National Health Investors : Business Update - April 2026

Published: 2026-04-21 16:52:40 ET NHI

Published on 04/21/2026 at 04:52 pm EDT

Business Update

NHI Announces Sale of NHC Portfolio for $560 Million

APRIL 21, 2026

The gross sales price is $560.0 million before estimated transaction costs in a range of $6.0 - $8.0 million.

The Special Committee of Non-Interested Directors ("Special Committee") has approved the sale of 32 skilled nursing facilities (approximately 4,550 beds) and three independent living facilities (approximately 250 units) to National HealthCare Corporation (NHC), the current lessee.

Special Committee retained separate counsel and engaged Houlihan Lokey Capital, Inc. to serve as a financial advisor in addition to guidance provided by Blueprint Healthcare Real Estate Advisors.

Financial Impact

The 35 properties currently leased to NHC generated cash lease revenue of approximately $39.7 million in 2025, including percentage rent.

NHI expects to use net proceeds from the transaction to repay outstanding borrowings and to fund future investments consistent with its capital allocation strategy, including potential tax-deferred reinvestment through Section 1031 exchanges.

Next Steps

The transaction is expected to close on July 1, 2026, subject to certain customary closing conditions, including the expiration or termination of the waiting period under the Hart-Scott-Rodino Act.

The impact of the transaction on the Company's distribution requirements to comply with REIT rules is to be determined during the fourth quarter of 2026. NHI expects to utilize 1031 exchanges on recently closed and new acquisitions to assist in deferring any potential capital gains distributions.

The Company's outlook remains subject to several variables, including the timing and impact of the transaction and potential capital redeployment.

Strategic Rationale

Capitalization Rates 1

Class A

Class B

Class C

Core Markets

Independent Living

6.1%

7.1%

7.7%

Assisted Living

6.8%

7.8%

8.9%

Memory Care

8.3%

9.3%

10.1%

Skilled Nursing

11.0%

12.1%

12.8%

Non-Core Markets

Independent Living

6.8%

7.7%

8.4%

Assisted Living

7.2%

8.4%

9.4%

Memory Care

8.7%

9.7%

10.6%

Skilled Nursing

11.7%

12.7%

13.3%

Source: CBRE U.S. Senior Housing & Care Investor Survey H2 2025.

As of December 31, 2025. Investment includes $3.3 billion in gross real estate and $0.2 million in mortgage notes and other notes receivable, net of credit loss reserves. See Appendix for Adjusted NOI reconciliation.

Pro forma basis assumes transactions occurred on January 1, 2026. Assumes sale of NHC properties with gross book value of $133.8 million and $39.7 million in annualized cash revenue. Assumes additional dispositions of 7 properties with gross book value of $121.3 million and $9.2 in annualized cash revenue. Assumes

Specialty

hospital 2.1%

Skilled nursing 12.2%

Skilled nursing

16.3%

Private Pay Valuation Superior to SNF

Senior

housing 61.8%

Senior

housing 61.8%

$3.51bn

Investment2

Specialty

hospital 2.0%

Other4

1.9%

SHOP

22.0%

Other4

1.8%

SHOP

18.1%

Pro Forma 3

As of Dec 31, 2025

Total Investment

Senior

housing 65.0%

$3.36bn

Investment3

Pro forma Senior Housing and SHOP Investment and adjusted

NOI concentrations increase significantly to 83.8% of Total Investment and 78.6% of annualized adjusted NOI

Significant embedded organic growth upside in SHOP adjusted NOI driven by high single-digit to low double digit internal growth during the next two years

Shift in concentration enhances NHI's overall value proposition due to valuation disparity between private pay senior housing and SNF cap rates

Increases Private Pay Senior Housing Concentration

Annualized Adjusted NOI

As of Dec 31, 2025

Pro Forma 3

SHOP

Specialty 9.3% hospital

2.0%

Other4

2.0%

Other4

SHOP 2.3%

13.8%

Senior

housing 59.0%

Specialty

hospital 2.3%

Skilled nursing

27.7%

$313mm

Adj. NOI2

Skilled nursing

16.5%

$273mm

Adj. NOI3

Further Strengthens the Balance Sheet (dollars in millions)

