National Health Investors (NHI) Q4 Conference Call Transcript

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DATE

Friday, Feb. 27, 2026, at 10 a.m. ET

CALL PARTICIPANTS

• President and Chief Executive Officer — D. Eric Mendelsohn
• Chief Investment Officer — Kevin Carlton Pascoe
• Chief Financial Officer — John L. Spaid
• Chief Accounting Officer — David Travis

TAKEAWAYS

• Normalized FFO Per Share Growth -- Increased 8.9% year over year in Q4 and 10.6% for the full year, with $1.22 and $4.91 per share, respectively.
• SHOP Segment NOI -- Rose 125% year over year and 48% sequentially in Q4; for the year, up 57% including 7.6% same-store growth and $6 million from transitions and acquisitions.
• Triple-Net Cash Rental Income -- Increased approximately 7% in Q4, primarily due to acquisitions, while interest income declined 19% due to loan payoffs and pay downs.
• Total 2025 Investments -- $392 million, exceeding initial guidance of $225 million; Q4 investments totaled $218 million, marking the highest annual volume since 2016.
• Active 2026 Pipeline -- Over $488 million, plus $111 million under signed letters of intent; $105.5 million SHOP acquisition closed in February, the largest SHOP deal to date.
• Portfolio Allocation Shift -- SHOP investments increased by 106% over twelve months to ~$740 million, now comprising 12% of annualized NOI, up from 4.5% the prior year.
• 2026 Investment Focus -- Guidance anticipates approximately 70% of new investments to be allocated to SHOP, with target acquisition yields of 7%-8% and expected SHOP NOI growth over 105% before new investments.
• Net Income and NAREIT FFO -- Q4 net income per share was $0.80, down 15.8% year over year; fourth quarter NAREIT FFO per share decreased 1.6% to $1.22, while the full year increased 2.2% to $4.65.
• FAD Growth -- Fourth quarter FAD rose 11.1% to $57.9 million; full-year FAD grew 13.7% to $232.1 million.
• Leverage and Liquidity -- Net debt to adjusted EBITDA ended at 3.8x; new policy range is 3.5x–4.5x; available liquidity at year-end totals ~$875 million.
• 2026 Guidance -- Normalized FFO per share growth at midpoint projected at 1.2%; total FAD expected to grow 7.8% to $250.2 million; guidance includes $230 million of new investments and $111 million of nonstrategic asset dispositions.
• Bickford Deferred Rent -- Repayments increased 38% to $1.5 million in Q4; the remaining balance was $7.6 million at year end, with future repayments subject to restructuring after April’s rent reset.
• Dividend Declaration -- Board declared a $0.92 per share dividend, payable May 1, 2026, to shareholders of record as of March 31, 2026.
• Board Appointment -- Lily Donahue joined the board, bringing experience as Holiday Retirement CEO from 2016 to 2022 with direct relevance to senior living operations.

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RISKS

• Net Income Decline -- Net income per share for Q4 was $0.80, a decrease of 15.8% year over year, attributed to the recognition of nonrecurring gains in the prior year period.
• 2026 FFO Growth Guidance -- Management stated, "This is clearly not where we view the core growth rate of the company," referencing the low midpoint of 1.2% normalized FFO per share growth, impacted by recurring benefit adjustments and large planned dispositions.
• Same-Store SHOP Performance -- The 15-property legacy Holiday same-store SHOP portfolio NOI declined 0.9% year over year, with growth more heavily weighted toward the second half of 2026 as occupancy recovers.
• Bickford Deferred Rent Repayment -- The company expects it would still probably take them a handful of years to pay that off, indicating continued exposure and uncertainty regarding deferred rent collections.

SUMMARY

National Health Investors (NYSE:NHI) delivered substantial full-year growth in normalized FFO per share and accelerated capital deployment, focused largely on expanding the SHOP platform. Management emphasized a nonrecurring boost to 2025 results and guided to only modest normalized FFO growth in 2026, citing $111 million of nonstrategic asset dispositions and past gains that will not repeat. The SHOP segment saw rapid growth, both operationally and as a strategic focus, while legacy triple-net business continued to contribute steady cash flow amid shifts in asset allocation and underwriting.

• Management is actively reallocating capital away from asset-intensive, non-core triple-net relationships and toward scalable SHOP and key partner platforms, aiming for enhanced efficiency and higher risk-adjusted returns.
• Recent investments and signed LOIs set the stage for NHI's largest expansion of the SHOP segment, with pipeline visibility and explicit plans for continued growth and operator diversification.
• The board appointment of Lily Donahue highlights a focus on operational leadership as the SHOP platform matures, reinforcing the company's evolving internal expertise in senior housing.
• Debt policy has been tightened, lowering the leverage target range to preserve an investment-grade rating and financial flexibility within a higher-for-longer interest rate environment.

