Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2026
or
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number: 001-41951
AMERICAN HEALTHCARE REIT, INC.
(Exact name of registrant as specified in its charter)
Maryland
47-2887436
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
18191 Von Karman Avenue, Suite 300
Irvine, California
92612
(Address of principal executive offices)
(Zip Code)
(949) 270-9200
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, $0.01 par value per share
AHR
New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No
As of May 4, 2026, American Healthcare REIT, Inc. had 192,722,308 shares of Common Stock outstanding.
(A Maryland Corporation)
TABLE OF CONTENTS
Page
PART I — FINANCIAL INFORMATION
Item 1.
Financial Statements (Unaudited)
3
Condensed Consolidated Balance Sheets as of March 31, 2026 and December 31, 2025
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the Three Months Ended March 31, 2026 and 2025
4
Condensed Consolidated Statements of Equity for the Three Months Ended March 31, 2026 and 2025
5
Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2026 and 2025
6
Notes to Condensed Consolidated Financial Statements
8
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
30
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
41
Item 4.
Controls and Procedures
42
PART II — OTHER INFORMATION
Legal Proceedings
43
Item 1A.
Risk Factors
Unregistered Sales of Equity Securities and Use of Proceeds
Defaults Upon Senior Securities
Mine Safety Disclosures
Item 5.
Other Information
Item 6.
Exhibits
44
Signatures
45
2
Item 1. Financial Statements.
CONDENSED CONSOLIDATED BALANCE SHEETS
As of March 31, 2026 and December 31, 2025
(In thousands, except share and per share amounts) (Unaudited)
March 31, 2026
December 31,2025
ASSETS
Real estate investments, net
$
4,319,911
4,183,419
Debt security investment, net
92,304
92,136
Cash and cash equivalents
119,380
114,836
Restricted cash
37,504
36,917
Accounts and other receivables, net
241,594
204,313
Identified intangible assets, net
250,424
253,236
Goodwill
234,942
Operating lease right-of-use assets, net
130,405
135,399
Other assets, net
172,194
171,028
Total assets
5,598,658
5,426,226
LIABILITIES AND EQUITY
Liabilities:
Mortgage loans payable, net(1)
962,375
966,925
Lines of credit and term loan, net(1)
549,818
549,761
Accounts payable and accrued liabilities(1)
340,265
317,742
Identified intangible liabilities, net
1,978
2,110
Financing obligations(1)
33,675
33,902
Operating lease liabilities(1)
130,806
135,603
Security deposits, prepaid rent and other liabilities(1)
58,386
59,568
Total liabilities
2,077,303
2,065,611
Commitments and contingencies (Note 10)
Equity:
Stockholders’ equity:
Preferred stock, $0.01 par value per share; 200,000,000 shares authorized; none issued and outstanding
—
Common stock, $0.01 par value per share; 700,000,000 shares authorized; 189,942,357 and 185,911,442 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively
1,894
1,852
Additional paid-in capital
5,065,446
4,880,169
Accumulated deficit
(1,583,441
)
(1,559,279
Accumulated other comprehensive loss
(2,224
(2,104
Total stockholders’ equity
3,481,675
3,320,638
Noncontrolling interests
39,680
39,977
Total equity
3,521,355
3,360,615
Total liabilities and equity
The accompanying notes are an integral part of these condensed consolidated financial statements.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
For the Three Months Ended March 31, 2026 and 2025
Three Months Ended March 31,
2026
2025
Revenues:
Resident fees and services
609,767
497,176
Real estate revenue
41,007
43,427
Total revenues
650,774
540,603
Expenses:
Property operating expenses
512,171
432,423
Rental expenses
13,100
13,643
General and administrative
17,605
13,155
Transaction, transition and restructuring costs
1,971
1,837
Depreciation and amortization
67,062
41,114
Total expenses
611,909
502,172
Other income (expense):
Interest expense:
Interest expense, net
(18,796
(22,945
Gain (loss) in fair value of derivative financial instruments
1,527
(750
Loss on dispositions of real estate investments, net
(359
Impairment of real estate investments
(418
(21,706
Income (loss) from unconsolidated entities
792
(1,848
Foreign currency (loss) gain
(819
1,416
Other income, net
2,335
1,525
Total net other expense
(15,379
(44,667
Income (loss) before income taxes
23,486
(6,236
Income tax benefit (expense)
525
(604
Net income (loss)
24,011
(6,840
Net (income) loss attributable to noncontrolling interests
(298
36
Net income (loss) attributable to controlling interest
23,713
(6,804
Net income (loss) per common share attributable to controlling interest:
Basic
0.13
(0.04
Diluted
Weighted average number of common shares outstanding:
187,319,513
156,922,819
187,970,438
Other comprehensive (loss) income:
Foreign currency translation adjustments
(120
176
Total other comprehensive (loss) income
Comprehensive income (loss)
23,891
(6,664
Comprehensive (income) loss attributable to noncontrolling interests
Comprehensive income (loss) attributable to controlling interest
23,593
(6,628
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
Three Months Ended March 31, 2026
Stockholders’ Equity
Common Stock
Numberof Shares
Amount
AdditionalPaid-In Capital
AccumulatedDeficit
Accumulated Other ComprehensiveLoss
Total Stockholders’ Equity
Noncontrolling Interests
Total Equity
BALANCE — December 31, 2025
185,911,442
Issuance of common stock in offerings
3,974,731
39
191,513
191,552
Offering costs — common stock
(1,518
Issuance of common stock related to equity compensation plans
4,396
135
Vested restricted common stock and stock units(1)
51,788
(9,711
(9,708
Amortization related to equity compensation plans
4,858
Distributions to noncontrolling interests
(595
Distributions declared ($0.25 per share)
(47,875
Net income
298
Other comprehensive loss
BALANCE — March 31, 2026
189,942,357
Three Months Ended March 31, 2025
BALANCE — December 31, 2024
157,446,697
1,564
3,720,268
(1,458,089
(2,512
2,261,231
42,711
2,303,942
Issuance of common stock in an offering
1,577,113
16
47,650
47,666
(542
41,195
(1,892
(1,889
2,551
(608
Adjustment to value of redeemable noncontrolling interests
(5
(39,968
Net loss
(31
(6,835
(2)
Other comprehensive income
BALANCE — March 31, 2025
159,065,005
1,583
3,768,030
(1,504,861
(2,336
2,262,416
42,072
2,304,488
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands) (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Other amortization
8,927
9,816
Deferred rent
(780
(735
Stock based compensation
359
418
21,706
(Income) loss from unconsolidated entities
(792
1,848
Distributions of earnings from unconsolidated entities
Deferred income tax benefit
(724
Foreign currency gain (loss)
810
(1,472
Loss on extinguishments of debt
482
Change in fair value of derivative financial instruments
(1,527
750
Changes in operating assets and liabilities:
Accounts and other receivables
(31,450
(10,037
Other assets
(7,176
(5,477
Accounts payable and accrued liabilities
24,579
12,998
Operating lease liabilities
(7,024
(7,887
Security deposits, prepaid rent and other liabilities
(128
1,440
Net cash provided by operating activities
81,067
60,616
CASH FLOWS FROM INVESTING ACTIVITIES
Developments and capital expenditures
(38,317
(21,181
Acquisitions of real estate investments
(165,937
(16,442
Proceeds from dispositions of real estate investments
9,575
Investments in unconsolidated entities
(16
(2
Issuances of real estate notes receivable
(4,405
Principal repayments on real estate notes receivable
2,975
Real estate and other deposits
(164
(3,296
Proceeds from insurance recoveries
1,343
Net cash used in investing activities
(203,091
(32,776
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings under mortgage loans payable
30,000
Payments on mortgage loans payable
(5,520
(11,484
Borrowings under the lines of credit and term loan
34,000
Payments on the lines of credit and term loan
(80,032
Payments on financing and other obligations
(351
(690
Deferred financing costs
(6
(259
Debt extinguishment costs
(26
Proceeds from issuance of common stock in offerings
Proceeds from issuance of common stock pursuant to employee stock purchase plan
Payment of offering costs
(1,347
(591
Distributions paid
(46,822
(39,548
Payments to taxing authorities in connection with common stock directly withheld from employees
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS — (Continued)
Security deposits, net
(146
(319
Net cash provided by (used in) financing activities
127,196
(23,776
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH
5,172
4,064
EFFECT OF FOREIGN CURRENCY TRANSLATION ON CASH, CASH EQUIVALENTS AND RESTRICTED CASH
(41
88
CASH, CASH EQUIVALENTS AND RESTRICTED CASH — Beginning of period
151,753
123,301
CASH, CASH EQUIVALENTS AND RESTRICTED CASH — End of period
156,884
127,453
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH
Beginning of period:
76,702
46,599
Cash, cash equivalents and restricted cash
End of period:
86,064
41,389
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for:
Interest
18,258
20,715
Income taxes
1
231
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES
Accrued developments and capital expenditures
32,961
22,447
Distributions declared but not paid
48,885
40,795
Accrued offering costs
94
The following represents the net increase (decrease) in certain assets and liabilities in connection with our acquisitions and dispositions of investments:
15
(1,109
(248
7
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
The use of the words “we,” “us” or “our” refers to American Healthcare REIT, Inc. and its subsidiaries, including American Healthcare REIT Holdings, LP, except where otherwise noted.
1. Organization and Description of Business
Overview and Background
American Healthcare REIT, Inc., a Maryland corporation, is a self-managed real estate investment trust, or REIT, that acquires, owns and operates a diversified portfolio of clinical healthcare real estate properties, focusing primarily on senior housing, skilled nursing facilities, or SNFs, outpatient medical, or OM, buildings and other healthcare-related facilities. We have built a fully-integrated management platform that operates clinical healthcare properties throughout the United States, and in the United Kingdom and the Isle of Man. We own and operate our integrated senior health campuses, or ISHC, and senior housing operating properties, or SHOP, utilizing the structure permitted by the REIT Investment Diversification and Empowerment Act of 2007, which is commonly referred to as a “RIDEA” structure. We have also originated and acquired secured loans and may acquire other real estate-related investments in the future on an infrequent and opportunistic basis. We generally seek investments that produce current income; however, we have selectively developed, and may continue to selectively develop, healthcare real estate properties. We have elected to be taxed as a REIT for U.S. federal income tax purposes. We believe that we have been organized and operated, and we intend to continue to operate, in conformity with the requirements for qualification and taxation as a REIT under the Internal Revenue Code of 1986, or the Code.
Operating Partnership
We conduct substantially all of our operations through American Healthcare REIT Holdings, LP, or our operating partnership, and we are the sole general partner of our operating partnership. As of both March 31, 2026 and December 31, 2025, we owned 99.0% of the operating partnership units, or OP units, in our operating partnership, and the remaining 1.0% of the OP units were owned by the following limited partners: (i) AHI Group Holdings, LLC, which is owned and controlled by Jeffrey T. Hanson, our Chairman of the Board of Directors and Interim Chief Executive Officer and President, Danny Prosky, our Chief Executive Officer, President and director, who is currently taking a leave of absence from his executive role for medical reasons, and Mathieu B. Streiff, one of our independent directors; and (ii) a wholly-owned subsidiary of Griffin Capital Company, LLC. Such limited partnership units are accounted for as noncontrolling interests in total equity in our accompanying condensed consolidated balance sheets.
Real Estate Investments Portfolio
We currently operate through four reportable business segments: ISHC, OM, SHOP and triple-net leased properties. As of March 31, 2026, we owned and/or operated 343 buildings and ISHC, which represent in total approximately 22,651,000 square feet of gross leasable area, or GLA, for an aggregate contract purchase price of $5,607,085,000. In addition, as of March 31, 2026, we also owned a real estate-related debt investment purchased for $60,429,000.
2. Summary of Significant Accounting Policies
The summary of significant accounting policies presented below is designed to assist in understanding our accompanying condensed consolidated financial statements. Such condensed consolidated financial statements and the accompanying notes thereto are the representations of our management, who are responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America, or GAAP, in all material respects, and have been consistently applied in preparing our accompanying condensed consolidated financial statements.
Basis of Presentation
Our accompanying condensed consolidated financial statements include our accounts and those of our operating partnership, the wholly-owned subsidiaries of our operating partnership and all non-wholly owned subsidiaries in which we have control, as well as any VIEs in which we are the primary beneficiary. The portion of equity in any subsidiary that is not wholly owned by us is presented in our accompanying condensed consolidated financial statements as a noncontrolling interest. We evaluate our ability to control an entity, and whether the entity is a VIE and we are the primary beneficiary, by considering substantive terms of the arrangement and identifying which enterprise has the power to direct the activities of the entity that most significantly impacts the entity’s economic performance.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)
We operate and intend to continue to operate in an umbrella partnership REIT structure in which our operating partnership, wholly-owned subsidiaries of our operating partnership and all non-wholly owned subsidiaries of which we have control will own substantially all of the interests in properties acquired on our behalf. We are the sole general partner of our operating partnership and as of both March 31, 2026 and December 31, 2025, we owned a 99.0% general partnership interest therein, and the remaining 1.0% partnership interest was owned by the limited partners.