Capacity for Future Capital Deployment Greatly Enhanced

Pro Forma Liquidity 1

NHI expects to paydown the outstanding balance on the $700.0 million revolver and payoff a

$125.0 million term loan and $100.0 million in private placement notes with the sale proceeds

On a pro forma basis, liquidity is estimated at approximately $1.4 billion which includes a recently refreshed $500.0 million At-the-Market ("ATM") equity program

On a pro forma basis, net debt to annualized adjusted EBITDA is estimated to improve from

3.8x at December 31, 2025, to 2.3x which is well below the Company's target range of 3.5x -4.5x

On a pro forma basis, weighted average debt maturity increases to 6 years from 4.4 years with no maturities until 2028

Cash and Restricted Cash $ 146.1

Credit Facility Availability 700.0

Equity available under ATM forward sale agreements

44.5

ATM assuming settlement of ATM forward sale agreements

500.0

Total Liquidity

$ 1,390.6

Pro Forma Debt Maturity 1

Amount Interest Fixed / Years to Financial Instrument Outstanding Rate Variable Maturity Maturity

Revolver (Daily SOFR + 105) $ - 4.70% Variable Oct-28 2.8

Senior Unsecured Notes 400.0 3.00% Fixed Feb-31 5.1

Senior Unsecured Notes 350.0 5.35% Fixed Feb-33 7.1

Total Debt $ 750.0

Weighted Average 4.10% 6.0

3.8x

2.3x

Net Debt to Annualized Adjusted EBITDA 2

4Q 2025 Pro Forma

Pro forma basis assumes transactions occurred on January 1, 2026. Assumes $105.5 million February 2026 SHOP acquisition financed with the revolver and that proceeds of approximately $661.3 million from the NHC sale and other dispositions used to paydown the revolver, payoff a

$125.0 million term loan due June 2026, and payoff $100.5 million in private placement notes due January 2027 (inclusive of a make-whole payment). Remaining balance after paydown and payoffs is assumed to be placed in cash and restricted cash.

See Appendix for Annualized Adjusted NOI reconciliation.

Pro forma basis assumes transactions occurred on January 1, 2026. Assumes $39.7 million in annualized NHC cash revenue and $9.2 million in annualized cash revenue from other dispositions. Assumes $105.5 million February 2026 SHOP acquisition at an initial annual NOI yield of 8.0%.

Creates Compelling Growth & Valuation Upside (dollars in millions)

Commitment to SHOP Reinvestment

Announced $392.4 million in 2025 investments which was the most active year since 2016

Large, active pipeline drives expectation that 2026 investments surpasses 2025

Replacing disposed NHC and other disposition NOI with SHOP NOI drives concentration to approximately 25%

Equity market is valuing SHOP and Senior Housing at a premium to triple net (NNN) and SNF

Pipeline Creates Pathway for External Growth Opportunities

2026 Investments: $105.5 million SHOP portfolio at 8.0% initial NOI yield Signed LOIs: $110.6 million at an average yield of 7.5% primarily in SHOP Pipeline: Approximately $488.0 million excluding portfolio deals

40.3x

Majority SHOP

Majority NNN / SNF

Price / Consensus 2026 AFFO per share *

Investment History with New & Existing Relationships

$500.0

New

Existing

Yield

10.0%

29.2x

27.6x

19.9x

16.7x

15.1x

13.9x

13.1x

$450.0 9.5%

$400.0 9.0%

$350.0 8.5%

$300.0

$250.0

$200.0

$150.0

8.0%

7.5%

7.0%

6.5%

$100.0 6.0%

$50.0 5.5%

WELL AHR VTR CTRE NHI OHI LTC SBRA

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026

5.0%

Simplifies Structure and Enhances Governance

Appendix: Definitions

ADJUSTED EBITDA & EBITDARM

NHI considers Adjusted EBITDA to be an important supplemental measure because it provides information which is used to evaluate the Company's performance and serves as an indication of the ability to service debt. NHI defines Adjusted EBITDA as consolidated earnings before interest, taxes, depreciation and amortization, including amounts in discontinued operations, excluding real estate asset impairments and gains on dispositions and certain items which, due to their infrequent or unpredictable nature, may create some difficulty in comparing Adjusted EBITDA for the current period to similar prior periods, and may include, but are not limited to, impairment of non-real estate assets, gains and losses attributable to the acquisition and disposition of assets and liabilities, and recoveries of previous write-downs. Adjusted EBITDA also includes NHI's proportionate share of unconsolidated equity method investments presented on a similar basis. Since others may not use the Company's definition of Adjusted EBITDA, caution should be exercised when comparing NHI's Adjusted EBITDA to that of other companies. EBITDARM is earnings before interest, taxes, depreciation, amortization, rent and management fees.

