revolving Facility and the Term Loan (including the delayed draw term loan) to August 2030 and August 2029, respectively, each with extension options that, if fully exercised, would extend the final maturity to August 2031, and (iii) reducing the applicable pricing for interest rates based on the Company's corporate leverage ratio. In connection with entering into the 2026 Credit Agreement, the Company also terminated the Fannie Mae Secured Debt, paying off the outstanding amount thereunder, and entered into interest rate swaps with an aggregate notional amount of $300.0 million to hedge the variable interest rate exposure on the Term Loan through its initial maturity date.

The Company’s prepayment of the Secured Term Loan 1 due 2028, Secured Term Loan 3 due 2031 and Fannie Mae Secured Debt as well as the 2026 Credit Agreement resulted in a net loss on extinguishment of debt of $0.4 million recognized in the Company’s consolidated statements of operations and comprehensive income during the three and nine months ended September 30, 2026.

Debt Maturities

As of September 30, 2026, the Company’s indebtedness had the following maturities (dollars in thousands):

(1)Does not include the $150 million delayed draw term loan facility that the Company has not yet drawn down.

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 common stock. See Note 7 — Stockholders’ Equity. 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 acquisitions and distributions to holders of its common stock, through a combination of current cash on hand, net cash provided by its operating activities and property dispositions, future draws under the Revolving Facility, issuance of equity securities 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 October 1, 2026 through September 30, 2027, $3.5 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.

(3)In connection with the 2026 Credit Agreement, the Company entered into 21 new interest rate swap agreements. See Note 5 — Mortgage Notes Payable and Other Debt.

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 September 30, 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 limit one-month Secured Overnight Financing Rate (“SOFR”) to 3.50% with terms through November 2026. The actual one-month SOFR rates during the nine months ended September 30, 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 were 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 (Loss) gain on non-designated derivatives in the Company’s consolidated statements of operations and comprehensive loss.

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 and Class A Common Stock

As of September 30, 2026 and December 31, 2025, the Company had 28.6 million and 28.4 million shares of common stock issued and outstanding, respectively.

On April 23, 2026, the Company issued an aggregate of 44.3 million shares of Class A common stock in connection with the Offering.

On July 1, 2026, the Company’s Board of Directors declared a quarterly dividend of $0.075 per share of its common stock (including its Class A common stock). The dividend was paid in cash on July 30, 2026 to holders of record as of the close of business on July 15, 2026.

On October 18, 2026, all outstanding shares of the Company’s Class A common stock automatically converted into shares of the Company’s existing common stock, $0.01 par value per share, on aone-for-one basis. On October 19, 2026, all shares of common stock became listed and freely tradeable on Nasdaq under the symbol “NHP.”

The common stock had the same preferences, rights, voting powers (one vote per share), restrictions, limitations as to dividends and other distributions, qualifications and terms and conditions of redemption or otherwise, as the Class A common stock. Following the conversion of the Class A common stock, all provisions of the Company’s charter documents, as amended or supplemented, applicable to the shares of common stock apply to the shares of the common stock converted from the Class A common stock.

Preferred Stock

The Company is authorized to issue up to 50.0 million shares of preferred stock which had previously been authorized and classified as 7.375% Series A Cumulative Redeemable Perpetual Preferred Stock, $0.01 par value per share (the “Series A Shares”) and 7.125% Series B Cumulative Redeemable Perpetual Preferred Stock, $0.01 par value per share (the “Series B Shares”), respectively.

In June 2026, the Company completed a tender offer for its Series A Shares and Series B Shares for $22.50 per share in cash.556,454 Series A Shares and 566,229 Series B Shares were properly tendered for an aggregate purchase price of approximately $25.3 million, excluding fees and expenses relating to the tender offer. The tendered shares were retired, reducing the authorized share counts.

In August 2026, the Company announced the redemption of all remaining outstanding Series A Shares and Series B Shares at a redemption price equal to $25.00 per share for approximately $82.2 million and $71.3 million, respectively (excluding accrued dividends and transaction costs). The redemption of the Series A Shares was settled on September 4, 2026 and the redemption of the Series B Shares was settled on October 6, 2026.

No Series A Shares and 2.85 million Series B Shares remained outstanding as of September 30, 2026. Given the Company’s commitment announced in August 2026 to redeem the Series B Shares at par, the redemption value of $71.3 million was reclassified from “Total stockholder’s equity” to “Accounts payable and accrued expenses” within “Total liabilities” on the Company’s consolidated balance sheets as of September 30, 2026.

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 September 30, 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 September 30, 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. During the nine months ended September 30, 2026, two held-for-use SHOP communities andfour OMFs were impaired to their sales prices as evidenced by applicable purchase and sale agreement or non-binding letter of intent.

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 —Equity-Based Compensation

On April 30, 2026, the Company awarded certain of its directors, executive officers and employees under its 2025 Omnibus Incentive Compensation Plan (the “Equity Incentive Plan”) an aggregate of (i)995,997 restricted 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 restricted shares of common stock and LTIP units and 136,457 performance-based restricted stock units (“RSUs”) as part of the Company’s annual long-term incentive equity grants for its employees. On May 15, 2026, the Company further awarded 39,719 LTIP units to its directors for their annual equity retainers.

The listing equity awards are time-based awards that vest on a graded schedule over a period offour years. The fair value of time-based restricted shares is based on the closing market price per share of the Company’s common stock on the date of grant. The fair value of LTIP units as part of the listing equity awards was based on the closing market price per share of the Company’s common stock on the date of the grant and further adjusted by applying an additional discount as the LTIP units were not initially economically equivalent to restricted shares of common stock.

