Financial Data and Key Metrics Changes - The company reported a net income per share of $0.79, down 2.5% from the prior year [23] - NAREIT FFO per share increased by 0.8% to $1.19, while normalized FFO per share rose 3.4% to $1.22 compared to the prior year [23] - FAD for the quarter increased by 8.1% to $56 million [24] - The company raised its normalized FFO guidance per share by $0.09 to $4.80, representing year-over-year growth of 8.1% [7][31] Business Line Data and Key Metrics Changes - SHOP NOI increased by over 29% year-over-year to $3.8 million [8][17] - The annualized SHOP NOI increased by approximately $8.8 million or 57% following the transition of seven properties from leases to SHOP [7] - SHOP revenues for the six months ended June 30 increased by 5.7% to $28.2 million [25] Market Data and Key Metrics Changes - The company has approximately $130 million in unsigned LOIs expected to close in the next few months, including a SHOP deal valued at approximately $74 million [10] - The incremental pipeline is nearly $350 million, focused entirely on senior housing, with a significant number of SHOP deals [10] Company Strategy and Development Direction - The company aims to expand its SHOP portfolio, believing it offers the highest growth potential with the best risk-adjusted returns [8] - The focus is on driving higher occupancy and improving RevPOR growth, which increased by 3.7% compared to 2024 [9][18] - The company is committed to improving governance and board refreshment, responding to shareholder feedback [12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in capitalizing on multiple growth opportunities, with a strong balance sheet supporting funding [12] - The company expects double-digit NOI growth for the SHOP segment in 2026 and has adjusted its full-year NOI growth rate to a range of 13% to 16% [18][31] - Management noted some recent softness in occupancy but remains optimistic about reversing this trend [18][52] Other Important Information - The company completed the acquisition of a senior housing portfolio for $63.5 million and closed on a $28 million senior housing construction loan [27] - The company has a liquidity of approximately $760 million, including cash and revolver capacity [29] Q&A Session Summary Question: What is driving the delay in closing some investments? - Management characterized it as a timing issue, with a robust pipeline still in place [36][37] Question: Are there larger portfolio transactions being evaluated? - Management confirmed that larger deals are still being evaluated, but they are focusing on tangible opportunities under $100 million [39][40] Question: How is the relationship with Discovery being managed? - Management stated that Discovery remains a partner, with ongoing NOI growth expected from the portfolio [47] Question: What caused the recent softness in occupancy? - Management attributed it to changes in local leadership and higher than normal move-outs, expecting a return to normal trends [52][53] Question: What is the status of discussions with NHC? - Discussions are ongoing, with improved coverage reported for NHC [66][67]

Financial Performance - Net income per diluted share increased to $0.79 in Q2 2025 from $0.74 in Q1 2025 and $0.81 in Q2 2024[8] - NAREIT FFO per diluted share increased to $1.19 in Q2 2025 from $1.14 in Q1 2025 and $1.18 in Q2 2024[8] - Normalized FFO per share increased to $1.22 in Q2 2025 from $1.15 in Q1 2025 and $1.18 in Q2 2024[8] - Funds Available for Distribution (FAD) was $55.957 million in Q2 2025, compared to $56.001 million in Q1 2025 and $51.779 million in Q2 2024[8] - The FAD payout ratio was 76.3% in Q2 2025, compared to 74.9% in Q1 2025 and 75.5% in Q2 2024[8] Senior Housing Operating Portfolio (SHOP) - SHOP NOI increased 29.4% year-over-year to $3.8 million in Q2 2025[12, 21] - SHOP NOI margin increased 480 bps year-over-year to 26.9% in Q2 2025[12, 21] - Average SHOP occupancy increased 210 bps year-over-year to 89.1% in Q2 2025[12, 21] - Revenue per Occupied Room (RevPOR) increased 3.7% year-over-year to $3,071 in Q2 2025[12, 21] Investments and Capital Structure - NHI settled approximately 0.8 million shares for proceeds of $58.0 million and sold approximately 1.3 million shares on a forward basis for net proceeds of approximately $93.2 million during the quarter[12] - Total liquidity was approximately $758.7 million as of June 30, 2025[12, 46] - Net Debt to Adjusted EBITDA at an annualized 3.9x is below the low end of NHI's target range of 4.0x – 5.0x[12]

[Executive Summary & Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Highlights) NHI reported strong Q2 2025 results, exceeding expectations, leading to raised full-year guidance and an increased quarterly dividend [CEO Comments](index=1&type=section&id=CEO%20Comments) NHI's CEO reported a strong quarter, exceeding expectations, leading to raised full-year guidance and an increased quarterly dividend, driven by acquisitions and SHOP growth - NHI is raising its **full year guidance** and announced an increase to its **quarterly dividend** due to strong quarterly results and good visibility into the second half of the year[3](index=3&type=chunk) - Outperformance was driven by **acquisitions**, excellent year-over-year **SHOP growth**, and continued collections on **deferral repayments**[4](index=4&type=chunk) - The **balance sheet is strong** with **net debt to adjusted EBITDA below the target range** and over **$750 million in liquidity and capital resources**[4](index=4&type=chunk) - **Seven properties** were recently transitioned to the **SHOP portfolio**, with **significant organic growth opportunities**, and **additional SHOP acquisitions** are expected[5](index=5&type=chunk) [Financial Performance Highlights (Q2 2025)](index=1&type=section&id=Financial%20Performance%20Highlights%20%28Q2%202025%29) NHI reported a slight decrease in diluted Net Income per common share for Q2 2025, but increases in FFO, Normalized FFO, and Normalized FAD, influenced by specific expenses and gains Key Financial Metrics (per diluted common share) | Metric (per diluted common share) | Q2 2025 | Q2 2024 | YoY Change | YoY Change (%) | | :-------------------------------- | :------ | :------ | :--------- | :------------- | | Net income attributable to common stockholders | $0.79 | $0.81 | ($0.02) | -2.47% | | NAREIT FFO | $1.19 | $1.18 | $0.01 | 0.85% | | Normalized FFO | $1.22 | $1.18 | $0.04 | 3.39% | | Normalized FAD (in millions) | $56.0 | $51.8 | $4.2 | 8.11% | - Net income attributable to common stockholders for Q2 2025 included approximately **$1.3 million** in proxy contest and related expenses[6](index=6&type=chunk) - Net income, NAREIT FFO, and Normalized FFO for Q2 2025 included approximately **$1.5 million in gains** from equity method investment and **$1.4 million in net reductions** of credit loss expense[8](index=8&type=chunk) - Normalized FAD for Q2 2025 included approximately **$1.9 million in repayment** of previously deferred rent and related interest[8](index=8&type=chunk) [Financial Results and Guidance](index=3&type=section&id=Financial%20Results%20and%20Guidance) NHI's Q2 2025 saw increased rental income and SHOP NOI, alongside rising expenses, leading to updated full-year guidance with raised Normalized FFO and FAD [Second Quarter 2025 Financial Performance](index=3&type=section&id=Second%20Quarter%202025%20Financial%20Performance) NHI's second quarter 2025 financial performance saw a 6.9% increase in rental income and 29.4% in SHOP segment NOI, alongside rising legal and administrative expenses Second Quarter 2025 Financial Performance Metrics | Metric | Q2 2025 (approx.) | Q2 2024 (approx.) | YoY Change (approx.) | YoY Change (%) (approx.) | | :-------------------------------- | :---------------- | :---------------- | :------------------- | :----------------------- | | Rental income | $70.3 million | $65.8 million | $4.5 million | 6.9% | | Interest income and other | $6.2 million | $5.8 million | $0.4 million | 6.1% | | SHOP segment NOI | $3.8 million | $2.9 million | $0.9 million | 29.4% | | Legal expenses | $1.1 million | $0.2 million | $0.9 million | 450.0% | | General