CareTrust REIT (CTRE) Q4 2025 Earnings Transcript

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DATE

Friday, February 13, 2026 at 1 p.m. ET

CALL PARTICIPANTS

• Chief Executive Officer — David M. Sedgwick
• Chief Investment Officer — James B. Callister
• Chief Financial Officer — Derek J. Bunker
• Chief Operating Officer — Jonathan Hughes

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TAKEAWAYS

• Fiscal Q4 2025 Investments (period ended Dec. 31, 2025) -- $562 million completed, including the first SHOP deal with three Texas communities totaling 270 assisted living and memory care units.
• Blended Stabilized Yield -- 8.8% achieved on fiscal Q4 2025 investments.
• Fiscal Q4 2025 Loan Investments -- $84 million, with a majority allocated to the skilled nursing sector.
• Fiscal Q4 2025 Senior Housing Acquisitions -- $27 million for two communities triple-net leased to an established operator.
• Fiscal Q4 2025 Skilled Nursing Acquisitions -- 14 facilities bought across three transactions; totals not separately disclosed.
• Investments Year to Date Post-2025 -- $215 million closed since year end, including six skilled nursing facilities in the Mid-Atlantic and two UK care homes.
• Investment Pipeline -- $500 million as of the call, approximately 50% UK care homes, one-third skilled nursing, a small SHOP deal, and the remainder in loans and senior housing triple-net.
• Normalized FFO (fiscal Q4 2025) -- $104.1 million, up 42.7% sequentially.
• Normalized FAD (fiscal Q4 2025) -- $103 million, rising 38.7% quarter over quarter.
• Normalized FFO Per Share (fiscal Q4 2025) -- $0.47, a $0.07 increase or 17.5% sequentially.
• Normalized FAD Per Share (fiscal Q4 2025) -- $0.46, up $0.05 or 12.2% quarter over quarter.
• Normalized FFO Per Share (fiscal year 2025) -- $1.76, an increase of $0.26 or 17.3%.
• Normalized FAD Per Share (fiscal year 2025) -- $1.76, up $0.22 or 14.3%.
• 2025 Total Investments -- $1.8 billion executed, exceeding the prior record year of 2024.
• 2025 Market Capitalization Growth -- 61% increase to $8.2 billion at year end.
• 10-Year Total Shareholder Return -- Approximately 439% through year end.
• Fiscal Q4 2025 Equity Forward Sales -- 6.5 million shares on a forward basis at an average $37.30 for $242.5 million gross proceeds.
• Post-Year End Equity Forward Sales -- 3.5 million shares for $129.5 million in gross proceeds; total unsettled equity forward contracts outstanding at $372 million.
• 2026 Initial Guidance -- Normalized FFO per share and FAD per share projected at $1.90 to $1.95, with midpoints representing a 9.4% year-over-year increase.
• Liquidity -- $100 million cash on hand as of Feb. 11, 2026, full $1.2 billion revolver capacity, net debt to EBITDA of 0.7x, net debt to enterprise value of 3.7%, and a fixed charge coverage ratio of 10.5x.
• Fiscal Q4 2025 SHOP Cap Rate Environment -- Cap rates compressing as investor competition intensifies, with cap rates for UK care homes typically pre-tax mid-8% range, post-tax mid-7% and higher.
• Occupancy Rate -- Approximately 79%-80% across the portfolio, per management’s remarks.
• Growth Platform -- Expanded via acquisition of Care REIT (UK care home market) and first US SHOP deal.
• Operator Diversification -- Increased across geography, asset type, operator, borrower, manager, and payer source.

SUMMARY

CareTrust REIT (NYSE:CTRE) delivered significant sequential and annual growth in normalized FFO and FAD, reinforced by record investment totals and balance sheet expansion. Management’s 2026 guidance signals expectations for continued per-share earnings and cash distribution growth, attributing future gains to diversified investments in skilled nursing, SHOP, and UK care home assets. Current liquidity and low leverage position the company to capitalize on its $500 million transaction pipeline, with further capacity available for opportunistic funding approaches. Strategic advancements include overlaying operational and data science capabilities, increasing platform depth for integration of new asset types and geographies.

