Core Insights - The company reported a gain of approximately $11.5 million from the sale of an inpatient rehab facility at a cap rate of 7.9%, with net proceeds reinvested into a new facility for $28.5 million, expected to yield an annual return of about 9.3% [1] - Total revenue for the fourth quarter increased to $30.9 million, reflecting a 5.6% annual growth, although it showed a slight decrease of $140,000 quarter-over-quarter [8][9] - The company is actively engaged in capital recycling, with plans for further acquisitions and dispositions, maintaining a focus on selective investment opportunities [5][19] Financial Performance - Funds from operations (FFO) for 2025 reached $13.3 million, a 4.6% increase year-over-year, while adjusted funds from operations (AFFO) totaled $14.9 million, a 2.1% increase from 2024 [10][11] - The company declared a fourth-quarter dividend of $0.4775 per share, marking a consistent increase in dividends since its IPO [6][7] Portfolio Management - Occupancy rates slightly decreased from 90.1% to 90% during the quarter, with an increase in the weighted average lease term from 6.7 to 7 years [2] - The company is undergoing redevelopment on three properties, with the largest project expected to be completed in 2026 [2] Acquisition and Disposition Strategy - The company has signed definitive purchase and sale agreements for five properties, with an expected total investment of $122.5 million [5] - The company anticipates closing on one property in the first quarter, with two more expected to close in 2026 and the remaining two in 2027 [6] Market Conditions - The company noted a high level of demand for its assets, with a cap rate of 7.9% achieved on recent dispositions, and expects similar pricing for future sales [22] - The company is seeing opportunities for acquisitions in the 9% to 10% cap rate range, while being cautious about raising capital through stock issuance at current price levels [22][30]

Financial Data and Key Metrics Changes - Total revenue increased from $29.3 million in Q4 2024 to $30.9 million in Q4 2025, representing a 5.6% annual growth [11] - FFO in Q4 2025 was $13.3 million, a 4.6% increase year-over-year compared to $12.7 million in Q4 2024 [13] - AFFO totaled $14.9 million in Q4 2025, a 2.1% increase year-over-year compared to $14.6 million in Q4 2024 [14] - Interest expense decreased slightly to $7 million in Q4 2025, primarily due to recent FOMC interest rate cuts [12] Business Line Data and Key Metrics Changes - Occupancy increased from 90.1% to 90.6% during the quarter [6] - Weighted average lease term increased from 6.7 to 7 years [6] - The company sold an inpatient rehab facility at a 7.9% cap rate, resulting in a gain of approximately $11.5 million [7] Market Data and Key Metrics Changes - The company acquired three properties totaling 113,000 sq ft for an aggregate purchase price of $64.5 million, which were 100% leased [8] - The company signed definitive purchase and sale agreements for five properties with an expected investment of $122.5 million [9] Company Strategy and Development Direction - The company aims to maintain modest leverage levels while evaluating the best uses of capital [9] - The company is focused on capital recycling and selective acquisitions, with plans to use 1031 like-kind exchanges for reinvestment [9][23] - The company anticipates significant growth from redevelopment projects expected to come online in mid-2026 and late 2026 [27] Management's Comments on Operating Environment and Future Outlook - Management noted that the transaction with the geriatric behavioral hospital operator is expected to occur all at once, with no plans for a staged closing [20] - Management expressed confidence in the leasing activity and expects leased occupancy to remain stable in the low nineties for the next couple of quarters, with potential growth in the second half of the year [32] - Management indicated that there are still great opportunities in the market, with a focus on maintaining relationships with brokers to identify potential acquisitions [34] Other Important Information - The company declared a dividend of $0.4775 per common share for Q4 2025, raising it to an annualized dividend of $1.91 per share [10] - The company did not issue any shares under its ATM last quarter, anticipating sufficient capital from asset sales to fund near-term acquisitions [9] Q&A Session Summary Question: Update on the Geriatric Behavioral Hospital operator transaction - Management indicated that the transaction is expected to happen all at once, with significant progress in the first quarter [20] Question: Balancing transactions and potential leverage increase - Management aims to sequence dispositions and acquisitions to avoid adding leverage, confident in capital recycling efforts [23] Question: Changes in cap rates for acquisitions or dispositions - Management noted a high level of demand for assets and expects similar pricing on other dispositions, with opportunities in the 9%-10% cap rate range [26] Question: Future occupancy expectations - Management expects occupancy to remain stable in the low nineties for the next couple of quarters, with potential growth in the second half of the year [32] Question: Investment pipeline and opportunities - Management confirmed that opportunities still exist, with a focus on supporting clients and potential acquisitions when stock prices allow [34] Question: Status of the dialysis term sheet pipeline - Management stated that the relationship is on the back burner, with no current focus on executing transactions under that deal [36]

