Core Insights - Community Healthcare Trust Inc. is a real estate investment trust focused on acquiring income-producing healthcare properties across the U.S. [1] Investment Performance - The stock price of Community Healthcare was approximately $18.38 per share a decade ago, and an investment of $10,000 would have allowed the purchase of about 544 shares. Currently, shares are trading at $14.66, resulting in a value of $7,976 from stock price appreciation alone [2] - Over the past 10 years, Community Healthcare has paid approximately $17.56 in dividends per share, leading to a total of $9,554 from dividends alone, bringing the total investment value to $17,530, which represents a total return of 75.30% [3][4] - This total return is significantly lower than the S&P 500's total return of 286.30% over the same period [4] Future Outlook - Analysts have a consensus rating of "Buy" for Community Healthcare, with a price target of $27.67, indicating an upside potential of over 88% from the current stock price [5] - The company reported Q3 2025 earnings with FFO of $0.56, exceeding the consensus estimate of $0.49, and revenues of $31.08 million, surpassing the consensus of $30.56 million [5] - Community Healthcare offers a solid dividend yield of 13% and has consistently raised its dividend for the past 11 years, making it attractive for growth-focused investors [6]

Group 1 - Community Healthcare Trust Incorporated (CHCT) and Medical Properties Trust, Inc. (MPW) are two REITs that have faced tenant issues in recent years [1] - The performance of these REITs in 2025 is being closely monitored, indicating ongoing interest in their market behavior [1] - The author has a long-term investment approach, focusing on fundamental analysis, particularly in REITs and financial sectors [1] Group 2 - The article expresses a beneficial long position in the shares of CHCT and MPW, indicating confidence in their future performance [2] - The author emphasizes that the article reflects personal opinions and is not influenced by external compensation [2]

Group 1 - Community Healthcare Trust Incorporated (CHCT) and Medical Properties Trust, Inc. (MPW) are two REITs that have faced tenant issues in recent years [1] - The performance of these REITs in 2025 is being closely monitored, indicating ongoing interest in their market behavior [1] - The author has a long position in both CHCT and MPW, suggesting a belief in their potential for recovery or growth [2] Group 2 - The author has been involved in investing since 2011, focusing on REITs, preferred stocks, and high-yield bonds, which reflects a long-term commitment to these asset classes [1] - The investment strategy includes combining long stock positions with covered calls and cash secured puts, indicating a sophisticated approach to risk management [1] - The author primarily covers REITs and financials on Seeking Alpha, with occasional insights into ETFs and macro-driven stock ideas, showcasing a broad understanding of market dynamics [1]

Financial Data and Key Metrics Changes - Total revenue increased from $29.6 million in Q3 2024 to $31.1 million in Q3 2025, representing a 4.9% year-over-year growth [10] - Quarter-over-quarter, total revenue grew by 1.1% when normalizing for a $1.7 million reversal of interest receivables in Q2 2025 [10] - Funds from operations (FFO) rose to $13.5 million in Q3 2025, a 5.7% increase from $12.8 million in Q3 2024 [13] - Adjusted funds from operations (AFFO) increased to $15.1 million, a 3.1% year-over-year growth [13] - The AFFO dividend payout ratio remained strong at 85% [14] Business Line Data and Key Metrics Changes - Occupancy decreased from 90.7% to 90.1% during the quarter, but leasing activity is expected to increase occupancy by 50 to 100 basis points by year-end [5][6] - The weighted average lease term increased slightly from 6.6 to 6.7 years [6] - One inpatient rehabilitation facility was acquired for $26.5 million, with an anticipated annual return of approximately 9.4% [7] Market Data and Key Metrics Changes - The company is seeing attractive opportunities in the market with cap rates in the 9%-10% range [17] - The company is focused on capital recycling to fund acquisitions without increasing leverage [20] Company Strategy and Development Direction - The company is being highly selective in acquisitions and is focused on capital recycling to fund new investments [17][20] - The strategy includes disposing of non-core properties to focus on better buildings and markets [36] - The company aims to maintain modest leverage levels while pursuing growth opportunities [9] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the leasing activity and expects a positive impact on occupancy and revenue in 2026 [31] - The company is actively pursuing multiple plans to ensure stable rent from the behavioral health tenant [27] - Management is cautious about the timing of the acquisition related to the behavioral health tenant, indicating it may close in Q1 2026 [26] Other Important Information - The company declared a dividend of $0.4750 per common share for Q3 2025, marking a continuous increase since the IPO [9] - The company expects to close on a property sale with an expected gain of approximately $11.5 million in Q4 2025 [8] Q&A Session Summary Question: Acquisition pipeline and funding - Management indicated that the acquisition pipeline remains attractive, but they are being selective due to current stock prices [17] Question: Impact of asset sales on leverage - Management clarified that they do not expect to increase leverage significantly and plan to match dispositions with acquisitions [20][21] Question: Behavioral health tenant rent payments - The tenant previously paid approximately $800,000 per quarter but only paid $200,000 in the current quarter [25] Question: Timing of acquisition closing - Management hopes to close the acquisition by year-end but realistically expects it to occur in Q1 2026 [26] Question: Plans if the acquisition falls through - Management is exploring multiple paths to ensure stable rent from the tenant [27] Question: Impact of redevelopment properties on earnings - Significant leases from redevelopment properties are expected to commence in 2026, contributing to earnings growth [29]

