CareTrust REIT, Inc.

Previous wording

Words such as “anticipate(s),” “expect(s),” “intend(s),” “plan(s),” “believe(s),” “may,” “will,” “would,” “could,” “should,” “seek(s)” and similar expressions, or the negative of these terms, are intended to identify such forward-looking statements. These statements are based on management’s current expectations and beliefs and are subject to a number of risks and uncertainties that could lead to actual results differing materially from those projected, forecasted or expected. Although we believe that the assumptions underlying the forward-looking statements are reasonable, we can give no assurance that our expectations will be attained. Factors which could have a material adverse effect on our operations and future prospects or which could cause actual results to differ materially from our expectations include, but are not limited to: (i) the ability and willingness of our tenants and borrowers to meet and/or perform their obligations under the agreements we have entered into with them, including without limitation, their respective obligations to indemnify, defend and hold us harmless from and against various claims, litigation and liabilities; (ii) the risk that we may have to incur additional impairment charges related to our assets held for sale if we are unable to sell such assets at the prices we expect; (iii) the impact of healthcare reform legislation, including potential minimum staffing level requirements, on the operating results and financial conditions of our tenants and borrowers; (iv) the ability of our tenants and borrowers to comply with applicable laws, rules and regulations in the operation of the properties we lease to them or finance; (v) the intended benefits of our acquisition of Care REIT plc (“Care REIT”) may not be realized, and we will be subject to additional risks from our investment in Care REIT and any other international investments; (vi) the ability and willingness of our tenants to renew their leases with us upon their expiration, and the ability to reposition our properties on the same or better terms in the event of nonrenewal or in the event we replace an existing tenant, as well as any obligations, including indemnification obligations, we may incur in connection with the replacement of an existing tenant; (vii) the availability of and the ability to identify (a) tenants who meet our credit and operating standards, and (b) suitable acquisition opportunities and the ability to acquire and lease the respective properties to such tenants on favorable terms; (viii) the ability to generate sufficient cash flows to service our outstanding indebtedness; (ix) access to debt and equity capital markets; (x) fluctuating interest and currency rates; (xi) the impact of public health crises, including significant COVID-19 outbreaks as well as other pandemics or epidemics; (xii) the ability to retain our key management personnel; (xiii) the ability to maintain our status as a real estate investment trust (“REIT”); (xiv) ch…

Excerpt shortened here; the source contains the full paragraph.

Current wording

Words such as “anticipate(s),” “expect(s),” “intend(s),” “plan(s),” “believe(s),” “may,” “will,” “would,” “could,” “should,” “seek(s)” and similar expressions, or the negative of these terms, are intended to identify such forward-looking statements. These statements are based on management’s current expectations and beliefs and are subject to a number of risks and uncertainties that could lead to actual results differing materially from those projected, forecasted or expected. Although we believe that the assumptions underlying the forward-looking statements are reasonable, we can give no assurance that our expectations will be attained. Factors which could have a material adverse effect on our operations and future prospects or which could cause actual results to differ materially from our expectations include, but are not limited to: (i) the ability and willingness of our tenants and borrowers to meet and/or perform their obligations under the agreements we have entered into with them, including without limitation, their respective obligations to indemnify, defend and hold us harmless from and against various claims, litigation and liabilities; (ii) the risk that we may have to incur additional impairment charges related to our assets held for sale if we are unable to sell such assets at the prices we expect; (iii) the impact of healthcare reform legislation, including potential minimum staffing level requirements, on the operating results and financial conditions of our tenants and borrowers; (iv) the ability of our tenants and borrowers to comply with applicable laws, rules and regulations in the operation of the properties we lease to them or finance; (v) the intended benefits of our acquisition of Care REIT plc (“Care REIT”) may not be realized, and we will be subject to additional risks from our investment in Care REIT and any other international investments; (vi) the ability and willingness of our tenants to renew their leases with us upon their expiration, and the ability to reposition our properties on the same or better terms in the event of nonrenewal or in the event we replace an existing tenant, as well as any obligations, including indemnification obligations, we may incur in connection with the replacement of an existing tenant; (vii) the availability of and the ability to identify (a) tenants who meet our credit and operating standards, and (b) suitable acquisition opportunities and the ability to acquire and lease the respective properties to such tenants on favorable terms; (viii) the ability to generate sufficient cash flows to service our outstanding indebtedness; (ix) access to debt and equity capital markets; (x) fluctuating interest and currency rates; (xi) the impact of public health crises, including significant COVID-19 outbreaks as well as other pandemics or epidemics; (xii) the ability to retain our key management personnel; (xiii) the ability to maintain our status as a real estate investment trust (“REIT”); (xiv) ch…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

