v3.26.1
Segment Reporting
 6 Months Ended
Jun. 30, 2026
Segment Reporting [Abstract]  
Segment Reporting

15. Segment Reporting

Our chief operating decision maker, or CODM, who is our Chief Executive Officer, evaluates our business and makes resource allocations based on four operating segments: ISHC, SHOP, OM and triple-net leased properties. These operating segments are also our reportable segments.

Our ISHC segment includes properties that each provide a range of independent living, assisted living, memory care, skilled nursing services and certain ancillary businesses. Our SHOP segment includes senior housing, which may provide assisted living care, independent living or memory care services, that are owned and operated utilizing a RIDEA structure. Our OM segment includes buildings that are typically leased to multiple tenants under separate leases, thus requiring active management and responsibility for many of the associated operating expenses (much of which are, or can effectively be, passed through to the tenants). Our triple-net leased properties segment includes senior housing, skilled nursing facilities and hospital investments, which are single-tenant properties for which we lease the properties to unaffiliated tenants under triple-net and generally master leases that transfer the obligation for all property operating costs (including maintenance, repairs, taxes, insurance and capital expenditures) to the tenant. In addition, our triple-net leased properties segment includes our debt security investment. During the first quarter of 2026, we reclassified two senior housing properties from our SHOP reportable segment to our ISHC reportable segment to align the properties that are managed by Trilogy Management Services, LLC within ISHC. Our reportable segments and the measure of segment profit or loss reviewed by our CODM were unchanged. As of and for the three and six months ended June 30, 2026, prior-period segment information presented in this Quarterly Report on Form 10-Q has been recast to conform to the current-period presentation. The reclassification had no impact on previously reported consolidated amounts.

Our CODM evaluates the performance of our combined properties in each reportable segment and determines how to allocate resources to those segments, primarily based on net operating income, or NOI, for each segment. NOI excludes certain items that are not associated with the operations of our properties. Our CODM also primarily uses NOI for each segment in the annual budget and forecasting process. Further, our CODM considers budget-to-actual variances in NOI on a quarterly basis when making decisions about the allocation of operating and capital resources to each segment. We define segment NOI as total revenues, less property operating expenses and rental expenses, which excludes depreciation and amortization, general and administrative expenses, transaction, transition and restructuring costs, net interest expense, gain or loss in fair value of derivative financial instruments, gain or loss on dispositions of real estate investments, impairment of real estate investments, impairment of intangible assets and goodwill, income or loss from unconsolidated entities, gain on re-measurement of previously held equity interests, foreign currency gain or loss, other income or expense and income tax benefit or expense for each segment. We believe that segment NOI serves as an appropriate supplemental performance measure to net income (loss) because it allows investors and our management to measure unlevered property-level operating results and to compare our operating results to the operating results of other real estate companies and between periods on a consistent basis. We also believe that NOI is a widely accepted measure of comparative operating performance in the real estate community. However, our use of the term NOI may not be comparable to that of other real estate companies as they may have different methodologies for computing this performance measure.

Interest expense, depreciation and amortization and other expenses not attributable to individual properties are not allocated to individual segments for purposes of assessing segment performance. Non-segment assets primarily consist of corporate assets, including cash and cash equivalents, deferred financing costs, operating lease right-of-use asset and other assets not attributable to individual properties.

Summary information for our reportable segments, including a summary of segment operating expenses, during the three and six months ended June 30, 2026 and 2025 was as follows (in thousands):

 

 

ISHC

 

 

SHOP

 

 

OM

 

 

Triple-Net
Leased
Properties

 

 

Three Months Ended
June 30, 2026

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Resident fees and services

 

$

512,878

 

 

$

121,641

 

 

$

—

 

 

$

—

 

 

$

634,519

 

Real estate revenue

 

 

—

 

 

 

—

 

 

 

29,985

 

 

 

9,746

 

 

 

39,731

 

Total revenues

 

 

512,878

 

 

 

121,641

 

 

 

29,985

 

 

 

9,746

 

 

 

674,250

 

Less(1):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation expense

 

 

260,203

 

 

 

53,142

 

 

 

—

 

 

 

—

 

 

 

 

Controllable expenses(2)

 

 

154,737

 

 

 

31,118

 

 

 

—

 

 

 

—

 

 

 

 

Non-controllable expenses(3)

 

 

13,027

 

 

 

5,859

 

 

 

—

 

 

 

—

 

 

 

 

Facility rental expense(4)

 

 

6,752

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

 

Other segment items(5)

 

 

—

 

 

 

—

 

 

 

11,493

 

 

 

680

 

 

 

 

Segment net operating income

 

$

78,159

 

 

$

31,522

 

 

$

18,492

 

 

$

9,066

 

 

