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 September 30, 2025
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 1-11314
LTC PROPERTIES, INC.
(Exact name of Registrant as specified in its charter)
Maryland
71-0720518
(State or other jurisdiction of
(I.R.S. Employer
incorporation or organization)
Identification No.)
3011 Townsgate Road, Suite 220
Westlake Village, California 91361
(Address of principal executive offices, including zip code)
(805) 981-8655
(Registrant’s telephone number, including area code)
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, $.01 par value
LTC
New York Stock Exchange
Indicate by check mark whether registrant (1) has filed all reports required to be filed by Section 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 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 ☑
The number of shares of common stock outstanding on October 28, 2025 was 47,614,192.
September 30, 2025
INDEX
PART I -- Financial Information
Page
Item 1.
Financial Statements
Consolidated Balance Sheets
3
Consolidated Statements of Income
4
Consolidated Statements of Comprehensive Income
5
Consolidated Statements of Equity
6
Consolidated Statements of Cash Flows
7
Notes to Consolidated Financial Statements
8
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
37
Item 3.
Quantitative and Qualitative Disclosures about Market Risk
62
Item 4.
Controls and Procedures
PART II -- Other Information
Legal Proceedings
63
Item 1A.
Risk Factors
Unregistered Sales of Equity Securities and Use of Proceeds
65
Item 5.
Other Information
Item 6.
Exhibits
66
Available Information
We make available to the public free of charge through our internet website at www.LTCreit.com our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as soon as reasonably practicable after we electronically file such reports with, or furnish such reports to, the Securities and Exchange Commission (“SEC”). We also use the “Investors” portion of our www.LTCreit.com website for purposes of compliance with Regulation FD and as a routine channel for distribution of important information to investors and interested parties, including news releases, analyst presentations, financial information, and corporate governance practices. Accordingly, investors and interested parties should monitor the “Investors” portion of our www.LTCreit.com website for the release of this information. Information on our website is not part of this Quarterly Report on Form 10-Q or any of our filings with the SEC unless specifically incorporated by reference.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
CONSOLIDATED BALANCE SHEETS
(amounts in thousands, except per share)
December 31, 2024
(unaudited)
(audited)
ASSETS
Investments:
Land
$
121,884
118,209
Buildings and improvements
1,402,825
1,212,853
Accumulated depreciation and amortization
(398,017)
(405,884)
Operating real estate property, net
1,126,692
925,178
Properties held-for-sale, net of accumulated depreciation: 2025—$29,284; 2024—$1,346
42,458
670
Real property investments, net
1,169,150
925,848
Financing receivables, net of credit loss reserve: 2025—$3,622; 2024—$3,615
358,579
357,867
Mortgage loans receivable, net of credit loss reserve: 2025—$3,930; 2024—$3,151
389,657
312,583
Real estate investments, net
1,917,386
1,596,298
Notes receivable, net of credit loss reserve: 2025—$270; 2024—$477
26,740
47,240
Investments in unconsolidated joint ventures
18,342
30,602
Investments, net
1,962,468
1,674,140
Other assets:
Cash and cash equivalents
17,933
9,414
Debt issue costs related to revolving line of credit
5,096
1,410
Interest receivable
21,535
60,258
Straight-line rent receivable
18,545
21,505
Lease incentives
2,717
3,522
Prepaid expenses and other assets
16,126
15,893
Total assets
2,044,420
1,786,142
LIABILITIES
Revolving line of credit
548,450
144,350
Term loans, net of debt issue costs: 2025—$0; 2024—$192
—
99,808
Senior unsecured notes, net of debt issue costs: 2025—$935; 2024—$1,058
396,065
440,442
Accrued interest
4,009
3,094
Accrued expenses and other liabilities
50,646
45,443
Total liabilities
999,170
733,137
EQUITY
Stockholders’ equity:
Common stock: $0.01 par value; 110,000 shares authorized; shares issued and outstanding: 2025—47,333; 2024—45,511
473
455
Capital in excess of par value
1,146,560
1,082,764
Cumulative net income
1,741,212
1,725,435
Accumulated other comprehensive income
1,459
3,815
Cumulative distributions
(1,931,854)
(1,851,842)
Total LTC Properties, Inc. stockholders’ equity
957,850
960,627
Non-controlling interests
87,400
92,378
Total equity
1,045,250
1,053,005
Total liabilities and equity
See accompanying notes.
CONSOLIDATED STATEMENTS OF INCOME
(amounts in thousands, except per share, unaudited)
Three Months Ended
Nine Months Ended
September 30,
2025
2024
Revenues:
Rental income
27,842
32,258
89,463
97,464
Resident fees and services
22,203
34,153
Interest income from financing receivables
7,096
7,001
21,182
14,661
Interest income from mortgage loans
9,856
10,733
28,715
35,842
Interest and other income
2,293
5,791
5,048
9,298
Total revenues
69,290
55,783
178,561
157,265
Expenses:
Interest expense
8,791
10,023
24,718
31,971
Depreciation and amortization
8,987
9,054
26,925
27,173
Seniors housing operating expenses
17,362
26,781
Write-off of effective interest receivable
41,455
Provision for credit losses
203
215
3,642
942
Transaction costs
587
33
7,734
679
Triple-net lease property tax expense
2,581
3,186
8,483
9,816
General and administrative expenses
7,523
6,765
22,941
20,016
Total expenses
87,489
29,276
162,679
90,597
(Loss) income before unconsolidated joint ventures, real estate dispositions and other items
(18,199)
26,507
15,882
66,668
(Loss) gain on sale of real estate, net
(738)
3,663
(235)
6,882
Income from unconsolidated joint ventures
439
692
4,543
1,739
Income tax (expense) benefit
(42)
39
Net (loss) income
(18,540)
30,862
20,229
75,289
Income allocated to non-controlling interests
(1,455)
(1,496)
(4,452)
(2,332)
Net (loss) income attributable to LTC Properties, Inc.
(19,995)
29,366
15,777
72,957
Income allocated to participating securities
(154)
(201)
(471)
(511)
Net (loss) income available to common stockholders
(20,149)
29,165
15,306
72,446
Earnings per common share:
Basic
(0.44)
0.66
0.33
1.67
Diluted
1.65
Weighted average shares used to calculate earnings per common share:
46,123
43,868
45,726
43,313
44,394
46,107
43,839
Dividends declared and paid per common share
0.57
1.71
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(amounts in thousands, unaudited)
Unrealized gain (loss) on cash flow hedges before reclassification
54
(1,289)
(4)
655
Gains reclassified from accumulated other comprehensive income to interest expense
(784)
(1,037)
(2,352)
(3,126)
Comprehensive (loss) income
(19,270)
28,536
17,873
72,818
Less: Comprehensive income allocated to non-controlling interests
Comprehensive (loss) income attributable to LTC Properties, Inc.
(20,725)
27,040
13,421
70,486
CONSOLIDATED STATEMENTS OF EQUITY
(amounts in thousands)
Capital in
Cumulative
Total
Non-
Common Stock
Excess of
Net
Accumulated
Stockholder's
Controlling
Shares
Amount
Par Value
Income
OCI
Distributions
Equity
Interests
Balance—December 31, 2023
43,022
430
991,656
1,634,395
6,110
(1,751,312)
881,279
34,988
916,267
Issuance of common stock
139
1
4,336
4,337
Issuance of restricted stock
160
2
(2)
Common Stock cash distributions ($0.57 per share)
(24,616)
Stock-based compensation expense
2,202
Net income
24,230
459
24,689
Fair market valuation adjustment for interest rate swap
378
Cash paid for taxes in lieu of common shares
(50)
(1,532)
Non-controlling interest contributions
50
Non-controlling interest distributions
(2,904)
Other
(29)
Balance—March 31, 2024
43,271
433
996,631
1,658,625
6,488
(1,775,928)
886,249
32,593
918,842
204
6,519
6,521
16
(24,787)
2,320
19,361
377
19,738
(523)
61,025
(377)
Balance—June 30, 2024
43,491
435
1,005,468
1,677,986
5,965
(1,800,715)
889,139
93,618
982,757
1,543
15
54,637
54,652
-
(25,281)
2,269
1,496
(2,326)
Balance—September 30, 2024
45,034
450
1,062,374
1,707,352
3,639
(1,825,996)
947,819
1,041,437
Balance—December 31, 2024
45,511
238
8,409
8,411
114
(1)
(27,259)
2,253
20,680
1,541
22,221
Vesting of performance-based stock units
163
(910)
(138)
(4,771)
(4,772)
Acquisitions of non-controlling interest
2,883
(4,033)
(1,150)
(2,486)
(11)
Balance—March 31, 2025
45,888
1,091,524
1,746,115
2,905
(1,879,101)
961,902
1,049,302
149
5,167
5,169
21
(26,297)
2,795
15,092
1,456
16,548
20
(717)
(13)
(437)
(1,456)
Balance—June 30, 2025
46,065
461
1,099,049
1,761,207
2,188
(1,905,398)
957,507
1,044,907
1,268
12
45,371
45,383
(26,456)
2,140
1,455
(729)
Balance—September 30, 2025
47,333
CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended September 30,
OPERATING ACTIVITIES:
Adjustments to reconcile net income to net cash provided by operating activities:
7,188
6,791
235
(6,882)
Income tax benefit
(39)
(4,543)
(1,739)
Income distributions from unconsolidated joint ventures
4,578
839
Straight-line rental adjustment
1,447
561
Adjustment for collectability of straight-line rental income
1,514
321
Adjustment for collectability of lease incentives
249
Amortization of lease incentives
556
626
Application of interest reserve
(233)
Amortization of debt issue costs
1,191
791
Other non-cash items, net
64
71
Change in operating assets and liabilities
Lease incentives funded
(1,794)
Increase in interest receivable
(7,097)
(7,124)
Increase (decrease) in accrued interest payable
915
(108)
Net change in other assets and liabilities
(3,526)
Net cash provided by operating activities
98,038
91,998
INVESTING ACTIVITIES:
Investment in real estate properties
(268,169)
(319)
Investment in real estate capital improvements
(6,673)
(9,908)
Proceeds from sale of real estate, net
5,714
33,641
Investment in financing receivables
(777)
(97)
Investment in real estate mortgage loans receivable
(99,200)
(19,078)
Principal payments received on mortgage loans receivable
21,731
34,474
(740)
(11,262)
Proceeds from liquidation of investments in unconsolidated joint ventures
13,000
Advances and originations under notes receivable
(25)
(340)
Principal payments received on notes receivable
18,039
13,268
Net cash (used in) provided by investing activities
(317,100)
40,379
FINANCING ACTIVITIES:
Borrowings from revolving line of credit
433,500
19,200
Repayment of term loans
(100,000)
Repayment of revolving line of credit
(29,400)
(81,300)
Principal payments on senior unsecured notes
(44,500)
(44,160)
Proceeds from common stock issued
59,316
65,629
Payments of common share issuance costs
(353)
(119)
Distributions paid to stockholders
(80,012)
(74,684)
Acquisition of and distributions paid to non-controlling interests
(1,188)
(109)
Financing costs paid
(4,562)
(516)
Cash paid for taxes in lieu of shares upon vesting of restricted stock
(5,209)
(1,533)
(31)
Net cash provided by (used in) financing activities
227,581
(117,623)
Increase in cash and cash equivalents
8,519
14,754
Cash and cash equivalents, beginning of period
20,286
Cash and cash equivalents, end of period
35,040
Supplemental disclosure of cash flow information:
Interest paid
22,612
31,288
Non-cash investing and financing transactions:
Contribution from non-controlling interest
(163,460)
Exchange of mortgage loans for controlling interests in joint ventures accounted for as financing receivables
102,435
Accretion of interest reserve recorded as mortgage loan receivable
233
Write-off of notes receivable
(2,693)
Decrease in fair value of interest rate swap agreements
(2,356)
(2,471)
Distributions paid to non-controlling interests
(5,359)
2,313
Transfer of joint venture partner's non-controlling interest to LTC
Distributions paid to non-controlling interests related to property sale
2,305
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1.
General
LTC Properties, Inc., a health care real estate investment trust (“REIT”), was incorporated on May 12, 1992 in the State of Maryland and commenced operations on August 25, 1992. We invest primarily in seniors housing and health care properties primarily through sale-leasebacks, mortgage financing, joint ventures and structured finance solutions including preferred equity and mezzanine lending. Additionally, during the second quarter of 2025, we began utilizing the structure authorized by the REIT Investment Diversification and Empowerment Act of 2007 (Commonly referred to as “RIDEA”) as permitted by the Housing and Economic Recovery Act of 2008.