Financial Data and Key Metrics Changes - Total revenue increased from $29.6 million in Q3 2024 to $31.1 million in Q3 2025, representing a 4.9% year-over-year growth [10] - Quarter-over-quarter, total revenue growth was 1.1% when normalizing for a $1.7 million reversal of interest receivables in Q2 2025 [10] - Funds from operations (FFO) rose to $13.5 million in Q3 2025, a 5.7% increase year-over-year [13] - Adjusted funds from operations (AFFO) totaled $15.1 million, reflecting a 3.1% year-over-year increase [14] - The AFFO dividend payout ratio remained strong at 85% [14] Business Line Data and Key Metrics Changes - Occupancy decreased from 90.7% to 90.1% during the quarter, but new leases signed in October are expected to increase leased occupancy by 50 to 100 basis points by year-end [5][6] - The weighted average lease term increased slightly from 6.6 to 6.7 years [6] - One inpatient rehabilitation facility was acquired for $26.5 million with an anticipated annual return of approximately 9.4% [7] - Six properties are under definitive purchase and sale agreements for an aggregate expected investment of $146 million, with expected returns ranging from 9.1% to 9.75% [7] Market Data and Key Metrics Changes - The company is experiencing strong leasing activity across its portfolio, indicating a positive market environment [33] - The geriatric behavioral hospital operator, a tenant in six properties, paid approximately $200,000 in rent during the quarter, down from $800,000 previously [4][26] Company Strategy and Development Direction - The company is focused on capital recycling to fund acquisitions without increasing leverage, emphasizing selective asset sales and acquisitions [9][20] - The strategy includes maintaining modest leverage levels while evaluating the best uses of capital [9] - The company aims to close on one property in Q4 2025, with the remaining five properties closing throughout 2026 and 2027 [7] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the acquisition pipeline, noting attractive opportunities in the 9 to 10% cap rate range [17] - The company is actively pursuing multiple plans to ensure continued rent payments from the behavioral health tenant [28] - Management expects to see a tailwind for growth in 2026 due to strong leasing activity and upcoming lease commencements [33] Other Important Information - The company declared a dividend of $0.4750 per common share for Q3 2025, marking a continuous increase since its IPO [9] - The company is undergoing redevelopment on three properties, with significant impacts expected on earnings starting in 2026 [31] Q&A Session Summary Question: Acquisition pipeline status - Management indicated that they are being highly selective and have a pipeline of quality assets, but the acquisition opportunities are generally attractive [17][18] Question: Funding and leverage concerns - Management reassured that they do not expect to meaningfully increase leverage and plan to match dispositions with acquisitions [20][21] Question: Behavioral health tenant rent payments - The tenant previously paid approximately $800,000 per quarter but only paid $200,000 in the current quarter [26] Question: Timing of acquisition closure - Management expressed hope for a closure by year-end but indicated it is more realistic to expect it in Q1 2026 [27] Question: Plans if the acquisition deal falls through - Management confirmed they are exploring multiple paths to ensure continued rent payments from the tenant [28] Question: Impact of redevelopment properties on earnings - Management noted that significant leases will not commence until after mid-2026, impacting earnings positively [31]