$

137,239

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

 

 

 

 

 

 

 

 

 

 

 

 

$

19,891

 

Transaction, transition and restructuring costs

 

 

 

 

 

 

 

 

 

 

 

 

2,786

 

Depreciation and amortization

 

 

 

 

 

 

 

 

 

 

 

 

 

 

72,125

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(18,626

)

Gain in fair value of derivative financial instruments

 

 

 

 

 

 

 

 

 

 

 

 

357

 

Gain on dispositions of real estate investments, net

 

 

 

 

 

 

 

 

 

 

 

 

5,647

 

Impairment of real estate investment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,719

)

Income from unconsolidated entities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

892

 

Foreign currency gain

 

 

 

 

 

 

 

 

 

 

 

 

 

 

75

 

Other income, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,914

 

Income before income taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

30,977

 

Income tax benefit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

$

30,980

 

 

 

 

ISHC

 

 

SHOP

 

 

OM

 

 

Triple-Net
Leased
Properties

 

 

Three Months Ended
June 30, 2025

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Resident fees and services

 

$

429,350

 

 

$

71,935

 

 

$

—

 

 

$

—

 

 

$

501,285

 

Real estate revenue

 

 

—

 

 

 

—

 

 

 

31,254

 

 

 

9,964

 

 

 

41,218

 

Total revenues

 

 

429,350

 

 

 

71,935

 

 

 

31,254

 

 

 

9,964

 

 

 

542,503

 

Less(1):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation expense

 

 

217,588

 

 

 

34,982

 

 

 

—

 

 

 

—

 

 

 

 

Controllable expenses(2)

 

 

133,079

 

 

 

19,536

 

 

 

—

 

 

 

—

 

 

 

 

Non-controllable expenses(3)

 

 

10,471

 

 

 

3,351

 

 

 

—

 

 

 

—

 

 

 

 

Facility rental expense(4)

 

 

7,278

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

 

Other segment items(5)

 

 

—

 

 

 

—

 

 

 

12,192

 

 

 

798

 

 

 

 

Segment net operating income

 

$

60,934

 

 

$

14,066

 

 

$

19,062

 

 

$

9,166

 

 

$

103,228

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

 

 

 

 

 

 

 

 

 

 

 

 

$

14,943

 

Transaction, transition and restructuring costs

 

 

 

 

 

 

 

 

 

 

 

 

(79

)

Depreciation and amortization

 

 

 

 

 

 

 

 

 

 

 

 

 

 

41,941

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(22,632

)

Loss in fair value of derivative financial instruments

 

 

 

 

 

 

 

 

 

 

 

 

(629

)

Loss on disposition of real estate investments, net

 

 

 

 

 

 

 

 

 

 

 

 

(2,676

)

Impairment of real estate investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(12,659

)

Loss from unconsolidated entities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,238

)

Foreign currency gain

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,742

 

Other income, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,480

 

Income before income taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10,811

 

Income tax expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(732

)

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

$

10,079

 

 

 

 

ISHC

 

 

SHOP

 

 

OM

 

 

Triple-Net
Leased
Properties

 

 

Six Months Ended
June 30, 2026

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Resident fees and services

 

$

1,015,621

 

 

$

228,665

 

 

$

—

 

 

$

—

 

 

$

1,244,286

 

Real estate revenue

 

 

—

 

 

 

—

 

 

 

60,827

 

 

 

19,911

 

 

 

80,738

 

Total revenues

 

 

1,015,621

 

 

 

228,665

 

 

 

60,827

 

 

 

19,911

 

 

 

1,325,024

 

Less(1):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation expense

 

 

517,576

 

 

 

100,795

 

 

 

—

 

 

 

—

 

 

 

 

Controllable expenses(2)

 

 

309,010

 

 

 

59,628

 

 

 

—

 

 

 

—

 

 

 

 

Non-controllable expenses(3)

 

 

25,604

 

 

 

10,883

 

 

 

—

 

 

 

—

 

 

 

 

Facility rental expense(4)

 

 

13,513

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

 

Other segment items(5)

 

 

—

 

 

 

—

 

 

 

23,617

 

 

 

1,656

 

 

 

 

Segment net operating income

 

$

149,918

 

 

$

57,359

 

 

$

37,210

 

 

$

18,255

 

 

$

262,742

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

 

 

 

 

 

 

 

 

 

 

 

 

$

37,496

 

Transaction, transition and restructuring costs

 

 

 

 

 

 

 

 

 

 

 

 

4,757

 

Depreciation and amortization

 

 

 

 

 

 

 

 

 

 

 

 

 

 

139,187

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(37,422

)

Gain in fair value of derivative financial instruments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,884

 

Gain on dispositions of real estate investments, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5,647

 