INDUSTRY GLOSSARY

• SHOP: Senior Housing Operating Portfolio; NHI's direct operating segment for private-pay senior living properties, allowing the REIT to participate in both revenues and expenses (RIDEA structure).
• NOI: Net Operating Income; a measure of property-level profitability before corporate overhead, capex, interest, and taxes.
• NAREIT FFO: National Association of Real Estate Investment Trusts Funds From Operations; a key non-GAAP metric reflecting net income with certain real estate-related adjustments, standard for REIT comparability.
• FAD: Funds Available for Distribution; cash available after capital expenditures and other adjustments, indicating dividend-paying capability.
• Triple-net: Lease structure in which tenants are responsible for property taxes, insurance, and maintenance, ensuring predictable rental income for the landlord.
• EBITDARM: Earnings Before Interest, Taxes, Depreciation, Amortization, Rent, and Management fees; a coverage metric used to assess senior housing operator creditworthiness.
• LOI: Letter of Intent; a non-binding agreement outlining the main terms of a potential transaction, used as a signal of advanced acquisition discussions.
• RIDEA: REIT Investment Diversification and Empowerment Act; a provision allowing REITs to participate directly in operating income and expenses of healthcare properties via taxable REIT subsidiaries.

Full Conference Call Transcript

Dana Hambly: On the call today are D. Eric Mendelsohn, President and CEO; Kevin Carlton Pascoe, Chief Investment Officer; John L. Spaid, Chief Financial Officer; and David Travis, Chief Accounting Officer. The results as well as notice of the accessibility of this conference call were released after the market closed yesterday in a press release that has been covered by the financial media. Any statements in this conference call which are not historical facts are forward-looking statements. National Health Investors, Inc. cautions investors that any forward-looking statement may involve risks or uncertainties that are not guarantees of future performance. All forward-looking statements represent National Health Investors, Inc.’s judgment as of the date of this conference call.

Investors are urged to carefully review various disclosures made by National Health Investors, Inc. in its periodic reports filed with the Securities and Exchange Commission, including the risk factors and other information disclosed in National Health Investors, Inc.’s Form 10-K for the year ended 12/31/2025. Copies of these filings are available on the SEC’s website at sec.gov or on National Health Investors, Inc.’s website at nhireit.com. In addition, certain terms used in this call are non-GAAP financial measures, reconciliations of which are provided in National Health Investors, Inc.’s earnings release and related tables and schedules which have been furnished on Form 8-K to the SEC.

Listeners are encouraged to review those reconciliations provided in the earnings release together with all other information provided in that release. I will now turn the call over to our CEO, D. Eric Mendelsohn.

D. Eric Mendelsohn: Good morning, and thanks to everyone for joining us today. Completed the year with a solid fourth quarter that generated normalized FFO per share growth of 8.9% compared to last year. The SHOP platform is central to our investment thesis, and was a core contributor to the quarter as total NOI increased by 125% year over year and 48% sequentially. Cash rental income from our triple-net portfolio increased by approximately 7% primarily due to acquisitions while interest income declined by 19% in the fourth quarter due to loan payoffs and pay downs. Reflecting on the full-year results, we delivered growth in normalized FFO per of 10.6%, and total FAD growth of 13.7%.

This exceeded the midpoints of our initial 2025 guidance by approximately 65%, respectively. SHOP NOI increased by approximately 57% compared to 2024 with 7.6% same-store growth and $6,000,000 from transitions and acquisitions. Our cash rental revenue increased by approximately 10% year over year with contributions both internally and externally. We announced investments of $392,000,000 in 2025, which was well above our initial guidance of $225,000,000, was our most active year since 2016. This included investments of $218,000,000 in the fourth quarter alone, setting the company up nicely for strong acquisition growth in 2026. In fact, we have already closed on one deal this year for $105,500,000, our largest SHOP acquisition to date.

We have an active pipeline of over $488,000,000 with an additional $111,000,000 under signed letters of intent. The industry tailwinds for senior housing have never been more favorable, and there is little evidence to suggest that this will change in the next several years. According to NIC MAP, there were fewer than 25,000 units under construction in the fourth quarter, which represents just 2.2% of total inventory and the lowest level since 2012. This shows no signs of reversing as new unit starts are less than 1% of inventory, the lowest level since NIC MAP started reporting this information in 2008. Meanwhile, demand is accelerating as the first baby boomers turned 80 this year.

National Health Investors, Inc. is well positioned to capitalize on this long-term generational growth. We continue to methodically invest in our SHOP capabilities as we significantly expand our presence in private-pay senior housing operations, where we see the greatest risk-adjusted returns. We are adding to talent rapidly. We currently have 35 employees, which is a 46% increase from our average employee count in 2022 when we established our SHOP platform. Including the recent February acquisition, we have increased our SHOP investment by 106% in the last twelve months to approximately $740,000,000. This has increased our annualized SHOP NOI contribution to 12% of total annualized NOI from 4.5% at the 2024.

As outlined in our guidance, we expect that 70% of our investment activity this year will be allocated to SHOP, which coupled with strong organic growth should continue to drive SHOP NOI contribution exponentially higher. Similar to our approach in the triple-net portfolio, we are targeting SHOP investments at need-driven senior living communities in secondary suburban markets where we have a better understanding of the local dynamics that most impact operations. We are seeking partners that have demonstrated an ability to deliver outstanding resident satisfaction, which we believe is achieved by attracting and retaining mission-driven employees.

