National Healthcare Properties Reports Second Quarter 2025 Results

NEW YORK, Aug. 06, 2025 (GLOBE NEWSWIRE) -- National Healthcare Properties, Inc. (Nasdaq: NHPAP / NHPBP) (the “Company”), a self-managed diversified healthcare real estate investment trust focusing on seniors housing and outpatient medical facilities, today announced results for the three and six months ended June 30, 2025. Michael Anderson, Chief Executive Officer and President, commented, “We are very pleased with our second quarter results, headlined by exceptional same store cash net operating income growth in each of the Senior Housing Operating Property and Outpatient Medical Facility segments. This across-the-board operational strength demonstrates the capabilities of our team and the quality of our portfolio, providing a tremendous backdrop for the Company as we prepare for an eventual public listing.” Financial Performance and Other Highlights Net loss of $(0.85) per basic and diluted share. Nareit defined Funds from Operations (“FFO”) of $0.19 per diluted share, and Adjusted Funds from Operations (“AFFO”) of $0.32 per diluted share. FFO per share increased 35.7% on a quarter-over-quarter basis.AFFO per share increased 3.2% on a quarter-over-quarter basis. Second quarter portfolio Same Store Cash Net Operating Income (“NOI”) growth was 8.5% year-over-year. Senior Housing Operating Property (“SHOP”) segment Same Store Cash NOI growth was 17.3%.Outpatient Medical Facility (“OMF”) segment Same Store Cash NOI growth was 4.4%. Second quarter dispositions totaled $21.4 million, representing the sale of three non-core OMFs and three non-core SHOPs. Operating Update SHOP Portfolio Year-over-year Same Store Cash NOI growth of 17.3%.Quarter-over-quarter Same Store Cash NOI growth of 6.6%.Same Store average occupancy totaled 82.8%, an increase of 5.0% on a year-over-year basis.Same Store revenue increased 11.8% on a year-over-year basis.Same Store Cash NOI Margin totaled 19.5%, an expansion of 0.9% on a year-over-year basis. OMF Portfolio Year-over-year Same Store Cash NOI growth of 4.4%.Quarter-over-quarter Same Store Cash NOI growth of 5.7%.Same Store ending occupancy totaled 92.2%, a decrease of 0.7% on a year-over-year basis. Investment Activity The Company completed dispositions with an aggregate contract sales price of $21.4 million during the quarter ended June 30, 2025. These dispositions consisted of three OMFs and three SHOPs, with each asset considered to be non-core. A net gain of $2.7 million was recognized as a result of these dispositions. Balance Sheet and Capital As of June 30, 2025, total debt outstanding (net of unamortized debt issuance costs) was $1.0 billion with a weighted average interest rate of 5.1% (when giving effect to interest rate hedges) and an average remaining term of 3.7 years. Year-to-date through June 2025, the Company has paid down $83.1 million of debt using proceeds from dispositions. In April 2025, the Company fully repaid the $21.7 million Capital One OMF Warehouse Facility. Net Leverage (Net Debt to Annualized Adjusted EBITDA) totaled 9.3x, an improvement of 0.4x relative to March 31, 2025. Preferred Stock On June 20, 2025, the Board of Directors declared dividends on the Company’s outstanding preferred stock as follows: A dividend of $0.4609375 per share on its 7.375% Series A Cumulative Redeemable Perpetual Preferred Stock to holders of record at the close of business on July 3, 2025. The dividend was paid on July 15, 2025.A dividend of $0.4453125 per share on its 7.125% Series B Cumulative Redeemable Perpetual Preferred Stock to holders of record at the close of business on July 3, 2025. The dividend was paid on July 15, 2025. During the quarter ended June 30, 2025, the Company completed the repurchase of $1.8 million of previously outstanding shares of preferred stock at a weighted average yield of 12.8%, representing a $10.87 discount to face value and reducing leverage by $1.3 million on a “Net Debt + Preferred” basis. Supplemental