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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The purpose of this Management's Discussion and Analysis ("MD&A") is to provide an understanding of the Company's consolidated financial condition, results of operations and liquidity. MD&A is provided as a supplement to, and should be read in conjunction with, the Company's Consolidated Financial Statements and accompanying notes.

Overview

We were organized in the State of Maryland in March 2014 and began operations upon the completion of our initial public offering in May 2015. We are a self-administered, self-managed healthcare REIT that acquires and owns properties that are leased to hospitals, doctors, healthcare systems or other healthcare service providers.

Trends and Matters Impacting Operating Results

Management monitors factors and trends that it believes are important to the Company and the REIT industry in order to gauge their potential impact on the operations of the Company. Certain of the factors and trends that management believes may impact the operations of the Company are discussed below.

Real estate acquisitions

During the year ended December 31, 2025, the Company acquired three real estate properties for an aggregate purchase price of approximately $64.5 million. Upon acquisition, the properties, totaling approximately 113,000 square feet, were 100.0% leased in the aggregate with lease expirations through 2040.

Real estate dispositions and Assets Held for Sale

Additionally, during the second quarter of 2025, the Company amended an operating lease on a property that resulted in a sales-type lease. As such, the Company reclassified the net book value of the real estate totaling $3.7 million to a net lease investment in other assets on the Condensed Consolidated Balance Sheet and recognized a gain on sale totaling approximately $1.3 million (see Sales-type leases in Note 3 – Real Estate Leases in the Consolidated Financial Statements for more details).

The Company has one property with a carrying balance of $5.3 million classified as held for sale at December 31, 2025. During the year ended December 31, 2025, the Company recorded impairment charges of $1.1 million on this property. See Note 4 – Real Estate Acquisitions, Dispositions, and Assets Held for Sale in the Consolidated Financial Statements for more details.

Acquisition pipeline

The Company has five properties under definitive purchase agreements, to be acquired after completion and occupancy, for an aggregate expected purchase price of approximately $122.5 million. The Company's expected returns on these investments are approximately 9.1% to 9.75%. The Company anticipates closing on one of these properties in the first quarter of 2026 with the remainder throughout 2026 and 2027; however, the Company cannot provide assurance as to the timing of when, or whether, these transactions will actually close.

Leased square footage

As of December 31, 2025, our real estate portfolio was approximately 90.6% leased, excluding the real estate asset held for sale. During the year ended December 31, 2025, we had expiring or terminated leases related to approximately 712,000 square feet, and we leased or renewed leases related to approximately 683,000 square feet.

Purchase Option Provisions

Certain of the Company's leases provide the lessee with a purchase option or a right of first refusal to purchase the leased property. The purchase option provisions generally allow the lessee to purchase the leased property at fair value or at an amount greater than the Company's gross investment in the leased property at the time of the purchase. The Company had an aggregate gross investment of approximately $42.0 million in 13 real estate properties as of December 31, 2025 that were subject to exercisable purchase options.

Lease Expirations

Approximately 6.1% to 9.0% of our leases (based on annualized rent) will expire in each of the next 5 years. Management expects that many of the tenants will renew their leases, but in cases where they do not renew, the Company believes it will generally be able to re-lease the space to existing or new tenants without significant loss of rental income. See "Properties" in Item 2 for a schedule of the Company's lease expirations.

Inflation

Inflation has significantly increased during the past several years and a prolonged period of high and persistent inflation could cause an increase in our expenses, capital expenditures, and cost of our variable-rate borrowings which could have a material impact on our financial position or results of operations. Many of our lease agreements contain provisions designed to mitigate the adverse impact of inflation, including annual rent increases based on stated increases or CPI increases. In response to inflationary pressures, the Federal Reserve raised interest rates in 2022 and 2023, however, the Federal Reserve lowered interest rates in 2024 and 2025, and may provide additional rate changes during 2026. Higher interest rates may adversely impact real estate asset values and increase our interest expense on our variable-rate borrowings under our revolving credit facility.

Credit Loss on Loans and Interest Receivables

During the second quarter of 2025, the Company recorded reserves, fully reserving its notes and interest with a geriatric inpatient behavioral hospital tenant, totaling approximately $8.7 million on its notes and approximately $1.7 million of interest receivables. See Note 1 – Summary of Significant Accounting Policies and Note 10 – Other Assets, net to the Condensed Consolidated Financial Statements for more details on these reserves.

Accelerated Amortization of Restricted Stock and Restricted Stock Units

The Company's former Executive Vice President, Asset Management was terminated effective May 31, 2025. In accordance with his employment agreement, his unvested restricted shares totaling 198,015 shares vested and his unvested restricted stock units totaling 18,275 units vested at target upon termination. As such, upon termination and vesting of these shares, the Company accelerated the unamortized remaining balance of his deferred compensation at May 31, 2025 and recognized $4.6 million of amortization expense. Also, the Company recognized severance and transition expense totaling approximately $1.3 million.

Interest Expense

At December 31, 2025, the Company had fixed the $275.0 million outstanding under the Term Loans and $75.0 million of its Revolving Credit Facility which had an aggregate fixed weighted average interest rate under the swaps of approximately 4.7% and 3.8%, respectively. These swaps that fix the interest rates on the Revolving Credit Facility mature in March 2026. If the Company does not enter into new interest rate swaps, the interest on this $75.0 million will be under a floating rate. The floating rate for the unhedged portion of the Revolving Credit Facility at December 31, 2025 was approximately 5.4%. See Note 5 – Debt, net and Note 6 – Derivative Financial Instruments for more details on the Company's debt and interest rate swaps.

Results of Operations

The Company's consolidated results of operations for 2025 compared to 2024 were significantly impacted by acquisitions, including depreciation and amortization on our real estate portfolio, asset dispositions, leasing activities, collectibility of lease payments, notes receivable and related interest, interest expense, and general and administrative expenses, including severance and the accelerated amortization of stock-based compensation upon the termination our former Executive Vice President, Asset Management in 2025.

Year Ended December 31, 2025 Compared to December 31, 2024

Revenues

Rental income increased approximately $6.8 million, or 5.9%, for the year ended December 31, 2025 compared to the same period in 2024 due mainly to the following:

•Income on properties acquired during 2025 and 2024 increased rental income by approximately $5.4 million;

•Rental income related to tenants on cash basis increased by approximately $0.9 million for the twelve months ended December 31, 2025 as compared to the same period in 2024, mainly due to the non-cash write-off of straight-line rent in 2024 for the geriatric inpatient behavioral hospital tenant accrued prior to 2024; partially offset by

•Properties sold during 2025 and 2024 resulted in a decrease in rental income of approximately $1.1 million, including $0.4 million related to a lease that was converted from an operating lease to a sales-type lease in 2025;

•A net decrease in the allowance for doubtful accounts for 2025 compared to 2024 totaling approximately $0.2 million; and

•The remaining $1.8 million net increase resulted from annual rent increases, net leasing activities, including the rent commencement of leases previously under construction and various other items.

Other operating interest decreased approximately $1.4 million, or 112.8%, for the year ended December 31, 2025 compared to the same period in 2024 due mainly to the following:

•A reduction in interest totaling $1.5 million due to reserving interest on notes in 2025 with a geriatric behavioral hospital borrower/tenant in six properties, net of cash collections differences in 2025 compared to 2024 for that borrower/tenant;

•A reduction in interest totaling $0.3 million due to amortizing payments on notes receivable; offset partially by

•An increase in interest of approximately $0.4 million from interest on a new note entered into during 2024, as well as interest on a financing and sales-type leases.

Expenses

Property operating expenses increased approximately $0.8 million, or 3.5%, for the year ended December 31, 2025 compared to the same period in 2024 due mainly to the following:

•Property operating expenses on properties acquired during 2025 and 2024 resulted in an increase of approximately $0.4 million;

•Utilities expenses (on a same store basis) increased approximately $0.3 million;

•Landscaping expenses, including snow plow expenses, (on a same store basis) increased approximately $0.2 million; and

•Property insurance expenses (on a same store basis) increased approximately $0.1 million; offset partially by

•A reduction of expenses totaling approximately $0.2 million due to properties sold during 2025 and 2024.

General and administrative expenses increased approximately $6.0 million, or 31.7%, for the year ended December 31, 2025 compared to the same period in 2024 due mainly to the following:

•On May 31, 2025, the Company terminated its former Executive Vice President of Asset Management. Upon termination, unvested shares of restricted stock and restricted stock units vested in accordance with the terms of his employment agreement, and the Company accelerated the unamortized remaining balance of deferred compensation and recognized approximately $4.6 million of non-cash amortization expense. Additionally, the Company recognized approximately $1.3 million of severance and transition-related expenses; and

•Compensation expense increased approximately $0.5 million for the twelve months ended December 31, 2025 compared to the same period in 2024, partially related to a $0.3 million increase to non-cash amortization of stock-based compensation; offset partially by

•A decrease in professional fees of $0.3 million for the twelve months ended December 31, 2025 compared to the same period in 2024.

Depreciation and amortization expense increased approximately $0.8 million, or 1.8%, for the year ended December 31, 2025 compared to the same period in 2024 due mainly to the following:

•Depreciation and amortization related to properties acquired during 2025 and 2024 accounted for an increase of approximately $1.8 million;

•Tenant improvements and other capital expenditures resulted in an increase of approximately $2.0 million; partially offset by

•Properties that were sold or classified as held for sale during 2024 and 2025 resulted in a decrease of approximately $0.4 million;

•Fully amortized land and building improvements resulted in a decrease of approximately $0.7 million; and

•Real estate intangible assets acquired prior to 2024 that became fully depreciated resulted in a decrease of approximately $1.9 million;

Gains on the sales of depreciable real estate assets, net of losses and impairments

Gains on the sales of depreciable real estate assets, net of losses and impairments increased by approximately$11.9 million for the year ended December 31, 2025 compared to the same period in 2024. This increase was due mainly to the following:

•During 2025, the Company sold five properties and recognized a net gain on sale, net of losses, totaling approximately $11.6 million;

•During 2025, the Company amended a lease with a tenant and converted it from an operating lease to a sales-type lease. The Company recognized a gain on sale of the real estate totaling approximately $1.3 million;

•As of December 31, 2025, the Company had a property classified as held for sale and recorded impairments on the property during 2025 at the lower of its net book value and fair value less estimated cost to sell of approximately $1.1 million; and

•During 2024, the Company sold two properties and a land parcel and recognized losses, net of gains, totaling approximately $0.1 million.

