Sila Realty Trust, Inc. (SILA)

CIK: 0001567925. SIC: 6798 Real Estate Investment Trusts. Latest 10-K as of: 2026-02-25.

SIC breadcrumb: Finance, Insurance, And Real Estate > Holding And Other Investment Offices > SIC 6798 Real Estate Investment Trusts

SEC company page: https://www.sec.gov/edgar/browse/?CIK=1567925. Latest filing source: 0001567925-26-000008.

Selected Fundamentals

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-25. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001567925.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Free cash flow = operating cash flow - capital expenditures. Missing metrics are omitted rather than fabricated.

Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

Financial Charts

Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-08. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001567925.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

Quarterly Charts

Macro Cross-References

• CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
• UNRATE - Unemployment Rate
• FEDFUNDS - Federal Funds Effective Rate
• CES0500000003 - Average Hourly Earnings of All Employees, Total Private
• DFEDTARU - Federal Funds Target Range - Upper Limit
• DFEDTARL - Federal Funds Target Range - Lower Limit
• DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
• DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
• DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
• DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
• T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
• CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
• CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
• CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
• CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
• PCEPI - Personal Consumption Expenditures: Chain-type Price Index
• PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
• PPIACO - Producer Price Index by Commodity: All Commodities
• T10YIE - 10-Year Breakeven Inflation Rate
• U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
• PAYEMS - All Employees, Total Nonfarm
• CIVPART - Labor Force Participation Rate
• EMRATIO - Employment-Population Ratio
• UNEMPLOY - Unemployed
• CE16OV - Employment Level
• ICSA - Initial Claims
• JTSJOL - Job Openings: Total Nonfarm
• JTSQUR - Quits: Total Nonfarm
• GDPC1 - Real Gross Domestic Product
• A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
• INDPRO - Industrial Production: Total Index
• TCU - Capacity Utilization: Total Index
• HOUST - New Privately-Owned Housing Units Started: Total Units
• PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
• RSAFS - Advance Retail Sales: Retail Trade
• PCE - Personal Consumption Expenditures
• DSPIC96 - Real Disposable Personal Income
• PSAVERT - Personal Saving Rate
• M2SL - M2
• BOPGSTB - U.S. International Trade in Goods and Services: Balance
• MSPUS - Median Sales Price of Houses Sold for the United States
• HSN1F - New One Family Houses Sold: United States
• RHORUSQ156N - Homeownership Rate in the United States
• TTLCONS - Total Construction Spending: Total Construction in the United States
• RRVRUSQ156N - Rental Vacancy Rate in the United States
• TOTALSL - Total Consumer Credit Owned and Securitized
• REVOLSL - Revolving Consumer Credit Owned and Securitized
• DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
• GDP - Gross Domestic Product
• GPDI - Gross Private Domestic Investment
• GCE - Government Consumption Expenditures and Gross Investment
• PCEC - Personal Consumption Expenditures
• NETEXP - Net Exports of Goods and Services
• GFDEBTN - Federal Debt: Total Public Debt
• GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
• FYFSD - Federal Surplus or Deficit
• FGRECPT - Federal Government Current Receipts
• FGEXPND - Federal Government: Current Expenditures
• MANEMP - All Employees, Manufacturing
• USCONS - All Employees, Construction
• USTRADE - All Employees, Retail Trade
• USFIRE - All Employees, Financial Activities
• USGOVT - All Employees, Government
• AWHAETP - Average Weekly Hours of All Employees, Total Private
• DGORDER - Manufacturers' New Orders: Durable Goods
• NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
• BUSINV - Total Business Inventories
• EXPGS - Exports of Goods and Services
• IMPGS - Imports of Goods and Services
• IR - Import Price Index (End Use): All Commodities
• PPIFIS - Producer Price Index by Commodity: Final Demand

Latest quarter (10-Q)

Latest 10-Q source: 0001567925-26-000020.

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary. Confidence: high. Filing date: 2026-05-08. Report date: 2026-03-31.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements, and the notes thereto, and the other financial information appearing elsewhere in this Quarterly Report on Form 10-Q.

The following discussion should also be read in conjunction with our audited consolidated financial statements, and the notes thereto, Risk Factors and Management's Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the U.S. Securities and Exchange Commission, or the SEC, on February 25, 2026, or the 2025 Annual Report on Form 10-K.

The terms “we,” “our,” “us,” and the “Company” refer to Sila Realty Trust, Inc., Sila Realty Operating Partnership, LP, or our Operating Partnership, and all wholly-owned subsidiaries.

Forward-Looking Statements

Certain statements contained in this Quarterly Report on Form 10-Q, other than historical facts, include forward-looking statements that reflect our expectations and projections about our future results, performance, prospects and opportunities. Such statements include, in particular, statements about our liquidity and capital resources, capital expenditures, material cash requirements, debt service requirements, expected interest rates and interest rate hedging impacts and practices, macroeconomic factors, the ability of our tenants to satisfy their rent and other obligations under their leases, tariffs and changes in other governmental policies, including the impacts of the government shutdown, term loan requirements, our share repurchases, our acquisitions and dispositions, plans, leases, dividends, distributions, strategies, prospects and the consummation of the Merger, as defined below, and are subject to certain risks and uncertainties, including known and unknown risks, which could cause actual results to differ materially from those projected or anticipated. Therefore, such statements are not intended to be a guarantee of our performance in future periods. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as “may,” “will,” “would,” “could,” “should,” “expect,” “intend,” “anticipate,” “estimate,” “believe,” “continue,” “seek,” “endeavor,” or other similar words. Forward-looking statements are subject to various risks and uncertainties, and factors that could cause actual results to differ materially from our expectations, and investors should not rely on forward-looking statements since they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond our control and which could materially affect our results of operations, financial condition, cash flows, performance or future achievements or events.