Financial Data and Key Metrics Changes - Total revenue increased from $29.3 million in Q4 2024 to $30.9 million in Q4 2025, representing a 5.6% annual growth [11] - FFO in Q4 2025 was $13.3 million, a 4.6% increase year-over-year compared to $12.7 million in Q4 2024 [13] - AFFO totaled $14.9 million in Q4 2025, a 2.1% increase year-over-year from $14.6 million in Q4 2024 [14] - The company declared a dividend of $0.4775 per common share for Q4 2025, raising the annualized dividend to $1.91 per share [10] Business Line Data and Key Metrics Changes - Occupancy increased from 90.1% to 90.6% during the quarter [6] - The weighted average lease term increased from 6.7 years to 7 years [6] - The company sold an inpatient rehab facility at a 7.9% cap rate, resulting in a gain of approximately $11.5 million [7] Market Data and Key Metrics Changes - The company acquired three properties totaling 113,000 sq ft for $64.5 million, which were 100% leased [8] - The expected return on new investments ranges from 9.1% to 9.75% [9] - The indicative cap rate for the sale of the inpatient rehab facility was 7.9%, with expectations for similar pricing on other dispositions [26] Company Strategy and Development Direction - The company is focused on capital recycling and selective acquisitions, maintaining modest leverage levels [9][23] - There are ongoing redevelopment projects expected to come online in mid-2026 and late 2026, which are anticipated to provide growth [27] - The company aims to execute transactions without adding meaningful leverage to the balance sheet [24] Management's Comments on Operating Environment and Future Outlook - Management noted that the transaction with the behavioral hospital operator is progressing, with expectations for a simultaneous closing of all six hospitals [20] - Leasing activity is strong, and management expects occupancy to remain stable in the low nineties for the next couple of quarters, with potential growth in the second half of the year [32] - The company sees a high level of demand for its assets and is optimistic about future acquisition opportunities [26][34] Other Important Information - The company has signed definitive purchase and sale agreements for five properties expected to be acquired after completion and occupancy [9] - The company did not issue any shares under its ATM last quarter, indicating a focus on using capital from asset sales for acquisitions [9] Q&A Session Summary Question: Update on the JRF Behavioral Hospital operator transaction - Management indicated that the transaction is expected to occur all at once, with no plans for a staged closing [20] Question: Balancing transactions and potential leverage increases - Management emphasized the goal of sequencing dispositions and acquisitions to maintain leverage levels [23] Question: Changes in cap rates for acquisitions or dispositions - Management noted a high demand for assets and expected similar pricing on other dispositions [26] Question: Future occupancy expectations - Management anticipates occupancy to remain stable in the low nineties for the next couple of quarters, with potential increases in the second half of the year [32] Question: Investment pipeline and opportunities - Management confirmed that opportunities still exist, and they are in touch with brokers to identify potential acquisitions [34] Question: Status of the dialysis term sheet pipeline - Management stated that the relationship is on the back burner, with no immediate focus on executing transactions [36]

Financial Data and Key Metrics Changes - Total revenue increased from $29.3 million in Q4 2024 to $30.9 million in Q4 2025, representing a 5.6% annual growth [11] - FFO in Q4 2025 was $13.3 million, a 4.6% increase year-over-year compared to $12.7 million in Q4 2024 [13] - AFFO totaled $14.9 million in Q4 2025, a 2.1% increase year-over-year from $14.6 million in Q4 2024 [14] - Interest expense decreased slightly to $7 million in Q4 2025, primarily due to recent FOMC interest rate cuts [12] Business Line Data and Key Metrics Changes - Occupancy increased from 90.1% to 90.6% during the quarter, with a weighted average lease term rising from 6.7 to 7 years [6] - The company sold an inpatient rehab facility at a 7.9% cap rate, resulting in a gain of approximately $11.5 million [7] - Acquired three properties totaling 113,000 sq ft for $64.5 million, all 100% leased with anticipated annual returns of 9.3%-9.5% [8] Market Data and Key Metrics Changes - The company received a 7.9% cap rate on the sale of the inpatient rehab facility and expects similar pricing on other dispositions [27] - Opportunities on the buy side are seen in the 9%-10% cap rate range [27] Company Strategy and Development Direction - The company is focused on capital recycling and selective acquisitions, with plans to maintain modest leverage levels [9] - Future acquisitions are expected to be funded through selected asset sales and revolver capacity [9] - The company anticipates significant growth from redevelopment projects expected to come online in mid-2026 and late 2026 [28] Management's Comments on Operating Environment and Future Outlook - Management noted that the transaction with the behavioral hospital operator is expected to occur all at once, with no plans for a staged closing [20] - The company expects leased occupancy to remain stable in the low nineties for the next couple of quarters, with potential growth in the second half of the year [33] - Management remains optimistic about the investment pipeline, indicating that opportunities still exist despite recent challenges [36] Other Important Information - The company declared a dividend of $0.4775 per common share for Q4 2025, marking a continuous increase since the IPO [10] - The company has signed definitive purchase and sale agreements for five properties expected to close between 2026 and 2027 [9] Q&A Session Summary Question: Update on the JRF Behavioral Hospital operator transaction - Management indicated that the transaction is expected to happen all at once, with significant progress anticipated in the first quarter [20] Question: Balancing transactions and potential increase in debt levels - Management aims to sequence dispositions and acquisitions effectively, maintaining current leverage levels without adding more [22][24] Question: Changes in cap rates for acquisitions or dispositions - Management noted a high demand for assets and expects similar cap rates for future dispositions, with opportunities in the 9%-10% range for acquisitions [27] Question: Expectations for occupancy rates - Management expects occupancy to remain stable in the low nineties for the next couple of quarters, with potential increases in the second half of the year [33] Question: Investment pipeline and opportunities - Management confirmed that opportunities still exist in the market, with a focus on both client business and brokered deals [36]

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]