Frankly, we have been overwhelmed by the interest in partnering with National Health Investors, Inc., which creates a larger talent pool for us and lowers new investments. From a financial standpoint, our target markets tend to see fewer buyers than the primary markets, allowing National Health Investors, Inc. to find stabilized properties at attractive yields in the 7% to 8% range. We expect near-term NOI growth in the first few years in the high single-digit to low double-digit range, which produces strong rates of return in the low to mid-teens. is very conducive to supporting growth National Health Investors, Inc.’s financial strength and bolstered by our fortress balance sheet.

Our leverage is less than four times net debt to adjusted EBITDA, and we have plenty of dry powder. Our demonstrated ability to access attractive debt and equity capital creates a real competitive advantage for National Health Investors, Inc. in maintaining and growing the pipeline, as market participants can be confident in our ability to finance deals quickly and with limited closing risk. Regarding our 2026 outlook, we issued guidance last night that included normalized FFO per share growth of 1.2% at the midpoint. This is clearly not where we view the core growth rate of the company.

Recall that in 2025, results benefited from several items that we do not view as recurring, which John will address in more detail. When adjusting for these items, we estimate that our normalized growth rate is in the 5% to 6% range, the midpoint of our 2026 NFFO per share guidance implies a two-year CAGR of approximately 6%. Further, this year’s guidance includes approximately $111,000,000 of dispositions of nonstrategic assets. While we are continually reviewing the portfolio, the early-year timing and unusually large size of the dispositions impact this year’s growth by an incremental and estimated 1.5%.

From a big-picture perspective, National Health Investors, Inc. is an great position to drive exceptional long-term FFO per share growth and create sustained value for shareholders. We are investing in the people and resources necessary to scale our future growth, particularly in SHOP, with estimated NOI growth of over 105% in 2026 before consideration for new investments. Our financial strength gives us flexibility to pursue significant external growth. And the senior housing industry fundamentals have never been more attractive. In short, we are as enthusiastic as we have ever been. Before I turn the call over to Kevin, I want to welcome our newest board member.

We announced this week that Lily Donahue has joined the National Health Investors, Inc. board of directors. As many of you know, Lily served as the CEO of Holiday Retirement from 2016 to 2022 overseeing a portfolio of more than 300 independent living communities in 46 states. She brings an extensive and diverse set of skills to the National Health Investors, Inc. board. Her deep experience in senior living operations obviously makes her a great fit for us in these early stages of our growing SHOP platform. I will now turn the call over to Kevin. Kevin?

Kevin Carlton Pascoe: Thank you, Eric. Starting with investment activity and the pipeline, National Health Investors, Inc. had a great year in 2025 with $392,400,000 in investments at an 8.1% average initial yield. As Eric noted, the fourth quarter was particularly active, investments of $217,500,000, and 2026 is off to a solid start. In February, we announced our largest SHOP to date of $105,500,000 for nine properties in Kentucky, South Carolina, and Tennessee. We expect an initial NOI yield for the first year of approximately 87.6% when including routine CapEx. Allegro Living Management is the new manager for these properties, so we expect some transitional impacts in the first year but forecast solid double-digit growth in year two.

Allegro is an affiliate of Spring Arbor Management whom we have worked with since 2024 and has extensive experience in these suburban markets that Eric described earlier. Our total investment with Spring Arbor is now $227,000,000, and we are looking at opportunities to continue to grow with them. On that note, the pipeline is as active as ever, which gives us confidence that we can meet or exceed last year’s total investments. We currently have $110,600,000 under signed letters of intent, primarily in SHOP, and we are evaluating an incremental pipeline of $488,000,000 all in senior housing. This figure excludes any portfolio deals, but I will add that we are reviewing several of these large potential investments.

We expect that the acquisition environment will remain incredibly strong for several years, which necessitates that we understand how each of our properties either fit or does not fit within National Health Investors, Inc.’s strategic outlook. As a part of this ongoing process, we have planned dispositions of seven buildings with six different operators. These properties are not strategically important, so we believe that we can better reallocate our resources to focus on relationships with much more growth potential. Turning to our operating performance. Total SHOP NOI increased by 124.9% compared to 2024 due to the transition of seven properties on August 1, and the acquisition of four properties on October 1.

The same-store NOI on the 15 legacy Holiday properties declined by less than 1% year over year but increased 8.7% sequentially from the third quarter. For the year, our same-store NOI increased by 7.6%, and our 2026 guidance contemplates a 7% to 8% increase which is more heavily weighted to the second half of the year as occupancy recovers and the 16 units we discussed last quarter come back into service in May. The 11 properties that we transitioned and acquired contributed $4,100,000 to the fourth-quarter SHOP NOI and are performing in line with expectations. We expect double-digit NOI growth from this group as it enters the same-store portfolio later this year and early next.