Our primary seniors housing and health care property classifications include skilled nursing centers (“SNF”), independent living communities (“ILF”), assisted living communities (“ALF”), memory care communities (“MC”) and combinations thereof. Independent living communities, assisted living communities, memory care communities and combinations thereof are included in the seniors housing communities classification (“SH”). We also invest in other (“OTH”) types of properties, such as land parcels, projects under development (“UDP”) and behavioral health care hospitals.
Our primary objectives are to create, sustain and enhance stockholder equity value and provide current income for distribution to stockholders through real estate investments in seniors housing and health care properties managed by experienced operators. To meet these objectives, we attempt to invest in properties that provide an opportunity for additional value and current returns to our stockholders and diversify our investment portfolio by geographic location, operator, property classification and form of investment.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
2.
Basic of Presentation and Accounting Policies
Basic of Presentation
We have prepared consolidated financial statements included herein without audit and in the opinion of management have included all adjustments necessary for a fair presentation of the consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and note disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to rules and regulations governing the presentation of interim financial statements.
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of our company and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. The results of operations for the three and nine months ended September 30, 2025 and 2024 are not necessarily indicative of the results for a full year.
Segments
As explained above, we began utilizing the RIDEA structure in the second quarter of 2025, and established a seniors housing operating portfolio (“SHOP”) segment. Accordingly, effective in the second quarter of 2025, we conduct and manage our business as two operating segments, for reporting and decision-making purposes: real estate investments and SHOP. See Note 16 to our consolidated financial statements for more information.
Our real estate investments segment consists of owned properties that are leased pursuant to non-cancelable triple-net operating (“NNN” or “Triple-Net”) leases, financing receivables, mortgage loans, notes receivable and unconsolidated joint ventures.
During 2025, we terminated the Anthem Memory Care, LLC (“Anthem”) and New Perspective Senior Living, LLC. (“New Perspective”) Triple-Net master leases and converted the 13 communities covered under the master leases into our new SHOP segment. Additionally, we acquired eight seniors housing communities within our SHOP segment during the third quarter of 2025. Accordingly, as of September 30, 2025, our SHOP segment is comprised of 21 ILF, ALF and MC that are managed on behalf of LTC by five independent operators pursuant to the terms of separate management agreements.
Revenue Recognition-SHOP
Resident fees and services represent all amounts earned from residents within our SHOP segment, as outlined in individual resident agreements. Fees are billed monthly based on contracted rates in the resident agreements, or where applicable, reimbursement rates established by Medicaid and Medicare. Resident fees and services revenue is derived from amounts paid by residents and/or third-party payors. Resident agreements typically vary in duration. Revenue is recognized in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers (“ASC 606”) when performance obligations are satisfied.
9
3.
Real Estate Investments
Independent living communities, assisted living communities, memory care communities and combinations thereof are included in the seniors housing communities classification (“SH”).
Any reference to the number of properties or facilities, number of units, number of beds, number of operators and yield on investments in real estate are unaudited and outside the scope of our independent registered public accounting firm’s review of our consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board.
Owned Properties
Our owned property investments include 107 properties leased to 20 different operators under Triple-Net leases, and 21 properties operated on our behalf by five independent operators pursuant to separate management agreements. The following tables summarize our investments in owned properties at September 30, 2025 (dollar amounts in thousands):
Average
Percentage
Number
Number of
Investment
Gross
of
SNF
SH
per
Type of Property
Properties (1)
Beds
Units
Bed/Unit
Seniors Housing-NNN
538,256
33.7
%
56
3,404
158.12
Seniors Housing-SHOP
446,527
28.0
1,577
283.15
Seniors Housing
984,783
61.7
77
4,981
197.71
Skilled Nursing
599,663
37.5
6,113
236
94.45
Other (2)
12,005
0.8
118
n/a
1,596,451
100.0
128
6,231
5,217
NNN
SHOP
Properties
1,149,924
72.0
107
During the nine months ended September 30, 2025 and 2024, we invested in the following capital improvement projects in our owned properties (dollar amounts in thousands):
Seniors Housing Communities
2,648
2,425
8,663
Skilled Nursing Centers
1,600
1,245
4,248
9,908
10
Intangible Assets. We make estimates as part of our allocation of the purchase price of acquisitions to various components of the acquisition based upon the fair value of each component. In determining fair value, we use current appraisals or other third-party opinions of value. The most significant components of our allocations are typically the allocation of fair value to land and buildings, and for certain of our acquisitions, in-place leases and other intangible assets. In the case of the value of in-place leases, we make estimates based on the evaluation of the specific characteristics of each tenant’s lease. Factors considered include estimates of carrying costs during the hypothetical expected lease-up periods, market conditions and costs to execute similar leases. The following is a summary of the carrying amount of intangible assets as of September 30, 2025 and December 31, 2024 (in thousands):
Assets
Cost
Amortization
In-place leases
20,887
(7,457)
13,430
11,047
(6,758)
4,289
Tax abatement intangible
8,309
(3)
(1,616)
6,693
(1,097)
7,212
The following table provides future amortization expenses related to the intangible assets at September 31, 2025 (in thousands):
October-
December
2026
2027
2028
2029
2030
Thereafter
In-place leases (1)
1,021
4,036
3,913
2,892
493
424
651
Tax abatement intangible (2)
174
3,059
20,123
1,195
4,728
4,605
3,584
1,185
1,116
3,710
Owned Properties- Triple-Net
Our Triple-Net leases require the lessee to pay all taxes, insurance, maintenance and repairs, capital and non-capital expenditures and other costs necessary in the operations of the facilities. Many of the leases contain renewal options. The majority of our leases contain provisions for specified annual increases over the rents of the prior year. Many of our existing leases contain renewal options that, if exercised, could result in the amount of rent payable upon renewal being greater than that currently being paid.
11
The following table outlines information related to our Triple-Net lease extensions during the nine months ended September 30, 2025 (dollar amounts in thousands):
Original
Extended
Beds/Units
State
Maturity
68,767
IL, MI, OH
May 31, 2025
May 31, 2026
53,339
782
AL, NM
April 30, 2026
April 30, 2031
32,361
159
GA, SC
December 31, 2025
December 31, 2026
25,704
88
TX
February 28, 2025
February 28, 2026
13,053
211
SC
February 28, 2031
5,275
141
TN
198,499
1,842
Additionally, during 2025, we terminated two existing leases with the same operator and combined them into a single master lease. The new master lease has a five-year term with one 1-year extension option and four 5-year extension options. Annual cash rent is $2,547,000 for the first lease year, escalating by 2% annually thereafter. In connection with the termination of these leases, we wrote-off the related straight-line rent receivable and lease incentive balances during the nine months ended September 30, 2025. See next page for details.
Also, during 2025, we terminated the Anthem Triple-Net master leases and converted the communities covered under the master leases into our SHOP segment. In conjunction with the conversion, during 2025, we wrote-off Anthem’s working capital note of $2,693,000 and the related interest receivable of $371,000. In addition, we terminated our New Perspective Triple-Net lease and converted the community covered under the lease into our SHOP segment. In connection with the conversion, we paid New Perspective a $5,971,000 lease termination fee. For more information regarding these communities, see Owned Properties-SHOP below.
We monitor the collectability of our receivable balances, including deferred rent receivable balances, on an ongoing basis. We write-off uncollectible operator receivable balances, including straight- line rent receivable and lease incentives balances, as a reduction to rental income in the period such balances are no longer probable of being collected. Therefore, recognition of rental income is limited to the lesser of the amount of cash collected or rental income reflected on a “straight-line” basis for those customer receivable balances deemed uncollectible. During the three months ended September 30, 2025, we wrote-off straight-line rent receivable balance of $1,271,000 in connection with the on-going Genesis Chapter 11 bankruptcy filing. Additionally, during the nine months ended September 30, 2025, we wrote-off straight-line rent receivable and lease incentive balances of $243,000 and $249,000, respectively, in connection with the termination of two existing leases with the same operator and combining them into a master lease, as discussed above. During the nine months ended September 30, 2024, we wrote-off a straight-line rent receivable balance of $321,000 as a result of converting a lease to fair-market rent resets and a lease incentive balance of $190,000 as a result of property sales.
We continue to take into account the current financial condition of our operators in our estimation of uncollectible accounts at September 30, 2025. We are closely monitoring the collectability of such rents and will adjust future estimations as appropriate as further information becomes known.
The following table summarizes components of our rental income for the three and nine months ended September 30, 2025 and 2024 (in thousands):
Rental Income
Contractual cash rental income
27,079
29,215
84,781
89,142
Variable cash rental income (3)
2,582
3,194
8,448
9,830
Straight-line rent (adjustment) income
(372)
(1,447)
(561)
Adjustment of lease incentives and rental income
(1,271)
(5)
(1,763)
(6)
(321)
(7)
(176)
(188)
(556)
(626)
13
Some of our lease agreements provide purchase options allowing the lessees to purchase the properties they currently lease from us. The following table summarizes information about purchase options included in our lease agreements (dollar amounts in thousands):
Type
Option
Net Book
Window
Property
Investments (1)
Value
2024-2028
North Carolina
41,000
North Carolina/ South Carolina
122,460
Tennessee
2,016
2025-2027
Florida
76,545
2025-2029
122,195
South Carolina
11,719
7,564
Georgia/South Carolina
24,250
2027-2029
Oklahoma
9,052
3,069
Texas
52,726
47,924
Colorado/Kansas/Ohio/Texas
17
65,554
29,266
15,239
6,970
554,126
483,259
Properties Held -for-Sale. The following summarizes our held-for-sale properties as of September 30, 2025 and December 31, 2024 (dollar amounts in thousands):
Beds/units
Depreciation
At September 30, 2025
CA/FL/VA
896
71,742
(29,284)
At December 31, 2024
OK
29
(1,346)
14
Acquisitions. The following table summarizes our acquisitions within our Triple-Net segment for the nine months ended September 30, 2025 and 2024 (dollar amounts in thousands):
Purchase
Transaction
Acquisition
Year
Price
Costs
OTH (1)
300
19
319
Properties Sold. During the nine months ended September 30, 2025 we recognized a net loss on sale of real estate of $235,000. During the nine months ended September 30, 2024, we recognized a net gain on sale of real estate of $6,882,000. The following table summarizes property sales during the nine months ended September 30, 2025 and 2024 (dollar amounts in thousands):
Sales
Carrying
(Loss) Gain (1)
Ohio
1,000
Ohio (3)
1,800
1,342
340
(96)
2,880
3,266
(715)
68
6,350
5,948
60
4,500
4,579
(289)
208
1,282
(390)
500
389
80
7,959
4,314
3,635
Wisconsin
110
20,193
16,195
3,986
(60)
458
34,752
26,759
(
Owned Properties-SHOP
As discussed above, during the second quarter of 2025, we terminated the Anthem and New Perspective Triple-Net master leases and converted the communities covered under the master leases into our new SHOP segment. Additionally, during the third quarter of 2025, we acquired eight seniors housing communities within our SHOP segment. Accordingly, as of September 30, 2025, our SHOP segment is comprised of 21 seniors housing communities that are managed on behalf of LTC by five independent operators pursuant to the terms of separate management agreements.
The following table summarizes acquisitions within our SHOP segment during the nine months ended September 30, 2025 (dollar amounts in thousands):
CA
35,200
247
35,447
67
KY
39,500
184
39,684
158
WI
194,050
165
194,215
520
268,750
596
269,346
745
The following table presents the total acquisition costs allocated to assets acquired (in thousands):
12,884
256,462
Total acquisition costs
The following table provides information regarding our SHOP segment as of September 30, 2025 (dollar amounts in thousands):
Unit
217,165
620
350.27
Illinois
57,998
264
219.69
California
48,695
133
366.13
Colorado
41,744
228
183.09
Kentucky
251.16
Kansas
26,220
230.00
15,021
250.35
Financing Receivables
As part of our acquisitions, we may invest in sale and leaseback transactions. In accordance with the accounting guidance, we must determine whether each sale and leaseback transaction qualifies as a sale. Generally, an option for the seller-lessee to repurchase a real estate asset precludes accounting for the transfer of the asset as a sale and the purchased assets should be presented as financing receivables.
We have entered into joint venture agreements and contributed into these JVs for the purchase of properties through sale and leaseback transactions. Concurrently, each of these JVs leased the purchased properties back to an affiliate of the seller and provided the seller-lessee with purchase options. Accordingly, these sale and leaseback transactions meet the accounting criteria to be presented as financing receivables. Furthermore, we determined that we exercise power over and receive benefits from each of these joint ventures. Therefore, we consolidated the joint ventures as Financing Receivables on our Consolidated Balance Sheets and recorded the rental revenue from these joint ventures as Interest income from financing receivables on our Consolidated Statements of Income.