ADJUSTED NET OPERATING INCOME

Adjusted net operating income ("Adjusted NOI") is a non-U.S. GAAP supplemental financial measure used to evaluate the operating performance of real estate. We define Adjusted NOI as total revenues, less straight-line revenue, less corporate interest income, less tenant reimbursements and property operating expenses, and adjusted for non-cash revenue items including, but not limited to, amortization of commitment fees, deferred financing costs and original issue discounts and lease incentive amortization. We believe Adjusted NOI provides investors relevant and useful information as it measures the operating performance of our properties at the property level on an unleveraged basis. We use adjusted NOI to make decisions about resource allocations and to assess the property level performance of our properties.

FAD PAYOUT RATIO

The Funds Available for Distribution (FAD) payout ratio is a metric used in the REIT (Real Estate Investment Trust) industry to gauge the percentage of FAD that a company distributes to shareholders as dividends. The FAD payout ratio is calculated by dividing the Company's accrued dividends payable to common stockholders by its FAD for the period indicated.

NET OPERATING INCOME

Net operating income ("NOI") is a non-U.S. GAAP supplemental financial measure used to evaluate the operating performance of real estate. NHI defines NOI as total revenues, less tenant reimbursements and property operating expenses. The Company believes NOI provides investors relevant and useful information as it measures the operating performance of properties at the property level on an unleveraged basis. NHI uses NOI to make decisions about resource allocations and to assess the property level performance of our properties.

NAREIT FUNDS FROM OPERATIONS (FFO)

FFO per share, as defined by the National Association of Real Estate Investment Trusts (NAREIT) and applied by us, is calculated using the two-class method with net income allocated to common stockholders and holders of unvested restricted stock by applying the respective weighted-average shares outstanding during each period. The calculation of FFO begins with net income attributable to common stockholders (computed in accordance with GAAP) and excludes gains (or losses) from sales of real estate property, impairments of real estate, and real estate depreciation and amortization after adjusting for unconsolidated partnerships and joint ventures, if any. Diluted FFO per share assumes the exercise of stock options and other potentially dilutive securities.

Appendix: Definitions

NAREIT FUNDS FROM OPERATIONS (FFO)

NORMALIZED FUNDS FROM OPERATIONS (NORMALIZED FFO)

Normalized FFO excludes from FFO certain items which, due to their infrequent or unpredictable nature, may create some difficulty in comparing FFO for the current period to similar prior periods, and may include, but are not limited to, impairment of non-real estate assets, gains and losses attributable to the acquisition and disposition of non-real estate assets and liabilities, and recoveries of previous write-downs. FFO and Normalized FFO are important supplemental measures of operating performance for a REIT. Because the historical cost accounting convention used for real estate assets requires depreciation (except on land), such accounting presentation implies that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen and fallen with market conditions, presentations of operating results for a REIT that uses historical cost accounting for depreciation could be less informative and should be supplemented with a measure such as FFO. The term FFO was designed by the REIT industry to address this issue.

NORMALIZED FUNDS AVAILABLE FOR DISTRIBUTION (FAD)

Normalized FAD is an important supplemental performance measure for a REIT. GAAP requires a lessor to recognize contractual lease payments into income on a straight-line basis over the expected term of the lease. This straight-line adjustment has the effect of reporting lease income that is significantly more or less than the contractual cash flows received pursuant to the terms of the lease agreement. GAAP also requires the original issue discount of our senior unsecured notes and debt issuance costs to be amortized as non-cash adjustments to earnings. We also adjust Normalized FAD for the net change in our allowance for expected credit losses, non-cash stock-based compensation, SHOP recurring capital expenditures as well as certain noncash items related to our equity method investments such as straight-line lease expense and amortization of purchase accounting adjustments. Normalized FAD is an important supplemental measure of liquidity for a REIT as a useful indicator of the ability to distribute dividends to stockholders.