Across the triple-net portfolio, we are generally experiencing the continuation of solid trends with no rent concessions, continued collection of deferred rents from Bickford in excess of expectations, stable occupancy and EBITDARM coverages. Cash lease revenue increased approximately 7.2% year over year driven primarily by acquisitions, successful transition of properties formerly operated by SLM, and annual escalators. Deferral collections of $1,900,000 actually decreased by 17% compared to the fourth quarter of last year, which we regard as a success as our outstanding balances have largely been collected at this point, and we do not expect to report on this metric going forward.

While total collections declined, the Bickford repayment increased by 38% to $1,500,000 in the fourth quarter and they had an outstanding balance of $7,600,000 at December 31. We continue to expect that Bickford’s cash rental revenue will increase in total dollars at the April 1 rent reset, and we will be able to provide more details on the next conference call. The pipeline continued to be active with triple-net senior housing deals as we do not think every property is a fit for SHOP. We are also getting more creative with certain targeted lease underwriting to maintain flexibility for potential SHOP conversions.

As an example, we purchased a property in Jamison, Pennsylvania for $52,100,000 which is now operated by Priority Life Care. Priority is a new relationship for National Health Investors, Inc. but they are a well-established operator with over 60 properties across 12 states. The lease is unique as it is a five-year lease at an initial yield of 8% plus a revenue participation feature that could add another 25 to 50 basis points. There are also provisions in the agreement would convert the property to SHOP we anticipate triggering. That concludes my remarks, and I will now turn the call over to John to discuss our financial results and guidance. John?

John L. Spaid: Thank you, Kevin, and hello, everyone. Morning, I will provide details on our fourth quarter and full-year results, review our financial strength, including our updated leverage policy, and conclude with our financial outlook for 2026. I will be using average diluted common shares for all per-share results. For the quarter ended 12/31/2025, our net income per share was $0.80, a decrease of 15.8% from the prior year. Recall that in the prior-year period, we recognized a $6,300,000 noncash gain related to derivative accounting for forward equity sales agreements as well as the $5,000,000 gain on sales of real estate. For the twelve-month period ended 12/31/2025, our net income per share was $3.02 compared to $3.13 in the prior year.

Our NAREIT FFO results per share for the fourth quarter and full year compared to the prior-year periods decreased 1.6% and increased 2.2% to $1.22 and $4.65 per share, respectively. The prior-year period’s NAREIT FFO benefited from the aforementioned $6,300,000 gain from derivative accounting. Our normalized FFO results per share for fourth quarter and full year increased 8.9% and 10.6% with $1.22 and $4.91 per share, respectively, compared to the prior-year periods. Several onetime items helped us achieve these great normalized FFO results. During the year, we recognized gains from equity method investments of $3,700,000, up from $400,000 in the prior year.

We also recognized a $3,400,000 benefit to our credit loss reserves compared to a credit loss expense of $4,600,000 in the prior year. Finally, we recognized $3,900,000 in cash rental income upon lease terminations, which excludes noncash write-offs of straight-line rents receivable, and excludes noncash rental income related to operations transfers attributable to the third-quarter SHOP transition properties, which benefited both normalized FFO and FAD. FAD for the fourth quarter and full year compared to the prior-year periods increased 11.1% and 13.7% to $57.9 and $232,100,000, respectively. As Kevin noted, NOI from our 26-property SHOP segment for the quarter ended December 31 increased 124.9% to $7,300,000 compared to the prior-year period.

Our 15-property same-store SHOP portfolio NOI declined 0.9% to $3,200,000 from the prior-year fourth quarter but was sequentially up 8.7% from the third quarter. Subsequent to the end of the year, we added an additional nine properties to our SHOP segment, which brings our total investment in SHOP to $740,000,000. Our 2026 guidance released last night included our NOI expectations for these properties to be $39,600,000 at the midpoint. We believe that the 5.4% yield on our current in-place SHOP invested capital continues to represent substantial NOI growth upside for the company. I will talk more about our 2026 guidance in just a moment.

Interest expense for the fourth quarter was down 6.4% year over year while weighted average common diluted shares was up 5.4% to 47,900,000 shares as a result of the company’s greater use of equity in lieu of debt to fund new investments over the last year. Cash G&A increased 39.9% to $6,600,000 compared to the year-earlier period while legal expense declined $400,000. During the quarter, we closed on new totaling $217,500,000. For the year, we made $392,000,000 in new investments. The highest level since 2016. This volume reflects both the success we have with converting existing loans into fee simple ownership as well as the redeployment of over $93,300,000 in other loan investment payoffs during the year.

Our net deployment of new investment capital represents a 42% increase year over year. During the quarter, we settled approximately 600,000 common shares from our Q2 2025 forward ATM equity activity with proceeds of approximately $46,200,000 at an adjusted forward price of $71.87 per share after fees and forward costs. At 12/31/2025, we have remaining escrowed forward equity proceeds of approximately $44,500,000 available to us in exchange for the future delivery of 600,000 common shares at an average price of $69.23 per share. We ended the year with $19,600,000 in cash on our balance sheet, $496,000,000 in revolver capacity and also had $315,800,000 available on our ATMs assuming the settlement of our forward equity sale agreements.