Information Additional information regarding these results can be found in the Company’s supplemental financial package that will be available on the Investor Relations section of the Company’s website at nhpreit.com. About National Healthcare Properties National Healthcare Properties is a self-managed real estate investment trust focusing on seniors housing and outpatient medical facilities. The Company’s preferred stocks are traded on the Nasdaq Exchange under the tickers “NHPAP” and “NHPBP”. Additional information about the Company can be found on its website at nhpreit.com. Investor & Media Contact Email: ir@nhpreit.com Forward-Looking Statements This press release may contain “forward-looking” statements as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements concern and are based upon, among other things, the possible expansion of the Company’s portfolio; the sale of properties; the performance of its operators/tenants and properties; its ability to enter into agreements with new viable tenants for vacant space on favorable terms, or at all; its occupancy rates; its ability to acquire, develop and/or manage properties; its ability to make distributions to shareholders; its policies and plans regarding investments, financings and other matters; its tax status as a real estate investment trust; its critical accounting policies; its ability to appropriately balance the use of debt and equity; its ability to access capital markets or other sources of funds; and its ability to finance and complete, and the effect of, future acquisitions. When the Company uses words such as “may,” “will,” “intend,” “should,” “believe,” “expect,” “anticipate,” “project,” “estimate” or similar expressions, it is making forward-looking statements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties. The Company’s expected results may not be achieved, and actual results may differ materially from expectations. This may be a result of various factors, including, but not limited, the risks and uncertainties described in the section titled Risk Factors of its most recent Annual Report on Form 10-K for the year ended December 31, 2024 and all other filings with the Securities and Exchange Commission. Finally, the Company assumes no obligation to update or revise any forward-looking statements or to update the reasons why actual results could differ from those projected in any forward-looking statements. Financial Statements and Definitions This press release includes certain non-GAAP financial measures, including FFO, AFFO, EBITDA, Adjusted EBITDA, NOI, Cash NOI and Same Store Cash NOI. While the Company believes that non-GAAP financial measures are helpful in evaluating its operating performance, the use of non-GAAP financial measures in this press release should not be considered in isolation from, or as an alternative for, a measure of financial or operating performance as defined by GAAP. There are inherent limitations associated with the use of each of these supplemental non-GAAP financial measures as an analytical tool. Additionally, the Company’s computation of non-GAAP financial measures may not be comparable to those reported by other REITs. Definitions of these non-GAAP financial measures and reconciliations to their most directly comparable GAAP measures are provided below. Nareit FFO and AFFO The Company calculates FFO consistent with the standards established over time by Nareit. Nareit defines FFO as net income or loss (computed in accordance with GAAP), adjusted for (i) real estate-related depreciation and amortization, (ii) impairment charges on depreciable real property, (iii) gains or losses from sales of depreciable real property and (iv) similar adjustments for non-controlling interests and unconsolidated entities. The Company calculates AFFO by further adjusting FFO to reflect the performance of its portfolio for items it believes are not directly attributable to its operations. The Company's adjustments to FFO to arrive at AFFO include removing