CareTrust REIT is a self-administered, publicly-traded REIT engaged in the ownership, acquisition, financing, development and leasing of skilled nursing, seniors housing and other healthcare-related properties located in the United States (“U.S.”) and the United Kingdom (“U.K.”). As of June 30, 2025, we owned, directly or indirectly in consolidated joint ventures, and leased to independent operators 400 skilled nursing facilities (“SNFs”), multi-service campuses, U.K. care homes, assisted living facilities (“ALFs”) and independent living facilities (“ILFs”) consisting of 36,162 operational beds and units located in 32 states and the U.K. with the highest concentration of properties by rental income located in California, Texas, the U.K. and Tennessee. As of June 30, 2025, we also had other real estate related investments consisting of four preferred equity investments, 14 real estate secured loans receivable and five mezzanine loans receivable with a carrying value of $840.9 million and one financing receivable with a carrying value of $97.3 million.

Current wording

CareTrust REIT is a self-administered, publicly-traded REIT engaged in the ownership, acquisition, financing, development and leasing of skilled nursing, seniors housing and other healthcare-related properties located in the United States (“U.S.”) and the United Kingdom (“U.K.”). As of September 30, 2025, we owned, directly or indirectly in consolidated joint ventures, and leased to independent operators 399 skilled nursing facilities (“SNFs”), multi-service campuses, U.K. care homes, assisted living facilities (“ALFs”) and independent living facilities (“ILFs”) consisting of 36,192 operational beds and units located in 32 states and the U.K. with the highest concentration of properties by rental income located in California, Texas, the U.K. and Tennessee. As of September 30, 2025, we also had other real estate related investments consisting of four preferred equity investments, 15 real estate secured loans receivable and five mezzanine loans receivable with a carrying value of $871.3 million and one financing receivable with a carrying value of $98.1 million.

Previous wording

Recent macroeconomic conditions, particularly market uncertainty, immigration restrictions and changes to immigration enforcement policy, changes to the U.S. healthcare system, declining consumer sentiment, inflation (including higher supply costs and shortages), effects of global tariffs, elevated interest rates and related changes to consumer spending, has adversely impacted and could continue to adversely impact our tenants’ ability to meet some of their financial obligations to us. Higher interest rates and market volatility have also increased our costs of capital to finance acquisitions and increased our borrowing costs. We continue to monitor changes in the interest rate environment and the effect of changing rates on our business. In addition, current macroeconomic conditions and the resulting market volatility may adversely impact our ability to sell properties on acceptable terms, if at all, which could result in additional impairment charges.

Current wording

Recent macroeconomic conditions, particularly market uncertainty, immigration restrictions and changes to immigration enforcement policy, changes to the U.S. healthcare system, shutdown of the federal government, declining consumer sentiment, inflation (including higher supply costs and shortages), effects of global tariffs, elevated interest rates and related changes to consumer spending, has adversely impacted and could continue to adversely impact our tenants’ ability to meet some of their financial obligations to us. Higher interest rates and market volatility have also increased our costs of capital to finance acquisitions and increased our borrowing costs. We continue to monitor changes in the interest rate environment and the effect of changing rates on our business. In addition, current macroeconomic conditions and the resulting market volatility may adversely impact our ability to sell properties on acceptable terms, if at all, which could result in additional impairment charges.

Previous wording

As a result of impacts experienced by our operators due to recent market trends and uncertainties, the ability of some of our tenants and borrowers to meet their financial obligations to us in full has been negatively impacted. From time to time in the past, we have taken actions to reposition one or more properties with a replacement tenant or sell the property and, in certain cases, we have also restructured tenants’ long-term obligations. See “Impairment of Real Estate Assets, Assets Held for Sale and Asset Sales” below. During the three months ended June 30, 2025, we collected 99.7% of contractual rents and interest due from our operators and borrowers excluding cash deposits. In the event our tenants or borrowers are unable to satisfy their obligations to us and we are unable to effect these actions on terms that are as favorable to us as those currently in place, our rental and interest income would be adversely impacted and we may incur additional expenses or obligations and be required to recognize additional impairment charges or fair value adjustments.

