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NATIONAL HEALTH INVESTORS INC

NATIONAL HEALTH INVESTORS INCNHI财报

NYSE · 金融 · 房地产投资信托

Oscar Health, Inc. is an American for-profit health insurance company, founded in 2012 by Joshua Kushner, Kevin Nazemi and Mario Schlosser, and is headquartered in New York City. The company focuses on the health insurance industry through telemedicine, healthcare focused technological interfaces, and transparent claims pricing systems which would make it easier for patients to navigate.

What changed in NATIONAL HEALTH INVESTORS INC's 10-K — 2024 vs 2025

Top changes in NATIONAL HEALTH INVESTORS INC's 2025 10-K

597 paragraphs added · 599 removed · 390 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

122 edited+37 added−59 removed43 unchanged
For example, a final rule issued by the Centers for Medicare & Medicaid Services (“CMS”) in November 2023 requires Medicare-enrolled SNFs and Medicaid-enrolled nursing homes to disclose additional information about owners, operators and management, which will be publicly available.
For example, a final rule issued by the Centers for Medicare and Medicaid Services (“CMS”) in November 2023 requires Medicare-enrolled SNFs and Medicaid-enrolled nursing homes to disclose additional information about owners, operators and management, which will be publicly available.
The failure of any manager, tenant or borrower to comply with such laws and regulations could affect its ability to operate its facility or facilities and could adversely affect any such tenant’s or borrower’s ability to make lease or debt payments to us.
The failure of any tenant, manager or borrower to comply with such laws and regulations could affect its ability to operate its facility or facilities and could adversely affect any such tenant’s or borrower’s ability to make lease or debt payments to us.
Any changes in government or private payor reimbursement policies that reduce payments to levels that are insufficient to cover the cost of providing patient care or significant decreases in enrollment or coverage under the Medicare and/or Medicaid programs could adversely affect the operating revenues of managers, tenants and borrowers in our properties that rely on such payments, and thereby adversely affect their ability to make their lease or debt payments to us.
Any changes in government or private payor reimbursement policies that reduce payments to levels that are insufficient to cover the cost of providing patient care or significant decreases in enrollment or coverage under the Medicare and Medicaid programs could adversely affect the operating revenues of tenants, managers and borrowers in our properties that rely on such payments, and thereby adversely affect their ability to make their lease or debt payments to us.
Entities subject to HIPAA include health plans, healthcare clearinghouses, and most healthcare providers (including some of our managers, tenants and borrowers). Business associates of these entities who create, receive, maintain or transmit protected health information are also subject to certain HIPAA provisions. Covered entities must report breaches involving unsecured protected health information to the affected individuals, the U.S.
Entities subject to HIPAA include health plans, healthcare clearinghouses, and most healthcare providers (including some of our tenants, managers and borrowers). Business associates of these entities who create, receive, maintain or transmit protected health information are also subject to certain HIPAA provisions. Covered entities must report breaches involving unsecured protected health information to the affected individuals, the U.S.
Further, the anticipated U.S. federal income tax treatment may be changed, perhaps retroactively, by legislative, administrative or judicial action at any time. To qualify as a REIT, we must elect to be treated as a REIT, and we must meet various (a) organizational requirements, (b) gross income tests, (c) asset tests, and (d) annual dividend requirements. Organizational Requirements.
Further, the anticipated U.S. federal income tax treatment may be changed, perhaps retroactively, by legislative, administrative or judicial action at any time. To qualify as a REIT, we must elect to be treated as a REIT, and we must meet various (a) organizational requirements, (b) gross income tests, (c) asset tests and (d) annual dividend requirements.
The Board of Directors, without the approval of the stockholders, may alter our investment policies if it determines that such a change is in our best interests and our stockholders’ best interests. The methods of implementing our investment policies may vary as new investment and financing techniques are developed or for other reasons.
The Board of Directors, without the approval of our stockholders, may alter our investment policies if it determines that such a change is in our best interests and our stockholders’ best interests. The methods of implementing our investment policies may vary as new investment and financing techniques are developed or for other reasons.
However, if the Subsidiary REIT were to fail to qualify as a REIT, then (i) the Subsidiary REIT would become subject to regular U.S. corporate income tax and (ii) our equity interest in the Subsidiary REIT would cease to be a qualifying real estate asset for purposes of the 75% asset test and could become subject to the 5% asset test, the 10% voting share asset test, and the 10% value asset test generally applicable to our ownership in corporations other than REITs, qualified REIT subsidiaries (“QRSs”) and TRSs.
However, if the Subsidiary REIT were to fail to qualify as a REIT, then (i) the Subsidiary REIT would become subject to regular U.S. corporate income tax and (ii) our equity interest in the Subsidiary REIT would cease to be a qualifying real estate asset for purposes of the 75% asset test and could become subject to the 5% asset test, the 10% voting share asset test, and the 10% value asset test generally applicable to our ownership in corporations other than REITs, qualified REIT subsidiaries and TRSs.
Qualifying income for purposes of the 75% gross income test generally includes: • rents from real property; • interest on debt secured by mortgages on real property, or on interests in real property (including interest on an obligation secured by a mortgage on both real property and personal property if the fair market value of the personal property does not exceed 15% of the total fair market value of all the property securing the obligation); • dividends or other distributions on, and gain from the sale of, shares in other REITs; • gain from the sale of real estate assets; and • income derived from the temporary investment of new capital that is attributable to the issuance of our shares of beneficial interest or a public offering of our debt with a maturity date of at least five years and that we receive during the one-year period beginning on the date on which we received such new capital.
Qualifying income for purposes of the 75% gross income test generally includes: • rents from real property; • interest on debt secured by mortgages on real property, or on interests in real property (including interest on an obligation secured by a mortgage on both real property and personal property if the fair market value of the personal property does not exceed 15% of the total fair market value of all the property securing the obligation); • dividends or other distributions on, and gains from the sale of, shares in other REITs; • gains from the sale of real estate assets; and • income derived from the temporary investment of new capital that is attributable to the issuance of our shares of beneficial interest or a public offering of our debt with a maturity date of at least five years that we receive during the one-year period beginning on the date on which we received such new capital.
To increase transparency with regard to direct and indirect owning and managing entities, the rule establishes definitions of REIT and private equity company for purposes of Medicare enrollment and requires providers to disclose whether an owner or manager is a REIT or private equity company.
To increase transparency with regard to direct and indirect owning and managing entities, the rule establishes definitions of REIT and private equity companies for purposes of Medicare enrollment and requires providers to disclose whether an owner or manager is a REIT or private equity company.
Various licenses, certifications and permits are required to operate SNFs, ALFs, EFCs, HOSPs and, to a lesser degree, ILFs, to dispense narcotics, to handle radioactive materials and to operate equipment, among other regulated actions.
Licensure and Certifications Various licenses, certifications and permits are required to operate SNFs, ALFs, EFCs, HOSPs and, to a lesser degree, ILFs, to dispense narcotics, to handle radioactive materials and to operate equipment, among other regulated actions.
The Medicare Part A payment rates cover most services provided to a beneficiary for a limited benefit period, including room and board, skilled nursing care, therapy, and medications. CMS updates Medicare payment rates annually.
Medicare Part A payment rates cover most services provided to a beneficiary for a limited benefit period, including room and board, skilled nursing care, therapy and medications. CMS updates Medicare payment rates annually.
Investment Policies Our investment objectives are to (i) provide consistent and growing current income for distribution to our stockholders through investments primarily in healthcare-related facilities or in the operations thereof through independent third-party management, (ii) provide the opportunity to realize capital growth resulting from appreciation, if any, in the residual value of our portfolio properties, and (iii) preserve and protect stockholders’ capital through a balance of diversity, flexibility and liquidity.
Investment Policies Our investment objectives are to (i) provide consistent and growing current income for distribution to our stockholders through investments primarily in healthcare-related facilities or in the operations thereof through independent third-party managers, (ii) provide the opportunity to realize capital growth resulting from appreciation, if any, in the residual value of our portfolio properties and (iii) preserve and protect stockholders’ capital through a balance of diversity, flexibility and liquidity.
In making new investments, we consider such factors as (i) the geographic area and type of property, (ii) the location, construction quality, condition and design of the property, (iii) the current and anticipated cash flow and its adequacy to meet operational needs, and for lease or mortgage obligations to provide a competitive income return to our investors, (iv) the growth, tax and regulatory environments of the communities in which the properties are located, (v) occupancy and demand for similar facilities in the same or nearby communities, (vi) the quality, experience and creditworthiness of the management operating the facilities located on the property and (vii) the mix of private and government-sponsored residents.
In making new investments, we consider factors, such as (i) the geographic area and type of property, (ii) the location, construction quality, condition and design of the property, (iii) the current and anticipated cash flow and its adequacy to meet operational needs, and for lease or mortgage obligations to provide a competitive income return to our investors, (iv) the growth, tax and regulatory environments of the communities in which the properties are located, (v) occupancy and demand for similar facilities in the same or nearby communities, (vi) the quality, experience and creditworthiness of the manager operating the facility located on the property and (vii) the mix of private and government-sponsored residents.
Many of these privacy laws and regulations and related interpretations are subject to uncertain application, interpretation or enforcement standards that could result in claims against us and/or our tenants, borrowers, and operators, extensive changes to our business practices, systems and operational processes, including our data processing and security systems, penalties, increased operating costs or other impacts on our businesses.
Many of these privacy laws and regulations and related interpretations are subject to uncertain application, interpretation or enforcement standards that could result in claims against us and/or our tenants, managers and borrowers, extensive changes to our business practices, systems and operational processes, including our data processing and security systems, penalties, increased operating costs or other impacts on our businesses.
We monitor our triple-net lease tenant credit quality and identify any material changes by performing the following activities: • Obtaining financial statements on a monthly, quarterly and annual basis to assess the operational trends of our tenants and the financial position and capability of those tenants • Calculating the operating cash flow of our tenants • Calculating the lease service coverage ratio and other ratios pertinent to our tenants • Obtaining property-level occupancy rates for our tenants • Verifying the payment of real estate taxes by our tenants • Obtaining certificates of insurance for our tenants • Obtaining reviewed or audited financial statements of our tenant corporate guarantors on an annual basis, if applicable • Conducting a periodic inspection of our properties to ascertain proper maintenance, repair and upkeep • Monitoring those tenants with indications of continuing and material deteriorating credit quality through discussions with our executive management and Board of Directors Mortgage loans.
We monitor our triple-net lease tenant credit quality and identify any material changes by performing the following activities: • obtaining financial statements on a monthly, quarterly and annual basis to assess the operational trends of our tenants and the financial position and capability of those tenants; • calculating the operating cash flows of our tenants; • calculating the lease service coverage ratio and other ratios pertinent to our tenants; • obtaining property-level occupancy rates for our tenants; • verifying the payment of real estate taxes by our tenants; • obtaining certificates of insurance for our tenants; • obtaining reviewed or audited financial statements of our tenant corporate guarantors on an annual basis, if applicable; • conducting a periodic inspection of our properties to ascertain proper maintenance, repair and upkeep; and • monitoring those tenants with indications of continuing and material deteriorating credit quality through discussions with our executive management and Board of Directors.
As the decision to transition to an EFC is typically made as a lifestyle choice and not as the result of a pressing medical concern, we consider the decision to transition to an EFC to be discretionary. Accordingly, the predominant source of revenue for operators of EFCs is from private payor sources.
As the decision to transition to an EFC is typically made as a lifestyle choice and not as the result of a pressing medical concern, we consider the decision of a senior adult to transition to an EFC to be discretionary. Accordingly, the predominant source of revenue for operators of EFCs is from private payor sources.
In addition to the security of the lien against the property, we will generally require additional security and collateral in the form of either payment and performance completion bonds or completion guarantees by the borrower’s parent, affiliates of the borrower or one or more of the individuals who control the borrower.
In addition to the security of a lien against the property, we will generally require additional security and collateral from the borrower in the form of either payment and performance completion bonds or completion guarantees by the borrower’s parent, affiliates of the borrower or one or more of the individuals who control the borrower.
Tax Regulation We have elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), and since our formation, have filed our U.S. federal income tax return as a REIT.
Income Tax Regulations We have elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), and since our formation, have filed our U.S. federal income tax return as a REIT.
The leases are “triple-net leases” under which the tenant is responsible for the payment of all taxes, utilities, insurance premiums, repairs and other charges relating to the operation of the properties, including required levels of capital expenditures each year.
The leases are “triple-net leases” under which the tenant is responsible for the payment of all taxes, utilities, insurance premiums, repairs and other charges relating to the operations of the properties, including required levels of capital expenditures each year.
In some leases, third parties or affiliated entities will also guarantee some portion of the lease obligations. Some obligations are backed further by other collateral such as security deposits, trade receivables, equipment, furnishings and other personal property.
For some leases, third parties or affiliated entities will also guarantee some portion of the lease obligations. Some obligations are backed further by other collateral, such as security deposits, trade receivables, equipment, furnishings and other personal property.
Accordingly, no assurance can be given that we will be organized or will be able to operate in a manner so as to qualify or remain qualified as a REIT. Income Tests. We must satisfy two gross income tests annually to maintain our qualification as a REIT.
Accordingly, no assurance can be given that we will be able to continue to operate in a manner so as to qualify or remain qualified as a REIT. Gross Income Tests We must satisfy two gross income tests annually to maintain our qualification as a REIT.
Licensed facilities are generally subject to periodic inspections by regulators to determine compliance with applicable licensure and certification standards. Further, some types of licensed facilities must comply with federal and/or state requirements related to staffing and facility spending.
Licensed facilities are generally subject to periodic inspections by regulators to determine compliance with applicable licensure and certification standards. Further, some types of licensed facilities must comply with federal and/or state requirements related to staffing and facilities.
To maintain our qualification as a REIT, we also must satisfy the following asset tests at the end of each quarter of each taxable year: • First, at least 75% of the value of our total assets must consist of: (a) cash or cash items, including certain receivables, (b) government securities, (c) real estate assets, including interests in real property, leaseholds and options to acquire real property and leaseholds, (d) interests in mortgages on real property (including an interest in an obligation secured by a mortgage on both real property and personal property if the fair market value of the personal property does not exceed 15% of the total fair market value of all the property securing the obligation) or on interests in real property, (e) stock in other REITs, (f) debt instruments issued by publicly offered REITs ( i.e ., REITs which are required to file annual and periodic reports with the Securities and Exchange Commission (the “SEC”) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), (g) personal property leased in connection with real property to the extent that rents attributable to such personal property do not exceed 15% of the total rent received under the lease and are treated as “rents from real property”; and (h) investments in stock or debt instruments during the one-year period following our receipt of new capital that we raise through equity offerings or offerings of debt with at least a five year term; • Second, of our investments not included in the 75% asset class, the value of our interest in any one issuer’s securities may not exceed 5% of the value of our total assets; • Third, we may not own more than 10% of the voting power or value of any one issuer’s outstanding securities; • Fourth, no more than 20% of the value of our total assets may consist of the securities of one or more TRSs; • Fifth, no more than 25% of the value of our total assets may consist of the securities of TRSs and other non-TRS taxable subsidiaries and other assets that are not qualifying assets for purposes of the 75% asset test; and • Sixth, no more than 25% of our total assets may consist of debt instruments issued by publicly offered REITs that qualify as “real estate assets” only because of the express inclusion of “debt instruments issued by publicly offered REITs” in the definition of “real estate assets”. 17 Ta ble of Contents Distribution Requirements.
Asset Tests To maintain our qualification as a REIT, we also must satisfy the following asset tests at the end of each quarter of each taxable year: • First, at least 75% of the value of our total assets must consist of (a) cash or cash items, including certain receivables, (b) government securities, (c) real estate assets, including interests in real property, leaseholds and options to acquire real property and leaseholds, (d) interests in mortgages on real property (including an interest in an obligation secured by a mortgage on both real property and personal property if the fair market value of the personal property does not exceed 15% of the total fair market value of all the property securing the obligation) or on interests in real property, (e) stock in other REITs, (f) debt instruments issued by publicly offered REITs ( i.e ., REITs which are required to file annual and periodic reports with the SEC under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), (g) personal property leased in connection with real property to the extent that rents attributable to such personal property do not exceed 15% of the total rent received under the lease and are treated as “rents from real property”; and (h) investments in stock or debt instruments during the one-year period following our receipt of new capital that we raise through equity offerings or offerings of debt with at least a five year term; • Second, of our investments not included in the 75% asset class, the value of our interest in any one issuer’s securities may not exceed 5% of the value of our total assets; • Third, we may not own more than 10% of the voting power or value of any one issuer’s outstanding securities; • Fourth, no more than 20% (25% commencing in 2026) of the value of our total assets may consist of the securities of one or more TRSs; 16 Table of Contents • Fifth, no more than 25% of the value of our total assets may consist of the securities of TRSs and other non-TRS taxable subsidiaries and other assets that are not qualifying assets for purposes of the 75% asset test; and • Sixth, no more than 25% of our total assets may consist of debt instruments issued by publicly offered REITs that qualify as “real estate assets” only because of the express inclusion of “debt instruments issued by publicly offered REITs” in the definition of “real estate assets”.
When present, tenant purchase options generally give the tenant an option to purchase the underlying property for consideration not less than our net investment basis. Some of the obligations under the leases are guaranteed by the parent corporation of the tenant, if any, or affiliates or individual principals of the tenant.
When present, tenant purchase options generally give the tenant an option to purchase the underlying property for consideration that would not be less than our net investment basis. Some of the obligations under our tenant leases are guaranteed by the parent corporation of the tenant, if any, or affiliates or individual principals of the tenant.
Each taxable year, we must distribute dividends, other than capital gain dividends, to our stockholders in an aggregate amount not less than: the sum of (a) 90% of our “REIT taxable income,” computed without regard to the dividends-paid deduction or our net capital gain or loss, and (b) 90% of our after-tax net income, if any, from foreclosure property, minus the sum of certain items of non-cash income.
Distribution Requirements Each taxable year, we must distribute dividends, other than capital gain dividends, to our stockholders in an aggregate amount not less than the sum of (a) 90% of our “REIT taxable income”, computed without regard to the dividends-paid deduction or our net capital gain or loss, and (b) 90% of our after-tax net income, if any, from foreclosure property, minus the sum of certain items of non-cash income.
A significant portion of the revenue of our SNF tenants and borrowers is derived from government-funded reimbursement programs, primarily Medicare and Medicaid. The Medicare and Medicaid programs are highly regulated and subject to frequent and substantial changes resulting from legislation, regulations and administrative and judicial interpretations of existing law.
Medicare and Medicaid Reimbursements A significant portion of the revenues of our SNF tenants and borrowers is derived from government-funded reimbursement programs, primarily Medicare and Medicaid. The Medicare and Medicaid programs are highly regulated and subject to frequent and substantial changes resulting from legislation, regulations and administrative and judicial interpretations of existing law.
For fiscal year 2025, which started October 1, 2024, CMS estimates that payments to SNFs under the SNF PPS will increase by approximately $1.4 billion, or 4.2%, compared to fiscal year 2024. CMS has implemented policies intended to shift Medicare towards value-based payment methodologies that link reimbursement to the quality of care provided rather than the quantity of services rendered.
For fiscal year 2026, which started October 1, 2025, CMS estimates that payments to SNFs under the SNF PPS will increase by approximately $1.2 billion, or 3.2%, compared to fiscal year 2025. CMS has implemented policies intended to shift Medicare towards value-based payment methodologies that link reimbursement to the quality of care provided rather than the quantity of services rendered.
Operators of our facilities compete on a local and regional basis with operators of facilities that provide comparable services. Operators compete for residents and/or patients and staff based on quality of care, reputation, location and physical appearance of facilities, services offered, family preference, physicians, staff and price.
Operators of our properties compete on a local and regional basis with operators of other facilities that provide comparable services. Operators compete for residents, patients and staff based on quality of care, reputation, location and physical appearance of facilities, services offered, family preference, physicians, staff and price.
The following is a brief discussion of certain laws and regulations applicable to certain of our managers, tenants and borrowers and, in some cases, to us. Licensure and Certification.
The following is a brief discussion of certain laws and regulations applicable to certain of our tenants, managers and borrowers and, in some cases, to us.
Medicare Part A generally pays a per diem rate for each beneficiary. The reimbursement rates are set forth under a prospective payment system (“PPS”), an acuity-based classification system that uses nursing and therapy indexes, adjusted by additional factors such as geographic differences in wage rates, to calculate per diem rates for each Medicare beneficiary.
