In our Real Estate Investments segment, we enter into financing arrangements with our tenants, or their affiliates, and other third-party healthcare operators which provide funding for the acquisition or construction of new healthcare properties, renovation and expansion projects at existing healthcare properties and working capital or other corporate needs. Our financing arrangements include mortgages, construction loans, mezzanine loans and revolving lines of credit. These investments are primarily secured loans at fixed interest rates that have been guaranteed either by significant parties to the notes or cross-collateralization of properties with the same owner. As of June 30, 2026, the aggregate principal amount of mortgage notes outstanding was $170.7 million, and the aggregate principal amount of all other notes outstanding was $53.8 million. As of December 31, 2025, the aggregate principal amount of mortgage notes outstanding was $154.3 million, and the aggregate principal amount of all other notes outstanding was $64.4 million. We had credit loss reserves of $15.3 million and $15.4 million as of June 30, 2026 and December 31, 2025, respectively, related to our mortgage and other notes receivable.

We have a fully funded construction loan with Bickford which is secured by a first mortgage lien on substantially all of the related real and personal property and a pledge of all leases or other agreements granting a right of use to the property. Pursuant to the loan agreement, Bickford is required to pay the related property taxes and insurance. The loan agreement contains a fair market value purchase option on the property that is available to us upon the stabilization of the underlying operations. As of June 30, 2026, the principal amount outstanding on the construction loan was $14.7 million and the annual interest rate was 9.0%. In April 2026, we extended the maturity of this loan to July 2029.

We received an $11.5 million second mortgage note from Bickford as a portion of the net proceeds received from the sale of six of our properties to Bickford in 2021. We did not include the mortgage note in our determination of the gain recognized on the sale of the properties at the time of the sale and it has not been recognized on our condensed consolidated balance sheets. The mortgage note bears a 10.0% annual interest rate. In April 2026, we extended the maturity of this loan to April 2029.

As of June 30, 2026, we have a $15.0 million revolving line of credit with Senior Living Communities, LLC (“Senior Living”) that matures in December 2031 which has an annual interest rate of 8.0%. We also have a $1.5 million revolving line of credit with an affiliate of Senior Living that matures in October 2040 which has an annual interest rate of 8.25%. As of June 30, 2026, these revolving lines of credit had no outstanding balances.

As of both June 30, 2026 and December 31, 2025, we had two loans designated as non-performing notes which were fully reserved on our condensed consolidated balance sheets. These loans consisted of an unsecured mezzanine loan due from affiliates of Senior Living Management with a principal balance of $12.0 million as of both June 30, 2026 and December 31, 2025 and an unsecured mezzanine loan due from Bickford with a principal balance of $1.2 million as of June 30, 2026 and $1.3 million as of December 31, 2025.

Our principal measures of credit quality related to our mortgage and other notes receivable, except for construction loans, are debt service coverage for amortizing loans and interest service or fixed charge coverage for non-amortizing loans (collectively, “Coverage”). A Coverage ratio provides a measure of the borrower’s ability to make scheduled principal and interest payments. The Coverage ratios presented in the table below have been calculated utilizing the most recent date for which data is available, March 31, 2026, using EBITDARM (earnings before interest, taxes, depreciation, amortization, rent and management fees) and the requisite debt service, interest service or fixed charges, as defined in the applicable loan agreement. We categorize Coverage into three levels: (i) more than 1.5x, (ii) between 1.0x and 1.5x and (iii) below 1.0x. We update our calculations of Coverage on a quarterly basis. Coverage is not a meaningful credit quality indicator for construction loans as these developments are typically not generating any operating income or they have insufficient operating income because occupancy levels necessary to stabilize the properties have not yet been achieved. We measure the credit quality of construction loans by taking into consideration, among other things, the construction and stabilization timelines of the properties and the financial condition of the borrower, as well as current economic and market conditions. We consider the accounting guidance in ASC 310-20, Receivables — Nonrefundable Fees and Other Costs, when determining whether a modification, extension or renewal of a loan constitutes a current period origination.


	Year of Loan Origination
											Prior
	2026		2025		2024		2023		2022		Years		Total
Mortgage notes:
More than 1.5x	$	7,300	$	16,260	$	27,424	$	724	$	14,763	$	—	$	66,471
Between 1.0x and 1.5x	—		11,150		24,716		—		—		14,700		50,566
Less than 1.0x	—		18,750		—		—		28,499		6,423		53,672

Total mortgage notes	7,300		46,160		52,140		724		43,262		21,123		170,709
Mezzanine loans:
More than 1.5x	—		—		—		—		—		18,110		18,110
Between 1.0x and 1.5x	—		1,270		—		—		—		6,629		7,899
Less than 1.0x	—		—		—		—		—		9,795		9,795

Total mezzanine loans	—		1,270		—		—		—		34,534		35,804
Non-performing notes:

Between 1.0x and 1.5x	—		—		1,199		—		—		—		1,199
No coverage available	—		—		—		—		—		12,000		12,000
Total non-performing notes	—		—		1,199		—		—		12,000		13,199
Revolving lines of credit:
More than 1.5x													4,475
Between 1.0x and 1.5x													350

Total revolving lines of credit													4,825
Credit loss reserves													(15,264)
Total mortgage and other notes
receivable, net													$	209,273

Due to the continuing challenges in the U.S. financial markets and the potential impact on the collectability of our mortgage and other notes receivable, we forecasted a 20.0% increase in the probability of a default and a 20.0% increase in the amount of estimated loss from a default on all loans, other than those designated as non-performing notes which are fully reserved, resulting in an effective adjustment of 4.3% as of June 30, 2026. Our methodology for estimating credit loss reserves related to non-performing notes includes consideration of the sufficiency of the underlying collateral, current economic conditions, forecasts of future economic conditions and other qualitative factors, all of which may differ from conditions existing in the historical periods.