Current wording

As a result of impacts experienced by our operators due to recent market trends and uncertainties, the ability of some of our tenants and borrowers to meet their financial obligations to us in full may be negatively impacted. From time to time in the past, we have taken actions to reposition one or more properties with a replacement tenant or sell the property and, in certain cases, we have also restructured tenants’ long-term obligations. See “Impairment of Real Estate Assets, Assets Held for Sale and Asset Sales” below. During the three months ended September 30, 2025, we collected 100% of contractual rents and interest due from our operators and borrowers exclusive of properties held-for-sale. In the event our tenants or borrowers are unable to satisfy their obligations to us and we are unable to effect these actions on terms that are as favorable to us as those currently in place, our rental and interest income would be adversely impacted and we may incur additional expenses or obligations and be required to recognize additional impairment charges or fair value adjustments.

Previous wording

The OBBBA also introduced sweeping changes to healthcare policy and funding in the U.S. which may affect our industry in ways we cannot yet predict. Notably, however, the bill did not include previously proposed cuts to Medicaid reimbursement rates for SNFs, which is expected to provide continued stability for many of our tenants, particularly those operating in states with high Medicaid census. While the long-term impact of the legislation will depend on subsequent rule making and state-level implementation, we believe the bill’s passage reduces near-term reimbursement risk and supports the financial health of our operator base. We continue to monitor regulatory developments closely and remain engaged with our tenants to assess the operational and financial implications of this and other legislative actions.

Current wording

The OBBBA also introduced sweeping changes to healthcare policy and funding in the U.S. which may affect our industry in ways we cannot yet predict. Notably, however, the bill did not include previously proposed cuts to Medicaid reimbursement rates for SNFs, which is expected to provide continued stability for many of our tenants, particularly those operating in states with high Medicaid census. In addition, the OBBBA placed a moratorium through September 30, 2034 on implementation or enforcement of the federal minimum staffing standards for long-term care facilities finalized by CMS on May 10, 2024, which reduces near-term compliance risk and cost pressure associated with those staffing rations. While the long-term impact of the legislation will depend on subsequent rule making and state-level implementation, we believe the bill’s passage reduces near-term reimbursement risk and supports the financial health of our operator base. We continue to monitor regulatory developments closely and remain engaged with our tenants to assess the operational and financial implications of this and other legislative actions.

Previous wording

In April 2025, the Centers for Medicare and Medicaid Services (“CMS”) proposed a payment rate update to SNF reimbursements for fiscal 2026, which includes a net increase of 2.8% in Medicare Part A payments to SNFs. In July 2024, CMS approved its payment rate update to SNF reimbursements for fiscal year 2025, which includes a net increase of 4.2%, or approximately $1.4 billion, in Medicare Part A payments to SNFs. These increases are expected to partially offset some of our tenants’ higher operating costs.

Current wording

In July 2025, the Centers for Medicare and Medicaid Services (“CMS”) approved its payment rate update to SNF reimbursements for fiscal year 2026, which includes a net increase of 3.2% in Medicare Part A payments to SNFs, a slight increase from the proposed rate, which was 2.8%. This increase is expected to partially offset some of our tenants’ higher operating costs.

Previous wording

In April 2025, a U.S. District Court vacated a CMS final rule regarding minimum staffing requirements, which was previously issued on April 22, 2024 and consisted of three core staffing requirements: (1) overall minimum standard of 3.48 total nurse staff hours per resident day; (2) minimum nurse staffing standards of 0.55 hours per resident day for registered nurses and 2.45 hours of care from a certified nurse’s aid per resident per day; and (3) a requirement to have a registered nurse onsite 24 hours a day, seven days a week. The rule included a staggered implementation approach for which CMS was required to publish additional details on compliance as the implementation dates approached. The rule also included possible waivers and temporary hardship exemptions for select facilities; however, no funding for the additional staff would be provided.