The following tables provide information regarding our investments in financing receivables at September 30, 2025 (dollar amounts in thousands):
Interest
Rate
Investments
7.25%
2022
2032
FL
62,220
299
256.00
2023
2033
NC
122,196
119,280
523
233.64
2034
NC/SC
64,450
234.15
37,985
217
188.94
362,201
283,935
31
1,562
Mortgage Loans
The following table sets forth information regarding our investments in mortgage loans secured by first mortgages at September 30, 2025 (dollar amounts in thousands):
Interest Rate
Loans (2)
Properties (3)
7.8%
15,956
4.0
112
142.46
7.3%
10,750
2.7
45
238.89
8.8%
MI
16,486
4.2
85
193.95
9.0%
IL
1,177
UDP
0.3
8.5%
39,330
10.0
250
157.32
8.3%
55,350
14.1
171
323.68
11.1%
2043
180,388
45.8
1,749
103.14
10.1%
2045
39,700
10.1
480
82.71
10.5%
19,650
5.0
201
97.76
10.8%
14,800
3.8
146
101.37
393,587
27
2,576
663
121.51
18
As noted in the table above, we modified the Prestige $180,388,000 mortgage loan to increase the current interest paid by the borrower from 8.5% to the full contractual interest rate of 11.14% escalated annually. The modification was effective July 1, 2025. Additionally, the modification provides Prestige an option to prepay their mortgage loan at par and without penalty within a 12-month window beginning in July 2026. In evaluating the impact of the prepayment provisions allowing the borrower to settle the obligation at an amount less than amounts previously accrued under the effective interest method, we wrote-off $41,455,000 of interest receivable previously accrued related to this mortgage loan during the three months ended September 30, 2025.
The following table summarizes our mortgage loan activity for the nine months ended September 30, 2025 and 2024 (in thousands):
Originations and funding under mortgage loans receivable
99,590
19,078
(102,435)
Pay-offs received
(21,281)
(34,094)
169
Scheduled principal payments received
(450)
(380)
Mortgage loan premium amortization
(Provision) recovery for loan loss reserve
(779)
1,176
Net increase (decrease) in mortgage loans receivable
77,074
(116,490)
4.
Investment in Unconsolidated Joint Ventures
We have a preferred equity investments in one joint venture and an acquisition, development and construction (“ADC”) loan. We determined that each of these JVs meet the accounting criteria to be considered a variable interest entity (“VIE”). We are not the primary beneficiary of the JVs as we do not have both: 1) the power to direct the activities that most significantly affect the JVs’ economic performance, and 2) the right to receive benefits from the VIE or the obligation to absorb losses of the VIE that could be significant to the VIE. However, we do have significant influence over the JVs. Therefore, we have accounted for the JVs using the equity method of accounting. During 2025, we received $15,962,000, which includes a 13% exit IRR of $2,962,000, from the redemption of our preferred equity investment in a joint venture that owns a 267-unit independent and assisted living community in Washington. The following table provides information regarding our unconsolidated joint venture investments at September 30, 2025 (dollar amounts in thousands):
Contractual
Preferred
Cash
Return
Portion
Beds/ Units
Senior Loan
9.2
104
12,002
Washington
Preferred Equity
12.0
9.0
109
6,340
213
The following table summarizes our capital contributions, income recognized, and cash interest received related to our investments in unconsolidated joint ventures during the nine months ended September 30, 2025 and 2024 (in thousands):
Cash Income
Non-cash
Recognized
Earned
Income Accrued
434
884
SH (1)
3,225
3,260
53
589
359
948
5.
Notes Receivable
Notes receivable consist of working capital loans and a mezzanine loan. The following table summarizes our investments in notes receivable at September 30, 2025 (dollar amounts in thousands):
Type of
IRR
Loan
# of loans
Working capital
25
8.0%
11.0
Mezzanine
25,000
0.0%
1,028
7.6%
957
27,010
The following table is a summary of our notes receivable components as of September 30, 2025 and December 31, 2024 (in thousands):
Mezzanine loans
42,000
Working capital loans
2,010
5,717
Notes receivable credit loss reserve
(270)
(477)
Total notes receivable, net of credit loss reserve
The following table summarizes our notes receivable activity for the nine months ended September 30, 2025 and 2024 (in thousands):
Advances under notes receivable
Principal payments received under notes receivable
(18,039)
(13,268)
Recovery of credit losses
207
129
Net decrease in notes receivable
(20,500)
(12,799)
6.
Lease Incentives
Our non-contingent lease incentive balances at September 30, 2025 and December 31, 2024 were $2,717,000 and $3,522,000, respectively. The following table summarizes our lease incentives activity for the nine months ended September 30, 2025 and 2024 (in thousands):
1,794
(249)
Other adjustments
(191)
Net (decrease) increase in non-contingent lease incentives
(805)
977
Non-contingent lease incentives represent payments made to our lessees for various reasons including entering into a new lease or lease amendments and extensions. Contingent lease incentives represent potential contingent earn-out payments that may be made to our lessees in the future, as part of our lease agreements. From time to time, we may commit to provide contingent payments to our lessees, upon our properties achieving certain rent coverage ratios. Once the contingent payment becomes probable and estimable, the contingent payment is recorded as a lease incentive. Lease incentives are amortized as a yield adjustment to rental income over the remaining life of the lease.
7.
Credit Loss Reserve
We apply ASC Topic 326, Financial Instruments-Credit Losses (“ASC 326”), which requires a forward-looking “expected loss” model, to estimate our loan losses. We determined our Financing receivables, Mortgage loans receivable and Notes receivable line items on our Consolidated Balance Sheets are within the scope of ASC 326.
Financing receivables. We obtained controlling interests in JVs that acquired properties through sale and leaseback transactions. The JVs concurrently leased the purchased properties to affiliates of sellers and provided the sellers-lessees with purchase options. We consolidated the JVs as Financing receivables on our Consolidated Balance Sheets. For more information regarding these transactions See Note 3. Real Estate Investments above. At September 30, 2025, we had investments in four JVs accounted for as financing receivables that owned 31 properties in three states. In addition to owning the properties through our controlling interests in the JVs, generally, these leases provide one or more of the following: security deposits, property tax impounds, repair and maintenance escrows and other credit enhancements such as corporate or personal guarantees or letters of credit.
Mortgage loans. As part of our strategy of making investments in properties used in the provision of long-term health care services, we provided mortgage loan financing on such properties. At September 30, 2025, we had ten mortgage loans secured by 27 properties in five states with six borrowers. In addition to a lien on the mortgaged properties, the loans are generally secured by non-real estate assets of the properties and contain certain other security provisions in the form of letters of credit and/or security deposits.
22
Notes receivable. Our notes receivable consist of working capital notes and a mezzanine loan. Security for these notes can include all or a portion of the following credit enhancements: secured second mortgage, pledge of equity interests and personal/corporate guarantees.
The following table summarizes our financial instruments within the scope of ASC 326 by year of origination (dollar amounts in thousands):
Year of origination (1)
Investment Type:
2021
Prior
Credit loss reserve
Financing receivables
163,460
3,622
Mortgage loans receivable
94,680
27,237
254,537
3,930
Working Capital loans
Total Notes Receivable
270
We monitor the credit quality of our financial instruments through a variety of methods determined by the underlying collateral or other protective rights, operator’s payment history and other internal metrics. Our monitoring process includes periodic review of financial statements for each facility, scheduled property inspections and review of covenant compliance, industry conditions and current and future economic conditions. The future economic conditions are based on the economic data from the Federal Reserve and reasonable assumptions for the future economic trends.
In determining the “expected” credit loss reserves on these instruments, we utilize the probability of default and discounted cash flow methods. Further, we stress-test the results to reflect the impact of unknown adverse future events including recessions.
The expected credit losses related to our financial instruments that are within the scope of ASC 326 are as follows (in thousands):
Recovery
Provision
Balance
due to
at
Payoffs/
Originations/
Description
12/31/2024
Write-offs
additional funding
9/30/2025
Credit Loss Reserve- Financing Receivables
3,615
Credit Loss Reserve- Mortgage Loans Receivable
3,151
(217)
996
Credit Loss Reserve-Notes Receivable
477
(207)
We elected not to measure an allowance for expected credit losses on accrued interest receivable under the expected credit loss standard as we have a policy in place to reserve or write off accrued interest receivable in a timely manner through our quarterly review of the loan and property performance. Therefore, we elected the policy to write off accrued interest receivable by recognizing credit loss expense. As of September 30, 2025, the total balance of accrued interest receivable of $21,535,000 was not included in the measurement of expected credit loss. During the nine months ended September 30, 2025, we wrote-off Anthem’s interest receivable of $371,000 in connection with the conversion of Anthem’s Triple-Net leases to SHOP as explained in Note 3. Real Estate Investments. During the nine months ended September 30, 2024, we wrote-off $613,000 of interest receivable related to a partial paydown of a mortgage loan.
23
8.
Prepaid Expenses and Other Assets
The following is a summary of our prepaid expenses and other assets at September 30, 2025 and December 31, 2024 (dollar amounts in thousands):
Intangible assets
SHOP prepaid expenses and other assets
1,179
Real estate investments, prepaid expenses and other assets
1,855
2,125
Right of use asset, net
2,660
2,741
Interest rate swap asset
SHOP accounts receivable, net of credit loss reserve: 2025— $92; 2024— $0
1,948
Deferred income tax asset
332
9.
Debt Obligations
Unsecured Credit Facility. Through the first quarter of 2024, we had an unsecured credit agreement (the “Original Credit Agreement”) that provided for an aggregate commitment of the lenders of up to $500,000,000 comprising of a $400,000,000 revolving credit facility (the “Revolving Line of Credit”) and two $50,000,000 term loans (the “Term Loans”). The Term Loans had maturities of November 19, 2025 and November 19, 2026. The Revolving Line of Credit had a maturity date of November 19, 2025 and provided a one-year extension option at our discretion, subject to customary conditions.
During the first quarter of 2024, we entered into an amendment to the Original Credit Agreement (the “Credit Agreement”) to accelerate our one-year extension option notice and exercised our option to extend the maturity date to November 19, 2026. Other material terms of the Original Credit Agreement remained unchanged. The Credit Agreement permitted us to request increases to the Revolving Line of Credit and Term Loans commitments up to a total of $1,000,000,000 (the “Accordion”). As permitted under the terms of the Credit Agreement, we exercised $25,000,000 of the available $500,000,000 Accordion feature of the Revolving Line of Credit during the third quarter of 2024. Accordingly, the aggregate commitment of the lenders under the Credit Agreement increased to $525,000,000, with $475,000,000 remaining available under the Accordion. The exercise of the Accordion did not change any other term or condition of the Credit Agreement, including its maturity date or covenant requirements.
During the third quarter of 2025, we entered into a new four-year unsecured credit agreement (the “New Credit Agreement”) maturing in July 2029, to replace our previous Credit Agreement. The New Credit Agreement increased the aggregate commitment on our revolving line of credit from $425,000,000 to $600,000,000 and provides for the opportunity to increase the total commitment to an aggregate $1,200,000,000. The New Credit Agreement provides for a one-year extension option, subject to customary conditions. Material terms of the New Credit Agreement remain unchanged. In connection with the New Credit Agreement, the Term Loans were rolled into the new revolving line of credit, keeping the interest rate swap agreements intact at an average 2.3% rate, based on current margins. Based on our leverage at September 30, 2025, the facility provides for interest annually at SOFR plus 115 basis points and a facility fee of 20 basis points.
24
Interest Rate Swap Agreements. In connection with entering into the Term Loans described above, we entered into two receive variable/pay fixed interest rate swap agreements (the “Interest Rate Swaps”) with maturities of November 19, 2025 and November 19, 2026, respectively, that effectively locked in the forecasted interest payments on the Term Loans’ borrowings over their four and five year terms of the loans. The Interest Rate Swaps are considered cash flow hedges and are recorded on our Consolidated Balance Sheets at fair value in Prepaid expenses and other assets, with cumulative changes in the fair value of these instruments recognized in Accumulated other comprehensive income (loss) on our Consolidated Balance Sheets. As discussed above, during the three months ended September 30, 2025, the Term Loans were paid off using proceeds from our new revolving line of credit under our New Credit Agreement, keeping the Interest Rate Swaps intact through November 2025 at 2.3% and November 2026 at 2.4%, based on current margins. During the three and nine months ended September 30, 2025, we recorded a decrease of $729,000 and $2,356,000 to the fair value of Interest Rate Swaps, respectively. During the three and nine months ended September 30, 2024, we recorded a decrease of $2,326,000 and $2,471,000 to the fair value of Interest Rate Swaps, respectively.