Forward-looking statements that were true at the time they were made may ultimately prove to be incorrect or false. We make no representation or warranty (express or implied) about the accuracy of any such forward-looking statements contained in this Quarterly Report on Form 10-Q, and we do not undertake to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Some of the factors that may affect outcomes and results include, but are not limited to: (i) risks associated with the Company’s ability to obtain the stockholder approval required to consummate the proposed transaction and the timing of the closing of the proposed transaction, including the risks that a condition to closing would not be satisfied within the expected timeframe or at all or that the closing of the proposed transaction would not occur, (ii) the outcome of any legal proceedings that may be instituted against the parties and others related to the merger agreement and the costs related to such proceedings, (iii) the risk that stockholder litigation or other proceedings in connection with the proposed transaction may affect the timing or occurrence of the proposed transaction or result in significant costs of defense, indemnification and liability, (iv) unanticipated difficulties or expenditures relating to the proposed transaction, the response of the Company’s tenants and business partners to the announcement of the proposed transaction, potential difficulties with the Company’s ability to retain and hire key personnel and maintain its business relationships, including those with tenants and other third parties, as a result of the proposed transaction, and/or potential difficulties in employee retention as a result of the announcement and pendency of the proposed transaction, (v) changes affecting the real estate industry and changes in market and economic conditions, including tariffs, geopolitical tensions and elevated inflation and interest rates that may adversely impact the Company or its tenants, (vi) fluctuations in interest rates and the costs and availability of financing, (vii) the occurrence of any event, change or other circumstance or condition that could give rise to the termination of the Merger Agreement, (viii) the ability to recognize the anticipated benefits of the proposed transaction and (ix) the risk that the Company’s stock price may decline significantly if the proposed transaction is not consummated. See Part I, Item 1A. “Risk Factors” of our 2025 Annual Report on Form 10-K, for a discussion of some, although not all, of the additional risks and uncertainties that could cause actual results to differ materially from those presented in our forward-looking statements.

Management’s discussion and analysis of financial condition and results of operations is based upon our condensed consolidated financial statements, which have been prepared in accordance with United States generally accepted accounting principles, or GAAP. The preparation of these financial statements requires management to make estimates and assumptions

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that affect the reported amounts of assets, liabilities, revenues and expenses. We evaluate these estimates on a regular basis. These estimates are based on management’s historical industry experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may differ from these estimates.

Overview

We are a net lease real estate investment trust, or REIT, with a strategic focus on investing in the growing and resilient healthcare sector. We invest in high quality net lease healthcare facilities along the continuum of care in the pursuit of generating predictable, durable and growing income streams. Our portfolio comprises high quality tenants in geographically diverse facilities, which are positioned to capitalize on the dynamic delivery of healthcare to patients. Our properties include, among others, medical outpatient buildings, inpatient rehabilitation facilities, and surgical and specialty facilities. We may also make other real estate related investments, which may include equity or debt interests in other real estate entities.

As of March 31, 2026, we owned 137 real estate properties and three undeveloped land parcels.

Critical Accounting Estimates

Our critical accounting estimates are disclosed in our 2025 Annual Report on Form 10-K. There have been no material changes to our critical accounting estimates as disclosed therein.

Interim Unaudited Financial Data

Our accompanying condensed consolidated financial statements have been prepared by us in accordance with GAAP in conjunction with the rules and regulations of the U.S. Securities and Exchange Commission, or SEC. Certain information and footnote disclosures required for annual financial statements have been condensed or excluded pursuant to SEC rules and regulations. Accordingly, our accompanying condensed consolidated financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. Our accompanying condensed consolidated financial statements reflect all adjustments, which are, in our view, of a normal recurring nature and necessary for a fair presentation of our financial position, results of operations and cash flows for the interim period. Interim results of operations are not necessarily indicative of the results to be expected for the full year; such full year results may be less favorable. Our accompanying condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in our 2025 Annual Report on Form 10-K.

Qualification as a REIT

We elected, and conduct our operations so as to qualify, to be taxed as a REIT for federal income tax purposes, and we intend to continue to be taxed as a REIT. To maintain our qualification as a REIT, we must continue to meet certain organizational and operational requirements, including a requirement to distribute at least 90.0% of our REIT taxable income, without regard to the deduction for dividends paid and excluding net capital gain, to our stockholders. As a REIT, we generally will not be subject to federal income tax on taxable income that we distribute to our stockholders.

If we fail to maintain our qualification as a REIT in any taxable year, we would then be subject to federal income taxes on our taxable income at regular corporate rates and would not be permitted to qualify for treatment as a REIT for federal income tax purposes for four years following the year during which qualification is lost unless the Internal Revenue Service grants us relief under certain statutory provisions. Such an event could have a material adverse effect on our net income and net cash available for distribution to our stockholders.

Proposed Merger

On April 19, 2026, we entered into a definitive merger agreement, or the Merger Agreement, pursuant to which certain affiliates of Blue Owl Real Estate Capital LLC, Sunshine Ultimate Parent LLC, a Delaware limited liability company, or the Parent, and Sunshine Holding REIT LLC, a Delaware limited liability company and wholly owned subsidiary of the Parent, or the Merger Sub, will acquire all outstanding shares of common stock of Sila Realty Trust, Inc. for $30.38 per share, or the Merger Consideration, in an all-cash transaction valued at approximately $2.4 billion. The Merger Agreement provides that we will merge with and into Merger Sub (such merger transaction, the “Merger”), with Merger Sub being the surviving entity, or the Surviving Entity, in the Merger.

At the effective time of the Merger, or the Merger Effective Time, each share of Common Stock, par value $0.01 per share, of the Company that is issued and outstanding immediately prior to the Merger Effective Time will automatically vest and be cancelled and terminated and converted into the right to receive the Merger Consideration. The transaction, which has been unanimously approved by our Board of Directors, or the Board, is expected to close in the second or third quarter of 2026,

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subject to approval by our stockholders and other customary closing conditions. During the pendency of the transaction, we are permitted under the Merger Agreement to pay up to two regular quarterly dividends.

Subject to and upon completion of the transaction, we will become a private company, and shares of the Common Stock will be de-registered under the Securities Exchange Act of 1934, as amended, or the Exchange Act, and will no longer trade on the New York Stock Exchange, or the NYSE. In certain specified circumstances further described in the Merger Agreement, in connection with the termination of the Merger Agreement, the Company will be required to pay Parent a termination payment of approximately $55.7 million, pursuant to

[Excerpt truncated for page length; source filing is linked above.]

Latest 10-K MD&A

Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Confidence: high. Filing date: 2026-02-25. Report date: 2025-12-31.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements, and the notes thereto, and the other financial information appearing elsewhere in this Annual Report on Form 10-K. The discussion contains forward looking statements that involve risks and uncertainties, such as statements of our plans, objectives, expectations and intentions. Our actual results could differ materially from those anticipated in the forward-looking statements as a result of various factors, including those discussed below and elsewhere in this report, particularly under “Risk Factors” and “Forward-Looking Statements.” All forward-looking statements in this document are based on information available to us as of the date hereof, and we assume no obligation to update any such forward-looking statements.

