Financial Data and Key Metrics Changes - In 2025, the company achieved consolidated NOI growth of 31.3% and reduced leverage by over three turns, with no debt maturities until 2028 [6][12] - For Q4 2025, total revenue was $379.6 million, Adjusted EBITDAre was $72.4 million, and Normalized FFO was $21.8 million or $0.09 per share [7][20] - Full year Adjusted EBITDAre was $284 million, at the high end of guidance [20] Business Line Data and Key Metrics Changes - SHOP NOI for Q4 improved 27.6% year-over-year to $38.3 million, with full year SHOP NOI at $139.3 million, towards the high end of guidance [6][7] - Medical office and life science NOI was $108.1 million, just above the midpoint of guidance [21] - Same-property Cash Basis NOI increased 15.4% year-over-year to $70.4 million in Q4 [15] Market Data and Key Metrics Changes - Same-property occupancy for SHOP increased 90 basis points year-over-year to 82.4%, with average monthly rates up 5.8% [7][15] - Consolidated occupancy in the medical office and life science portfolio increased 460 basis points sequentially to 91.2% [11] Company Strategy and Development Direction - The company aims to unlock value through operational performance and is focused on executing property-specific business plans [9][26] - There is a healthy pipeline of ROI projects expected to add approximately 500 SHOP units, with an unlevered mid-teens ROI [10][27] - Future dispositions will be opportunistic, with proceeds used to reduce leverage or redeploy into accretive initiatives [12][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 2026 outlook due to robust demand for SHOP communities and a favorable industry outlook [10][14] - The company anticipates continued increases in revenue and occupancy, leading to strong NOI and margin growth in 2026 [15][20] Other Important Information - The company completed the wind down of AlerisLife, transitioning 116 communities to seven operators [5] - G&A expenses for Q4 included a $5.7 million business management incentive fee, driven by a total shareholder return of nearly 113% in 2025 [16] Q&A Session Summary Question: What is the go-forward strategy and opportunities for reopening wings at existing communities? - The main strategy is to grow performance through operations, with potential to add close to 500 units through identified wings at a cost of $125-$175 per unit [26][27] Question: Will external investments focus on renovations or acquisitions? - Renovations are expected to provide better risk-adjusted returns, but acquisitions are not the current focus [28][29] Question: What drove the Q4 margin improvement? - The improvement was a combination of reduced transition noise and core operational gains [30][31] Question: What are the trends for January and February? - January showed promising results in line with expectations, with rent escalators around 4%-6% [33][34] Question: How should NOI growth be expected over the coming quarters? - NOI growth is expected to be back half of the year weighted due to occupancy growth and rate increases [38][40] Question: What are the prospects for renewing or releasing medical office and life science assets? - There are promising prospects for re-leasing, particularly for a building in Fremont, California [44] Question: What implications does the momentum have on the dividend? - The board will consider the dividend, but there are no immediate priorities for addressing it [51]

Financial Data and Key Metrics Changes - The company reported a net income of $621,000 or $0.01 per diluted share for Q3 2025, with core FFO at $26.4 million or $0.31 per diluted share, and AFFO at $28 million or $0.33 per diluted share, reflecting a 3.1% increase year-over-year [10][12] - Total recurring G&A increased to $5.1 million, representing 10.6% of total revenues, down from an 11.1% average last year, indicating improved efficiency [10][12] - The company’s adjusted net debt was $623.5 million, with a pro forma adjusted net debt to annualized adjusted EBITDAre ratio of 3.6 times, below the targeted range of 4.5 to 5.5 times [11][12] Business Line Data and Key Metrics Changes - The company closed $203.9 million in investments across 50 properties at a blended cash yield of 7.4%, with an average lease term of 13.4 years [5][6] - Disposition activity included the sale of 24 properties for $37.8 million at a 7.2% cap rate, allowing reinvestment into higher yielding opportunities [6][12] - The portfolio consisted of 721 investments with 114 tenants across 28 industries, generating over $183 million in ABR [6][7] Market Data and Key Metrics Changes - The company noted that over 62% of its ABR comes from tenants with investment grade ratings, with only 2.7% of ABR expiring through 2027, ensuring stable cash flows [7][12] - The company experienced a decline in its top five tenancy from 28.9% to 22.9% year-to-date, indicating successful diversification efforts [4][6] Company Strategy and Development Direction - The company is increasing its 2025 net investment guidance to a range of $350 million to $400 million, up from $125 million to $175 million, reflecting confidence in market opportunities [4][12] - The focus remains on acquiring high-quality, necessity-based retail properties, with a strategy to maintain a diversified tenant base [9][12] - The company aims to return to normal disposition volumes focused on credit risk and opportunistic sales after a period of elevated activity [6][12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the current investment landscape, noting it is the most attractive opportunity set seen since going public [9][12] - The company anticipates continued growth in 2026, driven by improved cost of capital and a robust acquisition pipeline [12][54] - Management acknowledged some softness in the lower and middle-income consumer segments but remains focused on resilient sectors [9][12] Other Important Information - The board declared a quarterly cash dividend of $0.215 per share, payable on December 15 to shareholders of record as of December 1 [12] - The company has over $1.1 billion in total liquidity, including cash, available credit, and undrawn term loan capacity [12] Q&A Session Summary Question: Can you elaborate on the attractive opportunity set mentioned? - Management indicated they are focusing on convenience stores, quick service restaurants, and grocery sectors, expecting to maintain a high acquisition pace [16][18] Question: Why didn't the guidance for 2025 AFFO per share change despite high activity? - The timing of investments was heavily weighted towards the end of the quarter, impacting revenue recognition, and there is uncertainty regarding treasury stock dilution [21][22] Question: What are the expectations for investment grade acquisitions? - Management noted a 50 basis point difference in cap rates between investment grade and non-investment grade assets, with a focus on risk-adjusted returns [32][33] Question: How is competition from private equity affecting the company? - Management stated that while there is competition, it primarily targets larger transactions, which do not directly impact the company's strategy [38][39] Question: What is the outlook for cap rates and spreads? - Management expects cap rates to remain stable, with potential slight compression, and believes the current spreads are healthy for future growth [48][50]