The reimbursement rates are set forth under a prospective payment system (“PPS”), an acuity-based classification system that uses nursing and therapy indexes, adjusted by additional factors such as geographic differences in wage rates, to calculate per diem rates for each Medicare beneficiary.
Second, in general, at least 95% of our gross income for each taxable year (excluding gross income from prohibited transactions) must consist of income that is qualifying income for purposes of the 75% gross income test, other types of interest and dividends, gain from the sale or disposition of stock or securities or any combination of these. Asset Tests.
Second, in general, at least 95% of our gross income for each taxable year (excluding gross income from prohibited transactions) must consist of income that is qualifying income for purposes of the 75% gross income test, other types of interest and dividends, gains from the sale or disposition of stock or securities or any combination of these.
We currently own all of the common interests in NHI PropCo Member LLC, an entity that has elected to be taxed as a REIT under the Internal Revenue Code (the “Subsidiary REIT”) and we may own and acquire direct or indirect interests in additional subsidiary REITs in the future.
We currently own all of the common interests in NHI PropCo Member LLC, an entity that has elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code (the “Subsidiary REIT”), and we may own and acquire direct or indirect interests in additional subsidiary REITs in the future.
CON requirements are not uniform throughout the United States and are subject to change. We cannot predict the impact of regulatory changes with respect to CONs on the operations of our managers, tenants and borrowers. Medicare and Medicaid Reimbursement.
CON requirements are not uniform throughout the United States and are subject to change. We cannot predict the impact of regulatory changes with respect to CONs on the operations of our tenants, managers and borrowers.
Our stock, if any, of a TRS is not subject to the 10% or 5% asset tests. Instead, the value of all TRSs owned by us cannot exceed 20% of the value of our assets. We currently own all of the membership interests of NHI-SS TRS, LLC.
Our stock, if any, of a TRS is not subject to the 10% or 5% asset tests. Instead, the value of all TRSs owned by us cannot exceed 20% (25% commencing in 2026) of the value of our assets. We currently own all of the membership interests of NHI-SS TRS, LLC.
A determination by a court or regulatory agency that the Company and/or our tenants, borrowers, and operators engaged in communication or marketing practices that violate the TCPA or CAN-SPAM could subject us to civil penalties and result in negative publicity.
A determination by a court or regulatory agency that we and/or our tenants, managers and borrowers engaged in communication or marketing practices that violate the TCPA or CAN-SPAM could subject us to civil penalties and result in negative publicity.
We and our Subsidiary REIT hold 99% and 1%, respectively, of and NHI-Discovery I TRS, LLC. We may form additional TRSs in the future.
We and our Subsidiary REIT, as defined below, hold 99% and 1%, respectively, of NHI-Discovery I TRS, LLC. We may form additional TRSs in the future.
New or expanding privacy and security laws could require substantial further investment in resources to comply with regulatory changes as privacy and security laws impose additional obligations. In addition, healthcare providers and industry participants are subject to a growing number of requirements intended to promote the interoperability and exchange of patient information.
New or expanding privacy and security laws could require substantial further investment in resources to comply with regulatory changes as privacy and security laws impose additional obligations. In addition, healthcare providers and industry participants are subject to a growing number of requirements intended to promote the interoperability and exchange of patient information. Noncompliance may result in penalties or other disincentives.
This organizational structure allows the TRS to engage in a broad range of activities and share in revenues that would otherwise be non-qualifying income under the REIT gross income tests. The TRS is subject to state and federal income taxes. Senior Housing Operating Portfolio.
Additionally, this organizational structure allows the TRS to engage in a broad range of activities and share in revenues that would otherwise be non-qualifying income under the REIT gross income tests. The TRS is subject to both federal and state income taxes.
In the event we are no longer required to pay dividends to maintain REIT status, this could adversely affect the value of our common stock. See “Item 1A. Risk Factors - Risks Related to Our Status as a REIT” in this Annual Report.
In the event we are no longer required to pay dividends to maintain REIT status, this could adversely affect the value of our common stock. Reference “Part I, Item 1A. Risk Factors - Risks Related to Our Status as a REIT” in this Annual Report.
We cannot make any assessment as to the timing or the effect that any such changes may have on our managers’, tenants’ and borrowers’ costs of doing business and on the amount of reimbursement by government and other third-party payors.
We cannot make any assessment as to the timing or the effect that any such changes may have on the costs to our tenants, managers and borrowers of doing business and on the amount of reimbursement by government and other third-party payors.
In the event that any manager, tenant or borrower were to be found in violation of any of these laws and regulations, that manager’s, tenant’s or borrower’s ability to operate the facility could be jeopardized, which could adversely affect any such tenant’s or borrower’s ability to make lease or debt payments to us and could thereby adversely affect us.
In the event that any tenant, manager or borrower were to be found in violation of any of these laws and regulations, the ability of that tenant, manager or borrower to operate the facility could be jeopardized, which could also adversely affect the ability of the tenants or borrowers to make lease or debt payments to us and could thereby adversely affect us.
Our tenants and borrowers that operate SNFs, nursing homes, HOSPs, SLCs, ALFs and EFCs are typically subject to extensive and complex federal, state and local healthcare laws and regulations, including those relating to Medicare and Medicaid reimbursement, fraud and abuse, relationships with referral sources and referral recipients, licensure and certification, building codes, privacy and security of health information and other personal data, CON, appropriateness and classification of care, qualifications of medical and support personnel, distribution, maintenance and dispensing of pharmaceuticals, communications with patients and consumers, and the operation of healthcare facilities.
Government Regulations Overview Our tenants, managers and borrowers are subject to extensive and complex federal, state and local healthcare laws and regulations, including those relating to Medicare and Medicaid reimbursement, fraud and abuse, relationships with referral sources and referral recipients, licensure and certification, building codes, privacy and security of health information and other personal data, CON, appropriateness and classification of care, qualifications of medical and support personnel, distribution, maintenance and dispensing of pharmaceuticals, communications with patients and consumers and the operation of healthcare facilities.
We have mortgage loans with original maturities generally less than five years, with varying amortization schedules from interest-only to fully amortizing. Most of the loans are at a fixed interest rate; however, some interest rates increase based on a fixed schedule.
Mortgage Loans In our Real Estate Investments segment, we have mortgage loans with original maturities, generally five years or less, with varying amortization schedules from interest-only to fully amortizing. Most of the loans are at a fixed interest rate; however, some interest rates increase based on a fixed schedule.
Privacy and Security and Data Interoperability. Privacy and security regulations issued pursuant to the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) restrict the use and disclosure of individually identifiable health information (“protected health information”), provide for individual rights, require safeguards for protected health information and require notification of breaches of unsecure protected health information.
Privacy and Security and Data Interoperability Privacy and security regulations issued pursuant to HIPPA restrict the use and disclosure of individually identifiable health information (“protected health information”), provide for individual rights, require safeguards for protected health information and require notification of breaches of unsecure protected health information.
As residents typically receive assistance with activities of daily living such as bathing, grooming, administering medication and memory care services, we consider these facilities to be need-driven senior housing. On-site staff personnel are available to assist with minor medical needs on an as-needed basis. Operators of ALFs are typically paid from private sources without assistance from the government.
As residents typically receive assistance with activities of daily living, such as bathing, grooming, administering medication and memory care services, we consider these facilities to be need-driven senior housing. On-site staff personnel at these facilities are available to assist with minor medical needs on an as-needed basis.
Most of our existing leases contain annual escalators in rent payments. For financial statement purposes, rental income is recognized on a straight-line basis over the term of the lease where the lease contains fixed escalators. Certain of our tenants hold purchase options allowing them to acquire properties they currently lease from us.
For financial statement purposes, rental income is recognized on a straight-line basis over the term of the lease when the lease contains fixed rent escalators. Certain of our tenants hold purchase options allowing them to acquire properties they currently lease from us.
If we lose our status as a REIT (currently or with respect to any tax years for which the statute of limitations has not expired), we will face serious tax consequences that will substantially reduce the funds available to satisfy our obligations, to implement our business strategy and to make distributions to our stockholders for each of the years involved because: • We would be subject to U.S. federal income tax at the regular corporate rate applicable to regular C corporations on our taxable income, determined without reduction for amounts distributed to stockholders; • For tax years beginning after December 31, 2022, we would possibly be subject to certain taxes enacted by the Inflation Reduction Act of 2022 that are applicable to non-REIT corporations, including the nondeductible 1% excise tax on certain stock repurchases; • We would not be required to make any distributions to stockholders, and any dividends to stockholders would be taxable as ordinary income to the extent of our current and accumulated earnings and profits (which may be subject to tax at preferential rates to individual stockholders); and • Unless we are entitled to relief under statutory provisions, we could not elect to be subject to tax as a REIT for four taxable years following the year during which we were disqualified.
If the Subsidiary REIT were to fail to qualify as a REIT and if we were not able to treat the Subsidiary REIT as a TRS of ours pursuant to certain prophylactic elections we have made, it is possible that we would not meet the 10% voting share test and the 10% value test with respect to our interest in the Subsidiary REIT, in which event we could fail to qualify as a REIT unless we could avail ourselves of certain relief provisions. 17 Table of Contents Failure to Qualify If we lose our status as a REIT (currently or with respect to any tax years for which the statute of limitations has not expired), we will face serious tax consequences that will substantially reduce the funds available to satisfy our obligations, to implement our business strategy and to make distributions to our stockholders for each of the years involved because: • we would be subject to U.S. federal income tax at the regular corporate rate applicable to regular C corporations on our taxable income, determined without reduction for amounts distributed to stockholders; • for tax years beginning after December 31, 2022, we would possibly be subject to certain taxes enacted by the Inflation Reduction Act of 2022 that are applicable to non-REIT corporations, including the nondeductible 1% excise tax on certain stock repurchases; • we would not be required to make any distributions to stockholders, and any dividends to stockholders would be taxable as ordinary income to the extent of our current and accumulated earnings and profits (which may be subject to tax at preferential rates to individual stockholders); and • unless we are entitled to relief under statutory provisions, we could not elect to be subject to tax as a REIT for four taxable years following the year during which we were disqualified.
Medicare is a federal health insurance program for persons aged 65 and over, some disabled persons, and persons with end-stage renal disease or Lou Gehrig’s disease/amyotrophic lateral sclerosis. Medicare generally covers SNF services for 13 Ta ble of Contents beneficiaries who require skilled nursing or therapy services after a qualifying hospital stay.
Medicare is a federal health insurance program for persons aged 65 and over, some disabled persons and persons with end-stage renal disease or Lou Gehrig’s disease/amyotrophic lateral sclerosis. Medicare generally covers SNF services for beneficiaries who require skilled nursing or therapy services after a qualifying hospital stay. Medicare Part A generally pays a per diem rate for each beneficiary.
Our revenues depend on the operating success of our managers, tenants and borrowers, whose sources and amounts of revenues are determined by (i) the licensed beds or other capacity of the facility, (ii) their occupancy rate, (iii) the extent to which the services provided at each facility are utilized by the residents and patients, (iv) the mix of private pay, Medicare and Medicaid patients, and (v) the rates paid by private payors and by the Medicare and Medicaid programs.
Our revenues depend on the operating success of our tenants, managers and borrowers whose sources and amounts of revenues are determined by factors including, but not limited to (i) the number of licensed beds or units at each facility, (ii) occupancy rates, (iii) the extent to which services are utilized by the residents and patients, (iv) the mix of private pay, Medicare and Medicaid patients and (v) the rates paid by private health insurance, Medicare and Medicaid programs.
As of December 31, 2024, our Real Estate Investments segment included 65 SNFs leased to operators and mortgage loans secured by five SNFs. SNFs provide some combination of skilled and intermediate nursing and rehabilitative care, including speech, physical and occupational therapy.
Medical Facilities Skilled Nursing Facilities - As of December 31, 2025, our Real Estate Investments segment included 65 SNFs leased to third-party operators and three SNFs secured by mortgage loans with us. SNFs provide residents with some combination of skilled and intermediate nursing and rehabilitative care, including speech, physical and occupational therapy.
The operators of the SNFs receive payment from a combination of private pay sources and government payors such as Medicaid and Medicare. SNFs are required to obtain state licenses and are highly regulated at the federal, state and local levels.
The operators of SNFs typically receive payment from a combination of private payor sources and government assistance programs, including Medicare and Medicaid. SNFs are required to obtain state licenses and are highly regulated at the federal, state and local levels.
Competition is with other operators as well as companies managing multiple facilities, some of which are substantially larger and have greater resources than the operators of our facilities. Some of these facilities are operated for profit, while others are owned by governmental agencies or tax-exempt not-for-profit entities.
We compete with other operators and companies that manage multiple healthcare facilities, some of which are substantially larger and have greater resources than the operators of our facilities. Some of these facilities are operated for profit while others are owned by government agencies or tax-exempt not-for-profit entities.
In addition, the Federal Trade Commission continues to pursue privacy as an enforcement priority, including addressing unfair or deceptive practices relating to privacy policies, consumer data collection and processing consent, and digital advertising practices.
In addition, the Federal Trade Commission (“FTC”) continues to pursue privacy as an enforcement priority, including addressing unfair or deceptive practices relating to privacy policies, consumer data collection and processing consent, and digital advertising practices. Health-specific consumer privacy laws were also passed in multiple states, including Washington and Nevada.
Noncompliance may result in penalties or other disincentives. 15 Ta ble of Contents Americans with Disabilities Act . Our properties generally must comply with the Americans with Disabilities Act (the “ADA”) and any similar state or local laws to the extent that such properties are public accommodations as defined in those statutes.
Americans with Disabilities Act Our properties generally must comply with the Americans with Disabilities Act (the “ADA”) and any similar state or local laws to the extent that such properties are public accommodations as defined in those statutes.
There are several other laws and legislative and regulatory initiatives and proposals at the federal and state levels addressing privacy and security of personal data that may not be preempted by HIPAA and that impact our business or the business of our managers, tenants and borrowers.
Violations of HIPAA may result in substantial civil and/or criminal fines and penalties. 13 Table of Contents There are several other laws and legislative and regulatory initiatives and proposals at the federal and state levels addressing privacy and security of personal data that may not be preempted by HIPAA and that impact on our business or the businesses of our tenants, managers and borrowers.
The leases also require the tenant to indemnify and hold us harmless from all claims resulting from the use, occupancy and related activities of each property by the tenant, and to indemnify us against all costs related to any release, discovery, clean-up and removal of hazardous substances or materials, or other environmental responsibility with respect to each facility.
The leases also require the tenant to indemnify and hold us harmless from all claims resulting from the use, occupancy and related activities of each property and to indemnify us against all costs related to any release, discovery, clean-up and removal of hazardous substances or materials, or other environmental responsibilities with respect to each facility. 7 Table of Contents Most of our existing leases contain annual escalators in rent payments.
Operators in 9 of the 11 states in which we own SNFs must obtain a CON from the state before opening or expanding such facilities. Some SNFs also include assisted living beds.
The operators in nine of the 11 states in which we own SNFs must obtain a CON from the state before opening or expanding their facilities. Some SNFs have assisted living beds available to residents.
None of our employees are subject to a collective bargaining agreement. We empower our employees and reinforce our corporate culture through onboarding, training, and social and team-building events. We actively support charitable organizations within our community that promote health education and social well-being, and we encourage our employees to personally volunteer with organizations that are meaningful to them.
We empower our employees and reinforce our corporate culture through onboarding, training and team-building events. We actively support charitable organizations within our local communities that promote health education and social well-being, and we encourage our employees to personally volunteer with organizations that are meaningful to them. We consider our employee relations to be good.
Services provided by HOSPs are generally paid for by a combination of private pay sources and government payors. As the decision to utilize the services of a HOSP is typically made as the result of a pressing medical concern, we consider this to be a need-driven medical facility. Medical Office Building.
Services provided by HOSPs are generally paid for by a combination of private payor sources and government assistance programs, including Medicare and Medicaid. As the decision to utilize the services of a HOSP is typically made as the result of a pressing medical concern, we consider these properties to be need-driven medical facilities.
Federal and state legislative and regulatory bodies, including at the executive level, continue to signal increased scrutiny and to propose or enact legislation and regulations addressing the creation, adoption, and leveraging of artificial intelligence and/or machine learning based or enhanced tools, systems, and functions.
These laws and regulations are constantly evolving and may impose limitations on our business activities. Federal and state legislative and regulatory bodies, including at the executive level, continue to signal increased scrutiny and to propose or enact legislation and regulations addressing the creation, adoption and leveraging of AI and/or machine learning based or enhanced tools, systems and functions.
Noncompliance with applicable laws and regulations may result in the imposition of civil and criminal penalties that could adversely affect the operations and financial condition of managers, tenants or borrowers, which in turn may adversely affect us.
Our tenants, managers and borrowers may find it increasingly difficult and costly to operate within this complex and evolving regulatory environment. Noncompliance with applicable laws and regulations may result in the imposition of civil and criminal penalties that could adversely affect the operations and financial condition of tenants, managers or borrowers, which in turn may adversely affect us.
However, monthly fees may be higher to reflect the current healthcare components delivered to each resident. EFC licensure is state-specific, but generally skilled nursing beds included in our EFC portfolio are subject to state licensure and regulation. Certain services may also require a CON.
EFC licensure is state-specific, but generally skilled nursing beds included in our EFC portfolio are subject to state licensure and regulation. Certain services may also require a CON.
Changes to Medicare and Medicaid that reduce payments under these programs or negatively affect utilization of services may negatively impact payments from private payors.
In some cases, private payors rely on governmental reimbursement systems to determine reimbursement rates and policies. Changes to Medicare and Medicaid that reduce payments under these programs or negatively affect utilization of services may negatively impact payments from private payors.
In our leasing operations, we offer to our tenants and to sellers of newly acquired properties a variety of inducements that originate contractually as contingencies but which may become commitments upon the satisfaction of the contingent event. Contingent payments earned will be included in the respective lease bases when funded.
In our leasing operations, we may offer our tenants and the sellers of properties we acquire certain inducements that originate contractually as contingencies, but which may become commitments upon the satisfaction of the contingent event. Any contingent payments made by us are included in the respective lease base when funded.
Marketing and patient engagement activities that the Company may engage in are subject to communications laws such as the Telephone Consumer Protection Act (the “TCPA”) and the Controlling the Assault of Non-Solicited Pornography and Marketing Act (“CAN-SPAM”).
Enforcement by the FTC under the FTC Act and Health Breach Notification Rule can result in civil penalties or enforcement actions. Marketing and patient engagement activities that we may engage in are subject to communications laws, such as the Telephone Consumer Protection Act (“TCPA”) and the Controlling the Assault of Non-Solicited Pornography and Marketing Act (“CAN-SPAM”).
Our arrangement with an affiliate of Life Care Services, which we completed in January 2020 and is structured to be compliant with the provisions of RIDEA, permits NHI to receive rent payments through a triple-net lease between a property company owned 80% by NHI and an unconsolidated operating company owned 25% by a taxable REIT subsidiary (“TRS”) of NHI and gives NHI the opportunity to capture additional value on the improving performance of the operating company through distributions to the TRS.
RIDEA Transactions Our arrangement with an affiliate of Life Care Services, which we completed in January 2020, is structured to be compliant with the provisions of RIDEA and permits us to receive rent payments through a triple-net lease between a consolidated real estate entity in which we own 80.0% and an unconsolidated operating company which is 25.0% owned by our TRS.
The Internal Revenue Code defines a REIT as a corporation, trust or association: (1) that is managed by one or more trustees or directors; (2) the beneficial ownership of which is evidenced by transferable shares, or by transferable certificates of beneficial interest; (3) that would otherwise be taxable as a domestic corporation, but for Sections 856 through 859 of the Internal Revenue Code; (4) that is neither a financial institution nor an insurance company to which certain provisions of the Internal Revenue Code apply; (5) the beneficial ownership of which is held by 100 or more persons; 16 Ta ble of Contents (6) during the last half of each taxable year, not more than 50% in value of the outstanding stock of which is owned, directly or constructively, by five or fewer individuals, as defined in the Internal Revenue Code to also include certain entities; and (7) which meets certain other tests regarding the nature of its income and assets.
Organizational Requirements The Internal Revenue Code defines a REIT as a corporation, trust or association with the following characteristics: • it is managed by one or more trustees or directors; • the beneficial ownership is evidenced by transferable shares, or by transferable certificates of beneficial interest; • it would otherwise be taxable as a domestic corporation, except for the exclusions that apply under Sections 856 through 859 of the Internal Revenue Code; • it is neither a financial institution nor an insurance company to which certain provisions of the Internal Revenue Code apply; • the beneficial ownership is held by 100 or more persons; • during the last half of each taxable year, not more than 50% in market value of its outstanding stock is owned, directly or constructively, by five or fewer individuals, as defined in the Internal Revenue Code to also include certain entities; and • certain other tests regarding the nature of its income and assets are met. 15 Table of Contents We believe that we have been organized and have operated in a manner that has allowed us, and will continue to allow us, to satisfy the conditions above during the relevant time periods, and we intend to continue to be organized and to operate in this manner.