Current wording

In April 2025, the U.S. District Court for the Northern District of Texas vacated a CMS final rule regarding minimum staffing requirements, which was previously issued on May 10, 2024 and consisted of three core staffing requirements: (1) overall minimum standard of 3.48 total nurse staff hours per resident day; (2) minimum nurse staffing standards of 0.55 hours per resident day for registered nurses and 2.45 hours of care from a certified nurse’s aid per resident per day; and (3) a requirement to have a registered nurse onsite 24 hours a day, seven days a week. The rule included a staggered implementation approach for which CMS was required to publish additional details on compliance as the implementation dates approached. The rule also included possible waivers and temporary hardship exemptions for select facilities; however, no funding for the additional staff would be provided. An appeal of this decision is pending.

Previous wording

(5)Represents U.K. Care Homes acquired in connection with the Acquisition. See Note 3, Acquisitions, for additional information. On July 31, 2025, the Company swapped 10 U.K. Care Homes for six U.K. Care Homes and received $2.9 million in cash before selling costs. The amounts shown above are inclusive of this asset swap. See Note 16, Subsequent Events, for additional information.

Current wording

(5)Includes U.K. Care Homes acquired in connection with the Acquisition. See Note 3, Acquisitions, for additional information. On July 31, 2025, we swapped 10 U.K. Care Homes for six U.K. Care Homes and received £2.2 million in cash before selling costs. The amounts shown above are inclusive of this asset swap. See Note 5, Impairment of Real Estate Investments, Assets Held for Sale and Asset Sales, for additional information.

Previous wording

(6)Includes two multi-service campuses held through joint ventures. See Note 4, Real Estate Investments, Net, Note 13, Variable Interest Entities, and Note 16, Subsequent Events, for additional information.

Current wording

(6)Includes two multi-service campuses held through joint ventures. See Note 4, Real Estate Investments, Net, and Note 13, Variable Interest Entities, for additional information.

Previous wording

(1)Represents annualized acquisition-date interest income, less subservicing fees, if applicable. For floating rate loans, interest income has been calculated using the benchmark rate at loan origination.

Current wording

(1)Represents annualized acquisition-date contractual interest income, less subservicing fees, if applicable. For floating rate loans, interest income has been calculated using the benchmark rate at loan origination.

Previous wording

Subsequent to June 30, 2025, we paid off the entire outstanding balance of the secured notes payable. We also paid off and terminated the secured revolving credit facilities, which were assumed in connection with the Acquisition. In connection with the payoff of the secured revolving credit facilities, we settled the outstanding interest rate caps. We funded the payoffs with cash on hand and $65.0 million in net borrowings under the Third Amended Revolving Facility.

Current wording

In July 2025, we paid off the entire outstanding balance of the secured notes payable and paid off and terminated the secured revolving credit facilities, which were each assumed in connection with the Acquisition. In connection with the payoff of the secured revolving credit facilities, we terminated the outstanding interest rate caps. We funded the payoffs with cash on hand and $65.0 million in net borrowings under the Third Amended Revolving Facility (as defined below).

Previous wording

On July 10, 2025, we entered into two interest rate swaps, with a notional amount of $250.0 million each, to hedge the variable cash flows associated with the Term Loan Facility. The interest rate swaps convert the Term Loan Facility’s Term SOFR rate to an effective fixed interest rate of 3.5%. Our objective in using interest rate derivatives is to change variable interest rates to fixed interest rates by using interest rate swaps. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for us making fixed-rate payments over the term of the agreements without exchange of the underlying notional amount.

Current wording

On July 10, 2025, we entered into two interest rate swaps, with a notional amount of $250.0 million each, to hedge the variable cash flows associated with the Term Loan Facility (as defined below). The interest rate swaps convert the Term Loan Facility’s Term SOFR rate to an effective fixed interest rate of 3.5%. Our objective in using interest rate derivatives is to change variable interest rates to fixed interest rates by using interest rate swaps. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for us making fixed-rate payments over the term of the agreements without exchange of the underlying notional amount.

Previous wording

The following tables summarize the ATM Program activity for the three and six months ended June 30, 2025 and 2024 (in thousands, except per share amounts).

Current wording

The following tables summarize the ATM Program activity for the three and nine months ended September 30, 2025 and 2024 (in thousands, except per share amounts).