Information regarding our Interest Rate Swaps measured at fair value, which are classified as Level 2 of the fair value hierarchy is presented below (dollar amounts in thousands):
Notional
Fair Value at
Date Entered
Maturity Date
Swap Rate
Rate Index
November 2021
November 19, 2025
2.52
1-month SOFR
50,000
200
1,305
November 19, 2026
2.66
1,259
2,510
100,000
Senior Unsecured Notes. We have senior unsecured notes held by institutional investors with interest rates ranging from 3.66% to 4.50%. The senior unsecured notes mature between 2026 and 2033.
The senior unsecured notes and the Credit Agreement, contain financial covenants, which are measured quarterly, that require us to maintain, among other things:
At September 30, 2025, we were in compliance with all applicable financial covenants. These debt obligations also contain additional customary covenants and events of default that are subject to a number of important and significant limitations, qualifications and exceptions.
The following table sets forth information regarding debt obligations by component as of September 30, 2025 and December 31, 2024 (dollar amounts in thousands):
Applicable
Available
Outstanding
for
Rate (1)
Borrowing
Revolving line of credit (2)
4.76%
51,550
280,650
Term loans, net of debt issue costs
Senior unsecured notes, net of debt issue costs
4.12%
4.49%
944,515
684,600
During the nine months ended September 30, 2025 and 2024, our debt borrowings and repayments were as follows (in thousands):
Borrowings
Repayments
Term loans
Senior unsecured notes
(173,900)
(125,460)
The following is a summary of our accrued expenses and other liabilities (dollar amounts in thousands):
Impounds
17,439
12,223
Security deposits
3,975
6,534
Property tax liability
7,297
7,807
Maintenance and repair reserves
5,545
5,961
Accounts payable and other accrued liabilities
5,442
6,085
SHOP liabilities
5,360
Deferred commitments
1,872
4,092
Lease liabilities
SHOP deferred revenue
1,056
26
11.
Non-controlling Interests. We have entered into partnerships to develop and/or own real estate. Given that our limited members do not have the substantive kick-out rights, liquidation rights, or participation rights, we have concluded that the partnerships are VIEs. As we exercise power over and receive benefits from the VIEs, we are considered the primary beneficiary. Accordingly, we consolidate the VIEs and record the non-controlling interests on the consolidated financial statements.
As of September 30, 2025, we have the following consolidated VIEs (in thousands):
Consolidated
Non-Controlling
Purpose
Own real estate
58,010
3,015
OH
54,934
9,134
2,916
14,325
417,134
During the nine months ended September 30, 2025, we acquired our JV partner’s non-controlling interest in a JV that owns two seniors housing communities in Oregon with a total of 186 units for $1,150,000 resulting in us controlling full ownership of these communities. As a result, these VIEs are not listed in the table above.
Common Stock. We had separate equity distribution agreements (collectively, the “Original Equity Distribution Agreements”) to offer and sell, from time to time, up to $200,000,000 in aggregate offering price of shares of our common stock. During the fourth quarter of 2024, we terminated our Original Equity Distribution Agreements and entered into a new equity distribution agreement (the “Equity Distribution Agreement”) to offer and sell, from time to time, up to $400,000,000 in aggregate offering price of shares of our common stock. The Equity Distribution Agreement provides for sales of common shares to be made by means of ordinary brokers’ transactions, which may include block trades, or transactions that are deemed to be “at the market” offerings.
During the nine months ended September 30, 2025, we sold 1,655,100 shares of common stock for $59,316,000 in net proceeds under our Equity Distribution Agreement. In conjunction with the sale of common stock, we incurred $353,000 of costs associated with this agreement which have been recorded in additional paid in capital as a reduction of proceeds received. At September 30, 2025, we had $330,271,000 available under the Equity Distribution Agreement. Subsequent to September 30, 2025, we sold 281,400 shares of common stock for $10,260,000 in net proceeds under our Equity Distribution Agreement. Accordingly, we have $319,881,000 available under the Equity Distribution Agreement.
During the nine months ended September 30, 2024, we sold 1,886,900 shares of common stock for $65,629,000 in net proceeds under our Original Equity Distribution Agreements. In conjunction with the sale of common stock, we incurred $119,000 of costs associated with this agreement which have been recorded in additional paid in capital as a reduction of proceeds received.
During the nine months ended September 30, 2025 and 2024, we acquired 151,018 shares and 49,540 shares, respectively, of common stock held by employees who tendered owned shares to satisfy tax withholding obligations.
Available Shelf Registration. We have an automatic shelf registration statement on file with the SEC, and currently have the ability to file additional automatic shelf registration statements, to provide us with capacity to publicly offer an indeterminate amount of common stock, preferred stock, warrants, debt, depositary shares, or units. We may from time to time raise capital under our automatic shelf registration statement in amounts, at prices, and on terms to be announced when and if the securities are offered. The specifics of any future offerings, along with the use of proceeds of any securities offered, will be described in detail in a prospectus supplement, or other offering materials, at the time of the offering. Our shelf registration statement expires in November 2027.
Distributions. We declared and paid the following cash dividends (in thousands):
Declared
Paid
Common Stock (1)
80,012
74,684
In October 2025, we declared a monthly cash dividend of $0.19 per share on our common stock for the months of October, November and December 2025, payable on October 31, November 28, and December 31, 2025, respectively, to stockholders of record on October 23, November 20, and December 23, 2025, respectively.
Stock-Based Compensation. During 2021, we adopted and our shareholders approved the 2021 Equity Participation Plan (“the 2021 Plan”) which replaces the 2015 Equity Participation Plan (“the 2015 Plan”). Under the 2021 Plan, 1,900,000 shares of common stock have been authorized and reserved for awards, less one share for every one share that was subject to an award granted under the 2015 Plan after December 31, 2020 and prior to adoption. In addition, any shares that are not issued under outstanding awards under the 2015 Plan because the shares were forfeited or cancelled after December 31, 2020 will be added to and again be available for awards under the 2021 Plan. Under the 2021 Plan, the shares were authorized and reserved for awards to officers, employees, non-employee directors and consultants. The
28
terms of the awards granted under the 2021 Plan and the 2015 Plan are set by our compensation committee at its discretion. Beginning in the first quarter of 2024, we entered into Performance Stock Unit Award Agreements, based upon absolute and relative total shareholder return, under the 2021 Plan.
During the nine months ended September 30, 2025 and 2024, no stock options were granted or exercised. During the nine months ended September 30, 2024, 5,000 stock options expired and were cancelled. At September 30, 2025 and 2024, we had no stock options outstanding and exercisable.
The following table summarizes our restricted stock activity for the nine months ended September 30, 2025 and 2024:
Weighted Average Price
Outstanding, January 1
301,209
258,620
33.18
36.43
Granted
135,041
175,431
34.94
31.07
Vested
(165,549)
(132,842)
33.69
31.51
Outstanding, September 30
270,701
33.75
During the nine months ended September 30, 2025, 182,915 units of performance-based stock units vested, which includes the accelerated vesting of 19,694 performance-based stock units in connection with an employee’s retirement. No performance-based stock units vested during the nine months ended September 30, 2024.
During the nine months ended September 30, 2025 and 2024, we granted restricted stock and performance-based stock units under the 2021 Plan as follows:
No. of
Price per
Shares/Units
Share
Reward Type
Vesting Period
113,790
34.88
Restricted stock
ratably over 3 years
5,626
35.55
April 30, 2028
15,625
35.20
52,666
Performance-based stock units
TSR targets (2)
48,535
TSR targets (3)
236,242
159,536
30.72
69,610
31.84
62,914
15,895
34.60
307,955
Compensation expense recognized related to the vesting of restricted common stock and performance-based stock units for the nine months ended September 30, 2024 was $6,791,000. Compensation expense recognized related to the vesting of restricted common stock and performance-based stock units for the nine months ended September 30, 2025, was $7,188,000, which includes $700,000 of compensation expense related to accelerated vesting of restricted common stock and performance-based stock units in connection with an employee’s retirement. Accordingly, the remaining compensation expense to be recognized related to the future service period of unvested outstanding restricted common stock and performance-based stock units are as follows (in thousands):
Remaining
Compensation
Vesting Date
Expense
October-December 2025
5,887
2,899
322
11,248
12.
Commitments and Contingencies
At September 30, 2025, we had commitments as follows (in thousands):
Commitment
Funding
Funded
Triple-Net properties
5,256
2,211
3,786
1,470
SHOP properties
4,328
137
4,191
Subtotal: owned real estate properties (Note 3. Real Estate Investments)
9,584
2,348
3,923
5,661
Financing receivables (Note 3.Real Estate Investments)
2,250
777
1,473
Accrued incentives and earn-out liabilities (Note 6. Lease Incentives)
Mortgage loans (Note 3. Real Estate Investments)
69,770
5,890
20,644
49,126
Joint venture investments (Note 4. Investments in Unconsolidated Joint Ventures)
1,438
740
698
Notes receivable (Note 5. Notes Receivable)
560
535
88,102
9,780
26,109
61,993
Additionally, some of our lease agreements provide purchase options allowing the lessee to purchase the properties they currently lease from us. See Note 3. Real Estate Investments for a table summarizing information about our purchase options.
30
We are a party from time to time to various general and professional liability claims and lawsuits asserted against the lessees or borrowers of our properties, which in our opinion are not singularly or in the aggregate material to our results of operations or financial condition. These types of claims and lawsuits may include matters involving general or professional liability, which we believe under applicable legal principles are not our responsibility as a non-possessory landlord or mortgage holder. We believe that these matters are the responsibility of our lessees and borrowers pursuant to general legal principles and pursuant to insurance and indemnification provisions in the applicable leases or mortgages. We intend to continue to vigorously defend such claims.
13.
Major Operators
Within our real estate investment segment, two operators each account for approximately 10% or more of our Total revenues. Our SHOP segment is not subject to operator concentration, as the communities are operated on our behalf by independent operators under management agreements. In addition, resident agreements are entered into with individual residents. Accordingly, we are not exposed to operator credit risk to the same extent as within our real estate investment segment. The following table presents information regarding our major operators as of September 30, 2025:
Percentage of
Operator
Revenues (1)
Assets (2)
Prestige Healthcare (3)
2,694
93
13.3
12.7
ALG Senior Living(4)
1,308
9.8
14.4
1,401
23.1
27.1
Our financial position and ability to make distributions may be adversely affected if Prestige Healthcare, ALG Senior Living or any of our lessees and borrowers face financial difficulties, including any bankruptcies, inability to emerge from bankruptcy, insolvency or general downturn in business of any such operator, or in the event any such operator does not renew and/or extend its relationship with us.
14.
Earnings per Share
The following table sets forth the computation of basic and diluted net income per share (in thousands, except per share amounts):
Less income allocated to non-controlling interests
Less income allocated to participating securities:
Non-forfeitable dividends on participating securities
(173)
(28)
Total net income allocated to participating securities
Effect of dilutive securities:
Participating securities (2)
Net (loss) income for diluted net income per share
Shares for basic net income per share
526
381
Total effect of dilutive securities
Shares for diluted net income per share
Basic net income per share
Diluted net income per share
15.
Fair Value Measurements
In accordance with the accounting guidance regarding the fair value option for financial assets and financial liabilities, entities are permitted to choose to measure certain financial assets and liabilities at fair value, with the change in unrealized gains and losses reported in earnings. We did not elect the fair value option for any of our financial assets and financial liabilities.
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The carrying amount of cash and cash equivalents approximates their fair value because of the short-term maturity of these instruments. We do not invest our cash in auction rate securities. The carrying value and estimated fair value of our financial instruments as of September 30, 2025 and December 31, 2024 were as follows (in thousands):
Fair
Financing receivables, net of credit loss reserve
367,061
363,228
Mortgage loans receivable, net of credit loss reserve
519,550
386,871
Notes receivable, net of credit loss reserve
30,402
53,549
376,268
402,394
16.
Segment Information
We use the management approach in determining the reportable operating segments. The management approach considers the internal organization and reporting used by our chief operating decision maker (“CODM”) for making operating decisions, allocating resources and assessing performance as the source for determining our reportable segments. In making this determination, we:
During the nine months ended September 30, 2025 and 2024, the CODM has been collectively identified as our Executive Chairman and Co-CEOs, who share the responsibility for allocating resources and assessing segment performance.
