CEO Comments
"NHI reported a solid start to 2026, with NAREIT FFO, Normalized FFO and FAD exceeding our internal expectations," said Eric Mendelsohn, NHI's President and CEO.
"During the quarter, we continued to expand our Senior Housing Operating Portfolio ("SHOP"), with first quarter invested capital of $742.5 million, a 106% increase from the prior year period. While same-store SHOP performance was impacted by near-term operating headwinds, we remain focused on executing our strategy and see solid performance from our recent SHOP additions. We also announced the acquisition of a seven-property portfolio for $106.9 million, which we expect to be accretive and to further support our growth."
"Year-to-date, we have announced $212.4 million of investments and continue to evaluate additional opportunities. Following the pending sale of the NHC portfolio, we expect pro forma leverage to decline below our target range, providing additional financial flexibility. We remain focused on expanding our private-pay senior housing portfolio and believe our positioning supports our longer-term growth objectives," concluded Mr. Mendelsohn.
Financial Results and Recent Events
Net income attributable to common stockholders per diluted share for the quarter ended March 31, 2026 increased by 10.8% to $0.82 per share compared to $0.74 per share for the same period in the prior year. Net income attributable to common stockholders for the quarter ended March 31, 2026 included $2.6 million of gains on dispositions of real estate properties. Net income attributable to common stockholders for the quarter ended March 31, 2025 included $0.3 million of proxy contest and related expenses for a proxy campaign associated with the Company's 2025 annual stockholders meeting and $1.2 million of costs incurred related to a large SHOP transaction that did not materialize.
National Association of Real Estate Investment Trusts ("NAREIT") FFO per diluted share for the quarter ended March 31, 2026 increased by 7.9% to $1.23 per share compared to $1.14 per share for the same period in the prior year. NAREIT FFO for the quarter ended March 31, 2025 included the $0.3 million of proxy contest and related expenses and the $1.2 million of transaction costs described above.
Normalized FFO per diluted share for the quarter ended March 31, 2026 increased by 7.0% to $1.23 per share compared to $1.15 per share for the same period in the prior year. Normalized FFO for the quarter ended March 31, 2025 included the $1.2 million of transaction costs described above.
Normalized FAD for the quarter ended March 31, 2026 increased by 11.6% to $62.5 million compared to $56.0 million for the same period in the prior year.
NHI is updating its 2026 full year guidance range as follows:
NAREIT FFO per diluted share from a range of $4.94 - $4.99 to a range of $4.74 - $4.79;
Normalized FFO per diluted share from a range of $4.94 - $4.99 to a range of $4.74 - $4.79; and
Normalized FAD from a range of $248.9 million - $251.4 million to a range of $240.6 million - $243.7 million.
A detailed schedule of the Company's updated 2026 full year guidance range and the updated related assumptions used has been included in this press release.
Results for the quarter ended March 31, 2026 compared to the same period in the prior year were impacted by the following:
Rental income increased $4.3 million, or 6.2%, primarily due to $4.0 million of increased rental income from real estate properties in the Real Estate Investments segment that were acquired since January 1, 2025, partially offset by $2.1 million of rental income in the prior year period related to seven properties transitioned into the SHOP segment on August 1, 2025 from the Real Estate Investments segment.
Resident fees and services, less senior housing operating expenses, increased $5.8 million, consisting of a $2.9 million increase related to the transitioned properties discussed above and a $3.0 million increase due to acquisitions in the SHOP segment since January 1, 2025.
On a same store ("Same Store") basis, resident fees and services, less senior housing operating expenses, declined 2.4% primarily due to a decline in occupancy that was partially offset by increases in resident rental rates.
Interest income from mortgage and other notes receivable decreased $1.5 million, or 23.8%, primarily due to a net reduction in the principal amounts of mortgage and other notes receivable outstanding in the current period compared to the prior year period.
Depreciation and amortization increased $4.5 million, or 23.7%, which primarily related to a $4.0 million increase as a result of acquisitions since January 1, 2025.
Interest expense increased $0.7 million, or 4.9%, primarily due to interest expense associated with the Company's 2033 Senior Notes which were issued in September 2025, partially offset by a decrease in the amounts outstanding under the Company's revolving credit facility and bank term loan in the current period compared to the prior year period.
Legal expense decreased $1.1 million, or 78.6%. Legal expense for the quarter ended March 31, 2025 included $1.2 million of costs related to a large SHOP transaction that did not materialize.
General and administrative expenses increased $1.0 million, or 15.0%, primarily due to higher compensation costs.
Gains on dispositions of real estate properties, net, of $2.6 million for the quarter ended March 31, 2026 primarily related to the sale of a senior living campus located in Michigan. This property was part of the Real Estate Investments segment.
National HealthCare Corporation ("NHC") Leased Portfolio Disposition
As previously announced on April 21, 2026, the Company executed a purchase and sale agreement, dated April 21, 2026, with NHC/Op, L.P., a wholly owned subsidiary of NHC, and certain of its affiliates (collectively, the "NHC Purchaser") related to the sale of the entire portfolio of real estate properties leased to NHC, which includes 32 skilled nursing facilities and three independent living facilities, for $560.0 million in net cash consideration. The Company anticipates closing the transaction on July 1, 2026, subject to certain customary closing conditions, including the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The NHC properties are included in the Real Estate Investments segment.
Pursuant to the terms of the purchase and sale agreement, contemporaneously with the closing of the transaction, the Company will execute a partial master lease termination and partial assignment and assumption of the master lease agreement which will result in the termination of its master lease agreement with NHC with respect to all properties, except for the four properties located in Florida that are subject to a sublease agreement. The Company will assign to the NHC Purchaser, and the NHC Purchaser will assume from the Company, the master lease for the four Florida properties. As of March 31, 2026, the aggregate net carrying amount of the NHC properties was $13.8 million.