• Chief Executive Officer Sedgwick said, "occupancy is right around 79%, 80%," indicating upside as care facility utilizations recover.
• James B. Callister stated that competition is "most" pronounced in SHOP, with cap rate compression evident across the sector.
• Chief Financial Officer Bunker confirmed, "net debt to enterprise value of 3.7%" and "fixed charge coverage ratio of 10.5 times," underlining capital structure resilience.
• Equity forward contract proceeds remain available to fund near-term acquisitions, with management clarifying guidance does not assume additional new investments or financings beyond currently announced transactions.
• Management expressed that the expanded pipeline contains a balance of UK care home, skilled nursing, SHOP, and senior housing opportunities, with a disciplined underwriting approach targeting low double-digit unlevered IRRs.

INDUSTRY GLOSSARY

• SHOP: Senior Housing Operating Portfolio; properties operated and managed for the owner’s account rather than net-leased to single operators.
• Triple-Net Lease: Lease structure assigning the tenant responsibility for property taxes, insurance, and maintenance, reducing the landlord’s operational risk.
• FFO: Funds from Operations; a REIT-specific earnings metric adjusting net income for depreciation and gains on property sales.
• FAD: Funds Available for Distribution; a REIT cash-flow metric indicating funds remaining after capital expenditures.
• EBITDAR: Earnings Before Interest, Taxes, Depreciation, Amortization, and Rent; measures operating performance and portfolio “rent coverage.”

Full Conference Call Transcript

David M. Sedgwick: Thanks, Lauren. Good morning. I want to first acknowledge our dear friend, William M. Wagner, who officially retired a few weeks ago. CareTrust REIT, Inc. would not be what it is without Bill. He helped establish a strong foundation on which we are poised for success, and our future achievements will be a tribute to his many contributions. We wish him well in his much-deserved retirement and caution him to take it easy on the Oreo cookies and the pizza. It is a marathon, Bill, not a sprint. Alright. Thank you for joining us as we reflect on the incredible year that was 2025 and our plans to keep the flywheel ripping for years to come.

Simply put, 2025 was a transformational year for CareTrust REIT, Inc. Starting the year, we were a team of 21 coming off the most active investment year of our history, by a factor of five, punctuated by our largest single transaction to that point, which we closed at the end of 2024. Our portfolio consisted predominantly of triple-net leased skilled nursing facilities with a handful of net-lease senior housing assets and a loan book. In 2024, we had grown the equity market cap 74% to $5.1 billion. But we are never satisfied. So even though the company was running at a record pace, we believed two things.

One, we had another gear in us, and two, we needed to do some strategic heavy lifting to position the company to scale for the long term. So we got to work. Doubling our team of professionals, adding firepower throughout the organization, and bringing in-house other areas like tax and data science, and we executed. Acquiring Care REIT, including their team, to enter the UK care home market and closing on our first SHOP deal after methodically evaluating many opportunities, large and small, along the way. Our collective efforts led to total investments of $1.8 billion, surpassing our record 2024 and supporting our 17.3% year-over-year normalized FFO per share growth.

Beyond FFO, we have increased the diversification of our portfolio across geography, asset type, operator, borrower, manager, and payer source, as well as achieving continual improvement in our already strong EBITDAR rent coverage. We ended the year having again grown our market cap by 61% to $8.2 billion. I cannot help but take a moment to thank our shareholders, our board, our operators, our capital and strategic partners, and our entire team for their dedication and hard work. We simply could not have produced the 10-year total shareholder return through year end of approximately 439% without your commitment, professionalism, and sacrifices. I could go on and on about 2025, but really our focus is on 2026.

The accelerating momentum from 2024 to 2025 and the resulting growth has only stoked the hunger and motivation everyone at CareTrust REIT, Inc. feels to make 2026 another great year. Today, the skilled nursing operating environment is stable and largely supportive across most states, and the senior housing environment in both the US and UK is also stable and gaining strength in many markets. We hit the ground running in 2026. We do it with a CareTrust REIT, Inc. team that is deeper and more capable than any time in our history, and we are now running with the two additional growth engines of UK care homes and SHOP.