This section of the Annual Report on Form 10-K generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024. A discussion of the changes in our financial condition and results of operations for the years ended December 31, 2024 and 2023 may be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal years ended December 31, 2024 and December 31, 2023.

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Regulation FD Disclosures

We use any of the following to comply with our disclosure obligations under Regulation FD: SEC filings; press releases; public conference calls; or our website. We routinely post important information on our website at www.silarealtytrust.com, including information that may be deemed material. We encourage our shareholders and others interested in our company to monitor these distribution channels for material disclosures. The contents of our website address referenced herein is included in this Annual Report on Form 10-K as a textual reference only and is not incorporated by reference into this Annual Report on Form 10-K.

Overview

We are a net lease REIT with a strategic focus on investing in the growing and resilient healthcare sector. We invest in high quality net lease healthcare facilities along the continuum of care in the pursuit of generating predictable, durable and growing income streams. Our portfolio comprises high quality tenants in geographically diverse facilities, which are positioned to capitalize on the dynamic delivery of healthcare to patients. Our properties include, among others, medical outpatient buildings, inpatient rehabilitation facilities, and surgical and specialty facilities. We may also make other real estate related investments, which may include equity or debt interests in other real estate entities.

As of December 31, 2025, we owned 140 real estate properties and three undeveloped land parcels, including the Stoughton Healthcare Facility which has been taken out of service and is being demolished.

Recent Developments

Share Repurchase Program

On August 4, 2025, the Board authorized a share repurchase program of up to $75,000,000 in gross purchase proceeds for a period of three-years from August 4, 2025, subject to the limitation of $25,000,000 in gross purchase proceeds in any twelve-month period. Repurchases of Common Stock under the 2025 SRP may be made from time to time in the open market, in privately negotiated purchases, in accelerated share repurchase programs or by any other lawful means. The number of shares of Common Stock purchased and the timing of any purchases will depend on a number of factors, including the price and availability of Common Stock and general market conditions. The 2025 SRP replaced the Company’s prior share repurchase program. The Company did not repurchase any shares under the 2025 SRP during the year ended December 31, 2025.

During the year ended December 31, 2025, the Company repurchased 304,878 shares of Common Stock for an aggregate purchase price of $7,344,000, excluding all related costs and fees, under a prior share repurchase program.

Automatic Shelf Registration Statement

On August 12, 2025, we filed with the SEC an automatic shelf registration statement on Form S-3 that is effective for a term of three years, covering future offerings of an indeterminate amount of our Common Stock, preferred stock, depositary shares, warrants, purchase contracts and units. In connection with the filing of the registration statement, on August 12, 2025, we filed a prospectus supplement related to the ATM Program (as defined below), with the SEC.

At-the-Market Program

On August 12, 2025, we entered into an ATM Equity Offering Sales Agreement, or the ATM Program, through which, from time to time, we may offer and sell shares of Common Stock having an aggregate offering price of up to $250,000,000. During the year ended December 31, 2025, no shares were issued under the ATM Program and as of December 31, 2025, we had $250,000,000 in gross sales of available capacity under the ATM Program.

Critical Accounting Estimates

The preparation of our consolidated financial statements in conformity with United States generally accepted accounting principles, or GAAP, requires management to make estimates and assumptions that affect reported amounts of assets, liabilities, revenues and expenses. Changes in these estimates and assumptions could have a significant effect on the financial statements. From time to time, we evaluate our estimates based on historical experience and various assumptions that we believe are reasonable under the circumstances. Although our actual results historically have not deviated materially from those determined using estimates, our results of operations or financial condition could differ materially from these estimates under different assumptions or conditions.

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We consider our critical accounting estimates to be those used in the determination of the reported amounts and disclosure related to the impairment of long-lived assets.

We review our real estate assets on an asset group basis for impairment. Typically, an individual property constitutes an asset group. We identify an asset group based on the lowest level of identifiable cash flows. During the impairment analysis, we must determine whether there are indicators of impairment. For operating properties, these indicators could include a reduction in our expected holding period, a tenant having unpaid rent or a delinquency, a significant decline in a property’s leased percentage, a current period operating loss or negative cash flows combined with a history of losses at the property, a significant decline in lease rates for that property or others in the property’s market, a significant change in the market value of the property, or an adverse change in the financial condition of significant tenants. The length of the expected holding period coupled with these other indicators impact the projected undiscounted cash flows.

If we determine that an asset has indicators of impairment, we then determine whether the undiscounted cash flows associated with the asset group over the expected holding period exceed the carrying amount of the asset group. In calculating the undiscounted cash flows of an asset group, we use considerable judgment to estimate several inputs. We estimate future rental rates, future capital expenditures, future operating expenses, and market capitalization rates for residual values, among other things. In addition, if there are alternative strategies for the future use of the asset, we assess the probability of each alternative strategy and perform a probability-weighted undiscounted cash flow analysis to assess the recoverability of the asset group. If the carrying value of the asset group exceeds the estimated undiscounted cash flows, an impairment loss is recognized to the extent the carrying value exceeds the estimated fair value of the asset group.

In determining the fair value of an asset group, we exercise considerable judgment on several factors. We may determine fair value by using a direct capitalization method, a discounted cash flow method or by utilizing comparable sales information. The direct capitalization method is based on a capitalization rate applied to the underlying asset group’s stabilized next twelve-month net operating income at the measurement date. The discounted cash flow method is based on estimated future cash flow projections utilizing discount rates, terminal capitalization rates, and planned capital expenditures. We use judgment to determine an appropriate discount rate to apply to the cash flows in the discounted cash flow calculation. We also use judgment in analyzing comparable market information because no two real estate assets are identical in location and price.

The estimates and judgments used in the impairment process are highly subjective and susceptible to frequent change. Significant increases or decreases in any of these inputs, particularly with regard to the expected holding period, cash flow projections and discount and capitalization rates, would result in a significantly lower or higher fair value measurement of the real estate assets being assessed. Additionally, changes in economic and operating conditions, including changes in the financial condition of our tenants, and changes to our intent and ability to hold the related asset, that occur after our impairment assessment could impact the assumptions used in that assessment and could result in future charges to earnings if assumptions regarding those investments differ from actual results.