During the second quarter of 2025, we began utilizing the RIDEA structure and established our SHOP segment. Accordingly, we conduct and manage our business as two operating segments: real estate investments and SHOP and our CODM evaluated the performance of our investments based on net operating income (“NOI”). For more information and reconciliation of NOI see Item 2. Non-GAAP Financial Measures. Summary information by reportable segment for the three and nine months ended September 30, 2025 is as follows (unaudited, in thousands):
Three Months Ended September 30, 2025
Real estate
Non-segment
investment portfolio
/corporate
2,191
102
46,985
Property level expenses
(2,581)
(17,362)
(19,943)
NOI
44,843
4,841
49,786
(8,791)
(8,987)
(41,455)
(203)
(587)
(7,523)
Loss on sale of real estate, net
Income tax expense
Net loss
Nine Months Ended September 30, 2025
/Corporate
4,642
406
144,002
(8,483)
(26,781)
(35,264)
140,062
7,372
147,840
(24,718)
(26,925)
(3,642)
(7,734)
(22,941)
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During the three and nine months ended September 30, 2024, we operated under one reportable segment. Summary information by reportable segment for the three and nine months ended September 30, 2024 is as follows (unaudited, in thousands):
Three Months Ended September 30, 2024
5,640
151
55,632
(3,186)
53,138
53,289
Interest Expense
(10,023)
Depreciation and Amortization
(9,054)
Impairment Loss
(33)
Recovery for credit losses
(215)
(6,765)
Gain on sale of real estate, net
Nine Months Ended September 30, 2024
8,389
909
156,356
(9,816)
148,279
149,188
(31,971)
(27,173)
(679)
(942)
(20,016)
Total assets by reportable business segment and segment-level significant expense categories are not disclosed as our CODM do not review such information to evaluate business performance and allocate resources.
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17.
Income Taxes
Our Company qualifies as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended. As such, we generally are not taxed on income that is distributed to our stockholders. Under RIDEA, a REIT may lease a "qualified healthcare property" on an arm's-length basis to a taxable REIT subsidiary ("TRS") if the property is operated on behalf of such TRS by a person who qualifies as an “eligible independent operator”. Generally, the rent received from the TRS will meet the related party exception and will be treated as “rents from real property”. A "qualified healthcare property" includes real property and any personal property that is, or is necessary or incidental to the use of, a hospital, nursing facility, assisted living facility, congregate care facility, qualified continuing care facility, or other licensed facility which extends medical or nursing or ancillary services to patients. Resident fees and services revenue and related operating expenses for these facilities are reported on our Consolidated Statements of Income and are subject to federal, state and local income taxes. Our provision for income taxes for the three and nine months ended September 30, 2025, was an expense of $42,000 and a benefit of $39,000, respectively. At September 30, 2025, our deferred income tax assets and deferred income tax liabilities with respect to our TRS entity were $332,000 and $80,000, respectively.
18.
Subsequent Events
Subsequent to September 30, 2025, the following events occurred:
Real Estate. We acquired an 88-unit seniors housing community within our SHOP segment in Georgia for $22,900,000. In conjunction with the acquisition, we entered into a management agreement with an operator new to us.
Property Sales. We sold two skilled nursing centers in Florida totaling 240 beds for $43,000,000. We received $41,900,000 of net proceeds and expect to record a gain on sale of approximately $26,000,000. Additionally, we sold five skilled nursing centers in Virginia (4) and California (1) with a total of 656 beds for an aggregate sales price of $79,950,000. We will use the total proceeds of $78,900,000 in a 1031 exchange for the acquisitions within our SHOP segment and anticipate recording an aggregate gain on sale of approximately $52,000,000. These seven properties had an aggregate gross book value and net book value of $71,742,000 and $42,458,000, respectively.
Debt. We repaid $62,900,000 under our unsecured revolving line of credit. Accordingly, we have $485,550,000 outstanding and $114,450,000 available for borrowing under our unsecured revolving line of credit.
Equity: We sold 281,400 shares of common stock for $10,260,000 in net proceeds under our Equity Distribution Agreements. Accordingly, we have $319,881,000 available under our Equity Distribution Agreements.
Additionally, we declared a monthly cash dividend of $0.19 per share on our common stock for the months of October, November and December 2025, payable on October 31, November 28, and December 31, 2025, respectively to stockholders of record on October 23, November 20, and December 23, 2025, respectively.
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Item 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Cautionary Statement Regarding Forward-Looking Statements
This quarterly report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act adopted pursuant to the Private Securities Litigation Reform Act of 1995. Statements that are not purely historical may be forward-looking. You can identify some of the forward-looking statements by their use of forward-looking words, such as “believes,” “expects,” “may,” “will,” “could,” “would,” “should,” “seeks,” “approximately,” “intends,” “plans,” “estimates” or “anticipates,” or the negative of those words or similar words. Forward-looking statements involve inherent risks and uncertainties regarding events, conditions and financial trends that may affect our future plans of operation, business strategy, results of operations and financial position. A number of important factors could cause actual results to differ materially from those included within or contemplated by such forward-looking statements, including, but not limited to, our dependence on our operators for revenue and cash flow; operational and legal risks and liabilities under our new SHOP segment; government regulation of the health care industry; changes in federal, state, or local laws limiting real estate investment trust (“REIT”) investments in the health care sector; federal and state health care cost containment measures including reductions in reimbursement from third-party payors such as Medicare and Medicaid; required regulatory approvals for operation of health care facilities; a failure to comply with federal, state, or local regulations for the operation of health care facilities; the adequacy of insurance coverage maintained by our operators; our reliance on a few major operators; our ability to renew leases or enter into favorable terms of renewals or new leases; the impact of inflation, operator financial or legal difficulties; the sufficiency of collateral securing mortgage loans; an impairment of our real estate investments; the relative illiquidity of our real estate investments; our ability to develop and complete construction projects; our ability to invest cash proceeds for health care properties; a failure to qualify as a REIT; our ability to grow if access to capital is limited; and a failure to maintain or increase our dividend. For a discussion of these and other factors that could cause actual results to differ from those contemplated in the forward-looking statements, please see the discussion under “Risk Factors” contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 and in our publicly available filings with the Securities and Exchange Commission. We do not undertake any responsibility to update or revise any of these factors or to announce publicly any revisions to forward-looking statements, whether as a result of new information, future events or otherwise. Although our management believes that the assumptions and expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. The actual results may differ materially from any forward-looking statements due to the risks and uncertainties of such statements.
Executive Overview
Business and Investment Strategy
We are a REIT that invests in seniors housing and health care properties through sale-leasebacks, financing receivables, mortgage financing, joint ventures and structured finance solutions including preferred equity and mezzanine lending. We create, sustain and enhance stockholder equity value and provide current income for distribution to stockholders through real estate investments in seniors housing and health care properties managed by experienced operators.
The following graph summarizes our gross investments as of September 30, 2025:
Our primary seniors housing and health care property classifications include skilled nursing centers (“SNF”), independent living communities (“ILF”), assisted living communities (“ALF”), memory care communities (“MC”) and combinations thereof. We also invest in other (“OTH”) types of properties, such as land parcels, projects under development (“UDP”) and behavioral health care hospitals. To meet these objectives, we attempt to invest in properties that provide opportunity for additional value and current returns to our stockholders and diversify our investment portfolio by geographic location, operator, property classification and form of investment. Additionally, during the second quarter of 2025, we began utilizing the structure authorized by the REIT Investment Diversification and Empowerment Act of 2007 (Commonly referred to as “RIDEA”) as permitted by the Housing and Economic Recovery Act of 2008.
We conduct and manage our business as two operating segments for internal reporting and internal decision-making purposes: real estate investments and seniors housing operating portfolio (“SHOP”). For purposes of this quarterly report and other presentations, we generally include ILF, ALF, MC, and combinations thereof in the seniors housing communities classification (“SH”). As of September 30, 2025, seniors housing and health care properties comprised approximately 99.5% of our gross investment portfolio. We have been operating since August 1992.
Substantially all of our revenues and sources of cash flows from operations are derived from rents from operating leases, resident fees and services, interest earned on financing receivables, interest earned on outstanding loans receivable and income from investments in unconsolidated joint ventures. Income from our investments represent our primary source of liquidity to fund distributions and are dependent upon the performance of the operators on their lease and loan obligations and the rates earned thereon. To
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the extent that the operators experience operating difficulties and are unable to generate sufficient cash to make payments to us, there could be a material adverse impact on our consolidated results of operations, liquidity and/or financial condition. To mitigate this risk, we monitor our investments through a variety of methods determined by investment type, property type and operator. Our monitoring process includes periodic review of financial statements for each facility, periodic review of operator credit, scheduled property inspections and review of covenant compliance.
In addition to our monitoring and research efforts, we also structure our investments to help mitigate payment risk. Some operating leases and loans are credit enhanced by guaranties and/or letters of credit. In addition, operating leases are typically structured as master leases and loans are generally cross-defaulted and cross-collateralized with other loans, operating leases or agreements between us and the operator and its affiliates.
During the second quarter of 2025, we began utilizing the structures provided for in the REIT Investment Diversification and Empowerment Act of 2007 (commonly referred to as “RIDEA”) as permitted by the Housing and Economic Recovery Act of 2008 and established a seniors housing operating portfolio (“SHOP”). Under a typical RIDEA structure, we have certain oversight approval rights and the right to review operational and financial reporting information, but our independent third party operators will ultimately control the day-to-day operations of the property, pursuant to the terms of our management agreements. Offering RIDEA structures represent a further aspect of our traditional strategy of investing through vehicles such as non-cancelable triple-net operating (“NNN” or “Triple-Net”) leases, mortgage loans, and structured finance. We believe that RIDEA structures provide us with additional investment opportunities. During the second quarter of 2025, we terminated the Anthem Memory Care, LLC (“Anthem”) and New Perspective Senior Living, LLC (“New Perspective”) Triple-Net master leases and converted the 13 communities covered under the master leases to our new SHOP segment. Additionally, we acquired eight seniors housing communities within our SHOP segment. Accordingly, as of September 30, 2025, our SHOP segment is comprised of 21 independent living, assisted living and memory care communities that are managed on behalf of LTC by five independent operators pursuant to the terms of separate management agreements. To develop and implement RIDEA structures, we may need to continue to commit financial and operational resources. While we anticipate that adding RIDEA transactions will be positive for our business model, our ability to succeed in this new segment will be determined by numerous factors, including our ability to identify suitable investments and our relationship with operators of RIDEA structures.
Depending upon the availability and cost of external capital, we anticipate making additional investments in health care related properties. New investments are generally funded from cash on hand, proceeds from periodic asset sales, temporary borrowings under our unsecured revolving line of credit and internally generated cash flows. Our investments generate internal cash from rent, resident fees and services, interest from financing receivables and interest receipts and principal payments on loan receivables and income from unconsolidated joint ventures. Permanent financing for future investments, which replaces funds drawn under our unsecured revolving line of credit, may be provided through a combination of public and private offerings of debt and equity securities and secured and unsecured debt financing. The timing, source and amount of cash flows provided by financing activities and used in investing activities are sensitive to the capital markets’ environment, especially to changes in interest rates. Changes in the capital markets’ environment may impact the availability of cost-effective capital.
We believe our business model has enabled and will continue to enable us to maintain the integrity of our property investments, including in response to financial difficulties that may be experienced by operators and the variability of cash flow from our SHOP segment. Traditionally, we have taken a conservative approach to managing our business, choosing to maintain liquidity and exercise patience until favorable investment opportunities arise.
Real Estate Portfolio Overview
The following tables summarize our real estate investment portfolio as of September 30, 2025 (dollar amounts in thousands):
and Resident
of Total
Fees and Services
Revenues
Owned-Triple-Net:
22.4
30,024
18.3
25.1
47,635
29.1
0.5
297
0.2
Subtotal: Triple-Net
3,640
48.0
77,956
(4)
47.6
Owned-SHOP:
18.6
(5)
20.8
Total Owned Properties
66.6
112,109
68.4
Interest Income
from Financing
Receivable
1,263
285,656
11.9
16,803
10.2
3.2
4,379
Total Financing Receivables
15.1
12.9
from Mortgage
Loans
137,873
5.8
4,542
2.8
10.6
22,865
13.9
Under Development (3)
0
0.0
Total Mortgage Loans
16.4
27,415
(6)
16.7
and other
621
25,982
1.1
1,970
1.2
(7)
Income from
Unconsolidated
Unconsolidated Joint Ventures
Joint Ventures
Total Unconsolidated Joint Ventures
1,318
(8)
Total Portfolio
193
9,210
7,873
2,397,591
163,994
Summary of Properties by Type
117
7,637
1,440,634
60.1
75
9,092
943,775
39.4
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As of September 30, 2025, we had $2.0 billion in net carrying value of investments as follows (dollar amounts in thousands):
Owned-Triple-Net
769,326
39.2
Owned-SHOP
399,824
20.4
18.2
19.9
1.4
0.9
The following table provides details on the components of revenues and related net operating income (“NOI”) across our portfolio (in thousands):
Real Estate Investment segment:
Variable cash rental income
Straight-line rent adjustment (1)
(1,514)
Financing Receivables:
Cash Interest income from financing receivables
6,731
20,161
Effective interest income (2)
365
Mortgage loans receivable:
Cash interest received
9,492
26,395
Effective interest income (3)
364
Other notes receivable:
Interest income-other notes
3,656
5,789
Effective interest adjustment (4)
(1,465)
(1,147)
Interest income from notes receivable
Unconsolidated joint ventures
Total revenue-Real Estate Investments segment
47,424
148,545
Property level expenses-real estate investments
NOI-Real Estate Investment segment (5)
SHOP segment:
Resident Fees and Services:
Property level expenses-SHOP
NOI-SHOP segment (5)
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(1)
(2)
Additionally, During 2025, we terminated two existing leases with the same operator and combined them into a single master lease. The new combined master lease has a five-year term with one 1-year extension option and four 5-year extension options. Annual cash rent is $2.5 million for the first lease year escalating by 2.0% annually thereafter. The terms and economics of the new combined master lease are similar to those of the two leases that were terminated. In connection with the termination of these leases, we wrote-off straight-line rent receivable and lease incentive balances totaling $0.5 million. During the fourth quarter of 2025, we expect to convert these seniors housing communities under the new combined master lease from our triple-net portfolio into our SHOP segment. Upon conversion, the new combined master lease will be terminated, and we will enter into a management agreement with an operator new to us. In conjunction with the new master lease termination, we expect to write-off a $1.0 million working capital note during the fourth quarter of 2025.