And yet, the start of this year feels very much like déjà vu all over again. What do I mean? What I mean is like 12 months ago, we are coming off another record year. Our operators continue to set the standard for portfolio lease coverage. We continue to have access to capital and a fortress balance sheet, and we again have high hopes for a substantial year of external growth. And we still feel the same urgency and hunger to grow long-term shareholder value.

And our mission remains the same: to be a unique healthcare REIT that is by operators for operators, making disciplined investments in assets and operators who can change the world of senior housing and care in a big way. With that, I will now turn it over to James. No pressure, my friend. Thanks, Dave. Good morning, everyone.

James B. Callister: During the fourth quarter, we completed approximately $562 million of investments, including our first SHOP deal, which involves three communities in Texas totaling 270 assisted living and memory care units. We are excited to partner with Sinceri Senior Living, who will help manage those communities for us. Fourth quarter investments included about $84 million of loans with the majority toward the skilled nursing sector, approximately $27 million to acquire two senior housing communities triple-net leased to an established operator, the remainder comprising the acquisition of 14 skilled nursing facilities across three transactions. Overall, the blended stabilized yield on fourth quarter investments was 8.8%.

Since year end, we have closed on another approximately $215 million of investments, including the acquisition of six skilled nursing facilities in the Mid-Atlantic, at a strong going-in rent coverage, leased to a quality operator in a new relationship for CareTrust REIT, Inc., and two care homes in the UK net leased to an existing operator. As we look forward, our investment pipeline remains strong, sitting at approximately $500 million. The quoted pipeline is approximately half UK care homes, a third skilled nursing, one small SHOP deal, and the remainder a combination of loans and senior housing triple net. It includes some singles and doubles as well as some mid to large-size portfolio transactions.

Please remember that when we quote our pipeline, we only include opportunities where we have a reasonable level of confidence that we can lock up and close within the next 12 months, and it does not always include larger portfolios that we are reviewing. Our investment pipeline remains robust, supported by a balanced mix of broker transactions and proprietary opportunities generated through established operator relationships and other strategic channels. We continue to see consistent deal flow across all sectors, encompassing triple-net and SHOP structures alongside a steady and meaningful increase in overall transaction activity, particularly within seniors housing and the care home market.

We are seeing the most competition in SHOP where cap rates continue to compress as investors seek more exposure to the sector to benefit from operating trends. Having said that, we are still finding SHOP opportunities that excite us, and we are benefiting from our strategic push in the UK and through our solid pipeline of skilled nursing deals. Our disciplined underwriting framework, combined with a strong focus on long-term operator partnerships and a commitment to creative, collaborative transaction structuring, will continue to drive sustainable growth across the skilled nursing, senior housing, and UK care home sectors. With that, I will now turn it over to Derek to review our quarterly financial results.

Derek J. Bunker: Thanks, James. For the fourth quarter, normalized FFO increased 42.7% over the prior quarter to $104.1 million, and normalized FAD increased 38.7% to $103 million. On a per-share basis, normalized FFO increased $0.07, or 17.5%, to $0.47 per share, and normalized FAD increased $0.05, or 12.2%, to $0.46 per share. For the full year, normalized FFO per share increased $0.26, or 17.3%, to $1.76 per share

James B. Callister: and normalized FAD increased $0.22, or 14.3%, to $1.76 per share.

Derek J. Bunker: During the fourth quarter, we sold 6.5 million shares on a forward basis at an average price of $37.30 for gross proceeds of approximately $242.5 million. After year end, we sold another 3.5 million shares on a forward basis for gross proceeds of $129.5 million, for a current total of $372 million of gross proceeds pending from unsettled equity forward contracts outstanding under the ATM program. We anticipate using proceeds from these sales to fund our acquisition pipeline. In yesterday's press release, we provided initial guidance for fiscal year 2026 of normalized FFO per share of $1.90 to $1.95, and normalized FAD per share of $1.90 to $1.95, the midpoints of which each represent a year-over-year increase of 9.4%.