We consider our employee relations to be good. 12 Ta ble of Contents Certain essential services such as internal audit, tax compliance, information technology and legal services are outsourced to third-party professional firms. Government Regulation Overview.
Certain of our essential services, such as internal audit, tax compliance, information technology and legal services, are outsourced to third-party professional firms.
Operators of SLCs are typically paid from private sources and from government programs such as Medicare and Medicaid for skilled nursing residents. SLCs may be licensed and regulated as nursing homes in some states and may also require a CON. Discretionary Senior Housing Independent Living Facilities.
Operators of SLCs are typically paid through private payor sources and when skilled nursing care is involved, they may also be paid from government assistance programs, including Medicare and Medicaid. SLCs may be licensed and regulated as nursing homes in some states and may also require a CON.
The tenure of our current employees includes eight who have been with the Company for over five years (but less than ten years), and three who have been with the Company over ten years (but less than 20 years). Two of our employees have been with the Company over 20 years.
The tenure of our current employees includes six employees who have been with us for over five years (but less than 10 years), three employees who have been with us over 10 years (but less than 20 years) and two employees who have been with us over 20 years. None of our employees are subject to a collective bargaining agreement.
Information contained on our website is not incorporated by reference into this Annual Report. The SEC also maintains reports, proxy statements, information statements, and other information regarding issuers that file electronically at http://www.sec.gov.
We have a policy of publishing these on the website as soon as reasonably practicable after filing them with, or furnishing them to, the SEC. Information contained on our website is not incorporated by reference into this Annual Report. The SEC also maintains reports, proxy statements, information statements, and other information regarding registrants that file electronically at http://www.sec.gov.
As of December 31, 2024, our Real Estate Investments segment included seven independent living facilities (“ILF”) leased to operators. ILFs offer specially designed residential units for active senior adults and provide various ancillary services for their residents including restaurants, activity rooms and social areas. Services provided by ILF operators are generally paid from private sources without assistance from government payors.
ILFs offer specially designed residential units for active senior adults and provide various ancillary services for their residents including restaurants, activity rooms and social areas. Services provided by ILF operators are generally paid from private payor sources without government assistance through the Medicare and Medicaid programs.
Further, these laws and regulations are subject to change, enforcement practices may evolve, and it is difficult to predict the impact of new laws and regulations. We expect that the healthcare industry, in general, will continue to face increased regulation. Our tenants may find it increasingly difficult and costly to operate within this complex and evolving regulatory environment.
Applicable laws and regulations are wide-ranging, vary across jurisdictions, and are administered by several government agencies. Further, these laws and regulations are subject to change, enforcement practices may evolve, and it is difficult to predict the impact of new laws and regulations. We expect that the healthcare industry, in general, will continue to face increased regulation.
We will not, without the approval of a majority of the Board of Directors and review of a committee comprised of disinterested directors, enter into any joint venture or partnership relationships with or acquire from or sell to any director, officer or employee of NHI, or any affiliate thereof, as the case may be, any of our assets or other property.
We will not, without the approval or ratification of the Audit Committee or a majority of our disinterested Board of Directors, enter into any agreement with any of our directors, officers, or employees, or any affiliate thereof, to (i) enter into any joint venture or other partnership relationships or (ii) acquire from or sell any of our real estate properties or other assets.
The healthcare facilities in which we invest may be subject to state CON or similar laws, which require government approval prior to the construction or establishment of new facilities, the expansion of existing facilities, the addition of beds to existing facilities, the addition of services or certain capital expenditures.
In addition, if we have to replace a tenant, we may experience difficulties in finding a replacement because our ability to replace the tenant may be affected by federal and state laws governing changes in control and ownership. 11 Table of Contents The healthcare facilities in which we invest may be subject to state CON or similar laws, which require government approval prior to the construction or establishment of new facilities, the expansion of existing facilities, the addition of beds to existing facilities, the addition of services or certain capital expenditures.
Computershare will assist registered owners with the NHI Dividend Reinvestment Plan, a change of address, a transfer of ownership, payment of dividends, or replacement of lost checks or stock certificates. 19 Ta ble of Contents Computershare’s contact information is: Computershare Trust Company, N.A., P.O. Box 43078, Providence, RI 02940-3078. The toll free number is 800-568-3476 and the website is www.computershare.com.
Computershare’s contact information is: Computershare Trust Company, N.A., P.O. Box 43078, Providence, RI 02940-3078. The toll free number is 800-568-3476 and the website is www.computershare.com. 19 Table of Contents
We have previously invested, and may in the future invest, in properties subject to existing loans or secured by mortgages, deeds of trust or similar liens with favorable terms or in mortgage investment pools.
We have previously invested, and may in the future invest, in properties subject to existing loans or secured by mortgages, deeds of trust or similar liens with favorable terms or in mortgage investment pools. 18 Table of Contents Investor Information We publish our Annual Report, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to such reports on our website at www.nhireit.com.
SLCs contain one or more buildings that typically include higher acuity level of care, for example, skilled nursing beds combined with an independent or assisted living facility that provides basic room and board functions for elderly residents. They may also provide assistance to residents with activities of daily living such as bathing, grooming and administering medication.
SLCs generally have one or more buildings and typically include a higher acuity level of care for residents. For example, an SLC may offer skilled nursing beds in combination with independent or assisted living accommodations providing basic room and board functions to elderly residents.
ALFs may be licensed and regulated in some states, but generally do not require the issuance of a Certificate of Need (“CON”) as is often required for skilled nursing facilities (“SNFs”). Senior Living Campuses.
Operators of ALFs are typically paid from private payor sources without government assistance through the Medicare and Medicaid programs. ALFs may be licensed and regulated in some states, but generally do not require the issuance of a Certificate of Need (“CON”) as is often required for SNFs.
On-site staff personnel are available to assist with minor medical needs on an as-needed basis. As the decision to transition to a SLC is typically more than a lifestyle choice and is usually driven by the need to receive some moderate level of care, we consider this facility type to be need-driven.
As the decision to transition to a SLC is typically more than a lifestyle choice and is usually driven by a resident’s need for some moderate level of care, we consider these types of SHOs to be need-driven.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Payment or other tenant defaults, the failure of tenants to meet their other obligations to us or a decline in the operating performance by any of these tenants or other tenants/operators could materially and adversely affect our business, financial condition and results of operations, and our ability to pay expected dividends to our stockholders.
Payment or other tenant defaults, the failure of tenants to meet their other obligations to us or a decline in the operating performance by any of these tenants or other tenants and operators could materially and adversely affect our business, financial condition and results of operations, and our ability to pay expected dividends to our stockholders.
In addition, different interpretations or enforcement of, or changes to, applicable laws and regulations in the future could subject current or past practices to allegations of illegality or impropriety or could require our managers, tenants and borrowers to make changes to their facilities, equipment, personnel, services, and operating expenses.
In addition, different interpretations or enforcement of, or changes to, applicable laws and regulations in the future could subject current or past practices to allegations of illegality or impropriety or could require our tenants, managers and borrowers to make changes to their facilities, equipment, personnel, services, and operating expenses.
There is uncertainty with regard to whether, when and what health reform initiatives will be adopted in the future and the impact of such reform efforts on providers and other healthcare industry participants, including our managers, tenants and borrowers.
There is uncertainty with regard to whether, when and what health reform initiatives will be adopted in the future and the impact of such reform efforts on providers and other healthcare industry participants, including our tenants, managers and borrowers.
We are exposed to the risk that the cash flows of our managers, tenants and borrowers may be adversely affected by increased liability claims and liability insurance costs. ALF and SNF operators have experienced substantial increases in both the number and size of patient care liability claims in recent years.
We are exposed to the risk that the cash flows of our tenants, managers and borrowers may be adversely affected by increased liability claims and liability insurance costs. ALF and SNF operators have experienced substantial increases in both the number and size of patient care liability claims in recent years.
In addition, investor concerns regarding the U.S. or international financial systems could result in less favorable commercial financing terms, including higher interest rates or costs and tighter financial and operating covenants, or systemic limitations on access to credit and liquidity sources, thereby making it more difficult for us to acquire financing on terms favorable to us in connection with a potential business combination, or at all, and could have material adverse impacts on our liquidity, our business, financial condition or results of operations, and our prospects.
In addition, investor concerns regarding the U.S. or international financial systems could result in less favorable commercial financing terms, including higher interest rates or costs and tighter financial and operating covenants, or systemic limitations on access to credit and liquidity sources, thereby making it more difficult for us to acquire financing on terms favorable to us in connection with a potential business combination, or at all, and could have material adverse impacts on our business, financial condition, results of operations or our prospects.
Our business, like that of other REITs, involves the receipt, storage and transmission of information about our Company, our managers, tenants and borrowers, and our employees, some of which is entrusted to third-party service providers and vendors.
Our business, like that of other REITs, involves the receipt, storage and transmission of information about our Company, our tenants, managers and borrowers, and our employees, some of which is entrusted to third-party service providers and vendors.
Natural and man-made disasters, including terrorist attacks and acts of nature such as hurricanes, tornados, earthquakes, flooding and wildfires, may cause damage to our properties or business disruption to our managers, tenants and borrowers. These adverse weather and natural or man-made events could cause substantial damage or loss to our properties which could exceed applicable property insurance coverage.
Natural and man-made disasters, including terrorist attacks and acts of nature, such as hurricanes, tornados, earthquakes, flooding and wildfires, may cause damage to our properties or business disruption to our tenants, managers and borrowers. These adverse weather and natural or man-made events could cause substantial damage or loss to our properties which could exceed applicable property insurance coverage.
If we are unable to obtain needed capital at all or only on unfavorable terms from these sources, we might not be able to make the investments needed to grow our business, or to meet our obligations and commitments as they mature, which could negatively affect the ratings of our debt and even, in extreme circumstances, affect our ability to continue operations.
If we are unable to obtain necessary capital at all or only on unfavorable terms from these sources, we might not be able to make the investments needed to grow our business, or to meet our obligations and commitments as they mature, which could negatively affect the ratings of our debt and even, in extreme circumstances, affect our ability to continue operations.
We have covenants related to our indebtedness which impose certain operational limitations and a breach of those covenants could materially adversely affect our financial condition and results of operations. The terms of our current indebtedness are, and debt instruments that the Company may enter into in the future may be, subject to customary financial and operational covenants.
We have covenants related to our indebtedness which impose certain operational limitations and a breach of those covenants could materially adversely affect our financial condition and results of operations. The terms of our current indebtedness are, and debt instruments that we may enter into in the future may be, subject to customary financial and operational covenants.
Internal Revenue Service (the “IRS”) and the U.S. Treasury Department, which results in statutory changes as well as frequent revisions to regulations and interpretations. Revisions in federal tax laws and interpretations thereof could affect or cause us to change our investments and commitments and affect the tax considerations of an investment in us.
Internal Revenue Service and the U.S. Treasury Department, which results in statutory changes as well as frequent revisions to regulations and interpretations. Revisions in federal tax laws and interpretations thereof could affect or cause us to change our investments and commitments and affect the tax considerations of an investment in us.
Actual or perceived risks associated with pandemics, epidemics or outbreaks have had and may in the future have a material adverse effect on our operators’ business and results of operations. The business and results of operations of the operators of our properties and the Company are subject to health and economic effects of public health conditions.
Actual or perceived risks associated with pandemics, epidemics or outbreaks have had, and may in the future, have a material adverse effect on our operators’ business and results of operations. The business and results of operations of the operators of our properties and our business and results of operations are subject to health and economic effects of public health conditions.
The business of the operators of our properties and the Company may be more vulnerable to the effects of a public health crisis because most of our properties are designed for elderly consumers, a population that may experience complex medical conditions or socioeconomic factors.
The business of the operators of our properties and our business may be more vulnerable to the effects of a public health crisis because most of our properties are designed for elderly consumers, a population that may experience complex medical conditions or socioeconomic factors.
High inflation and interest rates could have an adverse impact on our variable rate debt, our ability to borrow money, and general and administrative expenses, as these costs could increase at a rate higher than our rental and other revenue.
High inflation and interest rates could have an adverse impact on our variable rate debt, our ability to borrow money, and general and administrative expenses, as these costs could increase at a rate higher than our rental income and other revenue.
In the event of a tenant default, we may experience delays in enforcing our rights as landlord and may incur substantial costs in protecting our investment and re-leasing our property.
In the event of a tenant default, we may experience delays in enforcing our rights as landlord and may incur substantial costs in protecting our investment and re-leasing of the related property.
Thus, if the operation of any of our properties becomes unprofitable due to competition, age of improvements or other factors such that our tenant or borrower becomes unable to meet its obligations on the lease or mortgage loan, the liquidation value of the property may be less than the net book value or the amount owed on any related mortgage loan, because the property may not be readily adaptable to other uses.
Thus, if the operation of any of our properties becomes unprofitable due to competition, age of improvements or other factors such that our tenant or borrower becomes unable to meet its obligations on the lease or mortgage loan, the liquidation value of the property may be less than the net carrying value or the amount owed on any related mortgage loan, because the property may not be readily adaptable to other uses.
We may be unable to raise reasonably priced capital because of reasons related to our business or for reasons beyond our control, such as market conditions and rising interest rates. If our access to capital becomes limited, it could have an impact on our ability to refinance our debt obligations, fund dividend payments, acquire properties and fund acquisition activities.
We may be unable to raise reasonably priced capital because of reasons related to our business or for reasons beyond our control, such as market conditions and rising interest rates. If our access to capital becomes limited, it could have an impact on our ability to refinance our debt obligations, fund dividend payments and acquire properties.
Such events could also have a material adverse impact on our tenants’, operators’ and borrowers’ operations and ability to meet their obligations to us. In the event of a loss in excess of insured limits, we could lose our capital invested in the affected property, as well as anticipated future revenue from that property.
Such events could also have a material adverse impact on our tenants’, managers’ and borrowers’ operations and ability to meet their obligations to us. In the event of a loss in excess of insured limits, we could lose our capital invested in the affected property, as well as anticipated future revenue from that property.
The departure of any key personnel could have an adverse effect on the Company and adversely affect our financial condition and results of operations. Our senior management team possesses substantial experience and expertise and has strong business relationships with our tenants and operators and other members of the business communities and industries in which we operate.
The departure of any key personnel could have an adverse effect on us and adversely affect our financial condition and results of operations. Our senior management team possesses substantial experience and expertise and has strong business relationships with our tenants and operators and other members of the business communities and industries in which we operate.
As of December 31, 2024, we had the potential to access $480.0 million through the issuance of common stock under our at-the-market (“ATM”) equity program. In addition, we maintain an effective automatic shelf registration statement through which capital could be raised via the issuance of equity securities.
As of December 31, 2025, we had the potential to access $480.0 million through the issuance of common stock under our at-the-market (“ATM”) equity program. In addition, we maintain an effective automatic shelf registration statement through which capital could be raised via the issuance of equity securities.
If our tenants, operators or borrowers fail to comply with applicable laws and regulations, they may be subject to liabilities and other consequences including civil penalties, loss of facility licensure, exclusion from participation in the Medicare, Medicaid, and other government healthcare programs, civil lawsuits and criminal penalties.
If our tenants, managers or borrowers fail to comply with applicable laws and regulations, they may be subject to liabilities and other consequences including civil penalties, loss of facility licensure, exclusion from participation in the Medicare, Medicaid and other government healthcare programs, civil lawsuits and criminal penalties.
If a pandemic, epidemic, outbreaks of infectious disease or other public health crisis were to affect the markets in which our properties are located, our business could be adversely affected. Revenues for the tenants and operators of our properties are significantly impacted by occupancy rates.
If a pandemic, epidemic, outbreak of infectious disease or other public health crisis were to affect the markets in which our properties are located, our business could be adversely affected. Revenues for the tenants and operators of our properties are significantly impacted by occupancy rates.
If we (or our Subsidiary REIT) fail to qualify as a REIT: • we (or our Subsidiary REIT) will not be allowed a deduction for distributions to stockholders in computing our taxable income; • we (or our Subsidiary REIT) will be subject to corporate-level income tax, on taxable income at regular corporate rates; • we (or our Subsidiary REIT) could be subject to increased state and local income taxes; • For tax years beginning after December 31, 2022, we (or our Subsidiary REIT) would possibly be subject to certain taxes enacted by the Inflation Reduction Act of 2022 that are applicable to non-REIT corporations, including the nondeductible 1% excise tax on certain stock repurchases; and • unless we (or our Subsidiary REIT) are entitled to relief under relevant statutory provisions, we (or our Subsidiary REIT, as applicable) will be disqualified from taxation as a REIT for the four taxable years following the year during which we (or our Subsidiary REIT, as applicable) fail to qualify as a REIT.
If we, or our Subsidiary REIT fail to qualify as a REIT: • we, or our Subsidiary REIT, will not be allowed a deduction for distributions to our stockholders in computing taxable income; • we, or our Subsidiary REIT, will be subject to corporate-level income tax on taxable income at regular corporate rates; • we, or our Subsidiary REIT, could be subject to increased state and local income taxes; • we, or our Subsidiary REIT, would possibly be subject to certain taxes enacted by the Inflation Reduction Act of 2022 that are applicable to non-REIT corporations, including the nondeductible 1% excise tax on certain stock repurchases; and • unless we, or our Subsidiary REIT, are entitled to relief under relevant statutory provisions, we, or our Subsidiary REIT as applicable, will be disqualified from taxation as a REIT for the four taxable years following the year during which we, or our Subsidiary REIT as applicable, fail to qualify as a REIT.
For example, the Budget Control Act of 2011 requires automatic spending reductions to reduce the federal deficit, resulting in a uniform payment reduction across all Medicare programs of 2% per fiscal year that extends through the first eight months of 2032.
For example, the Budget Control Act of 2011 requires automatic spending reductions to reduce the federal deficit, resulting in a uniform payment reduction across all Medicare programs of 2% per fiscal year that extends through the first seven months of 2032.
Downgrades in our credit ratings could have a material adverse effect on our cost and availability of capital. We plan to manage the Company to maintain a capital structure consistent with our current profile, but there can be no assurance that we will be able to maintain our current credit ratings.
Downgrades in our credit ratings could have a material adverse effect on our cost and availability of capital. We plan to manage and to maintain a capital structure consistent with our current profile, but there can be no assurance that we will be able to maintain our current credit ratings.
In the event that we recognize a significant gain from the cash settlement of a forward sale agreement, we might not be able to satisfy the gross income requirements applicable to REITs under the Internal Revenue Code.
In the event that we recognize a significant gain from the cash settlement of a forward sales agreement, we might not be able to satisfy the gross income requirements applicable to REITs under the Internal Revenue Code.
Rents received from a TRS in a RIDEA structure are treated as qualifying rents from real property for REIT tax purposes only if (i) they are paid pursuant to a lease of a “qualified healthcare property” and (ii) the operator qualifies as an “eligible independent contractor,” as defined in the Internal Revenue Code.
Rents received from a TRS in a RIDEA structure are treated as qualifying rents from real property for REIT tax purposes only if (i) they are paid pursuant to a lease of a “qualified healthcare property” and (ii) the operator qualifies as an “eligible independent contractor”, as defined in the Internal Revenue Code.
In addition, our dividends in the past have included, and may in the future include a return of capital. Complying with REIT requirements may cause us to forego otherwise attractive acquisition opportunities or liquidate otherwise attractive investments, which could materially hinder our performance.
In addition, our dividends in the past have included, and may in the future include a return of capital. 32 Table of Contents Complying with the REIT requirements may cause us to forego otherwise attractive acquisition opportunities or liquidate otherwise attractive investments, which could materially hinder our performance.
Our charter provides that any transfer that would cause NHI to be beneficially owned by fewer than 100 persons or would cause NHI to be “closely held” under the Internal Revenue Code would be void, which, subject to certain exceptions, results in no person or entity being allowed to own, 34 Ta ble of Contents actually or constructively, more than 9.9% of the outstanding shares of our stock.
Our charter provides that any transfer that would cause NHI to be beneficially owned by fewer than 100 persons or would cause NHI to be “closely held” under the Internal Revenue Code would be void, which, subject to certain exceptions, results in no person or entity being allowed to own, actually or constructively, more than 9.9% of the outstanding shares of our stock.