The accounts of our operating partnership are consolidated in our accompanying condensed consolidated financial statements because we are the sole general partner of our operating partnership and have unilateral control over its management and major operating decisions (even if additional limited partners are admitted to our operating partnership). All intercompany accounts and transactions are eliminated in consolidation.
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 the SEC’s 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.
In preparing our accompanying condensed consolidated financial statements, management has evaluated subsequent events through the financial statement issuance date. We believe that although the disclosures contained herein are adequate to prevent the information presented from being misleading, our accompanying condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and the notes thereto included in our 2025 Annual Report on Form 10-K, as filed with the SEC on February 27, 2026.
Use of Estimates
The preparation of our accompanying condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, as well as the disclosure of contingent assets and liabilities, at the date of our condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant items subject to such estimates and assumptions include, but are not limited to, the initial and recurring valuation of certain assets acquired and liabilities assumed through property acquisitions including through business combinations, goodwill and its impairment, revenues, allowance for credit losses, impairment of long-lived and intangible assets and contingencies. These estimates are made and evaluated on an on-going basis using information that is currently available, as well as various other assumptions believed to be reasonable under the circumstances. Actual results could differ from those estimates, perhaps in material adverse ways, and those estimates could be different under different assumptions or conditions.
Revenue Recognition — Resident Fees and Services Revenue
Disaggregation of Resident Fees and Services Revenue
The following tables disaggregate our resident fees and services revenue by line of business, according to whether such revenue is recognized at a point in time or over time, for the periods presented below (in thousands):
ISHC
SHOP(1)
Total
Over time
439,898
103,739
543,637
358,396
66,499
424,895
Point in time
62,845
3,285
66,130
70,296
1,985
72,281
Total resident fees and services
502,743
107,024
428,692
68,484
9
The following tables disaggregate our resident fees and services revenue by payor class for the periods presented below (in thousands):
Private and other payors
194,053
97,297
291,350
164,562
59,183
223,745
Medicare
142,750
130,628
Medicaid
105,331
9,727
115,058
95,156
9,301
104,457
Medicare Advantage
60,609
38,346
___________
Accounts Receivable, Net — Resident Fees and Services Revenue
The beginning and ending balances of accounts receivable, net — resident fees and services are as follows (in thousands):
Private and Other Payors
Beginning balance — January 1, 2026
28,300
59,630
44,888
47,724
180,542
Ending balance — March 31, 2026
42,562
62,712
58,796
47,363
211,433
Increase (decrease)
14,262
3,082
13,908
(361
30,891
Deferred Revenue — Resident Fees and Services Revenue
Deferred revenue is included in security deposits, prepaid rent and other liabilities in our accompanying condensed consolidated balance sheets. The beginning and ending balances of deferred revenue — resident fees and services, almost all of which relates to private and other payors, are as follows (in thousands):
34,464
35,084
Increase
620
Resident and Tenant Receivables and Allowances
Resident receivables, which are related to resident fees and services revenue, are carried net of an allowance for credit losses. An allowance is maintained for estimated losses resulting from the inability of residents and payors to meet the contractual obligations under their lease or service agreements. Substantially all of such allowances are recorded as direct reductions of resident fees and services revenue as contractual adjustments provided to third-party payors or implicit price concessions in our accompanying condensed consolidated statements of operations and comprehensive income (loss). Our determination of the adequacy of these allowances is based primarily upon evaluations of historical loss experience, the residents’ financial condition, security deposits, cash collection patterns by payor and by state, current economic conditions, future expectations in estimating credit losses and other relevant factors. Tenant receivables, which are related to real estate revenue, and unbilled deferred rent receivables are reduced for amounts where collectability is not probable, which are recognized as direct reductions of real estate revenue in our accompanying condensed consolidated statements of operations and comprehensive income (loss).
10
The following is a summary of our adjustments to allowances for the periods presented below (in thousands):
Beginning balance
25,336
22,582
Additional allowances
10,850
9,573
Write-offs
(4,884
(2,834
Recoveries collected or adjustments
(4,880
(2,054
Ending balance
26,422
27,267
Accounts Payable and Accrued Liabilities
As of March 31, 2026 and December 31, 2025, accounts payable and accrued liabilities primarily include reimbursement of payroll-related costs to the managers of our ISHC and SHOP of $77,315,000 and $55,321,000, respectively, insurance reserves of $50,760,000 and $51,042,000, respectively, accrued distributions of $48,885,000 and $47,832,000, respectively, accrued developments and capital expenditures of $32,961,000 and $37,076,000, respectively, and accrued property taxes of $27,810,000 and $25,041,000, respectively.
Recently Issued Accounting Pronouncements
In November 2024, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, 2024-03, Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, or ASU 2024-03. Further, in January 2025, the FASB issued ASU 2025-01, Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date, or ASU 2025-01. ASU 2024-03 requires new financial statement disclosure to be provided in the notes to the financial statements in a tabular presentation related to the disaggregation of certain expense captions presented on the face of the income statement within continuing operations that include expense categories such as: (i) purchases of inventory; (ii) employee compensation; (iii) depreciation; and (iv) intangible asset amortization. ASU 2024-03 and ASU 2025-01 are effective for annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted and may be applied retrospectively or prospectively. We are currently evaluating this guidance to determine the impact on our consolidated financial statement disclosures beginning with our 2027 Annual Report on Form 10-K.
In May 2025, the FASB issued ASU 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity, or ASU 2025-03. ASU 2025-03 amends the guidance Topic 805 and Topic 810, to improve the determination of the accounting acquirer in business combinations involving VIEs. Under the new guidance, entities are required to apply the general principles in Topic 805 to identify the accounting acquirer when the legal acquiree is a VIE that meets the definition of a business, and the transaction is primarily effected by exchanging equity interests. ASU 2025-03 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. Early adoption is permitted and should be applied prospectively to any acquisition transaction that occurs after the adoption date. We are currently evaluating this guidance to determine the impact on our consolidated financial statement and disclosures beginning with our Quarterly Report on Form 10-Q for the quarterly period ending March 31, 2027.
In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow Scope Improvements, or ASU 2025-11, to update the guidance in ASC Topic 270, Interim Reporting, by improving navigability of the required interim disclosures, clarifying when that guidance is applicable and adding a principle that requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. ASU 2025-11 is effective for interim reporting periods beginning after December 15, 2027. Early adoption is permitted and may be applied retrospectively or prospectively. We are currently evaluating this guidance to determine the impact on our consolidated financial statement disclosures beginning with our Quarterly Report on Form 10-Q for the quarterly period ending March 31, 2028.
11
3. Real Estate Investments
Our real estate investments, net consisted of the following as of March 31, 2026 and December 31, 2025 (in thousands):
December 31, 2025
Building, improvements and construction in process
4,563,994
4,420,601
Land and improvements
440,040
420,046
Furniture, fixtures and equipment
319,131
305,491
5,323,165
5,146,138
Less: accumulated depreciation
(1,003,254
(962,719
Depreciation expense for the three months ended March 31, 2026 and 2025 was $44,756,000 and $36,577,000, respectively.
The following is a summary of our capital expenditures by reportable segment for the period presented below (in thousands):
Three Months EndedMarch 31, 2026
26,510
SHOP
4,349
OM
3,063
Triple-net leased properties
248
34,170
Acquisitions of Real Estate Investments
For the three months ended March 31, 2026, we acquired three land parcels in Kentucky and Ohio for an aggregate contract purchase price of $4,066,000, plus closing costs, for the future development of ISHC. For the three months ended March 31, 2026, we also acquired seven senior housing properties using cash. The following is a summary of such acquisitions (dollars in thousands):
Location
Number of Buildings
Type
DateAcquired
ContractPurchase Price
Blue Springs, Kansas City and Raymore, MO
02/09/26
62,500
San Rafael, CA
02/25/26
55,000
Lenexa and Olathe, KS
03/18/26
45,250
162,750
We accounted for such acquisitions of land and real estate investments completed during the three months ended March 31, 2026 as asset acquisitions. The following table summarizes the purchase price of such assets acquired at the time of acquisition based on their relative fair values (in thousands):
2026Acquisitions
Building and improvements
129,008
Land
17,490
In-place leases
19,031
1,807
Certificates of need
185
Total assets acquired
167,521
12
Impairment of Real Estate Investments
As we continue to evaluate our properties based on their historical operating performance and our expected holding period, for the three months ended March 31, 2026, we recognized an impairment charge of $418,000 for one OM building. The fair value of such impaired OM building was determined by the sales price of the executed purchase and sale agreement with a third-party buyer, which was considered a Level 2 measurement within the fair value hierarchy. For the three months ended March 31, 2025, we recognized an impairment charge of $21,706,000 for one OM building. The fair value of such OM building was determined by the sales price of the executed purchase and sale agreement with a third-party buyer, which was considered a Level 2 measurement within the fair value hierarchy.
4. Debt Security Investment
Our investment in a commercial mortgage-backed debt security, or debt security, bears an interest rate on the stated principal amount thereof equal to 4.24% per annum, the terms of which security provide for monthly interest-only payments. The debt security was issued by an unaffiliated mortgage trust and represented an approximate 10% beneficial ownership interest in such mortgage trust. The debt security is subordinate to all other interests in the mortgage trust and is not guaranteed by a government-sponsored entity. The debt security matures on January 1, 2028, at an aggregate stated amount of $93,433,000.
As of March 31, 2026 and December 31, 2025, the carrying amount of the debt security investment was $92,304,000 and $92,136,000, respectively, net of unamortized closing costs of $82,000 and $93,000, respectively. Accretion on the debt security for the three months ended March 31, 2026 and 2025 was $180,000 and $471,000, respectively, which is recorded as an increase to real estate revenue in our accompanying condensed consolidated statements of operations and comprehensive income (loss). Amortization expense of closing costs for the three months ended March 31, 2026 and 2025 was $12,000 and $37,000, respectively, which is recorded as a decrease to real estate revenue in our accompanying condensed consolidated statements of operations and comprehensive income (loss). We evaluated credit quality indicators such as the agency ratings and the underlying collateral of such investment in order to determine expected future credit loss. No credit loss was recorded for the three months ended March 31, 2026 and 2025.
5. Identified Intangible Assets and Liabilities
Identified intangible assets, net and identified intangible liabilities, net consisted of the following as of March 31, 2026 and December 31, 2025 (dollars in thousands):
Amortized intangible assets:
In-place leases, net of accumulated amortization of $65,047 and $44,498 as of March 31, 2026 and December 31, 2025, respectively (with a weighted average remaining life of 2.1 years and 2.3 years as of March 31, 2026 and December 31, 2025, respectively)
115,506
118,080
Above-market leases, net of accumulated amortization of $8,311 and $7,859 as of March 31, 2026 and December 31, 2025, respectively (with a weighted average remaining life of 6.1 years and 6.3 years as of March 31, 2026 and December 31, 2025, respectively)
9,503
9,965
Unamortized intangible assets:
105,148
104,924
Trade names
20,267
Total identified intangible assets, net
Amortized intangible liabilities:
Below-market leases, net of accumulated amortization of $2,354 and $2,336 as of March 31, 2026 and December 31, 2025, respectively (with a weighted average remaining life of 4.2 years and 4.4 years as of March 31, 2026 and December 31, 2025, respectively)
Total identified intangible liabilities, net
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Amortization expense on identified intangible assets for the three months ended March 31, 2026 and 2025 was $22,030,000 and $4,427,000, respectively, which included $462,000 and $604,000, respectively, of amortization recorded as a decrease to real estate revenue for above-market leases in our accompanying condensed consolidated statements of operations and comprehensive income (loss).
Amortization expense on below-market leases for the three months ended March 31, 2026 and 2025 was $132,000 and $191,000, respectively, which is recorded as an increase to real estate revenue in our accompanying condensed consolidated statements of operations and comprehensive income (loss).