Real Estate Acquisitions in 2025

We purchased six healthcare properties, comprising approximately 241,000 rentable square feet for an aggregate purchase price of approximately $148,877,000.

Factors That May Influence Results of Operations

Economic and Market Conditions

Our operating results have been and will continue to be generally impacted by global and national economic and market conditions and by the local economic conditions where our real estate properties are located. Increased interest rates, persistent elevated prices due to recent inflation, ongoing geopolitical tensions, and increased volatility in public and private equity and fixed income markets have led to increased costs and have limited the availability of capital. Continued elevated interest rates imposed by the Federal Reserve to address potential inflation may adversely impact our borrowing costs and real estate asset values generally, including our real estate properties. In addition, any tariffs imposed by the United States or other countries, as well as any prolonged government shutdown, may cause additional impacts to the economy, including further inflationary pressures. On July 4, 2025, the One Big Beautiful Bill Act, or OBBBA, was signed into law. The OBBBA includes, among other things, changes to Medicaid and health insurance marketplaces that may have an impact on our tenants’ financial position. We continue to evaluate the impacts of the OBBBA.

Most of our lease agreements contain provisions designed to mitigate the adverse impact of inflation, including annual rent increases based on stated increases or consumer price index (CPI) increases, as well as the triple net nature of the leases whereby tenants are responsible for the operating expenses of the properties. To the extent our tenants have experienced difficulties due to the foregoing economic and market conditions, they may be unable or unwilling to make payments or perform their obligations when due.

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Rental Revenue

The amount of rental revenue generated by our properties depends principally on our ability to maintain the occupancy rates of leased space and to lease available space at existing rental rates. Negative trends in one or more of these factors could adversely affect our rental revenue in future periods. We continually monitor our tenants’ ability to meet their lease obligations to determine if any adjustments should be reflected currently. As of December 31, 2025, our properties were 98.7% leased.

Results of Operations

Our results of operations are influenced by the timing of acquisitions and the performance of our real estate properties.

The following table shows the property statistics of our real estate properties as of December 31, 2025 and 2024:

December 31,

2025

2024

Number of real estate properties(1)

140 

135 

Leased square feet

5,255,000 

5,050,000 

Weighted average percentage of rentable square feet leased

98.7 

%

96.0 

%

(1)As of December 31, 2025 we owned 140 real estate properties and three undeveloped land parcels, including the Stoughton Healthcare Facility which has been taken out of service and is being demolished. As of December 31, 2024, we owned 135 real estate properties and two undeveloped land parcels.

The following table summarizes our real estate activity for the years ended December 31, 2025 and 2024:

Year Ended

December 31,

2025

2024

Real estate properties acquired

6 

8 

Real estate properties disposed

— 

4 

Aggregate purchase price of real estate properties acquired(1)(2)

$

148,877,000 

$

164,053,000 

Net book value of real estate properties disposed

$

— 

$

18,099,000 

Leased square feet of real estate property additions

241,000 

307,000 

Leased square feet of real estate property dispositions(3)

— 

71,000 

(1)Includes $2,676,000 for additional land purchased to expand the Dover Healthcare Facility for the year ended December 31, 2025.

(2)Includes capitalized acquisition costs associated with transactions determined to be asset acquisitions.

(3)The Fort Myers Healthcare Facility and Fort Myers Healthcare Facility II, or collectively, the Fort Myers Healthcare Facilities, and the Yucca Valley Healthcare Facility were vacant upon disposition on September 25, 2024 and December 10, 2024, respectively.

This section describes and compares our results of operations for the years ended December 31, 2025 and 2024. We generate substantially all of our revenue from property operations. In order to evaluate our overall portfolio, management analyzes the results of our “same store properties.” We define “same store properties” as properties that were owned and operated for the entirety of both calendar periods being compared and exclude properties under development, redevelopment, or classified as held for sale.

By evaluating the results of our same store properties, management is able to monitor the operations of our existing properties for comparable periods to measure the performance of our current portfolio and readily observe the expected effects of our new acquisitions and dispositions on net income.

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

The following table details our total revenues for the year ended December 31, 2025, compared to the comparable period in 2024 (amounts in thousands):

Year Ended

December 31,

2025

2024

$ Change

% Change

Same store rental revenue

$

161,924 

$

156,524 

$

5,400 

3.4 

%

Same store tenant reimbursements

14,797 

14,579 

218 

1.5 

%

Non-same store rental revenue

19,100 

15,266 

3,834 

25.1 

%

Non-same store tenant reimbursements

479 

466 

13 

2.8 

%

Other operating income

4 

21 

(17)

(81.0)

%

Total rental revenue

196,304 

186,856 

9,448 

5.1 

%

Real estate related notes receivable interest income

1,232 

— 

1,232 

n/a

Total revenues

$

197,536 

$

186,856 

$

10,680 

5.7 

%

•Same store rental revenue increased primarily due to a $5,371,000 increase as a result of new and renewal leasing activity, a $474,000 increase in annual base rent escalations for leases indexed to CPI, a $456,000 increase related to less accelerated amortization of above-market lease intangible assets as a result of lease amendments in the prior year, a $295,000 increase in lease termination income as a result of tenants who vacated their leased space, a $156,000 increase in rent recognized on a cash basis as a result of a tenant with payment uncertainty who was paying less rent in the prior year and had annual base rent escalations in the current year being compared, and a $54,000 increase attributable to the amortization of GenesisCare severance fee income, partially offset by a decrease of $710,000 as a result of properties with tenant vacancies and lease terminations and a decrease of $696,000 as a result of less accelerated amortization of below-market lease intangible liabilities as a result of lease terminations related to GenesisCare in the prior year.

•Same store tenant reimbursements increased primarily due to higher operating costs in the current year, which are generally passed along to our tenants.

•Non-same store rental revenue increased primarily due to a $9,644,000 increase attributable to properties acquired since January 1, 2024, a $2,667,000 increase related to less accelerated amortization of above-market lease intangibles as a result of a lease termination related to GenesisCare in the prior year, and a $112,000 increase related to a property that was under development throughout 2024 and completed in December 2025, partially offset by lease termination income of $4,098,000 recognized in the prior year, a $1,630,000 decrease from properties sold since January 1, 2024, a $1,344,000 decrease resulting from the vacant Stoughton Healthcare Facility due to a lease termination as a result of the Steward Healthcare System LLC, or Steward, bankruptcy in the prior year, a $1,342,000 decrease related to less accelerated amortization of below-market lease intangibles as a result of lease terminations related to GenesisCare in the prior year, and a $175,000 decrease related to a property that was operational for part of 2024, under redevelopment in 2025 and completed and placed in service in December 2025.