Interest expense

Interest expense increased approximately $3.3 million, or 13.8%, for the year ended December 31, 2025 compared to the same period in 2024. Contractual interest due under the Credit Facility increased $3.4 million due to: (i) a pricing grid increase on hedged debt in the fourth quarter of 2024 due to increased leverage ratio, and (ii) a higher weighted average balance on the Revolving Credit Facility in 2025 compared to 2024. See Note 5 – Debt, net to the Consolidated Financial Statements. Also, a mortgage note payable on a property was repaid during 2024, which results in a decrease to interest expense of $0.1 million in 2025 compared to 2024.

Credit loss reserve

Credit loss reserves totaling $8.7 million and $11.0 million, respectively, were recorded during 2025 and 2024, related to notes receivable with a geriatric inpatient behavioral hospital borrower/tenant, fully reserving these notes in 2025. See Note 10 – Other Assets, net in the Consolidated Financial Statements for more details on these notes and the credit loss reserves.

Interest and other income

Interest and other income decreased approximately $0.5 million for the year ended December 31, 2025 compared to the same period in 2024. Interest and other income for 2024 included an undistributed allowance for tenant improvements totaling $0.3 million for a lease that expired and $0.2 million of earnest money on a terminated contract for a property held for sale.

Year Ended December 31, 2024 Compared to December 31, 2023

See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Results of Operations” in our 2024 Annual Report on Form 10-K for a comparison of the year ended December 31, 2024 compared to December 31, 2023, which is incorporated by reference.

Liquidity and Capital Resources

The Company monitors its liquidity and capital resources and relies on several key indicators in its assessment of capital markets for financing acquisitions and other operating activities as needed, including the following:

•leverage ratios and financial covenants included in our Credit Facility;

•dividend payout percentage; and

•interest rates, underlying treasury rates, debt market spreads and equity markets.

The Company uses these indicators and others to compare its operations to its peers and to help identify areas in which the Company may need to focus its attention.

Sources and Uses of Cash

The Company derives most of its revenues from its real estate properties, collecting rental income and operating expense reimbursements based on contractual arrangements with its tenants. These sources of revenue represent our primary source of liquidity to fund our dividends, general and administrative expenses, property operating expenses, interest expense on our Credit Facility and other expenses incurred related to managing our existing portfolio and investing in additional properties. To the extent additional resources are needed, the Company will fund its investment activity generally with net proceeds from equity or debt issuances, including our at-the-market equity offering program, either in the public or private markets, from our Credit Facility, or from asset sales.

The Company expects to meet its liquidity needs through cash on hand, cash flows from operations and cash flows from sources discussed above. The Company believes that its liquidity and sources of capital are adequate to satisfy its cash requirements. The Company cannot, however, be certain that these sources of funds will be available at a time and upon terms acceptable to the Company in sufficient amounts to meet its liquidity needs.

Operating Activities

Cash flows provided by operating activities for the years ended December 31, 2025, 2024 and 2023 were approximately $56.4 million, $58.9 million, and $61.4 million, respectively. Cash flows provided by operating activities for the years ended December 31, 2025, 2024 and 2023 were generally provided by contractual rents and interest on notes receivables, net of property operating expenses not reimbursed by the tenants, general and administrative expenses, and interest expense.

Investing Activities

Cash flows used in investing activities for the years ended December 31, 2025, 2024 and 2023 were approximately $47.7 million, $92.7 million, and $113.7 million, respectively.

•During 2025, the Company invested in three real estate properties for cash consideration of approximately $64.6 million, and received net proceeds of approximately $32.2 million in the aggregate during 2025 for the sale of four properties, which excludes net proceeds of approximately $0.7 million received subsequent to December 31, 2025 for a fifth property sold in 2025. During 2024, the Company invested in nine real estate properties for an aggregate cash consideration of approximately $72.4 million, and sold two properties and a land parcel, for net proceeds of approximately $2.3 million. During 2023, the Company invested in 19 real estate properties and a land parcel for an aggregate cash consideration of approximately $98.9 million.

•During 2024 and 2023, the Company funded notes receivable of approximately $3.1 million, and $2.0 million, respectively, and received payments on notes receivable in 2025, 2024 and 2023 of approximately $5.2 million, $5.1 million, and $3.9 million, respectively.

•The Company funded capital expenditures, including tenant improvements, during 2025, 2024 and 2023 totaling approximately $20.5 million, $24.6 million, and $19.0 million, respectively.

•During 2023, the Company received insurance proceeds from a casualty loss of approximately $2.3 million.

Financing Activities

Cash flows used in financing activities for the year ended December 31, 2025 were $9.8 million and cash flows provided by financing activities for the years ended December 31, 2024 and 2023 were approximately $33.5 million and $44.9 million, respectively.

•During 2025, 2024 and 2023, the Company borrowed, on a net basis, $46.0 million, $162.0 million, and $50.0 million, respectively, on its Revolving Credit Facility.

•During 2024, the Company amended its Credit Facility to increase its Revolver limit and extend maturity, repaid $75.0 million in Term Loans under its Credit Facility, and incurred $3.4 million in additional debt issuance costs.

•During 2025, 2024 and 2023, the Company paid dividends totaling approximately $53.7 million, $51.7 million and $48.1 million, respectively.

•During 2024 and 2023, the Company completed equity offerings under its at-the-market program, resulting in net proceeds, net of underwriters' discount and offering costs, of approximately $7.3 million and $44.0 million, respectively.

•During 2024 and 2023, the Company had mortgage note repayments totaling approximately $4.8 million and $0.1 million, respectively.

•During 2025, 2024 and 2023, the Company withheld shares and paid taxes totaling approximately $1.8 million, $0.8 million, and $1.0 million upon the vesting of stock-based awards for certain employees.

Universal Shelf Registration Statement

On February 19, 2025, the Company filed a new non-automatic shelf registration statement on Form S-3 with the Securities and Exchange Commission which became effective on March 14, 2025. The registration statement is for $500.0 million of securities and is effective for three years. Under this registration statement, the Company has the capacity to offer and sell from time to time various types of securities, including common stock, preferred stock, depository shares, rights, debt securities, warrants and units.

ATM Program

Under the ATM Program, the Company may issue and sell shares of its common stock, having an aggregate gross sales price of up to $300.0 million, exclusive of shares of common stock sold under its prior agreements with our Agents. The shares of common stock may be sold from time to time through or to one or more of the Agents, as may be determined by the Company in its sole discretion, subject to the terms and conditions of the third amended and restated sales agency agreement and applicable law. In addition, the Company may enter into one or more forward sales agreements under the ATM Program. As of December 31, 2025, the Company had $300.0 million remaining that may be issued under the ATM Program. See Note 7 – Stockholders' Equity to the Consolidated Financial Statements for more detail on the ATM Program.

Security Deposits

As of December 31, 2025, the Company held approximately $2.6 million in security deposits, included in other liabilities, on the Consolidated Balance Sheet, for the benefit of the Company in the event the obligated tenant fails to perform under the terms of its respective lease. Generally, the Company may, at its discretion and upon notification to the tenant, draw upon the security deposits if there are any defaults under the leases.

Credit Facility

The Company's third amended and restated credit agreement, as amended (the "Credit Facility") provides for a $400.0 million revolving credit facility (the "Revolving Credit Facility") and $275.0 million in term loans (the "Term Loans"), as well as an accordion feature which allows borrowings up to a total of $875.0 million, including the ability to add and fund additional term loans. The Company has entered into interest rate swaps to fix the interest rates on the Term Loans and the portion of the Revolver balance that was used to repay a Term Loan. Note 5 – Debt, net and Note 6 – Derivative Financial Instruments to the Consolidated Financial Statements provide more detail on the Company's debt and interest rate swaps. At December 31, 2025, the Company had borrowing capacity remaining under the Revolving Credit Facility of approximately $142.0 million.

The Company’s ability to borrow under the Credit Facility is subject to its ongoing compliance with a number of customary affirmative and negative covenants, including limitations with respect to liens, indebtedness, distributions, mergers, consolidations, investments, restricted payments and asset sales, as well as financial

maintenance covenants. The Company was in compliance with its financial covenants under its Credit Facility as of December 31, 2025.

Ground Leases

At December 31, 2025, the Company was obligated, as the lessee, under four non-prepaid ground leases accounted for as operating leases with expiration dates through 2076, including renewal options, and two non-prepaid ground leases accounted for as a financing lease with an expiration date through 2109, including renewal options. Any rental increases related to the Company's ground leases are generally either stated or based on the Consumer Price Index. At December 31, 2025, the Company's aggregate obligation under these ground leases was approximately $8.5 million. See Note 3 – Real Estate Leases to the Consolidated Financial Statements.

Acquisition Pipeline

The Company anticipates funding these investments with cash from operations, from net proceeds from equity or debt issuances, from our Credit Facility, or from asset sales.

Asset Disposition

On February 12, 2026, the Company sold the property classified as an asset held for sale at December 31, 2025 and received net proceeds of approximately $5.2 million.

Tenant Improvements and Capital Improvements

The Company may provide tenant improvement allowances in new or renewal leases for the purpose of refurbishing or renovating tenant space. The Company may also assume tenant improvement obligations included in leases acquired in its real estate acquisitions. As of December 31, 2025, the Company had approximately $28.8 million in commitments for tenant improvements. Three of these projects, with remaining obligations totaling approximately $8.0 million as of December 31, 2025, represent redevelopment projects of the buildings into different healthcare uses backed by long term leases.

The Company has entered into contracts with various vendors for various capital improvement projects related to its portfolio. As of December 31, 2025, the Company had approximately $2.0 million in commitments for capital improvement projects; three of these projects totaling approximately $0.9 million, represent redevelopment projects of the buildings into different healthcare uses backed by long-term leases.

The Company anticipates funding these investments with cash from operations, or with net proceeds from equity or debt issuances, from our Credit Facility, or from asset sales.

Notes Receivable

The Company has one revolving credit facility with a tenant with an unfunded commitment remaining totaling approximately $5.8 million at December 31, 2025. See Note 10 – Other Assets, net to the Consolidated Financial Statements.

Dividends

The Company is required to pay dividends to its stockholders at least equal to 90% of its taxable income in order to maintain its qualification as a REIT. The ability of the Company to pay dividends is dependent upon its ability to generate cash flows and to make accretive new investments.

During 2025, 2024 and 2023, the Company paid cash dividends in the amounts of $1.885 per share, $1.845 per share and $1.805 per share, respectively.

On February 12, 2026, the Company’s Board of Directors declared a quarterly common stock dividend in the amount of $0.4775 per share. The dividend is payable on March 4, 2026 to stockholders of record on February 23, 2026.