Previous wording

(1) Total gross proceeds is before $4.4 million and $3.8 million of commissions paid to the sales agents during the three months ended June 30, 2025 and 2024, respectively, under the ATM Program. Total gross proceeds is before $4.6 million and $7.2 million of commissions paid to the sales agents during the six months ended June 30, 2025 and 2024, respectively, under the ATM Program.

Current wording

(1) Total gross proceeds is before $6.2 million of commissions paid to the sales agents during the three months ended September 30, 2024 under the ATM Program. Total gross proceeds is before $4.6 million and $13.4 million of commissions paid to the sales agents during the nine months ended September 30, 2025 and 2024, respectively, under the ATM Program.

Previous wording

We did not recognize any impairment charges during the three and six months ended June 30, 2025. During the three and six months ended June 30, 2024, we recognized an impairment charge of $25.7 million and $28.5 million, respectively, related to properties held for sale, which is reported in impairment of real estate investments in the condensed consolidated income statements.

Current wording

During both the three and nine months ended September 30, 2025, we recognized an impairment charge of $0.5 million related to properties held for sale. During the three and nine months ended September 30, 2024, we recognized impairment charges of $8.4 million and $36.9 million, respectively, related to properties held for sale. These charges are reported in impairment of real estate investments in the condensed consolidated income statements.

Previous wording

The following table summarizes our dispositions for the three and six months ended June 30, 2025 and 2024 (dollars in thousands):

Current wording

The following table summarizes our dispositions for the three and nine months ended September 30, 2025 and 2024 (dollars in thousands):

Previous wording

(1) One non-operational previously impaired facility sold during the six months ended June 30, 2025 was not classified as held for sale as of December 31, 2024.

Current wording

(1) One non-operational previously impaired facility sold during the nine months ended September 30, 2025 was not classified as held for sale as of December 31, 2024.

Previous wording

(2) Net sales proceeds for the six months ended June 30, 2024 includes $1.0 million of seller financing in connection with the sale of one ALF in January 2024.

Current wording

(2) Net sales proceeds for the three and nine months ended September 30, 2025 includes non-cash consideration related to an asset exchange. Net sales proceeds for the nine months ended September 30, 2024 includes $1.0 million of seller financing in connection with the sale of one ALF in January 2024. Net sales proceeds for the three and nine months ended September 30, 2024 includes $2.8 million of liabilities assumed by the buyer in connection with the sale of 11 SNFs.

Previous wording

Rental income. Rental income increased by approximately $14.4 million as detailed below:

Current wording

Rental income. Rental income increased by approximately $18.2 million as detailed below:

Previous wording

Total contractual rent includes initial contractual cash rent and tenant operating expense reimbursements, as adjusted for applicable rental escalators and rent increases due to capital expenditures funded by the Company. For tenants on a cash basis, this represents the lesser of the amount that would be recognized on a straight-line basis or cash that has been received. Total contractual rent increased by $12.6 million due to an $11.9 million increase in rental income from real estate investments made after December 31, 2024, including properties acquired in connection with the Acquisition, a $1.1 million increase in rental rates for our existing tenants, and an increase of $0.3 million related to the transfer of five facilities to new operators, partially offset by a $0.3 million decrease due to assets sold during the first quarter of 2025, a decrease of $0.3 million in tenant reimbursements and a $0.1 million decrease in rental income recognized related to certain tenants on a cash basis method of accounting. Straight-line rent increased by $1.8 million related to the Acquisition.

Current wording

Total contractual rent includes initial contractual cash rent and tenant operating expense reimbursements, as adjusted for applicable rental escalators and rent increases due to capital expenditures funded by the Company. For tenants on a cash basis, this represents the lesser of the amount that would be recognized on a straight-line basis or cash that has been received. Total contractual rent increased by $12.7 million due to a $10.9 million increase in rental income from real estate investments made after March 31, 2025, including properties acquired in connection with the Acquisition, a $1.0 million increase in rental rates for our existing tenants, an increase of $0.6 million related to the transfer of 12 facilities to new operators, and an increase of $0.2 million in tenant reimbursements. Straight-line rent increased by $1.7 million related to the Acquisition. Amortization of above and below market leases increased $3.8 million due to lease terminations in August 2025, which accelerated the amortization of the applicable below market lease intangibles.