The aggregate weighted average remaining life of the identified intangible assets was 2.4 years and 2.6 years as of March 31, 2026 and December 31, 2025, respectively. The aggregate weighted average remaining life of the identified intangible liabilities was 4.2 years and 4.4 years as of March 31, 2026 and December 31, 2025, respectively. As of March 31, 2026, estimated amortization expense on the identified intangible assets and liabilities for the remaining nine months ending December 31, 2026 and for each of the next four years ending December 31, and thereafter was as follows (in thousands):
Amortization Expense
Year
Intangible Assets
Intangible Liabilities
65,471
(392
2027
42,673
(514
2028
4,479
(478
2029
3,829
(338
2030
3,222
(121
Thereafter
5,335
(135
125,009
(1,978
6. Other Assets
Other assets, net consisted of the following as of March 31, 2026 and December 31, 2025 (dollars in thousands):
Deferred rent receivables
49,820
49,158
Prepaid expenses and other assets
48,138
49,338
Deferred tax assets, net
23,664
22,939
Inventory — finished goods
20,441
18,838
Lease commissions, net of accumulated amortization of $10,152 and $9,569 as of March 31, 2026 and December 31, 2025, respectively
17,137
17,081
4,419
3,616
Real estate deposits
4,315
6,053
Deferred financing costs, net of accumulated amortization of $2,116 and $1,854 as of March 31, 2026 and December 31, 2025, respectively
1,995
2,251
Lease inducement, net of accumulated amortization of $3,333 and $3,246 as of March 31, 2026 and December 31, 2025, respectively (with a weighted average remaining life of 4.8 years and 5.0 years as of March 31, 2026 and December 31, 2025, respectively)
1,667
1,754
Derivative financial instruments
598
Deferred financing costs included in other assets were related to the 2025 Trilogy Credit Facility, as defined in Note 8, Lines of Credit and Term Loan, as well as the senior unsecured revolving credit facility portions of the 2024 Credit Facility, as defined in Note 8, Lines of Credit and Term Loan. For the three months ended March 31, 2026, we did not incur any loss on extinguishment of debt related to our credit facilities. In March 2025, in connection with the termination of our previous credit facility, we incurred a loss on extinguishment of $508,000 primarily consisting of the write-off of unamortized deferred financing costs associated with such facility. Loss on extinguishment of debt is recorded as an increase to interest expense in our accompanying condensed consolidated statements
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of operations and comprehensive income (loss). See Note 8, Lines of Credit and Term Loan, for further discussion of our lines of credit. Amortization expense on lease inducement for both the three months ended March 31, 2026 and 2025 was $87,000, and is recorded as a decrease to real estate revenue in our accompanying condensed consolidated statements of operations and comprehensive income (loss).
7. Mortgage Loans Payable
Mortgage loans payable, net consisted of the following as of March 31, 2026 and December 31, 2025 (dollars in thousands):
Fixed-rate debt (85 loans as of both March 31, 2026 and December 31, 2025)
980,045
985,565
Less: deferred financing costs, net
(8,745
(9,214
Less: discount
(8,925
(9,426
Mortgage loans payable, net
Based on interest rates in effect as of both March 31, 2026 and December 31, 2025, effective interest rates on mortgage loans payable ranged from 2.21% to 5.99% per annum, with a weighted average effective interest rate of 3.73%. We are required by the terms of certain loan documents to meet certain reporting requirements and covenants, such as net worth ratios, fixed charge coverage ratios and leverage ratios.
The following table reflects the changes in the carrying amount of mortgage loans payable, net for the periods presented below (in thousands):
982,071
Additions:
Borrowings under mortgage loan payable
Amortization of deferred financing costs
469
400
Amortization of discount/premium on mortgage loans payable, net
501
517
Deductions:
Scheduled principal payments on mortgage loans payable
Payoff of mortgage loans payable due to dispositions of real estate investments
(6,604
(1,015
1,000,489
Amortization of deferred financing costs and amortization of discount/premium on mortgage loans payable is included in interest expense in our accompanying condensed consolidated statements of operations and comprehensive income (loss).
As of March 31, 2026, the principal payments due on our mortgage loans payable for the remaining nine months ending December 31, 2026 and for each of the next four years ending December 31, and thereafter were as follows (in thousands):
154,167
56,182
139,740
16,963
44,732
568,261
8. Lines of Credit and Term Loan
2024 Credit Facility
We, through our operating partnership, as borrower, and certain of our subsidiaries, or the subsidiary guarantors, collectively, with us, as guarantors, were party to an amended loan agreement, or the 2024 Credit Agreement, with Bank of America, N.A., or Bank of America, KeyBank National Association, or KeyBank, Citizens Bank, National Association, or Citizens Bank, and a syndicate of other banks, as lenders, for a credit facility with an aggregate maximum principal amount up to $1,150,000,000, or the 2024 Credit Facility. The 2024 Credit Facility consisted of a senior unsecured revolving credit facility in the initial aggregate amount of $600,000,000 and a senior unsecured term loan facility in the initial aggregate amount of $550,000,000. The proceeds of loans made under the 2024 Credit Facility could have been used for general corporate purposes including for working capital, capital expenditures, refinancing existing indebtedness and other corporate purposes not inconsistent with obligations under the 2024 Credit Agreement. We could have also obtained up to $25,000,000 in the form of standby letters of credit pursuant to the 2024 Credit Facility. Unless defined herein, all capitalized terms under this “2024 Credit Facility” subsection are defined in the 2024 Credit Agreement.
Under the terms of the 2024 Credit Agreement, the Revolving Loans would have matured on February 14, 2028, and could have been extended for one 12-month period, subject to the satisfaction of certain conditions, including payment of an extension fee. The Term Loan matures on January 19, 2027, and may not be extended. The maximum principal amount of the 2024 Credit Facility could have been increased by an aggregate incremental amount of $600,000,000, subject to: (i) the terms of the 2024 Credit Agreement and (ii) at least five business days’ prior written notice to Bank of America.
At our option, the 2024 Credit Facility bore interest at varying rates based upon (i) Daily Simple SOFR, plus the Applicable Rate for Daily SOFR Rate Loans or (ii) Term SOFR, plus the Applicable Rate for Term SOFR Rate Loans. If, under the terms of the 2024 Credit Agreement, there was an inability to determine the Daily SOFR or the Term SOFR, then the 2024 Credit Facility would have borne interest at a rate per annum equal to the Base Rate plus the Applicable Rate for Base Rate Loans. The loans could have been repaid in whole or in part without prepayment premium or penalty, subject to certain conditions.
We were required to pay a fee on the unused portion of the lenders’ commitments under the 2024 Credit Agreement computed at (a) 0.25% per annum if the actual daily Commitment Utilization Percentage for such quarter was less than or equal to 50% and (b) 0.20% per annum if the actual daily Commitment Utilization Percentage for such quarter was greater than 50%, which fee was computed on the actual daily amount of the Available Commitments during the period for which payment was made and payable in arrears on a quarterly basis.
The 2024 Credit Agreement required us to add additional subsidiaries as guarantors in the event the value of the assets owned by the subsidiary guarantors fell below a certain threshold as set forth in the 2024 Credit Agreement. In the event of default, Bank of America had the right to terminate the commitment of each Lender to make Loans and any obligation of the L/C Issuer to make L/C Credit Extensions under the 2024 Credit Agreement and to accelerate the payment on any unpaid principal amount of all outstanding loans and all interest accrued and unpaid thereon.
As of both March 31, 2026 and December 31, 2025, our aggregate borrowing capacity under the 2024 Credit Facility was $1,150,000,000, excluding the $25,000,000 standby letters of credit described above. As of March 31, 2026 and December 31, 2025, borrowings outstanding under the 2024 Credit Facility totaled $550,000,000 ($549,818,000, net of deferred financing costs related to the senior unsecured term loan facility portion of the 2024 Credit Facility), and $550,000,000 ($549,761,000, net of deferred financing costs related to the senior unsecured term loan facility portion of the 2024 Credit Facility), respectively, and the weighted average interest rate on such borrowings outstanding was 4.98% and 5.01% per annum, respectively.
On April 1, 2026, we entered into an agreement, or the Second Amendment, to further amend the 2024 Credit Agreement. See Note 18, Subsequent Event, — 2026 Credit Facility, for a further discussion.
2025 Trilogy Credit Facility
On October 31, 2025, we, through Trilogy RER, LLC, entered into a loan agreement, or the 2025 Trilogy Credit Agreement, with KeyBank, as lender named therein, with respect to a senior secured revolving credit facility that had an aggregate maximum principal amount of $50,000,000, or the 2025 Trilogy Credit Facility. The proceeds of the 2025 Trilogy Credit Facility may be used for acquisitions, debt repayment and general corporate and working capital purposes. Unless defined herein, all capitalized terms under this “2025 Trilogy Credit Facility” subsection are defined in the 2025 Trilogy Credit Agreement.
The 2025 Trilogy Credit Facility matures on October 31, 2028. At our option, the 2025 Trilogy Credit Facility bears interest at per annum rates equal to (a) Daily Simple SOFR, plus the Applicable Margin for SOFR Rate Loans and (b) for Base Rate Loans, the
Applicable Margin plus a fluctuating rate per annum equal to the highest of: (i) Federal Funds Effective Rate in effect on such day plus 0.50%, (ii) the rate of interest in effect for such day as established from time to time by KeyBank as its prime rate and (iii) one-month Term SOFR plus 1.00%.
As of both March 31, 2026 and December 31, 2025, our aggregate borrowing capacity under the 2025 Trilogy Credit Facility was $50,000,000, and there were no borrowings outstanding.
9. Derivative Financial Instruments
We use derivative financial instruments to manage interest rate risk associated with variable-rate debt. We recorded such derivative financial instruments in our accompanying condensed consolidated balance sheets as either an asset or a liability, as applicable, measured at fair value. The following table lists the derivative financial instruments held by us as of March 31, 2026 and December 31, 2025, which were included in other assets and other liabilities in our accompanying condensed consolidated balance sheets (dollars in thousands):
Fair Value
Instrument
Notional Amount
Index
Interest Rate
Effective Date
Maturity Date
Swap
275,000
Daily SOFR
3.74%
2/1/2023
1/19/2026
4.41%
8/8/2023
(99
350,000
3.51%
1/20/2026
1/19/2027
386
(518
200,000
3.52%
212
(306
(929
As of both March 31, 2026 and December 31, 2025, none of our derivative financial instruments were designated as hedges. Derivative financial instruments not designated as hedges are not speculative and are used to manage our exposure to interest rate movements, but do not meet the strict hedge accounting requirements. For the three months ended March 31, 2026 and 2025, we recorded a net gain (loss) in the fair value of derivative financial instruments of $1,527,000 and $(750,000), respectively, as a decrease (increase) to total interest expense in our accompanying condensed consolidated statements of operations and comprehensive income (loss) related to the change in the fair value of our derivative financial instruments.
See Note 12, Fair Value Measurements, for a further discussion of the fair value of our derivative financial instruments.
10. Commitments and Contingencies
Litigation
We are not presently subject to any material litigation nor, to our knowledge, is any material litigation threatened against us, which, if determined unfavorably to us, would have a material adverse effect on our consolidated financial position, results of operations or cash flows.
Environmental Matters
We follow a policy of monitoring our properties for the presence of hazardous or toxic substances. While there can be no assurance that a material environmental liability does not exist at our properties, we are not currently aware of any environmental liability with respect to our properties that would have a material adverse effect on our consolidated financial position, results of operations or cash flows. Further, we are not aware of any material environmental liability or any unasserted claim or assessment with respect to an environmental liability that we believe would require additional disclosure or the recording of a loss contingency.
Other
Our other commitments and contingencies include the usual obligations of real estate owners and operators in the normal course of business, which include calls/puts to sell/acquire properties. In our view, these matters are not expected to have a material adverse effect on our consolidated financial position, results of operations or cash flows.
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11. Equity
Preferred Stock
Pursuant to our charter, we are authorized to issue 200,000,000 shares of our preferred stock, $0.01 par value per share. As of both March 31, 2026 and December 31, 2025, no shares of preferred stock were issued and outstanding.
Pursuant to our charter, as amended, we are authorized to issue 1,000,000,000 shares of our common stock, $0.01 par value per share. As of March 31, 2026 and December 31, 2025, we had 189,942,357 and 185,911,442 shares of our common stock issued and outstanding, respectively.
ATM Offerings
On August 8, 2025, we established an at-the market, or ATM, equity offering program, or the 2025 ATM Offering, pursuant to which we offered to sell shares of our common stock for a maximum gross sales price of up to $1,000,000,000. On February 27, 2026, we terminated the 2025 ATM Offering, at which time, $230,140,000 in shares of our common stock remained unsold under such program. On February 27, 2026, concurrent with the termination of the 2025 ATM Offering, we entered into a new ATM equity offering program, or the 2026 ATM Offering, pursuant to which we may, from time to time, offer and sell shares of our common stock for a maximum gross sales price of up to $1,750,000,000. Shares sold through our 2025 ATM Offering and 2026 ATM Offering, or our ATM offering programs, were and are offered and sold in amounts determined by us from time to time, and are sold in negotiated transactions at market prices prevailing at the time of sale in accordance with Rule 415 under the Securities Act of 1933, as amended, or the Securities Act.
Our ATM offering programs allow us to enter into forward sale agreements which give us the ability to lock in a share price on the sale of common stock at or shortly after the time the forward sale agreement becomes effective, while postponing the receipt of proceeds from the sale of shares until a future date. We evaluated our forward sale agreements in accordance with Accounting Standards Codification, or ASC, Topic 815-40 and concluded that they meet the conditions to be classified within equity as of March 31, 2026. Shares issuable under a forward sale agreement are reflected in the diluted earnings per share calculations for the applicable periods using the treasury stock method.