Non-GAAP Financial Measures and Key Performance Indicators

Management considers certain non-GAAP financial measures and key performance indicators to be useful supplemental measures of the Company's operating performance. A non-GAAP financial measure is generally defined as one that purports to measure financial performance, financial position or cash flows, but excludes or includes amounts that would not be so adjusted in the most comparable measure determined in accordance with GAAP. The Company reports non-GAAP financial measures because these measures are observed by management to also be among the most predominant measures used by the REIT industry and by industry analysts to evaluate REITs. For these reasons, management deems it appropriate to disclose and discuss these non-GAAP financial measures. Set forth below are descriptions of the non-GAAP financial measures management considers relevant to the Company's business and useful to investors, as well as reconciliations of those measures to the most directly comparable GAAP financial measure.

The non-GAAP financial measures and key performance indicators presented herein are not necessarily identical to those presented by other real estate companies due to the fact that not all real estate companies use the same definitions. These measures should not be considered as alternatives to net income, as indicators of the Company's financial performance, or as alternatives to cash flow from operating activities as measures of the Company's liquidity, nor are these measures necessarily indicative of sufficient cash flow to fund all of the Company's needs. Management believes that in order to facilitate a clear understanding of the Company's historical consolidated operating results, these measures should be examined in conjunction with net income and cash flows from operations as presented in the Consolidated Financial Statements and other financial data included elsewhere in this Annual Report on Form 10-K.

Funds from Operations ("FFO") and Adjusted Funds from Operations ("AFFO")

FFO is an operating performance measure adopted by the National Association of Real Estate Investment Trusts, Inc. (“NAREIT”). NAREIT defines FFO as the most commonly accepted and reported measure of a REIT’s operating performance equal to net income (calculated in accordance with GAAP), excluding gains or losses from the sale of certain real estate assets, gains and losses from change in control, impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity, plus depreciation and amortization related to real estate properties, and after adjustments for unconsolidated partnerships and joint ventures. NAREIT also provides REITs with an option to exclude gains, losses and impairments of assets that are incidental to the main business of the REIT from the calculation of FFO.

In addition to FFO, the Company presents AFFO and AFFO per share. The Company defines AFFO as FFO, excluding certain expenses related to closing costs of properties acquired accounted for as business combinations and mortgages funded, excluding straight-line rent and the amortization of stock-based compensation, and including or excluding other non-cash items from time to time. AFFO presented herein may not be comparable to similar measures presented by other real estate companies due to the fact that not all real estate companies use the same definition.

Management believes that net income, as defined by GAAP, is the most appropriate earnings measurement. However, management believes FFO, AFFO, FFO per share and AFFO per share provide an understanding of the operating performance of the Company’s properties without giving effect to certain significant non-cash items, primarily depreciation and amortization expense. Historical cost accounting for real estate assets in accordance with GAAP assumes that the value of real estate assets diminishes predictably over time. However, real estate values instead have historically risen or fallen with market conditions. The Company believes that by excluding the effect of depreciation, amortization, impairments and gains or losses from sales of real estate, losses and impairment of

incidental assets, all of which are based on historical costs and which may be of limited relevance in evaluating current performance, FFO, AFFO, FFO per share and AFFO per share can facilitate comparisons of operating performance between periods.

The table below reconciles net income to FFO and AFFO for the years ended December 31, 2025, 2024, and 2023.

Year Ended December 31,

(Amounts in thousands, except per share amounts) 2025 2024 2023

Accelerated amortization of stock-based compensation (2) 4,591 — 11,799

Severance and transition-related expenses (2) 1,311 — —

Net gain from insurance recovery on casualty loss — — (706)

FFO per diluted common share $ 1.69 $ 1.91 $ 1.86

AFFO per diluted common share $ 2.15 $ 2.21 $ 2.49

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(1) During 2025 and 2024, the Company recorded credit loss reserves on its notes receivable with a geriatric inpatient behavioral hospital borrower/tenant totaling approximately $8.7 million and $11.0 million, respectively, where collectibility was not reasonably assured. The Company's notes receivable are considered incidental to the Company's main business, as such, the reserves are added back to FFO.

(2) During 2025, the Company recorded severance and transition-related charges totaling approximately $5.9 million, including non-cash accelerated amortization of stock-based compensation of approximately $4.6 million. Also, non-cash accelerated amortization of stock-based compensation totaling $11.8 million was recorded in 2023 upon the passing of the Company's former CEO.

(3) Diluted weighted average common shares outstanding for FFO are calculated based on the treasury method, rather than the 2-class method used to calculate earnings per share.

Net Operating Income ("NOI")

NOI is a key performance indicator. NOI is defined as net income or loss, computed in accordance with GAAP, generated from our total portfolio of properties and other investments before general and administrative expenses, depreciation and amortization expense, gains or losses on the sale of real estate properties or other investments, interest expense, deferred income tax expense, and interest and other income, net. We believe that NOI provides an accurate measure of operating performance of our operating assets because NOI excludes certain items that are not associated with management of the properties. The Company's use of the term NOI may not be comparable to that of other real estate companies as they may have different methodologies for computing NOI.

The table below reconciles net income to NOI for the years ended December 31, 2025, 2024, and 2023.

Year Ended December 31,

Severance and transition related expenses 1,311 — —

Accelerated amortization of stock-based compensation 4,591 — 11,799

Deferred income taxes 23 — 306

Interest and other income, net (34) (530) (813)

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(1) General and administrative expenses for 2025 and 2023 exclude accelerated amortization of stock-based compensation and severance and transition related expenses, which are shown separately in the table.

EBITDAre and Adjusted EBITDAre

The Company uses the NAREIT definition of EBITDAre which is net income plus interest expense, income tax expense, and depreciation and amortization, plus losses or minus gains on the disposition of depreciable property, including losses/gains on change of control, plus impairment write-downs of depreciable property and of investments in unconsolidated affiliates caused by a decrease in value of depreciable property in the affiliate, plus or minus adjustments to reflect the entity's share of EBITDAre of unconsolidated affiliates and consolidated affiliates with non-controlling interest. The Company also presents Adjusted EBITDAre which is EBITDAre before non-cash items, such as stock-based compensation expense and other such items.

We consider EBITDAre and Adjusted EBITDAre important measures because they provide additional information to allow management, investors, and our current and potential creditors to evaluate and compare our core operating results and our ability to service debt.

The table below reconciles net income to EBITDAre and Adjusted EBITDAre for the years ended December 31, 2025, 2024, and 2023.

Year Ended December 31,

Deferred income tax expense 23 — 306

Accelerated amortization of stock-based compensation 4,591 — 11,799

Net gain from insurance recovery on casualty loss — — (706)

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(1) General and administrative expenses for 2025 and 2023 exclude accelerated amortization of stock-based compensation which are shown separately in the table.

Critical Accounting Policies and Estimates

Our Consolidated Financial Statements are prepared in conformity with GAAP and the rules and regulations of the SEC. In preparing the Consolidated Financial Statements, management is required to exercise judgment and make assumptions and estimates that may impact the carrying value of assets and liabilities and the reported amounts of revenues and expenses. Actual results could differ from those estimates. Set forth below is a summary of our accounting policies and estimates that we believe are critical to the preparation of our Consolidated Financial Statements. Our accounting policies are more fully discussed in Note 1 – Summary of Significant Accounting Policies to the Consolidated Financial Statements.

Principles of Consolidation

Our Consolidated Financial Statements may include the accounts of the Company, its wholly owned subsidiaries, joint ventures, partnerships and variable interest entities, or VIEs, where the Company controls the operating activities. All material intercompany accounts, transactions, and balances have been eliminated.

Management must make judgments regarding the Company's level of influence or control over an entity and whether or not the Company is the primary beneficiary of a variable interest entity. Consideration of various factors include, but is not limited to, the Company's ability to direct the activities that most significantly impact the entity's governing body, the size and seniority of the Company's investment, the Company's ability and the rights of other investors to participate in policy making decisions, the Company's ability to replace the manager and/or liquidate the entity. Management's ability to correctly assess its influence or control over an entity when determining the primary beneficiary of a VIE affects the presentation of these entities in the Company's Consolidated Financial Statements. If it is determined that the Company is the primary beneficiary of a VIE, the Company's Consolidated Financial Statements would consolidate the VIE rather than the Company's pro rata results of its variable interest in the VIE. The Company would depend on the VIE to provide timely financial information and would rely on the interest control of the VIE to provide accurate financial information. Untimely or inaccurate financial information provided to the Company or deficiencies in the VIE's internal controls over financial reporting could impact the Company's Consolidated Financial Statements and its internal control over financial reporting.

Accounting for Acquisitions of Real Estate Properties

Real estate property acquisitions are accounted for as a business combination or an asset acquisition. An acquisition accounted for as a business combination is recorded at fair value and related closing costs are expensed as incurred. An acquisition accounted for as an asset acquisition is recorded at its purchase price, inclusive of acquisition costs, which is allocated among the acquired assets and assumed liabilities based upon their relative fair values at the date of acquisition. The Company expects that substantially all of its acquisitions will be accounted for as asset acquisitions.

The acquisition date fair values of the tangible and intangible assets and acquired liabilities are estimated based on information obtained from multiple sources as a result of pre-acquisition due diligence, tax records, and other sources, including third-party valuations. Based on these estimates, we recognize the acquired assets and liabilities based on their estimated fair values. We expense transaction costs associated with business combinations in the period incurred. The fair value of tangible property assets acquired considers the value of the property as if vacant and determined by a combination of comparable sales, replacement cost, income valuation approach and other relevant data. The determination of fair value involves the use of significant judgment and estimation. We value land based on various inputs, which may include internal analysis of recently acquired properties, existing comparable properties within our portfolio, or third party appraisals or valuations based on comparable sales.

In recognizing identified intangible assets and liabilities of an acquired property, the value of above- or below-market leases is estimated based on the present value (using a discount rate which reflects the risks associated with the leases acquired) of the difference between contractual amounts to be received pursuant to the leases and management’s estimate of market lease rates measured over a period equal to the estimated remaining term of the lease. In the case of a below-market lease, we also evaluate any renewal options associated with that lease to determine if the intangible should include those periods. The capitalized above-market or below-market lease

intangibles are amortized as a reduction from or an addition to rental income over the estimated remaining term of the respective leases.

In determining the value of in-place leases and tenant relationships, we consider current market conditions and costs to execute similar leases in arriving at an estimate of the carrying costs during the expected lease-up period from vacant to existing occupancy. In estimating carrying costs, we include real estate taxes, insurance, other property operating expenses, estimates of lost rental revenue during the expected lease-up periods, and costs to execute similar leases, including leasing commissions. The values assigned to in-place leases and tenant relationships are amortized over the estimated remaining term of the lease. If a lease terminates prior to its scheduled expiration, all unamortized costs related to that lease are written off.