Previous wording

Interest income from other real estate related investments and other income. The $1.4 million, or 6%, increase in interest income from other real estate related investments and other income was primarily due to an increase of $1.5 million of interest earned on escrow deposits primarily related to the Acquisition, an increase of $0.4 million of interest income on new loan investments made after December 31, 2024, an increase of $0.2 million due to origination and extension fees, and an increase of $0.2 million related to the number of days in the quarter compared to the prior quarter, partially offset by a decrease of $0.7 million of interest earned on money market funds and a decrease of $0.2 million of interest income due to loans paid off after December 31, 2024.

Current wording

Interest income from other real estate related investments and other income. The $1.7 million, or 7%, increase in interest income from other real estate related investments and other income was primarily due to an increase of $3.4 million of interest earned on money market funds, an increase of $1.4 million of interest income on new investments made after March 31, 2025, and an increase of $0.2 million related to the number of days in the quarter compared to the prior quarter, partially offset by a decrease of $3.1 million of interest earned on escrow deposits during the three months ended June 30, 2025, primarily related to the Acquisition, and a decrease of $0.2 million due to origination and extension fees during the three months ended June 30, 2025.

Previous wording

Depreciation and amortization. The $3.4 million, or 19%, increase in depreciation and amortization was primarily due to an increase of $3.4 million due to acquisitions and capital improvements made after December 31, 2024, including related to properties acquired in connection with the Acquisition.

Current wording

Depreciation and amortization. The $5.5 million, or 26%, increase in depreciation and amortization was primarily due to an increase of $3.3 million due to acquisitions and capital improvements made after March 31, 2025, including related to properties acquired in connection with the Acquisition, and $2.2 million of accelerated amortization of lease intangibles related to lease terminations in August 2025.

Previous wording

Interest expense. Interest expense increased by approximately $6.4 million as detailed below:

Current wording

Interest expense. Interest expense decreased by approximately $0.4 million as detailed below:

Previous wording

Property taxes and insurance. The $0.1 million, or 3%, increase in property taxes and insurance was primarily due to an increase of $0.3 million due to acquisitions made after December 31, 2024, partially offset by a decrease of $0.2 million related to reassessments.

Current wording

Property taxes and insurance. The $0.2 million, or 10%, increase in property taxes and insurance was primarily due to an increase of $0.2 million due to acquisitions made after March 31, 2025 and an increase of $0.1 million due to reassessments, partially offset by a decrease of $0.1 million due to the transfer of certain properties to new operators that make direct tax payments.

Previous wording

Impairment of real estate investments. During the six months ended June 30, 2024, we recognized impairment charges of $28.5 million related to properties classified as held for sale. We did not recognize any impairment charges during the six months ended June 30, 2025.

Current wording

Impairment of real estate investments. During the three months ended September 30, 2025, we recognized impairment charges of $0.5 million related to properties classified as held for sale. We did not recognize any impairment charges during the three months ended June 30, 2025.

Previous wording

Transaction costs. During the three months ended June 30, 2025, we recognized $0.1 million of non-capitalizable acquisition costs. During the three months ended March 31, 2025, we recognized $0.9 million of unsuccessful acquisition pursuit costs that we classify as transaction costs.

Current wording

Transaction costs. During the three months ended September 30, 2025, we recognized $0.6 million of costs related to integrating the operations of Care REIT plc. During the three months ended June 30, 2025, we recognized $0.1 million of non-capitalizable acquisition costs.

Previous wording

Property operating expenses. During the six months ended June 30, 2025, we recognized $1.4 million of property operating expenses related to assets we plan to sell or repurpose, re-tenant, or have sold, partially offset by $0.4 million in recoveries. During the six months ended June 30, 2024, we recognized $0.9 million of property operating expenses related to assets we plan to sell or repurpose, re-tenant or have sold.

Current wording

Property operating expenses. During the three months ended September 30, 2025, we recognized $0.3 million of property operating expenses related to assets we plan to sell or repurpose, re-tenant, or have sold. During the three months ended June 30, 2025, we recognized $0.9 million of property operating expenses related to assets we plan to sell or repurpose, re-tenant, or have sold.