and administrative costs | $6.1 million | $4.9 million | $1.3 million | 26.5% | | Loan and realty (gains) losses, net | $1.4 million gain | $1.1 million loss | $2.5 million swing | N/A | | Gains on sales of real estate properties, net | $0.1 million gain | $1.5 million gain | ($1.4 million) | -93.3% | - Rental income increased primarily due to **net new investments** funded since June 2024[8](index=8&type=chunk) - SHOP segment NOI increase was primarily due to **increased revenue** from **higher occupancy levels** and **Revenue per Occupied Room (RevPOR)**[8](index=8&type=chunk) - Legal expenses increased primarily from **costs incurred** in connection with the **transition of Discovery properties** into the SHOP segment[8](index=8&type=chunk) [Updated Full Year 2025 Guidance](index=7&type=section&id=Updated%20Full%20Year%202025%20Guidance) NHI updated its full-year 2025 guidance, raising Normalized FFO and Normalized FAD per diluted common share, while slightly lowering NAREIT FFO, based on new investment and SHOP growth assumptions Updated Full Year Guidance (per diluted common share) | Metric (per diluted common share) | Previous Guidance Range | Updated Guidance Range | | :-------------------------------- | :---------------------- | :--------------------- | | NAREIT FFO | $4.64 - $4.70 | $4.46 - $4.50 | | Normalized FFO | $4.68 - $4.73 | $4.78 - $4.82 | | Normalized FAD (in millions) | $223.8 - $226.4 | $227.9 - $229.8 | - Guidance assumes **$105 million in unidentified new investments** at an initial average yield of **8.1%**[20](index=20&type=chunk) - Same-store SHOP NOI growth is projected in a range of **13% - 16%** year over year[20](index=20&type=chunk) - SHOP conversion NOI is expected to be **$3.6 million - $3.7 million**[20](index=20&type=chunk) [Portfolio and Capital Activity](index=4&type=section&id=Portfolio%20and%20Capital%20Activity) NHI transitioned Discovery properties to SHOP, made new investments, received loan repayments, maintained a strong balance sheet, and utilized its ATM equity program [Discovery Transition](index=4&type=section&id=Discovery%20Transition) NHI terminated its triple-net master lease with Discovery Senior Living for six facilities, transitioning operations to a new independent manager under a RIDEA-compliant SHOP structure - Effective **August 1, 2025**, NHI terminated its **triple-net master lease** with Discovery Senior Living for **five assisted living and memory care facilities and one independent living facility**[9](index=9&type=chunk) - Operations of these **six facilities** were transitioned to a **new independent manager**, and the properties (aggregate net carrying value of approximately **$125.7 million**) were reclassified into the **SHOP segment**[9](index=9&type=chunk) - NHI expects to record an aggregate **$8.8 million reduction** in rental income in Q3 2025, including **$12.1 million in write-offs** related to straight-line rent receivable[10](index=10&type=chunk) [Portfolio Activity & Pipeline](index=4&type=section&id=Portfolio%20Activity%20%26%20Pipeline) NHI acquired six memory care communities for $63.5 million, committed to a $28.0 million construction loan, received a $2.5 million loan repayment, and has a robust investment pipeline - NHI acquired a portfolio of **six memory care communities** in Nebraska for **$63.5 million**, leased under a **15-year triple-net master lease** with an initial rate of **8.0%** and **2.0% annual escalators**[14](index=14&type=chunk) - NHI agreed to fund up to **$28.0 million on a construction loan** for an **84-unit assisted living and memory care facility** in Wyoming, Michigan, with an annual interest rate of **9.0%**[14](index=14&type=chunk) - Received **$2.5 million in partial repayment** on a non-performing mezzanine loan, resulting in a **$1.3 million reduction** to the credit loss reserve and credit loss expense[14](index=14&type=chunk) - NHI has approximately **$129.9 million of Board-approved investment opportunities** (LOIs) with an average initial yield of **8.0%**, primarily **sale-leaseback and loans with purchase options** in senior housing[14](index=14&type=chunk) - The company is evaluating an additional pipeline of approximately **$343.0 million in investments**, including SHOP, sale-leaseback, and loans with purchase options for senior housing assets[14](index=14&type=chunk) [Balance Sheet & Liquidity](index=4&type=section&id=Balance%20Sheet%20%26%20Liquidity) As of June 30, 2025, NHI maintained a strong financial profile with $1.1 billion in net debt, $378.0 million outstanding on its credit facility, and a net debt to adjusted EBITDA ratio of 3.9x - As of June 30, 2025, the Company had **$1.1 billion in net debt**, including **$378.0 million outstanding** on its **$700.0 million revolving credit facility**[12](index=12&type=chunk) - During Q2 2025, NHI repaid all remaining Fannie Mae **outstanding principal and accrued interest of $75.7 million**[12](index=12&type=chunk) - The Company has **$315.8 million available** under its at-the-market equity program as of June 30, 2025[12](index=12&type=chunk) - NHI's net debt to adjusted EBITDA ratio is **3.9x**, which is below the Company's target range of **4.0x – 5.0x**[13](index=13&type=chunk) - NHI maintains **investment grade credit ratings** from Moody's, S&P Global, and Fitch Ratings[13](index=13&type=chunk) [At the Market (ATM) Equity Program](index=6&type=section&id=At%20the%20Market%20%28ATM%29%20Equity%20Program) In Q2 2025, NHI sold approximately 1.3 million shares for $91.8 million via ATM forward sales agreements and settled 0.8 million shares for $58.0 million from previous agreements - In Q2 2025, NHI sold **approximately 1.3 million shares** on a forward basis at a weighted average price of **$71.41 per common share**, totaling approximately **$91.8 million**, through ATM forward sales agreements[15](index=15&type=chunk) - In Q2 2025, the Company settled **0.8 million shares** of common stock from previous ATM forward sales agreements for proceeds of **$58.0 million** at a weighted average forward price of **$74.71 per common share**[16](index=16&type=chunk) - As of June 30, 2025, **1.4 million shares** of common stock remained available under ATM forward sales agreements, representing aggregate net proceeds of **$102.3 million**[17](index=17&type=chunk) [Company Information](index=8&type=section&id=Company%20Information) National Health Investors (NHI) is a NYSE-listed REIT specializing in senior housing and medical investments, with an upcoming Q2 earnings conference call [About National Health Investors](index=8&type=section&id=About%20National%20Health%20Investors) National Health Investors, Inc. (NHI) is a NYSE-listed REIT specializing in various financing and ownership structures for need-driven and discretionary senior housing and medical investments - National Health Investors, Inc. (NYSE: NHI) was incorporated in **1991** and is a **real estate investment trust (REIT)**[22](index=22&type=chunk) - NHI specializes in **sale, leasebacks, joint-ventures, senior housing operating partnerships, and mortgage and mezzanine financing**[22](index=22&type=chunk) - The portfolio consists of **independent living, assisted living and memory care communities, entrance-fee retirement communities, skilled nursing facilities and specialty hospitals**[22](index=22&type=chunk) [Investor Relations](index=8&type=section&id=Investor%20Relations) NHI will host a conference call on Thursday, August 7, 2025, at 10:00 a.m. ET to discuss its second quarter results, with a live webcast available on its website - NHI will host a conference call on **Thursday, August 7, 2025, at 10:00 a.m. ET** to discuss second quarter results[21](index=21&type=chunk) - The live broadcast of the conference call will be available online at **www.nhireit.com**, with a replay available for **one year**[21](index=21&type=chunk) [Non-GAAP Financial Measures](index=9&type=section&id=Non-GAAP%20Financial%20Measures) This section reconciles GAAP net income to non-GAAP measures like FFO, Normalized FFO, FAD, and NOI, providing definitions and usage caveats [Reconciliation of FFO, Normalized