•There were no material changes in non-same store rental reimbursements or other operating income.

•Real estate related notes receivable interest income increased due to the funding of the mezzanine loans during the year ended December 31, 2025.

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Changes in our expenses are summarized in the following table (amounts in thousands):

Year Ended

December 31,

2025

2024

$ Change

% Change

Same store rental expenses

$

21,392 

$

20,916 

$

476 

2.3 

%

Non-same store rental expenses

2,412 

2,222 

190 

8.6 

%

Listing-related expenses

— 

3,012 

(3,012)

n/a

General and administrative expenses

20,907 

25,336 

(4,429)

(17.5)

%

Depreciation and amortization

76,946 

74,754 

2,192 

2.9 

%

Impairment and disposition losses

9,951 

1,210 

8,741 

722.4 

%

Demolition costs

1,011 

— 

1,011 

n/a

Total operating expenses

$

132,619 

$

127,450 

$

5,169 

4.1 

%

•Same store rental expenses, most of which are subject to reimbursement by our tenants, increased primarily due to higher operating costs in the current year.

•Non-same store rental expenses, most of which are subject to reimbursement by our tenants, increased primarily due to a $487,000 increase from properties acquired since January 1, 2024, and a $379,000 increase in non-reimbursable operating costs resulting from the vacant Stoughton Healthcare Facility due to a lease termination in the prior year, partially offset by a $597,000 decrease primarily attributable to properties sold since January 1, 2024 and a $79,000 decrease primarily related to a property that was under redevelopment during the year, which was completed in December 2025.

•Listing-related expenses of $3,012,000 were recorded during the year ended December 31, 2024, and consisted of advisory fees for legal, banking, and other advisory services, related to our listing on the New York Stock Exchange on June 13, 2024, or the Listing.

•General and administrative expenses decreased primarily due to a $2,950,000 decrease in personnel costs primarily attributable to 2024 separation pay and performance bonuses, a $1,051,000 decrease in costs primarily attributable to transfer agent and custodial fees as a result of the Listing, a $917,000 decrease in accelerated stock-based compensation as a result of accelerated awards due to severance, and a $119,000 decrease in stock-based compensation primarily due to forfeitures during the year, partially offset by a $608,000 increase primarily due to an increase in audit fees as a result of the audit of internal controls over financial reporting due to (among other things) the change in our filer status to a large accelerated filer.

•Depreciation and amortization increased primarily due to a $4,181,000 increase due to properties acquired since January 1, 2024, a $3,395,000 increase in depreciation recognized related to the change in estimated useful life at the Stoughton Healthcare Facility, which is being demolished, $1,075,000 of accelerated amortization of in-place lease intangible assets as a result of a lease termination at a property that was subsequently leased to a new tenant and a $372,000 increase due to assets placed in service since January 1, 2024, partially offset by $4,646,000 of accelerated amortization of in-place lease intangible assets as a result of lease amendments and terminations related to GenesisCare in the prior year, a $1,801,000 decrease primarily attributable to fully amortized in-place lease intangible assets and tenant improvements, and a $384,000 decrease from properties sold since January 1, 2024.

•We recorded impairment losses of $9,951,000 during the year ended December 31, 2025, related to the impacts of vacancies and lease terminations at three properties. We recorded impairment and disposition losses in the aggregate amount of $1,210,000 during the year ended December 31, 2024 as a result of tenant related triggering events that occurred at certain properties and costs related to the disposition of the Fort Myers Healthcare Facilities.

•Demolition costs of $1,011,000 were recorded during the year ended December 31, 2025, related to the demolition of the Stoughton Healthcare Facility.

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Changes in other (expense) income are summarized in the following table (amounts in thousands):

Year Ended

December 31,

2025

2024

$ Change

% Change

Gain on dispositions of real estate

$

— 

$

341 

$

(341)

n/a

Interest and other income

1,169 

4,130 

(2,961)

(71.7)

%

Interest expense

(32,786)

(21,220)

(11,566)

54.5 

%

Increase in current expected credit loss reserve

(180)

— 

(180)

n/a

Total other (expense) income

$

(31,797)

$

(16,749)

$

(15,048)

89.8 

%

•During the year ended December 31, 2025, we did not dispose of any real estate properties. During the year ended December 31, 2024, we recognized a gain on disposition on two real estate properties. On January 31, 2024, we sold one property for a sale price of $1,500,000, resulting in a gain on sale of $76,000. On December 10, 2024, we sold one property for a sales price of $1,700,000, resulting in a gain on sale of $265,000.

•Interest and other income decreased primarily due to a decline in dividend income attributable to a lower average investment in money market funds from the deployment of proceeds in the prior year.

•Interest expense increased due to a $10,923,000 increase primarily resulting from a higher weighted average interest rate on our credit facility, driven by higher fixed rates on interest rate swaps entered into to replace five interest rate swaps that matured on December 31, 2024 and higher average borrowings on our variable rate debt, a $638,000 increase in amortization of deferred financing costs, and a $5,000 increase in loss on extinguishment of debt in connection with entering into the 2029 Revolving Credit Agreement (as defined below) to replace the 2026 Revolving Credit Agreement (as defined below).

•The current expected credit loss reserve increased by $180,000 due to the recognition of expected credit losses associated with two mezzanine loans we entered into in November 2024.

Liquidity and Capital Resources

Our principal uses of funds are for acquisitions of real estate and real estate related investments, capital expenditures, operating expenses, distributions to, and share repurchases from, stockholders, and principal and interest payments on current and future indebtedness. Interest rates on variable rate debt increased in recent years and then declined some due to the interest rate cuts by the Federal Reserve in the second half of 2024 and 2025. Future increases or decreases are difficult to predict during the current uncertain macroeconomic environment, particularly given the recent significant changes in U.S. tariffs. That said, we believe our exposure to increased or fluctuating interest rates is limited at this time due to our hedging strategy, which has effectively fixed 78% of our outstanding debt as of December 31, 2025, and therefore allowed us to reasonably project our liquidity needs. Generally, cash for these items is generated from operations of our current and future investments. Our sources of funds are primarily operating cash flows, our credit facility and other potential borrowings.