Previous wording

General and administrative expense. General and administrative expense increased by $3.5 million as detailed below:

Current wording

General and administrative expense. General and administrative expense increased by $2.9 million as detailed below:

Previous wording

$0.3 million, to bring the interest rates in line with market rates. During the three months ended March 31, 2025, we recorded $1.8 million of unrealized gains on our secured and mezzanine loans receivable, partially offset by unrealized losses of $0.5 million, to bring the interest rates in line with market rates.

Current wording

Unrealized gain on other real estate related investments, net. During the three months ended September 30, 2025, we recorded $4.1 million of unrealized gains on our secured and mezzanine loans receivable, partially offset by unrealized losses of $0.1 million to bring the interest rates in line with market rates and unrealized foreign currency loss of $0.4 million related to one mortgage loan receivable. During the three months ended June 30, 2025, we recorded $2.3 million of unrealized gains on our secured and mezzanine loans receivable, partially offset by unrealized losses of $0.3 million, to bring the interest rates in line with market rates.

Previous wording

Gain on foreign currency transaction. During the six months ended June 30, 2025, we recorded a $4.4 million foreign currency gain on cash paid to Care REIT shareholders in connection with the Care REIT Acquisition.

Current wording

(Loss) gain on foreign currency transactions. During the three months ended September 30, 2025, we recorded a $0.3 million foreign currency loss on cash paid in connection with the acquisition of Impact Health Partners LLP. During the three months ended June 30, 2025, we recorded a $4.4 million foreign currency gain on cash paid to Care REIT shareholders in connection with the Care REIT Acquisition.

Previous wording

Income tax expense. During the six months ended June 30, 2025, we recorded a $1.0 million income tax expense related to foreign withholding taxes related to taxable income in the U.K.

Current wording

Income tax expense. During the three months ended September 30, 2025 and June 30, 2025, we recorded $2.1 million and $1.0 million of income tax expense, respectively, related to foreign withholding taxes related to taxable income in the U.K.

Previous wording

Rental income. Rental income increased by $48.8 million as detailed below:

Current wording

Rental income. Rental income increased by $95.9 million as detailed below:

Previous wording

Total contractual rent includes initial contractual cash rent and tenant operating expense reimbursements, as adjusted for applicable rental escalators and rent increases due to capital expenditures funded by the Company. For tenants on a cash basis, this represents the lesser of the amount that would be recognized on a straight-line basis or cash that has been received. Total contractual rent increased by $46.3 million due to a $46.7 million increase in rental income from real estate investments made after December 31, 2023, including properties acquired in connection with the Acquisition, a $3.3 million increase in rental rates for our existing tenants, a $0.9 million increase in tenant reimbursements, and an increase of $0.5 million related to the transfer of seven facilities to new operators, partially offset by a $3.5 million decrease in rental income recognized related to certain tenants on a cash basis method of accounting and a $1.6 million decrease in rental income related to dispositions made after December 31, 2023. Straight-line rent increased by $1.8 million due to the Acquisition.

Current wording

Total contractual rent includes initial contractual cash rent and tenant operating expense reimbursements, as adjusted for applicable rental escalators and rent increases due to capital expenditures funded by the Company. For tenants on a cash basis, this represents the lesser of the amount that would be recognized on a straight-line basis or cash that has been received. Total contractual rent increased by $86.1 million due to a $84.7 million increase in rental income from real estate investments made after December 31, 2023, including properties acquired in connection with the Acquisition, a $5.0 million increase in rental rates for our existing tenants, a $1.4 million increase in tenant reimbursements, and an increase of $1.4 million related to the transfer of 15 facilities to new operators, partially offset by a $3.7 million decrease in rental income recognized related to certain tenants on a cash basis method of accounting and a $2.7 million decrease in rental income related to dispositions made after December 31, 2023. Straight-line rent increased by $5.2 million due to the Acquisition. Amortization of above and below market leases increased $4.8 million primarily due to lease terminations in August 2025, which accelerated the amortization of the applicable below market lease intangibles.

Previous wording

Interest income from financing receivable. During the six months ended June 30, 2025, we recorded $5.7 million of interest income related to an investment classified as a financing receivable in December 2024.