Long-lived Asset Impairments

The Company assesses the potential for impairment of identifiable, definite-lived, intangible assets and long-lived assets, including real estate properties, whenever events occur or a change in circumstances indicates that the carrying value might not be fully recoverable. Indicators of impairment may include significant under-performance of an asset relative to historical or expected operating results; significant changes in the Company’s use of assets or the strategy for its overall business; plans to sell an asset before its depreciable life has ended; the expiration of a significant portion of leases in a property; or significant negative economic trends or negative industry trends for the Company or its operators. In addition, the Company’s review for possible impairment may include those assets subject to purchase options and those impacted by casualties, such as tornadoes and hurricanes.

In addition, the Company assesses whether there were other indicators, including property operating performance, occupancy, changes in holding periods, and other market conditions, that would suggest that the value of the Company's investment may have been impaired.

If management determines that the carrying value of the Company’s assets may not be fully recoverable based on the existence of any of the factors above, or others, management would measure and record an impairment charge based on the estimated fair value of the property or the estimated fair value less costs to sell the property.

Revenue Recognition

The primary source of revenue for the Company is generated through its leasing arrangements with its tenants which is accounted for under Accounting Standards Codification Topic 842 ("ASC Topic 842"), or through notes with its borrowers which is covered under ASC 310. The Company's rental income and interest income are recognized based on contractual arrangements with its tenants and borrowers. From the inception of a lease, if collection of substantially all of the lease payments is probable for a tenant, then rental income is recognized as earned over the life of the lease agreement on a straight-line basis. Management's judgment is necessary if or when it determines that collection of substantially all of a lessee’s payments is not probable, upon which time, the Company will revert to recognizing such lease payments on a cash basis and will reverse any recorded receivables related to that lease. In the event that management subsequently determines collection of substantially all of that lease’s receivable is probable, management will reinstate and record all such receivables for the lease in accordance with the lease.

Allowance for Credit Losses

Credit losses on financial instruments are measured using an expected credit loss ("CECL") model in evaluating the collectability of notes receivable and other financial instruments. The CECL impairment model requires an estimate of expected credit losses, measured over the contractual life of an instrument, that considers forecasts of future economic conditions in addition to information about past events and current conditions. Under the CECL model, the Company estimates credit losses over the entire contractual term of the instrument from the date of initial recognition of that instrument and is required to record a credit loss expense (or reversal) in each reporting period.

The Company evaluates factors such as its historical credit loss experience with the borrower or similar financial assets, current economic conditions, current and expected future financial condition of the borrower, as well as payment history of the borrower, along with other relevant factors for each borrower or similar instruments. If a sale of the borrower's collateral, such as the underlying business or real estate, is expected to repay amounts due to the Company, the Company will also evaluate the value of the underlying collateral in measuring any expected credit

loss which may include, but is not limited to, the borrower's current or projected operating cash flows and financial performance, the borrower's ability to refinance the loan, market liquidity and/or other circumstances that could impact the borrower's ability to satisfy its obligations under its notes with the Company.

Use of Estimates in the Consolidated Financial Statements

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed to market risk in the form of changing interest rates on its debt and mortgage note receivable. Market risk refers to the risk of loss from adverse changes in market prices and interest rates. Management uses regular monitoring of market conditions and analysis techniques to manage this risk.

As of December 31, 2025, the Company's Revolving Credit Facility and Term Loans were based on variable interest rates while its notes receivable bore interest at fixed rates. The Company has entered into interest rate swaps to fix the interest rates on its Term Loans and $75.0 million of the $258.0 million Revolving Credit Facility borrowings outstanding as of December 31, 2025. The swaps to fix the interest rate on the Revolving Credit Facility borrowings mature in March 2026. See Trends and Matters Impacting Operating Results in Item 7 for more information related to these interest rate swaps.

The following table provides information regarding the sensitivity of certain of the Company’s financial instruments, reflecting the effect of hedging instruments, as described above, to market conditions and changes resulting from changes in interest rates. For purposes of this analysis, sensitivity is demonstrated based on hypothetical 10% changes in the underlying market interest rates.

Impact on Earnings and Cash Flows

Variable Rate Debt:

Revolving Credit Facility, hedged (1) $ 75,000 $ 2,881 $ — $ —

___________

Fair Value

Fixed Rate Receivables/Payable:

___________

Inflation

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Report of Independent Registered Public Accounting Firm

Stockholders and Board of Directors

Community Healthcare Trust Incorporated

Franklin, Tennessee

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Community Healthcare Trust Incorporated (the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive (loss) income, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2025, and the related notes and financial statement schedules listed in the accompanying index (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and our report dated February 17, 2026 expressed an unqualified opinion thereon.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Asset Impairment – Assessment of Recoverability for Real Estate Properties

The Company recorded total real estate properties, net of accumulated depreciation, of approximately $923 million as of December 31, 2025. As described in Note 1 to the consolidated financial statements, the Company assesses the potential for impairment of long-lived assets, including real estate properties, whenever events occur or a change in circumstances indicates that the carrying value might not be fully recoverable. A long-lived asset is tested for impairment when management’s estimate of current and projected, undiscounted and unleveraged, operating cash flows of the property is

less than the net carrying value of the long-lived asset. In determining these cash flows, the Company estimates market rents, capitalization rates, and other relevant inputs.

We identified management's assessment of recoverability for certain real estate properties as a critical audit matter. The determination of the operating cash flows used in recoverability tests requires judgment and estimation of certain assumptions, including market rents and capitalization rates. Auditing these elements involved especially challenging auditor judgment due to the nature and extent of audit effort required to address this matter, including the extent of specialized skills or knowledge needed.

The primary procedures we performed to address this critical audit matter included:

•Assessing the reasonableness of certain assumptions used by management in their recoverability test by utilizing professionals with specialized knowledge and skills in valuation specific to market rents and capitalization rates, including comparing to third party market data.

Current Expected Credit Losses – Estimation of Fair Value of Underlying Collateral of Notes Receivable

As described in Notes 1 and 10 to the consolidated financial statements, the Company estimates credit losses over the entire contractual term of the instrument from the date of initial recognition of that instrument and is required to record a credit loss expense (or reversal) in each reporting period. The Company evaluates factors such as its historical credit loss experience with the borrower or similar financial assets, current economic conditions, current and expected future financial condition of the borrower, as well as payment history of the borrower, along with other relevant factors for each borrower or similar instruments. If a sale of the borrower's collateral, such as the underlying business or real estate, is expected to repay amounts due to the Company, the Company will also evaluate the value of the underlying collateral in measuring any expected credit loss. During 2025, the Company recorded an $8.7 million credit loss reserve related to the remaining balance of its notes receivable with a borrower/tenant.

We identified the estimation of the fair value of the underlying collateral of notes receivable as a critical audit matter. Estimating the fair value of the underlying collateral requires management to obtain borrower/tenant financial data and to make certain valuation estimates using such borrower/tenant financial data and letters of intent. Auditing these elements involved especially challenging and subjective auditor judgment due to the nature and extent of audit effort required to address this matter, including the extent of specialized skills or knowledge needed.

The primary procedures we performed to address this critical audit matter included:

•Utilizing professionals with specialized knowledge and skills in valuation to assess the reasonableness of the fair value of the underlying collateral of the notes receivable by developing an independent estimate of the fair value of the underlying collateral, using a weighting of borrower/tenant financial data and letters of intent.

•Testing the completeness and accuracy of the borrower/tenant financial data, used in the estimation of the fair value of the underlying collateral.

/s/ BDO USA, P.C.

We have served as the Company's auditor since 2015.

Nashville, Tennessee

February 17, 2026

COMMUNITY HEALTHCARE TRUST INCORPORATED

CONSOLIDATED BALANCE SHEETS

(Dollars and shares in thousands, except per share amounts)

December 31,

ASSETS

Real estate properties

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities

Accounts payable and accrued liabilities 14,925 14,289

Commitments and contingencies

Stockholders' Equity

Accumulated other comprehensive income 6,691 17,631

Total liabilities and stockholders' equity $ 990,757 $ 992,563

See accompanying notes to the consolidated financial statements.

COMMUNITY HEALTHCARE TRUST INCORPORATED

CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars and shares in thousands, except per share amounts)

Year Ended December 31,

REVENUES

EXPENSES

OTHER (EXPENSE) INCOME

Deferred income tax expense (23) — (306)

Interest and other income, net 34 530 813

NET INCOME (LOSS) PER COMMON SHARE

Net income (loss) per common share - Basic $ 0.08 $ (0.23) $ 0.20

Net income (loss) per common share - Diluted $ 0.08 $ (0.23) $ 0.20

See accompanying notes to the consolidated financial statements.

COMMUNITY HEALTHCARE TRUST INCORPORATED

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(Dollars in thousands)

Year Ended December 31,

Other comprehensive (loss) income:

(Decrease) increase in fair value of cash flow hedges (3,870) 11,625 3,803

See accompanying notes to the consolidated financial statements.

COMMUNITY HEALTHCARE TRUST INCORPORATED

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Dollars and shares in thousands, except per share amounts)

Preferred Stock Common Stock

Stock-based compensation, net of forfeitures — — 331 3 19,962 — — — 19,965

Shares withheld on vesting of stock-based compensation — — — — (963) — — — (963)

Increase in fair value of cash flow hedges — — — — — — 3,803 — 3,803

Issuance of common stock, net of issuance costs — — 313 3 7,169 — — — 7,172

Stock-based compensation, net of forfeitures — — 350 3 9,984 — — — 9,987

Increase in fair value of cash flow hedges — — — — — — 11,625 — 11,625

Issuance costs on stock-based compensation — — — — (175) — — — (175)

Stock-based compensation, net of forfeitures — — 336 3 14,893 — — — 14,896

Decrease in fair value of cash flow hedges — — — — — — (3,870) — (3,870)

See accompanying notes to the consolidated financial statements.

COMMUNITY HEALTHCARE TRUST INCORPORATED

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

For the Year Ended December 31,

OPERATING ACTIVITIES

Accelerated amortization of stock-based compensation 4,591 — 11,799

Net gain from insurance recovery on casualty loss — — (706)

Deferred income tax expense 23 — 306

Changes in operating assets and liabilities:

Accounts payable and accrued liabilities (1,219) 2,273 859

INVESTING ACTIVITIES

Proceeds from the sale of real estate 32,202 2,301 —

Funding of notes receivable — (3,075) (1,985)

Proceeds from repayments on notes receivable 5,225 5,123 3,915

Insurance proceeds from casualty loss — — 2,273

FINANCING ACTIVITIES

Term loan repayments — (75,000) —

Mortgage note repayments — (4,820) (126)

Proceeds from issuance of common stock — 7,492 44,232

Debt issuance costs — (3,433) —

Net cash (used in) provided by financing activities (9,778) 33,533 44,857

For the Year Ended December 31,

Supplemental Cash Flow Information:

(Decrease) increase in fair value of cash flow hedges $ (3,870) $ 11,625 $ 3,803

See accompanying notes to the consolidated financial statements.