Financial Data and Key Metrics Changes - Total revenue increased from $29.6 million in Q3 2024 to $31.1 million in Q3 2025, representing a 4.9% year-over-year growth [10] - Funds from operations (FFO) rose to $13.5 million in Q3 2025, a 5.7% increase compared to $12.8 million in Q3 2024 [13] - Adjusted funds from operations (AFFO) totaled $15.1 million in Q3 2025, a 3.1% increase year-over-year [13] - The AFFO dividend payout ratio remained strong at 85% [13] Business Line Data and Key Metrics Changes - Occupancy decreased from 90.7% to 90.1% during the quarter, but new leases signed in October are expected to increase leased occupancy by 50 to 100 basis points by year-end [5] - Weighted average lease term increased slightly from 6.6 to 6.7 years [6] - One inpatient rehabilitation facility was acquired for $26.5 million, with an anticipated annual return of approximately 9.4% [6] Market Data and Key Metrics Changes - The company is seeing attractive opportunities in the market with cap rates in the 9% to 10% range [17] - The geriatric behavioral hospital operator, a tenant in six properties, paid approximately $200,000 in rent during the quarter, down from approximately $800,000 previously [21] Company Strategy and Development Direction - The company is focused on capital recycling to fund acquisitions without increasing leverage [9][19] - The strategy includes being selective in acquisitions and focusing on high-quality assets with attractive returns [17][31] - The company plans to close on one property in Q4 2025, with additional properties closing throughout 2026 and 2027 [6] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about leasing activity and expects a tailwind for growth in 2026 [28] - There is a cautious approach regarding the acquisition pipeline, with a focus on maintaining modest leverage levels [9][19] - Management is actively pursuing multiple plans to resolve issues with the behavioral health tenant and is motivated to increase rent [24] Other Important Information - The company declared a dividend of $0.4750 per common share for Q3 2025, marking a continuous increase since the IPO [9] - The company expects to close on the sale of an inpatient rehabilitation facility in Q4 with an expected gain of approximately $11.5 million [8] Q&A Session Summary Question: What is the status of the acquisition pipeline? - Management stated they are being highly selective and see attractive opportunities in the market, but are cautious about issuing shares at depressed levels [17] Question: What are the expectations for the behavioral health tenant's rent? - The tenant previously paid approximately $800,000 per quarter but only paid $200,000 in the current quarter [21] Question: When is the acquisition expected to close? - Management hopes to close by year-end but realistically expects it to occur in Q1 2026 [23] Question: What is the likelihood of recovering unpaid rents from the tenant? - Management does not put a high likelihood on recovering unpaid rents but is focused on getting paid more rent in the future [25] Question: How is the company identifying assets for disposal? - The company evaluates tenant concentration, weighted average lease term, and market conditions when identifying assets for disposal [31]

Company Overview - Community Healthcare Trust (CHCT) is a REIT focused on healthcare properties[3] - As of September 30, 2025, CHCT had a market capitalization of $4356 million and an enterprise value of $9624 million[3] - The company has achieved dividend growth for 41 consecutive quarters[5] - CHCT's portfolio includes properties leased to approximately 315 tenants across 36 states[6,27] Financial Performance & Growth - CHCT has demonstrated consistent total asset growth since its IPO in 2015, with 590% growth[14,15] - The company has consistently increased its dividend each quarter since inception[16,17] - Healthcare spending accounted for 183% of US GDP in 2021 and is projected to reach $72 trillion by 2031, representing 197% of GDP[46] Investment Strategy & Portfolio - CHCT focuses on smaller, off-market or lightly marketed transactions to acquire properties at attractive yields[10,22] - The company is negotiating definitive purchase agreements for six properties with an aggregate expected purchase price of approximately $146 million and expected returns of 91% to 975%[26] - The portfolio is diversified by tenant, geography, healthcare facility type, and industry segment[22] - The top 3 tenants account for 212% of annualized rent[27] - The company maintains a conservative balance sheet, with debt to capitalization at 431% as of Q3 2025[55]

Core Insights - Community Healthcare Trust (CHCT) reported a revenue of $31.09 million for the quarter ended September 2025, reflecting a year-over-year increase of 4.9% and a surprise of +0.96% over the Zacks Consensus Estimate of $30.79 million [1] - The earnings per share (EPS) for the quarter was $0.56, significantly higher than the $0.04 reported in the same quarter last year, with an EPS surprise of +3.7% compared to the consensus estimate of $0.54 [1] Revenue Breakdown - Rental income was reported at $30.81 million, exceeding the three-analyst average estimate of $30.4 million, with a year-over-year change of +5% [4] - Other operating interest, net, was reported at $0.27 million, below the three-analyst average estimate of $0.4 million, showing a year-over-year decline of -10.5% [4] Stock Performance - Over the past month, shares of Community Healthcare Trust have returned -3.5%, contrasting with the Zacks S&P 500 composite's +3.6% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Core Insights - Community Healthcare Trust (CHCT) reported quarterly funds from operations (FFO) of $0.56 per share, exceeding the Zacks Consensus Estimate of $0.54 per share, and showing a slight increase from $0.55 per share a year ago [1] - The company achieved revenues of $31.09 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 0.96% and up from $29.64 million year-over-year [2] - The stock has underperformed, losing approximately 24.5% since the beginning of the year, while the S&P 500 has gained 16.9% [3] Financial Performance - The FFO surprise for the recent quarter was +3.70%, following a previous quarter where the actual FFO was $0.50, missing the estimate of $0.54 by -7.41% [1][2] - Over the last four quarters, the company has surpassed consensus FFO estimates three times and revenue estimates two times [2] Future Outlook - The current consensus FFO estimate for the upcoming quarter is $0.55 on revenues of $31.2 million, and for the current fiscal year, it is $2.14 on revenues of $121.17 million [7] - The estimate revisions trend for Community Healthcare Trust was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The REIT and Equity Trust - Other industry is currently ranked in the top 35% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8]