FFO, and Normalized FAD](index=9&type=section&id=Reconciliation%20of%20FFO,%20Normalized%20FFO,%20and%20Normalized%20FAD) This section provides a detailed reconciliation of Net Income attributable to common stockholders to NAREIT FFO, Normalized FFO, and Normalized FAD for Q2 2025 and 2024 FFO, Normalized FFO, and Normalized FAD Reconciliation (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income attributable to common stockholders | $36,938 | $35,227 | $71,051 | $66,142 | | NAREIT FFO attributable to common stockholders | $55,891 | $51,229 | $108,241 | $98,942 | | Normalized FFO attributable to common stockholders | $57,199 | $51,229 | $109,813 | $99,728 | | Normalized FAD attributable to common stockholders | $55,957 | $51,779 | $111,958 | $102,758 | | NAREIT FFO per diluted common share | $1.19 | $1.18 | $2.34 | $2.27 | | Normalized FFO per diluted common share | $1.22 | $1.18 | $2.37 | $2.29 | [Reconciliation of NOI](index=10&type=section&id=Reconciliation%20of%20NOI) This section reconciles Net Operating Income (NOI) to Net Income for Q2 2025 and 2024, breaking down NOI by segment Net Operating Income (NOI) Reconciliation (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income | $36,689 | $34,952 | $70,506 | $65,610 | | Total NOI | $77,352 | $71,731 | $152,908 | $140,196 | | NOI by segment: | | | | | | Real Estate Investments | $73,496 | $68,702 | $145,924 | $134,097 | | SHOP | $3,821 | $2,953 | $6,907 | $5,894 | | Non-segment / corporate | $35 | $76 | $77 | $205 | [Notes on Non-GAAP Financial Measures](index=11&type=section&id=Notes%20on%20Non-GAAP%20Financial%20Measures) This section defines FFO, Normalized FFO, Normalized FAD, and NOI, emphasizing they are supplemental measures not comparable to GAAP alternatives - **FFO**, as defined by **NAREIT**, is net income attributable to common stockholders, excluding gains/losses on sales of real estate, impairments, and real estate depreciation/amortization[27](index=27&type=chunk) - **Normalized FFO** excludes from **FFO** certain infrequent or unpredictable items to improve comparability between periods[27](index=27&type=chunk) - **Normalized FAD** further adjusts **Normalized FFO** by excluding straight-line rent revenue, amortization of debt issuance costs, non-cash share-based compensation, and certain non-cash items related to equity method investments[29](index=29&type=chunk)[30](index=30&type=chunk) - **NOI** is defined as total revenues less tenant reimbursements and property operating expenses, used to evaluate property-level operating performance on an unleveraged basis[31](index=31&type=chunk) - These **supplemental performance measures** may not be comparable to similarly titled measures used by other REITs and should not be considered an alternative to **GAAP net income or net cash flows from operating activities**[26](index=26&type=chunk) [Consolidated Financial Statements](index=12&type=section&id=Consolidated%20Financial%20Statements) This section presents NHI's condensed consolidated statements of income and selected balance sheet data for Q2 2025 and prior periods [Condensed Consolidated Statements of Income](index=12&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) This section presents the condensed consolidated statements of income for Q2 2025 and 2024, detailing revenues, expenses, and net income attributable to common stockholders Condensed Consolidated Statements of Income (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total revenues | $90,662 | $84,970 | $179,958 | $166,482 | | Total expenses | $55,607 | $51,771 | $111,615 | $102,891 | | Net income | $36,689 | $34,952 | $70,506 | $65,610 | | Net income attributable to common stockholders | $36,938 | $35,227 | $71,051 | $66,142 | | Earnings per share - diluted | $0.79 | $0.81 | $1.53 | $1.52 | [Selected Condensed Consolidated Balance Sheet Data](index=13&type=section&id=Selected%20Condensed%20Consolidated%20Balance%20Sheet%20Data) This section provides selected condensed consolidated balance sheet data as of June 30, 2025, and December 31, 2024, showing key asset and liability figures Selected Condensed Consolidated Balance Sheet Data (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :-------------- | :---------------- | | Real estate properties, net | $2,316,452 | $2,211,253 | | Mortgage and other notes receivable, net | $252,939 | $268,926 | | Cash and cash equivalents | $18,640 | $24,289 | | Straight-line rent receivable | $89,097 | $87,150 | | Debt, net | $1,118,835 | $1,146,041 | | National Health Investors, Inc. stockholders' equity | $1,479,645 | $1,366,475 | [Legal Disclaimer](index=14&type=section&id=Legal%20Disclaimer) This section provides a legal disclaimer regarding forward-looking statements, outlining inherent risks and uncertainties that may affect actual results [Forward-Looking Statements](index=14&type=section&id=Forward-Looking%20Statements) This section serves as a legal disclaimer, identifying forward-looking statements and cautioning investors about inherent risks and uncertainties that could cause actual results to differ materially - The press release includes forward-looking statements regarding future financial position, results of operations, cash flows, business strategy, acquisitions, and growth opportunities[36](index=36&type=chunk) - Forward-looking statements involve known and unknown risks and uncertainties that may cause actual results to differ materially from projections[36](index=36&type=chunk) - Key risks include the operating success of tenants, potential bankruptcy, concentration of portfolio, governmental regulations, liability claims, success of property development, illiquidity of real estate, inflation, interest rates, and the ability to qualify as a REIT[36](index=36&type=chunk) - The Company assumes no obligation to update any forward-looking statements, and investors are urged to review disclosures in Form 10-K and Form 10-Q[36](index=36&type=chunk)

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of income, cash flows, and equity, along with detailed notes explaining the company's organization, accounting policies, investment activities, debt, equity, and segment performance [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheets (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :---------------------------------- | :------------ | :---------------- | | Total assets | $2,695,959 | $2,614,371 | | Total liabilities | $1,198,665 | $1,229,194 | | Total equity | $1,487,973 | $1,375,387 | | Real estate properties, net | $2,316,452 | $2,211,253 | | Debt, net | $1,118,835 | $1,146,041 | [Condensed Consolidated Statements of Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Condensed Consolidated Statements of Income (in thousands, except per share amounts) **Three Months Ended June 30,** | Metric | 2025 | 2024 | Change ($) | Change (%) | | :---------------------------------- | :----- | :----- | :--------- | :--------- | | Total Revenues | $90,662 | $84,970 | $5,692 | 6.7% | | Total Expenses | $55,607 | $51,771 | $3,836 | 7.4% | | Net Income | $36,689 | $34,952 | $1,737 | 5.0% | | Net Income Attributable to Common Stockholders | $36,938 | $35,227 | $1,711 | 4.9% | | Diluted EPS | $0.79 | $0.81 | $(0.02) | (2.5%) | **Six Months Ended June 30,** | Metric | 2025 | 2024 | Change ($) | Change (%) | | :---------------------------------- | :----- | :----- | :--------- | :--------- | | Total Revenues | $179,958 | $166,482 | $13,476 | 8.1% | | Total Expenses | $111,615 | $102,891 | $8,724 | 8.5% | | Net Income | $70,506 | $65,610 | $4,896 | 7.5% | | Net Income Attributable to Common Stockholders | $71,051 | $66,142 | $4,909 | 7.4% | | Diluted EPS | $1.53 | $1.52 | $0.01 | 0.7% | [Condensed Consolidated Statements of Cash Flows](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Condensed Consolidated Statements of Cash Flows (in thousands) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change ($) | Change (%) | | :---------------------------------- | :----------------------------- | :----------------------------- | :--------- | :--------- | | Net cash provided by operating activities | $106,295 | $101,566 | $4,729 | 4.7% | | Net cash used in investing activities | $(123,785) | $(29,544) | $(94,241) | NM | | Net cash provided by (used in) financing activities | $10,311 | $(79,736) | $90,047 | NM | | Decrease in cash, cash equivalents and restricted cash | $(7,179) | $(7,714) | $535 | (6.9%) | - Investing activities in 2025 included **$130,984 thousand** in acquisitions of real estate properties, a significant increase from **$9,866 thousand** in 2024[14](index=14&type=chunk) - Financing activities in 2025 included **$123,484 thousand** from issuance of common shares, net, compared to none in 2024[14](index=14&type=chunk) [Condensed Consolidated Statements of Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Equity) - Total equity increased from **$1,375,387 thousand** at December 31, 2024, to **$1,487,973 thousand** at June 30, 2025[18](index=18&type=chunk) - Issuance of common shares, net, contributed **$65,483 thousand** in Q1 2025 and **$58,001 thousand** in Q2 2025[18](index=18&type=chunk) - Dividends declared were **$0.90 per common share** for both quarters in 2025 and 2024[18](index=18&type=chunk)[20](index=20&type=chunk) [Note 1. Organization and Nature of the Business](index=9&type=section&id=Note%201.