In addition to the assumptions detailed in our release yesterday, I will note that our guidance does not assume any new investments, dispositions, debt repayments, and debt or equity issuances beyond those announced to date. Since we do not assume additional investments in our guidance, we assume the equity forward contracts will settle at year end. Lastly, our liquidity continues to remain strong. In addition to approximately $100 million of cash on hand as of 02/11/2026, we have full capacity available on our $1.2 billion revolver.

And despite a record pace of investments, we continue to maintain low leverage with net debt to EBITDA of 0.7 times, net debt to enterprise value of 3.7%, and a fixed charge coverage ratio of 10.5 times.

James B. Callister: Each as of year end.

Derek J. Bunker: With that, I will turn it back to Dave. Thanks, Derek. We hope our report has been helpful to you, and thank you for your continued support. We would be happy to answer your questions at this time.

Operator: We will now begin the question-and-answer session. If you would like to ask a question, please press 1 on your telephone keypad. To withdraw your question, press 1 again. Please pick up your handset when asking a question. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from Farrell Granath with Bank of America. Your line is open. Please proceed with your question. Thank you. And

Farrell Granath: I guess I will just start it off with your guidance and expectations for the pipeline going forward. I know you have added that there has been some additional competition at least in the SHOP area. But I am curious if you can elaborate on the opportunity set on these larger portfolios, specifically in SHOP. Now that you have entered into deals with your recent acquisition, is it seemingly easier to have these conversations? Are you having more inbound, especially on these larger portfolios?

James B. Callister: Yeah. Hey, Farrell. This is James. I mean, I think that the inbounds, I think, are pretty consistent. SHOP deals are typically pretty heavily marketed. So I think you see a pretty wide range of large and small deals that come through. I think our view is we want to look at all of it. Right? I think that

David M. Sedgwick: we want to be able to look at large and small and see the best, most risk-adjusted path to get us to a low double-digit IRR. I think we look at both. Like I said, they are pretty heavily marketed, even the larger ones. So I think we see just about everything that comes in, and I think the brokers have definitely gotten word of our interest in SHOP and know, I would be pretty surprised, shocked if a meaningful deal was out there that had not come across our desk.

Farrell Granath: Thank you. And also in your commentary around specifically SNFs reaching record levels of coverage and now looking forward to 2026, I am curious how sustainable do you think these coverage levels are as well as just framing the current market environment headlines when it comes to Medicare Advantage and how you are just viewing SNFs in the market.

David M. Sedgwick: Yeah. Thanks, Farrell. The skilled nursing environment right now I think is in a really good place. Speaking with our operators very recently, that is the sentiment that we get from them. Labor is in a much better place than it has been in recent history. The states, regulatory, reimbursement-wise, things feel really good. And our operators are really anxious to seize the moment and get back into growth mode. So we feel like if you look at our portfolio, you look at the coverage, you know, our occupancy is right around 79%, 80%. So there is still room, quite a bit of upside for our operators as that number increases, to offset the inevitable headwinds.

There is always going to be headwinds in skilled nursing every year. There is always something. But with great operators and beefy coverage, you can at least, we believe, manage through any of that.

Farrell Granath: Great. Thank you very much.

David M. Sedgwick: Thanks, Farrell.

Operator: Your next question comes from the line of Wesley Golladay with Baird. Your line is open. Please go ahead.

David M. Sedgwick: Thank you. Hey. Hey, everyone. You did make some data analytics hires

Wesley Golladay: earlier in the year. Can you talk about what they are focused on at the beginning? Are they mainly targeting senior housing operations? Or is it more so for the acquisitions of all segments?

David M. Sedgwick: Yeah. So the investment in the data science team right now is prioritized on building out our SHOP capabilities, building out that platform, but ultimately, that team is going to have an impact across the whole organization, making us more efficient, making us smarter. We are already seeing it, and we really like what we see. We will continue to invest in that department.