When we acquire a property, we prepare a capital plan that contemplates the estimated capital needs of that investment. In addition to operating expenses, capital needs may also include, for example, costs of refurbishment, tenant improvements or other major capital expenditures. The capital plan also sets forth the anticipated sources of the necessary capital, which may include a line of credit, operating cash generated by the investment, additional equity investments from us, and when necessary, capital reserves. The capital plan for each investment will be adjusted through ongoing, regular reviews of our portfolio or, as necessary, to respond to unanticipated additional capital needs.

Automatic Shelf Registration Statement

On August 12, 2025, we filed with the SEC an automatic shelf registration statement on Form S-3 that is effective for a term of three years, covering future offerings of an indeterminate amount of our Common Stock, preferred stock, depositary shares, warrants, purchase contracts and units. In connection with the filing of the registration statement, on August 12, 2025, we filed a prospectus supplement related to the ATM Program (as defined below), with the SEC.

ATM Program

On August 12, 2025, we entered into an ATM Equity Offering Sales Agreement, or the ATM Program, through which, from time to time, we may offer and sell shares of Common Stock having an aggregate offering price of up to $250,000,000. During the year ended December 31, 2025, no shares were issued under the ATM Program and as of December 31, 2025, we had $250,000,000 in gross sales of available capacity under the ATM Program.

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Short-term Liquidity and Capital Resources

For at least the next twelve months, we expect our principal demands for funds will be for operating expenses, including our general and administrative expenses, as well as the acquisition of real estate and real estate related investments, and funding of capital improvements, including developments, and tenant improvements, distributions to, and potential stock repurchases from, stockholders, and interest payments on our credit facility. We expect to meet our short-term liquidity requirements through proceeds from cash flows from operations and borrowings on our credit facility and potential other borrowings. Additionally, we may issue our Common Stock within the next twelve months, afterwards, or both to raise funds to meet our liquidity needs.

We believe we will have sufficient liquidity available to meet our obligations in a timely manner, under both normal and stressed conditions, for the next twelve months.

Long-term Liquidity and Capital Resources

Beyond the next twelve months, we expect our principal demands for funds will be for costs to acquire additional real estate properties, interest and principal payments on our credit facility, long-term capital investment demands for our real estate properties and distributions necessary to maintain our REIT status.

We currently expect to meet our long-term liquidity requirements through proceeds from cash flows from operations and borrowings on our credit facility, potential other borrowings and potential equity offerings.

We expect to pay distributions to our stockholders from cash flows from operations; however, we have used, and may in the future use, other sources to fund distributions, as necessary. To the extent cash flows from operations are lower due to lower-than-expected returns on the properties held or the disposition of properties, distributions paid to stockholders may be lower. We currently expect that substantially all net cash flows from our operations will be used to fund acquisitions, certain capital expenditures and tenant improvement allowances identified at acquisition, ongoing capital expenditures, interest and principal payments on outstanding debt and distributions to our stockholders.

Material Cash Requirements

As of December 31, 2025, we had $32,288,000 in cash and cash equivalents. In addition to the cash we need to conduct our normal business operations, we expect to require up to $43,554,000 in cash over the next twelve months, of which $31,673,000 is related to estimated interest payments on our outstanding debt (calculated based on the interest rates in effect as of December 31, 2025), up to $9,069,000 is related to a development to expand the Dover Healthcare Facility, and $2,812,000 is related to our various obligations as lessee. We cannot provide assurances, however, that actual expenditures will not exceed these estimates. In addition, we may provide capital expenditure or tenant improvement allowances in new or renewal leases for the purpose of refurbishing or renovating tenant space. We may also assume tenant improvement obligations included in leases acquired in our real estate acquisitions. Many of these allowances are subject to contingencies that make it difficult to predict when they will be utilized, if at all.

As of December 31, 2025, we had material obligations beyond twelve months in the amount of $818,998,000, inclusive of $707,068,000 related to principal and estimated interest payments on our outstanding debt (calculated based on our effective interest rates as of December 31, 2025) and $111,930,000 related to our various obligations as lessee.

One of our principal liquidity needs is the payment of principal and interest on outstanding indebtedness. As of December 31, 2025, we had $676,000,000 of principal outstanding under our Unsecured Credit Facility (as defined below). We are required by the terms of certain loan documents relating to the Unsecured Credit Facility to meet certain covenants, such as financial ratios and reporting requirements. As of December 31, 2025, we were in compliance with all such covenants and requirements on our Unsecured Credit Facility.

As of December 31, 2025, the aggregate notional amount under our derivative instruments was $525,000,000. We have agreements with each derivative counterparty that contain cross-default provisions; if we default on our indebtedness, then we could also be declared in default on our derivative obligations, resulting in an acceleration of payment of any net amounts due under our derivative contracts. As of December 31, 2025, we were in compliance with all such cross-default provisions.

Debt Service Requirements

Credit Facility

As of December 31, 2025, the maximum commitments available under our senior unsecured revolving line of credit with Bank of America, N.A., as Administrative Agent for the lenders, or the 2029 Revolving Credit Agreement, were $600,000,000, which may be increased, subject to lender approval, through incremental term loans and/or revolving loan commitments in an aggregate amount not to exceed $1,500,000,000. The maturity date for the 2029 Revolving Credit Agreement is February 16, 2029, which, at our election, may be extended for a period of six-months on no more than two occasions, subject to certain

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conditions, including the payment of an extension fee. The 2029 Revolving Credit Agreement was entered into on February 18, 2025, to replace our prior Revolving Credit Agreement with Truist Bank, as Administrative Agent for the Lenders, that had a maturity date of February 15, 2026, or the 2026 Revolving Credit Agreement. Upon closing of the 2029 Revolving Credit Agreement, we extinguished all commitments associated with the 2026 Revolving Credit Agreement. As of December 31, 2025, the 2029 Revolving Credit Agreement had an aggregate outstanding principal balance of $151,000,000.

As of December 31, 2025, the maximum commitments available under our senior unsecured amended and restated term loan agreement with Truist Bank, as Administrative Agent for the lenders, or the 2027 Term Loan Agreement, were $250,000,000, which may be increased, subject to lender approval, to an aggregate amount not to exceed $500,000,000. The 2027 Term Loan Agreement has a maturity date of March 20, 2027, which, at our election, may be extended for a period of one year on no more than two occasions, subject to the satisfaction of certain conditions, including the payment of an extension fee. As of December 31, 2025, the 2027 Term Loan Agreement had an aggregate outstanding principal balance of $250,000,000.