Through March 31, 2026, we have entered into forward sale agreements pursuant to our ATM offering programs with maturities extending through April 10, 2027. For the three months ended March 31, 2026, we settled a total of 639,345 shares of common stock under forward sale agreements for our ATM offering programs for gross proceeds of $31,074,000, at an average gross price of $48.60 per share, before commissions, fees and other adjustments. As of March 31, 2026, a total of 10,692,620 shares of common stock remain unsettled under these agreements, representing approximately $537,628,000 in gross proceeds at an average gross price of $50.28 per share. Subsequent to March 31, 2026, we settled an additional 2,755,996 shares of common stock under forward sale agreements for our ATM offering programs for gross proceeds of $133,954,000, at an average gross price of $48.60 per share, before commissions, fees and other adjustments.
Follow-on Public Offering
On November 24, 2025, we closed a follow-on public offering, or the November 2025 Offering, for the sale of 9,315,000 shares of our common stock for gross proceeds of $447,120,000 at an average gross price of $48.00 per share, including the exercise in full of the underwriter’s option to purchase up to an additional 1,215,000 shares of common stock. In connection with the November 2025 Offering, we entered into forward sale agreements to postpone the delivery and settlement of such shares until a future date no later than May 20, 2027. For the three months ended March 31, 2026, we settled and issued all of the remaining 3,335,386 shares of common stock outstanding pursuant to such forward sale agreements for gross proceeds of $160,099,000 at a gross price of $48.00 per share, before commissions, fees and other adjustments.
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Equity Compensation Plans
AHR Incentive Plan
Pursuant to our Second Amended and Restated 2015 Incentive Plan, or the AHR Incentive Plan, our board of directors (with respect to options and restricted shares of common stock granted to independent directors) or our compensation committee (with respect to any other award) may grant options, restricted shares of common stock, stock purchase rights, stock appreciation rights or other awards to our independent directors, officers, employees and consultants. The AHR Incentive Plan terminates on June 15, 2033, and the maximum number of shares of our common stock that may be issued pursuant to such plan is 4,000,000 shares.
Restricted common stock
Pursuant to the AHR Incentive Plan, we may grant shares of our restricted common stock, or RSAs, as defined in the AHR Incentive Plan, to our independent directors in connection with their initial election or re-election to our board or in consideration of their past services rendered, as well as to certain executive officers and key employees. Our RSAs generally have a vesting period between one to four years and are subject to continuous service through the vesting dates.
Restricted stock units
Pursuant to the AHR Incentive Plan, we may grant to our executive officers and certain employees performance-based restricted stock units, or PBUs, and/or time-based restricted stock units, or TBUs, which represent the right to receive shares of our common stock upon vesting. PBUs and TBUs are collectively referred to as RSUs. RSUs granted to executive officers and employees generally have a vesting period of up to three years and are subject to continuous service through the vesting dates and performance conditions, as applicable.
The total fair value of the RSAs and RSUs granted pursuant to the AHR Incentive Plan during the three months ended March 31, 2026 and 2025 was $13,081,515 and $11,191,444, respectively. For the three months ended March 31, 2026 and 2025, we recognized stock compensation expense related to such awards of $3,419,000 and $2,529,000, respectively. Stock compensation expense is recognized over the requisite service or performance period and is included in general and administrative expenses in our accompanying condensed consolidated statements of operations and comprehensive income (loss). As of March 31, 2026, we had $29,164,000 of total unrecognized stock compensation expense related to nonvested RSAs and RSUs, which we expect to recognize over a weighted average period of 2.1 years. A summary of the status of our nonvested RSAs and RSUs pursuant to the AHR Incentive Plan as of March 31, 2026 and December 31, 2025, and the changes for the three months ended March 31, 2026 is presented below:
Number of NonvestedRSAs
Weighted AverageGrant DateFair Value - RSAs
Number of NonvestedRSUs
Weighted AverageGrant DateFair Value -RSUs
Balance — December 31, 2025
753,522
13.86
815,953
26.41
Granted
294,752
51.63
Vested
(243,066
(1)
13.12
(223,492
25.14
Forfeited/cancelled
(1,111
(157
31.40
Balance — March 31, 2026
509,345
14.22
887,056
34.17
Employee Stock Purchase Plan
Pursuant to our 2024 Employee Stock Purchase Plan, or the ESPP, eligible employees may purchase shares of our common stock at a purchase price equal to the lesser of 85.0% of the fair market value of a share on the applicable enrollment date for such offering period or on the applicable exercise date. The maximum number of shares of our common stock that may be issued pursuant to the ESPP is 1,000,000 shares. For the three months ended March 31, 2026, employees purchased and we issued 4,396 shares under the ESPP and 985,525 shares remained available for future issuance. As of December 31, 2025, 10,079 shares were purchased and issued under the ESPP.
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Manager Equity Plan
We adopted the 2025 Manager Equity Plan, or the Manager Plan, to align the incentives of our external third-party RIDEA managers with the overall success of our business by issuing equity-based incentives to such RIDEA managers. Pursuant to the Manager Plan, we may issue shares of our common stock to the RIDEA managers, which they may in turn issue to their directors, officers, employees, advisors or consultants. The maximum number of shares of our common stock that may be issued pursuant to the Manager Plan is 1,000,000 shares. The Manager Plan allows for the grant of stock options, stock appreciation rights, restricted stock, RSUs and other equity-based awards. We have granted TBUs and PBUs to one of our RIDEA managers pursuant to the Manager Plan. Such RSUs have a vesting period of up to three years and are subject to continuous service through the vesting dates and any performance conditions, as applicable.
We did not grant any equity-based awards pursuant to the Manager Plan during the three months ended March 31, 2025. The total fair value of the RSUs granted pursuant to the Manager Plan during the three months ended March 31, 2026 was $4,270,000. Stock compensation expense related to such awards for the three months ended March 31, 2026 was $1,407,000. As of March 31, 2026, we had $11,239,000 of total unrecognized stock compensation expense related to nonvested RSUs, which we expect to recognize over a weighted average period of 2.2 years. Stock compensation expense is recognized over the requisite service or performance period and is included in general and administrative expenses in our accompanying condensed consolidated statements of operations and comprehensive income (loss). A summary of the status of our nonvested RSUs pursuant to the Manager Plan as of March 31, 2026 and December 31, 2025, and the changes for the three months ended March 31, 2026 is presented below:
147,468
49.34
90,534
47.16
(24,578
213,424
48.42
12. Fair Value Measurements
Assets and Liabilities Reported at Fair Value
The table below presents our assets and liabilities measured at fair value on a recurring basis as of March 31, 2026, aggregated by the level in the fair value hierarchy within which those measurements fall (in thousands):
Quoted Prices inActive Markets forIdentical Assetsand Liabilities(Level 1)
Significant OtherObservable Inputs(Level 2)
SignificantUnobservable Inputs(Level 3)
Assets:
Total assets at fair value
The table below presents our assets and liabilities measured at fair value on a recurring basis as of December 31, 2025, aggregated by the level in the fair value hierarchy within which those measurements fall (in thousands):
Total liabilities at fair value
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There were no transfers into and out of fair value measurement levels during the three months ended March 31, 2026 and 2025.
Derivative Financial Instruments
We entered into interest rate swaps to manage interest rate risk associated with variable-rate debt. The valuation of these instruments was determined using widely accepted valuation techniques including a discounted cash flow analysis on the expected cash flows of each derivative. Such valuation reflected the contractual terms of the derivatives, including the period to maturity, and used observable market-based inputs, including interest rate curves, as well as option volatility. The fair values of our interest rate swaps were determined by netting the discounted future fixed cash payments and the discounted expected variable cash receipts. The variable cash receipts were based on an expectation of future interest rates derived from observable market interest rate curves.
We incorporated credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of our derivative contracts for the effect of nonperformance risk, we considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts and guarantees.
Although we determined that the majority of the inputs used to value our derivative financial instruments fell within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with this instrument utilized Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by us and our counterparty. However, as of March 31, 2026, we assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our derivative positions and determined that the credit valuation adjustments were not significant to the overall valuation of our derivatives. As a result, we determined that our derivative valuations in their entirety were classified in Level 2 of the fair value hierarchy.
Financial Instruments Disclosed at Fair Value
Our accompanying condensed consolidated balance sheets include the following financial instruments: debt security investment, cash and cash equivalents, restricted cash, accounts and other receivables, accounts payable and accrued liabilities, mortgage loans payable and borrowings under our lines of credit and term loan.
We consider the carrying values of cash and cash equivalents, restricted cash, accounts and other receivables and accounts payable and accrued liabilities to approximate the fair value for these financial instruments based upon an evaluation of the underlying characteristics and market data, in light of the short period of time between origination of the instruments and their expected realization. The fair values of such financial instruments are classified in Level 2 of the fair value hierarchy.
The fair value of our debt security investment is estimated using a discounted cash flow analysis using interest rates available to us for investments with similar terms and maturities. The fair values of our mortgage loans payable and our lines of credit and term loan are estimated using discounted cash flow analyses using borrowing rates available to us for debt instruments with similar terms and maturities. We have determined that the valuations of our debt security investment, mortgage loans payable and lines of credit and term loan are classified in Level 2 within the fair value hierarchy. The carrying amounts and estimated fair values of such financial instruments as of March 31, 2026 and December 31, 2025 were as follows (in thousands):
CarryingAmount(1)
FairValue
Financial Assets:
Debt security investment
93,143
93,107
Financial Liabilities:
Mortgage loans payable
892,097
898,892
Lines of credit and term loan
547,823
549,914
547,510
549,946
13. Income Taxes
As a REIT, we generally will not be subject to U.S. federal income tax on taxable income that we distribute to our stockholders. We have elected to treat certain of our consolidated subsidiaries as taxable REIT subsidiaries, or TRS, pursuant to the Code. TRS may participate in services that would otherwise be considered impermissible for REITs and are subject to federal and state income tax at regular corporate tax rates.
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Current Income Tax
Federal and state income taxes are generally a function of the level of income recognized by our TRS. Foreign income taxes are generally a function of our income on our real estate located in the United Kingdom, or UK, and Isle of Man.
Deferred Taxes
Deferred income tax is generally a function of the period’s temporary differences (primarily basis differences between tax and financial reporting for real estate assets and equity investments) and generation of tax net operating loss that may be realized in future periods depending on sufficient taxable income.
We recognize the effects of an uncertain tax position on the financial statements, when it is more likely than not, based on the technical merits of the tax position, that such a position will be sustained upon examination by the relevant tax authorities. If the tax benefit meets the “more likely than not” threshold, the measurement of the tax benefit will be based on our estimate of the ultimate tax benefit to be sustained if audited by the taxing authority. As of both March 31, 2026 and December 31, 2025, we did not have any tax benefits or liabilities for uncertain tax positions that we believe should be recognized in our accompanying condensed consolidated financial statements.
We assess the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets. A valuation allowance is established if we believe it is more likely than not that all or a portion of the deferred tax assets are not realizable. As of both March 31, 2026 and December 31, 2025, our valuation allowance partially reserved our net deferred tax assets, due to historical losses and inherent uncertainty of future income. We will continue to monitor industry and economic conditions, and our ability to generate taxable income based on our business plan and available tax planning strategies, which would allow us to utilize the tax benefits of the net deferred tax assets and thereby allow us to reverse all, or a portion of, our valuation allowance in the future.
14. Leases
Lessor
We have operating leases with tenants that expire at various dates through 2050. For the three months ended March 31, 2026 and 2025, we recognized $40,310,000 and $42,508,000, respectively, of revenues related to operating lease payments, of which $9,748,000 and $9,741,000, respectively, was for variable lease payments. As of March 31, 2026, the following table sets forth the undiscounted cash flows for future minimum base rents due under operating leases for the remaining nine months ending December 31, 2026 and for each of the next four years ending December 31 and thereafter for properties that we wholly own (in thousands):
88,027
113,863
104,281
92,903
81,234
437,709
918,017
Lessee
We lease certain land, buildings, campuses, office equipment and automobiles. We have lease agreements with lease and non-lease components, which are generally accounted for separately. Most leases include one or more options to renew, with renewal terms that generally can extend at various dates through 2107, excluding extension options. The exercise of lease renewal options is at our sole discretion. Certain leases also include options to purchase the leased property.
The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. Certain of our lease agreements include rental payments that are adjusted periodically based on the United States Bureau of Labor Statistics’ Consumer Price Index and may also include other variable lease costs (i.e., common area maintenance, property taxes and insurance). Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.