Wesley Golladay: Okay. Thank you.

David M. Sedgwick: Thanks, Wes.

Operator: Your next question comes from the line of Michael Albert Carroll with RBC Capital Markets. Your line is open. Please proceed.

Michael Albert Carroll: James, can you provide us some details on the pipeline right now? Of that $500 million, like what is

Michael Albert Carroll: the break out between care homes, SHOP, and skilled nursing facility deals?

Michael Albert Carroll: Yeah. Mike, I would say of that $500 million right now, I think like I kind of put in the prepared remarks, it is about half UK care homes right now, about a third, I would say, US skilled nursing, and the rest is a combination of, you know, a SHOP deal, triple-net seniors, and a couple small loans in there.

Michael Albert Carroll: I am sorry. I forgot that you said that. Can you, I know you kind of highlighted this earlier, but just on the competitive landscape that you are seeing within this space, I mean, is it any more competitive in specific property types? Like, are you seeing it being more competitive in SHOP, SNFs, UK care homes? Or is it kind of similar across the board?

James B. Callister: You know, I would say of the three segments, I think that SHOP is definitely the most competitive. I think you have the most capital pursuing deals. So I think you see definitely the most interest based on groups wanting to get in on the operating trends. But I think that we still feel like there are SHOP deals out there that really excite us. I feel like with our cost of capital, we can be really competitive.

And as we really pour through just about everything that comes in and wanting to look at, you know, deals that we think can get us through different paths to that low double-digit IRR, we feel like when we find those deals that really intrigue us despite the competition, that we can pounce and go get the deals we really want.

Michael Albert Carroll: And then if you look at the cap rates for each individual property type, how much do they typically vary? I know that you did about high eights, I guess, the fourth quarter and to date. Like, if you are looking at more UK care homes and SHOP deals, I mean, should we expect that yield to dip a little bit lower? And just kind of off of that, when you are quoting those cap rates do you include the tax leakage on the UK care homes, or do we need to make sure that we think about that when we are putting our numbers out there?

James B. Callister: I will defer to Derek. I think we do quote post-tax, but I mean, the SNF yields are going to be the same that they have been historically. I mean, if it is a really large portfolio deal or with incredible coverage, we might dip, you know, a teeny below what we normally do, but SNF deals are still going to be in the nines.

Derek J. Bunker: SHOP

James B. Callister: cap rates, Mike, are definitely compressing, so every deal is a little different. There is just a wider band range of cap rates in seniors depending on how old the vintage is, the CapEx needs, the location, the age, all those kinds of things. In UK, I mean, it is typically going to be pre-tax mid-eights

Derek J. Bunker: to higher.

James B. Callister: Post-tax mid-sevens to higher.

Michael Albert Carroll: Great. I appreciate it.

Derek J. Bunker: On the blended deal, we typically

Derek J. Bunker: typically do not exclude the impact of the withholding tax in the UK when giving a blended stabilized yield.

Operator: Okay. Your next question comes from the line of Michael Goldsmith with UBS. Your line is open. Please go ahead.

David M. Sedgwick: Afternoon. Thanks for taking my question. You know, you have already done $215 million to start the year. You have got $500 million in the pipeline.

Michael Goldsmith: So over $700 million. At this point last year, you were at $350 million. You know, you started the call talking about how 2025 was a bit déjà vu of 2024 with the growth. But I guess just given where you are set up, like, how confident are you that we will be talking about next year, we will be talking about déjà vu all again given the strong growth and investment opportunities.

David M. Sedgwick: Oh, I love a crystal ball question, Mike. I will answer it this way. I think we felt really, really good going into 2025. We felt like the table was set to have another big year, and the difference going into this year is I just feel better about it. Because now the difference is our team is deeper and more capable, and we have the UK and the SHOP TAMs to play in as well. So as long as there are some meaningful, you know, chunky-type opportunities out there, we should be really competitive,

David M. Sedgwick: and

David M. Sedgwick: we certainly have the potential, if those deals materialize, to have another really substantial year.