Also, as previously discussed, during 2025, we terminated the Anthem Triple-Net master leases and converted the communities covered under the master leases into our new SHOP segment. In conjunction with the conversion, we wrote-off Anthem’s working capital note of $2.7 million and the related interest receivable of $0.4 million. In addition, we terminated our New Perspective Triple-Net lease and converted the community covered under the lease into our SHOP segment. In connection with the conversion, we paid New Perspective a $6.0 million lease termination fee.
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Update on Certain Operators
ALG Senior Living
We hold controlling interest in three joint ventures with ALG Senior Living (“ALG”). The joint ventures own 28 assisted living and memory care communities in North Carolina (27) and South Carolina (1) with a total of 1,263 units. The joint ventures lease these communities to affiliates of ALG under three 10-year master leases and has provided the lessee with the option to purchase these communities. In accordance with generally accepted accounting principles (“GAAP”), the communities are recorded as Financing Receivables on our Consolidated Balance Sheets. Additionally, ALG operates a 45-unit assisted living and memory care community in North Carolina under a mortgage loan, which was scheduled to mature in January 2025. During 2025, the mortgage loan maturity was extended to May 2026. ALG has paid their contractual rent and interest obligations through November 2025.
Anthem Memory Care
Anthem operated 12 memory care communities located in California, Colorado, Kansas, Illinois and Ohio under Triple-Net master leases. During the second quarter of 2025, we terminated the Anthem Triple-Net master leases and converted the 12 memory care communities covered under the master leases into our new SHOP segment. In conjunction with the conversion, we wrote-off Anthem’s working capital note of $2.7 million and the related interest receivable of $0.4 million during the second quarter of 2025.
Genesis Healthcare, Inc.
During the second quarter of 2025, we received Genesis’ written notice of its exercise of a 5-year extension option, which would extend the term of the lease to April 30, 2031. During the third quarter of 2025, Genesis filed for Chapter 11 bankruptcy. Accordingly, we wrote-off straight-line rent receivable balance of $1.3 million related to Genesis’ master lease. Affiliates of Genesis lease six skilled nursing centers in New Mexico (five) and Alabama (one) with a total of 782 beds under a master lease with LTC. Genesis has paid their contractual rent through November 2025.
Prestige Healthcare
Prestige Healthcare (“Prestige”) operates 21 skilled nursing centers located in Michigan secured under four mortgage loans and two skilled nursing centers located in South Carolina under a master lease. Prestige is our largest operator based upon revenues and assets representing 13.3% of our total revenues and 12.7% of our total assets as of September 30, 2025.
Prior to an amendment in July 2025, under one of the mortgage loans with Prestige secured by 14 properties, the minimum mortgage interest payment due to us was based on an annual current pay rate of 8.5% on the outstanding loan balance. The difference between the contractual interest rate and the current pay interest rate on the outstanding loan balance remained an obligation of Prestige and was payable through the application of security deposits we hold on behalf of Prestige or was payable at maturity
During the first quarter of 2025, we received full contractual cash interest of $5.0 million from Prestige through $3.8 million of cash receipts and application of $1.2 million of Prestige’s security. At March 31, 2025, Prestige’s security totaled $3.8 million.
During the second quarter of 2025, we received full contractual cash interest of $5.0 million from Prestige. None of Prestige’s security was used to pay the difference between the contractual interest rate and the 8.5% current pay interest rate.
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During the third quarter of 2025, the Prestige mortgage loan was modified to increase the current interest paid by Prestige from 8.5% to the full contractual interest rate of 11.14% and escalated annually. The modification was effective July 1, 2025. Additionally, the modification provides Prestige an option to prepay their mortgage loan at par and without penalty within a 12-month window beginning in July 2026. Prestige is required to provide us with a 90-day notice of its intention to exercise the option and the ability for Prestige to exercise the pre-payment option is contingent on several factors including Prestige being current and in good standing on all its mortgage loans with LTC and obtaining replacement financing. In conjunction with the loan amendment that provided the borrower with a penalty-free early payoff option, we wrote-off $41.5 million of interest receivable previously accrued related to this loan during the three months ended September 30, 2025. Prestige is current on their contractual loan obligations through November 2025.
Other Operators
We had a JV that owned two assisted living communities with a total of 186 units in Oregon. The communities were leased under two separate leases with the same operator, who was the non-controlling member of the JV. During 2025, we acquired the operator’s $4.0 million non-controlling interest in the JV for $1.2 million and terminated the two existing leases. In connection with the termination of these leases, we wrote-off $0.2 million straight-line rent receivable and $0.3 million lease incentive. Concurrently, we entered into a new combined master lease with the same operator. The new combined master lease has a five-year term with one 1-year extension option and four 5-year extension options. Annual cash rent is $2.5 million for the first lease year, escalating by 2% annually thereafter. Additionally, the master lease provides the operator with an earn-out of up to $4.0 million, contingent on achieving certain performance thresholds. During the fourth quarter of 2025, we expect to convert these two assisted living communities under the new combined master lease from our triple-net portfolio into our SHOP segment. Upon conversion, the new combined master lease will be terminated, and we will enter into a management agreement with an operator new to us. In conjunction with the new master lease termination, we expect to write-off a $1.0 million working capital note during the fourth quarter of 2025.
Additionally, during the first quarter of 2025, we engaged a broker to sell seven skilled nursing centers under a master lease, following the operator’s election not to exercise the renewal option available under the master lease. The master lease covered seven skilled nursing centers in California (1), Florida (2) and Virginia (4) with a gross book value of $71.7 million and was set to mature in January 2026. Accordingly, these centers met the criteria under GAAP as held-for-sale and have been classified as held-for-sale. The operator is obligated to pay rent on the portfolio through maturity and is current on rent obligations through November 2025. Subsequent to September 30, 2025, we sold two skilled nursing centers within this portfolio located in Florida with a total of 240 beds for $43.0 million. We received $41.9 million of net proceeds and expect to record a gain on sale of approximately $26.0 million. Additionally, we sold the remaining five skilled nursing centers in Virginia (4) and California (1) with a total of 656 beds for an aggregate sales price of $80.0 million. We will use the total proceeds of $78.9 million in a 1031 exchange for the acquisitions within our SHOP segment and anticipate recording an aggregate gain on sale of approximately $52.0 million. These seven properties, which were classified as held-for-sale at September 30, 2025, had an aggregate gross book value and net book value of $71.7 million and $42.5 million, respectively.
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2025 Activities Overview
The following tables summarize our transactions during the nine months ended September 30, 2025 (dollar amounts in thousands):
SHOP Segment
During the second quarter of 2025, we r the Anthem and New Perspective Triple-Net master leases and converted the communities covered under the master leases into our new SHOP segment. Additionally, during the third quarter of 2025, we acquired eight seniors housing communities within our SHOP segment. Accordingly, as of September 30, 2025, our SHOP segment is comprised of 21 independent living, assisted living and memory care communities that are managed on behalf by five independent operators pursuant to separate management agreements. The following table provides information regarding our SHOP segment as of September 30, 2025 (dollar amounts in thousands):
The following table summarizes our acquisitions within our SHOP segment during the nine months ended September 30, 2025 (dollar amounts in thousands):
Investment in Improvement projects
Properties Held -for-Sale
Properties Sold
Ohio (2)
Total (3)
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Investment in Mortgage Loans Receivable
The following tables provide information regarding our investments in mortgage loans secured by first mortgages at September 30, 2025 (dollar amounts in thousands):
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Provision for loan loss reserve
Net increase in mortgage loans receivable
Preferred Equity Investment in Unconsolidated Joint Ventures
During the nine months ended September 30, 2025, we received $16.0 million, which includes a 13% exit IRR of $3.0 million, from the redemption of our preferred equity investment in a joint venture that owns a 267-unit independent and assisted living community in Washington.
Investment in Notes Receivable
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Health Care Regulatory
The Centers for Medicare & Medicaid Services (“CMS”) annually updates Medicare SNF prospective payment system rates and other policies. On July 31, 2025, CMS issued a final rule to update Medicare payment policies and rates for SNFs under the SNF prospective payment system (“SNF PPS”) for fiscal year (“FY”) 2026. CMS announced that for FY 2026, it was updating SNF PPS rates by 3.2% based on the final SNF market basket of 3.3%, plus a 0.6% market basket forecast error adjustment, and a negative 0.7% productivity adjustment, which amounts to an increase in SNF PPS payments of $1.16 billion compared to payments in FY 2025. CMS stated that its impact figures do not incorporate the SNF Value-Based Purchasing (“VBP”) reductions for certain SNFs subject to the net reduction in payments under the SNF VBP, which are estimated to total $208.36 million in FY 2026. CMS announced that it was finalizing several changes to the PDPM ICD-10-CM code mappings to allow providers to provide more accurate, consistent, and appropriate primary diagnoses that meet the criteria for skilled intervention during a Part A SNF stay. CMS finalized 34 changes to the PDPM ICD-10-CM code mappings to maintain consistency with the latest ICD-10-CM coding guidance. CMS also announced that for the SNF VBP Program, it was finalizing a series of operational and administrative proposals as part of the final rule. In addition, CMS announced that for the SNF Quality Reporting Program (“QRP”), it was finalizing its proposal to remove four standardized patient assessment data elements from the Minimum Data Set (“MDS”), the SNF resident assessment form, beginning with residents admitted on or after October 1, 2025. CMS also announced it was finalizing its proposal to amend the reconsideration request policy and process.
On April 22, 2024, CMS issued the Minimum Staffing Standards for Long-Term Care Facilities and Medicaid Institutional Payment Transparency Reporting final rule. The final rule set forth new comprehensive minimum staffing requirements. It finalized a total nurse staffing standard of 3.48 hours per resident day (“HPRD”), which must include at least 0.55 hours per resident day of direct registered nurse care and 2.45 hours per resident day of direct nurse aide care. It permitted facilities to use any combination of nurse staff (registered nurse, licensed practical nurse and licensed vocational nurse, or nurse aide) to account for the additional 0.48 hours per resident day needed to comply with the total nurse staffing standard. CMS also finalized enhanced facility assessment requirements and a requirement to have a registered nurse onsite 24 hours a day, seven days a week (“24/7”), to provide skilled nursing care. The final rule also provided a staggered implementation timeframe of the minimum nurse staffing standards and 24/7 registered nurse requirement based on geographic location as well as possible exemptions for qualifying facilities for some parts of these requirements based on workforce unavailability and other factors. The final rule was challenged in federal courts in Texas and Iowa. An April 2025 decision from the U.S. District Court for the Northern District of Texas and a June 2025 decision from the U.S. District Court for the Northern District of Iowa blocked the rule from taking effect. The Texas federal court vacated the rule in full, finding that CMS had exceeded its authority in promulgating it. Meanwhile, the Iowa federal court only vacated the 24/7 RN requirement and the minimum staffing hours requirement, while leaving the rest of the rule in place. The U.S. Department of Justice appealed the Texas federal court’s decision striking down the entire rule to the U.S. Court of Appeals for the Fifth Circuit, but that appeal was dismiss at the government’s motion on September 19, 2025. The Iowa federal court’s decision was also initially appealed to the U.S. Court of Appeals for the Eighth Circuit, however that appeal was also voluntarily dismissed on a motion by the government on October 3, 2025. Thus both federal district court rulings stand undisturbed. Regardless, however, the 2025 budget reconciliation act (also known as the “One Big Beautiful Bill Act”), signed by President Trump on July 4, 2025, imposes a 10-year moratorium on the implementation and enforcement of the entire rule. So even if a future administration seeks to re-challenge the court’s rulings at some point in the future, CMS is barred from implementing the rule until 2034 at the earliest.