Our balance sheet ended the fourth quarter in great shape. Our net debt to adjusted EBITDA ratio was 3.8 times for the quarter, and our available liquidity was approximately $875,000,000 attributable to the cash on our balance sheet, excess revolver, forward equity, and additional ATM capacity. We are also announcing today a change in our leverage policy. We are lowering our leverage policy from a range of four times to five times to a range of three and a half times to four and a half times net debt to adjusted EBITDA.

Our lower leverage policy reflects the importance we place in our investment grade rating, and also reflects the changes to our debt service coverage ratio in this higher-for-longer interest rate environment. Let me now turn to our dividend and guidance. As we announced last night, our board of directors declared a $0.92 per share dividend for shareholders of record 03/31/2026, payable 05/01/2026. Last night, we introduced our full-year 2026 guidance, and I previously touched on some of our SHOP expectations. For 2026, we expect NAREIT FFO and NFFO per share at the midpoint to grow 6.9% and 1.2%, respectively. We expect total FAD at the midpoint to grow 7.8% to $250,200,000.

Our full-year 2026 guidance includes $230,000,000 in additional future investments, and an average NOI yield of 7.8% comprised approximately 70% of SHOP investments, which we believe is a conservative assumption for the year. Excluded from our guidance is any assumption for the early resolution of our NHC lease, which matures 12/31/2026. Negotiations are ongoing; we expect to have more to report as the year progresses. Capital market activity in our initial 2026 guidance currently only reflects the settlement of our remaining forward equity and the retirement of our upcoming debt maturities using proceeds from our revolver.

However, we expect our capital market activity to adjust as required to meet the company’s liquidity needs due to changes in the timing and the amount of our investments and dispositions. So once again, thank you for joining our call today. That concludes our prepared remarks. So with that, operator, please open the lines for questions.

Operator: Thank you. We will now open for questions. At this time, we will be conducting our question-and-answer session. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. It may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Thank you. Our first question is coming from Farrell Granath with Bank of America.

Farrell Granath: I first just wanted to start off with a question on the same-store SHOP guidance for 2026. Know that last quarter, there was some commentary around taking corrective measures and that we could potentially accept double digits in 2026. In that same-store portfolio. So curious of this initial guidance. Is this reflective of just what you are seeing today? Teacher plans of these corrective measures, which could potentially provide greater to that guidance.

Kevin Carlton Pascoe: Sure. This is Kevin. I would tell you overall, if the way we conduct ourselves is we want to deliver something that we feel very confident that we can achieve. And there is there should be opportunity within the portfolio from there. So it is a bit of an under-promise, overdeliver. We do have some things that are going to take place in the back half of the year. We mentioned that we have one building where 16 units are coming online. That building is a percent occupied. So that will be additive. Those units do not come on until May. And then, you know, we expect that it will not grow through the balance of the year.

We are not expecting everybody to move in all at once. You know? So we have a number of things that we are focused on with the portfolio. We are focused on sales pipeline, building the funnel. You know, typically the first part of the year, you know, is a little bit softer with holidays and coming out of the winter. So we do expect better results out of the second half of the year.

Farrell Granath: Great. Thank you. And also just touching on your SHOP pipeline. Especially seeing the momentum that you have picked up in the second half ’25 and then now what we have seen under LOI and in the pipeline for ’26. Is it fair to expect that momentum can continue going forward into ’26 of the level that you are potentially able to achieve now?

Kevin Carlton Pascoe: That is our expectation. That is, you know, we give you guidance based on what we have. We feel like we have some reasonable into and what we can execute on. But as you noted, we outpaced what the expectation that we set at the beginning of last year and would be, you know, that we are working to do the same this year.

Operator: Thank you. Our next question is coming from Austin Todd Wurschmidt with KeyBanc Capital Markets.

Austin Todd Wurschmidt: Just, Eric, I wanted to go back to NHC and I am wondering, it feel like the lease negotiations with the group are moving forward and maybe more importantly, constructively moving forward? And what is the probability that you think you will reach a resolution in the next, you know, three to nine months?

D. Eric Mendelsohn: Hey, Austin. We are in the thick of it right now, so I would describe our posture as we are in a quiet period regarding NHC.

Austin Todd Wurschmidt: Understood. Appreciate that. And then from the SHOP challenges that you guys have faced, and you have talked about where, you know, you would have expected annualized NOI to restabilize a couple of years ago. I mean has that changed your approach to either underwriting new deals or how you are structuring management agreements? To provide, you know, any added flexibility moving forward?

Kevin Carlton Pascoe: Sure. This is Kevin. I would say it definitely impacts the way we think about deals, but we are also focused on more senior housing campus-style products, ones that have assisted memory care. You recall these are former Holiday properties that, you know, we are not the only ones that have had some issues with. But making sure that we have a bit of that continuum or it is the senior housing, the need-driven component is a component to the deal. I think it is something that we are focused on. As you touch on, our management agreements are such that we do have flexibility should we need to make a change.

You know, that is never our never desire of ours. Changes are very disruptive to the property, but, you know, if we need to, then we have that ability.