Nevertheless, a public health crisis, and the public and government responses to such future public health crisis, could have a material, adverse effect on our business. A member of our Board of Directors is also the chairman of the board of directors of NHC, and his interests may differ from those of our stockholders.
Nevertheless, a public health crisis, and the public and government responses to such future public health crisis, could have a material, adverse effect on our business. 21 Table of Contents A member of our Board of Directors is also the chairman of the board of directors of NHC, and his interests may differ from those of our stockholders.
Effective January 31, 2020, we entered into an investment with Life Care Services (“LCS”) which consists of two parts, NHI-LCS JV I, LLC (“Timber Ridge PropCo”), which owns the real estate and is owned 80% by NHI and 20% by LCS, and Timber Ridge OpCo, LLC (“Timber Ridge OpCo”), which operates the property and is owned 25% by NHI’s TRS and 75% by LCS.
In January 2020, we entered into an investment with Life Care Services (“LCS”) which consists of two parts, NHI-LCS JV I, LLC (“Timber Ridge PropCo”), which owns the real estate and is owned 80.0% by NHI and 20.0% by LCS, and Timber Ridge OpCo, LLC (“Timber Ridge OpCo”), which operates the property and is owned 25.0% by NHI’s TRS and 75.0% by LCS.
Delays in reinvesting our cash may negatively impact revenues and the amount of distributions to stockholders. Competition for acquisitions may result in increased prices for properties. 28 Ta ble of Contents We may face increased competition for acquisition opportunities from other well-capitalized investors, including publicly traded and privately held REITs, private real estate funds, partnerships and others.
Delays in reinvesting our cash may negatively impact revenues and the amount of distributions to stockholders. Competition for acquisitions may result in increased prices for properties. We may face increased competition for acquisition opportunities from other well-capitalized investors, including publicly traded and privately held REITs, private real estate funds, partnerships and others.
Under Section 1032 of the Internal Revenue Code, generally, no gains and losses are recognized by a corporation in dealing in its own shares, including pursuant to a “securities futures contract,” as defined in the Internal Revenue Code by reference to the Exchange Act.
Under Section 1032 of the Internal Revenue Code, generally, no gains and losses are recognized by a corporation in dealing in its own shares, including pursuant to a “securities futures contract”, as defined in the Internal Revenue Code by reference to the Exchange Act.
There can be no assurances that the IRS will agree with our characterization of these assets and if the IRS were to successfully contend that our SHOP structures do not meet the REIT requirements, all or a portion of the rent that we receive under these structures could be non-qualifying income for purposes of the REIT gross income tests.
There can be no assurances that the Internal Revenue Service will agree with our characterization of these assets and if the Internal Revenue Service were to successfully contend that our SHOP structures do not meet the REIT requirements, all or a portion of the rent that we receive under these structures could be non-qualifying income for purposes of the REIT gross income tests.
Although we believe that any amount received by us in exchange for our shares of our common stock would qualify for the exemption under Section 1032 of the Internal Revenue Code, because it is not entirely clear whether a forward sale agreement qualifies as a “securities futures contract,” the U.S. federal income tax treatment of any cash settlement payment we receive is uncertain.
Although we believe that any amount received by us in exchange for our shares of our common stock would qualify for the exemption under Section 1032 of the Internal Revenue Code, because it is not entirely clear whether a forward sales agreement qualifies as a “securities futures contract”, the U.S. federal income tax treatment of any cash settlement payment we receive is uncertain.
We may be required to fund certain expenses ( e.g., real estate taxes, maintenance and capital improvements) to preserve the value of a property, avoid the imposition of liens on a property and/or transition a property to a new tenant or borrower. In some instances, we have terminated our lease with a tenant and leased the facility to another tenant.
We may be required to fund certain expenses, such as real estate taxes, maintenance and capital improvements, to preserve the value of a property, avoid the imposition of liens on a property and/or transition a property to a new tenant or borrower. In some instances, we have terminated our lease with a tenant and leased the facility to another tenant.
We cannot give any assurance that these protective measures will eliminate any risk to us related to future litigation, the costs of which could have a material adverse impact on us. Risks Related to Our Business and Operations We depend on the success of property development and construction activities, which may fail to achieve the operating results we expect.
We cannot give any assurance that these protective measures will eliminate any risk to us related to future litigation, the costs of which could have a material adverse impact on us. We depend on the success of property development and construction activities, which may fail to achieve the operating results we expect.
Because of this distribution requirement, we may not be able to fund, from cash retained from operations, all 32 Ta ble of Contents future capital needs, including capital needed to make investments and to satisfy or refinance maturing commitments. As a result, we rely on external sources of capital, including debt and equity financing.
Because of this distribution requirement, we may not be able to fund, from cash retained from operations, all future capital needs, including capital needed to make investments and to satisfy or refinance maturing commitments. As a result, we rely on external sources of capital, including debt and equity financing.
If we are materially impacted by increasing inflation because, for example, inflationary increases in costs are not sufficiently offset by the contractual rent increases and operating expense reimbursement provisions or escalations in the leases with our tenants, our 25 Ta ble of Contents results of operations could be adversely affected.
If we are materially impacted by increasing inflation because, for example, inflationary increases in costs are not sufficiently offset by the contractual rent increases and operating expense reimbursement provisions or escalations in the leases with our tenants, our results of operations could be adversely affected.
The U.S. federal income tax treatment of the cash that we might receive from cash settlement of the forward sale agreements is unclear and could jeopardize our ability to meet the REIT qualification requirements.
The U.S. federal income tax treatment of the cash that we might receive from cash settlement of the forward equity sales agreements is unclear and could jeopardize our ability to meet the REIT qualification requirements.
If the operations, cash flows or financial condition of our tenants, operators and/or borrowers are materially adversely impacted by current or future government regulation, our revenue and operations may be adversely affected as well.
If the operations, cash flows or financial condition of our tenants, operators, or affiliates of our tenants and operators, and our borrowers are materially adversely impacted by current or future government regulation, our revenues and operations may be adversely affected as well.
In the event that we elect to settle any forward sale agreement for cash and the settlement price is below the applicable forward sale price, we would be entitled to receive a cash payment from the relevant forward purchaser.
In the event that we elect to settle any forward sales agreements for cash and the settlement price is below the applicable forward sale price, we would be entitled to receive a cash payment from the relevant forward purchaser.
We depend on our ability to retain our management team and other personnel and attract suitable replacements should any such personnel leave. The management and governance of the Company depends on the services of certain key personnel, including senior management.
We depend on our ability to retain our management team and other personnel and attract suitable replacements should any such personnel leave. The management and governance of our business depend on the services of certain key personnel, including senior management.
The rapid development, fluid nature and other factors related to an epidemic, pandemic, outbreaks of infectious disease or other public health crisis makes it difficult to predict the potential impact of such a crisis on NHI or its operators.
The rapid development, fluid nature and other factors related to an epidemic, pandemic, outbreak of infectious disease or other public health crisis make it difficult to predict the potential impact of such a crisis on NHI or its operators.
As with other publicly traded companies, the availability of equity capital will depend, in part, on the market price of our common stock which, in turn, will depend upon various market conditions and other factors, some of which we cannot control, that may change from time to time including: • the extent of investor interest; • the general reputation of REITs and the attractiveness of their equity securities in comparison to other equity securities, including securities issued by other real estate-based companies; • the financial performance of us and our managers, tenants and borrowers; • investment and tenant concentrations in our investment portfolio; • concerns about our operators’, tenants’ and borrowers’ financial condition due to uncertainty regarding reimbursement from governmental and other third-party payor programs; • our credit ratings and analyst reports on us and the REIT industry in general, including recommendations, and our ability to meet our guidance estimates or analysts’ estimates; • general economic, global and market conditions, including changes in interest rates on fixed income securities, which may lead prospective purchasers of our common stock to demand a higher annual yield from future distributions; • our failure to maintain or increase our dividend, which is dependent, to a large part, on the increase in funds from operations, which in turn depends upon increased revenues from additional investments and rental increases; and • other factors such as governmental regulatory action and changes in REIT tax laws, as well as changes in litigation and regulatory proceedings. 29 Ta ble of Contents The market value of the equity securities of a REIT is generally based upon the market’s perception of the REIT’s growth potential and its current and potential future earnings and cash distributions.
Similar to other publicly traded companies, the availability of equity capital will depend, in part, on the market price of our common stock which, in turn, will depend upon various market conditions and other factors, some of which we cannot control, that may change from time to time including: • the extent of investor interest; • the general reputation of REITs and the attractiveness of their equity securities in comparison to other equity securities, including securities issued by other real estate-based companies; • the financial performance of us and our tenants, managers and borrowers; • investment and tenant concentrations in our investment portfolio; • concerns about our operators’, tenants’ and borrowers’ financial condition due to uncertainty regarding reimbursement from governmental and other third-party payor programs; • our credit ratings and analyst reports on us and the REIT industry in general, including recommendations, and our ability to meet our guidance estimates or analysts’ estimates; • general economic, global and market conditions, including changes in interest rates on fixed income securities, which may lead prospective purchasers of our common stock to demand a higher annual yield from future distributions; • our failure to maintain or increase our dividend, which is dependent, to a large part, on the increase in funds from operations, which in turn depends upon increased revenues from additional investments and rental increases; and • other factors, such as governmental regulatory action and changes in REIT tax laws as well as changes in litigation and regulatory proceedings.
Further, we may not be able to re-lease the property for the rent previously received, or at all, or lease terminations may cause us to sell the property at a loss. The realization of any of the foregoing risks could have a material adverse effect on our business and financial condition.
Further, we may not be able to re-lease the property for the rent for a similar rental rate, or at all, or lease terminations may cause us to sell the property at a loss. The realization of any of the foregoing risks could have a material adverse effect on our business and financial condition.
In some cases, we have had to, and we may in the future have to, write-off unpaid rental payments, incur lease accounting charges due to the uncollectibility of rental payments and/or restructure our tenants’ and operators’ long-term rent obligations.
In some cases, we have had to, and we may in the future have to, write off unpaid rental payments, incur lease accounting charges due to uncollectible rental payments and/or restructure our tenants’ long-term rent obligations.
Our payment of dividends is subject to compliance with restrictions contained in our credit agreements, notes and any preferred 33 Ta ble of Contents stock that our Board of Directors may from time to time designate and authorize for issuance.
Our payment of dividends is subject to compliance with restrictions contained in our credit agreements, notes and any preferred stock that our Board of Directors may from time to time designate and authorize for issuance.
In June 2023, we entered into a two -year term loan agreement providing for a $200.0 million term loan (the “2025 Term Loan”) bearing interest at a variable rate which is Secured Overnight Financing Rate (“SOFR”) based with a margin determined according to our credit ratings plus a 0.10% credit spread adjustment.
In June 2023, we entered into a two-year term loan agreement providing for a $200.0 million term loan (the “Bank Term Loan”) bearing interest at a variable rate which is Secured Overnight Financing Rate (“SOFR”) based with a margin determined according to our credit ratings.
Risks Related to Our Managers, Tenants and Borrowers We depend on the operating success of our managers, tenants and borrowers and if their financial condition or business prospects deteriorate, our financial condition and results of operations could be adversely affected. We rely on our managers, tenants and borrowers and their ability to perform their obligations to us.
Risks Related to Our Business and Operations We depend on the operating success of our tenants, managers and borrowers and if their financial condition or business prospects deteriorate, our business, financial condition and results of operations could be adversely affected.
If our projections prove to be inaccurate due to increased capital costs, lower occupancy 23 Ta ble of Contents rates or other factors, our investment in that property may not generate the cash flow we expected.
If our projections prove to be inaccurate due to increased capital costs, lower occupancy rates or other factors, our investment in that property may not generate the cash flow we expected.
In addition, if an operator, borrower or tenant defaults on its lease or loan with us, our ability to replace the operator or tenant may be delayed by federal, state, or local approval processes. Our tenants’, operators’ and borrowers’ businesses are also affected by government and private payor reimbursement rates and policies.
In addition, if an operator, borrower or tenant defaults on its lease or loan with us, our ability to replace the operator or tenant may be delayed by federal, state, or local approval processes. The businesses of our tenants, managers and borrowers are also affected by government and private payor reimbursement rates and policies.
Overall, no more than 20% of the value of a REIT’s total assets may consist of stock or securities of one or more TRSs.
Overall, no more than 20% (25% commencing in 2026) of the value of a REIT’s total assets may consist of stock or securities of one or more TRSs.
Any of our managers, tenants or borrowers may experience a weakening in their overall financial condition as a result of deteriorating operating performance, changes in industry or market conditions, such as rising interest rates or inflation, or other factors.
Any of our tenants, managers or borrowers may experience a weakening in their overall financial condition as a result of deteriorating operating performance, changes in industry or market conditions, such as rising or elevated interest rates or inflation, increases in operating and borrowing costs, including labor costs, or other factors.
Our business model assumes that we can earn a spread between the returns earned from our investments in real estate as compared to our cost of debt and/or equity capital. Interest rates increased during 2022 and 2023 and, while they have decreased during 2024, they remain above levels prior to 2022.
Our business model assumes that we can earn a spread between the returns earned from our investments in real estate as compared to our cost of debt and/or equity capital. Interest rates remain above levels prior to 2022.
We are exposed to risks related to governmental regulations and payors, principally Medicare and Medicaid, and the effect of changes to laws, regulations and reimbursement rates on our tenants’ and borrowers’ business. Our managers, tenants and borrowers are subject to complex federal, state and local laws and regulations relating to governmental healthcare programs. See “Item 1.
We are exposed to risks related to government regulations and payors, principally Medicare and Medicaid, and the effect of changes to laws, regulations and reimbursement rates on the businesses of our tenants, managers and borrowers. Our tenants, managers and borrowers are subject to complex federal, state and local laws and regulations relating to governmental healthcare programs.
Furthermore, because threat actors may leverage new and evolving technologies, including aritifical intelligence, that may not be immediately recognized, the Company may experience security or data breaches that remain undetected for an extended time.
Furthermore, because threat actors may leverage new and evolving technologies, including AI, which may not be immediately recognized, we may experience security or data breaches that remain undetected for an extended time.
Our ability to raise capital through equity sales is dependent, in part, on the market price of our common stock, and our failure to meet market expectations with respect to our business, or other factors we do not control, could negatively impact such market price and availability of equity capital.
These actions could also cause our stock price to experience periods of volatility. 29 Table of Contents Our ability to raise capital through equity sales is dependent, in part, on the market price of our common stock, and our failure to meet market expectations with respect to our business, or other factors we do not control, could negatively impact such market price and availability of equity capital.
Increased operating costs could have an adverse impact on our operators if increases in their operating expenses exceed increases in their revenue, which may adversely affect their ability to pay rent and make loan payments owed to us.
Increased operating costs could have an adverse impact on our operators and the operating results of our SHOP segment if increases in operating expenses exceed increases in revenue, which may adversely affect our operators’ ability to pay rent and make loan payments to us.
Business - Government Regulation.” in this Annual Report. Regulation of the healthcare industry generally has intensified over time both in the number and type of regulations and in the efforts to enforce those regulations.
Reference “Part I, Item 1. Business - Government Regulations” in this Annual Report. Regulation of the healthcare industry generally has intensified over time both in the number and type of regulations and in the efforts to enforce those regulations.
Subject to certain conditions, we have the right to elect physical, cash or net share settlement under the August 2024 forward sale agreements or the ATM forward sale agreements at any time and from time to time, in part or in full.
We enter into forward sales agreements from time to time and, subject to certain conditions, we have the right to elect physical, cash or net share settlement under these agreements at any time and from time to time, in part or in full.
These risks include fluctuations in resident occupancy rates, operating expenses, and economic conditions; competition; certification and inspection laws, regulations, and standards; the availability and increases in cost of general and professional liability insurance coverage; litigation; federal, state and local taxes and regulations; costs associated with government investigations and enforcement actions; the availability and increases in cost of labor; and other risks applicable to any operating business.
For example, our investment in Timber Ridge OpCo is subject to risks applicable to operating healthcare businesses, including fluctuations in resident occupancy rates, operating expenses, and economic conditions; competition; certification and inspection laws, regulations, and standards; the availability and increases in cost of general and professional liability insurance coverage; litigation; federal, state and local taxes and regulations; costs associated with government investigations and enforcement actions; the availability and increases in cost of labor; and other risks applicable to any operating business.
Should the impact of climate change be material in nature, including destruction of our properties, or occur for lengthy periods of time, our financial condition or results of operations may be adversely affected. We depend on the success of our future acquisitions and investments. We are exposed to the risk that our future acquisitions may not prove to be successful.
Should the impact of climate change be material in nature, including destruction of our properties, or occur for lengthy periods of time, our financial condition or results of operations may be adversely affected. 28 Table of Contents We depend on the success of our future acquisitions and investments.
We are exposed to the risk that our managers, tenants and borrowers may become subject to bankruptcy or insolvency proceedings. 20 Ta ble of Contents Although our lease agreements provide us the right to evict a tenant/operator and demand immediate payment of rent and exercise other remedies, and our mortgage loans provide us the right to terminate any funding obligations, demand immediate repayment of principal and unpaid interest, foreclose on the collateral and exercise other remedies, in the event our counterparty has filed for bankruptcy or reorganization, the bankruptcy laws afford certain rights to a party that has filed for bankruptcy or reorganization.
Although our lease agreements provide us the right to evict a tenant/operator and demand immediate payment of rent and exercise other remedies, and our mortgage loans provide us the right to terminate any funding obligations, demand immediate repayment of principal and unpaid interest, foreclose on the collateral and exercise other remedies, in the event our counterparty has filed for bankruptcy or reorganization, the bankruptcy laws afford certain rights to a party that has filed for bankruptcy or reorganization.
We could encounter unanticipated difficulties and expenditures relating to any acquired properties, including contingent liabilities, and newly acquired properties might require significant attention of our management that would otherwise be devoted to our existing business.
We are exposed to the risk that our future acquisitions may not prove to be successful. We could encounter unanticipated difficulties and expenditures relating to any acquired properties, including contingent liabilities, and newly acquired properties might require significant attention of our management that would otherwise be devoted to our existing business.
One of our board members is also a member of NHC’s board of directors. This director may have conflicting interests with holders of the Company’s common stock with respect to the NHC properties. During the year ended December 31, 2024, revenue from NHC represented 12% of our total revenue.
One of the members of our Board of Directors is also the chairperson of NHC’s board of directors. This director may have conflicting interests with holders of our common stock with respect to the NHC properties. During the year ended December 31, 2025, our revenues from NHC represented 10.7% of our total revenues.
If the financial condition of any of our other managers, tenants or borrowers deteriorates, they may be unable or unwilling to make payments or perform their obligations to us in a timely manner, if at all. Revenues for the operators of our properties are primarily driven by occupancy rates and reimbursement by Medicare, Medicaid and private payors.
If the financial condition of any of our tenants, managers or borrowers deteriorates, they may be unable or unwilling to make payments or perform their obligations to us in a timely manner, if at all. Our operators’ revenues are also driven by occupancy rates.
In certain of those situations, we provided working capital loans to, and limited indemnification of, the new tenant. If we cannot transition a leased facility to a new tenant, we may take possession of that property, which may expose us to certain successor liabilities. Should such events occur, our revenue and operating cash flow may be adversely affected.
In certain of those situations, we provided working capital loans to, and limited indemnification of, the new tenant. If we cannot transition a leased facility to a new tenant, we may take possession of that property, which may expose us to certain successor liabilities.
These instruments also require the tenants, borrowers to indemnify and hold us harmless for all claims arising out of or incidental to the occupancy and use of each facility. However, claims could exceed the policy limits, the insurance company could fail or coverage may not otherwise be available.
We also require our tenants and borrowers to indemnify and hold us harmless for all claims arising from or incidental to the occupancy and use of our properties. However, claims could exceed the applicable policy limits, the insurance company could fail or other coverage may not be available.
For example, a final rule issued by CMS in November 2023 requires Medicare-enrolled SNFs and Medicaid-enrolled nursing homes to disclose additional information about owners, operators, and management, including whether they are a REIT or private equity company. This information will be publicly available.
Recent government initiatives and proposals relevant to our properties include those focused on transparency of SNF ownership. For example, a final rule issued by CMS in November 2023 requires Medicare-enrolled SNFs and Medicaid-enrolled nursing homes to disclose additional information about owners, operators, and management, including whether they are a REIT or private equity company. This information will be publicly available.
We will continue to monitor the situation carefully and, if necessary, take action to protect our business, operations, and financial condition. We are exposed to operational risks with respect to our SHOP structured communities. During 2022, we transitioned 15 of our legacy Holiday properties to be SHOP structured communities.