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On June 18, 2025, CMS issued a Quality, Safety and Oversight memorandum, QSO-25-NH, which outlines updates to how nursing home ratings are calculated and reported on the Nursing Home Care Compare website. According to the QSO memo, as of July 30, 2025, CMS will publish average Five Star ratings and other performance-based information for chains or affiliated entities on the Nursing Home Care Compare website. CMS will also be removing COVID-19 vaccination information from the main profile page of each nursing home effective as of the same date. CMS will also be revising the methodology used to calculate Five Star Ratings. In addition, CMS also recently announced a third extension for SNFs to submit required Medicare revalidations. Facilities now have until January 1, 2026 to submit these filings.
There can be no assurance that these rules or future regulations modifying Medicare SNF payment rates or other requirements for Medicare and/or Medicaid participation will not have an adverse effect on the financial condition of our borrowers and lessees which could, in turn, adversely impact the timing or level of their payments to us and our overall financial condition. Failure by an operator to comply with regulatory requirements can, among other things, jeopardize a facility’s compliance with the conditions of participation under relevant federal and state healthcare programs. Further the ability of our operators to comply with applicable regulations, including minimum staffing requirements, can be adversely impacted by changes in the labor market and increases in inflation.
Key Performance Indicators, Trends and Uncertainties
We utilize several key performance indicators to evaluate the various aspects of our business. These indicators are discussed below and relate to concentration risk and credit strength. Management uses these key performance indicators to facilitate internal and external comparisons to our historical operating results in making operating decisions and for budget planning purposes.
Concentration Risk. We evaluate by gross investment our concentration risk in terms of asset mix, real estate investment mix, operator mix and geographic mix. Concentration risk is valuable to understand what portion of our real estate investments could be at risk if certain sectors were to experience downturns. Asset mix measures the portion of our investments that are real property or mortgage loans. The National Association of Real Estate Investment Trusts (“NAREIT”), an organization representing U.S. REITs and publicly traded real estate companies, classifies a company with 50% or more of assets directly or indirectly in the equity ownership of real estate as an equity REIT. Investment mix measures the portion of our investments that relate to our various property classifications. Operator/credit mix measures the portion of our investments that relate to our top five operators. Geographic mix measures the portion of our real estate investment that relate to our top five states.
The following table reflects our recent historical trends of concentration risk (gross investment, in thousands):
9/30/25
6/30/25
3/31/25
12/31/24
9/30/24
Asset mix:
Owned properties-Triple-Net
1,154,836
1,329,856
1,333,078
1,342,188
Owned properties-SHOP
174,847
361,438
361,460
361,482
361,504
Mortgage loan receivables
356,815
317,527
315,734
364,414
Notes receivable
44,135
44,786
47,717
48,173
17,793
17,602
Real estate investment mix:
Senior housing communities
1,138,799
1,100,232
1,117,588
1,165,395
Skilled nursing centers
959,060
958,994
959,020
959,482
Other (1)
Under development
9,999
Operator/credit mix:
296,405
295,628
295,629
307,308
Prestige Healthcare (1)
268,534
268,567
268,896
269,022
269,345
Encore Senior Living
199,187
196,735
195,355
195,276
191,988
HMG Healthcare, LLC
167,917
167,202
166,976
166,716
166,833
Anthem Memory Care, LLC (2)
153,714
156,407
Carespring Health Care Management, LLC
102,940
Remaining operators (2)
916,081
903,945
887,721
902,623
952,060
SHOP operators (2)
Geographic mix:
314,232
319,423
318,584
318,133
323,737
302,504
301,727
301,650
301,468
301,142
Michigan
293,889
293,189
292,396
290,450
287,795
288,933
94,051
93,849
93,844
93,562
164,697
168,626
130,152
130,174
130,196
Remaining states
1,033,336
932,848
934,600
954,544
1,010,449
Credit Strength. We measure our credit strength both in terms of leverage ratios and coverage ratios. Our leverage ratios include debt to gross asset value and debt to market capitalization. The leverage ratios indicate how much of our Consolidated Balance Sheets capitalization is related to long-term obligations. Our coverage ratios include interest coverage ratio and fixed charge coverage ratio. The coverage ratios indicate our ability to service interest and fixed charges (interest). The coverage ratios are based on earnings before interest, taxes, depreciation and amortization for real estate (“EBITDAre”) as defined by NAREIT. See Non-GAAP Financial Measures below for information and reconciliation.
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The following table reflects the recent historical trends for our credit strength measures:
Balance Sheet Metrics
Year to Date
Quarter Ended
Debt to gross asset value
38.1
31.3
31.1
34.5
Debt to market capitalization ratio
35.1
30.4
29.5
30.3
32.3
Interest coverage ratio (10)
x
4.8
(3 )
5.1
4.7
(9)
Fixed charge coverage ratio (10)
We evaluate our key performance indicators in conjunction with current expectations to determine if historical trends are indicative of future results. Our expected results may not be achieved, and actual results may differ materially from our expectations. This may be a result of various factors, including, but not limited to
Management regularly monitors the economic and other factors listed above. We develop strategic and tactical plans designed to improve performance and maximize our competitive position. Our ability to achieve our financial objectives is dependent upon our ability to effectively execute these plans and to appropriately respond to emerging economic and company-specific trends.
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Operating Results (unaudited, in thousands)
Difference
(4,416)
95
(877)
(3)
(3,498)
13,507
1,232
(554)
605
(758)
(58,213)
Loss (gain) on sale of real estate, net
(10)
(4,401)
(253)
(49,402)
Net income attributable to LTC Properties, Inc.
(49,361)
Net income available to common stockholders
(49,314)
(8,001)
(7,127)
(4,250)
21,296
7,253
248
(2,700)
(7,055)
1,333
(2,925)
(11)
(72,082)
(12)
(13)
(7,117)
2,804
(14)
(55,060)
(2,120)
(57,180)
(57,140)
Non-GAAP Financial Measures
A non-GAAP financial measure is defined as a numerical measure of a registrant’s historical or future financial performance, financial position or cash flows that excludes or includes amounts that are not excluded from or included in the most directly comparable measure calculated and presented in accordance with GAAP. We consider Funds from Operations (“FFO”), NOI and EBITDAre to be useful supplemental measures of our financial or operating performance.
Funds From Operations Available to Common Stockholders
FFO attributable to common stockholders, basic FFO attributable to common stockholders per share and diluted FFO attributable to common stockholders per share are supplemental measures of a REIT’s financial performance that are not defined by GAAP. Real estate values historically rise and fall with market conditions, but cost accounting for real estate assets in accordance with GAAP assumes that the value of real estate assets diminishes predictably over time. We believe that by excluding the effect of historical cost depreciation, which may be of limited relevance in evaluating current performance, FFO facilitates comparisons of operating performance between periods.
We use FFO as a supplemental performance measurement of our cash flow generated by operations. FFO does not represent cash generated from operating activities in accordance with GAAP, and is not necessarily indicative of cash available to fund cash needs and should not be considered an alternative to net income available to common stockholders.
We calculate and report FFO in accordance with the definition and interpretive guidelines issued by NAREIT. FFO, as defined by NAREIT, means net income available to common stockholders (computed in accordance with GAAP) excluding gains or losses on the sale of real estate and impairment write-downs of depreciable real estate plus real estate depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Our calculation of FFO may not be comparable to FFO reported by other REITs that do not define the term in accordance with the current NAREIT definition or that have a different interpretation of the current NAREIT definition from us; therefore, caution should be exercised when comparing our FFO to that of other REITs.
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The following table reconciles GAAP net income available to common stockholders to NAREIT FFO available to common stockholders (unaudited, amounts in thousands, except per share amounts):
GAAP net (loss) income available to common stockholders
Add: Depreciation and amortization
Add/(Less): Loss/(Gain) on sale of real estate, net
738
(3,663)
NAREIT FFO attributable to common stockholders
(10,424)
34,556
42,466
92,737
NAREIT FFO attributable to common stockholders per share:
Add: Participating securities
511
Diluted NAREIT FFO attributable to common stockholders
34,757
93,248
Weighted average shares used to calculate NAREIT FFO per share:
Participating securities
302
294
828
820
Shares for diluted FFO per share
44,696
44,133
Net Operating Income
Net operating income or NOI is a non-GAAP financial measure that is calculated as net income (loss) (computed in accordance with GAAP) before (i) general and administrative expenses, (ii) transaction costs, (iii) write-off of effective interest, (iv) provision for credit losses, (v) impairment loss, (vi) depreciation and amortization, (vii) interest expense, (viii) gain or loss on sale of real estate and (ix) income tax benefit or expense. We use NOI to reflect the operating performance of our portfolio because NOI excludes certain items that are not associated with the operations of our properties.
NOI is not equivalent to our net income (loss) as determined under GAAP. Additionally, 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. Therefore, caution should be exercised when comparing our NOI to that of other REITs.
The following is a reconciliation of net income or loss, which is the most directly comparable GAAP financial measure to NOI for the three and nine months ended September 30, 2025 and 2024 (in thousands):
Add/ (Less): Income tax expense (benefit)
Add/ Less : Loss (gain) on sale of real estate, net
Add: General and administrative expense
Add: Transaction costs
Add: Write-off of effective interest
Add: Provision for credit losses
Add: Interest expense
Earnings before Interest, Taxes, Depreciation and Amortization for Real Estate
Earnings before interest, taxes, depreciation and amortization for real estate or EBITDAre is calculated as net income available to common stockholders (computed in accordance with GAAP) excluding (i) interest expense, (ii) income tax expense, (iii) real estate depreciation and amortization, (iv) impairment write-downs of depreciable real estate, (v) gains or losses on the sale of depreciable real estate, and (vi) adjustments for unconsolidated partnerships and joint ventures.
EBITDAre is not an alternative to net income, operating income or cash flows from operating activities as calculated and presented in accordance with GAAP. You should not rely on EBITDAre as a substitute for any such GAAP financial measures or consider it in isolation, for the purpose of analyzing our financial performance, financial position or cash flows. Net income is the most directly comparable GAAP measure to EBITDAre.
The following is a reconciliation of net income or loss, which is the most directly comparable GAAP financial measure to EBITDAre for the periods presented below (in thousands):
Net income (loss)
19,590
Add/Less: (Loss) gain on sale
(332)
(171)
Less/Add: Income tax (benefit) expense
(81)
Add: Impairment loss
6,953
8,014
7,913
8,365
8,776
9,162
9,194
EBITDAre
72,068
32,925
39,125
43,005
46,276
Add/(Less) : Non-recurring one-time items
50,834
42,418
8,011
405
(3,379)
(4,173)
Adjusted EBITDAre
122,902
42,436
40,936
39,530
39,626
42,103
Interest coverage ratio
Total fixed charges
Fixed charge coverage ratio
57
Liquidity and Capital Resources
Sources and Uses of Cash
As of September 30, 2025, we had $400.0 million in liquidity as follows (amounts in thousands, except per share amounts):
Available under unsecured revolving line of credit
Available under Equity Distribution Agreement
330,271
Total Liquidity
399,754
We believe that our current cash balance, cash flow from operations available for distribution or reinvestment, our borrowing capacity and our potential ability to access the capital markets are sufficient to provide for payment of our current operating costs, meet debt obligations and pay common dividends at least sufficient to maintain our REIT status and repay borrowings at, or prior to, their maturity. The timing, source and amount of cash flows used in financing and investing activities are sensitive to the capital markets environment, especially to changes in interest rates. In addition inflation may adversely affect our operators’ business, results of operations, cash flows and financial condition which could, in turn, adversely affect our financial position.
The operating results of the facilities will be impacted by various factors over which the operators/owners may have no control. Those factors include, without limitation, the health of the economy, inflation pressures, employee availability and cost, changes in supply of or demand for competing seniors housing and health care facilities, ability to hire and maintain qualified staff, ability to control other rising operating costs, and the potential for significant reforms in the health care industry and related occupancy challenges in the governmental regulations and financing of the health care industry or the impact of any other infectious disease and epidemic outbreaks. We cannot presently predict what impact these potential events may have, if any. We believe that adequate provision has been made for the possibility of loans proving uncollectible but we will continually evaluate the financial condition of the operations of our seniors housing and health care properties. In addition, we will monitor our borrowers and the underlying collateral for mortgage loans and will make future revisions to the provision, if considered necessary.