the impacts of (i) acquisition and transaction related costs, (ii) amortization of market-lease intangible assets and liabilities, (iii) adjustments for straight-line rent, (iv) termination fees to related parties, (v) equity-based compensation expense, (vi) depreciation and amortization related to non-real estate related assets, (vii) mark-to-market gains and losses from its non-designated derivatives, (viii) non-cash components of interest expense, (ix) casualty-related charges, (x) gains or losses on extinguishment of debt and (xi) similar adjustments for non-controlling interests and unconsolidated entities. The Company considers FFO and AFFO to be useful supplemental measures for reviewing comparative operating and financial performance because, by excluding the applicable items listed below, FFO and AFFO can help investors compare its operating performance between periods or as compared to other REITs. Adjusted EBITDA The Company defines Adjusted EBITDA as earnings before interest, taxes, depreciation and amortization, excluding acquisition and transaction related costs, termination fees to related parties, interest and other income, amortization of market-lease intangible assets and liabilities and other non-cash items including equity-based compensation, impairment charges, casualty-related charges, gains and losses on sale of real estate investments, gains or losses on extinguishment of debt and gains and losses on derivative investments. Cash NOI and NOI The Company defines NOI as total revenues from tenants less property operating costs. The Company defines Cash NOI as NOI excluding net amortization of above/below market lease and lease intangibles and straight-line rent adjustments that are included in GAAP revenue from tenants and property operating and maintenance. Cash NOI Margin For the SHOP segment, Cash NOI divided by revenue from tenants excluding net amortization of above/below market lease and lease intangibles. Net Debt Total gross debt less cash and cash equivalents. Net Debt to Annualized Adjusted EBITDA or Net Leverage Net Debt divided by Annualized Adjusted EBITDA (annualized based on Adjusted EBITDA for the quarter multiplied by four). Non-Core Properties Assets that have been deemed not essential to generating future economic benefit or value to the Company’s day-to-day operations and/or are scheduled to be sold. Occupancy or Leased % Occupancy for the OMF segment is presented as of the end of the period shown; occupancy for the SHOP segment is presented for the duration of the period shown. Same Store The Company defines “same store” as operational properties owned for the full period in both comparison periods and that are not otherwise excluded. Properties are excluded from same store if they are (i) Non-Core Properties (as defined above), (ii) sold, classified as held for sale, or classified as discontinued operations in accordance with GAAP; or (iii) impacted by materially disrupted events. Refer to the reconciliation of Same Store properties below. NATIONAL HEALTHCARE PROPERTIES, INC.CONSOLIDATED BALANCE SHEETS(In thousands, except share and per share data)(Unaudited) Q2 2025 Q1 2025 Q4 2024 Q3 2024 Q2 2024ASSETS Real estate investments, at cost: Land$177,999 $182,662 $190,082 $198,124 $208,522 Buildings, fixtures and improvements 1,804,274 1,837,150 2,012,401 2,051,313 2,131,409 Acquired intangible assets 249,941 256,440 284,447 290,408 294,683 Construction in progress 4,126 9,558 7,867 3,930 4,967 Total real estate investments, at cost 2,236,340 2,285,810 2,494,797 2,543,775 2,639,581 Less: accumulated depreciation and amortization (671,070) (670,907) (725,831) (724,985) (720,254)Total real estate investments, net 1,565,270 1,614,903 1,768,966 1,818,790 1,919,327 Assets held for sale 1,725 — — — — Cash and cash equivalents 47,123 71,383 21,652 32,858 29,461 Restricted cash 56,047 55,025 52,443 52,054 51,512 Derivative assets, at fair value 11,208 13,281 19,206 17,177 31,568 Straight-line rent receivable, net 20,315 