%20Organization%20and%20Nature%20of%20the%20Business) - NHI is a self-managed REIT specializing in sale-leaseback, joint venture, and financing for senior housing and medical facility investments[21](index=21&type=chunk) - The Real Estate Investments segment has **$2.7 billion** in 181 properties (115 senior housing, 65 SNFs, 1 HOSP) across 32 states, primarily under triple-net leases, and **$270.4 million** in mortgages and other notes receivable[22](index=22&type=chunk) - The SHOP segment comprises two ventures owning operations of 15 ILFs (1,732 units) in eight states, managed by third-party property managers[23](index=23&type=chunk) [Note 2. Basis of Presentation and Significant Accounting Policies](index=9&type=section&id=Note%202.%20Basis%20of%20Presentation%20and%20Significant%20Accounting%20Policies) - Financial statements are unaudited and prepared in accordance with U.S. GAAP for interim periods[24](index=24&type=chunk) - The company consolidates wholly-owned subsidiaries, joint ventures, and Variable Interest Entities (VIEs) where it is deemed the primary beneficiary, such as the Merrill and Discovery SHOP ventures and certain real estate partnerships[25](index=25&type=chunk)[26](index=26&type=chunk)[27](index=27&type=chunk) - NHI intends to qualify as a REIT, generally exempt from U.S. federal income tax, with Taxable REIT Subsidiaries (TRSs) subject to income taxes[42](index=42&type=chunk)[43](index=43&type=chunk) - Recent accounting pronouncements include ASU 2023-09 (Income Tax Disclosures, effective after Dec 15, 2024), ASU 2024-03 (Income Statement Expenses Disaggregation, effective after Dec 15, 2026), and ASU 2025-05 (Credit Losses for Accounts Receivable, effective after Dec 15, 2025)[49](index=49&type=chunk)[50](index=50&type=chunk)[51](index=51&type=chunk) [Note 3. Investment Activity](index=14&type=section&id=Note%203.%20Investment%20Activity) Real Estate Acquisitions (Six Months Ended June 30, 2025, in thousands) | Operator | Period | Properties | Asset Class | Total Acquisition Price | | :---------------------- | :------- | :--------- | :---------- | :---------------------- | | Generations, LLC | Q1 2025 | 1 | SLC | $21,200 | | Mainstay Healthcare | Q1 2025 | 1 | ALF | $8,600 | | Juniper Communities, LLC | Q1 2025 | 1 | ALF | $46,284 | | Agemark Senior Living | Q2 2025 | 6 | ALF | $63,500 | | **Total** | | | | **$139,584** | - Effective August 1, 2025, a portfolio of six senior housing properties with Discovery was transitioned from Real Estate Investments to the SHOP segment, involving a **$9.0 million** write-off of straight-line rent receivable[55](index=55&type=chunk)[176](index=176&type=chunk) - Also effective August 1, 2025, an ILF in Tulsa, Oklahoma, was transitioned from Real Estate Investments to the existing Discovery SHOP venture, with a **$3.2 million** write-off of straight-line rent receivable[57](index=57&type=chunk)[178](index=178&type=chunk) Future Minimum Lease Payments (as of June 30, 2025, in thousands) | Period | Amount | | :---------------- | :------- | | Remainder of 2025 | $131,619 | | 2026 | $269,241 | | 2027 | $220,143 | | 2028 | $215,015 | | 2029 | $206,183 | | 2030 | $197,456 | | Thereafter | $779,528 | | **Total** | **$2,019,185** | [Note 4. Mortgage and Other Notes Receivable](index=19&type=section&id=Note%204.%20Mortgage%20and%20Other%20Notes%20Receivable) - Mortgage notes receivable totaled **$169.4 million** and other notes receivable totaled **$101.0 million** as of June 30, 2025, net of credit loss reserves of **$17.5 million**[75](index=75&type=chunk) - As of June 30, 2025, two loans totaling **$13.3 million** were designated as non-performing notes (SLM mezzanine loan and Bickford unsecured loan)[76](index=76&type=chunk) - In February 2025, an assisted living facility in Oviedo, Florida, was acquired via deed in lieu of foreclosure for a **$10.0 million** non-performing mortgage from SLM, recorded at an estimated fair value of **$8.6 million**[78](index=78&type=chunk)[191](index=191&type=chunk) Credit Loss Reserves (Six Months Ended June 30, 2025, in thousands) | Metric | Amount | | :----------------------------- | :------- | | Balance at December 31, 2024 | $20,249 | | Provision for expected credit losses | $(1,384) | | Write-offs | $(1,400) | | **Balance at June 30, 2025** | **$17,465** | [Note 5. Senior Housing Operating Portfolio](index=22&type=section&id=Note%205.%20Senior%20Housing%20Operating%20Portfolio) - The SHOP segment consists of two consolidated ventures owning operations of 15 ILFs, structured to comply with REIT requirements using TRSs[89](index=89&type=chunk) - The Merrill Managed Portfolio (six ILFs) has Merrill owning a **20%** common equity interest, classified as redeemable noncontrolling interest (mezzanine equity) due to put rights[90](index=90&type=chunk)[91](index=91&type=chunk) - The Discovery Managed Portfolio (nine ILFs) has the Discovery member owning a **2%** common equity interest, classified as equity[92](index=92&type=chunk) - Effective August 1, 2025, six properties (five ALFs and one ILF) transitioned from Real Estate Investments to the newly formed Sinceri Managed Portfolio under management agreements[95](index=95&type=chunk) [Note 6. Equity Method Investment](index=23&type=section&id=Note%206.%20Equity%20Method%20Investment) - NHI holds a **25%** equity interest in Timber Ridge OpCo, LLC, a CCRC operating company, accounted for under the equity method[96](index=96&type=chunk) - Recognized gains from equity method investment of **$1.5 million** for the three months ended June 30, 2025, and **$1.9 million** for the six months ended June 30, 2025, significantly up from **$0.2 million** and **$0.4 million** in the prior year periods, respectively[97](index=97&type=chunk) - Cumulative unrecognized losses for this investment totaled **$15.4 million** through June 30, 2025[97](index=97&type=chunk) [Note 7. Other Assets](index=24&type=section&id=Note%207.%20Other%20Assets) Other Assets, Net (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :---------------------------------- | :------------ | :---------------- | | Total other assets, net | $18,831 | $22,753 | | Restricted cash | $683 | $2,213 | - The company recognized **$1.2 million** of transaction costs related to an acquisition in its SHOP segment that did not materialize in Q1 2025[99](index=99&type=chunk) [Note 8. Debt](index=24&type=section&id=Note%208.%20Debt) - Total debt, net, decreased to **$1,118,835 thousand** as of June 30, 2025, from **$1,146,041 thousand** at December 31, 2024[100](index=100&type=chunk) Aggregate Principal Maturities of Outstanding Debt (as of June 30, 2025, in thousands) | Period | Amount | | :---------------- | :------- | | Remainder of 2025 | $250,000 | | 2026 | — | | 2027 | $100,000 | | 2028 | $378,000 | | 2029 | — | | 2030 | — | | Thereafter | $400,000 | | **Total** | **$1,128,000** | - The **$700.0 million** unsecured revolving credit facility's maturity date was extended to October 2028[101](index=101&type=chunk) - All outstanding Fannie Mae term loans, totaling **$75.7 million**, were repaid in the second quarter of 2025[108](index=108&type=chunk)[219](index=219&type=chunk) [Note 9. Commitments, Contingencies and Uncertainties](index=26&type=section&id=Note%209.