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The components of lease costs were as follows (in thousands):
Lease Cost
Classification
Operating lease cost(1)
Property operating expenses, rental expenses or general and administrative expenses
8,197
8,941
Finance lease cost:
Amortization of leased assets
Interest on lease liabilities
Interest expense
Sublease income
Resident fees and services revenue or other income
(53
(141
Total lease cost
8,152
8,821
Additional information related to our leases for the periods presented below was as follows (dollars in thousands):
Lease Term and Discount Rate
Weighted average remaining lease term (in years):
Operating leases
11.4
Finance leases
3.3
3.6
Weighted average discount rate:
5.85
%
11.25
Supplemental Disclosure of Cash Flows Information
Operating cash outflows related to finance leases
Financing cash outflows related to finance leases
Right-of-use assets obtained in exchange for operating lease liabilities
1,281
Operating Leases
As of March 31, 2026, the following table sets forth the undiscounted cash flows of our scheduled obligations for future minimum payments for the remaining nine months ending December 31, 2026 and for each of the next four years ending December 31 and thereafter, as well as the reconciliation of those cash flows to operating lease liabilities on our accompanying condensed consolidated balance sheet (in thousands):
21,326
29,138
29,467
28,563
26,673
68,862
Total undiscounted operating lease payments
204,029
Less: interest
(73,223
Present value of operating lease liabilities
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Finance Leases and Financing Obligations
As of March 31, 2026, the following table sets forth the undiscounted cash flows of our scheduled obligations for future minimum payments for the remaining nine months ending December 31, 2026 and for each of the next four years ending December 31 and thereafter, as well as a reconciliation of those cash flows to finance lease liabilities and financing obligations (in thousands):
3,111
3,905
3,556
32,458
92
Total undiscounted payments
43,122
(9,447
Present value of finance lease liabilities and financing obligations
15. Segment Reporting
Our chief operating decision maker, or CODM, who is our Interim Chief Executive Officer and President, evaluates our business and makes resource allocations based on four operating segments: ISHC, OM, SHOP and triple-net leased properties. These operating segments are also our reportable segments.
Our ISHC each provide a range of independent living, assisted living, memory care, skilled nursing services and certain ancillary businesses that are owned and operated utilizing a RIDEA structure. Our OM buildings 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 SHOP segment includes senior housing, which may provide assisted living care, independent living, memory care or skilled nursing services, that are owned and operated utilizing a RIDEA structure. 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 three months ended March 31, 2026, we reclassified two senior housing properties from our SHOP reportable segment to our ISHC reportable segment to align the properties that are operated 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 months ended March 31, 2025, 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,
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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 months ended March 31, 2026 and 2025 was as follows (in thousands):
Triple-NetLeasedProperties
30,842
10,165
Less(1):
Compensation expense
257,373
47,653
Controllable expenses(2)
154,273
28,510
Non-controllable expenses(3)
12,577
5,024
Facility rental expense(4)
6,761
Other segment items(5)
12,124
976
Segment net operating income
71,759
25,837
18,718
9,189
125,503
Gain in fair value of derivative financial instruments
Impairment of real estate investment
Income from unconsolidated entities
Foreign currency loss
Income before income taxes
Income tax benefit
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Three Months EndedMarch 31, 2025
33,194
10,233
218,779
34,006
137,160
19,191
12,263
3,525
7,499
12,685
958
52,991
11,762
20,509
9,275
94,537
Loss in fair value of derivative financial instruments
Loss on dispositions of real estate investments
Loss from unconsolidated entities
Foreign currency gain
Loss before income taxes
Income tax expense
Total assets by reportable segment as of March 31, 2026 and December 31, 2025 were as follows (in thousands):
2,718,571
2,686,143
1,426,363
1,273,714
1,041,285
1,048,810
393,010
393,952
19,429
23,607
26
As of both March 31, 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):
United States
649,107
539,049
International
1,554
The following is a summary of real estate investments, net by geographic regions as of March 31, 2026 and December 31, 2025 (in thousands):
Real estate investments, net:
4,277,832
4,140,169
42,079
43,250
16. Concentration of Credit Risk
Financial instruments that potentially subject us to a concentration of credit risk are primarily our debt security investment, cash and cash equivalents, restricted cash and accounts and other receivables. We are exposed to credit risk with respect to our debt security investment, but we believe collection of the outstanding amount is probable. Cash and cash equivalents are generally invested in investment-grade, short-term instruments with a maturity of three months or less when purchased. We have cash and cash equivalents in financial institutions that are insured by the Federal Deposit Insurance Corporation, or FDIC. As of March 31, 2026 and December 31, 2025, we had cash and cash equivalents in excess of FDIC insured limits. We believe this risk is not significant. Concentration of credit risk with respect to accounts receivable from tenants and residents is limited. We perform credit evaluations of prospective tenants and security deposits are obtained at the time of property acquisition and upon lease execution.
Based on leases as of March 31, 2026, properties in two states in the United States accounted for 10% or more of our total consolidated property portfolio’s annualized base rent or annualized NOI, which is based on contractual base rent from leases in effect for our non-RIDEA properties and annualized NOI for our ISHC and SHOP as of March 31, 2026. Properties located in Indiana and Ohio accounted for 35.6% and 13.7%, respectively, of our total consolidated property portfolio’s annualized base rent or annualized NOI. Accordingly, there is a geographic concentration of risk subject to fluctuations in each state’s economy.
Based on leases in effect as of March 31, 2026, our ISHC, SHOP, OM and triple-net leased properties accounted for 58.3%, 19.2%, 16.5% and 6.0%, respectively, of our total consolidated property portfolio’s annualized base rent or annualized NOI. As of March 31, 2026, none of our tenants at our properties accounted for 10% or more of our total consolidated property portfolio’s annualized base rent or annualized NOI.
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17. Earnings Per Share
The following table presents the amounts used in computing our basic and diluted earnings per share (in thousands, except share and per share amounts):
Numerator:
Net income (loss) attributable to controlling interest — basic
Adjustment for net loss allocated to participating securities
(1
Net income (loss) attributable to controlling interest — diluted
23,712
Denominator:
Denominator for basic earnings per share — weighted average shares
Effect of dilutive securities:
Nonvested restricted common stock and stock units
550,804
ESPP
273
Forward equity sale agreements
99,848
Denominator for diluted earnings per share — adjusted weighted average shares
Basic earnings per share:
Diluted earnings per share:
Basic earnings (loss) per share for all periods presented are computed by dividing net income (loss) applicable to common stock by the weighted average number of shares of our common stock outstanding during the period. Diluted earnings (loss) per share are computed based on the weighted average number of shares of our common stock and all dilutive securities, if any. TBUs, RSAs, limited OP units, as well as common stock issued pursuant to the ESPP, the Manager Plan and forward sale agreements, give rise to potentially dilutive shares of our common stock.
The following securities were excluded from the computation of diluted earnings (loss) per share because such securities were anti-dilutive during the periods presented below:
Nonvested TBUs
443,835
Nonvested RSAs
758,066
Limited OP units
1,936,425
2,004,216
Forward sale agreements
5,577,147
For the three months ended March 31, 2026 and 2025, 604,294 and 424,788 nonvested PBUs, respectively, were treated as contingently issuable shares pursuant to ASC Topic 718, Compensation — Stock Compensation. Such contingently issuable shares were excluded from the computation of diluted earnings (loss) per share because they were anti-dilutive during the period.
18. Subsequent Event
2026 Credit Facility
On April 1, 2026, we, through our operating partnership, as borrower, and certain of our subsidiaries, or the subsidiary guarantors, and our company, collectively as guarantors, entered into the Second Amendment to the 2024 Credit Agreement with Bank of America, as administrative agent and letters of credit issuer; Citizens Bank, Fifth Third Bank, National Association, and KeyBank as syndication agents for the revolving facility and the term loan facility and letters of credit issuers; and a syndicate of other
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banks, as lenders, to amend certain terms of the 2024 Credit Facility. Unless defined herein, all capitalized terms are as defined in the 2024 Credit Agreement as conformed through the Second Amendment, or the 2026 Credit Agreement.
The 2026 Credit Agreement provides for an amended revolving facility and term loan facility, or the 2026 Credit Facility, with: (i) Revolving Loans that mature on April 1, 2030, with two extension options to extend the maturity, first, until October 1, 2030, and, second, until April 1, 2031, in each case, subject to the satisfaction of certain conditions, including payment of an extension fee; and (ii) a Term Loan with a maturity date of January 19, 2027 that remains unchanged, and may not be extended. The principal amount of the Term Loan under the 2026 Credit Facility remains unchanged at $550,000,000, and the principal amount of the available Revolving Loans under the 2026 Credit Facility is increased to $800,000,000. The aggregate borrowing capacity under the 2026 Credit Facility is $1,350,000,000, which may be increased by an aggregate incremental amount such that after giving effect thereto, the maximum aggregate amount of Term Loans and available Revolving Loans does not exceed $1,850,000,000, subject to: (i) the terms of the 2026 Credit Agreement; and (ii) at least five business days’ prior written notice to Bank of America.
The 2026 Credit Facility bears interest at varying rates based upon, at our option, (i) the Daily Simple SOFR, plus the Applicable Rate for Daily SOFR Rate Loans or (ii) the Term Secured Overnight Financing Rate, or the Term SOFR, plus the Applicable Rate for Term SOFR Rate Loans. If, under the terms of the 2026 Credit Agreement, there is an inability to determine the Daily SOFR or the Term SOFR, then the 2026 Credit Facility will bear interest at a rate per annum equal to the Base Rate plus the Applicable Rate for Base Rate Loans. The loans may be repaid in whole or in part without prepayment premium or penalty, subject to certain conditions.
Under the 2026 Credit Agreement, we are required to pay a facility fee as determined in the Consolidated Leverage Ratio Based Pricing Grid or the Debt Ratings Based Pricing Grid, as applicable depending on how the Applicable Rate is then determined, multiplied by the actual daily amount of the Aggregate Revolving Commitments, or, if the Aggregate Revolving Commitments have terminated, the Outstanding Amount of all Revolving Loans and L/C Obligations, regardless of usage.
The 2026 Credit Agreement requires us to add additional subsidiaries as guarantors in the event the value of the assets owned by the subsidiary guarantors falls below a certain threshold as set forth in the 2026 Credit Agreement. In the event of default, Bank of America has the right to terminate the commitment of each Lender to make Loans and any obligation of the L/C Issuer to make L/C Credit Extensions under the 2026 Credit Agreement, and to accelerate the payment on any unpaid principal amount of all outstanding loans and all interest accrued and unpaid thereon.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to promote understanding of our results of operations and financial condition. Such discussion is provided as a supplement to, and should be read in conjunction with our accompanying condensed consolidated financial statements and notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q and in our 2025 Annual Report on Form 10-K, as filed with the United States Securities and Exchange Commission, or SEC, on February 27, 2026. Such condensed consolidated financial statements and information have been prepared to reflect our financial position as of March 31, 2026 and December 31, 2025, together with our results of operations and cash flows for the three months ended March 31, 2026 and 2025. Our results of operations and financial condition, as reflected in the accompanying condensed consolidated financial statements and related notes, are subject to management’s evaluation and interpretation of business conditions, changing capital market conditions, and other factors that could affect the on-going operations and occupancy of our tenants and residents.
Forward-Looking Statements
Certain statements contained in this report, other than historical facts, may be considered forward-looking statements within the meaning of Section 27A of the Securities Act, Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and the Private Securities Litigation Reform Act of 1995 (collectively with the Securities Act and Exchange Act, or the “Acts”). We intend for all such forward-looking statements to be covered by the applicable safe harbor provisions for forward-looking statements contained in the Acts. Such forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “will,” “can,” “expect,” “intend,” “anticipate,” “estimate,” “believe,” “continue,” “possible,” “initiatives,” “focus,” “seek,” “objective,” “goal,” “strategy,” “plan,” “potential,” “potentially,” “preparing,” “projected,” “future,” “long-term,” “once,” “should,” “could,” “would,” “might,” “uncertainty,” or other similar words. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date this report is filed with the SEC.
Any such forward-looking statements are based on current expectations, estimates and projections about the industry and markets in which we operate, and beliefs of, and assumptions made by, our management and involve uncertainties that could significantly affect our financial results. Such statements include, but are not limited to: (i) statements about our plans, strategies, initiatives and prospects, including any future capital-raising initiatives and planned or future acquisitions or dispositions of properties and other assets; and (ii) statements about our future results of operations, capital expenditures and liquidity. Such statements are subject to known and unknown risks and uncertainties, which could cause actual results to differ materially from those projected or anticipated, including, without limitation: changes in economic conditions generally and the real estate market specifically; legislative and regulatory changes, including changes to laws governing the taxation of real estate investment trusts, or REITs, and regulations or proposed regulations governing the operations and sales of healthcare properties; the availability of capital; our ability to pay down, refinance, restructure or extend our indebtedness as it becomes due; our ability to maintain our qualification as a REIT for U.S. federal income tax purposes; changes in interest rates, and foreign currency risk; competition in the real estate industry; changes in accounting principles generally accepted in the United States of America, or GAAP, policies and guidelines applicable to REITs; the success of our investment strategy; cybersecurity incidents and information technology failures, including unauthorized access to our computer systems and/or our vendors’ computer systems and our third-party management companies’ computer systems and/or their vendors’ computer systems; our ability to retain our executive officers and key employees; our ability to settle outstanding forward sale agreements; unexpected labor costs and inflationary pressures; changing macroeconomic, domestic legal and fiscal policies and geopolitical conditions; and those risks identified in Item 1A, Risk Factors in our 2025 Annual Report on Form 10-K, as filed with the SEC on February 27, 2026, this Quarterly Report on Form 10-Q, and any future filings we make with the SEC. These risks and uncertainties should be considered in evaluating forward-looking statements, and undue reliance should not be placed on such statements. Forward-looking statements in this Quarterly Report on Form 10-Q speak only as of the date on which such statements are made, and undue reliance should not be placed on such statements. We undertake no obligation to update any such statements that may become untrue because of subsequent events. Additional information concerning us and our business, including additional factors that could materially affect our financial results, is included herein and in our other filings with the SEC.