19,967 22,841 23,056 26,171 Operating lease right-of-use assets 6,841 6,879 7,480 7,553 7,587 Prepaid expenses and other assets 22,591 23,721 26,316 23,706 25,870 Accounts receivable, net 9,311 8,096 5,850 5,238 4,967 Deferred costs, net 18,465 18,630 21,269 17,238 16,916 Total assets 1,758,896 1,831,885 1,946,023 1,997,670 2,113,379 LIABILITIES AND EQUITY Mortgage notes payable, net$696,508 $711,065 $779,160 $816,988 $816,757 Credit facilities 337,624 360,774 362,216 363,659 365,101 Market lease intangible liabilities, net 5,380 5,691 6,125 6,910 7,211 Derivative liabilities, at fair value — — — — — Accounts payable and accrued expenses 46,322 54,649 89,575 84,472 143,620 Operating lease liabilities 7,801 7,815 8,109 8,122 8,133 Deferred rent 9,347 8,275 7,217 5,717 6,474 Distributions payable 3,432 3,496 3,496 3,496 3,496 Total liabilities 1,106,414 1,151,765 1,255,898 1,289,364 1,350,792 Stockholders’ Equity 7.375% Series A cumulative redeemable perpetual preferred stock, $0.01 par value, 4,740,000 authorized 40 40 40 40 40 7.125% Series B cumulative redeemable perpetual preferred stock, $0.01 par value, 3,680,000 authorized 35 36 36 36 36 Common stock, $0.01 par value, 300,000,000 shares authorized 1,132 1,132 1,132 1,132 1,132 Additional paid-in capital 2,532,585 2,533,737 2,533,706 2,533,697 2,533,484 Accumulated other comprehensive income 9,441 11,646 16,640 14,301 24,468 Distributions in excess of accumulated earnings (1,896,200) (1,872,012) (1,866,994) (1,846,558) (1,802,415)Total stockholders’ equity 647,033 674,579 684,560 702,648 756,745 Non-controlling interests 5,449 5,541 5,565 5,658 5,842 Total equity 652,482 680,120 690,125 708,306 762,587 Total liabilities and equity$1,758,896 $1,831,885 $1,946,023 $1,997,670 $2,113,379 NATIONAL HEALTHCARE PROPERTIES, INC.CONSOLIDATED INCOME STATEMENTS(In thousands, except share and per share data)(Unaudited) Three Months Ended Q2 2025 Q1 2025 Q4 2024 Q3 2024 Q2 2024 Revenue from tenants$85,332 $86,443 $87,738 $88,940 $88,817 Operating expenses: Property operating and maintenance 53,848 57,540 54,591 56,407 55,005 Impairment charges 15,212 11,899 13,383 8,829 2,409 Operating fees to related parties — — 22 6,391 6,424 Termination fees to related parties — — — 8,409 98,241 Acquisition and transaction related 497 51 2,263 5,187 357 General and administrative 5,406 5,212 5,806 5,502 4,668 Depreciation and amortization 18,539 23,706 20,681 20,720 21,928 Total expenses 93,502 98,408 96,746 111,445 189,032 Operating loss before gain on sale of real estate investments (8,170) (11,965) (9,008) (22,505) (100,215)Gain (loss) on sale of real estate investments 2,652 24,989 7,953 1,579 (225)Operating (loss)/income (5,518) 13,024 (1,055) (20,926) (100,440)Other income (expense): Interest expense (15,836) (14,529) (17,305) (18,007) (17,752)Interest and other income (expense) 231 (15) (26) 548 457 Gain on extinguishment of debt 257 — 392 — — Gain (loss) on non-designated derivatives 32 (1) 1,095 (2,384) 882 Total other expenses, net (15,316) (14,545) (15,844) (19,843) (16,413)Loss before income taxes (20,834) (1,521) (16,899) (40,769) (116,853)Income tax expense (benefit) — 6 (127) — (65)Net loss (20,834) (1,515) (17,026) (40,769) (116,918)Net loss (income) attributable to non-controlling interests 31 (54) 38 77 452 Allocation for preferred stock (3,386) (3,450) (3,449) (3,450) (3,450)Net loss attributable to common stockholders (24,189) (5,019) (20,437) (44,142) (119,916) Other comprehensive loss: Unrealized (loss) gain on designated derivatives (2,205) (4,994) 2,339 (10,167) (1,276)Comprehensive loss attributable to common stockholders$(26,394) $(10,013) $(18,098) $(54,309) $(121,192) Weighted-average shares outstanding — Basic and Diluted 28,296,439 28,296,439 28,296,439 28,291,594 28,296,439 Net loss per share attributable to common stockholders — Basic and Diluted$(0.85) $(0.18) $(0.72) $(1.56) $(4.24) NATIONAL HEALTHCARE PROPERTIES, INC.NON-GAAP FINANCIAL MEASURES RECONCILIATION(In thousands, except share and