COMMUNITY HEALTHCARE TRUST INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2025

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business Overview

Community Healthcare Trust Incorporated (the ‘‘Company’’, ‘‘we’’, ‘‘our’’) was organized in the State of Maryland on March 28, 2014. The Company is a fully-integrated healthcare real estate company that owns and acquires real estate properties that are leased to hospitals, doctors, healthcare systems or other healthcare service providers. As of December 31, 2025, we had gross investments of approximately $1.2 billion in 198 real estate properties (including one property, with sales-type leases, with a gross amount totaling approximately $8.1 million and one property classified as held for sale with a net investment totaling approximately $5.3 million). The properties are located in 36 states, totaling approximately 4.5 million square feet in the aggregate, with a weighted average remaining lease term of approximately 7.0 years. Excluding the real estate asset held for sale, the properties were approximately 90.6% leased at December 31, 2025. Any references to square footage, property count, or occupancy percentages, and any amounts derived from these values in these notes to the consolidated financial statements are unaudited.

Principles of Consolidation

Our Consolidated Financial Statements include the accounts of the Company, its wholly-owned subsidiaries, and may also include joint ventures, partnerships and variable interest entities, or VIEs, where the Company controls the operating activities. Management must make judgments regarding the Company's level of influence or control over an entity and whether or not the Company is the primary beneficiary of a VIE. Consideration of various factors include, but is not limited to, the Company's ability to direct the activities that most significantly impact the entity's governing body, the size and seniority of the Company's investment, and the Company's ability to replace the manager and/or liquidate the entity. Management's ability to correctly assess its influence or control over an entity when determining the primary beneficiary of a VIE affects the presentation of these entities in the Company's Consolidated Financial Statements. If it is determined that the Company is the primary beneficiary of a VIE, the Company's Consolidated Financial Statements would consolidate the VIE rather than the Company's pro rata results of its variable interest in the VIE. Untimely or inaccurate financial information provided to the Company or deficiencies in the VIE's internal control over financial reporting could impact the Company's Consolidated Financial Statements and its own internal control over financial reporting. See Note 10 – Other Assets, net regarding VIEs identified by the Company related to its notes receivable.

All material intercompany accounts, transactions, and balances have been eliminated in the presentation of the Company's Consolidated Financial Statements.

Use of Estimates in the Consolidated Financial Statements

Preparation of the Consolidated Financial Statements in accordance with GAAP requires management to make estimates and assumptions that affect amounts reported in the Consolidated Financial Statements and accompanying notes, including, among others, estimates related to impairment assessments, purchase price allocations, valuation of properties held for sale, and valuation of financial instruments. Actual results may materially differ from those estimates.

Segment Reporting

The Company acquires and owns, or finances, healthcare-related real estate properties that are leased to hospitals, doctors, healthcare systems or other healthcare service providers throughout the U.S. The Company operates and manages its business as one reportable operating segment. Operating segments are defined as components of an enterprise where separate financial information is evaluated regularly by the chief operating decision maker ("CODM") in deciding how to allocate resources and assess performance. The Company's CODM is the Chief Executive Officer who reviews total consolidated assets and consolidated net income (loss) and assesses the performance of the Company's portfolio and makes operating decisions accordingly. There are no significant

Notes to Consolidated Financial Statements - Continued

segment expenses which require disclosure other than the expense categories on the Consolidated Statements of Operations.

Cash, Cash Equivalents

Cash and cash equivalents includes short-term investments with original maturities of three months or less when purchased.

Real Estate Properties

The allocation of real estate property acquisitions may include land and land improvements, building and building improvements, and identified intangible assets and liabilities (which can include above- and below-market leases, in-place leases, and tenant relationships) based on the evaluation of information and estimates available at the acquisition date, and we allocate the purchase price based on these assessments. We make estimates of the acquisition date fair value of the acquired tangible and intangible assets and assumed liabilities using information obtained from multiple sources as a result of pre-acquisition due diligence, tax records, and other sources, including third-party valuations. Based on these estimates, we recognize the acquired assets and assumed liabilities at their relative fair values for asset acquisitions. The fair value of tangible property assets acquired considers the value of the property as if vacant determined by a combination of comparable sales, replacement cost, income valuation approach and other relevant data. The determination of fair value involves the use of significant judgment and estimation. We value land based on various inputs, which may include internal analysis of recently acquired properties, existing comparable properties within our portfolio, or third-party appraisals or valuations based on comparable sales. If a lease terminates prior to its scheduled expiration, all unamortized costs related to that lease are written off.

In recognizing identified intangible assets and liabilities of an acquired property, the value of above- or below-market leases is estimated based on the present value (using a discount rate which reflects the risks associated with the leases acquired) of the difference between contractual amounts to be received pursuant to the leases and an estimate of market lease rates measured over the remaining term of the lease. In the case of a below-market lease, renewal options associated with that lease are evaluated to determine if the intangible should include those periods. The capitalized above-market or below-market lease intangibles are amortized as a reduction from or an addition to rental income over the estimated remaining term of the respective leases.

In determining the value of in-place leases and tenant improvements, current market conditions and costs to execute similar leases to arrive at an estimate of the carrying costs during the expected lease-up period from vacant to existing occupancy are considered. Estimated carrying costs include real estate taxes, insurance, other property operating expenses, estimates of lost rental revenue during the expected lease-up periods, and costs to execute similar leases, including leasing commissions. The values assigned to in-place leases and tenant relationships are amortized over the estimated remaining term of the lease.

The Company may capitalize direct costs, including costs such as construction costs and professional services, and indirect costs, including capitalized interest and overhead costs, associated with the development and construction of real estate assets while substantive activities are ongoing to prepare the assets for their intended use. Capitalized interest cost is calculated using the weighted average interest rate of the revolving credit facility debt.

Long-lived Asset Impairments

Notes to Consolidated Financial Statements - Continued

carrying value might not be fully recoverable. Indicators of impairment may include significant under-performance of an asset relative to historical or expected operating results; significant changes in the Company’s use of assets or the strategy for its overall business; plans to sell an asset before its depreciable life has ended; the expiration of a significant portion of leases in a property; or significant negative economic trends or negative industry trends for the Company or its operators. In addition, the Company’s review for possible impairment may include those assets subject to purchase options and those impacted by casualties, such as tornadoes and hurricanes or sustained changes to property occupancy. A long-lived asset is tested for impairment when management's estimate of current and projected, undiscounted and unleveraged, operating cash flows of the property is less than the net carrying value of the property. In determining these cash flows, the Company estimates market rents, capitalization rates, expected holding periods, and other relevant inputs. If management determines that the carrying value of the Company’s assets may not be fully recoverable based on the existence of any of the factors above, or others, management would measure and record an impairment charge based on the estimated fair value of the property or the estimated fair value less costs to sell the property. The Company recorded impairments totaling approximately $1.8 million, $0.1 million, and $0.1 million on assets classified as held for sale during the years ended December 31, 2025, 2024 and 2023.

Assets Held for Sale

The Company may sell properties from time to time for various reasons, including the exercise of purchase options by our tenants. The Company classifies long-lived assets as held for sale once certain criteria have been met. The Company classifies a real estate property, or portfolio, as held for sale when: (i) management has approved the disposal, (ii) the property is available for sale in its present condition, (iii) an active program to locate a buyer has been initiated, (iv) it is probable that the property will be disposed of within one year, (v) the property is being marketed at a reasonable price relative to its fair value, and (vi) it is unlikely that the disposal plan will significantly change or be withdrawn. Following the classification of a property as “held for sale,” no further depreciation or amortization is recorded on the assets and the assets are recorded at the lower of carrying value or fair market value, less cost to sell. See Note 4 – Real Estate Acquisitions, Dispositions, and Assets Held for Sale for more details.

Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants. In calculating fair value, a company must maximize the use of observable market inputs, minimize the use of unobservable market inputs and disclose in the form of an outlined hierarchy the details of such fair value measurements.

A hierarchy of valuation techniques is defined to determine whether the inputs to a fair value measurement are considered to be observable or unobservable in a marketplace. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. This hierarchy requires the use of observable market data when available. These inputs have created the following fair value hierarchy:

•Level 1 – quoted prices for identical instruments in active markets.

•Level 2 – quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and

•Level 3 – fair value measurements derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

Our interest rate swaps are valued in the market using discounted cash flow techniques. These techniques incorporate Level 2 inputs. The market inputs are utilized in the discounted cash flow calculation considering the instrument’s term, notional amount, discount rate and credit risk. Significant inputs to the derivative valuation model for interest rate swaps are observable in active markets and are classified as Level 2 in the hierarchy.

Notes to Consolidated Financial Statements - Continued

Lease Accounting

As a lessor, we make a determination with respect to each of our leases whether they should be accounted for as sales-type, direct-financing, or operating leases. Additionally, for each of our real estate transactions involving the leaseback of the related property, or a portion of the related property, to the seller or affiliates of the seller, we determine whether these transactions qualify as sale and leaseback transactions under the accounting guidance in Accounting Standards Codification ("ASC") 842, Leases. For these transactions, we consider various inputs and assumptions including, but not necessarily limited to, lease terms, renewal options, discount rates, and other rights and provisions in the purchase and sale agreement, lease and other documentation to determine whether control has been transferred to the Company or remains with the lessee. A transaction involving a sale leaseback will be treated as a purchase of a real estate property if it is considered to transfer control of the underlying asset from the lessee to the Company. Criteria in determining the lease classification includes estimates and assumptions regarding the fair value of the leased facilities, minimum lease payments, effective cost of funds, the economic useful life of the facilities, the existence of a purchase option, and certain other terms in the lease agreements, as well as the amounts we expect to derive from the underlying property at the end of each lease which equals our purchase price. The lease accounting guidance requires that a sale leaseback with an option to purchase the property from the landlord at the tenant's option be accounted for as a financing or sales-type lease. We expect that most of our leases will be accounted for as operating leases. The Company had one property with two sales-type leases at December 31, 2025 and one sales-type lease at December 31, 2024 which are included in other assets on the Consolidated Balance Sheets.

Payments received under operating leases are accounted for in the Consolidated Statements of Operations as rental income for actual cash rent collected plus or minus straight-line adjustments, such as lease escalators. The Company has elected not to separate lease and nonlease components, such as common area maintenance, unless certain conditions are not met. As such, tenant reimbursements are combined with rental income on the Consolidated Statements of Operations.