As of December 31, 2025, the maximum commitments available under our senior unsecured term loan with Truist Bank, as Administrative Agent for the lenders, or the 2028 Term Loan Agreement, were $275,000,000, which may be increased, subject to lender approval, to an aggregate amount not to exceed $500,000,000 and has a maturity date of January 31, 2028. The 2028 Term Loan Agreement is pari passu with our 2029 Revolving Credit Agreement and 2027 Term Loan Agreement. As of December 31, 2025, the 2028 Term Loan Agreement had an aggregate outstanding principal balance of $275,000,000.

The 2029 Revolving Credit Agreement, the 2027 Term Loan Agreement and the 2028 Term Loan Agreement, or collectively, the Unsecured Credit Facility, has aggregate commitments available of $1,125,000,000, as of December 31, 2025. Generally, the proceeds of loans made under our Unsecured Credit Facility may be used for acquisition of real estate investments, funding of tenant improvements and leasing commissions with respect to real estate, repayment of indebtedness, funding of capital expenditures with respect to real estate, and general corporate and working capital purposes.

As of December 31, 2025, we had a total pool availability under our Unsecured Credit Facility of $1,125,000,000 and an aggregate outstanding principal balance of $676,000,000; therefore, $449,000,000 was available to be drawn under our Unsecured Credit Facility.

Cash Flows

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

Year Ended

December 31,

(in thousands)

2025

2024

Change

Net cash provided by operating activities

$

119,145 

$

132,847 

$

(13,702)

Net cash used in investing activities

$

(174,497)

$

(149,687)

$

(24,810)

Net cash provided by (used in) financing activities

$

47,796 

$

(145,501)

$

193,297 

Operating Activities

•Net cash provided by operating activities decreased primarily due to property dispositions, vacancies, lease terminations, a decrease in lease termination income, a decrease in dividend income from money market funds, and an increase in interest paid on our Unsecured Credit Facility, partially offset by an increase in cash collected for rent resulting from property acquisitions and annual rent increases.

Investing Activities

Significant investing activities included:

•Investment of $148,874,000 to purchase six properties and a land parcel for development during the year ended December 31, 2025, compared to an investment of $164,053,000 to purchase eight properties during the year ended December 31, 2024.

•There were no property dispositions during the year ended December 31, 2025. Received net proceeds of $17,705,000 from the sale of four properties during the year ended December 31, 2024.

•Funded capital expenditures, primarily for tenant improvements, of $8,281,000 during the year ended December 31, 2025, compared to $2,989,000 funded during the year ended December 31, 2024.

•Funded real estate related notes receivable of $17,543,000 during the year ended December 31, 2025.

•Received origination fees on real estate related notes receivable of $351,000 during the year ended December 31, 2025.

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•Paid net deposits for investments in real estate of $150,000 during the year ended December 31, 2025, compared to the payment of net deposits for investments in real estate of $350,000 during the year ended December 31, 2024.

Financing Activities

Significant financing activities included:

•Payment of $88,787,000 in cash distributions to common stockholders, including cash distributions on vested performance-based deferred stock unit awards, during the year ended December 31, 2025, compared to $81,367,000 during the year ended December 31, 2024.

•Repurchase of $8,634,000 of Common Stock for a prior share repurchase program and the net settlement of withholding taxes in connection with the vesting of restricted stock and issuance of performance-based deferred stock unit awards during the year ended December 31, 2025, compared to $61,495,000 of Common Stock repurchased for the tender offer, costs and fees related to the tender offer, our prior share repurchase program and the net settlement of withholding taxes in connection with the vesting of restricted stock and issuance of performance-based deferred stock unit awards during the year ended December 31, 2024.

•Payment of $5,783,000 in deferred financing costs primarily as a result of entering into the 2029 Revolving Credit Agreement during the year ended December 31, 2025, compared to $2,578,000 as a result of entering into the 2027 Term Loan Agreement during the year ended December 31, 2024.

•The following Unsecured Credit Facility related activity during the year ended December 31, 2025:

◦Drew $164,000,000 on the 2029 Revolving Credit Agreement to fund acquisitions and mezzanine loan fundings.

◦Repayment of $13,000,000 on the 2029 Revolving Credit Agreement with cash provided by operations.

•The following Unsecured Credit Facility related activity during the year ended December 31, 2024:

◦Replacement of $250,000,000 on our prior term loan with borrowings from the 2027 Term Loan Agreement.

◦Draw of $20,000,000 on the 2026 Revolving Credit Agreement to fund an acquisition.

◦Repayment of $20,000,000 on the 2026 Revolving Credit Agreement with proceeds from dispositions and cash flows from operations.

Distributions to Stockholders

The amount of distributions payable to our stockholders is determined by the Board and is dependent on a number of factors, including our funds available for distribution, financial condition, lenders’ restrictions and limitations, capital expenditure requirements, corporate law restrictions and the annual distribution requirements needed to maintain our status as a REIT under the Internal Revenue Code of 1986, as amended. The Board must authorize each distribution and may, in the future, authorize lower amounts of distributions or not authorize additional distributions and, therefore, distribution payments are not guaranteed. Additionally, our organizational documents permit us to pay distributions from unlimited amounts of any source, and we may use sources other than operating cash flows to fund distributions, which may reduce the amount of capital we ultimately invest in properties or other permitted investments.

In order to maintain our status as a REIT, we are required to make distributions each taxable year equal to at least 90% of our REIT taxable income, computed without regard to the dividends paid deduction and excluding capital gains.

For the year ended December 31, 2025, we paid approximately $88,787,000 in aggregate ordinary cash distributions on our Common Stock. On February 23, 2026, the Board authorized a quarterly cash dividend of $0.40 per share of Common Stock payable on March 18, 2026, to our stockholders of record as of the close of business on March 6, 2026. To the extent funds are available, we intend to continue to pay regular distributions to stockholders.

For federal income tax purposes, distributions to common stockholders are characterized as ordinary dividends, capital gain distributions, or nontaxable distributions. To the extent that we make a distribution in excess of our current or accumulated earnings and profits, such excess will be a nontaxable return of capital, reducing the tax basis in each U.S. stockholder’s shares. Further, the amount of distributions in excess of a U.S. stockholder’s tax basis in such shares will be taxable as a realized gain.