per share data)(Unaudited) Three Months Ended Q2 2025 Q1 2025 Q4 2024 Q3 2024 Q2 2024OMFs: Revenue from tenants $29,252 $30,635 $33,744 $34,303 $34,671 Property operating and maintenance (8,013) (11,169) (9,118) (10,656) (9,727)OMF Segment Net Operating Income $21,239 $19,466 $24,626 $23,647 $24,944 SHOPs: Revenue from tenants $56,080 $55,808 $53,994 $54,637 $54,146 Property operating and maintenance (45,835) (46,371) (45,473) (45,751) (45,278)SHOP Segment Net Operating Income $10,245 $9,437 $8,521 $8,886 $8,868 Net Operating Income (NOI) $31,484 $28,903 $33,147 $32,533 $33,812 Impairment charges (15,212) (11,899) (13,383) (8,829) (2,409)Operating fees to related parties — — (22) (6,391) (6,424)Termination fees to related parties — — — (8,409) (98,241)Acquisition and transaction related (497) (51) (2,263) (5,187) (357)General and administrative (5,406) (5,212) (5,806) (5,502) (4,668)Depreciation and amortization (18,539) (23,706) (20,681) (20,720) (21,928)Gain (loss) on sale of real estate investments 2,652 24,989 7,953 1,579 (225)Interest expense (15,836) (14,529) (17,305) (18,007) (17,752)Interest and other income (expense) 231 (15) (26) 548 457 Gain (loss) on non-designated derivatives 32 (1) 1,095 (2,384) 882 Gain (loss) on extinguishment of debt 257 — 392 — — Income tax (expense) benefit — 6 (127) — (65)Net loss (income) attributable to non-controlling interests 31 (54) 38 77 452 Preferred stock dividends (3,386) (3,450) (3,449) (3,450) (3,450)Net loss attributable to common stockholders (in accordance with GAAP) $(24,189) $(5,019) $(20,437) $(44,142) $(119,916) NATIONAL HEALTHCARE PROPERTIES, INC.NON-GAAP FINANCIAL MEASURES RECONCILIATION(In thousands, except share and per share data)(Unaudited) Three Months Ended Q2 2025 Q1 2025 Q4 2024 Q3 2024 Q2 2024Net loss attributable to common stockholders (in accordance with GAAP)$(24,189) $(5,019) $(20,437) $(44,142) $(119,916)Depreciation and amortization on real estate assets 17,127 22,281 19,287 19,293 20,903 Impairment charges 15,212 11,899 13,383 8,829 2,409 (Gain) loss on sale of real estate (2,652) (24,989) (7,953) (1,579) 225 Adjustments for non-controlling interests (146) (56) (181) (64) (120)FFO (as defined by NAREIT) attributable to common stockholders 5,352 4,116 4,099 (17,663) (96,499)Amortization (accretion) of market lease and other intangibles, net (135) 2,331 (606) (134) (228)Straight-line rent adjustments (635) (1,023) (434) (458) (90)Acquisition and transaction related(1) 497 51 2,263 5,187 357 Termination fees to related parties(2) — — — 8,409 98,241 Equity-based compensation 570 — — 153 230 Depreciation and amortization on non-real estate assets 1,411 1,425 1,394 1,427 1,025 Mark-to-market (gains)/losses from derivatives(3) 813 931 310 4,224 910 Non-cash components of interest expense(4) 1,481 858 879 880 862 Adjustments for non-controlling interests(1) (13) (19) — (91) (451)Gain on extinguishment of debt (257) — (392) — — Casualty-related charges(5) 7 115 412 2 17 Adjusted funds from operations (AFFO) attributable to common stockholders$9,091 $8,785 $7,925 $1,936 $4,374 Percentage increase Q2'25 vs Q1'25 3.5% Percentage increase Q2'25 vs Q2'24 107.8% Recurring Capital Expenditures$10,571 $6,658 $10,570 $5,917 $7,281 FFO and AFFO weighted-average shares outstanding — Diluted 28,533,395 28,530,465 28,530,264 28,525,620 28,543,571 FFO per common share — Diluted$0.19 $0.14 $0.14 $(0.62) $(3.38)AFFO per common share — Diluted$0.32 $0.31 $0.28 $0.07 $0.15 (1) Includes certain advisory, legal, accounting, information technology, tax and other professional expenses and other non-recurring employee transition expenses that were directly related to the Company's internalization and the reverse stock split.(2) Represents the closing payments paid in connection with the Company's internalization.(3) Presented as total gains or losses from the Company's non-designated derivatives net of cash received.