%20Commitments,%20Contingencies%20and%20Uncertainties) - Total working capital, mortgage, construction, revolving credit, and mezzanine loan commitments amounted to **$179.3 million**, with **$106.6 million** funded as of June 30, 2025[111](index=111&type=chunk) - Aggregate development commitments totaled **$23.4 million**, with **$7.5 million** funded[112](index=112&type=chunk) - Aggregate contingent lease inducement commitments were **$12.9 million**[112](index=112&type=chunk) - The credit loss liability for unfunded loan commitments was **$0.1 million** as of June 30, 2025[114](index=114&type=chunk)[240](index=240&type=chunk) [Note 10. Redeemable Noncontrolling Interest](index=27&type=section&id=Note%2010.%20Redeemable%20Noncontrolling%20Interest) - Merrill's noncontrolling interest in the SHOP venture is classified as redeemable noncontrolling interest (mezzanine equity) due to put rights, though a redemption event is not currently probable[116](index=116&type=chunk) - The balance of redeemable noncontrolling interest was **$9,321 thousand** as of June 30, 2025[117](index=117&type=chunk) [Note 11. Equity and Dividends](index=27&type=section&id=Note%2011.%20Equity%20and%20Dividends) - The remaining **1.0 million shares** from the August 2024 forward equity sale agreement were settled in Q1 2025 for **$65.5 million**[118](index=118&type=chunk)[230](index=230&type=chunk) - Under the ATM equity program, **0.2 million shares** were sold on a forward basis in March 2025 for **$15.5 million**, and **1.3 million shares** were sold on a forward basis in June 2025 for **$91.8 million**[120](index=120&type=chunk)[122](index=122&type=chunk)[233](index=233&type=chunk)[235](index=235&type=chunk) - As of June 30, 2025, **1.4 million shares** remain available under ATM forward sales agreements, representing **$102.3 million** in net proceeds[123](index=123&type=chunk)[236](index=236&type=chunk) - A quarterly dividend of **$0.90 per common share** was declared for Q1 and Q2 2025 and 2024, with a **$0.92 per common share** dividend declared on August 5, 2025[125](index=125&type=chunk)[229](index=229&type=chunk) [Note 12. Share-Based Compensation](index=28&type=section&id=Note%2012.%20Share-Based%20Compensation) - **29,500 restricted stock awards** were issued in February 2025, vesting over five years[127](index=127&type=chunk) - Options to purchase **567,000 shares** of common stock were granted in Q2 2025[128](index=128&type=chunk) Share-Based Compensation Expense (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Restricted stock awards | $351 | $186 | $575 | $344 | | Stock options | $720 | $501 | $3,054 | $2,498 | | **Total share-based compensation expense** | **$1,071** | **$687** | **$3,629** | **$2,842** | - Unrecognized share-based compensation expense totaled **$5.1 million** as of June 30, 2025[131](index=131&type=chunk) [Note 13. Earnings Per Share](index=30&type=section&id=Note%2013.%20Earnings%20Per%20Share) Earnings Per Share (except share amounts) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Basic EPS | $0.79 | $0.81 | $1.54 | $1.52 | | Diluted EPS | $0.79 | $0.81 | $1.53 | $1.52 | | Weighted average common shares outstanding - diluted | 46,822,465 | 43,563,654 | 46,350,498 | 43,494,103 | [Note 14. Fair Value of Financial Instruments](index=31&type=section&id=Note%2014.%20Fair%20Value%20of%20Financial%20Instruments) Fair Values of Financial Instruments (as of June 30, 2025, in thousands) | Instrument | Carrying Amount | Fair Value | Level | | :---------------------------------- | :-------------- | :--------- | :---- | | Variable rate debt | $573,258 | $578,000 | 2 | | Fixed rate debt | $545,577 | $490,511 | 2 | | Mortgage and other notes receivable, net | $252,939 | $248,610 | 3 | [Note 15. Segment Reporting](index=31&type=section&id=Note%2015.%20Segment%20Reporting) Total Revenues by Segment (Six Months Ended June 30, 2025, in thousands) | Segment | Amount | | :-------------------------- | :------- | | Real Estate Investments | $151,725 | | SHOP | $28,156 | | Non-Segment / Corporate | $77 | | **Total** | **$179,958** | Net Operating Income (NOI) by Segment (Six Months Ended June 30, 2025, in thousands) | Segment | Amount | | :-------------------------- | :------- | | Real Estate Investments | $145,924 | | SHOP | $6,907 | | Non-Segment / Corporate | $77 | | **Total** | **$152,908** | - Capital expenditures for the Real Estate Investments segment increased to **$141.8 million** in 2025 from **$35.0 million** in 2024, while SHOP segment capital expenditures decreased to **$2.5 million** from **$3.7 million**[138](index=138&type=chunk) [Note 16. Variable Interest Entities](index=35&type=section&id=Note%2016.%20Variable%20Interest%20Entities) - Consolidated SHOP ventures had aggregate assets of **$258.5 million** (real estate properties, net) and liabilities of **$4.4 million** as of June 30, 2025[148](index=148&type=chunk) - Consolidated real estate partnerships had aggregate assets of **$240.3 million** (real estate properties, net) as of June 30, 2025[149](index=149&type=chunk) Unconsolidated Variable Interest Entities (Maximum Exposure to Loss as of June 30, 2025, in thousands) | Name | Carrying Amounts to Loss | Maximum Exposure | | :------------------------------ | :----------------------- | :--------------- | | Senior Living | $86,446 | $87,446 | | Senior Living Management | $12,000 | $12,000 | | Bickford | $16,127 | $28,150 | | Encore Senior Living | $35,558 | $35,625 | | Timber Ridge OpCo | $(2,756) | $2,244 | | Senior Living Hospitality Group | $13,026 | $14,050 | | Montecito Medical Real Estate | $9,391 | $39,002 | | Vizion Health | $19,888 | $20,309 | | Navion Senior Solutions | $7,636 | $9,786 | | Kindcare Senior Living | $801 | $801 | | Mainstay Healthcare | $9,062 | $9,062 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.](index=37&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) This section provides management's perspective on the company's financial performance, liquidity, and capital resources, including an executive overview, detailed analysis of investment activities, tenant performance, and key financial metrics like FFO, FAD, and Adjusted EBITDA [Cautionary Statement Regarding Forward Looking Statements](index=37&type=section&id=Cautionary%20Statement%20Regarding%20Forward%20Looking%20Statements) - The report contains forward-looking statements that involve known and unknown risks and uncertainties, which could cause actual results to differ materially from projections[153](index=153&type=chunk)[154](index=154&type=chunk) - Key risks include dependence on operator success, potential for bankruptcy, tenant concentration, regulatory changes, increased liability claims, illiquidity of real estate investments, and the ability to raise capital[154](index=154&type=chunk)[155](index=155&type=chunk) [Executive Overview](index=40&type=section&id=Executive%20Overview) - NHI is a self-managed REIT specializing in senior housing and medical facility investments, operating through two segments: Real Estate Investments and Senior Housing Operating Portfolio (SHOP)[158](index=158&type=chunk) - The Real Estate Investments segment includes 197 facilities (125 senior housing, 70 SNFs, 2 HOSPs) with an aggregate gross carrying value of **$2.7 billion**, and **$270.4 million** in mortgage and other notes receivable[159](index=159&type=chunk) - The SHOP segment comprises two consolidated ventures owning operations of 15 ILFs with 1,732 units, managed by third-party property managers[164](index=164&type=chunk) - Senior housing properties are categorized as need-driven (ALFs, SLCs) or discretionary (ILFs, EFCs), while medical facilities (SNFs, HOSPs) primarily receive payments from Medicare, Medicaid, and health insurance[160](index=160&type=chunk)[161](index=161&type=chunk)[162](index=162&type=chunk)[163](index=163&type=chunk) [Recent