Portfolio Activity
In January 2026, the Company sold a 42-unit senior living campus located in Michigan for $6.7 million in net cash consideration. The net carrying amount of the property was $4.2 million and a gain of $2.5 million was recognized on the sale of the property.
In February 2026, the Company acquired a portfolio of nine assisted living facilities located in Kentucky, South Carolina and Tennessee with a combined total of 460 units. The total purchase price was $105.5 million, including $1.0 million in closing costs. This portfolio of properties has been included in the SHOP segment and is being managed by Allegro Living Management, an affiliate of Spring Arbor Management, LLC, pursuant to a management agreement.
In April 2026, the combined rental income related to the four master lease agreements comprising the Bickford Senior Living ("Bickford") portfolio of 38 properties was reset to fair market value, or $38.4 million annually. Future base rental income will escalate on an annual basis at a rate ranging between 2.0% and 3.0% in accordance with each amended lease agreement. These amendments also provide for a new contingent rent clause requiring Bickford to pay additional rent based on a percentage of its combined monthly revenues for all properties that are in excess of a base amount. Bickford will continue to be recognized as a cash basis tenant under the amended master lease agreements until the substantial doubt about its ability to continue as a going concern has been alleviated.
In April 2026, the Company completed the sale of a property located in South Carolina upon the acceleration of an existing purchase option at the tenant's request. The Company received $3.2 million in net cash consideration and recognized a gain of $0.8 million related to the sale. As of March 31, 2026, the net carrying amount of the property was $2.3 million. During each of the quarters ended March 31, 2026 and 2025, the Company recognized rental income of $0.1 million related to this property.
In April 2026, the Company completed the sale of a property located in Ohio that was classified as assets held for sale as of March 31, 2026. The Company received $4.5 million in net cash consideration and recognized a gain of $0.9 million related to the sale. As of March 31, 2026, the net carrying amount of the property was $3.6 million. During each of the quarters ended March 31, 2026 and 2025, the Company recognized rental income of $0.2 million related to this property.
In May 2026, the Company completed the sale of a property located in Washington in which a purchase and sale agreement was outstanding as of March 31, 2026. The Company received $39.0 million in net cash consideration and will recognize a gain of approximately $20.1 million related to the sale. As of March 31, 2026, the net carrying amount of the property was $18.3 million. During the quarters ended March 31, 2026 and 2025, the Company recognized rental income of $0.6 million and $0.7 million, respectively, related to this property.
In May 2026, the Company acquired a portfolio of seven senior housing properties located in Colorado with a combined total of 532 units. The total purchase price was $106.9 million, including closing costs. The Company acquired the portfolio using a qualified intermediary to facilitate a potential reverse exchange transaction under Section 1031 of the Internal Revenue Code. This portfolio of properties has been included in the SHOP segment and is being managed by Generations, LLC pursuant to a management agreement.
Recent Pipeline Developments
The Company currently has approximately $20.3 million of investment opportunities under signed Letters of Intent ("LOI") with an average initial yield of approximately 7.5% and primarily structured as SHOP investments.
In addition to the signed LOIs, the Company is currently evaluating a pipeline of approximately $560.0 million of investments which include SHOP, sale-leasebacks and loans with purchase options primarily for senior housing properties. The pipeline excludes portfolio deals.
Balance Sheet and Liquidity
As of March 31, 2026, the Company had $1.2 billion in consolidated net debt, including $309.0 million outstanding on its $700.0 million revolving credit facility.
The Company continues to maintain a strong financial profile with a consolidated net debt to adjusted EBITDA ratio of 4.0x, which is currently well within the Company's target range of 3.5x to 4.5x. The Company is in compliance with all debt covenants and has investment grade credit ratings from Moody's, S&P Global and Fitch Ratings.
Shelf Registration Statement
In March 2026, the Company renewed its automatic shelf registration statement, on file with the SEC, which allows the Company to offer and sell to the public an unspecified amount of common stock, preferred stock, debt securities, warrants and/or units at prices and on terms to be announced when and if such securities are offered. The details of any future offerings, along with the use of proceeds from any securities offered, will be described in a prospectus supplement, or other offering materials, at the time of the offering.
ATM Equity Program
Concurrently with the renewal of its shelf registration statement, the Company entered into a new equity distribution agreement whereby the Company can sell up to $500.0 million in common stock under its ATM equity program. During the quarter ended March 31, 2026, the Company did not enter into any new ATM forward equity sales agreements or settle any of its outstanding ATM forward equity sales agreements. As of March 31, 2026, the Company had the ability to access 0.6 million shares of its common stock at a weighted average price of $68.81 per share, net of sales agent fees, under remaining active ATM forward equity sales agreements which mature in the second quarter of 2026 and represent $44.2 million of undrawn net proceeds.
2026 Updated Full Year Guidance
The Company updated its 2026 full year guidance range, including information on the underlying assumptions and timing of certain transactions, as set forth below (in millions, except per share amounts):
2026 Guidance Range
Low
High
Net income attributable to common stockholders
$ 703.0
$ 705.2
Adjustments to NAREIT FFO:
Depreciation, net1
94.4
95.0
Gains on dispositions, net, and impairments of real estate properties
(565.9)
(566.3)
Participating securities
0.8
1.0
NAREIT FFO attributable to common stockholders
232.3
234.9
Normalized FFO attributable to common stockholders
232.3
234.9