American Healthcare REIT, Inc., a Maryland corporation, is a self-managed REIT that acquires, owns and operates a diversified portfolio of clinical healthcare real estate properties, focusing primarily on senior housing, skilled nursing facilities, or SNFs, outpatient medical, or OM, buildings, and other healthcare-related facilities. We have built a fully-integrated management platform that operates clinical healthcare properties throughout the United States, and in the United Kingdom and the Isle of Man. We own and operate our integrated senior health campuses, or ISHC, and senior-housing operating properties, or SHOP, utilizing the structure permitted by the REIT Investment Diversification and Empowerment Act of 2007, which is commonly referred to as a “RIDEA” structure. We have also originated and acquired secured loans and may acquire other real estate-related investments in the future on an infrequent and opportunistic basis. We generally seek investments that produce current income; however, we have selectively developed, and may continue to selectively develop, healthcare real estate properties. We have elected to be taxed as a REIT for U.S. federal income tax purposes. We believe that we have been organized and operated, and we intend to continue to operate, in conformity with the requirements for qualification and taxation as a REIT under the Internal Revenue Code of 1986, or the Code.
We conduct substantially all of our operations through American Healthcare REIT Holdings, LP, or our operating partnership, and we are the sole general partner of our operating partnership. As of both March 31, 2026 and December 31, 2025, we owned 99.0% of the operating partnership units, or OP units, in our operating partnership, and the remaining 1.0% of the OP units were owned by the following limited partners: (i) AHI Group Holdings, LLC, which is owned and controlled by Jeffrey T. Hanson, our Chairman of the Board of Directors and Interim Chief Executive Officer and President, Danny Prosky, our Chief Executive Officer, President and director, who is currently taking a leave of absence from his executive role for medical reasons, and Mathieu B. Streiff, one of our independent directors; and (ii) a wholly-owned subsidiary of Griffin Capital Company, LLC.
Critical Accounting Estimates
Our accompanying condensed consolidated financial statements are prepared in conformity with GAAP, which requires management to make estimates and assumptions that affect the amounts reported in our financial statements and accompanying footnotes. These estimates are made and evaluated on an on-going basis using information that is currently available, as well as various other assumptions believed to be reasonable under the circumstances. Actual results could differ from those estimates, perhaps in material adverse ways, and those estimates could be different under different assumptions or conditions. The complete listing of our Critical Accounting Estimates was previously disclosed in our 2025 Annual Report on Form 10-K, as filed with the SEC on February 27, 2026, and there have been no material changes to our Critical Accounting Estimates as disclosed therein, except as included within Note 2, Summary of Significant Accounting Policies, to our accompanying condensed consolidated financial statements.
For a discussion of interim unaudited financial data, see Note 2, Summary of Significant Accounting Policies — Interim Unaudited Financial Data, to our accompanying condensed consolidated financial statements. Our accompanying condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and the notes thereto included in our 2025 Annual Report on Form 10-K, as filed with the SEC on February 27, 2026.
Acquisitions in 2026
For a discussion of our acquisitions of investments in 2026, see Note 3, Real Estate Investments, to our accompanying condensed consolidated financial statements.
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Factors Which May Influence Results of Operations
Other than the effects of inflation discussed below, as well as other national economic conditions affecting real estate generally, and as otherwise disclosed in our risk factors, we are not aware of any material trends or uncertainties that may reasonably be expected to have a material impact, favorable or unfavorable, on revenues or income from the acquisition, disposition, management and operation of our properties. For a further discussion of these and other factors that could impact our future results or performance, see “Forward-Looking Statements” above and Part II, Item 1A, Risk Factors, of this Quarterly Report on Form 10-Q and those Risk Factors previously disclosed in our 2025 Annual Report on Form 10-K, as filed with the SEC on February 27, 2026.
Inflation
During the three months ended March 31, 2026 and 2025, inflation has affected our operations. The annual rate of inflation in the United States was 3.3% in March 2026 and 2.4% in March 2025, as measured by the Consumer Price Index. We believe inflation has impacted our operations such that we have experienced, and continue to experience, increases in the cost of labor, services, energy and supplies, and therefore continued inflationary pressures on our ISHC and SHOP could continue to impact our profitability in future periods. To offset the impact of inflation on the cost of labor and services, our RIDEA managers may have billed higher than average annual rent and care fee increases for existing residents in 2025 and 2026, as compared to prior years, while adjusting market rates as frequently as needed based on competitor pricing and market conditions. We believe this practice will improve operating performance in our ISHC and SHOP, as well as increase rent coverage and the stability of our real estate revenue in our triple-net leased properties over time.
For properties that are not operated under a RIDEA structure, there are provisions in the majority of our tenant leases that help us mitigate the impact of inflation. These provisions include negotiated rental increases, which historically range from 2% to 3% per year, reimbursement billings for operating expense pass-through charges and real estate tax and insurance reimbursements. However, due to the long-term nature of existing leases, among other factors, the leases may not reset frequently enough to cover inflation.
In addition, inflation has also caused an increase in the cost of our variable-rate debt due to historically rising interest rates. See Item 3, Quantitative and Qualitative Disclosures About Market Risk — Interest Rate Risk, of this Quarterly Report on Form 10-Q for a further discussion.
Scheduled Lease Expirations
Excluding our ISHC and SHOP, as of March 31, 2026, our properties were 90.7% leased, and, during the remainder of 2026, 4.8% of the leased GLA is scheduled to expire. Our leasing strategy focuses on negotiating renewals for leases scheduled to expire during the next 12 months. In the future, if we are unable to negotiate renewals, we will try to identify new tenants or collaborate with existing tenants who are seeking additional space to occupy. As of March 31, 2026, our remaining weighted average lease term was 6.7 years, excluding our ISHC and SHOP.
Our combined ISHC and SHOP were 89.8% leased as of March 31, 2026. Substantially all of our leases with residents at such properties are for a term of one year or less.
Results of Operations
Comparison of Three Months Ended March 31, 2026 and 2025
Our operating results are primarily comprised of income derived from our portfolio of properties and expenses in connection with the acquisition and operation of such properties. Our primary sources of revenue include rent generated by our leased, non-RIDEA properties and resident fees and services revenue from our RIDEA properties. Our primary expenses include property operating expenses and rental expenses. In general, we expect such revenues and expenses related to our portfolio of RIDEA properties to increase in the future due to an overall increase in occupancies, resident fees and pricing of care services provided.
We segregate our operations into reporting segments in order to assess the performance of our business in the same way that management reviews our performance and makes operating decisions. As of March 31, 2026, we operated through four reportable business segments: ISHC, OM, SHOP and triple-net leased properties. During the three months ended March 31, 2026, we reclassified two senior housing properties from our SHOP segment to our ISHC segment to align the properties that are operated by Trilogy Management Services, LLC within ISHC. Prior-period segment results discussed below have been recast to conform to the current-period presentation, and the reclassification did not affect consolidated results.
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The most significant drivers behind changes in our consolidated results of operations for the three months ended March 31, 2026 compared to the corresponding period in 2025 were primarily due to: our increase in resident occupancies and billing rates; the adverse impact of inflation, which resulted in increases in the cost of labor, services, energy and supplies; and our acquisitions and dispositions of investments. Additional information behind the changes in our consolidated results of operations is discussed in more detail below. See Note 3, Real Estate Investments, to our accompanying condensed consolidated financial statements for a further discussion of our acquisitions during 2026. As of March 31, 2026 and 2025, we owned and/or operated the following types of properties (dollars in thousands):
March 31,
Number of Buildings/Campuses
Aggregate Contract Purchase Price
Leased % (1)
149
2,509,296
90.2
127
2,051,065
88.4
101
1,638,957
88.9
81
894,407
85.7
74
1,090,167
88.2
84
1,205,145
87.4
368,665
100
373,165
Total/weighted average(2)
343
5,607,085
90.7
312
4,523,782
89.9
Revenues
Our primary sources of revenue include resident fees and services revenue generated by our RIDEA properties and rent from our leased, non-RIDEA properties. For the three months ended March 31, 2026 and 2025, resident fees and services revenue primarily consisted of rental fees related to resident leases, extended healthcare fees and other ancillary services, and real estate revenue primarily consisted of base rent and expense recoveries. The amount of revenues generated by our RIDEA properties depends principally on our ability to maintain resident occupancy rates. The amount of revenues generated by our non-RIDEA properties is dependent on our ability to maintain tenant occupancy rates of currently leased space and to lease available space at the then existing rental rates. Revenues by reportable segment consisted of the following for the periods presented below (in thousands):
Resident Fees and Services Revenue
Total resident fees and services revenue
Real Estate Revenue
Total real estate revenue
For our ISHC segment, we increased resident fees and services revenue by $74,051,000 for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, primarily due to: (i) increased resident occupancy, a more favorable payor mix and higher resident fees as a result of an increase in billing rates and levels of care service; (ii) an increase of $19,618,000 due to the acquisition in July 2025 of nine senior housing properties located in Ohio, Michigan and Kentucky; and (iii) an increase of $34,438,000 due to the acquisition in December 2025 of 14 senior housing properties located in Ohio, Indiana, New Mexico and North Carolina.
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For our SHOP segment, resident fees and services revenue increased $38,540,000 for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, primarily due to: (i) an increase of $3,419,000 due to the acquisition of one senior housing property in Virginia in April 2025; (ii) an increase of $3,904,000 due to the acquisition of three senior housing properties in Minnesota and Idaho in the third quarter 2025; (iii) an increase of $22,676,000 due to the acquisition of 10 senior housing properties in California, Minnesota, Pennsylvania, Utah and Wisconsin in the fourth quarter of 2025; (iv) an increase of $6,924,000 due to the acquisition of seven senior housing properties in California, Kansas and Missouri in the first quarter of 2026; and (v) increased resident occupancy and higher resident fees as a result of an increase in billing rates.
Property Operating Expenses and Rental Expenses
ISHC and SHOP typically have a higher percentage of direct operating expenses to revenue than OM buildings and triple-net leased properties due to the nature of RIDEA-type facilities where we conduct day-to-day operations. Property operating expenses and property operating expenses as a percentage of resident fees and services revenue, as well as rental expenses and rental expenses as a percentage of real estate revenue, by reportable segment consisted of the following for the periods presented below (dollars in thousands):
Property Operating Expenses
430,984
85.7%
375,701
87.6%
81,187
75.9%
56,722
82.8%
Total property operating expenses
84.0%
87.0%
Rental Expenses
39.3%
38.2%
9.6%
9.4%
Total rental expenses
31.9%
31.4%
For our ISHC segment, total property operating expenses increased by $55,283,000 for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, primarily due to: (i) increased resident occupancy and levels of care services at the facilities within such segment, thereby increasing labor costs and other operating expenses; (ii) an increase of $16,383,000 due to the acquisition in July 2025 of nine senior housing properties located in Ohio, Michigan and Kentucky; and (iii) an increase of $31,047,000 due to the acquisition in December 2025 of 14 senior housing properties located in Ohio, Indiana, New Mexico and North Carolina.
For our SHOP segment, total property operating expenses increased by $24,465,000 for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, primarily due to: (i) an increase of $1,857,000 due to the acquisition of one senior housing property located in Virginia in April 2025; (ii) an increase of $2,870,000 due to the acquisitions of three senior housing properties in Minnesota and Idaho in the third quarter 2025; (iii) an increase of $14,861,000 due to the acquisition of 10 senior housing properties in California, Minnesota, Pennsylvania, Utah and Wisconsin in the fourth quarter of 2025; (iv) an increase of $5,638,000 due to the acquisition of seven senior housing properties in California, Kansas and Missouri in the first quarter of 2026; and (v) increased occupancy at the facilities within such segment, which resulted in increasing labor costs from additional staffing and other operating expenses.
Depreciation and Amortization
For the three months ended March 31, 2026 and 2025, depreciation and amortization was $67,062,000 and $41,114,000, respectively, which primarily consisted of depreciation on our operating properties of $44,756,000 and $36,577,000, respectively, and amortization of our identified intangible assets of $21,568,000 and $3,823,000, respectively. For the three months ended March 31, 2026 as compared to the three months ended March 31, 2025, depreciation and amortization increased by $25,948,000, primarily attributable to the amortization of in-place leases due to property acquisitions since 2025.