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The following table shows the character of distributions the Company paid on a percentage basis during the years ended December 31, 2025 and 2024:

Year Ended December 31,

Character of Distributions(1):

2025

2024

Ordinary dividends

73.84 

%

62.79 

%

Capital gain distributions

— 

%

— 

%

Nontaxable distributions

26.16 

%

37.21 

%

Total

100.00 

%

100.00 

%

(1)Attributable to Common Stock for the year ended December 31, 2025. Attributable to Class A shares, Class I shares, and Class T shares of common stock until the Listing and attributable to Common Stock after the Listing for the year ended December 31, 2024.

Non-GAAP Financial Measures

In the real estate industry, analysts and investors employ certain non-GAAP supplemental financial measures in order to facilitate meaningful comparisons between periods and among peer companies. We believe that these measures are useful to investors to consider because they may assist them to better understand and measure the performance of our business over time and against similar companies. We use the following non-GAAP financial measures: Funds From Operations, or FFO, Core Funds From Operations, or Core FFO, and Adjusted Funds From Operations, or AFFO.

Net Income and FFO, Core FFO and AFFO

A description of FFO, Core FFO, and AFFO and reconciliations of these non-GAAP measures to net income, the most directly comparable GAAP measure, are provided below.

The National Association of Real Estate Investment Trusts, or Nareit, an industry trade group, has promulgated the FFO measure, which we believe is an appropriate additional measure to reflect the operating performance of a REIT. The use of FFO is recommended by the REIT industry as a supplemental performance measure. FFO is not equivalent to our net income as determined under GAAP.

We define FFO, consistent with Nareit’s definition, as net income (calculated in accordance with GAAP), excluding gains and losses from sales of real estate assets, impairment of 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, and depreciation and amortization of real estate assets. Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect FFO on the same basis. We do not have any investments in unconsolidated partnerships or joint ventures.

We, along with many of our peers in the real estate industry, consider FFO to be an appropriate supplemental measure of a REIT’s operating performance because it is based on a net income analysis of real estate portfolio performance that excludes non-cash items such as real estate depreciation and amortization and real estate impairments. We believe FFO provides investors a useful understanding of our performance to the investors and to our management, and when compared to year over year, FFO reflects the impact on our operations from trends in occupancy.

We calculate Core FFO by adjusting FFO to remove the effect of certain GAAP non-cash income and expense items, unusual and infrequent items that are not expected to impact our operating performance on an ongoing basis, items that affect comparability to prior periods and/or items that are not related to our core real estate operations. We consider it to be a useful supplemental financial performance measure because it provides investors with additional information to understand our sustainable performance. Excluded items include listing-related expenses, severance, write-off of straight-line rent receivables related to prior periods, accelerated stock-based compensation, amortization of above- and below-market lease intangibles (including ground leases), loss on extinguishment of debt, changes in the current expected credit loss reserve and demolition costs.

We calculate AFFO by further adjusting Core FFO for the following items: deferred rent, current period straight-line rent adjustments, amortization of deferred financing costs, amortization of fees on our real estate related notes receivable, and stock-based compensation. We believe AFFO is a supplemental performance measure that provides investors appropriate supplemental information to evaluate our ongoing operations. AFFO is a metric used by management to evaluate our dividend policy.

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Presentation of this information is intended to assist management and investors in comparing the operating performance of different REITs, although it should be noted that not all REITs calculate FFO, Core FFO and AFFO the same way, so comparisons with other REITs may not be meaningful. Furthermore, FFO, Core FFO and AFFO are not necessarily indicative of cash flows available to fund cash needs and should not be considered as an alternative to net income as an indication of our performance or as an indication of our liquidity, including our ability to make distributions to our stockholders. FFO, Core FFO and AFFO may be useful in assisting management and investors in assessing the sustainability of operating performance in future operating periods. All of our non-GAAP financial measures should be reviewed in conjunction with other measurements as an indication of our performance. The method used to evaluate the value and performance of real estate under GAAP should be considered a more relevant measure of operating performance and more prominent than the non-GAAP financial measures presented here.

Reconciliation of Net Income to FFO, Core FFO and AFFO

The following table presents a reconciliation of net income attributable to common stockholders, which is the most directly comparable GAAP financial measure, to FFO, Core FFO and AFFO for the years ended December 31, 2025 and 2024 (amounts in thousands):

Year Ended

December 31,

2025

2024

Net income attributable to common stockholders(1)(2)

$

33,120 

$

42,657 

Adjustments:

Depreciation and amortization of real estate assets

76,838 

74,660 

Gain on dispositions of real estate

— 

(341)

Impairment and disposition losses

9,951 

1,210 

FFO(1)(2)

$

119,909 

$

118,186 

Adjustments:

Listing-related expenses

— 

3,012 

Severance

33 

1,885 

Write-off of straight-line rent receivables related to prior periods

462 

— 

Accelerated stock-based compensation

19 

936 

Amortization of above (below) market lease intangibles, including ground leases, net

78 

1,778 

Loss on extinguishment of debt

233 

228 

Increase in current expected credit loss reserve

180 

— 

Demolition costs

1,011 

— 

Core FFO(1)(2)

$

121,925 

$

126,025 

Adjustments:

Deferred rent(3)

1,226 

3,510 

Straight-line rent adjustments

(9,763)

(5,555)

Amortization of deferred financing costs

2,823 

2,185 

Amortization of fees on real estate related notes receivable

(94)

— 

Stock-based compensation

4,796 

4,914 

AFFO(1)(2)

$

120,913 

$

131,079 

(1)The year ended December 31, 2025 includes $295,000 of lease termination fee income received. The year ended December 31, 2024 includes $4,098,000 of lease termination fee income received.

(2)The year ended December 31, 2025 includes $83,000 of rental revenue received as a result of bankruptcy proceedings from Steward, the sponsor and owner of the former tenant at the Stoughton Healthcare Facility.

(3)The year ended December 31, 2024 includes a $2,000,000 severance fee received from GenesisCare, which is recognized in rental revenues over the remaining GenesisCare amended master lease term. Additionally, the years ended December 31, 2025 and 2024 include a property that was under development. This property was placed in service in December 2025 and therefore, subsequent rent received is reflected in rental revenue and the prior deferred revenue is recognized over time in straight-line rent adjustments within rental revenues.

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