We will continue to monitor the situation carefully and, if necessary, take action to protect our business, operations, and financial condition. 26 Table of Contents We are exposed to operational risks with respect to our SHOP structured communities.
In addition, as the regulatory environment related to information security, data collection and use, and privacy becomes increasingly rigorous at the federal and state levels, with new and constantly changing requirements applicable to our business, compliance with those requirements could also result in significant additional costs. 27 Ta ble of Contents We are exposed to risks related to environmental laws and the costs associated with liabilities related to hazardous substances.
In addition, as the regulatory environment related to information security, data collection and use, and privacy becomes increasingly rigorous at the federal and state levels, with new and constantly changing requirements applicable to our business, compliance with those requirements could also result in significant additional costs.
The funds in our accounts are held in banks or other financial institutions. Our cash held in non-interest bearing and interest-bearing accounts may periodically exceed any applicable Federal Deposit Insurance Corporation (“FDIC”) insurance limits.
Our cash held in non-interest bearing and interest-bearing accounts may periodically exceed any applicable Federal Deposit Insurance Corporation (“FDIC”) insurance limits.
A small number of tenants in our portfolio account for a significant percentage of the rent we expect to generate from our portfolio, and the failure of any of these tenants to meet their obligations to us could materially and adversely affect our business, financial condition and results of operations and our ability to make distributions to our stockholders.
Should such events occur, our revenues and operating cash flows may be adversely affected. 20 Table of Contents A small number of tenants in our portfolio account for a significant percentage of the rental income we expect to generate from our portfolio, and the failure of any of these tenants to meet their obligations to us could materially and adversely affect our business, financial condition and results of operations and our ability to make distributions to our stockholders.
A downturn in the healthcare property sector also could adversely impact the ability of our operators to meet their obligations to us and maintain residents and occupancy rates. Additionally, a downturn in the healthcare property sector could adversely affect the value of our properties and our ability to sell properties at prices or on terms acceptable to us.
A downturn in the healthcare property sector also could adversely impact the ability of our operators to meet their obligations to us and maintain residents and occupancy rates.
Furthermore, infections of contagious diseases at our facilities could lead to material increases in litigation costs for which our operators, or possibly we, may be liable. 21 Ta ble of Contents The measures that federal, state and local governments, agencies and health authorities implement to address an epidemic, pandemic, outbreaks of infectious disease or other public health crisis may be insufficient to offset any downturn in business of our tenants and operators, may increase operating costs for our managers, tenants and borrowers or may otherwise disrupt or affect the operation of our properties.
The measures that federal, state and local governments, agencies and health authorities implement to address an epidemic, pandemic, outbreak of infectious disease or other public health crisis may be insufficient to offset any downturn in business of our tenants and operators, may increase operating costs for our tenants, managers and borrowers or may otherwise disrupt or affect the operation of our properties.
W. Andrew Adams retired from our Board of Directors effective December 31, 2024. However, these relationships could influence the Board of Directors’ decisions with respect to the properties leased to and operated by NHC. As of December 31, 2024, NHC owned 1,630,642 shares of our common stock.
However, this relationship could influence our Board of Directors’ decisions with respect to the properties leased to and operated by NHC. As of December 31, 2025, NHC owned 1,630,642 shares of our common stock.
Periods of weak economic growth in the U.S. that affect housing sales, investment returns and personal incomes may adversely affect senior housing occupancy rates. An oversupply of senior housing real estate may also apply downward pressure to the occupancy rates of our operators.
Periods of weak economic growth in the U.S. that affect housing sales, investment returns and personal incomes, as well as with an oversupply of senior housing real estate, may adversely affect senior housing occupancy rates. In addition, our operators are experiencing increasing cost pressures.
Our charter gives our Board of Directors broad powers to prohibit and rescind any attempted transfer in violation of the ownership limits. These ownership limits may delay, defer or prevent a transaction or a change of control that might involve a premium price for our common stock or might otherwise be in the best interests of our stockholders.
These ownership limits may delay, defer or prevent a transaction or a change of control that might involve a premium price for our common stock or might otherwise be in the best interests of our stockholders.
We are exposed to the risk that we may not be fully indemnified by our managers, tenants and borrowers against future litigation. Our facility leases and loans require that the managers, tenants, borrowers name us as an additional insured party on their insurance policies covering professional liability or personal injury claims.
Our facility leases and loans require that the tenants, managers or borrowers that are a party to the respective agreement name us as an additional insured party on their insurance policies covering professional liability or personal injury claims.
We have a $700.0 million unsecured revolving credit facility (the “Credit Facility”), which was amended and restated on October 24, 2024 to extend the maturity date from March 2026 to October 2028, which may be further extended by us pursuant to (i) one or both of the two six-month extension options or (ii) one twelve-month extension option.
We have a $700.0 million unsecured revolving credit facility (the “Credit Facility”) that matures in October 2028, which may be further extended by us pursuant to (i) one or both of the two six-month extension options or (ii) one 12-month extension option.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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We have engaged the services of various third-party service providers to, among other things, review and evaluate our processes and procedures designed to control access to our information systems, perform penetration testing on our cybersecurity systems on a biannual basis, and provide regular information technology reviews based upon the National Institute of Standards and Technology (“NIST”) Cybersecurity Framework.
We have engaged the services of various third-party service providers to, among other things, review and evaluate our processes and procedures designed to control access to our information systems, perform penetration testing on our cybersecurity systems on a biannual basis, and perform regular information technology reviews based upon the National Institute of Standards and Technology (“NIST”) Cybersecurity Framework.
The ISO has served in various roles in corporate compliance for over 20 years and reports directly to the Company’s CEO. To enhance our cybersecurity capabilities, we actively collaborate with third-party vendors. Notably, we engage a Managed Service Provider (“MSP”) and an MDR provider who specializes in cybersecurity issues.
The ISO has served in various roles in corporate compliance for over 20 years and reports directly to our CEO. To enhance our cybersecurity capabilities, we actively collaborate with third-party vendors. Notably, we engage a Managed Service Provider (“MSP”) and an MDR provider who specializes in cybersecurity issues.
ITEM 1C. CYBERSECURITY Risk Management and Strategy The Board of Directors recognizes the importance of maintaining the trust and confidence of our tenants/borrowers/operators and employees to safeguard sensitive information and the integrity of our information systems.
ITEM 1C. CYBERSECURITY Risk Management and Strategy The Board of Directors recognizes the importance of maintaining the trust and confidence of our tenants, managers, borrowers and employees to safeguard sensitive information and the integrity of our information systems.
The IRP is overseen by the Information Technology Steering Committee and sets forth the processes for containment, review, escalation, recovery from and remediation of any cybersecurity incidents identified by the Company.
The IRP is overseen by the Information Technology Steering Committee and sets forth the processes for containment, review, escalation, recovery from and remediation of any cybersecurity incidents identified by us.
The Audit Committee meets with the ISO at least annually to review and discuss the Company’s cyber risks and threats, incident responses, technology, the status of projects to strengthen the Company’s information security systems, assessments of the Company’s security program and the emerging threat landscape.
The Audit Committee of our Board of Directors meets with the ISO at least annually to review and discuss our cyber risks and threats, incident responses, technology, the status of projects to strengthen our information security systems, assessments of our security program and the emerging threat landscape.
The Company periodically conducts cybersecurity “tabletop” exercises administered by an independent third-party in which members of a cross-functional team and relevant third-party vendors engage in simulated cybersecurity incident scenarios. These exercises are intended to provide hand-on training for the participants and assists the Company with assessing its processes and capabilities in addressing cybersecurity threats.
We periodically conducts cybersecurity “tabletop” exercises administered by an independent third-party in which members of a cross-functional team and relevant third-party vendors engage in simulated cybersecurity incident scenarios. These exercises are intended to provide hands-on training for the participants and assist us in assessing our processes and capabilities in addressing cybersecurity threats.
In addition, we contracted with a third-party managed detection and response security company (“MDR”) in the fourth quarter of 2023 to commence testing for cyber vulnerabilities on a continual basis.
In addition, we contracted with a third-party managed detection and response security company (“MDR”) to test for cyber vulnerabilities on a continual basis.
We also maintain cyber liability insurance to help mitigate potential liabilities resulting from cyber issues. However, there can be no assurance that our cyber risk insurance coverage will be sufficient to cover incurred losses in the event of a cyber-attack. 36 Ta ble of Contents
However, there can be no assurance that our cyber risk insurance coverage will be sufficient to cover incurred losses in the event of a cyber attack. 35 Table of Contents
Board & Management Responsibilities We have formed an Information Technology Steering Committee comprised of employees from multiple departments within the Company including the Chief Executive Officer (“CEO”); the Chief Financial Officer; the Chief Accounting Officer; the Vice President, Controller; the Vice President, Investor Relations & Finance; and the Vice President of Human Resources and Compliance & Information Security Officer (“ISO”) to more effectively prevent, detect and respond to information security 35 Ta ble of Contents threats.
In order to identify and mitigate cybersecurity threats related to our use of material third-party vendors, we conduct periodic reviews of internal controls of certain third-party service providers to assess their procedures to mitigate material security risks. 34 Table of Contents Board of Directors and Management Responsibilities We formed an Information Technology Steering Committee which is comprised of employees across multiple departments in our business, including our Chief Executive Officer (“CEO”), Chief Financial Officer, Chief Accounting Officer, the Vice President and Controller, the Vice President of Finance and Investor Relations, the Vice President of Portfolio Management, and the Vice President of Human Resources, Benefits and Compliance and our Information Security Officer (“ISO”), to more effectively prevent, detect and respond to information security threats.
Removed
In order to identify and mitigate cybersecurity threats related to our use of material third-party vendors, we conduct periodic reviews of internal controls of certain third-party service providers to assess their procedures to mitigate material security risks.
Added
As of December 31, 2025, we have not had any known instances of material cybersecurity incidents, including third-party incidents, during any of the prior three fiscal years. We also maintain cyber liability insurance to help mitigate potential liabilities resulting from cyber issues.
Removed
As of December 31, 2024, we have not experienced any material risks from cybersecurity threats, including as a result of any previous cybersecurity incidents or threats, that have materially affected the business strategy, results of operations or financial condition of the Company or are reasonably likely to have such a material effect.

Item 2. Properties

Properties — owned and leased real estate

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We have engaged Blueprint Healthcare Real Estate Advisors, a national advisory firm focused on skilled nursing and senior housing, to assist with underwriting, diligence, and market analysis with respect to the master lease renewal.
We have engaged Blueprint Healthcare Real Estate Advisors, a national advisory firm focused on senior housing and skilled nursing facilities, to assist with underwriting, due diligence and market analysis with respect to the master lease renewal.
Removed
PROPERTIES OWNED AS OF AND FOR THE YEAR ENDED DECEMBER 31, 2024 ( $ in thousands ) Real Estate Investments SHOP Gross Net Operating Location SHO SNF HOSP ILF Investment Income Alabama 1 2 — — $ 17,260 $ 2,751 Arizona — 1 — — 7,131 908 Arkansas — — — 2 52,823 1,752 California 1 — — 5 127,465 5,019 Colorado 1 — — — 7,600 650 Connecticut 3 — — — 139,451 13,453 Florida 2 10 — — 214,180 24,450 Georgia 3 — — 2 107,032 5,997 Idaho 1 — — — 9,673 355 Illinois 13 — — — 197,251 14,863 Indiana 8 — — — 90,803 5,824 Iowa 7 — — — 40,269 5,287 Kentucky — 1 — — 2,143 1,449 Louisiana 2 — — — 10,241 1,164 Maryland 2 — — — 65,788 3,763 Massachusetts 1 — — — 52,108 3,536 Michigan 5 — — — 44,138 3,678 Minnesota 5 — — — 31,144 2,417 Missouri 1 5 — — 27,695 3,360 Nebraska 3 — — — 28,682 3,248 Nevada 1 — — — 18,136 1,640 New Jersey — — — 1 26,227 824 North Carolina 16 — — — 261,685 14,333 Ohio 6 — — 1 103,912 5,450 Oklahoma 1 — 1 1 99,388 8,435 Oregon 3 3 — — 95,259 6,564 Pennsylvania 2 — — — 29,418 1,206 South Carolina 4 4 — 2 340,841 32,961 Tennessee 3 16 — — 50,984 19,073 Texas — 21 — — 298,599 28,500 Virginia 5 1 — — 68,685 7,124 Washington 3 — — 1 202,999 13,675 Wisconsin 3 1 — — 81,955 5,507 106 65 1 15 2,950,965 249,216 Corporate office 2,583 Non-geographic — 50 Net operating income from properties sold — 8,788 $ 2,953,548 $ 258,054 37 Ta ble of Contents PROPERTIES ASSOCIATED WITH MORTGAGE LOAN INVESTMENTS AS OF AND FOR THE YEAR ENDED DECEMBER 31, 2024 ($ in thousands) Net Interest Location SHO SNF HOSP Investment Income Florida 3 — 1 $ 26,898 $ 729 Illinois 1 — — 14,877 1,168 Indiana 1 — — 6,423 546 Michigan 1 — — 14,700 1,345 Oklahoma 2 — — 9,416 437 South Carolina 1 — — 32,666 2,418 Texas — 5 — 42,465 3,218 Wisconsin 1 — — 28,386 2,327 10 5 1 175,831 12,188 Current year note payoffs — 1,242 Other non-mortgage 93,095 10,281 $ 268,926 $ 23,711 10-YEAR LEASE EXPIRATIONS The following table provides additional information on our leases that are scheduled to expire based on the maturity contained in the most recent lease agreement or extension.
Added
PROPERTIES A summary of information related to our owned real estate properties as of and for the year ended December 31, 2025 follows ($ in thousands) : Gross Number of Properties 1 Carrying Location SHOs SNFs HOSPs SHOP NOI Amount 2 Alabama 2 2 — — $ 3,453 $ 24,297 Arizona — 1 — — 930 7,131 Arkansas — — — 2 2,008 53,931 California 1 — — 5 4,672 130,774 Colorado 2 — — — 2,402 28,800 Connecticut 3 — — — 13,561 139,719 Florida 2 10 — 1 23,972 223,665 Georgia 3 — — 2 7,790 108,612 Idaho 1 — — — 1,066 9,673 Illinois 13 — — — 15,449 197,528 Indiana 5 — — 3 4,123 92,117 Iowa 7 — — — 5,585 41,384 Kentucky — 1 — — 1,568 2,143 Louisiana 2 — — — 1,183 10,241 Maryland 1 — — 1 2,656 66,081 Massachusetts 1 — — — 3,536 52,108 Michigan 5 — — — 3,605 44,138 Minnesota 5 — — — 2,414 31,144 Missouri 1 5 — — 3,279 27,695 Nebraska 9 — — — 7,716 92,933 Nevada 1 — — — 1,640 18,136 New Jersey 1 — — 1 4,058 72,894 North Carolina 16 — — — 23,742 262,408 Ohio 5 — — 1 4,919 100,329 Oklahoma — — 1 4 7,468 124,784 Oregon 3 3 — 2 10,609 146,043 Pennsylvania 2 — — 1 1,192 81,623 South Carolina 5 4 — 2 34,748 395,552 Tennessee 3 16 — — 19,021 50,984 Texas — 21 — — 29,221 298,599 Virginia 5 1 — — 7,824 68,685 Washington 3 — — 1 13,693 207,002 Wisconsin 3 1 — — 8,145 81,955 Total real estate properties in segments 110 65 1 26 277,248 3,293,108 Corporate — 2,632 Other 2,504 — Total real estate properties $ 279,752 $ 3,295,740 1 The total number of properties, as presented in the table above, excludes our corporate office building and one property in the Real Estate Investments segment that was classified as assets held for sale as of December 31, 2025. 2 The total gross carrying amount, as presented in the table above, excludes $2.6 million related to our corporate office and equipment and $4.8 million related to one property in the Real Estate Investments segment that was classified as assets held for sale as of December 31, 2025. 36 Table of Contents A summary of information related to our mortgage and other notes receivable investments as of December 31, 2025 and for the year ended December 31, 2025 follows ($ in thousands) : Gross Number of Properties Interest Carrying SHOs SNFs HOSPs Income Amount Mortgage notes: Florida 2 — 1 $ 2,703 $ 36,942 Illinois 1 — — 1,360 14,907 Indiana 1 — — 562 6,423 Michigan 2 — — 1,547 23,004 South Carolina 1 — — 195 18,750 Texas 1 3 — 2,525 25,887 Wisconsin 1 — — 2,513 28,414 Total mortgage notes receivable 9 3 1 11,405 154,327 Other notes 9,727 64,366 Mortgage and other note payoffs 2,684 — Other interest income 150 — Total mortgage and other notes receivable $ 23,966 $ 218,693 The following table provides information on the expirations of our tenant leases based on the maturities included in the most recent lease agreements or extension periods as of December 31, 2025 ($ in thousands) : Percentage of Number of Number of Annualized Annualized Year of Maturity Properties 1 Beds / Units Gross Rent 2 Gross Rent 2026 36 4,849 $ 39,286 14.9 % 2027 4 803 15,753 6.0 % 2028 12 591 11,948 4.5 % 2029 7 836 12,756 4.8 % 2030 1 107 4,493 1.7 % 2031 13 2,513 57,492 21.8 % 2032 2 213 3,958 1.5 % 2033 28 1,815 28,297 10.7 % 2034 16 984 13,326 5.0 % Thereafter 57 5,145 76,645 29.1 % Total 176 17,856 $ 263,954 100.0 % 1 The total number of properties, as presented in the table above, excludes our corporate office building and one property in the Real Estate Investments segment that was classified as assets held for sale as of December 31, 2025. 2 Annualized gross rent refers to the amount of rental income we would have generated during the year ended December 31, 2025 if all of our tenant leases were in effect for the full calendar year, regardless of the actual commencement dates, maturity dates or renewal periods of the leases. 37 Table of Contents As of December 31, 2025, we leased 32 SNFs and three ILFs to NHC, a publicly owned company, under a triple-net master lease which expires in December 2026.
Removed
Annualized Percentage of Number Number Gross Rent** Annualized Year of Properties of Units/Beds ( $ in thousands ) Gross Rent 2025 3 296 $ 2,432 1.0 % 2026 35 4,807 38,143 15.6 % 2027 2 549 13,736 5.6 % 2028 12 591 11,468 4.7 % 2029 13 1,579 18,136 7.4 % 2030 2 119 520 0.2 % 2031 13 2,506 55,743 22.8 % 2032 2 213 3,357 1.4 % 2033 29 2,007 29,972 12.3 % 2034 14 855 11,003 4.5 % Thereafter 47 4,374 59,548 24.5 % 100.0 % **Annualized Gross Rent refers to the amount of lease revenue that our portfolio would have generated in 2024 if all leases were in effect for the twelve-month calendar year, regardless of the commencement date, maturity date, or renewals.
Added
The master lease includes two five-year extension options in which the annual lease rate resets at the current fair market value as negotiated between the parties.
Removed
The above table does not reflect purchase options. See Note 3 to the consolidated financial statements for discussion of purchase options. The lease that expires in 2026 is the NHC lease, which covers three ILFs and 32 SNFs under a master lease.
Added
On September 8, 2025, we provided formal written notice to NHC that it is in default of the triple-net master lease as a result of NHC’s failure to remedy its non-compliance with certain non-monetary provisions of the triple-net master lease previously identified by us.
Removed
These facilities are leased to NHC under the terms of an amended master lease agreement that expires on December 31, 2026. There are two additional five-year renewal options at a fair rental value as negotiated between the parties.
Added
NHC had 30 days to cure such default and its failure to do so entitles us to declare an event of default and to pursue any and all remedies available to us under the triple-net master lease. We are currently evaluating potential courses of action.
Added
On October 7, 2025, NHC informed us that it was exercising its option to renew the master lease for one five-year term commencing January 1, 2027. We are currently reviewing the effectiveness and legality of NHC’s notice.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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While there may be lawsuits pending against us and certain of the 38 Ta ble of Contents managers, owners and/or tenants of the facilities, management believes that the ultimate resolution of all such pending proceedings will have no direct material adverse effect on our financial condition, results of operations or cash flows.
Management believes that the ultimate resolution of all such pending proceedings will have no material adverse effect on our financial condition, results of operations or cash flows.
Such claims may include, among other things, professional liability and general liability claims, as well as regulatory proceedings related to our SHOP segment.
ITEM 3. LEGAL PROCEEDINGS From time to time, we are a party to various lawsuits, investigations, claims and other legal and regulatory proceedings arising in connection with our business. Such claims may include, among other things, professional and general liability claims, as well as regulatory proceedings related to our SHOP segment.