The annual long-term incentive equity grants and annual board equity retainers consist of time-based awards that vest on a graded schedule over a period ofone year orthree years and performance-based RSUs that vest, if at all, at the end of athree-year performance period subject to continued employment through the performance period and the achievement of performance goals set forth in the related award agreements. The number of performance-based RSUs that ultimately vest can be either 0% or vary from 50% to 200% of target depending on the level of achievement of the performance criteria. The fair value of performance-based RSUs is determined based on the closing market price per share of the Company’s common stock on the date of grant and management’s expectation of the amount of RSUs to be earned and vested at the end of the performance period.

The total grant date fair value of time-based restricted shares, time-based LTIP units and performance-based RSUs granted during the three and nine months ended September 30, 2026 was $16.3 million.

Total equity-based compensation expense was $2.1 million and $4.4 million for the three and nine months ended September 30, 2026, respectively, which was recognized in general and administrative expense in the Company’s consolidated statements of operations and comprehensive loss. As of September 30, 2026, there was $16.7 million of future expenses related to unvested equity-based compensation arrangements granted under the Equity Incentive Plan, which is expected to be recognized over a weighted average period of 3.0 years.

Equity-based compensation under the Equity Incentive Plan was first granted to the executive officers and certain other employees in May 2025. Total equity-based compensation expense was $1.3 million and $1.9 million for the three and nine months ended September 30, 2025, respectively.

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 income (loss) are comprised of the following (dollars in thousands):

Non-controlling Interests in the OP

Series A Preferred Units

A holder of Series A Preferred Units has the right to receive cash distributions equivalent to the cash distributions, if any, on the Company’s Series A Shares.

During the three and nine months ended September 30, 2026, Series A Preferred Unit holders were paid $23 thousand and $116 thousand in cash distributions, respectively. During the three and nine months ended September 30, 2025, Series A Preferred Unit holders were paid $46 thousand and $139 thousand in cash distributions, respectively.

In June 2026, the Company repurchased 50,000 of the 100,000 then outstanding Series A Preferred Units at $22.50 per unit.

In September 2026, the Company repurchased the remaining 50,000 outstanding Series A Preferred Units at $25.00 per unit. As of September 30, 2026, there were no Series A Preferred Units outstanding.

Common OP Units, Class B Units and LTIP Units

As of September 30, 2026, the Company had 234,026 partnership units outstanding in the OP designated as “Common OP Units” and 951,199 LTIP units outstanding. A holder of Common OP Units has the right to receive cash distributions equivalent to the cash distributions, if any, on the Company’s common stock. After holding the Common OP Units for a period of one year, a holder of Common OP Units has the right to redeem Common OP Units for, at the option of the OP, the corresponding number of shares of the Company’s common stock. Vested LTIP units can be converted to Common OP Units on aone-for-one basis once an equity transaction has occurred that results in the accretion of the member’s capital account to the economic equivalent of a Common Unit. All LTIP units, whether vested or not, receive the same per unit cash distributions as Common OP Units.

Prior to the Offering, the Company had 405,998 Common OP Units and 359,250 Class B Units outstanding. In connection with the Offering, the Class B Units were converted into Common OP Units pursuant to the Class B Units’ terms and the number of Common OP Units was then consolidated into 234,026 Common OP Units to give effect to adjustments for the impact of the stock dividends from October 2020 to January 2024 and the September 2024 one-for-four common stock reverse split, so the Common OP Units are redeemable for the Company’s common stock on aone-for-one basis.

During thethree and nine months ended September 30, 2026,$18 thousand incash distributions were paid to Common OP Unit non-controlling interest holders. No distributions were paid in 2025.

Non-controlling Interests in Property Owning Subsidiaries

In July 2026, the Company, through a joint venture with Discovery Senior Living, acquired 13 SHOP communities for an aggregate purchase price of $64.0 million. Discovery Senior Living initially contributed $1.0 million towards the purchase price for its 1.5% common equity interest in the venture. The Company owns approximately 98.5% of the joint venture and, as part of this transaction, the Company holds a right of first refusal and purchase option on an additional 13 SHOP communities managed by Discovery Senior Living.

Note 12 —Net Income (Loss) Per Share

The following is a summary of the net income (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, LTIP units and RSUs outstanding for the periods presented. There were 1,323,470 and 200,422 unvested restricted shares, LTIP units and RSUs outstanding as of September 30, 2026 and 2025, respectively.

(2)Weighted average number of Common OP Units outstanding for the periods presented, at the current redemption rate. There were 234,026 Common OP Units outstanding as of both September 30, 2026 and 2025.

(3)As of April 30, 2026, the Company’s Class B Units have been converted to Common OP Units. The comparable prior period numbers have been restated to maintain comparability.

(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, LTIP units, RSUs and Common OP units to be common stock equivalents.

Note 13 —Segment Reporting

As of September 30, 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):

(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.

(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.

(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.

(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.

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 September 30, 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 September 30, 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 and in addition to the subsequent events discussed elsewhere:

On October 1, 2026, the Company’s Board of Directors declared a quarterly dividend of $0.075 per share of its common stock (including its Class A common stock). The dividend was paid in cash on October 16, 2026 to holders of record as of the close of business on October 12, 2026.

In October 2026, the Company acquiredone SHOP community in Arkansas for $25.5 million to be managed by an existing operating partner.

As of the date of this filing, the Company hadnine SHOP communities under definitive purchase agreements for approximately $240.2 million; however, the Company can provide no assurances that these acquisitions will be consummated on the terms and timing the Company expects, or at all.