Michael Goldsmith: Thanks for that. And as a follow-up, being a SNF REIT and seeing the operational intensity that comes with skilled nursing and dealing with SNF operators, does that give you an advantage as you enter SHOP? How much different is there in identifying skilled nursing operators versus SHOP operators?

Michael Goldsmith: Thanks.

David M. Sedgwick: Thanks for that question. We do think that our operating DNA and deep experience is helpful. It certainly informs how we underwrite. It certainly informs how we vet operators and how we asset manage. I think it provides a deeper level across the board. And I see, and I think you see, that manifested in our lease coverage. You know that? That really is a symbol of choosing the right operators, underwriting the deals properly. And there is a lot that we carry over from vetting skilled operators with choosing seniors as well. Thank you very much. Good luck in 2026. Thanks a lot. Your next

Operator: question comes from the line of Juan Sanabria with BMO Capital Markets. Your line is open. Please go ahead.

Juan Sanabria: Hi. Thanks for the time.

Michael Goldsmith: Just curious, as you have expanded your opportunities set with UK care homes and SHOP, if you look at, one, UK SHOP or IDA transactions, and two, if you consider doing development at some point in seniors housing recognizing you are larger and can maybe wear the initial dilution, I would imagine some of the growing operators are looking to development as a source of opportunities. So curious on your stance on those two.

David M. Sedgwick: Great question. I think on the first, as we look at the UK,

Michael Goldsmith: the

David M. Sedgwick: operator relationships that we have right now are eager to grow with us, and they have expressed a desire to

Derek J. Bunker: to continue to, you know, to do deals with us in a triple-net basis. I think that there will be, as you look in the future, there is going to be opportunities probably to apply our SHOP platform to the UK. So I would never say never on that, and I would say it is probably more likely than not in years to come. So the second part of your question was development, and I think, yeah, there is going to be, I think what we would like to do there is de-risk to the market instead of being at risk.

So right now, generally, you know, it still does not pencil to do anything in a significant way here in the United States with respect to development.

Michael Goldsmith: But there could be

Derek J. Bunker: certain circumstances, certain opportunities that do. And on a limited basis for the right operator, for the right location, I think we would take a hard look at that.

Michael Goldsmith: Great. Thanks. Since you kind of noted getting a new operating partner in the Mid-Atlantic with the recent transaction, I am not sure if you feel comfortable naming that operator, or you could just give us a little color on that group and if it was related in any way to the Integra transaction that one of your peers announced.

James B. Callister: Yeah. I mean, I do not think we have a problem announcing it. They have released their own press releases, Juan. So it is a group known as Miller Group, but I do not think they are affiliated with anything else anybody has announced. If you are referencing Sabra, it is not Sabra.

Michael Goldsmith: Thank you.

Derek J. Bunker: Thanks, Juan.

Operator: Your next question comes from the line of Michael Stroyak with Green Street. Your line is open. Please go ahead.

James B. Callister: Thanks, and good morning. Can you maybe just talk about your underwriting

Michael Albert Carroll: criteria within SHOP and whether that has changed at all due to the increased competition, either at the property level or just in terms of IRR requirements, or are you just passing on more deals than maybe

James B. Callister: you would have, call it, three to six months ago? I mean, we definitely noticed the compression in cap rates. I think that we still look to get an unlevered IRR in the low double digits. And we look at every deal to see what that deal's path is to get us there and what we think the pricing will be. So, I mean, I do not think we just look at it in one box and say, you know, we have to have, you know, a seven going in, and it has to look exactly like this to get us there.

I think we are going to look at it given the compression in the market and the cap rates, and we are going to look at what is this deal's path to get us to that low double digit. And how realistic is it? Right? If it is in lease-up, if it does or does not need CapEx, what its position is in the market, what is the revenue versus expense growth look like. So I think you look at all of that in the same way we always

Derek J. Bunker: have.