Removed
ITEM 3. LEGAL PROCEEDINGS Healthcare facilities in our portfolio are subject to claims and suits in the ordinary course of business.
Added
Further, from time to time, we are a party to certain legal proceedings for which third parties, such as our tenants, managers and borrowers, are contractually obligated to indemnify us from and against various claims, litigation and liabilities arising in connection with their respective businesses.
Removed
Our managers, tenants and borrowers have indemnified, and are obligated to continue to indemnify us, against all liabilities arising from the operation of the facilities, and are further obligated to indemnify us against environmental or title problems affecting the real estate underlying such facilities.
Removed
See Note 9 to the consolidated financial statements in this Annual Report for further discussion of the Company’s legal proceedings.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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In order to qualify for the beneficial tax treatment accorded to a REIT, we must make distributions to holders of our common stock on an annual basis equal to at least 90% of our REIT taxable income (excluding net capital gains), as defined in the Internal Revenue Code.
In order to qualify for the beneficial tax treatment of a REIT, we must make distributions to holders of our common stock on an annual basis equal to at least 90% of our REIT taxable income, excluding net capital gains and as defined in the Internal Revenue Code.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. The Company’s charter contains certain provisions which are designed to ensure that the Company’s status as a REIT is protected for federal income tax purposes.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our charter contains certain provisions which are designed to ensure that our status as a REIT is protected for federal income tax purposes.
Cash available for distribution to our stockholders is primarily derived from rental payments received under our leases and from interest payments received on our mortgage and other notes receivable.
Cash available for distribution to our common stockholders is primarily derived from lease payments received from our tenant leases and interest payments received on our mortgage and other notes receivable.
One of the provisions ensures that any transfer of shares which would cause NHI to be beneficially owned by fewer than 100 persons or would cause NHI to be “closely-held” under the Internal Revenue Code would be void which, subject to certain exceptions, result in no stockholder being allowed to own, either directly or indirectly pursuant to certain tax attribution rules, more than 9.9% of the Company’s common stock with the exception of prior agreements entered into in 1991 which were confirmed in writing in 2008 with the Company’s founders Dr.
One of the provisions ensures that any transfers of our common stock which would cause us to be beneficially owned by fewer than 100 persons or which would cause us to be “closely-held” under the Internal Revenue Code would be voided and, subject to certain exceptions, results in no stockholder being allowed to own, either directly or indirectly pursuant to certain tax attribution rules, more than 9.9% of our common stock.
All distributions will be made by us at the discretion of the Board of Directors and will depend on our cash flow and earnings, our financial condition, covenants contained in our financing documents and such other factors as the Board of Directors deems relevant. Our REIT taxable income is calculated without reference to our cash flow.
Dividend distributions are made by us, at the discretion of the Board of Directors, and depend on our financial condition, results of operations, cash flows, compliance with debt covenants and other factors deemed relevant by our Board of Directors. Our REIT taxable income is calculated without reference to our cash flows.
Our charter gives our Board of Directors broad powers to prohibit and rescind any attempted transfer in violation of the ownership limits. In addition, W.
Our charter gives our Board of Directors broad powers to prohibit and rescind any attempted stock transfers in violation of the ownership limits. The purpose of these provisions is to protect our status as a REIT for federal income tax purposes.
The MSCI US REIT Index is a free float-adjusted market capitalization weighted index that is comprised of equity REIT securities.
The MSCI US REIT Index is a free float-adjusted market capitalization weighted index that is comprised of equity REIT securities. The MSCI US REIT Index includes securities with exposure to core real estate, such as residential and retail properties, as well as securities with exposure to other types of real estate, such as casinos and theaters.
The MSCI US REIT Index includes securities with exposure to core real estate ( e.g . residential and retail properties), as well as securities with exposure to other types of real estate ( e.g. casinos and theaters). 40 Ta ble of Contents 2019 2020 2021 2022 2023 2024 NHI $100.00 $90.97 $80.40 $77.75 $88.93 $116.46 MSCI $100.00 $92.43 $132.23 $99.82 $105.27 $105.27 S&P 500 $100.00 $118.40 $152.39 $124.79 $145.87 $145.87 The graph above is not deemed to be “soliciting material” and is “furnished” and shall not be deemed to be “filed” with the SEC or incorporated by reference in any filing under Exchange Act or the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in any such filing.
Year Ended December 31, 2020 2021 2022 2023 2024 2025 NHI $ 100.00 $ 88.38 $ 85.46 $ 97.76 $ 128.02 $ 148.30 MSCI 100.00 143.06 108.00 122.84 133.59 137.53 S&P 500 100.00 128.71 105.40 133.10 166.40 196.16 This graph is not deemed to be “soliciting material” and has been “furnished”, and shall not be deemed to be “filed” with the SEC or incorporated by reference in any filing under the Exchange Act or the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in any such filing.
Carl E. Adams and Jennie Mae Adams and their lineal descendants. Based on these agreements, the ownership limit for all other stockholders is approximately 7.5%. If a stockholder’s stock ownership exceeds the limit, then such shares over the limit become “Excess Shares” within the meaning in the Company’s charter and lose rights to vote and receive dividends in certain situations.
If a stockholder’s beneficial ownership in us exceeds this limit, then such shares of our common stock over the limit become “Excess Shares”, as defined in our charter, and the stockholder loses the right to vote and the right to receive dividends in certain situations.
The following graph demonstrates the performance of the cumulative total return to the holders of our common stock during the previous five years in comparison to the cumulative total return on the MSCI US REIT Index and the Standard & Poor’s 500 Stock Index.
Our common stock is traded on the New York Stock Exchange under the symbol “NHI.” As of February 20, 2026, there were 601 holders of record of shares and 61,389 beneficial owners of shares. 39 Table of Contents The following graph provides information on our performance related to the cumulative total return to our common stockholders for the previous five years based on a $100 starting investment as of December 31, 2020 in comparison to the cumulative total returns on the MSCI US REIT Index and the Standard and Poor’s (“S&P”) 500 Stock Index for the same periods.
Removed
Andrew Adams’ Excess Holder Agreement also provides that he will not own shares of stock in any tenant of the Company if such ownership would cause the Company to constructively own more than a 9.9% interest in such tenant. The purpose of these provisions is to protect the Company’s status as a REIT for tax purposes.
Added
Therefore, under certain circumstances, our required dividend distribution amounts may exceed our cash available for distribution.
Removed
Therefore, under certain circumstances, our required distributions may exceed the cash available for distribution. Our common stock is traded on the New York Stock Exchange under the symbol “NHI.” As of February 19, 2025, there were approximately 618 holders of record of shares and 59,262 beneficial owners of shares.
Removed
Issuer Purchases of Equity Securities None. 41 Ta ble of Contents

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Therefore, we consider the competing interests of short and long-term debt (interest rates, maturities and other terms) versus the higher cost of new equity, and we accept some level of risk associated with leveraging our investments.
Therefore, we consider the competing interests of short-term and long-term debt interest rates, maturities and other terms versus the higher cost of new equity, and we accept some level of risk associated with leveraging our investments.
We believe EBITDARM is useful in our most fundamental analyses, as it is a property-level measure of an operator’s success, by eliminating the effects of the operator’s method of acquiring the use of its assets (interest and rent), its non-cash expenses (depreciation and amortization), and expenses that are dependent on its level of success (income taxes), and also excluding the effect of the operator’s payment of its management fees, as typically those fees are contractually subordinate to our lease payment.
We believe EBITDARM is useful in our most fundamental analyses, as it is a property-level measure of an operator’s success, by eliminating the effects of the operator’s method of acquiring the use of its assets (interest and rent), its non-cash expenses (depreciation and amortization), and expenses that are dependent on its level of success (income taxes), and also excluding the effect of the operator’s payment of its management fees, as typically those fees are contractually subordinate to our lease payments.
In addition to EBITDARM and the coverage ratio, we rely on a careful balance sheet analysis, and other analytical procedures to help us identify potential areas of concern relative to our operators’ ability to generate sufficient liquidity to meet their obligations, including their obligation to continue to pay the amount due to us.
In addition to EBITDARM and the coverage ratio, we rely on a careful balance sheet analysis and other analytical procedures to help us identify potential areas of concern relative to our operators’ ability to generate sufficient liquidity to meet their obligations, including their obligations to continue to pay the amount due to us.
FFO and Normalized FFO are important supplemental measures of operating performance for a REIT. Because the historical cost accounting convention used for real estate assets requires depreciation (except on land), such accounting presentation implies that the value of real estate assets diminishes predictably over time.
FFO and Normalized FFO are important supplemental measures of operating performance for a REIT. Because the historical cost accounting convention used for real estate assets requires depreciation (except on land), such accounting presentation implies that the realizable value of real estate assets diminishes predictably over time.
We view our ATM program as an effective way to match-fund our smaller acquisitions by exercising control over the timing and size of transactions and achieving a more favorable cost of capital as compared to larger follow-on offerings.
We view our ATM equity program as an effective way to match-fund our smaller acquisitions by exercising control over the timing and size of transactions and achieving a more favorable cost of capital as compared to larger follow-on offerings.
Senior Housing – Discretionary includes ILFs and EFCs which primarily attract private payment for services from residents who are making the lifestyle choice of living in an age-restricted multi-family community that offers social programs, meals, housekeeping and in some cases access to healthcare services. Discretionary properties are subject to limited regulatory oversight.
Discretionary Senior Housing Discretionary senior housing properties include ILFs and EFCs which primarily attract private payment for services from residents who are making the lifestyle choice of living in an age-restricted, multi-family community that offers social programs, meals, housekeeping, and in some cases, access to healthcare services. Discretionary properties are subject to limited regulatory oversight.
However, we rely on the property managers’ personnel, expertise, technical resources and information systems, proprietary information, good faith and judgment to manage our communities efficiently and effectively.
However, we rely on the managers’ personnel, expertise, technical resources and information systems, proprietary information, good faith and judgment to manage our communities efficiently and effectively.
Since other REITs may not use our definition of these measures, caution should be exercised when comparing our FFO, Normalized FFO and Normalized FAD to that of other REITs.
Since other REITs may not use our definition of these performance measures, caution should be exercised when comparing our FFO, Normalized FFO and Normalized FAD to that of other REITs.
Our unsecured private placement note agreements include a rate increase provision that is effective if any rating agency lowers our credit rating below investment grade and our compliance leverage increases to 50% or more. Any reduction in outlook or downgrade in our credit ratings from the rating agencies could negatively impact our costs of borrowings.
Our unsecured private placement notes agreements include a rate increase provision that is effective if any rating agency lowers our credit rating below investment grade and our compliance leverage increases to 50% or more. Any reduction in outlook or downgrade in our credit ratings from the rating agencies could negatively impact our costs of borrowings.
Normalized FAD is an important supplemental performance measure for a REIT and a useful measure of liquidity as an indicator of the ability to distribute dividends to stockholders. GAAP requires a lessor to recognize contractual lease payments into income on a straight-line basis over the expected term of the lease.
Normalized FAD is an important supplemental performance measure for a REIT and a useful measure of liquidity as an indicator of our ability to distribute dividends to our stockholders. GAAP requires a lessor to recognize contractual lease payments as income on a straight-line basis over the expected term of the lease.
Other Portfolio Activity Real Estate and Mortgage Write-downs In addition to inflation risk and increased interest rates, our borrowers and tenants experience periods of significant financial pressures and difficulties similar to those encountered by other healthcare providers.
Other Investment Portfolio Activity Real Estate and Mortgage Write-downs In addition to inflation risk and increased interest rates, our tenants and borrowers may experience periods of significant financial pressures and difficulties similar to those encountered by other healthcare providers.
Normalized FFO excludes from FFO certain items which, due to their infrequent or unpredictable nature, may create some difficulty in comparing FFO for the current period to similar prior periods, and may include, but are not limited to, impairment of non-real estate assets, gains and losses attributable to the acquisition and disposition of non-real estate assets and liabilities, and recoveries of previous write-downs.
Normalized FFO excludes from FFO certain items which, due to their infrequent or unpredictable nature, may create some difficulty in comparing FFO for the current period to similar prior periods, and may include, but are not limited to including, impairments of non-real estate assets, gains or losses attributable to the acquisition and disposition of non-real estate assets and liabilities, and recoveries of previous write-downs.
Since others may not use our definition of Adjusted EBITDA, caution should be exercised when comparing our Adjusted EBITDA to that of other companies. EBITDA reflects GAAP interest expense, which excludes amounts capitalized during the period.
Since others may not use our definition of Adjusted EBITDA, caution should be exercised when comparing our Adjusted EBITDA to that of other companies. Adjusted EBITDA reflect GAAP interest expense, which excludes amounts capitalized during the period.
FFO per share, as defined by the National Association of Real Estate Investment Trusts (“NAREIT”) and applied by us, is calculated using the two-class method with net income allocated to common stockholders and holders of unvested restricted stock by applying the respective weighted-average shares outstanding during each period.
FFO, as defined by the National Association of Real Estate Investment Trusts (“NAREIT”) and applied by us, is calculated using the two-class method with net income allocated to common stockholders and holders of unvested restricted stock awards by applying the respective weighted average shares outstanding during each period.
The calculation of FFO begins with net income attributable to common stockholders (computed in accordance with GAAP) and excludes gains (or losses) from sales of real estate, impairments of real estate, and real estate depreciation and amortization after adjusting for unconsolidated partnerships and joint ventures, if any.
The calculation of FFO begins with net income attributable to common stockholders (computed in accordance with GAAP) and excludes gains or losses on sales of real estate properties, impairments of real estate properties, and real estate depreciation and amortization after adjusting for unconsolidated partnerships and joint ventures, if any.
Since real estate values instead have historically risen and fallen with market conditions, presentations of operating results for a REIT that uses historical cost accounting for depreciation could be less informative, and should be supplemented with a measure such as FFO. The term FFO was designed by the REIT industry to address this issue.
Since real estate asset values instead have historically risen and fallen with market conditions, presentation of operating results for a REIT that uses historical cost accounting for depreciation could be less informative and should be supplemented with a performance measure such as FFO. The term FFO was designed by the REIT industry to address this issue.
We do not use a “bright line” in considering what constitutes “substantially all of the fair value,” but we undertake a more focused assessment when the lease payments approach 90% of the composition of all future cash flows expected from the asset.
We do not use a “bright line” in considering what constitutes “substantially all of the fair value”, but we undertake a more focused assessment when the lease payments approach 90% of the composition of all future cash flows expected from the asset.
We define Adjusted EBITDA as consolidated earnings before interest, taxes, depreciation and amortization, excluding real estate asset impairments and gains on dispositions and certain items which, due to their infrequent or unpredictable nature, may create some difficulty in comparing Adjusted EBITDA for the current period to similar prior periods.
We define Adjusted EBITDA as consolidated earnings before interest, income taxes, depreciation and amortization, excluding impairments of real estate properties and gains on dispositions and certain items which, due to their infrequent or unpredictable nature, may create some difficulty in comparing Adjusted EBITDA for the current period to similar prior periods.
We base our estimates on historical experience, current trends and various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates.
We base our estimates on historical experience, current trends and various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.
We have identified EBITDARM (earnings before interest, taxes, depreciation, amortization, rent and management fees) as a primary performance measure for our tenants, based on results they have reported to us.
We have identified EBITDARM, which is calculated as earnings before interest, taxes, depreciation, amortization, rent and management fees, as a primary performance measure for our tenants, based on results they have reported to us.
We consider an accounting estimate or assumption critical if: 1. the nature of the estimates or assumptions is material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change; and 2. the impact of the estimates and assumptions on financial condition or operating performance is material.
We consider an accounting estimate or assumption critical if the nature of the estimate or assumption is material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change and if the impact of the estimate or assumption on financial condition or operating performance is material.
Shelf Registration Statement - We have an automatic shelf registration statement on file with the Securities and Exchange Commission that allows the Company to offer and sell to the public an unspecified amount of common stock, preferred stock, debt securities, warrants and/or units at prices and on terms to be announced when and if such securities are offered.
Shelf Registration Statement - We have an automatic shelf registration statement on file with the SEC that allows us to offer and sell to the public an unspecified amount of common stock, preferred stock, debt securities, warrants and/or units at prices and on terms to be announced when and if such securities are offered.
Lease Classification Lease accounting standards require that, for purposes of lease classification, we assess whether the lease, by its terms, transfers substantially all of the fair value of the asset under lease. This consideration will drive accounting for the alternative classifications among operating, sales-type, or direct financing types of leases.
Lease Classifications Lease accounting standards require that, for purposes of lease classification, we assess whether the lease, by its terms, transfers substantially all of the fair value of the asset under lease to the tenant. This consideration will determine the accounting treatment for the alternative classifications among operating, sales-type, or direct financing types of leases.
The base rate means, for any day, a fluctuating rate per annum equal to the highest of (x) the agent’s prime rate, (y) the federal funds rate on such day plus 0.50% or (z) the adjusted Term SOFR for 57 Ta ble of Contents a one-month tenor in effect on such day plus 1.0%.
The base rate means, for any day, a fluctuating interest rate per annum equal to the highest of (x) the agent’s prime rate, (y) the federal funds rate on such day plus 0.50% or (z) the adjusted Term SOFR for a one-month tenor in effect on such day plus 1.0%.
We do not expect to utilize borrowings to satisfy the payment of dividends and project that cash flows from operations will be adequate to fund dividends at the current rate. We intend to comply with REIT dividend requirements that we distribute at least 90% of our annual taxable income for the year ended December 31, 2024 and thereafter.
We do not expect to utilize borrowings to satisfy the payment of dividends and project that cash flows from operations will be adequate to fund dividends at the current rate. 60 Table of Contents We intend to comply with REIT dividend requirements that require us to distribute at least 90% of our annual taxable income for the year ended December 31, 2025 and thereafter.
We intend to continue to make new investments that meet our underwriting criteria and where the spreads over our cost of equity and debt capital on a leverage neutral basis will generate sufficient returns to our stockholders.
We intend to continue to make new investments that meet our underwriting criteria and where the credit spread over our costs of equity and debt capital on a leverage neutral basis will generate sufficient returns to our stockholders.
The net forward sale price that we were to receive upon physical settlement of the forward sale agreements is subject to adjustment for (i) a floating interest rate factor equal to a specified daily rate less a spread, and (ii) scheduled dividends during the term of the forward sale agreement.
The net forward sale price that we received upon physical settlement of the forward sales agreements is subject to adjustment for (i) a floating interest rate factor equal to a specified daily rate less a spread and (ii) scheduled dividends during the term of the forward equity sales agreements.
Typical among our operators is a varying lag in reporting to us the results of their operations. Across our portfolio, however, our operators report their results, typically within 52 Ta ble of Contents either 30 or 45 days and at the latest, within 90 days of month’s end.
Typical among our operators is a varying lag in reporting to us the results of their operations. Across our portfolio, however, our operators report their results, typically within either 30 or 45 days and at the latest, within 90 days of month end.
The Guarantors are either owned, or controlled by, or are affiliates of the Company.
The Guarantors are either owned or controlled by, or are affiliates of, us.
Debt Metrics - We believe that our fixed charge coverage ratio, which is the ratio of Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization, including amounts in discontinued operations, excluding real estate asset impairments and gains on dispositions) to fixed charges (interest expense at contractual rates net of capitalized interest and principal payments on debt), and the ratio of consolidated net debt to Adjusted EBITDA are meaningful measures of our ability to service our debt.
Debt Metrics - We believe that our fixed charge coverage ratio, which is the ratio of Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization, excluding impairments of real estate properties and gains on dispositions) to fixed charges (interest expense at contractual rates, net of capitalized interest and principal payments on debt), and the ratio of consolidated net debt (debt less cash and cash equivalents) to Adjusted EBITDA are meaningful measures of our ability to service our debt.
We use NOI to make decisions about resource allocations and to assess the property level performance of our properties.
We use NOI to make decisions about resource allocations to our segments and to assess the property level performance of our investment portfolios.
We review each property for recoverability when events or circumstances, including significant physical changes in the property, significant adverse changes in general economic conditions, reclassification of real estate property as held for sale, or significant deterioration of the underlying cash flows of the property, indicate that the carrying amount of the property may not be recoverable.
We review each property for recoverability when events or circumstances, including any significant physical changes in a property, significant adverse changes in general economic conditions or significant deterioration of the underlying cash flows of a property indicate that the carrying amount of a property may not be recoverable.
The properties are operated by two third-party property managers in exchange for a management fee, and as such, we are not directly exposed to the credit risk of the property managers in the same manner or to the same extent as we are to our triple-net tenants.
The properties are operated by third-party managers in exchange for a management fee from us, and as such, we are not directly exposed to the credit risk of the managers in the same manner or to the same extent as we are related to our triple-net tenant leases.