Austin Todd Wurschmidt: Got it. And then just last one. You know, Eric, you had highlighted the targeting of secondary suburban markets for deals. What is sort of the long-term growth profile for those markets just given the and affordability? And how would you characterize the labor pool for the markets that you are focused on?

D. Eric Mendelsohn: Great question, Austin. We definitely pay attention to labor. For example, you know, we tend to avoid Indiana because it has a tough labor market, and the buildings there tend to run a lot of agency labor. But it is no secret that there is a lot of migration from coastal areas to places like Tennessee and other places in the Midwest where housing is more affordable and cost of living is more affordable. So for the time being, as we look at Bickford and other Midwestern operators, they are able to staff their buildings with full-time employees and not have to utilize any agency labor.

Austin Todd Wurschmidt: And just from a growth profile perspective for those types of assets, I mean, how do you think about that over time?

D. Eric Mendelsohn: Well, you look at our pipeline, we are pleasantly surprised at the number of deals and opportunities we are seeing now that we are gung ho on SHOP and RIDEA. So growth for us is more of an issue of managing it and underwriting it responsibly rather than trying to find it.

Austin Todd Wurschmidt: For the comments.

Operator: Thank you. Our next question is coming from Juan Sanabria with BMO Capital Markets.

Juan Sanabria: Just hoping you could help us think about job growth and the guidance for ’26. Recognizing there is some struggles with the ex-Holiday portfolio. But maybe if you can compare and contrast what is not in the same-store pool and how that is performing versus the same-store pool and kind of the expectations on occupancy and rep poor just so we can get a kind of a more holistic picture rather than just focus on same store.

Kevin Carlton Pascoe: Sure. This is Kevin. I will try and address your question. If I miss something, you know, please reask the question. But when we are looking at what is not in same store right now, we are recall that two of them, one of the transition from triple net to SHOP. The other is a transition to a new operator. We do have some transitional impacts that we are we had through the first part or, sorry, the second half of 2025, and then on the newest we will have some transitional impacts that we experience in 2026. There has only been one of those that was the current manager. So that group is performing to expectation.

You know, feel very good about where they are at from an operation standpoint. But overall, what we will be looking at is making sure that they are putting in the right systems and people feel like they have done a very good job of that. They are building their funnels. We are able to pass through some rate increases, but we are doing that responsibly to make sure that we are not losing occupancy while we go through these transitions. So we were to look at this, it is more of a, I would call it, a forward look than so there might be a little bit of noise in the near term.

Overall, though, the transitions have gone pretty well. I would say, you know, just pulling one out. The since the transition we did last year, that performed better than expectation through the second half of the year. Where we just finalized our budgeting process and have some solid growth expectations for them this year. So I think, you know, we are feeling good about where we are at with those operators. You will see those roll into the same into same store starting fourth quarter of this year. So you will have a little more incremental visibility on that piece here in the next couple of quarters.

Juan Sanabria: Okay. That is helpful. And just with maybe going back to, I think, maybe trying to ask Austin’s question in a different way, I guess. You know, Holiday is maybe a unique situation, but I guess, what have you learned that you think prepares you better to deal with I do not see, the growing pains in SHOP or under transitions, etcetera, that should give us confidence about investments or activity in SHOP as you look to grow pretty significantly with the compelling opportunity going forward with supply demand.

D. Eric Mendelsohn: Hey, Juan. I would just remind everyone that the Holiday SHOP was more of a science experiment that we backed into when Holiday sold to Atria and Welltower. We have put a lot of CapEx in those buildings. We have changed managers. And as we compare them to the same Holiday buildings that are at Ventas and Welltower, from what we are able to surmise, we are doing as good or better than they are, which those buildings. Our new SHOP portfolio, the not same store I feel very positive on. I would also point out that it is assisted living and memory care, not just independent living. And these buildings are performing well from the get go.

And we look at them for an eye towards double-digit growth, and we verify that with the operator when we do our pro formas. And budget for year two growth. So, you know, as Kevin said, I think you will start to see our same store perk up in the third and fourth quarter when the one Holiday building has units that come online and when the Sinceri buildings become same store.

Juan Sanabria: And just last question for me. You know? How should we think about the pricing power and the ability to drive rate in somebody’s secondary markets. I am not sure kinda the affluence around some of these assets. Or the ability to drive pricing with the target customers?

Kevin Carlton Pascoe: Sure. This is Kevin again. Every market is different. We are underwriting the local market fundamentals of each building that we are looking at. So each one is, it is very hard to give a generalization here on, you know, how we are looking at those because they are all, again, they are all different. And one thing I will say though is based on the margins where they are at, if you can increase rates 5% a year, and hold your expenses to less than 4%, that is going to be 7% to 8% growth.

So we think that is very and we think that there is some potential for additional growth beyond that on the revenue line in a lot of these. So, you know, I like our chances here. I think that we are building a very good portfolio or like our operating partners and their ability to pass through those increases, if not more. You know, that is kind of in line with what we have seen with our triple-net portfolio as well. So I think we can do as good or better. Yeah. So that is our opportunity, though, as John mentioned in his comments. We can continue to get some margin expansion as we grow the SHOP segment.