(4) Non-cash components of interest expense include (i) deferred financing cost amortization, (ii) mortgage discount and premium amortization and (iii) amortized gains or losses from terminated hedging instruments(5) Includes labor, supplies and evacuation expenses from natural disasters not covered by insurance. NATIONAL HEALTHCARE PROPERTIES, INC.NON-GAAP FINANCIAL MEASURES RECONCILIATION(In thousands, except share and per share data)(Unaudited) Three Months Ended Q2 2025 Q1 2025 Q4 2024 Q3 2024 Q2 2024Net loss (in accordance with GAAP)$(20,834) $(1,515) $(17,025) $(40,771) $(116,918)Interest expense 15,836 14,529 17,305 18,007 17,752 Income tax expense — (6) 127 — 65 Depreciation and amortization 18,539 23,706 20,681 20,720 21,928 EBITDA 13,541 36,714 21,088 (2,044) (77,173)Acquisition and transaction related 497 51 2,263 5,187 357 Termination fees to related parties — — — 8,409 98,241 Equity-based compensation 570 — — 153 230 Impairment charges 15,212 11,899 13,383 8,829 2,409 (Gain)/loss on sale of real estate investments (2,652) (24,989) (7,953) (1,579) 225 (Gain)/loss on non-designated derivatives (32) 1 (1,095) 2,384 (882)Gain on extinguishment of debt (257) — (392) — — Amortization (accretion) of market lease and other intangibles, net (135) 2,331 (606) (135) (228)Casualty-related charges 7 115 412 2 17 Adjusted EBITDA 26,751 26,122 27,100 21,206 23,196 Operating fees to related parties — — 22 6,391 6,424 General and administrative 4,836 5,212 5,806 5,349 4,438 Interest and Other income (231) 15 25 (546) (457)Amortization (accretion) of market lease and other intangibles, net 135 (2,331) 606 135 228 Casualty-related charges (7) (115) (412) (2) (17)NOI 31,484 28,903 33,147 32,533 33,812 Adjustments for straight-line rent (634) (1,021) (435) (458) (90)Accretion of market lease and other intangibles, net (135) 2,331 (605) (133) (228)Cash NOI$30,715 $30,213 $32,107 $31,942 $33,494 NATIONAL HEALTHCARE PROPERTIES, INC.NON-GAAP FINANCIAL MEASURES RECONCILIATION(In thousands, except share, per share, and property data)(Unaudited) Three Months Ended Q2 2025 Q1 2025 Q4 2024 Q3 2024 Q2 2024OMF Segment - Revenue from tenants$29,252 $30,635 $33,744 $34,303 $34,671 OMF Segment - Property operating and maintenance (8,013) (11,169) (9,118) (10,656) (9,727)OMF Segment Net Operating Income$21,239 $19,466 $24,626 $23,647 $24,944 Straight line rent adjustments (634) (1,021) (434) (456) (88)Accretion of market lease and other intangibles, net (165) 2,335 (544) (135) (227)OMF Segment Cash NOI$20,440 $20,780 $23,648 $23,056 $24,629 Acquisitions — — — — — Dispositions (51) (1,456) (3,798) (3,852) (5,070) Non-Core Properties 73 41 44 51 38 OMF Segment Same Store Cash NOI$20,462 $19,365 $19,894 $19,255 $19,597 Percentage increase Q2'25 vs Q1'25 5.7% Percentage increase Q2'25 vs Q2'24 4.4% NATIONAL HEALTHCARE PROPERTIES, INC.NON-GAAP FINANCIAL MEASURES RECONCILIATION(In thousands, except share and per share data)(Unaudited) Three Months Ended Q2 2025 Q1 2025 Q4 2024 Q3 2024 Q2 2024SHOP Segment - Revenue from tenants$56,081 $55,808 $53,994 $54,637 $54,145 SHOP Segment - Property operating and maintenance (45,836) (46,371) (45,472) (45,751) (45,279)SHOP Segment Net Operating Income$10,245 $9,437 $8,522 $8,886 $8,866 Non-cash adjustments 30 (4) (63) — — SHOP Segment Cash NOI$10,275 $9,433 $8,459 $8,886 $8,866 Acquisitions — — — — — Dispositions 455 533 (2) (292) (130) Non-Core Properties 114 207 508 675 508 SHOP Segment Same Store Cash NOI$10,844 $10,173 $8,965 $9,269 $9,244 Percentage increase Q2'25 vs Q1'25 6.6% Percentage increase Q2'25 vs Q2'24 17.3% NATIONAL HEALTHCARE PROPERTIES, INC.NON-GAAP FINANCIAL MEASURES RECONCILIATION(In thousands, except share, per share, and property data)(Unaudited) For the three months ended June 30, 2025 OMF SHOPTotal properties as of March 31, 2025136 45 Acquisitions— — Dispositions(3) (3) Total properties as of June 30, 2025133 42 Non-core properties(1) (2)Same Store properties as of June 30, 2025132 40

National Healthcare Properties Reports Second Quarter 2025 Results

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