Current wording

Interest income from financing receivable. During the nine months ended September 30, 2025, we recorded $8.6 million of interest income related to an investment classified as a financing receivable in December 2024.

Previous wording

Interest income from other real estate related investments and other income. The $22.7 million increase in interest and other income was primarily due to an increase of $24.7 million due to the origination of loans receivable after December 31, 2023, an increase of $4.7 million of interest income earned on escrow deposits and an increase of $0.2 million due to originations of other loans, partially offset by a decrease of $6.2 million of interest income on money market funds, a decrease of $0.5 million related to loan payments and a $0.2 million decrease of interest income due to placing one other loan on non-accrual status.

Current wording

Interest income from other real estate related investments and other income. The $27.7 million increase in interest and other income was primarily due to an increase of $29.7 million due to the origination of loans receivable after December 31, 2023, an increase of $4.7 million of interest income earned on escrow deposits and an increase of $0.7 million due to originations of other loans, partially offset by a decrease of $6.2 million of interest income on money market funds, a decrease of $0.9 million related to loan payments and a $0.3 million decrease of interest income due to placing one other loan on non-accrual status.

Previous wording

Depreciation and amortization. The $11.7 million, or 43%, increase in depreciation and amortization was primarily due to an increase of $14.6 million related to acquisitions and capital improvements made after December 31, 2023, partially offset by a decrease of $1.9 million due to classifying assets as held for sale after December 31, 2023, a decrease of $0.9 million due to assets becoming fully depreciated after December 31, 2023 and a decrease of $0.1 million due to the impairment of assets after December 31, 2023.

Current wording

Depreciation and amortization. The $24.4 million, or 59%, increase in depreciation and amortization was primarily due to an increase of $26.0 million related to acquisitions and capital improvements made after December 31, 2023 and an increase of $2.3 million due to lease terminations in August 2025, which accelerated the amortization of the applicable in-place lease intangibles, partially offset by a decrease of $1.9 million due to the disposal of assets, a decrease of $1.2 million due to assets becoming fully depreciated after December 31, 2023 and a decrease of $ 0.8 million due to classifying assets as held for sale after December 31, 2023.

Previous wording

Interest expense. Interest expense increased by $2.8 million as detailed below:

Current wording

Interest expense. Interest expense increased by $7.1 million as detailed below:

Previous wording

Property taxes and insurance. The $0.4 million, or 11%, increase in property taxes was due to a $1.0 million increase related to acquisitions made after December 31, 2023, partially offset by a decrease of $0.5 million due to reassessments and a decrease of $0.1 million due to the sale of three properties after December 31, 2023.

Current wording

Property taxes and insurance. The $0.6 million, or 10%, increase in property taxes was due to a $1.8 million increase related to acquisitions made after December 31, 2023, partially offset by a decrease of $0.8 million due to reassessments, a decrease of $0.2 million due to properties that were sold after December 31, 2023 and a decrease of $0.2 million due to the transfer of certain properties to new operators that make direct tax payments.

Previous wording

Transaction costs. During the six months ended June 30, 2025, we recognized $0.9 million of transaction costs primarily related to unsuccessful acquisition pursuit costs that we classify as transaction costs. We did not recognize any transaction costs during the six months ended June 30, 2024.

Current wording

Transaction costs. During the nine months ended September 30, 2025, we recognized $1.5 million of costs related to unsuccessful acquisition pursuit costs that we classify as transaction costs and costs related to integrating the operations of Care REIT plc. We did not recognize any transaction costs during the nine months ended September 30, 2024.

Previous wording

Property operating expenses. During the three months ended June 30, 2025, we recognized $0.9 million of property operating expenses related to assets we plan to sell or repurpose, re-tenant, or have sold. During the three months ended March 31, 2025, we recognized $0.5 million of property operating expenses related to assets we plan to sell or repurpose, re-tenant, or have sold, partially offset by $0.4 million in recoveries.

Current wording

Property operating expenses. During the nine months ended September 30, 2025, we recognized $1.7 million of property operating expenses related to assets we plan to sell or repurpose, re-tenant, or have sold, partially offset by $0.4 million in recoveries. During the nine months ended September 30, 2024, we recognized $4.4 million of property operating expenses related to assets we plan to sell or repurpose, re-tenant or have sold.