Sources and Uses of Funds Our primary sources of cash include rent payments, receipts from residents, principal and interest payments on mortgage and other notes receivable, proceeds from the sales of real property, net proceeds from offerings of equity securities and borrowings from our loans and Credit Facility.
Sources and Uses of Funds Our primary sources of cash include lease payments from tenants, receipts from residents, principal and interest payments on mortgage and other notes receivable, proceeds from the sales of real estate properties, net proceeds from offerings of debt and equity securities and borrowings from our Credit Facility.
Senior Housing – Need-Driven includes ALFs and SLCs which primarily attract private payment for services from residents who require assistance with activities of daily living. Need-driven properties are subject to regulatory oversight.
A summary of each of these classifications follows: Need-Driven Senior Housing Need-driven senior housing properties include ALFs and SLCs which primarily attract private payment for services from residents who require assistance with activities of daily living. Need-driven properties are subject to regulatory oversight.
We also adjust Normalized FAD for the net change in our allowance for expected credit losses, non-cash share-based compensation as well as certain non-cash items related to our equity method investments such as straight-line lease expense and amortization of purchase accounting adjustments.
We also adjust Normalized FAD for the net change in our credit loss reserves, non-cash share-based compensation expense, SHOP capital expenditures, as well as certain non-cash items related to our equity method investment, such as straight-line lease expense and amortization of purchase accounting adjustments.
Additionally, we consider historical, demographic and market trends in developing our estimates. For each new lease, we discount our estimate of unguaranteed residual value and include this amount along with the stream of lease payments (also discounted) called for in the lease.
For each new lease, we discount our estimate of unguaranteed residual value and include this amount along with the stream of lease payments (also discounted) called for in the lease.
These items include, but are not limited to, impairment of non-real estate assets, gains and losses attributable to the acquisition and disposition of assets and liabilities, and recoveries of previous write-downs. Adjusted EBITDA also includes our proportionate share of unconsolidated equity method investments presented on a similar basis.
These items include, but are not limited to, impairments of non-real estate assets, gains or losses on disposition of assets and liabilities, and recoveries of previous write-downs on mortgages and other notes. Adjusted EBITDA also includes our proportionate share of an unconsolidated equity method investment presented on a similar basis.
In addition, the Company maintains an effective automatic shelf registration statement through which capital could be raised via the issuance of debt and/or equity securities.
In addition, we maintain an effective automatic shelf registration statement through which capital could be raised through the issuance of additional debt or equity securities.
Borrowings under the Credit Facility bear interest, at our election, at one of the following (a) Term Secured Overnight Financing Rate (“SOFR”) (plus a credit spread adjustment) plus a margin ranging from 0.725% to 1.40%, (b) Daily SOFR (plus a credit spread adjustment) plus a margin ranging from 0.725% to 1.40% or (c) the base rate plus a margin ranging from 0.00% to 0.40%.
Borrowings under the Credit Facility bear interest, at our election, at one of the following (a) Term SOFR plus a margin ranging from 0.725% to 1.400%, (b) Daily SOFR plus a margin ranging from 0.725% to 1.400% or (c) the base rate plus a margin ranging from 0.000% to 0.400%.
We believe our current liquidity position, supplemented by our ability to generate positive cash flows from operations in the future, and our low net leverage will be sufficient to meet all of our short-term and long-term financial commitments.
Should we have additional liquidity needs, we believe that we could access long-term financing in the debt and equity capital markets. We believe our current liquidity position, supplemented by our ability to generate positive cash flows from operations in the future, and our low net leverage will be sufficient to meet all of our short-term and long-term financial commitments.
From this segregation of the sources of cash flow, we are able to establish whether the lease is, in essence, a sale or financing based on it having transferred substantially all of the fair value of the leased asset.
From this segregation of the sources of cash flow, we are able to establish whether the lease is, in essence, a sale or financing based on it having transferred substantially all of the fair value of the leased asset. Accordingly, management’s projected residual values represent significant assumptions in our accounting for leases.
Interest Rate Schedule The current SOFR spreads and facility fee for our Credit Facility and 2025 Term Loan reflect our ratings compliance based on the applicable margin for SOFR loans at a debt rating of BBB-/Baa3 in the Interest Rate Schedule provided below in summary format: SOFR Spread Debt Ratings Credit Facility Credit Facility Fee 2025 Term Loan A+/A1 0.725% 0.125% 0.75% A/A2 0.725% 0.125% 0.80% A-/A3 0.725% 0.125% 0.85% BBB+/Baa1 0.775% 0.150% 0.90% BBB/Baa2 0.850% 0.200% 1.00% BBB-/Baa3 1.050% 0.250% 1.25% Lower than BBB-/Baa3 1.400% 0.300% 1.65% If our credit rating from at least two credit rating agencies is downgraded below “BBB-/Baa3”, the debt under our debt agreements will be subject to defined increases in interest rates and fees. 2031 Senior Notes - In January 2021, we issued $400.0 million in aggregate principal amount of 3.00% senior notes that mature on February 1, 2031 and pay interest semi-annually (the “2031 Senior Notes”).
We have provided summary information in the table below on the current SOFR credit spread adjustments and facility fee for our Credit Facility and Bank Term Loan reflecting our ratings compliance based on the applicable margin for SOFR loans with a debt rating of BBB-/Baa3: SOFR Credit Spread Adjustments Credit Credit Bank Debt Ratings Facility Facility Fee Term Loan A-/A3 0.725% 0.125% 0.850% BBB+/Baa1 0.775% 0.150% 0.900% BBB/Baa2 0.850% 0.200% 1.000% BBB-/Baa3 1.050% 0.250% 1.250% Lower than BBB-/Baa3 1.400% 0.300% 1.650% If our credit rating from at least two credit rating agencies is downgraded below “BBB-/Baa3”, the debt under our debt agreements will be subject to defined increases in interest rates and fees. 2031 Senior Notes - In January 2021, we issued $400.0 million in aggregate principal amount of 3.000% unsecured senior notes that mature in February 2031 (the “2031 Senior Notes”) and require semi-annual interest payments.
Our primary uses of cash include debt service payments (both principal and interest), new investments in real estate and notes receivable, dividend distributions to our stockholders, operating expenses for SHOP and general corporate overhead.
Our primary uses of cash include principal and interest payments on our debt, investments in new and existing real estate properties, mortgage and other notes, dividend distributions to our stockholders, operating expenses of our SHOP segment and general corporate overhead expenses.
Additionally, we make judgments with respect to our level of influence or control of an entity and whether we are the primary beneficiary of a VIE.
We make judgments about which entities are VIEs based on the criteria above and with respect to our level of influence or control of an entity and whether we are the primary beneficiary of a VIE.
We expect to meet our short-term liquidity needs largely through cash generated from operations and borrowings under the Credit Facility (refer to the “ Credit Facility” discussion above) drawdowns on forward sale agreements of our common stock, and sales from real estate investments, although we may choose to seek alternative sources of liquidity.
We expect to meet our short-term liquidity needs largely through cash generated from operations, borrowings under our Credit Facility, settlements of ATM forward sales agreements and proceeds from the sale of real estate properties, although we may choose to seek alternative sources of liquidity.
Fitch reaffirmed its public issuer credit rating of BBB- and “Stable” outlook on the Company on April 5, 2024 and S&P Global reaffirmed its BBB- rating and “Stable” outlook on the Company on October 16, 2024.
Fitch Ratings reaffirmed its public issuer credit rating of BBB- and “Stable” outlook on NHI on April 16, 2025 and S&P Global reaffirmed its BBB- rating and “Stable” outlook on NHI on October 6, 2025.
Taxable income is determined in accordance with the Internal Revenue Code and differs from net income for financial statements purposes determined in accordance with U.S. generally accepted accounting principles (“GAAP”). Our Board of Directors has historically directed the Company towards maintaining a strong consolidated balance sheet.
Taxable income is determined in accordance with the Internal Revenue Code and differs from net income for financial statement purposes that has been determined in accordance with GAAP. Our Board of Directors has historically directed us towards maintaining a strong consolidated balance sheet.
Net Operating Income NOI is a non-GAAP financial measure used to evaluate the operating performance of real estate. We define NOI as total revenues, less tenant reimbursements and property operating expenses. We believe NOI provides investors relevant and useful information as it measures the operating performance of our properties at the property level on an unleveraged basis.
We define NOI as total revenues, less tenant reimbursements and property operating expenses. We believe NOI provides investors relevant and useful information as it measures the operating performance of real estate assets at the property level on an unleveraged basis.
FFO & FAD These supplemental performance measures described below may not be comparable to similarly titled measures used by other REITs. Consequently, our Funds From Operations (“FFO”), Normalized FFO and Normalized Funds Available for Distribution (“FAD”) may not provide a meaningful measure of our performance as compared to that of other REITs.
Consequently, our funds from operations (“FFO”), Normalized FFO and Normalized Funds Available for Distribution (“FAD”) may not provide a meaningful measure of our performance as compared to that of other REITs.
We use these two measures as a useful basis to compare the strength of our balance sheet with those in our peer group. We also believe our balance sheet gives us a competitive advantage when accessing debt markets.
We use these two measures as a useful basis to compare the strength of our consolidated balance sheet with those of our peer group. We also believe our consolidated balance sheet gives us a competitive advantage when accessing debt markets. Our fixed charge ratio was 5.3x for the year ended December 31, 2025.
Assets Held for Sale and Long-Lived Assets During the year ended December 31, 2024, we recorded impairment charges of approximately $0.7 million for one property sold in the fourth quarter of 2024 in our Real Estate Investments segment.
During the year ended December 31, 2024, we recognized an impairment charge of $0.7 million related to one property in our Real Estate Investments segment which was reclassified to assets held for sale in the second quarter of 2024 and sold in the fourth quarter of 2024.
The eliminations and adjustments reflect covenants in our leases and provide a comparable basis for assessing our various relationships. We believe that EBITDARM is a useful way to analyze the cash potential of a group of assets. From EBITDARM we calculate a coverage ratio (EBITDARM/cash rent), measuring the ability of the operator to meet its monthly obligation.
The eliminations and adjustments reflect covenants in our leases and provide a comparable basis for assessing our various relationships. 50 Table of Contents We believe that EBITDARM is a useful way to analyze the cash potential of a group of assets.
Material Cash Requirements We had approximately $10.8 million in cash and cash equivalents on hand and $327.3 million in availability under the Credit Facility as of January 31, 2025. Our expected material cash requirements for the twelve months ended December 31, 2025 and thereafter consist of long-term debt maturities; interest on long-term debt; and contractually obligated expenditures.
Material Cash Requirements As of January 31, 2026, we had $29.7 million in cash and cash equivalents on hand and $356.0 million of availability under our Credit Facility. Our expected material cash requirements for the 12-months ending December 31, 2026 and thereafter consist of long-term debt maturities, interest payments on our debt and other contractually obligated expenditures.
Management has discussed the development and selection of its critical accounting policies and estimates with the Audit Committee of the Board of Directors.
On an ongoing basis, we reconsider and evaluate our estimates and assumptions. Management has discussed the development and selection of its critical accounting policies and estimates with the Audit Committee of our Board of Directors.
NHI exercised its purchase option in February 2023. Tenant Monitoring Our operators report to us the results of their operations on a periodic basis, which we in turn subject to further analysis as a means of monitoring potential concerns within our portfolio.
Tenant Monitoring The operators of our properties in the Real Estate Investments segment report to us the results of their operations on a periodic basis, which we in turn subject to further analysis as a means of monitoring potential credit risks within our portfolio.
There is a correlation between demand for this type of community and the strength of the housing market. Medical Facilities within our Real Estate Investments segment receive payment primarily from Medicare, Medicaid and health insurance. These properties include SNFs and HOSPs that attract patients who have a need for acute or complex medical attention, preventative medicine, or rehabilitation services.
There is a correlation between demand for this type of community and the strength of the housing market. Medical Facilities Medical facilities within our Real Estate Investments segment receive payment for services primarily from Medicare, Medicaid and health insurance.
Debt Maturities - Reference Note 8, Debt to the consolidated financial statements included in this report for more information on our debt maturities. 58 Ta ble of Contents Credit Ratings - Moody's Investors Services reaffirmed its credit rating and a senior unsecured debt rating of Baa3 and “Stable” outlook on the Company on November 1, 2024.
Debt Maturities - Reference Note 8 to the consolidated financial statements included in this Annual Report. Credit Ratings - Moody’s Investors Services reaffirmed its credit rating and a senior unsecured debt rating of Baa3 and “Stable” outlook on NHI on September 21, 2025.
The property will be reclassified to assets held for sale when the sale becomes probable, including when the tenant demonstrates its ability to obtain sufficient financing to close on the sale of the 50 Ta ble of Contents property within the terms of the purchase and sale agreement.
The property will be reclassified to assets held for sale when the sale becomes probable, including when the tenant demonstrates its ability to obtain sufficient financing to close on the sale of the property within the terms of the purchase and sale agreement. As of December 31, 2025, the net carrying value of this property was $18.4 million.
These accounting principles require us 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 financial statements, and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, we reconsider and evaluate our estimates and assumptions.
Critical Accounting Estimates We prepare our consolidated financial statements in conformity with U.S. GAAP, which require us 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 financial statements, and the reported amounts of revenues and expenses during the reporting period.
Contingent consideration is deemed to be probable to the extent that a significant reversal in amounts recognized is not likely to occur when the uncertainty associated with the contingent consideration is subsequently resolved.
Contingent consideration deemed to be probable at the acquisition date, if any, is also included in the purchase price allocation to the extent that a significant reversal in amounts recognized is not likely to occur and the uncertainty associated with the contingent consideration has been resolved.
The following table reconciles “ Net income attributable to common stockholders ”, the most directly comparable GAAP metric, to FFO, Normalized FFO and Normalized FAD and is presented for both basic and diluted weighted average common shares for FFO and Normalized FFO ( $ in thousands, except share and per share amounts ): 65 Ta ble of Contents Years ended December 31, 2024 2023 2022 Net income attributable to common stockholders $ 137,867 $ 135,597 $ 66,403 Elimination of certain non-cash items in net income: Real estate depreciation 70,449 69,436 70,734 Real estate depreciation related to noncontrolling interests (1,647) (1,585) (1,393) Gains on sales of real estate (6,678) (14,721) (28,342) Impairments of real estate 654 1,642 51,555 NAREIT FFO attributable to common stockholders 200,645 190,369 158,957 Gain on operations transfer, net — (20) 710 Portfolio transition costs, net of noncontrolling interests — — 426 Gain on note receivable payoff — — (1,113) Loss on early retirement of debt — 73 151 Non-cash write-off of straight-line rents receivable 1,452 — 36,353 Gain on forward equity sale agreement, net (6,261) — — Non-cash rental income — (2,500) (3,000) Normalized FFO attributable to common stockholders 195,836 187,922 192,484 Straight-line lease revenue, net (4,483) (6,961) (12,563) Straight-line lease revenue, net, related to noncontrolling interests (19) 58 124 Non-real estate depreciation 994 537 146 Non-real estate depreciation related to noncontrolling interests (140) (49) (16) Amortization of lease incentives 2,893 2,521 446 Amortization of lease incentive related to noncontrolling interests (508) (434) — Amortization of original issue discount 322 322 322 Amortization of debt issuance costs 3,461 2,325 2,155 Adjustments related to equity method investments, net (1,863) (1,647) (863) Note receivable credit loss expense 4,641 (266) 10,356 Equity method investment capital expenditures (293) (210) (420) Equity method investment non-refundable fees received 1,357 1,327 1,206 Gains from equity method investment (402) (555) (569) Non-cash share-based compensation 4,182 4,605 8,613 SHOP recurring capital expenditures (1,948) (1,845) (390) SHOP recurring capital expenditures related to noncontrolling interests 180 191 — Normalized FAD attributable to common stockholders $ 204,210 $ 187,841 $ 201,031 BASIC Weighted average common shares outstanding 43,844,771 43,388,794 44,774,708 NAREIT FFO attributable to common stockholders per share $ 4.58 $ 4.39 $ 3.55 Normalized FFO attributable to common stockholders per share $ 4.47 $ 4.33 $ 4.30 DILUTED Weighted average common shares outstanding 44,102,636 43,389,466 44,794,236 NAREIT FFO attributable to common stockholders per share $ 4.55 $ 4.39 $ 3.55 Normalized FFO attributable to common stockholders per share $ 4.44 $ 4.33 $ 4.30 66 Ta ble of Contents Adjusted EBITDA We consider Adjusted EBITDA to be an important supplemental measure because it provides information which we use to evaluate our performance and serves as an indication of our ability to service debt.
GAAP also requires any discount or premium related to indebtedness and debt issuance costs to be amortized as non-cash adjustments to earnings. 65 Table of Contents The following table reconciles our net income attributable to common stockholders, the most directly comparable GAAP financial measure, to NAREIT FFO, Normalized FFO and Normalized FAD and provides supplemental information on basic and diluted earnings per share using these metrics ($ in thousands, except per share amounts) : Year Ended December 31, 2025 2024 2023 Net income attributable to common stockholders $ 141,976 $ 137,867 $ 135,597 Elimination of certain non-cash items in net income: Real estate depreciation and amortization 78,772 70,449 69,436 Real estate depreciation related to noncontrolling interests (1,629) (1,647) (1,585) Gains on sales of real estate properties, net (456) (6,678) (14,721) Impairments of real estate properties — 654 1,642 NAREIT FFO attributable to common stockholders 218,663 200,645 190,369 Non-cash write-offs of straight-line rents receivable 12,350 1,452 — Non-cash rental income related to operations transfers upon early lease terminations (1,375) — — Other non-cash rental income — — (2,500) Proxy contest and related expenses 1,572 — — Gains on forward equity sales agreements, net — (6,261) — Loss on early retirement of debt — — 73 Gains on operations transfers, net — — (20) Normalized FFO attributable to common stockholders 231,210 195,836 187,922 Straight-line rent revenue adjustments (5,085) (4,483) (6,961) Straight-line rent revenue adjustments related to noncontrolling interests (68) (19) 58 Amortization of lease incentives 2,901 2,893 2,521 Amortization of lease incentives related to noncontrolling interests (508) (508) (434) Non-real estate depreciation 2,172 994 537 Non-real estate depreciation related to noncontrolling interests (257) (140) (49) Amortization of debt discount 453 322 322 Amortization of debt issuance costs 2,974 3,461 2,325 Adjustments related to equity method investment, net (1,219) (1,863) (1,647) Gains from equity method investment (3,664) (402) (555) Equity method investment capital expenditures (671) (293) (210) SHOP recurring capital expenditures (1,937) (1,948) (1,845) SHOP recurring capital expenditures related to noncontrolling interests 216 180 191 Equity method investment non-refundable fees received 2,339 1,357 1,327 Notes receivable credit (benefit) loss expense (3,447) 4,641 (266) Non-cash share-based compensation expense 5,576 4,182 4,605 Transaction costs 1,164 — — Normalized FAD attributable to common stockholders $ 232,149 $ 204,210 $ 187,841 Basic: Weighted average common shares outstanding 46,874,691 43,844,771 43,388,794 NAREIT FFO attributable to common stockholders per share $ 4.66 $ 4.58 $ 4.39 Normalized FFO attributable to common stockholders per share $ 4.93 $ 4.47 $ 4.33 Diluted: Weighted average common shares outstanding 47,051,763 44,102,636 43,389,466 NAREIT FFO attributable to common stockholders per share $ 4.65 $ 4.55 $ 4.39 Normalized FFO attributable to common stockholders per share $ 4.91 $ 4.44 $ 4.33 66 Table of Contents Adjusted EBITDA We consider Adjusted EBITDA to be an important supplemental financial measure because it provides information which we use to evaluate our performance and serves as an indication of our ability to service debt.
We believe that the carrying amounts of our real estate properties are recoverable and that mortgage and other notes receivables, net of reserves, are realizable and supported by the value of the underlying collateral. However, it is possible that future events could require us to make additional significant adjustments to these carrying amounts.
We believe that the carrying amounts of our real estate properties are recoverable and that mortgage and other notes receivables, net of credit loss reserves, are realizable and supported by the value of the underlying collateral.
We make judgments about which entities are VIEs based on an assessment of whether (i) the total equity investment at risk is insufficient to finance that entity’s activities without additional subordinated financial support, (ii) as a group, the holders of the equity investment at risk do not have a controlling financial interest, or (iii) the equity investors have voting rights that are not proportional to their economic interests, and substantially all of the entity’s activities either involve, or are conducted on behalf of, an investor that has disproportionately few voting rights.
