Community Healthcare Trust Incorporated Q4 FY2025 earnings call

• Geriatric behavioral hospital operator tenant in 6 properties paid $200,000 rent in Q4, signed letter of intent to sell operations to another operator, under exclusivity. - Occupancy increased from 90.1% to 90.6% in Q4, weighted average lease term increased from 6.7 to 7 years. - 3 properties undergoing redevelopment/renovations, largest expected to complete Q2 2026, rent commencing Q3 2026 after tenant gets license. - Sold inpatient rehab facility in Q4 at ~7.9% cap rate, gained ~$11.5 million, reinvested via 1031 exchange into new facility. - Acquired 3 properties in 2025 with total 113,000 sq ft, aggregate purchase price $64.5 million, 100% leased through 2040. - 2 additional dispositions closed in Q4 and 1 in Q1, net proceeds ~$7.7 million. - Signed definitive purchase and sale agreements for 5 properties, expected investment $122.5 million, return 9.1%-9.75%, expect closings in different quarters. - Declared dividend for Q4, raised to $0.4775 per common share, annualized $1.91 per share.

Total revenue grew from $29.3 million in Q4 2024 to $30.9 million in Q4 2025, a 5.6% annual growth. QoQ, total revenue slightly decreased by $140,000 to $30.9 million due to capital recycling and asset disposition. FFO in Q4 2025 was $13.3 million, up 4.6% YoY, with diluted EPS FFO from $0.48 to $0.49. AFFO in Q4 2025 was $14.9 million, up 2.1% YoY, with diluted EPS AFFO $0.55, same as Q4 2024 but $0.01 less QoQ. Net gains on sale of $12.1 million from capital recycling and asset disposition in Q4 2025 increased net income.

• Anticipate largest redevelopment project to complete Q2 2026, rent commencing Q3 2026 after tenant gets license. - 2026 has embedded growth with redevelopment projects coming online mid-2026 and end of year. - Expect to close one property in Q1, 2 properties in H2 2026, and remaining 2 in H2 2027 for the signed 5-property purchase agreements.

• Uncertainty regarding timing of the geriatric behavioral hospital operator transaction closing as buyer is finalizing legal and business due diligence. - Potential time gaps between closing and selling properties which may impact financial performance. - Cap rate fluctuations in the market could affect acquisition and disposition outcomes.

Q: Just focusing first on the geriatric behavioral hospital operator that signed the transaction last summer. Is the transaction on your part essentially supposed to all take place in one bite at the same time?

A: As to the transaction, not as much progress made in Q4. Buyer still very interested in all 6 hospitals, goal is to happen all at one time with no staged closing.

Q: Turning towards transactions. How do you balance the level of transactions, timing of closing along with finding right dispositions?

A: Goal is to execute and sequence dispositions like in Q4, with goal to do 1031 like-kind exchange if appropriate, confident in capital recycling to acquire assets without adding meaningful leverage.

Q: Can you just give an update on if there's really been any change in what you're seeing for cap rates for either acquisitions or dispositions?

A: Received indicative 7.9% cap rate on sale of inpatient rehab, expect similar pricing on other dispositions, see opportunities on buy side in 9%-10% cap rate range but being selective.

Q: Last quarter on the call, you said you expected the leased percentage for the portfolio to be up 50 to 100 bps in 4Q, and it was. I was just wondering if you felt compelled to give a little bit of insight into what you might expect for occupancy either over the next quarter or 2 or for the full year?

A: Leasing activity is good, but leased occupancy likely to stay in low 90s for next couple of quarters, expect momentum in second half of 2026.

Q: The investment pipeline. Is the goal now you have these developments that you'll be taking down? Or if you were going to do $120 million to $150 million annually and you had the cost of capital, is there still that volume of opportunity out there?

A: Opportunity still there, see great opportunities, always had client business and brokered business, will look to augment with broker deals when share price allows.

Q: Can you just give an update on if there's really been any change in the dialysis term sheet pipeline?

A: It's on the back burner, most of that company's growth hasn't been with real estate as part of acquisition cadence, still have great relationship but not a focus soon.