Impairment of real estate investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,137

)

Income from unconsolidated entities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,684

 

Foreign currency loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(744

)

Other income, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4,249

 

Income before income taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

54,463

 

Income tax benefit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

528

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

$

54,991

 

 

 

 

ISHC

 

 

SHOP

 

 

OM

 

 

Triple-Net
Leased
Properties

 

 

Six Months Ended
June 30, 2025

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Resident fees and services

 

$

858,042

 

 

$

140,419

 

 

$

—

 

 

$

—

 

 

$

998,461

 

Real estate revenue

 

 

—

 

 

 

—

 

 

 

64,448

 

 

 

20,197

 

 

 

84,645

 

Total revenues

 

 

858,042

 

 

 

140,419

 

 

 

64,448

 

 

 

20,197

 

 

 

1,083,106

 

Less(1):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation expense

 

 

436,367

 

 

 

68,988

 

 

 

—

 

 

 

—

 

 

 

 

Controllable expenses(2)

 

 

270,239

 

 

 

38,727

 

 

 

—

 

 

 

—

 

 

 

 

Non-controllable expenses(3)

 

 

22,734

 

 

 

6,876

 

 

 

—

 

 

 

—

 

 

 

 

Facility rental expense(4)

 

 

14,777

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

 

Other segment items(5)

 

 

—

 

 

 

—

 

 

 

24,877

 

 

 

1,756

 

 

 

 

Segment net operating income

 

$

113,925

 

 

$

25,828

 

 

$

39,571

 

 

$

18,441

 

 

$

197,765

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

 

 

 

 

 

 

 

 

 

 

 

 

$

28,098

 

Transaction, transition and restructuring costs

 

 

 

 

 

 

 

 

 

 

 

 

1,758

 

Depreciation and amortization

 

 

 

 

 

 

 

 

 

 

 

 

 

 

83,055

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(45,577

)

Loss in fair value of derivative financial instruments

 

 

 

 

 

 

 

 

 

 

 

 

(1,379

)

Loss on dispositions of real estate investments, net

 

 

 

 

 

 

 

 

 

 

 

 

(3,035

)

Impairment of real estate investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(34,365

)

Loss from unconsolidated entities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3,086

)

Foreign currency gain

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4,158

 

Other income, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,005

 

Income before income taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4,575

 

Income tax expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,336

)

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

$

3,239

 

 

(1)
The significant expense categories and amounts below align with the segment-level information that is regularly provided to our CODM.
(2)
Controllable expenses include utilities, food, repairs and maintenance, and other operating expenses.
(3)
Non-controllable expenses include property taxes and insurance.
(4)
Facility rental expense relates to properties operated, but not owned.
(5)
Other segment items for the following reportable segments primarily include:
•
OM — property taxes, insurance, utilities, management fees and certain overhead expenses.
•
Triple-Net Leased Properties — property taxes and insurance.

Total assets by reportable segment as of June 30, 2026 and December 31, 2025 were as follows (in thousands):

 

 

June 30,
2026

 

 

December 31,
2025

 

ISHC

 

$

2,705,525

 

 

$

2,686,143

 

SHOP

 

 

1,547,014

 

 

 

1,273,714

 

OM

 

 

1,029,510

 

 

 

1,048,810

 

Triple-Net Leased Properties

 

 

386,540

 

 

 

393,952

 

Other

 

 

35,329

 

 

 

23,607

 

Total assets

 

$

5,703,918

 

 

$

5,426,226

 

 

As of both June 30, 2026 and December 31, 2025, goodwill of $168,177,000, $47,812,000 and $18,953,000 was allocated to our ISHC, OM and triple-net leased properties segments, respectively.

Our portfolio of properties and other investments are located in the United States, the UK and Isle of Man. Revenues and assets are attributed to the country in which the property is physically located. The following is a summary of geographic information for our operations for the periods presented below (in thousands):

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

2026

 

 

2025

 

 

2026

 

 

2025

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

United States

 

$

672,590

 

 

$

540,854

 

 

$

1,321,697

 

 

$

1,079,903

 

International

 

 

1,660

 

 

 

1,649

 

 

 

3,327

 

 

 

3,203

 

Total

 

$

674,250

 

 

$

542,503

 

 

$

1,325,024

 

 

$

1,083,106

 

 

The following is a summary of real estate investments, net by geographic regions as of June 30, 2026 and December 31, 2025 (in thousands):

 

 

 

June 30,
2026

 

 

December 31,
2025

 

Real estate investments, net:

 

 

 

 

 

 

United States

 

$

4,376,744

 

 

$

4,140,169

 

International

 

 

41,757

 

 

 

43,250

 

Total

 

$

4,418,501

 

 

$

4,183,419