James B. Callister: I think that we take expected pricing into account for sure, and it impacts how we see us getting to that double-digit IRR. But, you know, maybe some deals trade a little too expensive to get us there, but that has always been the case a little bit. So I do not think it has changed much of the underwriting. I think it has just changed the path we see as getting to the low double-digit IRR we are looking for.

Michael Albert Carroll: Got it. Makes sense.

James B. Callister: Maybe one additional question. Just

Michael Albert Carroll: given pretty minimal leverage today,

James B. Callister: how are you thinking about funding future external growth? And at what point do you think it would make sense to use some balance sheet capacity instead of equity issuances?

Derek J. Bunker: Thanks, Mike. You know, I think more of the same as we have approached over the past year or two. Really just piggybacking off Dave’s comments. It feels like we are positioned really well. Capital markets have been favorable. I think as rates have come down, you know, using the balance sheet is a balance between looking at where our equity is trading and a little bit more on the

Jonathan Hughes: revolver side. And I think there will be a point where we start to carry a little bit there, maybe then look toward the bond market, especially as we fully realize the IG savings that we think we can get. But we just feel like we are in a multiyear sort of inflection of getting bigger deals and bigger opportunities, and so we want to make sure we have got really full capacity and full availability, whether that is debt or equity.

Michael Goldsmith: Got it. Thanks for the time.

Derek J. Bunker: Thanks, Mike. Thanks.

Lauren Beale: Your next question

Operator: comes from the line of Austin Todd Wurschmidt with KeyBanc Capital Markets. Your line is open. Please go ahead.

James B. Callister: Yeah. These

Michael Goldsmith: you referenced some of the hiring that you have done this past year, and I am just wondering, you know, for any potential larger transactions, do you feel like you have the platform and people in place to digest that? Or do you think it would come with, you know, adding additional

James B. Callister: folks to kind of help oversee that effort, you know, maybe particularly within SHOP, which is a little bit of a newer segment for you.

Derek J. Bunker: Yeah. I think the answer to that is really going to be relative

David M. Sedgwick: to the circumstances of the deal, the size of it, the complexity of it, whether or not the team, or part of a team, would come with it,

Derek J. Bunker: those are all things that we throw into the

David M. Sedgwick: mix to figure out how to get a big deal done. The team here is

Derek J. Bunker: pound for pound, in my opinion, the best and the most capable to do all sorts of things. But there still are going to be some deals,

David M. Sedgwick: like the UK care home acquisition last year, Care REIT, where it came with some really talented people, and we decided to keep. So it is all going to be relative to the circumstances of the particular deal.

Austin Todd Wurschmidt: Helpful. And then just one on the loan book. I mean, it seems like kind of the competition in the lending markets these days has picked up a little bit. I mean, any risk of loan prepayments that you foresee or any conversations you are having on that front?

Michael Goldsmith: Well,

David M. Sedgwick: you know, the loan strategy that we put in place a few years ago has

Derek J. Bunker: wildly exceeded our expectations and helped

David M. Sedgwick: fuel real growth, real acquisition of real estate that either came with or because of those loans and relationships that we developed. I think as things get more competitive as banks kind of jump back into the space, those relationships are still very active with us. It is still looking at off-market opportunities with those relationships. And so I think that is still going to be, going forward,

Derek J. Bunker: a really unique and powerful

David M. Sedgwick: mode of growth for us,

Derek J. Bunker: maybe a little bit less

David M. Sedgwick: than it has been in the past if banks continue to get really aggressive, but we are looking still, not included in that pipeline number, at some larger deals that are off-market with some of these strategic partners of ours. And

Derek J. Bunker: you know, if we get some loans paid back,

David M. Sedgwick: that will just fuel additional growth because that pipeline continues to reload.

Austin Todd Wurschmidt: Thank you. Thanks, Austin.

Operator: There are no further questions at this time. I will now turn the call back to David M. Sedgwick, CEO, for closing remarks.

Derek J. Bunker: Well, we are really grateful for everybody's interest and support. If you have follow-ups, you know where to find us. Have a great day.

Operator: That concludes today's call. Thank you for attending. You may now disconnect.

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