Investments Activity](index=43&type=section&id=Recent%20Investments%20Activity) Real Estate Acquisitions (Six Months Ended June 30, 2025, in thousands) | Operator | Period | Properties | Asset Class | Total Acquisition Price | | :---------------------- | :------- | :--------- | :---------- | :---------------------- | | Generations, LLC | Q1 2025 | 1 | SLC | $21,200 | | Mainstay Healthcare | Q1 2025 | 1 | ALF | $8,600 | | Juniper Communities, LLC | Q1 2025 | 1 | ALF | $46,284 | | Agemark Senior Living | Q2 2025 | 6 | ALF | $63,500 | | **Total** | | | | **$139,584** | - In March 2025, a mezzanine loan agreement with Vizion Health affiliates was amended, providing an additional **$5.4 million** in funding, with an outstanding principal balance of **$17.7 million** as of June 30, 2025[173](index=173&type=chunk) - In May 2025, the company entered into a construction loan agreement to fund up to **$28.0 million** for the development of an 84-unit assisted living and memory care facility[174](index=174&type=chunk) - Effective August 1, 2025, a portfolio of six senior housing properties and an ILF in Tulsa, Oklahoma, were transitioned from the Real Estate Investments segment to the SHOP segment, resulting in write-offs of straight-line rent receivables totaling **$12.2 million**[176](index=176&type=chunk)[178](index=178&type=chunk) [Tenant Leases](index=44&type=section&id=Tenant%20Leases) - Tenant leases are typically structured as triple-net leases with initial terms of **10 to 15 years**, including annual rent escalators[179](index=179&type=chunk) - One senior living community is subject to a purchase and sale agreement for approximately **$39.0 million**, expiring in October 2025[180](index=180&type=chunk) - Tenants hold purchase options on four properties with an aggregate net carrying value of **$76.0 million**, with exercise dates between 2028 and 2031[181](index=181&type=chunk) [Tenant Concentrations](index=45&type=section&id=Tenant%20Concentrations) Top Tenant Concentrations (% of Total Revenues, Six Months Ended June 30, 2025) | Tenant | % of Total Revenues | | :-------------------------- | :------------------ | | Senior Living Communities, LLC | 15% | | Bickford Senior Living | 12% | | National HealthCare Corporation (NHC) | 11% | | All others, net | 43% | | Escrow funds received from tenants | 3% | | Resident fees and services | 16% | - Bickford Senior Living has been on a cash basis of revenue recognition since Q2 2022 due to financial condition concerns[185](index=185&type=chunk) - The master lease for NHC, covering three ILFs and 32 SNFs, expires on December 31, 2026, with two five-year extension options[186](index=186&type=chunk) - Lease payments received from cash basis tenants decreased to **$22,939 thousand** for the six months ended June 30, 2025, from **$26,854 thousand** in the prior year[188](index=188&type=chunk) [Occupancy](index=46&type=section&id=Occupancy) Average Portfolio Occupancy (Q2 2025 vs. Q2 2024) | Segment | Q2 2025 | Q2 2024 | | :-------------- | :------ | :------ | | Senior Living | 83.9% | 83.1% | | Bickford | 85.2% | 85.4% | | SHOP | 89.1% | 87.0% | [Tenant Monitoring](index=47&type=section&id=Tenant%20Monitoring) - The company uses EBITDARM (Earnings Before Interest, Taxes, Depreciation, Amortization, Rent, and Management Fees) as a primary performance measure for tenants to assess their ability to meet obligations[194](index=194&type=chunk) Real Estate Investments Portfolio Coverage (Trailing 12-month, Q1 2025 vs. Q1 2024) | Property Type | Q1 2025 Coverage | Q1 2024 Coverage | Q1 2025 Occupancy | Q1 2024 Occupancy | | :-------------------- | :--------------- | :--------------- | :---------------- | :---------------- | | Senior Housing | 1.54x | 1.46x | 86.3% | 84.5% | | Skilled Nursing Facilities (SNF) | 3.04x | 2.97x | 83.9% | 81.9% | | Non-SNF Medical | 2.72x | 3.27x | 77.5% | 80.4% | | **Total** | **2.06x** | **2.01x** | **85.1%** | **83.2%** | Key Customer Coverage (Trailing 12-month, Q1 2025 vs. Q1 2024) | Customer | Q1 2025 Coverage | Q1 2024 Coverage | Q1 2025 Occupancy | Q1 2024 Occupancy | | :--------------- | :--------------- | :--------------- | :---------------- | :---------------- | | NHC | 4.16x | 3.96x | 88.8% | 88.2% | | Senior Living | 1.49x | 1.49x | 83.5% | 81.9% | | Bickford | 1.66x | 1.71x | 86.0% | 84.2% | [Critical Accounting Policies and Estimates](index=49&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) - There have been no significant changes to critical accounting policies and estimates from the Annual Report on Form 10-K for the year ended December 31, 2024[197](index=197&type=chunk) - No impairment charges were recognized during the three and six months ended June 30, 2025, compared to a **$0.7 million** impairment charge in the prior year period[198](index=198&type=chunk) - Credit loss reserves totaled **$17.5 million** for mortgage and other notes receivable and **$0.1 million** for unfunded loan commitments as of June 30, 2025[200](index=200&type=chunk) [Results of Operations](index=50&type=section&id=Results%20of%20Operations) - For the three months ended June 30, 2025, rental income increased by **$4.5 million** (**6.9%**), resident fees and services (net of operating expenses) increased by **$0.9 million** (**29.4%**), and interest income increased by **$0.4 million** (**6.9%**)[203](index=203&type=chunk) - Legal expenses increased by **$0.9 million**, and proxy contest expenses of **$1.3 million** were incurred in Q2 2025, with no comparable costs in Q2 2024[203](index=203&type=chunk) - Loan and realty (gains) losses, net, shifted from a **$1.1 million** net loss in Q2 2024 to a **$1.4 million** net gain in Q2 2025, primarily due to a **$1.8 million** reduction in credit loss reserves in 2025 and a **$0.7 million** impairment charge in 2024[203](index=203&type=chunk) - For the six months ended June 30, 2025, rental income increased by **$11.2 million** (**8.7%**), resident fees and services (net of operating expenses) increased by **$1.0 million** (**17.2%**), and interest income increased by **$0.9 million** (**7.7%**)[205](index=205&type=chunk) - Legal expenses increased by **$2.1 million**, including **$1.2 million** for an unrealized SHOP transaction, and proxy contest expenses of **$1.6 million** were incurred in 2025, with no comparable costs in 2024[205](index=205&type=chunk) [Liquidity and Capital Resources](index=55&type=section&id=Liquidity%20and%20Capital%20Resources) - As of June 30, 2025, the company had **$322.0 million** available on its **$700.0 million** revolving credit facility, **$18.6 million** in unrestricted cash, and **$102.3 million** of undrawn net proceeds from ATM forward sales agreements[206](index=206&type=chunk) Cash Flow Summary (Six Months Ended June 30, in thousands) | Metric | 2025 | 2024 | Change ($) | Change (%) | | :---------------------------------- | :----- | :----- | :--------- | :--------- | | Net cash provided by operating activities | $106,295 | $101,566 | $4,729 | 4.7% | | Net cash used in investing activities | $(123,785) | $(29,544) | $(94,241) | NM | | Net cash provided by (used in) financing activities | $10,311 | $(79,736) | $90,047 | NM | - Total outstanding indebtedness was **$1.1 billion** as of June 30, 2025, with the **$700.0 million** revolving credit facility's maturity extended to October 2028 and the **$200.0 million** term loan's maturity extended to December 2025[212](index=212&type=chunk)[213](index=213&type=chunk)[215](index=215&type=chunk) - All **$75.7 million** of Fannie Mae term loans were repaid in Q2 2025[219](index=219&type=chunk) Contractual Obligations (as of June 30, 2025, in thousands) | Obligation Type | Total | Less than 1 Year | 1 - 3 Years | 3 - 5 Years | More than 5 Years | | :---------------------- | :---------- | :--------------- | :---------- | :---------- | :---------------- | | Debt, including interest | $1,280,419 | $294,905 | $171,109 | $409,099 | $405,306 | | Loan commitments | $72,720 | $41,109 | $31,611 | — | — | | Development commitments | $15,867 | — | $15,867 | — | — | | **Total** | **$1,369,006** | **$336,014** | **$218,587** | **$409,099** | **$405,306** | [FFO