The Company is the lessee under four non-prepaid ground leases accounted for as operating leases and two non-prepaid ground leases accounted for as financing leases. The Company has elected not to separate lease and nonlease components, such as common area maintenance, unless certain conditions are not met. Discount rates are determined using Company specific incremental borrowing rates, which represent the rate of interest that it would pay to borrow on a fully collateralized basis over a similar term. Right-of-use lease assets are included in other assets, net and lease liabilities are included in other liabilities, net on the Company's Consolidated Balance Sheets.

Revenue Recognition

The primary source of revenue for the Company is generated through its leasing arrangements with its tenants which is accounted for under ASC Topic 842, or through notes with its borrowers which is covered under ASC 310. The Company's rental income and interest income are recognized based on contractual arrangements with its tenants and borrowers. From the inception of a lease, if collection of substantially all of the lease payments is probable for a tenant, then rental income is recognized as earned over the life of the lease agreement on a straight-line basis. Recognizing rental revenue on a straight-line basis for leases may result in recognizing revenue in amounts more or less than amounts currently due from tenants. The Company recognizes operating expense recoveries in the period that applicable expenses are incurred. Other variable payments, such as late fees and sales tax are recognized based on the contractual terms of its leases. Income received but not yet earned is deferred until such time it is earned.

Losses from Operating Lease Receivables

We assess the probability of collecting substantially all rents under our leases, on a tenant-by-tenant basis, based on several factors, including, payment and default history, financial strength of the tenant and/or guarantors, historical and operating trends of the property, and the value of the underlying collateral, if any. If management determines that collection of substantially all of a lease’s payments is not probable, we will revert to recognizing such lease payments at the lesser of cash collected, lease income reflected on a straight-line basis, or another systematic basis plus variable rent when it becomes accruable and will reverse any recorded receivables related to that lease. At December 31, 2025 and 2024, the Company had $7.5 million and $4.4 million, respectively, of lease receivables related to cash basis tenants that were reversed against rental income, including $1.1 million and $1.0 million,

Notes to Consolidated Financial Statements - Continued

respectively, of straight-line rent ($6.6 million and $3.6 million, respectively, of the lease receivables and $1.0 million and $0.9 million, respectively, of the straight-line rent related to a geriatric behavioral hospital tenant). In the event that management subsequently determines collection of substantially all of a lessee's future lease payments are probable of collection, management will reinstate and record all such receivables for the lease in accordance with the lease terms. The Company also maintains a general allowance for its lease receivables that the Company has determined are not probable of collection. During December 31, 2025 and 2024, the Company had a general allowance for lease receivables of $0.2 million and $0.4 million, respectively. Accounts receivable, straight-line rent and related allowances are included in Other assets, net on the Company's Consolidated Balance Sheets and any offsetting reduction in income is included in rental income on the Company's Statements of Operations.

Credit Losses on Notes and Interest Receivables

Historically, the Company has at times entered into notes with certain of its tenants for working capital or other needs. We consider our notes to be incidental to our main business of acquiring and leasing healthcare real estate. Credit losses on financial instruments are measured using an expected credit loss ("CECL") model in evaluating the collectability of notes receivable and other financial instruments. The CECL impairment model requires an estimate of expected credit losses, measured over the contractual life of an instrument, that considers forecasts of future economic conditions in addition to information about past events and current conditions. Under the CECL model, the Company estimates credit losses over the entire contractual term of the instrument from the date of initial recognition of that instrument and is required to record a credit loss expense (or reversal) in each reporting period. The Company evaluates factors such as its historical credit loss experience with the borrower or similar financial assets, current economic conditions, current and expected future financial condition of the borrower, as well as payment history of the borrower, along with other relevant factors for each borrower or similar instruments. If a sale of the borrower's collateral, such as the underlying business or real estate, is expected to repay amounts due to the Company, the Company will also evaluate the value of the underlying collateral in measuring any expected credit loss. Estimating the fair value of underlying collateral requires management to determine certain assumptions used for the estimation of fair value, including borrower/tenant financial data used in the determination of adjusted earnings before income taxes, depreciation and amortization ("EBITDA") and the selected EBITDA multiple range. The Company's financial instruments included in the scope of the CECL guidance are the principal balances of its tenant notes receivable and its net investment in sales-type leases which are included in Other assets on the Company's Consolidated Balance Sheets.

We made an accounting policy election to exclude interest receivables from the credit loss reserve model. The Company recognizes interest income on an accrual basis unless the Company has determined that collectability of contractual amounts is not reasonably assured, at which point the note is placed on non-accrual status and interest income is recognized on a cash basis. Subsequently, when collectability of contractual amounts is reasonably assured, management will resume the accrual basis.

During the year ended December 31, 2025, the Company recorded an $8.7 million credit loss reserve, and reversed $1.7 million of interest on notes receivable with a borrower/tenant, fully reserving the notes and interest related to the borrower/tenant. During the year ended December 31, 2024, the Company recorded an $11.0 million credit loss reserve, and reversed $2.8 million of interest on notes receivable with a borrower/tenant.

Stock-Based Compensation

The Company's 2024 Incentive Plan, as amended (the "2024 Incentive Plan") is intended to attract and retain qualified persons upon whom, in large measure, our sustained progress, growth and profitability depend, to motivate the participants to achieve long-term company goals and to more closely align the participants’ interests with those of our other stockholders by providing them with a proprietary interest in our growth and performance. The 2024 Incentive Plan will expire on March 4, 2034.

The three distinct programs under the 2024 Incentive Plan are the Fourth Amended and Restated Alignment of Interest Program (the "Alignment of Interest Program"), the Fourth Amended and Restated Executive Officer Incentive Program (the "Executive Officer Incentive Program") and the Second Amended and Restated Non-Executive Officer Incentive Program (the "Non-Executive Officer Incentive Program"). Our executive officers, officers, employees, consultants and non-employee directors are eligible to participate in the 2024 Incentive Plan.

Notes to Consolidated Financial Statements - Continued

The 2024 Incentive Plan is administered by the Company’s compensation committee, which interprets the 2024 Incentive Plan and has broad discretion to select the eligible persons to whom awards will be granted, as well as the type, size and terms and conditions of each award, including the number of shares subject to awards and the expiration date of, and the vesting schedule or other restrictions (including, without limitation, restrictive covenants) applicable to, awards. The Company recognizes share-based payments to its directors and employees in its Consolidated Statements of Operations on a straight-line basis over the shorter of the requisite service period, retirement eligibility date, or other period as deemed appropriate based on the fair value of the award on the grant date. In the event of a forfeiture, the previously recognized expense would be reversed.

Intangible Assets

Intangible assets with finite lives are amortized over their respective lives to their estimated residual values and are reviewed for impairment only when impairment indicators are present. Identifiable intangible assets of the Company are generally comprised of in-place and above-market lease intangible assets and below-market lease intangible liabilities, as well as deferred financing costs. In-place lease intangible assets are amortized to depreciation expense on a straight-line basis over the applicable lives of the leases. Above- and below-market lease intangibles are amortized to rental income on a straight-line basis over the applicable lives of the leases. Deferred financing costs are amortized to interest expense over the term of the related credit facility or other debt instrument using the straight-line method, which approximates amortization under the effective interest method.

Income Taxes

The Company has elected to be taxed as a real estate investment trust ("REIT"), as defined under the Internal Revenue Code of 1986, as amended (the "Code"). The Company and two subsidiaries have also elected for those subsidiaries to be treated as taxable REIT subsidiaries ("TRSs"), which are subject to federal and state income taxes. No provision has been made for federal income taxes for the REIT; however, the Company has recorded income tax expense or benefit for the TRSs to the extent applicable. The Company also evaluates the realizability of its deferred tax assets and will record valuation allowances if it is determined that more likely than not the asset will not be recovered. The Company intends at all times to qualify as a REIT under the Code. The Company must distribute at least 90% per annum of its REIT taxable income to its stockholders (which is computed without regard to the dividends paid deduction or net capital gain and which does not necessarily equal net income as calculated in accordance with generally accepted accounting principles) and meet other requirements to continue to qualify as a REIT. See further discussion in Note 15 – Other Data.

The Company classifies interest and penalties related to uncertain tax positions, if any, in the Consolidated Statements of Operations as a component of general and administrative expenses. No such amounts were recognized during 2025, 2024 or 2023.

Sales and Use Taxes

The Company must pay sales and use taxes to certain state tax authorities based on rental income collected from tenants in properties located in those states. The Company is generally reimbursed for those taxes by those tenants. The Company accounts for the payments to the taxing authority and subsequent reimbursement from the tenant on a net basis, included in rental income on the Company’s Consolidated Statements of Operations.

Concentration of Credit Risks

Our credit risks primarily relate to cash and cash equivalents, mortgage notes, if any, other notes receivable and our interest rate swaps, which are discussed below. Cash and cash equivalents are primarily held in bank accounts and overnight investments. We maintain our bank deposit accounts with large financial institutions in amounts that often exceed federally-insured limits. We have not experienced any losses in such accounts.

Derivative Financial Instruments

In the normal course of business, we are subject to risk from adverse fluctuations in interest rates. We have chosen to manage this risk through the use of derivative financial instruments, primarily with interest rate swaps. Counterparties to these contracts are major financial institutions. We are exposed to credit loss in the event of

Notes to Consolidated Financial Statements - Continued

nonperformance by these counterparties. We do not use derivative instruments for trading or speculative purposes. Our objective in managing exposure to market risk is to limit the impact on cash flows relating to interest payments on the Company's variable rate debt. To qualify for hedge accounting, our interest rate swaps must effectively reduce the risk exposure that they are designed to hedge. In addition, at inception of a qualifying cash flow hedging relationship, the underlying transaction or transactions must be, and are expected to remain, probable of occurring in accordance with our related assertions. All of our hedges are cash flow hedges and are recognized at their fair value in the Consolidated Balance Sheets. Changes in the fair value of the derivatives are recognized in accumulated other comprehensive income.

Earnings per Share

Basic earnings per common share is computed by dividing net income by the weighted average common shares outstanding less issued and outstanding non-vested shares of common stock. Diluted earnings per common share is calculated by including the effect of dilutive securities.

Our unvested restricted common stock and time-based restricted stock units outstanding contain non-forfeitable rights to dividends, and accordingly, these awards are deemed to be participating securities. These participating securities, under the 2-class method, are excluded in the earnings allocation in computing both basic and diluted earnings per common share.

