Core Insights - The company is maintaining strategic selectivity in acquisitions to avoid issuing equity at current price levels, focusing on supporting existing client relationships [1] - Management is managing a tenant transition for six geriatric behavioral hospitals, with the buyer currently in due diligence, involving complex government-related liability verifications [1] - Interest expense has decreased slightly due to FOMC interest rate cuts impacting floating rates on the revolving credit facility [1] Group 1 - The company executed a 1031 like-kind exchange, selling an inpatient rehab facility at a 7.9% cap rate and reinvesting in a new facility at a 9.3% return to reduce tenant concentration [2] - Occupancy improved from 90.1% to 90.6% during the quarter, driven by active leasing and renewals, extending the weighted average lease term to seven years [2] Group 2 - Management attributed the slight quarter-over-quarter revenue decrease to the timing of capital recycling and asset disposition activity rather than underlying portfolio weakness [3] - The company expects embedded growth in 2026 from two major redevelopment projects, with the largest slated for rent commencement in the third quarter of 2026 [3] - Future acquisition volume is expected to focus on programmatic client business until the share price allows for accretive capital raises to resume brokered deal activity [3] - The company has $122.5 million in definitive purchase agreements for five properties to be acquired upon completion through 2027 at returns between 9.1% and 9.75% [3]