34
Interest Expense
Interest expense, including gain or loss in fair value of derivative financial instruments, consisted of the following for the periods presented below (in thousands):
10,208
10,647
Lines of credit and term loan and derivative financial instruments
7,245
9,650
Amortization of deferred financing costs:
319
626
Amortization of debt discount/premium, net
(Gain) loss in fair value of derivative financial instruments
Loss on debt and derivative extinguishments
508
Interest on finance lease liabilities
Interest expense on financing obligations and other liabilities
696
690
Capitalized interest
(644
(97
17,269
23,695
The decrease in total interest expense for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, was primarily due to the $2,405,000 decrease in interest expense related to a decrease in debt balances on our revolving line of credit during 2025. Such decrease was primarily a result of the paydown of our variable-rate lines of credit using net proceeds raised from our equity offerings during 2025 and cash flow from operations. The decrease in total interest expense for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, was also driven by a $2,277,000 change from loss to gain in fair value of derivative financial instruments.
As we continued to evaluate our properties based on their historical operating performance and our expected holding period, for the three months ended March 31, 2026, we recognized an impairment charge of $418,000 for one OM building. For the three months ended March 31, 2025, we determined that one of our OM buildings was impaired and recognized an impairment charge of $21,706,000. See Note 3, Real Estate Investments — Impairment of Real Estate Investments, to our accompanying condensed consolidated financial statements for a further discussion.
Liquidity and Capital Resources
Our principal sources of liquidity are cash flows from operations, net proceeds from the issuances of equity securities, including through the 2026 ATM Offering (as defined and described at Note 11, Equity — Common Stock, to our accompanying condensed consolidated financial statements), and borrowings under our lines of credit. For the next 12 months, our principal liquidity needs are to: (i) fund property operating expenses and general and administrative expenses; (ii) meet our debt service requirements (including principal and interest); (iii) fund the acquisition of real estate investments, development activities and capital expenditures; and (iv) make distributions to our stockholders, as required for us to continue to qualify as a REIT. We believe that the sources of liquidity described above will be sufficient to satisfy our cash requirements for the next 12 months and thereafter. We do not have any material off-balance sheet arrangements that we expect would materially affect our liquidity and capital resources.
35
Material Cash Requirements
Capital Improvement Expenditures
A capital plan for each investment is established upon acquisition that contemplates the estimated capital needs of that investment, including 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 operating cash generated by the investment, capital reserves, a line of credit or other loan established with respect to the investment, other borrowings or additional equity investments from us and joint venture partners. The capital plan for each investment is adjusted through on-going, regular reviews of our portfolio or as necessary to respond to unanticipated additional capital needs. As of March 31, 2026, we had $11,597,000 of restricted cash in loan impounds and reserve accounts to fund a portion of such capital expenditures. Based on the budget for the properties we owned as of March 31, 2026, we estimate that expenditures for capital and tenant improvements as of such date will be approximately $71,789,000 for the remaining nine months of 2026, although actual expenditures are predominantly discretionary and are dependent on many factors which are not presently known.
Contractual Obligations
The following table provides information with respect to: (i) the maturity and scheduled principal repayment of our secured mortgage loans payable and lines of credit and term loan; (ii) interest payments on our mortgage loans payable and lines of credit and term loan, excluding the effect of our interest rate swaps; (iii) operating lease obligations; and (iv) financing and other obligations as of March 31, 2026 (in thousands):
Payments Due by Period
2027-2028
2029-2030
Principal payments — fixed-rate debt
195,922
61,695
Interest payments — fixed-rate debt
25,612
55,169
45,341
298,626
424,748
Principal payments — variable-rate debt
550,000
Interest payments — variable-rate debt (based on rates in effect as of March 31, 2026)
20,923
1,370
22,293
Operating lease obligations
58,605
55,236
Financing and other obligations
7,461
32,550
225,139
868,527
194,822
935,749
2,224,237
Distributions
For information on distributions, see the “Distributions” section below.
Credit Facilities
As of March 31, 2026, we were party to a credit agreement, as amended, with an aggregate maximum principal amount up to $1,150,000,000, or the 2024 Credit Facility. On April 1, 2026, we, through our operating partnership, entered into an amendment to the 2024 Credit Facility, which increased the aggregate maximum principal amount of such facility to $1,350,000,000, or the 2026 Credit Facility. In addition, we are party to an agreement regarding a senior secured revolving credit facility with an aggregate maximum principal amount of $50,000,000, or the 2025 Trilogy Credit Facility. See Note 8, Lines of Credit and Term Loan, and Note 18, Subsequent Event — 2026 Credit Facility, to our accompanying condensed consolidated financial statements for a further discussion.
As of March 31, 2026, our aggregate borrowing capacity under the 2024 Credit Facility and the 2025 Trilogy Credit Facility was $1,200,000,000. As of March 31, 2026, our aggregate borrowings outstanding under such credit facilities was $550,000,000, and we had $650,000,000 available on such facilities. We believe that such resources will be sufficient to satisfy our cash requirements for the next 12 months and the longer term thereafter.
Cash Flows
The following table sets forth changes in cash flows (in thousands):
Cash, cash equivalents and restricted cash — beginning of period
Effect of foreign currency translation on cash, cash equivalents and restricted cash
Cash, cash equivalents and restricted cash — end of period
The following summary discussion of our changes in our cash flows is based on our accompanying condensed consolidated statements of cash flows and is not meant to be an all-inclusive discussion of the changes in our cash flows for the periods presented below.
Operating Activities
For the three months ended March 31, 2026 and 2025, cash flows from operating activities were primarily related to property operations, offset by payments of general and administrative expenses and interest payments on our outstanding indebtedness. In general, cash flows from operating activities are affected by the timing of cash receipts and payments, and have increased since 2025 primarily due to improved resident occupancy, an increase in billing rates and expense management at our properties operated under a RIDEA structure, as well as a decrease in interest paid on our outstanding indebtedness as a result of mortgage loan payoffs and paydowns on our lines of credit using net proceeds from our equity offerings in 2025. See the “Results of Operations” section above for a further discussion.
Investing Activities
For the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, the increase in net cash used in investing activities was primarily due to a $149,495,000 increase in cash paid to acquire real estate investments and a $17,136,000 increase in developments and capital expenditures.
Financing Activities
For the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, the change from net cash used in financing activities to net cash provided by financing activities was primarily due to a $143,886,000 increase in gross equity offering proceeds and a $21,996,000 decrease in net payments on our lines of credit and mortgage loans payable primarily using the net proceeds from equity offerings. Such amounts were partially offset by a $7,819,000 increase in payments to taxing authorities in connection with common stock directly withheld from employees and a $7,274,000 increase in distributions paid.
Our board of directors, or our board, shall authorize distributions, if any, on a quarterly basis, in such amounts as our board shall determine, and each quarterly record date for the purposes of such distributions shall be determined and authorized by our board in the last month of each calendar quarter until such time as our board changes our distribution policy. Our board has authorized a quarterly distribution equal to $0.25 per share to holders of our common stock, which we expect will continue to be paid in the future, though we cannot guarantee that our distributions will continue at the current value or at all. Such quarterly distributions were equal to an annualized distribution rate of $1.00 per share and paid in cash, only from legally available funds.
The amount of the quarterly distributions paid to our common stockholders was determined by our board and was dependent on a number of factors, including funds available for payment of distributions, our financial condition, capital expenditure requirements and annual distribution requirements needed to maintain our qualification as a REIT under the Code. As of March 31, 2026, any distributions of amounts in excess of our current and accumulated earnings and profits have resulted in a return of capital to our stockholders, and some portion of a distribution to our stockholders may have been paid from borrowings.
Financing
Mortgage Loans Payable, Net
For a discussion of our mortgage loans payable, see Note 7, Mortgage Loans Payable, to our accompanying condensed consolidated financial statements.
37
Lines of Credit and Term Loan
For a discussion of our lines of credit and term loan, see Note 8, Lines of Credit and Term Loan, and Note 18, Subsequent Event — 2026 Credit Facility, to our accompanying condensed consolidated financial statements.
REIT Requirements
In order to maintain our qualification as a REIT for U.S. federal income tax purposes, we are required to distribute to our stockholders a minimum of 90.0% of our REIT taxable income. Existing Internal Revenue Service, or IRS, guidance includes a safe harbor pursuant to which publicly offered REITs can satisfy the distribution requirement by distributing a combination of cash and stock to stockholders. In general, to qualify under the safe harbor, each stockholder must elect to receive either cash or stock, and the aggregate cash component of the distribution to stockholders must represent at least 20.0% of the total distribution. In the event that there is a shortfall in net cash available due to factors including, without limitation, the timing of such distributions or the timing of the collection of receivables, we may seek to obtain capital to make distributions by means of unsecured and secured debt financing through one or more unaffiliated third parties. We may also make distributions with cash from capital transactions including, without limitation, the sale of one or more of our properties.
Commitments and Contingencies
For a discussion of our commitments and contingencies, See Note 10, Commitments and Contingencies, to our accompanying condensed consolidated financial statements.
Debt Service Requirements
A significant liquidity need is the payment of principal and interest on our outstanding indebtedness. As of March 31, 2026, we had $980,045,000 of fixed-rate mortgage loans payable outstanding secured by our properties. As of March 31, 2026, we had $550,000,000 outstanding, and $650,000,000 remained available under our lines of credit. The weighted average effective interest rate on our outstanding debt, factoring in our interest rate swaps, was 4.14% per annum as of March 31, 2026. See Note 7, Mortgage Loans Payable, and Note 8, Lines of Credit and Term Loan, to our accompanying condensed consolidated financial statements.
We are required by the terms of certain loan documents to meet various financial and non-financial covenants, such as leverage ratios, net worth ratios, debt service coverage ratios and fixed charge coverage ratios. As of March 31, 2026, we were in compliance with all such covenants and requirements on our mortgage loans payable and our lines of credit and term loan. If any future covenants are violated, we anticipate seeking a waiver or amending the debt covenants with the lenders when and if such event should occur. However, there can be no assurances that management will be able to effectively achieve such plans.
Funds from Operations and Normalized Funds from Operations
Due to certain unique operating characteristics of real estate companies, the National Association of Real Estate Investment Trusts, or NAREIT, an industry trade group, has promulgated a measure known as funds from operations, a non-GAAP financial measure, which we believe to be an appropriate supplemental performance measure to reflect the operating performance of a REIT. The use of funds from operations is recommended by the REIT industry as a supplemental performance measure, and our management uses FFO to evaluate our performance over time. FFO is not equivalent to our net income (loss) as determined under GAAP.
Our FFO calculation complies with NAREIT’s policy, under which we define FFO, a non-GAAP financial measure, as net income (loss) computed in accordance with GAAP, excluding gains or losses from sales of certain real estate assets, gains or losses upon consolidation of a previously held equity interest, and impairment writedowns of certain real estate assets and investments, plus depreciation and amortization related to real estate, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect funds from operations.
Historical accounting for real estate involves the use of GAAP. Any other method of accounting for real estate such as the fair value method cannot be construed to be any more accurate or relevant than the comparable methodologies of real estate valuation found in GAAP. Nevertheless, we believe that the use of FFO, which excludes the impact of real estate-related depreciation and amortization and impairments, provides a further understanding of our operating performance to investors, industry analysts and our management, and when compared year over year, reflects the impact on our operations from trends in occupancy rates, rental rates, operating costs, general and administrative expenses and interest costs, which may not be immediately apparent from net income (loss).
We define normalized FFO attributable to controlling interest, or Normalized FFO, as FFO further adjusted for the following items included in the determination of GAAP net income (loss): transaction, transition and restructuring costs; amounts relating to changes in deferred rent and amortization of above- and below-market leases; the non-cash impact of changes to our equity instruments; non-cash or non-recurring income or expense; the non-cash effect of income tax benefits or expenses; capitalized interest; impairment of intangible assets and goodwill; amortization of closing costs on debt security investments; mark-to-market adjustments
38
included in net income (loss); gains or losses included in net income (loss) from the extinguishment or sale of debt, hedges, foreign exchange, derivatives or securities holdings where trading of such holdings is not a fundamental attribute of the business plan; and after adjustments for consolidated and unconsolidated partnerships and joint ventures, with such adjustments calculated to reflect Normalized FFO on the same basis.
However, FFO and Normalized FFO should not be construed to be more relevant or accurate than the current GAAP methodology in calculating net income (loss) as an indicator of our operating performance, GAAP cash flows from operations as an indicator of our liquidity or indicative of funds available to fund our cash needs, including our ability to make distributions to our stockholders. The method utilized to evaluate the value and performance of real estate under GAAP should be construed as a more relevant measure of operational performance and considered more prominently than the non-GAAP FFO and Normalized FFO measures and the adjustments to GAAP in calculating FFO and Normalized FFO. Presentation of this information is intended to provide useful information to investors, industry analysts and management as they compare the operating performance used by the REIT industry, although it should be noted that not all REITs calculate funds from operations and normalized funds from operations the same way, so comparisons with other REITs may not be meaningful. FFO and Normalized FFO should be reviewed in conjunction with other measurements as an indication of our performance. None of the SEC, NAREIT, or any other regulatory body has passed judgment on the acceptability of the adjustments that we use to calculate FFO or Normalized FFO.