Recent Accounting Pronouncements

Recently Adopted

On December 31, 2025, the Company adopted ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 requires that a Company provide additional disclosures including disaggregated information on its effective tax rate reconciliation as well as information on income taxes paid. One of the amendments in ASU 2023-09 includes disclosure of, on an annual basis, a tabular rate reconciliation (using both percentages and reporting currency amounts) of (i) the reported income tax expense (or benefit) from continuing operations, to (ii) the product of the income (or loss) from continuing operations before income taxes and the applicable statutory federal income tax rate of the jurisdiction of domicile using specific categories, including separate disclosure for any reconciling items within certain categories that are equal to or greater than a specified quantitative threshold of 5%. ASU 2023-09 also requires disclosure of, on an annual basis, the year-to-date amount of income taxes paid (net of refunds received) disaggregated by federal, state, and foreign jurisdictions, including additional disaggregated information on income taxes paid (net of refunds received) to an individual jurisdiction equal to or greater than 5% of total income taxes paid (net of refunds received).

Not Yet Adopted

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses, that will require entities to provide enhanced disclosures related to certain expense categories included in income statement captions. ASU 2024-03 aims to increase transparency and provide investors with more detailed information about the nature of expenses reported on the face of the income statement. The new standard does not change the requirements for the presentation of expenses on the face of the income statement. Entities will be required to disaggregate, in a tabular format, expense captions presented on the face of the income statement, including but not limited to employee compensation, intangible asset amortization, and depreciation and amortization. For any remaining items within each relevant expense caption, entities must provide a qualitative description of the nature of those expenses. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027 though early adoption is permitted. While the adoption is not expected to have an impact on our financial statements, it is expected to result in incremental disclosures within the footnotes to our Consolidated Financial Statements.

Notes to Consolidated Financial Statements - Continued

NOTE 2. REAL ESTATE INVESTMENTS

As of December 31, 2025, we had gross real estate investments of approximately $1.2 billion in 198 real estate properties (including one property with sales-type leases with a gross amount totaling approximately $8.1 million, included in other assets on the Consolidated Balance Sheets, and one property classified as held for sale with an aggregate amount totaling approximately $5.3 million). The Company's real estate investments are diversified by property type, geographic location, and tenant as shown in the following tables.

Property Type # of Properties Gross Investment(in thousands)

Inpatient Rehabilitation Hospitals 10 234,340

Acute Inpatient Behavioral 5 130,535

Behavioral Specialty Facilities 13 85,492

Surgical Centers and Hospitals 6 47,065

Long-term Acute Care Hospitals 2 21,484

State # of Properties Gross Investment(in thousands)

Primary Tenant # of Properties Gross Investment(in thousands)

Notes to Consolidated Financial Statements - Continued

Depreciation and amortization expense was $43.5 million, $42.8 million and $39.7 million, respectively, for the years ended December 31, 2025, 2024 and 2023, which is included on the Company's Consolidated Statements of Operations. Depreciation and amortization is recognized on a straight-line basis over the estimated useful lives of the assets. The estimated useful lives of our real estate properties at December 31, 2025 are as follows:

Land improvements 2 - 20 years

Buildings 7 - 53 years

Building improvements 3 - 39.8 years

Tenant improvements 1.9 - 20.9 years

Lease intangibles 2.6 - 13.7 years

Personal property 3 -10 years

NOTE 3. REAL ESTATE LEASES

Lessor Accounting

The Company’s properties are generally leased pursuant to non-cancelable, fixed-term operating leases with expiration dates through 2046. The Company’s leases generally require the lessee to pay minimum rent, with fixed rent renewal terms or increases based on a Consumer Price Index and may also include additional rent, which may include taxes (including property taxes), insurance, maintenance and other operating costs associated with the leased property. The real estate properties were 90.6% leased, excluding the real estate asset held for sale, at December 31, 2025 with a weighted average remaining lease term of approximately 7.0 years.

Future Minimum Lease Payments

Future minimum lease payments under the non-cancelable operating leases due the Company for the years ending December 31, as of December 31, 2025, are as follows (in thousands):

Customer Concentrations

The Company's real estate portfolio is leased to a diverse tenant base. See Note 2 – Real Estate Investments. For the years ended December 31, 2025, 2024 and 2023, the Company had no customers that accounted for more than 10% of its consolidated total revenues.

Geographic Concentrations

The Company's portfolio was located in 36 states at December 31, 2025. For the year ended December 31, 2025, 47.7% of our consolidated total revenues was derived from properties located in Texas (16.7%), Illinois (11.0%), Florida (10.0%), and Ohio (10.0%). For the year ended December 31, 2024, 39.0% of our consolidated total revenue was derived from properties located in Texas (17.1%), Illinois (11.3%) and Ohio (10.6%). For the year ended December 31, 2023, 38.4% of our consolidated total revenue was derived from properties located in Texas (14.7%), Ohio (12.7%) and Illinois (11.0%).

Purchase Option Provisions

Notes to Consolidated Financial Statements - Continued

value or at an amount greater than the Company's gross investment in the leased property at the time of the purchase. The Company had an aggregate gross investment of approximately $42.0 million in 13 real estate properties as of December 31, 2025 that were subject to exercisable purchase options.

Straight-line rental income

Rental income is recognized as earned over the life of the lease agreement on a straight-line basis when collection of rental payments over the term of the lease is probable. Straight-line rent included in rental income was approximately $3.7 million, $1.9 million, and $3.1 million, respectively, for the years ended December 31, 2025, 2024 and 2023.

Prepaid rent

Income received but not yet earned is deferred until such time it is earned. Prepaid rent, included in other liabilities, net on the Consolidated Balance Sheets, was approximately $6.0 million and $6.5 million, respectively, at December 31, 2025 and 2024.

Sales-type leases

The Company has one property with two sales-type leases totaling approximately $7.9 million included in other assets, net on the Company's Consolidated Balance Sheet. Future lease payments due to the Company under this lease for the years ending December 31, as of December 31, 2025, are as follows (in thousands):

Total undiscounted lease receivable 13,214

Lease receivable $ 7,894

During the year ended December 31, 2025 and 2024, the Company recognized interest income of approximately $0.6 million and $0.3 million, respectively, related to these leases which is included in other operating interest on the Company's Consolidated Statement of Operations.

Lessee Accounting

Notes to Consolidated Financial Statements - Continued

The Company's future lease payments under these non-prepaid ground leases were as follows (in thousands):

Operating Financing

Total undiscounted lease payments 1,237 7,263

Other information regarding our ground leases are disclosed in the following tables.

For the Year Ended December 31,

Operating lease costs:

Financing lease costs:

Amortization of right of use asset 59 59 59

Depreciation and amortization 59 59 59

Cash paid for amounts included in the measurement of lease liabilities:

Operating leases $ 44 $ 43 $ 42

Year Ended December 31,

Operating leases:

Weighted-average discount rate 4.0 % 4.0 %

Financing leases:

Weighted-average discount rate 4.3 % 4.3 %

Notes to Consolidated Financial Statements - Continued

NOTE 4. REAL ESTATE ACQUISITIONS, DISPOSITIONS, AND ASSETS HELD FOR SALE

2025 Real Estate Acquisitions

During the year ended December 31, 2025, the Company acquired three real estate properties as detailed in the table below. Upon acquisition, the properties were 100.0% leased in the aggregate with lease expirations through 2040. Amounts recorded in revenues and net income for these properties were approximately $2.6 million and $2.1 million, respectively, and transaction costs totaling approximately $0.3 million were capitalized for the year ended December 31, 2025 relating to these property acquisitions.

(1) BSF - Behavioral Specialty Facility; IRF - Inpatient Rehabilitation Facility

The following table summarizes the estimated relative fair values of the assets acquired and liabilities assumed in the property acquisitions for the year ended December 31, 2025.

Estimated Fair Value Weighted AverageUseful Life

(In thousands) (In years)

Land and land improvements $ 6,832 13.4

Building and building improvements 57,932 49.4

Accounts payable, accrued liabilities and other liabilities acquired (165)

Total cash consideration $ 64,599

2025 Dispositions

During the year ended December 31, 2025, the Company disposed of five properties. The Company received net proceeds of approximately $32.9 million, including $0.7 million where cash was received subsequent to December 31, 2025, and recognized an aggregate gain on sale, net of impairment and losses, of $11.6 million on the dispositions. Also, during 2025, the Company amended an operating lease on a property that resulted in a sales-type lease. As such, the Company reclassified the net book value of the real estate totaling $3.7 million to a net lease investment in other assets on the Condensed Consolidated Balance Sheet and recognized a gain on sale totaling approximately $1.3 million (see Sales-type leases in Note 3 – Real Estate Leases).

Assets Held for Sale

The Company had one property classified as assets held for sale as of December 31, 2025 and had two properties classified as assets held for sale as of December 31, 2024. The Company sold a property during 2025 that was classified as held for sale at December 31, 2024. During 2025, the Company recorded impairment charges totaling $1.1 million on an asset classified as held for sale at December 31, 2025 and December 31, 2024, based on the estimated fair value less costs to sell.

Notes to Consolidated Financial Statements - Continued

The table below reflects the real estate assets classified as assets held for sale as of December 31, 2025 and December 31, 2024.

Balance Sheet data:

Building, improvements, and lease intangibles 6,604 8,218

Assets held for sale, net $ 5,265 $ 6,755

2024 Real Estate Acquisitions

During the year ended December 31, 2024, the Company acquired nine real estate properties as detailed in the table below. Upon acquisition, the properties were 99.3% leased in the aggregate with lease expirations through 2039. Amounts recorded in revenues and net income for these properties were approximately $5.2 million and $2.8 million, respectively, and transaction costs totaling approximately $0.7 million were capitalized for the year ended December 31, 2024 relating to these property acquisitions.

Notes to Consolidated Financial Statements - Continued

The following table summarizes the estimated relative fair values of the assets acquired and liabilities assumed in the property acquisitions for the year ended December 31, 2024.

Estimated Fair Value Weighted AverageUseful Life

(In thousands) (In years)

Land and land improvements $ 9,241 8.9

Building and building improvements 58,764 34.4

Intangibles:

At-market lease intangibles 5,016 3.9

Above-market lease intangibles 121 5.0

Below-market lease intangibles (344) 2.6

Total intangibles 4,793

Accounts receivable and other assets acquired 50

Accounts payable, accrued liabilities and other liabilities acquired (338)

Total cash consideration $ 72,368

2024 Dispositions

During the year ended December 31, 2024, the Company disposed of two properties in Texas and a land parcel adjacent to a property in Georgia. The Company received net proceeds of approximately $2.3 million and recognized an immaterial gain in the aggregate on the dispositions.

NOTE 5. DEBT, NET

The table below details the Company's debt, net as of December 31, 2025 and December 31, 2024.