and FAD](index=61&type=section&id=FFO%20and%20FAD) - NAREIT FFO attributable to common stockholders per diluted share increased by **$0.07** (**3.1%**) to **$2.34** for the six months ended June 30, 2025, compared to **$2.27** in the prior year[251](index=251&type=chunk) - Normalized FFO attributable to common stockholders per diluted share increased by **$0.08** (**3.5%**) to **$2.37** for the six months ended June 30, 2025, compared to **$2.29** in the prior year[251](index=251&type=chunk) - Normalized FAD attributable to common stockholders increased by **$9.2 million** (**8.9%**) to **$111,958 thousand** for the six months ended June 30, 2025, compared to **$102,758 thousand** in the prior year[251](index=251&type=chunk) - Normalized FAD for 2025 includes a **$1.164 million** adjustment for transaction costs related to a large SHOP transaction that did not materialize[249](index=249&type=chunk) [Adjusted EBITDA](index=64&type=section&id=Adjusted%20EBITDA) - Adjusted EBITDA increased by **$7.2 million** (**5.5%**) to **$138,408 thousand** for the six months ended June 30, 2025, compared to **$131,193 thousand** in the prior year[253](index=253&type=chunk) - The Fixed Charge Coverage Ratio was **5.0x** for the six months ended June 30, 2025, up from **4.6x** in the prior year[253](index=253&type=chunk) [Net Operating Income](index=65&type=section&id=Net%20Operating%20Income) - Total Net Operating Income (NOI) increased by **$12.7 million** (**9.1%**) to **$152,908 thousand** for the six months ended June 30, 2025, compared to **$140,196 thousand** in the prior year[255](index=255&type=chunk) Net Operating Income (NOI) by Segment (Six Months Ended June 30, 2025, in thousands) | Segment | Amount | | :-------------------------- | :------- | | Real Estate Investments | $145,924 | | SHOP | $6,907 | | Non-segment / corporate | $77 | | **Total** | **$152,908** | [Item 3. Quantitative and Qualitative Disclosures About Market Risk.](index=66&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk.) This section discusses the company's exposure to market risks, primarily focusing on interest rate fluctuations and their potential impact on debt, cash flows, and the fair value of financial instruments, as well as inflation risk [Interest Rate Risk](index=66&type=section&id=Interest%20Rate%20Risk) - As of June 30, 2025, **$578.0 million** of outstanding indebtedness was subject to variable interest rates[256](index=256&type=chunk) - A **50 basis point** (bps) increase or decrease in variable interest rates would annually change interest expense by approximately **$2.9 million**, or **$0.06 per common share**[257](index=257&type=chunk) Interest Rates on Debt (as of June 30, 2025, in thousands) | Debt Type | Balance | % of Total | Weighted Average Interest Rate | | :-------------------------- | :---------- | :--------- | :----------------------------- | | Fixed rate | $550,000 | 48.8% | 3.49% | | Variable rate | $578,000 | 51.2% | 5.54% | | **Total** | **$1,128,000** | **100.0%** | **4.48%** | - A **50 bps** increase in market interest rates would decrease the estimated fair value of mortgages and notes by approximately **$1.4 million**[260](index=260&type=chunk) [Inflation Risk](index=67&type=section&id=Inflation%20Risk) - Tenant leases generally include annual rent escalators (fixed or CPI-based) and require tenants to pay all property operating expenses, which are expected to partially offset inflationary increases[261](index=261&type=chunk) [Item 4. Controls and Procedures.](index=67&type=section&id=Item%204.%20Controls%20and%20Procedures.) This section confirms the effectiveness of the company's disclosure controls and procedures and reports no material changes in internal control over financial reporting during the quarter [Evaluation of Disclosure Control and Procedures](index=67&type=section&id=Evaluation%20of%20Disclosure%20Control%20and%20Procedures) - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[262](index=262&type=chunk) [Changes in Internal Control over Financial Reporting](index=67&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) - No changes in internal control over financial reporting were identified during the three months ended June 30, 2025, that materially affected or are reasonably likely to materially affect these controls[264](index=264&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=68&type=section&id=Item%201.%20Legal%20Proceedings) This section states that the company's facilities are subject to routine legal claims and lawsuits, but management believes their ultimate resolution will not have a material adverse effect on the company's financial condition, results of operations, or cash flows - The company's facilities are subject to claims and potential lawsuits in the ordinary course of business[265](index=265&type=chunk) - Property managers, tenants, and borrowers are obligated to indemnify NHI against liabilities arising from operations, environmental, or title issues[265](index=265&type=chunk) - Management believes the ultimate resolution of all pending legal proceedings will not materially adversely affect the company's financial condition, results of operations, or cash flows[265](index=265&type=chunk) [Item 1A. Risk Factors](index=68&type=section&id=Item%201A.%20Risk%20Factors) This section notes that there have been no material changes to the risk factors previously disclosed in the Annual Report on Form 10-K, except for the addition of risks related to stockholder activism efforts - No material changes to risk factors from the Annual Report on Form 10-K for the year ended December 31, 2024, except for new risks related to stockholder activism[266](index=266&type=chunk) - Stockholder activism efforts could cause substantial costs, divert management's attention, and adversely affect the business[267](index=267&type=chunk) [Item 5. Other Information](index=68&type=section&id=Item%205.%20Other%20Information) This section states that no Rule 10b5-1 trading arrangements were adopted, modified, or terminated by the company's directors or officers during the fiscal quarter ended June 30, 2025 - No Rule 10b5-1 trading arrangements were adopted, modified, or terminated by the company's directors or officers during the fiscal quarter ended June 30, 2025[268](index=268&type=chunk) [Item 6. Exhibits](index=69&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including corporate governance documents, debt instruments, and various certifications and XBRL data files - Exhibits include Articles of Incorporation, Bylaws, Third Supplemental Indenture, CEO and CFO certifications (pursuant to 18 U.S.C. Section 1350 and Section 302/906 of Sarbanes-Oxley Act), and XBRL instance documents[269](index=269&type=chunk) [Signatures](index=70&type=section&id=Signatures) This section contains the official signatures of the company's President, Chief Executive Officer, and Director, D. Eric Mendelsohn, and Chief Financial Officer, John L. Spaid, certifying the report - The report was signed by D. Eric Mendelsohn, President, Chief Executive Officer and Director, and John L. Spaid, Chief Financial Officer, on August 6, 2025[272](index=272&type=chunk)

Core Insights - Strawberry Fields REIT, Inc. (STRW) and National Health Investors (NHI) are being compared for their value to investors, with STRW currently showing a stronger potential for value investment [1][3]. Valuation Metrics - STRW has a forward P/E ratio of 8.01, significantly lower than NHI's forward P/E of 15.09, indicating STRW may be undervalued [5]. - The PEG ratio for STRW is 1.00, while NHI's PEG ratio is 4.28, suggesting STRW has a better balance between price and expected earnings growth [5]. - STRW's P/B ratio stands at 1.43 compared to NHI's 2.3, further supporting STRW's position as a more attractive value option [6]. Analyst Ratings - STRW holds a Zacks Rank of 1 (Strong Buy), while NHI has a Zacks Rank of 2 (Buy), indicating a more favorable earnings estimate revision trend for STRW [3]. - STRW's solid earnings outlook and superior valuation metrics contribute to its Value grade of A, whereas NHI has a Value grade of D [6].