A variable interest entity (“VIE”) is broadly defined as an entity with one or more of the following characteristics: (a) the total equity investment at risk is insufficient to finance the entity’s activities without additional subordinated financial support; (b) as a group, the holders of the equity investment at risk lack (i) the ability to make decisions about the entity’s activities through voting or similar rights, (ii) the obligation to absorb the expected losses of the entity, or (iii) the right to receive the expected residual returns of the entity; or (c) the equity investors have voting rights that are not proportional to their economic interests, and substantially all of the entity’s activities either involve, or are conducted on behalf of, an investor that has disproportionately few voting rights.
Credit Facility - We have a $700.0 million unsecured revolving Credit Facility, which was amended and restated on October 24, 2024 to extend the maturity date from March 2026 to October 2028, which may be further extended by us pursuant to (i) one or both of the two six-month extension options or (ii) one twelve-month extension option.
Revolving Credit Facility and Bank Term Loan - We have a $700.0 million Credit Facility that matures in October 2028, which may be further extended by us pursuant to (i) one or both of the six-month extension options or (ii) one 12-month extension option.
Historically, the Company has distributed at least 100% of annual taxable income.
Historically, we have distributed at least 100% of our annual taxable income.
The following table reconciles NOI to net income, the most directly comparable GAAP metric ( $ in thousands ): 67 Ta ble of Contents Years Ended December 31, NOI Reconciliations: 2024 2023 2022 Net income $ 136,639 $ 134,381 $ 65,501 Gain on forward sale agreement, net (6,261) — — Gains from equity method investment (402) (555) (569) Other income — (202) — Loss on early retirement of debt — 73 151 Gain on note receivable payoff — — (1,113) (Gain) loss on operations transfer, net — (20) 710 Gains on sales of real estate (6,678) (14,721) (28,342) Loan and realty losses, net 5,295 1,376 61,911 General and administrative 20,736 19,314 22,768 Franchise, excise and other taxes 38 449 844 Legal 1,052 507 2,555 Interest 59,903 58,160 44,917 Depreciation 71,443 69,973 70,880 Consolidated NOI $ 281,765 $ 268,735 $ 240,213 NOI by segment: Real Estate Investments $ 269,127 $ 259,162 $ 232,295 SHOP 12,170 9,222 7,603 Non-Segment/Corporate 468 351 315 Total NOI $ 281,765 $ 268,735 $ 240,213 68 Ta ble of Contents
The following table reconciles our net income, the most directly comparable GAAP financial measure, to NOI ( $ in thousands ): Year Ended December 31, 2025 2024 2023 Net income $ 140,787 $ 136,639 $ 134,381 Depreciation and amortization 80,944 71,443 69,973 Interest expense 57,368 59,903 58,160 Legal expense 2,666 1,052 507 Franchise, excise and other taxes 1,080 38 449 General and administrative expenses 26,868 20,736 19,314 Proxy contest and related expenses 1,572 — — Loan and realty (gains) losses, net (3,447) 5,295 1,376 Gains on sales of real estate properties, net (456) (6,678) (14,721) Gains from equity method investment (3,664) (402) (555) Gains on forward equity sales agreements, net — (6,261) — Loss on early retirement of debt — — 73 Gains on operations transfers, net — — (20) Other income — — (202) NOI $ 303,718 $ 281,765 $ 268,735 The following table provides a summary of our NOI by segment ($ in thousands) : Year Ended December 31, 2025 2024 2023 Real Estate Investments segment $ 284,584 $ 269,127 $ 259,162 SHOP segment 19,134 12,170 9,222 Non-segment / corporate — 468 351 Total NOI $ 303,718 $ 281,765 $ 268,735 68 Table of Contents
Executive Overview National Health Investors, Inc., established in 1991 as a Maryland corporation, is a self-managed REIT specializing in sale-leaseback, joint venture, and mortgage and mezzanine financing of need-driven and discretionary senior housing and medical facility investments. We operate through two reportable segments: Real Estate Investments and SHOP.
Executive Overview National Health Investors, Inc., established in 1991 as a Maryland corporation, is a self-managed REIT. We own, lease, operate and finance the development of high-quality real estate properties, focusing on senior housing communities and medical facilities. We operate through two reportable segments, Real Estate Investments and SHOP.
These ventures, consolidated by the Company, are structured to comply with REIT requirements and utilize the TRS for activities that would otherwise be non-qualifying for REIT purposes.
We have structured the operations at these senior housing communities to comply with the requirements of RIDEA and to utilize our TRS for activities that would otherwise be non-qualifying for REIT purposes.
Our estimates consider all available evidence including, as appropriate, the present value of the expected future cash flows discounted at market rates, general economic conditions and trends, the duration of the fair value deficiency, and any other relevant factors.
We assess all the evidence available to us, including the present value of the expected future discounted cash flows from a mortgage or note, general economic conditions and trends, the duration of a fair value deficiency and other relevant factors.
Accordingly, management’s projected residual values represent significant assumptions in our accounting for leases. 47 Ta ble of Contents While we do not incorporate residual value guarantees in our lease provisions, the contractual structure of other provisions provides a basis for expectations of realizable value from our properties, upon expiration of their lease terms.
While we do not incorporate residual value guarantees in our lease provisions, the contractual structure of other provisions provides a basis for expectations of realizable value from our properties upon expiration of their lease terms. Additionally, we consider historical, demographic and market trends in developing our estimates.
Cash Basis Operators We had three operators on the cash basis of accounting for revenue recognition for their leasing arrangements based on our assessment of each tenant’s ability to satisfy its contractual obligations as of December 31, 2024.
Cash Basis Tenants During the year ended December 31, 2025, two of our tenants were on the cash basis of accounting for revenue recognition for their leasing arrangements with us based on our assessment of each tenant’s ability to satisfy its contractual obligations under the terms of the respective leases.
Quantitative and Qualitative Disclosures About Market Risk” in this Annual Report for more details on our indebtedness and the impact of interest rate risk.
Reference Note 8 to our consolidated financial statements included in this Annual Report for additional information on our debt. Reference “Part II, Item 7A. Quantitative and Qualitative Disclosures About Market Risk” in this Annual Report for more details on the impact of interest rate risk on our business.
For the year ended December 31, 2023, we sold 12 properties generating gains on sales of real estate totaling $14.7 million. • Gain on forward equity sale agreement, net of $6.3 million for the year ended December 31, 2024, represents the period a forward sale agreement under our ATM equity program did not qualify for equity treatment in accordance with ASC 815-40. 56 Ta ble of Contents Liquidity and Capital Resources At December 31, 2024, we had $368.8 million available to draw on our $700.0 million unsecured revolving Credit Facility, $24.3 million in unrestricted cash and cash equivalents, the ability to access approximately $64.9 million of undrawn net proceeds through forward sale agreements executed in August 2024, and the potential to access $480.0 million through the issuance of common stock under the Company’s ATM equity program.
During the year ended December 31, 2024, we recognized a gain on forward equity sales agreements under our ATM equity program for the period in which these agreements did not qualify for equity treatment under GAAP. 56 Table of Contents Liquidity and Capital Resources At December 31, 2025, we had $496.0 million available to draw on our $700.0 million unsecured revolving credit facility (“Credit Facility”), $19.6 million in unrestricted cash and cash equivalents, the ability to access $44.5 million of undrawn net proceeds through ATM forward sales agreements and the ability to access $315.8 million through the issuance of common stock under our ATM equity program.
During the year ended December 31, 2023, we recorded impairment charges of approximately $1.6 million for four properties of which $0.5 million related to three properties either sold or classified as assets held for sale in our Real Estate Investments segm ent. Impairment charges are included in “ Loan and realty losses, net ” in the Consolidated Statements of Income.
Du ring the year ended December 31, 2023 , we recognized impairment charges of $1.6 million related to four properties in our Real Estate Investments segment, which include d $0.5 million of impairment charges on three of these properties which were either sold or reclassified to assets held for sale during the year ended December 31, 2023.
The credit loss liability for unfunded loan commitments was $0.1 million as of December 31, 2024 and is estimated using the same methodology as our funded mortgage and other notes receivable based on the estimated amount that we expect to fund.
As of December 31, 2025, the total credit loss liabilities established for our unfunded loan commitments were $0.2 million. We estimate the amounts we expect to fund using the same methodology as the one applied to provide for credit loss reserves on our mortgage and other notes receivable.
Our ability to correctly determine the primary beneficiary of a VIE at inception of our involvement impacts the presentation of these entities in our consolidated financial statements. Real Estate Properties Real property we develop is recorded at cost, including the capitalization of interest during construction.
Our ability to correctly determine the primary beneficiary of a VIE at inception of our involvement impacts the presentation of these entities in our consolidated financial statements. 52 Table of Contents Asset Acquisitions Our investments in real estate properties are accounted for as asset acquisitions.
We have a $200.0 million term loan (the “2025 Term Loan”) that matures in June 2025 and bears interest at a variable rate which is SOFR-based with a margin determined according to our credit ratings plus a 0.10% credit spread adjustment.
The Bank Term Loan bears interest at a variable rate which is SOFR-based with a margin determined according to our credit ratings.
The ATM equity program has a forward sale provision which allows us to sell shares of common stock to forward purchasers at a predetermined price at a future date (“the ATM forward sale agreements”).
ATM Equity Program - We maintain an ATM equity program which allows us to sell our common stock directly into the market. This program is governed by an ATM equity sales agreement which includes a forward sales provision that allows us to sell shares of our common stock to forward purchasers at a predetermined price at a future date.
The following table reconciles “ Net income ”, the most directly comparable GAAP metric, to Adjusted EBITDA ($ in thousands ): Years ended December 31, 2024 2023 2022 Net income $ 136,639 $ 134,381 $ 65,501 Interest expense 59,903 58,160 44,917 Franchise, excise and other taxes 38 449 844 Depreciation 71,443 69,973 70,880 NHI’s share of EBITDA adjustments for unconsolidated entities 719 2,432 2,976 Gain on forward equity sale agreement, net (6,261) — — Gains on sales of real estate (6,678) (14,721) (28,342) Impairments of real estate 654 1,642 51,555 (Gain) loss on operations transfer, net — (20) 710 Gain on note receivable payoff — — (1,113) Loss on early retirement of debt — 73 151 Non-cash write-off of straight-line rents receivable and lease amortization 1,452 — 36,353 Non-cash rental income — (2,500) (3,000) Note receivable credit loss expense 4,641 (266) 10,356 Adjusted EBITDA $ 262,550 $ 249,603 $ 251,788 Interest expense at contractual rates $ 56,315 $ 55,603 $ 42,487 Principal payments 425 408 389 Fixed Charges $ 56,740 $ 56,011 $ 42,876 Fixed Charge Coverage 4.6x 4.5x 5.9x For all periods presented, Adjusted EBITDA reflects GAAP interest expense, which excludes amounts capitalized during the period.
The following table reconciles our net income, the most directly comparable GAAP financial measure, to Adjusted EBITDA ( $ in thousands ): Year Ended December 31, 2025 2024 2023 Net income $ 140,787 $ 136,639 $ 134,381 Depreciation and amortization 80,944 71,443 69,973 Interest 57,368 59,903 58,160 Franchise, excise and other taxes 1,080 38 449 Write-offs of straight-line rents receivable 12,141 1,452 — Non-cash rental income related to operations transfers upon early lease terminations (1,375) — — Notes receivable credit (benefit) loss expense (3,447) 4,641 (266) Gains on sales of real estate properties, net (456) (6,678) (14,721) Loss on early retirement of debt — — 73 Gains on forward equity sales agreements, net — (6,261) — Other non-cash rental income — — (2,500) Write-offs of transaction costs 608 — — Gains on operations transfers, net — — (20) NHI’s share of EBITDA adjustments for unconsolidated subsidiaries — 719 2,432 Impairments of real estate properties — 654 1,642 Adjusted EBITDA $ 287,650 $ 262,550 $ 249,603 Interest expense at contractual rates 1 $ 53,941 $ 56,315 $ 55,603 Principal payments on debt, excluding balloon payments 222 425 408 Fixed charges $ 54,163 $ 56,740 $ 56,011 Fixed charge coverage 5.3x 4.6x 4.5x 1 Interest expense at contractual rates includes capitalized interest in the table above. 67 Table of Contents Net Operating Income NOI is a non-GAAP supplemental financial measure used to evaluate the operating performance of real estate.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Substantially all of our leases require the tenant to pay all operating expenses for the property, whether paid directly by the tenant or reimbursed to us. We believe that inflationary increases will be at least partially offset by the contractual rent increases and expense reimbursements described above. 70 Ta ble of Contents
Substantially all of our leases include a provision that requires the tenant to pay the operating expenses of the respective property, whether paid directly by the tenant or reimbursed to us. We believe that inflationary increases experienced by us will be at least partially offset by the contractual rent increases and operating expense reimbursements described above.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. Interest Rate Risk At December 31, 2024, we were exposed to market risks related to fluctuations in interest rates on approximately $531.2 million of variable-rate indebtedness and on our mortgage and other notes receivable.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Interest Rate Risk We are exposed to risks related to fluctuations in market interest rates that affect our indebtedness and our mortgage and other notes receivable.
We may engage in hedging strategies to manage our exposure to market risks in the future, depending on an analysis of the interest rate environment and the costs and risks of such strategies. We had no derivative financial instruments outstanding during 2024.
We do not use derivative financial instruments for speculative or trading purposes. We currently have no derivative financial instruments, but may engage in hedging strategies to manage our exposure to interest rate risk in the future depending on our analysis of the current interest rate environment and the costs and risks of such strategies.
However, interest rate changes will affect the fair value of our fixed rate instruments. Conversely, changes in interest rates on variable rate debt and investments would change our future earnings and cash flows, but not significantly affect the fair value of those instruments.
However, interest rate fluctuations will affect the fair values of our fixed rate financial instruments from period to period. Conversely, changes in interest rates related to our variable rate debt, mortgages and other notes will impact our future results of operations and cash flows but will not significantly affect the fair values of those financial instruments from period to period.
Inflation Risk Our real estate leases generally provide for annual increases in contractual rent due based on a fixed amount or percentage or based on increases in the Consumer Price Index (“CPI”). Leases with increases based on CPI may contain a minimum or a cap on the maximum annual increase.
Inflation Risk Our tenant leases generally provide for annual escalators in contractual rent due to us based on a fixed rate of increase or a variable index, such as CPI. Our tenant leases which are subject to an annual escalator based on CPI may also contain a minimum or maximum cap on the annual increase.
Assuming a 50 basis-point increase or decrease in the interest rate related to variable-rate debt, and assuming no change in the outstanding balance as of December 31, 2024, net interest expense would increase or decrease annually by approximately $2.7 million or $0.06 per common share on a diluted basis.
Assuming a 50 basis point (“bps”) increase or decrease in the interest rates on the principal amounts due on our variable rate debt outstanding as of December 31, 2025 and assuming the amounts outstanding did not change during the period, our interest expense would increase or decrease annually by approximately $1.6 million.
The following table sets forth certain information with respect to our debt ($ in thousands) : December 31, 2024 December 31, 2023 Balance 1 % of total Rate 2 Balance 1 % of total Rate 2 Fixed rate: Private placement notes - unsecured $ 150,000 13.0 % 4.45 % $ 225,000 19.6 % 4.28 % Senior notes - unsecured 400,000 34.6 % 3.00 % 400,000 34.9 % 3.00 % Fannie Mae term loans - secured, non-recourse 75,815 6.6 % 3.96 % 76,241 6.7 % 3.96 % Variable rate: Bank term loans - unsecured 200,000 17.2 % 5.95 % 200,000 17.4 % 6.69 % Revolving credit facility - unsecured 331,200 28.6 % 5.75 % 245,000 21.4 % 6.49 % $ 1,157,015 100.0 % 4.55 % $ 1,146,241 100.0 % 4.70 % 1 Differs from carrying amount due to unamortized discounts and loan costs. 2 Total is weighted average rate. 69 Ta ble of Contents To highlight the sensitivity of our term loans, senior notes and secured mortgage debt to changes in interest rates, the following summary shows the effects on fair value (“FV”) assuming a parallel shift of 50 basis points (“bps”) in market interest rates for a contract with similar maturities as of December 31, 2024 ( $ in thousands ): Balance Fair Value 1 FV reflecting change in interest rates Fixed rate: -50 bps +50 bps Private placement notes - unsecured $ 150,000 $ 145,055 $ 146,230 $ 143,892 Senior notes - unsecured 400,000 327,984 338,912 320,647 Fannie Mae term loans - secured, non-recourse 75,815 75,300 75,419 75,182 1 The change in fair value of our fixed rate debt was due primarily to the overall change in interest rates.
The following table provides a summary of the interest rates on our debt ( $ in thousands ): December 31, 2025 December 31, 2024 Weighted Weighted Principal % of Average Principal % of Average Amount Total Interest Amount Total Interest Outstanding Debt Rate Outstanding Debt Rate Fixed rate debt: 2031 Senior Notes - unsecured $ 400,000 33.9 % 3.00 % $ 400,000 34.6 % 3.00 % 2033 Senior Notes - unsecured 350,000 29.7 % 5.35 % — — % — % Private placement loans - unsecured 100,000 8.5 % 4.51 % 150,000 13.0 % 4.45 % Fannie Mae term loans - secured, non-recourse — — % — % 75,815 6.6 % 3.96 % Variable rate debt: Revolving credit facility - unsecured 204,000 17.3 % 4.71 % 331,200 28.6 % 5.75 % Bank term loan - unsecured 125,000 10.6 % 4.91 % 200,000 17.2 % 5.95 % Total principal amounts of debt outstanding $ 1,179,000 100.0 % 4.32 % $ 1,157,015 100.0 % 4.55 % 69 Table of Contents The following table provides a summary of the sensitivity of our fixed rate debt as of December 31, 2025 to changes in market interest rates ( $ in thousands ): Principal Fair Value Amount Fair After 50 bps After 50 bps Outstanding Value Decrease Increase 2031 Senior notes - unsecured $ 400,000 $ 348,467 $ 358,278 $ 341,700 2033 Senior notes - unsecured 350,000 347,127 360,295 339,406 Private placement term loans - unsecured 100,000 98,638 99,160 98,120 Substantially all of our investments in mortgages and other notes are negotiated at fixed interest rates.
The unused portion ($368.8 million at December 31, 2024) of our Credit Facility, should it be drawn upon, is subject to variable rates. Interest rate fluctuations will generally not affect our future earnings or cash flows on our fixed rate debt and loans receivable unless such instruments mature or are otherwise terminated.
Interest rate fluctuations generally will not affect our future results of operations or cash flows associated with our debt, mortgages and other notes at fixed interest rates unless these financial instruments mature or are otherwise terminated and we are seeking new borrowings or to refinance these borrowings.
At December 31, 2024, the fair value of our mortgage and other notes receivable, discounted for estimated changes in the risk-free rate, was approximately $261.7 million.
A 50 bps increase in market interest rates as of December 31, 2025 would decrease the total estimated fair values of our mortgage and other notes receivable by approximately $74.7 million and a 50 bps decrease in market interest rates would increase the estimated fair values of our mortgage and other notes receivable by approximately $203.6 million.
Removed
We have historically used derivative financial instruments in the normal course of business to mitigate interest rate risk. We do not use derivative financial instruments for speculative purposes. Derivatives, if any, are included in the Consolidated Balance Sheets at their fair value.
Added
As of December 31, 2025, we had $329.0 million of principal amounts outstanding on indebtedness and $496.0 million of availability under our Credit Facility that are subject to variable interest rates. We have historically used derivative financial instruments in the normal course of our business to mitigate interest rate risk.
Removed
A 50 basis-point increase in market rates would decrease the estimated fair value of our mortgage and other loans by approximately $2.2 million, while a 50 basis-point decrease in such rates would increase their estimated fair value by approximately $3.0 million. Equity Price Risk The Company is not subject to equity risk since it owns no marketable securities.
Added
As of December 31, 2025, the principal amounts outstanding on these investments totaled $218.7 million and the estimated fair values, discounted for the change in the risk-free interest rate, totaled $201.5 million.
Added
In addition, inflation, both real and anticipated, as well as any resulting government policies have affected and could continue to adversely affect the costs of labor, goods and services experienced by our operators in the SHOP segment.
Added
In periods of inflation, the increases in operating costs experienced by our operators could exceed the corresponding increases in revenues which may adversely affect our operators’ and borrowers’ ability to make rent and loan payments to us under the terms of the agreements.
Added
Additionally, our financial condition and results of operations may be adversely affected by any shortfall experienced by our operators during periods of inflation. 70 Table of Contents

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