OCCUPANCY

Occupancy is the average percentage of all units in our SHOP segment that are occupied during the time period described. NHI defines occupancy as the average number of units occupied in any given time period divided by the total number of available units.

RETURN ON INVESTED CAPITAL (ROIC)

ROIC is a performance metric that intends to measure the percentage return earned on capital invested by a company. NHI calculates ROIC as TTM Normalized FAD plus contractual interest divided by the average of total assets plus accumulated deprecation less straight-line rent receivable over the TTM period.

RevPOR

RevPOR is the average monthly revenue generated by occupied units in the SHOP segment. NHI defines RevPOR as monthly resident fees and services revenue

Appendix: Definitions

Same-Store (SS)

We define Same-Store as properties owned, consolidated and operational for the full period in both comparison periods and that are not otherwise excluded; provided, however, that we may include selected properties that otherwise meet the Same-Store criteria if they are included in substantially all of, but not a full, period for one or both of the comparison periods, and in our judgment such inclusion provides a more meaningful presentation of our segment performance.

Newly acquired properties, recently developed or redeveloped properties, and properties undergoing operator transitions in our SHOP reportable business segment will be included in Same-Store after five full quarters from the date of acquisition, transition, or being placed into service. Our SHOP and NNN that have undergone operator or business model transitions will be included in Same-Store once operating under consistent operating structures for the full period in both periods presented.

Properties are excluded from Same-Store if they are: (i) sold, classified as held for sale or properties whose operations were classified as discontinued operations in accordance with GAAP; (ii) impacted by significant disruptive events such as flood or fire; (iii) those properties that are currently undergoing a significant disruptive redevelopment; or (iv) those properties that are scheduled to undergo operator or business model transitions, or have transitioned operators or business models after the start of the prior comparison period.

(unaudited, dollars in thousands)

4Q 2025

FY 2025

Net Income

$ 37,803

$ 140,787

Interest

14,264

57,368

Gains on sales of real estate

(119)

(456)

(Gain) loss from equity method investment

(1,652)

(3,664)

Franchise, excise and other taxes

324

1,080

Legal

2,666

Loan and realty gains (losses)

(61)

(3,447)

General and administrative

7,603

26,868

Depreciation and amortization

21,653

80,944

Consolidated NOI

$ 79,826

$ 303,718

Straight-line revenue

(1,232)

(4,876)

Amortization of lease incentives

725

2,901

Amortization of commitment fees and discounts

(143)

(684)

Non-cash write-off of straight-line rent receivable

12,141

Reconciliations: Adjusted NOI

Adjusted NOI $ 79,176 $ 313,200

Three Months Ended

December 31,

(unaudited, dollars in thousands) 2025 2024

Net income

$ 37,803

$ 42,788

Interest expense

14,264

15,241

Franchise, excise, and other taxes

324

Depreciation

21,653

18,680

Gains on sales of real estate, net

(119)

(4,960)

Notes receivable credit loss (benefit) expense

(61)

745

Non-cash write-off of straight-line rents receivable

819

Gain on forward equity sale agreement, net

(6,261)

Adjusted EBITDA

$ 73,864

$ 67,146

Interest expense at contractual rates

$ 13,412

$ 14,066

Principal payments

109

Fixed Charges

$ 13,412

$ 14,175

Fixed Charge Coverage

5.5x

4.7x

Net Debt to Adjusted EBITDA Consolidated Total Debt

$ 1,163,814

Less: cash and cash equivalents

(19,624)

Consolidated Net Debt

$ 1,144,190

Adjusted EBITDA

$ 73,864

Annualizing Adjustment

221,589

Annualized impact of recent investments

4,517

$ 299,970

Consolidated Net Debt to Adjusted EBITDA

3.8x

Reconciliations: Adjusted EBITDA

Disclaimer

National Health Investors Inc. published this content on April 21, 2026, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on April 21, 2026 at 20:48 UTC.