Balance as of December 31,

(Dollars in thousands) 2025 2024 Maturity Dates

Credit Facility:

Credit Facility

The Company's third amended and restated credit agreement, as amended on October 16, 2024 (the "Credit Facility") is by and among Community Healthcare Trust Incorporated, as borrower, the several banks and financial institutions party thereto as lenders, and Truist Bank, as administrative agent. The Credit Facility provides for a $400.0 million revolving credit facility (the "Revolving Credit Facility") and $275.0 million in term loans (the "Term Loans"). The Revolving Credit Facility matures on October 16, 2029 . The Term Loans include a seven-year term loan facility in the aggregate principal amount of $125.0 million (the "A-4 Term Loan") which matures on March 19, 2028, and a seven-year and three-month term loan facility in the aggregate principal amount of $150.0 million (the "A-5 Term Loan) which matures on March 14, 2030. Loans under the Credit Facility are interest only with principal amounts due as of each facility's applicable maturity date. The Company's material subsidiaries are guarantors of the obligations under the Credit Facility.

Amounts outstanding under the Revolving Credit Facility bear interest at a floating rate based on the Company's option, on either: (i) adjusted term SOFR or adjusted daily simple SOFR plus 1.15% to 1.75%, plus a simple SOFR

Notes to Consolidated Financial Statements - Continued

adjustment equal to 0.10% per annum, or (ii) a base rate plus 0.15% to 0.75% in each case, depending upon the Company’s leverage ratio. In addition, the Company is obligated to pay an annual fee equal to 0.20% of the amount of the unused portion of the Revolving Credit Facility if amounts borrowed are greater than 33.3% of the borrowing capacity under the Revolving Credit Facility and 0.25% of the unused portion of the Revolving Credit Facility if amounts borrowed are less than or equal to 33.3% of the borrowing capacity under the Revolving Credit Facility. The Company had $258.0 million outstanding under the Revolving Credit Facility with a borrowing capacity remaining of approximately $142.0 million at December 31, 2025.

Amounts outstanding under the Term Loans bear interest at a floating rate that is based, at the Company's option, on either (i) adjusted term SOFR or adjusted daily SOFR plus 1.65% to 2.30%, plus a simple SOFR adjustment equal to 0.10% per annum, or (ii) a base rate plus 0.65% to 1.30%, in each case, depending upon the Company’s leverage ratio.

The Company has entered into interest rate swaps to fix the interest rates on the Term Loans and a portion of the Revolving Credit Facility. At December 31, 2025, the Company had fixed the $275.0 million outstanding under the Term Loans and $75.0 million of the Revolving Credit Facility, which had an aggregate fixed weighted average interest rate under the swaps of approximately 4.7% and 3.8%, respectively. The interest rate swap to fix the interest rates on the portion of the Revolving Credit Facility matures in March 2026. See Note 6 – Derivative Financial Instruments for more details on the interest rate swaps. The floating rate for the $183.0 million of the Revolving Credit Facility not under a swap at December 31, 2025 was approximately 5.4%.

NOTE 6. DERIVATIVE FINANCIAL INSTRUMENTS

Risk Management Objective of Using Derivatives

The Company may use derivative financial instruments, including interest rate swaps, caps, options, floors and other interest rate derivative contracts, to hedge all or a portion of the interest rate risk associated with its borrowings. The principal objective of such arrangements is to minimize the risks and/or costs associated with the Company’s operating and financial structure as well as to hedge specific anticipated transactions. The Company does not intend to utilize derivatives for speculative or other purposes other than interest rate risk management. The use of derivative financial instruments carries certain risks, including the risk that the counterparties to these contractual arrangements are not able to perform under the agreements. To mitigate this risk, the Company only enters into derivative financial instruments with counterparties with high credit ratings and with major financial institutions with which the Company and its affiliates may also have other financial relationships. The Company does not anticipate that any of the counterparties will fail to meet their obligations.

Cash Flow Hedges of Interest Rate Risk

The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish these objectives, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.

As of December 31, 2025, the Company had fifteen outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk for notional amounts totaling $350.0 million, which mature between 2026 and 2030 (see Note 5 – Debt, net for additional details).

Notes to Consolidated Financial Statements - Continued

Tabular Disclosure of Fair Value of Derivative Instruments on the Balance Sheet

The table below presents the fair value of the Company's derivative financial instruments as well as their classification on the Consolidated Balance Sheets as of December 31, 2025 and 2024.

The changes in the fair value of derivatives designated and that qualify as cash flow hedges are recorded in accumulated other comprehensive income ("AOCI") and are subsequently reclassified to interest expense in the period that the hedged forecasted transaction affects earnings.

Amounts reported in AOCI related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s Term Loans. During the next twelve months, the Company estimates that an additional $3.3 million will be reclassified from AOCI as a decrease to interest expense.

Tabular Disclosure of the Effect of Cash Flow Hedge Accounting on Accumulated Other Comprehensive Loss

The table below details the location in the financial statements of the gain or loss recognized on interest rate derivatives designated as cash flow hedges for the years ended December 31, 2025 and 2024.

For the Year Ended December 31,

Amount of gain reclassified from AOCI into interest expense $ (7,070) $ (10,411)

Tabular Disclosures of Offsetting Derivatives

The tables below present a gross presentation, the effects of offsetting, and a net presentation of the Company's derivatives as of December 31, 2025 and December 31, 2024. The net amounts of derivative assets can be reconciled to the tabular disclosure of fair value. The tabular disclosure of fair value above provides the location that derivative assets are presented on the Consolidated Balance Sheets. There were no derivative liabilities as of December 31, 2025 and December 31, 2024.

Offsetting of Derivative Assets (as of December 31, 2025)

Gross Amounts Not Offset in the Consolidated Balance Sheets

Offsetting of Derivative Assets (as of December 31, 2024)

Gross Amounts Not Offset in the Consolidated Balance Sheets

Notes to Consolidated Financial Statements - Continued

Credit-risk-related Contingent Features

As of December 31, 2025, the Company did not have any derivatives in a net liability position, and had not posted any collateral related to these agreements and was not in breach of any agreement provisions. If the Company terminated these interest rate swaps or breached any of these provisions, it could have been required to settle its obligations under the agreements at their aggregate termination value.

NOTE 7. STOCKHOLDERS' EQUITY

Common Stock

The following table provides a reconciliation of the beginning and ending common stock balances for the years ended December 31, 2025, 2024 and 2023:

For the Year Ended December 31,

Issuance of common stock — 313 1,385

Restricted stock issued, net of withheld and forfeited 201 305 331

ATM Program

On February 18, 2025, the Company amended its at-the-market offering program ("ATM Program") with Piper Sandler & Co., Piper Sandler Financial Products II Inc., Evercore Group L.L.C., Fifth Third Securities, Inc., Huntington Securities, Inc., Janney Montgomery Scott LLC, KeyBanc Capital Markets Inc., Regions Securities LLC, Truist Bank, and Truist Securities, Inc. in their capacities as Sales Agents, Forward Purchasers and/or Forward Sellers (each, an “Agent”, and, collectively, the “Agents”).

The Company's activity under the ATM Program for the years ended December 31, 2025, 2024, and 2023 is detailed in the table below.

For the Year Ended December 31,

(Shares in thousands, except per share amounts) 2025 2024 2023

Net proceeds received (in millions) $ — $7.5 $44.2

Average gross sales price per share $ — $24.38 $32.56

Universal Shelf Registration Statement

capacity to offer and sell from time to time various types of securities, including common stock, preferred stock, depository shares, rights, debt securities, warrants and units.

Notes to Consolidated Financial Statements - Continued

Dividends Declared

During 2025, the Company declared and paid dividends totaling $1.8850 per common share as shown in the table below.

Declaration Date Record Date Date Paid Amount Per Share

During 2024, the Company declared and paid dividends totaling $1.8450 per common share as shown in the table below.

Declaration Date Record Date Date Paid Amount Per Share

NOTE 8. INCOME PER COMMON SHARE

The following table sets forth the computation of basic and diluted income per common share. Net income (loss) available to common stockholders excludes dividends paid on participating securities which include restricted stock and time-based RSUs. Dividends accrue but are not paid on unvested performance-based RSUs.

Year Ended December 31,

(Dollars and shares in thousands, except per share data) 2025 2024 2023

Participating securities' share in earnings (3,022) (2,795) (2,619)

Weighted Average Common Shares Outstanding

Dilutive potential common shares (1) — — —

Basic Income (Loss) per Common Share $ 0.08 $ (0.23) $ 0.20

Diluted Income (Loss) per Common Share $ 0.08 $ (0.23) $ 0.20

_______________

Notes to Consolidated Financial Statements - Continued

NOTE 9. STOCK INCENTIVE PLANS

2024 Incentive Plan

The 2024 Incentive Plan, as amended, authorized the Company to award 1,150,000 shares of the Company's common stock outstanding at December 31, 2025. Shares issued under the 2024 Incentive Plan are generally subject to long-term, fixed vesting periods of 3 to 8 years. If an employee or director voluntarily terminates his or her relationship with the Company or is terminated for cause before the end of the vesting period, the shares are forfeited. Recipients of restricted stock awards and time-based units have the right to receive dividends and the right to vote the shares. As of December 31, 2025, the Company had granted a total of 473,592 restricted shares or restricted stock units under the Plan Pool as award shares to its employees and directors, with 676,408 authorized shares remaining which had not been granted.

Programs under the 2024 Incentive Plan

Alignment of Interest Program

The Alignment of Interest Program, as amended, authorized the Company to grant 1,000,000 shares of the Company’s common stock to its employees and directors in lieu of the employee's or director's cash compensation (the "Program Pool"), at their election. As of December 31, 2025, the Company had issued a total of 976,853 restricted shares under the Program Pool in lieu of cash compensation to its employees and directors, with 23,147 authorized shares remaining which had not been issued. See Note 16 – Subsequent Events for additional shares authorized under this program in January 2026.

The Company's Alignment of Interest Program is designed to provide the Company's employees and directors with an incentive to remain with the Company and to incentivize long-term growth and profitability. Under the Alignment of Interest Program, employees may elect to defer up to 100% of their base salary and other compensation (certain employees are limited to 50% of their base salary, bonus and any other compensation), and directors may elect to defer up to 100% of their director fee. The number of shares granted will be increased through a Company match depending on the length of the vesting period selected by the employee or director. Employees may select vesting periods of 3 years, 5 years, or 8 years, subject to certain retirement eligibility requirements, with a 30%, 50%, and 100% Company match, respectively. Directors may select vesting periods of 1 year, 2 years, or 3 years, with a 20%, 40%, or 60% Company match, respectively.

CHCT US Equity

CHCT · 10-K · period ended 2025-12-31

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

CHCT US Equity☆

CHCT · 10-K · period ended 2025-12-31

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

CHCT US Equity