Depending on our borrowing capacity, compliance with financial covenants, ability to access the capital markets, and the payment of dividends may be negatively impacted. We continuously evaluate the availability of cost-effective capital and believe we have sufficient liquidity for our current dividend, corporate expenses and additional capital investments in 2025 and 2026.
Our investments, principally our investments in owned properties, financing receivables and mortgage loans, are subject to the possibility of loss of their carrying values as a result of changes in market prices, interest rates and inflationary expectations. The effects on interest rates may affect our costs of financing our operations and the fair-market value of our financial assets. Generally, our leases have agreed upon annual increases and our loans have predetermined increases in interest rates. Inasmuch
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as we may initially fund some of our investments with variable interest rate debt, we would be at risk of net interest margin deterioration if medium and long-term rates were to increase.
Our primary sources of cash include rent, resident fees and services, interest receipts, borrowings under our unsecured credit facility, public and private issuances of debt and equity securities, proceeds from investment dispositions and principal payments on loans receivable. Our primary uses of cash include dividend distributions, debt service payments (including principal and interest), seniors housing operating expenses, property tax expenses, real property investments (including acquisitions, capital expenditures and construction advances), loan advances and general and administrative expenses. These sources and uses of cash are reflected in our Consolidated Statements of Cash Flows as summarized below (in thousands):
Change
Net cash provided by (used in):
Operating activities
6,040
Investing activities
(357,479)
Financing activities
345,204
(6,235)
(10,872)
(17,107)
Unsecured Credit Facility. We had an unsecured credit agreement (the “Credit Agreement”) that provided for an aggregate commitment of the lenders of up to $525.0 million comprised of a $425.0 million revolving credit facility (the “Revolving Line of Credit”) and two $50.0 million term loans (the “Term Loans”). The Term Loans had maturities of November 19, 2025 and November 19, 2026. The Revolving Line of Credit has a maturity date of November 19, 2026. The Credit Agreement permitted us to request increases to the Revolving Line of Credit and Term Loans commitments up to a total of $1.0 billion.
During the third quarter of 2025, we entered into a new four-year unsecured credit agreement (“New Credit Agreement”) maturing in July 2029, to replace our previous Credit Agreement. The New Credit Agreement increased the aggregate commitment on our revolving line of credit from $425.0 million to $600.0 million and provides for the opportunity to increase the total commitment to an aggregate of $1.2 billion. The New Credit Agreement provides for a one-year extension option, subject to customary conditions. Material terms of the New Credit Agreement remain unchanged. In connection with the New Credit Agreement, the Term Loans were rolled into the new revolving line of credit, keeping the interest rate swap agreements intact at an average 2.3% rate, based on current margins. Based on our leverage at September 30, 2025, the facility provides for interest annually at SOFR plus 115 basis points and a facility fee of 20 basis points.
Interest Rate Swap Agreements. In connection with entering into the Term Loans as described above, we entered into two receive variable/pay fixed interest rate swap agreements (the “Interest Rate Swaps”) with maturities of November 19, 2025 and November 19, 2026, respectively, that effectively locked in the forecasted interest payments on the Term Loans’ borrowings over their four and five year terms of the loans. The Interest Rate Swaps are considered cash flow hedges and are recorded on our Consolidated Balance Sheets at fair value, with changes in the fair value of these instruments recognized in Accumulated other comprehensive income (loss) on our Consolidated Balance Sheets. During the three and nine months ended September 30, 2025, we recorded a decrease of $0.7 million and $2.4 million in fair value of Interest Rate Swaps, respectively. As discussed above, during the third quarter of 2025, Term Loans were paid off using proceeds from our new revolving line of credit under our New Credit
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Agreement, keeping the Interest Rate Swaps intact through November 2025 at 2.3% and November 2026 at 2.4%, based on current margins.
As of September 30, 2025, the terms of the Interest Rate Swaps are as follows (dollar amounts in thousands):
The debt obligations by component as of September 30, 2025 are as follows (dollar amounts in thousands):
During the nine months ended September 30, 2025, our debt borrowings and repayments were as follows (in thousands):
At September 30, 2025, we had 47,332,792 shares of common stock outstanding, total equity on our balance sheet $1.0 billion and our equity securities had a market value of $1.7 billion. During the nine months ended September 30, 2025, we declared and paid $80.0 million of cash dividends.
During the nine months ended September 30, 2025, we acquired 151,018 shares of common stock held by employees who tendered owned shares to satisfy tax withholding obligations.
Subsequent to September 30, 2025, we declared a monthly cash dividend of $0.19 per share on our common stock for the months of October, November and December 2025, payable on October 31, November 28, and December 31, 2025, respectively, to stockholders of record on October 23, November 20, and December 23, 2025, respectively.
At-The-Market Program. We have an equity distribution agreement (the “Equity Distribution Agreement”) to offer and sell, from time to time, up to $400.0 million in aggregate offering price of shares of our common stock. The Equity Distribution Agreement provides for sales of common shares to be made by means of ordinary brokers’ transactions, which may include block trades, or transactions that are deemed to be “at the market” offerings.
During the nine months ended September 30, 2025, we sold 1,655,100 shares of common stock for $59.3 million in net proceeds under our Equity Distribution Agreement. In conjunction with the sale of common stock, we incurred $353,000 of costs associated with this agreement which have been recorded in additional paid in capital as a reduction of proceeds received. At September 30, 2025, we had $330.3 million available under the Equity Distribution Agreement.
Available Shelf Registrations. We have an automatic shelf registration statement on file with the SEC and currently have the ability to file additional automatic shelf registration statements to provide us with capacity to publicly offer an indeterminate amount of common stock, preferred stock, warrants, debt, depositary shares, or units. We may from time to time raise capital under our automatic registration statement in amounts, at prices, and on terms to be announced when and if the securities are offered. The specifics of any future offerings, along with the use of proceeds of any securities offered, will be described in detail in a prospectus supplement, or other offering materials, at the time of the offering. Our shelf registration statement expires in November 2027.
Stock-Based Compensation. During the second quarter of 2021, we adopted and our shareholders approved the 2021 Equity Participation Plan (“the 2021 Plan”) which replaces the 2015 Equity Participation Plan (“the 2015 Plan”). Under the 2021 Plan, 1,900,000 shares of common stock have been authorized and reserved for awards, less one share for every one share that was subject to an award granted under the 2015 Plan after December 31, 2020 and prior to adoption. In addition, any shares that
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are not issued under outstanding awards under the 2015 Plan because the shares were forfeited or cancelled after December 31, 2020 will be added to and again be available for awards under the 2021 Plan. Under the 2021 Plan, the shares were authorized and reserved for awards to officers, employees, non-employee directors and consultants. The terms of the awards granted under the 2021 Plan and the 2015 Plan are set by our compensation committee at its discretion. Beginning in the first quarter of 2024, we entered into Performance Stock Unit Award Agreements, based upon absolute and relative total shareholder return, under the 2021 Plan.
During the nine months ended September 30, 2025, 165,549 shares of restricted stock and 182,915 performance-based stock units vested. During the nine months ended September 30, 2025, we awarded restricted stock and performance-based stock units as follows:
Award Type
Critical Accounting Policies
Our consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q are prepared in conformity with U.S. generally accepted accounting principles for interim financial information set forth in the Accounting Standards Codification as published by the Financial Accounting Standards Board, which require us to make estimates and assumptions regarding future events that affect the amounts reported in our financial statements and accompanying footnotes. We base these estimates on our experience and assumptions regarding future events we believe to be reasonable under the circumstances. Actual results could differ from those estimates and such differences may be material to the consolidated financial statements. We have described our most critical accounting policies in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of our Annual Report on Form 10-K for the year ended December 31, 2024. There have been no material changes to our critical accounting policies or estimates since December 31, 2024.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There were no material changes in our market risk during the nine months ended September 30, 2025. For additional information, refer to Item 7A as presented in our Annual Report on Form 10-K for the year ended December 31, 2024.
Item 4. CONTROLS AND PROCEDURES
Our management, with the participation of our Co-Chief Executive Officers and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on such evaluation our Co-Chief Executive Officers and Chief Financial Officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective.
There has not been any change in our internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15d and 15d-15(d) under the Exchange Act that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II -- OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
We are and may become from time to time a party to various claims and lawsuits arising in the ordinary course of business, which in our opinion are not singularly or in the aggregate anticipated to be material to our results of operations or financial condition. Claims and lawsuits may include matters involving general or professional liability asserted against the lessees or borrowers related to our properties, which we believe under applicable legal principles are not our responsibility as a non-possessory landlord or mortgage holder. We believe that these matters are the responsibility of our lessees and borrowers pursuant to general legal principles and pursuant to insurance and indemnification provisions in the applicable leases or mortgages. We intend to continue to vigorously defend such claims and lawsuits.
Item 1A. RISK FACTORS
The additional risk factors below should be read in conjunction with the risk factors set forth in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
Changes in federal, state, or local laws limiting REIT investments in the health care sector may adversely impact our ability to participate in the ownership of and investment in health care real estate.
Legislation potentially impacting REIT ownership and investment in the health care sector has recently been introduced or is under discussion at the federal and state level. These legislative proposals range from additional oversight to prohibitions on investors acquiring or increasing ownership, or operational or financial control, in a nursing home. Such legislation or similar laws or regulations, if enacted, may limit our opportunities to participate in the ownership of, or investment in, health care real estate. Changes in federal, state, or local laws or regulations limiting REIT investment in the health care sector, reducing health care related benefits for REITs, or requiring additional approvals for health care entities to do business with REITs, could have a material adverse effect on our financial condition and operations.
We are responsible for, and our financial performance will be impacted by, additional operational and legal risks and liabilities under our new SHOP segment.
During the second quarter of 2025, we began utilizing a structure, as authorized by the REIT Investment Diversification and Empowerment Act of 2007, commonly referred to as “RIDEA”. Under RIDEA, a REIT may lease a qualified healthcare property on an arm's-length basis to a taxable REIT subsidiary ("TRS") if the property is operated on behalf of such TRS by a person/entity who qualifies as an “eligible independent operator.” Under this structure, the eligible operator receives a management fee from our TRS for operating the property as an independent third party.
Properties in our new RIDEA structure are included in our seniors housing operating portfolio (“SHOP”) segment. During the second quarter of 2025, we terminated the Anthem Memory Care, LLC and New Perspective Senior Living, LLC triple-net master leases and converted 12 memory care and one independent and assisted living communities covered under the master leases to our new SHOP segment.
Additionally, during the third quarter of 2025, we acquired eight seniors housing communities within our SHOP segment. We may in the future acquire or transition other properties to a third-party manager using the RIDEA structure in our SHOP segment. There can be no assurance these transitions will improve performance of the properties, and they will also increase our exposure to risks associated with operating in this structure.
As the owner of a property under a RIDEA structure, we are responsible for, and our financial performance is impacted by, operational and legal risks and liabilities of the property. Although we have some general oversight approval rights and the right to review operational and financial reporting information with respect to a typical RIDEA structure, our independent third-party operators ultimately control of the day-to-day business of the property. We rely on the personnel, expertise, technical resources and information systems, proprietary information, good faith, and judgment of our independent third party operators to set appropriate resident fees, provide accurate property-level financial results for our properties in a timely manner and to otherwise operate properties in our SHOP segment in compliance with the terms of our management agreements and all applicable laws and regulations. The income we generate from RIDEA structures in our SHOP segment is subject to a number of operational risks including fluctuations in occupancy levels and resident fee levels, increases in the cost of food, materials, energy, labor or other services, national and regional economic conditions, the imposition of new or increased taxes and regulation, capital expenditure requirements, professional and general liability claims, and the availability and cost of professional and general liability insurance.
Except as described in this Item 1A, there have been no other known material changes from the risk factors since December 31, 2024.
Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None
Item 5. OTHER INFORMATION
Insider Trading Arrangements
During the nine months ended September 30, 2025, none of our directors or executive officers adopted, modified or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement” as such terms are defined under Item 408 of Regulation S-K.
Item 6. EXHIBITS
3.1
LTC Properties, Inc. Articles of Amendment and Restatement (incorporated by reference to Exhibit 3.1 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2025)
Bylaws of LTC Properties, Inc. (incorporated by reference to Exhibit 3.2 to the registrant’s Current Report on Form 8-K filed May 26, 2023)
Credit Agreement dated as of July 21, 2025 (incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed July 21, 2025)
Certification of the Co-Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2
Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to 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 Document
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF
Inline XBRL Taxonomy Extension Definitions Linkbase Document
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase Document
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
SIGNATURES
Pursuant to the requirements 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.
Registrant
Dated: November 4, 2025
By:
/s/ Caroline Chikhale
Caroline Chikhale
Executive Vice President, Chief Financial Officer, Treasurer and Corporate Secretary
(Principal Financial Officer)