Group 1 - The article emphasizes the importance of income-focused investing, particularly in well-run REITs that can withstand adversity and emerge stronger [2] - National Health Investors (NHI) is highlighted as a defensive stock with a medium- to long-term investment horizon, appealing to investors seeking stability [2] - The service provided by iREIT+HOYA Capital focuses on sustainable portfolio income, diversification, and inflation hedging, catering to income-producing asset classes [1] Group 2 - The article does not provide specific financial metrics or performance data related to National Health Investors or other companies [4][5]

Financial Data and Key Metrics Changes - For Q1 2025, net income per diluted common share was $0.74, up 4.2% from the prior year [17] - Net FFO per diluted common share increased 3.6% to $1.14, while normalized FFO rose 2.7% to $1.15 compared to the prior year [17][18] - FAD for the quarter increased 9.9% to $56 million [18] - Cash rent from the Real Estate Investment segment increased by $2.6 million, attributed to acquisitions and percentage revenue rents [18] Business Line Data and Key Metrics Changes - SHOP segment NOI increased 4.9% year over year to $3.1 million, with resident fees up 5.2% driven by occupancy improvement [16][19] - The discretionary senior housing portfolio had a coverage of 1.67 times, while the SNF portfolio reported solid coverage of 3.06 times [14] Market Data and Key Metrics Changes - The company has an active investment pipeline of approximately $264 million, with a focus on senior housing [6][11] - The market shows a limited buyer pool, but an increasing number of sellers, leading to a competitive environment for acquisitions [11][78] Company Strategy and Development Direction - The company is focused on growing its SHOP portfolio through internal conversions and optimizing its existing portfolio [8][10] - A significant investment pipeline is being pursued, with a goal to surpass last year's total investments of $237.5 million [10][24] - The company is cautious about pursuing growth for growth's sake, emphasizing quality over quantity in acquisitions [7][56] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the near-term outlook, raising normalized FFO guidance midpoint by $0.08 per share to $4.71, representing a year-over-year growth of 6.1% [6][23] - The company is maintaining its outlook for 12% to 15% NOI growth for the year, despite typical seasonality in the first quarter [9][24] Other Important Information - The company recorded a $1.2 million charge in transaction costs related to a large SHOP portfolio that was ultimately not pursued [7] - The balance sheet remains strong, with a net debt to adjusted EBITDA ratio of 4.1 times, well within the stated leverage policy [21][22] Q&A Session Summary Question: Update on NHC lease process and Medicaid clarity - Management is in dialogue with NHC regarding lease renewal and navigating Medicaid issues, with an independent committee assisting in strategy [31][32] Question: Reasons for low SHOP performance in Q1 - Management noted seasonality and a one-time expense affecting performance, but remains positive about future growth [34][35] Question: Status of SLM mezzanine loans - SLM situation is largely wrapped up, with potential for additional payments as facilities are sold [36] Question: Transition process with Discovery and potential rent impacts - Management anticipates some noise during the transition but is confident in maintaining FAD guidance [41][45] Question: Insights on the large SHOP portfolio that did not close - The decision was based on the portfolio not fitting the company's growth strategy at this time [54][56] Question: Timing for bond market tapping - The company is preparing to tap the bond market later in the year, with a minimum raise of $300 million expected [87][88]

Financial Data and Key Metrics Changes - The company reported a net income per diluted common share of $0.74, up 4.2% from the prior year [17] - Net FFO per diluted common share increased 3.6% to $1.14, while normalized FFO increased 2.7% to $1.15 compared to the prior year [17] - FAD for the quarter increased 9.9% to $56 million [17] - Cash rent from the Real Estate Investment segment increased by $2.6 million, attributed to acquisitions and percentage revenue rents [18] Business Line Data and Key Metrics Changes - The SHOP segment's NOI increased 4.9% year over year to $3.1 million, with resident fees up 5.2% driven by occupancy improvement [15][19] - The discretionary senior housing portfolio had a coverage of 1.67 times, while the SNF portfolio reported solid coverage of 3.06 times [14] Market Data and Key Metrics Changes - The company has an active investment pipeline of approximately $264 million, with a focus on senior housing [5][11] - The balance sheet remains strong, with a net debt to adjusted EBITDA ratio of 4.1 times, well within the stated leverage policy [21] Company Strategy and Development Direction - The company is focused on growing its SHOP portfolio through internal conversions and has made significant investments in acquisitions [5][6] - The company is not pursuing growth for growth's sake and is selective in its investment strategy [6][78] - The company aims to maintain a competitive cost of capital and solid access to debt and equity capital [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about surpassing last year's investment total of $237.5 million due to a strong start in 2025 [10] - The company maintains its outlook for 12% to 15% NOI growth this year, despite typical seasonality in the first quarter [8][16] - Management is closely monitoring the potential impact of Medicaid cuts on the portfolio but believes geographic exposure can mitigate risks [14] Other Important Information - The company declared a $0.90 per share dividend for shareholders of record on June 30, 2025 [23] - The updated full-year guidance for NAREIT FFO and normalized FFO per diluted common share is $4.67 and $4.71, representing increases of 2.6% and 6.1% respectively over 2024 [23][24] Q&A Session Summary Question: Update on NHC and Medicaid clarity - Management is in dialogue with NHC regarding lease renewal and is cautious about discussing land and buildings due to legal monitoring [30] Question: SHOP performance in Q1 - Management acknowledged a one-time expense affecting performance but noted that seasonality was expected [34] Question: Status of SLM mezz loans - Management indicated that SLM is largely wrapped up, with potential for additional payments as facilities are sold [36] Question: Discovery transition and potential disruptions - Management expects some noise during the transition but is confident in maintaining FAD guidance [40][44] Question: Impact of percentage rent on tenant profitability - Management stated that the percentage rent was factored into projections and that tenant performance is improving [46] Question: SHOP occupancy and incentives - Management explained that occupancy challenges are due to a subset of buildings not reaching 90% and the need for incentives to maintain occupancy [62] Question: Large SHOP portfolio that fell out of pipeline - Management decided not to pursue the portfolio due to concerns about its fit and potential returns [53] Question: Unidentified new investments mix - Management indicated a mix of property investments and debt financing, primarily focusing on fee simple arrangements [55] Question: Timing for NOI transition with Discovery - Management is targeting the third quarter for the transition, subject to legal review [57] Question: Drivers of increased deal flow - Management noted that sellers are realizing current market conditions, leading to increased activity [74]

National Health Investors (NHI) came out with quarterly funds from operations (FFO) of $1.15 per share, beating the Zacks Consensus Estimate of $1.13 per share. This compares to FFO of $1.10 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an FFO surprise of 1.77%. A quarter ago, it was expected that this health care real estate investment trust would post FFO of $1.10 per share when it actually produced FFO of $1.13, delivering a surprise of 2.73%. ...

Financial Performance - Net income per diluted share increased from $0.71 in Q1 2024 to $0.74 in Q1 2025[8] - NAREIT FFO per diluted share increased from $1.10 in Q1 2024 to $1.14 in Q1 2025[8] - Funds Available for Distribution (FAD) increased by 9.9% from $50.975 million in Q1 2024 to $56.001 million in Q1 2025[8] - Lease revenue excluding straight-line, lease amortization, and escrow reimbursement revenue of $65.3 million increased 8.0% compared to Q1 2024[11] SHOP Performance - SHOP NOI increased by 4.9% to $3.1 million in Q1 2025 compared to the prior year period[11] - SHOP NOI margin was 22.1% in Q1 2025, a decrease of 10 bps compared to the prior year period[11] - Average SHOP occupancy increased by 390 bps year-over-year to 89.2% in Q1 2025[11] - The company continues to estimate 12%-15% NOI growth for SHOP in 2025[11, 21] Balance Sheet and Investments - Net Debt to Adjusted EBITDA was 4.1x, at the low end of the company's target range of 4.0x – 5.0x[11] - The company announced 2025 YTD investments totaling $174.9 million at an average initial yield of approximately 8.2%[11] - The company is evaluating a pipeline of investment opportunities valued at approximately $264 million[11]