The following is a reconciliation of net income or loss, which is the most directly comparable GAAP financial measure, to FFO and Normalized FFO for the periods presented below (in thousands):
Depreciation and amortization related to real estate — consolidated properties
66,993
41,015
Depreciation and amortization related to real estate — unconsolidated entities
497
Impairment of real estate investments — consolidated properties
Loss on dispositions of real estate investments, net — consolidated properties
Depreciation, amortization, impairments and net loss on dispositions — noncontrolling interests
(784
(892
NAREIT FFO attributable to controlling interest
90,354
55,881
Amortization of above- and below-market leases
330
413
Amortization of closing costs — debt security investment
Change in deferred rent
(582
(672
Non-cash impact of changes to equity instruments
Non-cash income tax benefit
Loss on debt extinguishments
Foreign currency loss (gain)
819
(1,416
Adjustments for unconsolidated entities
Adjustments for noncontrolling interests
(51
(50
Normalized FFO attributable to controlling interest
94,815
59,742
Net Operating Income
Net operating income, or NOI, is a non-GAAP financial measure that is defined as net income (loss), computed in accordance with GAAP, generated from properties before general and administrative expenses, transaction, transition and restructuring costs, depreciation and amortization, 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.
NOI is not equivalent to our net income (loss) as determined under GAAP and may not be a useful measure in measuring operational income or cash flows. Furthermore, NOI should not be considered as an alternative to net income (loss) as an indication of our operating performance or as an alternative to cash flows from operations as an indication of our liquidity. NOI should not be construed to be more relevant or accurate than the current GAAP methodology in calculating net income (loss). NOI should be reviewed in conjunction with other measurements as an indication of our performance.
We believe that NOI is an appropriate supplemental performance measure to reflect the performance of our operating assets because NOI excludes certain items that are not associated with the operations of our properties. We believe that NOI is a widely accepted measure of comparative operating performance in the real estate community and is useful to investors in understanding the profitability and operating performance of our property portfolio. 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 amount.
To facilitate understanding of this financial measure, the following is a reconciliation of net income or loss, which is the most directly comparable GAAP financial measure, to NOI for the periods presented below (in thousands):
18,796
22,945
(2,335
(1,525
Income tax (benefit) expense
(525
604
Net operating income
Subsequent Event
For a discussion of a subsequent event, see Note 18, Subsequent Event — 2026 Credit Facility, to our accompanying condensed consolidated financial statements.
40
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Market risk includes risks that arise from changes in interest rates, foreign currency exchange rates, commodity prices, equity prices and other market changes that affect market sensitive instruments. In pursuing our business plan, we expect that the primary market risk to which we will be exposed is interest rate risk. There were no material changes in our market risk exposures, or in the methods we use to manage market risk, from those that were provided for in our 2025 Annual Report on Form 10-K, as filed with the SEC on February 27, 2026.
Interest Rate Risk
We are exposed to the effects of interest rate changes primarily as a result of long-term debt used to acquire and develop properties and other investments. Our interest rate risk is monitored using a variety of techniques. Our interest rate risk management objectives are to limit the impact of interest rate increases on earnings, prepayment penalties and cash flows and to lower overall borrowing costs while taking into account variable interest rate risk. To achieve our objectives, we may borrow or lend at fixed or variable rates.
We have entered into, and may continue to enter into, derivative financial instruments, such as interest rate swaps and interest rate caps, in order to mitigate our interest rate risk on a related financial instrument. We have not elected, and may continue to not elect, to apply hedge accounting treatment to these derivatives; therefore, changes in the fair value of interest rate derivative financial instruments were recorded as a component of interest expense in gain or loss in fair value of derivative financial instruments in our accompanying condensed consolidated statements of operations and comprehensive income (loss). As of March 31, 2026, our interest rate swaps are recorded in other assets and other liabilities in our accompanying condensed consolidated balance sheet at their aggregate fair value of $598,000 and $0, respectively. We do not enter into derivative transactions for speculative purposes. For information on our interest rate swaps, see Note 9, Derivative Financial Instruments, and Note 12, Fair Value Measurements, to our accompanying condensed consolidated financial statements for a further discussion.
As of March 31, 2026, the table below presents the principal amounts and weighted average interest rates by year of expected maturity to evaluate the expected cash flows and sensitivity to interest rate changes, excluding the effect of our interest rate swaps (dollars in thousands):
Expected Maturity Date
Assets
Debt security held- to-maturity
93,433
Weighted average interest rate on maturing fixed -rate debt security
—%
4.24%
4.24
Liabilities
Fixed-rate debt — principal payments
Weighted average interest rate on maturing fixed- rate debt
3.02
3.51
4.40
3.36
4.51
3.74
Variable-rate debt — principal payments
Weighted average interest rate on maturing variable- rate debt (based on rates in effect as of March 31, 2026)
4.98
Debt Security Investment, Net
As of March 31, 2026, the net carrying value of our debt security investment was $92,304,000. As we expect to hold our debt security investment to maturity and the amounts due under such debt security investment are limited to the outstanding principal balance and any accrued and unpaid interest, we do not expect that fluctuations in interest rates, and the resulting change in fair value of our debt security investment, would have a significant impact on our operations. See Note 12, Fair Value Measurements, to our
accompanying condensed consolidated financial statements for a discussion of the fair value of our investment in a held-to-maturity debt security. The stated interest rate on our debt security investment was 4.24% per annum as of March 31, 2026.
Mortgage Loans Payable, Net and Lines of Credit and Term Loan
Mortgage loans payable were $980,045,000 ($962,375,000, net of discount/premium and deferred financing costs) as of March 31, 2026. As of March 31, 2026, we had 85 fixed-rate mortgage loans payable with effective interest rates ranging from 2.21% to 5.99% per annum and a weighted average effective interest rate of 3.73%. In addition, as of March 31, 2026, we had $550,000,000 ($549,818,000, net of deferred financing costs) outstanding under our lines of credit and term loan, at a weighted average interest rate of 4.98% per annum.
As of March 31, 2026, the weighted average effective interest rate on our outstanding debt, factoring in our fixed-rate interest rate swaps, was 4.14% per annum. An increase in the variable interest rate on our variable-rate lines of credit and term loan constitutes a market risk. As of March 31, 2026, a 0.50% increase in the market rates of interest would have no impact on our overall annualized interest expense as all variable-rate loan balances as of March 31, 2026 have interest rate swap arrangements in place. See Note 7, Mortgage Loans Payable, and Note 8, Lines of Credit and Term Loan, to our accompanying condensed consolidated financial statements.
Other Market Risk
In addition to changes in interest rates and foreign currency exchange rates, the value of our future investments is subject to fluctuations based on changes in local and regional economic conditions and changes in the creditworthiness of tenants and residents, which may affect our ability to refinance our debt if necessary.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms, and that such information is accumulated and communicated to us, including our Interim Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, we recognize that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, as ours are designed to do, and we necessarily are required to apply our judgment in evaluating whether the benefits of the controls and procedures that we adopt outweigh their costs.
As required by Rules 13a-15(b) and 15d-15(b) of the Exchange Act, an evaluation as of March 31, 2026 was conducted under the supervision and with the participation of our management, including our Interim Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on this evaluation, our Interim Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures, as of March 31, 2026, were effective at the reasonable assurance level.
Changes in Internal Control over Financial Reporting
There were no changes in internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that occurred during the fiscal quarter ended March 31, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Item 1. Legal Proceedings.
For a discussion of our legal proceedings, see Note 10, Commitments and Contingencies — Litigation, to our accompanying condensed consolidated financial statements.
Item 1A. Risk Factors.
There were no material changes from the risk factors previously disclosed in our 2025 Annual Report on Form 10-K, as filed with the SEC on February 27, 2026.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Purchase of Equity Securities by the Issuer and Affiliated Purchasers
During the three months ended March 31, 2026, we acquired shares of our common stock in order to satisfy employee tax withholding requirements associated with the vesting of restricted stock awards issued pursuant to the AHR Incentive Plan, as follows:
Period
Total Number of Shares Purchased
Average Price per Share (1)
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
Maximum Number (or Approximate Dollar Value) of Shares that May Yet be Purchased Under the Plans or Programs
January 1, 2026 to January 31, 2026
February 1, 2026 to February 28, 2026
85,085
48.77
March 1, 2026 to March 31, 2026
111,197
49.98
196,282
49.46
On March 31, 2026, we granted 45,267 time-based restricted stock units, or TBUs, to one of our RIDEA managers pursuant to the Manager Equity Plan, or the Manager Plan. See Note 11, Equity — Equity Compensation Plans — Manager Equity Plan. Such TBUs vest in three equal installments on each of March 1, 2027, March 1, 2028 and March 1, 2029 (subject to continuous service through each vesting date), and each such TBU represents the right to receive one share of our common stock upon vesting. The TBUs were issued in transactions exempt from registration pursuant to Section 4(a)(2) of the Securities Act.
On March 31, 2026, we granted 45,267 performance-based restricted stock units, or PBUs, representing the right to receive up to 70,662 shares of our common stock upon vesting (such number of shares assumes that we issue shares of our common stock underlying such nonvested performance-based awards at maximum levels for performance and market conditions that have not yet been achieved; to the extent that performance or market conditions do not meet maximum levels, the actual number of shares of our common stock issued under the Manager Plan would be less than the amount reflected above) to one of our RIDEA managers pursuant to the Manager Plan. Such PBUs will cliff vest on December 31, 2028 (subject to continuous service through that vesting date). The PBUs were issued in a transaction exempt from registration pursuant to Section 4(a)(2) of the Securities Act.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
Item 6. Exhibits.
The following exhibits are included, or incorporated by reference, in this Quarterly Report on Form 10-Q for the period ended March 31, 2026 (and are numbered in accordance with Item 601 of Regulation S-K).
3.1
Fourth Articles of Amendment and Restatement of Griffin-American Healthcare REIT IV, Inc., dated October 1, 2021 (included as Exhibit 3.1 to our Current Report on Form 8-K (File No. 000-55775) filed October 1, 2021 and incorporated herein by reference)
3.2
Articles of Amendment (Reverse Stock Split) of American Healthcare REIT, Inc., dated November 15, 2022 (included as Exhibit 3.1 to our Current Report on Form 8-K (File No. 000-55775) filed November 16, 2022 and incorporated herein by reference)
Articles of Amendment (Par Value Decrease) of American Healthcare REIT, Inc., dated November 15, 2022 (included as Exhibit 3.2 to our Current Report on Form 8-K (File No. 000-55775) filed November 16, 2022 and incorporated herein by reference)
3.4
Articles Supplementary (Common Stock Reclassification) of American Healthcare REIT, Inc., dated January 26, 2024 (included as Exhibit 3.1 to our Current Report on Form 8-K (File No. 000-55775) filed January 30, 2024 and incorporated herein by reference)
3.5
Articles Supplementary (Subtitle 8 Opt-Out) of American Healthcare REIT, Inc., dated February 7, 2024 (included as Exhibit 3.1 to our Current Report on Form 8-K (File No. 001-41951) filed February 12, 2024 and incorporated herein by reference)
Second Amended and Restated Bylaws of American Healthcare REIT, Inc. (included as Exhibit 3.1 to our Current Report on Form 8-K (File No. 001-41951) filed February 24, 2025 and incorporated herein by reference)
10.1†
Employment Letter, dated as of March 23, 2026, by and between American Healthcare REIT, Inc. and Jeffrey T. Hanson (included as Exhibit 10.1 to our Current Report on Form 8-K/A (File No. 001-41951) filed March 24, 2026 and incorporated herein by reference)
10.2
Second Amendment to Second Amended and Restated Credit Agreement, dated April 1, 2026, by and among American Healthcare REIT Holdings, LP, American Healthcare REIT, Inc. and certain subsidiaries and Bank of America, N.A., KeyBank, National Association, Citizens Bank, National Association, Bank of the West, Credit Agricole Corporate and Investment Bank, Fifth Third Bank, National Association, Citibank, N.A., Morgan Stanley Bank, N.A., Truist Bank, Regions Bank, Royal Bank of Canada, KeyBanc Capital Markets and BofA Securities, Inc. (included as Exhibit 10.1 to our Current Report on Form 8-K (File No. 001-41951) filed April 7, 2026 and incorporated herein by reference)
31.1*
Certification of Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*
Certification of Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1**
Certification of Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002
32.2**
Certification of Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*
Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL Document
101.SCH*
Inline XBRL Taxonomy Extension Schema with Embedded Linkbase Documents
104*
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
*
Filed herewith.
**
Furnished herewith. In accordance with Item 601(b)(32) of Regulation S-K, this Exhibit is not deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section. Such certifications will not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that the registrant specifically incorporates it by reference.
†
Management contract or compensatory plan or arrangement.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
American Healthcare REIT, Inc.
(Registrant)
May 8, 2026
By:
/s/ JEFFREY T. HANSON
Date
Jeffrey T. Hanson
Chairman of the Board of Directors and Interim Chief Executive Officer and President
(Principal Executive Officer)
/s/ BRIAN S. PEAY
Brian S. Peay
Chief Financial Officer
(Principal Financial Officer and Principal Accounting Officer)