Know, that is going to add additional growth for us.

Juan Sanabria: Thanks for that. Appreciate it.

Operator: Our next question is coming from William John Kilichowski with Wells Fargo.

Jesus (for William John Kilichowski): Good morning. This is Jesus on for John. Thanks for taking the question. Just to switch gears a little bit on the $1,100,000,000 of dispositions and guidance. We look it is a little bit higher than what we were expecting here. Can you walk us through what is driving the higher volume? Specifically, what assets are being sold? And it is primarily, like, just capital recycling not going to SHOP or including non-core assets?

Kevin Carlton Pascoe: This is Kevin. It is really operator relationship situation coupled with the underlying asset not being core to National Health Investors, Inc. So the profile of the communities is largely senior housing, but they are not relationships we are going to grow. They are triple net in nature. And they are intensive from an asset management standpoint. So we feel if we can move the capital to the relationships where we are going to have additional growth not only from a whether it is a triple-net or a SHOP deal that we do from the proceeds, you know, something where we are going to get additional volume out of that customer, be less intensive from an asset management standpoint.

Meaning we are not spending so much time on one building of an operator, you know, really gives us a little more efficiency from an asset management standpoint. And we have hired a fair amount of folks for asset management. We are building out our bench and our analytics competencies. I feel good about where we are at, but we need to make sure we are focusing them on the pieces that are going to be meaningful to National Health Investors, Inc. And that is really what these dispositions are born out of.

You know, generally, we like to hold on to, you know, income, but I think this is the right decision here to make sure that we are focusing our team.

Jesus (for William John Kilichowski): That is great. And just a quick follow-up on NHC to the extent you are able to comment. If you do renew the lease, how does that impact what you could reposition or sell versus or our earlier discussions where you were talking about rotating in the SHOP from this portfolio? Would it be, like, an all or nothing scenario?

D. Eric Mendelsohn: Could you ask that again? So if we do renew the lease, then what?

Jesus (for William John Kilichowski): How does that impact, what you could reposition versus, or sell, I guess? Because you were talking about some dispositions potentially being involved with this. And rotating some capital?

D. Eric Mendelsohn: Fair question. And if I, I will repeat your question back. So on the NHC lease, if we were to sell some of the buildings, would that be redeployed? And the answer is yes, it would be redeployed into SHOP.

Jesus (for William John Kilichowski): Thanks, guys.

Operator: Thank you. Our next question is coming from Rich Anderson with Cantor Fitzgerald.

Rich Anderson: Hey, team. Thanks. Good morning. So the 7% to 8% SHOP same-store NOI guidance. Just to clarify, that is still just the 15 legacy Holiday assets. Is that correct?

Kevin Carlton Pascoe: Yes, John. Yes, that is correct.

Rich Anderson: Okay. And I think you said, you know, your longer-term view on SHOP growth is sort of high single digit, low double digit. Is that also correct? You sort of get a step up after you sort of write, you know, address some of the issues that are going on, the legacy portfolio. Is that the right way to think about it?

Kevin Carlton Pascoe: Yes.

Rich Anderson: Okay. I am obviously leading up here. So at 9.3% of the portfolio today, SHOP, as of the end of the year, what is your target in terms of how big SHOP can become as a percentage of the total? And do you still think that your from a growth perspective? Because, you know, you are seeing, you know, ups the growth approaching 20% from some of your larger peers. Now that has a lot to do with occupancy lift. So is your same-store offering more of a rate growth versus, you know, expense growth phenomenon and less about occupancy lift.

I am just curious how you are approaching the same-store profile of SHOP going forward and how big it could be in a couple of years from now.

D. Eric Mendelsohn: Well, in terms of growth of NOI for the company, we have told people that last year we doubled from five to roughly 10. And this year, we could easily double that again to 20. And with an eye towards getting it up to 30 or beyond, in terms of percentage of SHOP. So I still feel like that is achievable and on track. And, you know, I understand we have some catching up to do, but as you can see by our pipeline numbers, it is easier to find new deals when you are looking for SHOP and RIDEA, not so much with leases. In terms of same-store growth, I think the opportunity is one of margins.

You know, we see on the Holiday portfolio a lot of margin opportunity and we see on the new not same-store rate opportunity, and, frankly, experienced operators that are taking over from, say, a mom-and-pop operator who just is not getting the margins that they could.

Rich Anderson: Okay. So it is a, again, a lot of your peers are getting this occupancy lift, which is not a forever situation. So, you know, yours is more of a, you know, stabilize, but, you know, still, you know, as you point out margin, story, and something in the 10% range on a, you know, foreseeable future type of.

Kevin Carlton Pascoe: That is fair. That is fair.

John L. Spaid: Okay, Rich. This is John. Look. Let us just be honest about a little bit about the makeup of our SHOP portfolio. It was comprised of the Holiday assets, which Eric touched on before. It is also comprised of these assets that we transitioned away from Discovery to Sinceri. And that was the whole point of my discussing the return on invested capital that we are currently experiencing. We strongly believe in the potential of these assets. We have got to unlock, you know, the margin to improve that, and that is why we are talking about that. And at the same time, growth will help us improve our metrics over time as well.