Financial Performance - Total revenues for Q3 2025 were $31,086,000, an increase of 6.9% compared to Q2 2025[14] - Net income for Q3 2025 was $1,640,000, recovering from a net loss of $12,557,000 in Q2 2025[14] - Net operating income (NOI) for Q3 2025 reached $25,156,000, up from $23,500,000 in Q2 2025, reflecting a 7.1% increase[14] - Adjusted EBITDAre for Q3 2025 was $22,970,000, compared to $20,068,000 in Q2 2025, marking a 14.3% growth[14] - Rental income for Q3 2025 was $30,814,000, an increase of 2.3% from $30,128,000 in Q2 2025[24] - Funds from Operations (FFO) for Q3 2025 were $13,547,000, compared to $6,336,000 in Q2 2025, marking a 113.5% increase[26] - Adjusted Funds from Operations (AFFO) for Q3 2025 were $15,099,000, up from $13,585,000 in Q2 2025, reflecting an 11.1% growth[26] - The company recorded a loss of $888,000 on the sale and impairments of real estate assets in Q3 2025, compared to a gain of $640,000 in Q2 2025[26] Dividends and Shareholder Returns - The company reported a quarterly dividend of $0.4725 per share, resulting in a dividend yield of 12.35%[8] - The company declared a dividend of $0.4725 per common share for Q3 2025, slightly up from $0.4700 in Q2 2025[24] Debt and Capitalization - The debt to total capitalization ratio was 43.1% as of Q3 2025, up from 41.6% in Q2 2025[20] - Total debt as of September 30, 2025, amounted to $531,000 thousand, with a net debt of $530,138 thousand after accounting for deferred financing costs[42] - The leverage ratio stood at 43.8%, well below the required maximum of 60.0%[45] - The company maintains a minimum debt service coverage ratio of 3.2, exceeding the required minimum of 2.0[45] Property and Portfolio Management - The total real estate properties increased to $1,190,151,000 in Q3 2025 from $1,158,312,000 in Q2 2025[20] - The company has a weighted average remaining lease term of 6.7 years across its properties[8] - The portfolio was approximately 90.1% leased as of September 30, 2025, with lease expirations extending from 2025 to 2045[54] - The company acquired two properties in 2025, with a total purchase price of $36,004 thousand and both properties fully leased at 100%[46] Market Capitalization and Share Performance - The market capitalization was $435,613,000 as of Q3 2025, down from $471,766,000 in Q2 2025[20] - The average share price per share decreased from $19.08 in Q1 2025 to $15.66 in Q3 2025, a decline of approximately 17.0%[40] - The weighted average common shares outstanding increased to 27,195,000 in Q3 2025 from 27,011,000 in Q2 2025[26] Key Performance Metrics - The company emphasizes the importance of Adjusted Funds from Operations (AFFO) as a key performance metric, allowing for better comparison across periods and with other real estate companies[70] - The definition of Net Operating Income (NOI) is highlighted as a crucial measure of operating performance, excluding certain non-operational items[78] - The company utilizes the NAREIT definition of Funds from Operations (FFO) to provide a clearer picture of operating performance, excluding gains or losses from real estate sales[72] Future Outlook and Strategy - The company is focused on expanding its portfolio through acquisitions, which is reflected in the Adjusted AFFO metric[65] - Forward-looking statements indicate management's expectations regarding future performance and market conditions, emphasizing the inherent risks and uncertainties[84] Revenue Generation by Property Type - Approximately 51% of property revenues are generated from MSAs with populations over 1,000,000[56] - The annualized rent distribution by property type shows Medical Office Buildings (MOB) at 36.0% and Inpatient Rehabilitation Facilities (IRF) at 21.5%[48] Annualized Rent Details - The average annualized rent across the listed properties is approximately $1,000K[59][60] - The company is focusing on expanding its medical office buildings (MOB) and surgical centers (SC) in key metropolitan areas[59][60]