Rich Anderson: K. Switching gears. On the outlook for this year, and the $7,600,000 of remaining Bickford rent repayment left on the table. Do you expect that all to be paid back in the next year or two? Like, what is the cadence of that payback?

Kevin Carlton Pascoe: Well, this is Kevin. What I would guess, have you think about is once the rent reset happens, there is less cash flow overall to pay at least at the same rate. It is not something that we are just going to let go for free. So we will be discussing with them what type of alternative there are to pay that remaining balance or, you know, various other things that we can negotiate over that give National Health Investors, Inc. value.

So, you know, it would still probably take them a handful of years to pay that off if we just reset the rent and then, you know, just have them revise the formula and have it pay it out. Because we are not looking to take every last dollar from them. They still have got to be make sure they pay their people and invest in the company. So we are going to be mindful of that but, you know, it is not going to just go away. National Health Investors, Inc. will get value out of it. Kevin, that is April, right? The next one? That is correct.

Rich Anderson: Okay. Lastly, so DOC is drawing some attention to CCRCs these days. I am wondering, you know, when you think about your CCRC portfolio, entrance fee portfolio, if you are seeing any more activity on the ground in terms of transactions and, you know, renewed interest in the space. Any comment there? Maybe the answer is no. But.

Kevin Carlton Pascoe: Well, I think the answer for us is it has been a very good portfolio for us, and we, you know, very much appreciate working with our operating partner there. It did wonders through COVID and continue to perform very well. So it has always been something that we have had an eye on. We are also mindful of our concentrations there and do not want to make sure we get upside down. So we will continue to look at those opportunities. There are a few in the marketplace that we have been looking at. But we are also going to make sure we are rigorous with our underwriting criteria.

So it is on the table, but not necessarily a direct focus, but something that we will approach opportunistically. We have some great operating partners that do that space very well. So it is something I think we should continue to look at.

Rich Anderson: Okay. I got. Thanks very much.

Kevin Carlton Pascoe: Thank you.

Operator: Thank you. As a reminder, ladies and gentlemen, if you have any questions or comments, our next question is coming from Omotayo Tejumade Okusanya with Deutsche Bank.

Omotayo Tejumade Okusanya: Yes. Good morning, everyone. Quick question again on the Bickford deferred rent. When you talk about getting value for the remaining amount of deferred rent, could it be, I know in the past, you guys have kinda done this structure where, you know, rather than getting the spread rent, you just kinda lowered the value of any kind of acquisitions you were buying from Bickford. Could it be something like that? That you guys continue to do to kind of make sure you get value for that remaining deferred rent. Yes. That is how you say it. Right.

Kevin Carlton Pascoe: Sorry, Tayo. I missed part of your question there. You were asking what value we can get from Bickford in lieu of cash. That is the question.

Omotayo Tejumade Okusanya: Yes. Exactly. So I know in the past, you know, sometimes with the deferred rent, rather than get the rent, you just lowered the valuation of an acquisition that you were making from Bickford. Is that kind of more of what we should expect to see?

Kevin Carlton Pascoe: Well, I do not want to guide you to anything specifically. We have the reset coming up, the April 1, so we will be finalizing where rent sits going forward this month. Okay. But, yes, you are on the right track in terms of what value is out there. We have built, you know, several buildings with Bickford. There is still another one remaining that could have some value like that. There were some other developments that we had looked at in the past. There is just some reimagination of the portfolio whether we prune a little bit. I would not think those are going to be huge numbers of buildings. But thank you, buddy.

There is potentially some addition by detractions that could help us get additional rent. So, you know, we have a number of options, but there is a formula in place in terms of how rent gets that will be the baseline for what we think. We believe that we are going to continue to get the aggregate number of rent that Bickford paid and then some going forward. And just as a reminder, they paid $5,300,000 last year. So they have been really moving down that repayment number at a steady clip. And happy with where we are at with them. We have got a little more work to do. But we are in a pretty good spot.

Omotayo Tejumade Okusanya: Gotcha. And then one follow-up. With the reset, at some point, there was also the option of going with another operator and potentially looking at that option. Is that still on the table at this point, or are we kind of firmly just in the world of renegotiating with NHC?

D. Eric Mendelsohn: I would say that we are in a quiet period. We are in the thick of it right now, Tayo. I just have to be careful what I say.

Omotayo Tejumade Okusanya: Fair enough. Alright. Thank you.

D. Eric Mendelsohn: Thanks, Tayo.

Operator: Thank you. As we have no further questions on the lines at this time, I would like to turn the call back over to Mr. Mendelsohn for any closing remarks.

D. Eric Mendelsohn: Thanks, everyone, for joining today and for your interest, and we will see you at a conference sometime soon.

Kevin Carlton Pascoe: Thank you.

Operator: Thank you. Ladies and gentlemen, this does conclude today’s call. And you may disconnect your lines at this time, and we thank you for your participation.

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