SBRA

Investment Activity

• Closed approximately $600 million in investments in 2026 year-to-date as of quarter-end, including $100 million in skilled nursing; an additional $223 million in seven managed senior housing properties was closed after quarter-end, bringing total year-to-date closed investments to ~$599 million with an estimated initial cash yield of 7.5%.
• Another $100 million in awarded managed senior housing and skilled nursing investments are expected to close before year-end 2026, with an additional $330 million of managed investments actively being pursued. Total potential deal pipeline under review exceeds $1 billion, almost entirely for the managed (shop) senior housing segment.
• Most new investments are single-asset opportunities, with only a small number of small portfolios of 3-5 assets.

Operational Performance

• Consolidated, unconsolidated, and same-store shop cash NOI margins are growing, and overall company leverage dropped to 4.61x net debt to adjusted EBITDA as of quarter-end, down from 5.04x at the end of Q1 2026, below the company's prior 5x target leverage.
• Medicaid rates are expected to grow ~2% overall as they revert to pre-pandemic levels, and the final 2026 Medicare market basket rate came in at 2.4%, in line with expectations with no new regulatory hurdles expected.
• Two triple net tenants were moved from cash basis to accrual basis accounting, reflecting improved underlying performance and payment reliability; over 90% of the company's tenant base is now on accrual basis accounting.
• The company completed a discounted payoff of the RCA mortgage loan, which resulted in a $102.4 million provision for loan losses excluded from normalized results.
• The board declared a Q2 2026 dividend of $0.30 per share, representing a 75% payout of normalized AFFO per share.
• The company ended the quarter with $1.3 billion in total liquidity, and remains in full compliance with all debt covenants.

• The company reaffirmed its previously issued upwardly revised 2026 full-year earnings guidance. At the midpoint, guidance calls for approximately 7% year-over-year growth in normalized FFO per share and 8% year-over-year growth in normalized AFFO per share.
• Same-store shop NOI growth guidance is maintained at a low to mid-teens annual rate, with the first half of 2026 averaging 14.1% growth, which falls within the guided range; management notes potential for upside but will revisit guidance as more visibility into the second half of the year emerges.
• Management expects sustained solid earnings growth of 5-6%+ annually beyond 2026, with 7-8% growth possible in 2027 as full-year contributions from 2026 acquisitions are realized.

1. Managed Senior Housing (Shop) Segment: Q2 2026 cash NOI was $44.6 million, up from $39 million in Q1 2026. Total portfolio (including non-stabilized and JV assets) had sequential Q2 revenue growth of 9.6% and cash NOI growth of 14.4%, with 130 basis points of margin expansion. Same-store portfolio delivered 8.6% year-over-year revenue growth, 13.7% year-over-year cash NOI growth, and a 170 basis point year-over-year occupancy increase to 88.2%. This segment now accounts for approximately 31% of total portfolio cash NOI, with a target of 40% by end-2026.

2. Triple Net Segment: Q2 2026 cash rental income was $94.1 million, up from $89.8 million in Q1 2026. A rent reset for the Avamir lease increased annualized fixed rent to $48 million (from $41 million in 2025), adding $3.2 million of rental revenue in Q2. Smaller portfolio initiatives added another $1.6 million of cash rental income, and recent acquisitions added $823,000 sequentially. Offsetting gains were a $1.3 million reduction from the Communicare sale and a $226,000 reduction from the transition of one asset to the managed shop segment. Triple Net senior housing occupancy and coverage saw a minor drop due solely to the aforementioned asset transition; results would have been flat without this change, and the skilled nursing sub-segment saw increased rent coverage.

Total company Q2 2026 cash NOI was $144.3 million, up $5.6 million sequentially from Q1 2026.

• The company notes that all forward-looking statements are subject to inherent risks and uncertainties that could cause actual results to differ materially from expectations, with key risks outlined in the company's annual Form 10-K and recent earnings filings.
• Value-add shop investments carry limited incremental risk relative to core stabilized investments, as they are acquired at 80% occupancy (far higher than deep value-add opportunities) with existing proven operator partnerships and a clear path to stabilization.
• Canadian senior housing investments face slightly higher regulatory risk for rent growth, though this has not materially impacted performance to date, and cap rates in Canada are 100-150 basis points tighter than in the U.S., making U.S. investments more attractive for the company currently.
• Private market competition often leads to higher bid prices for available assets than the company is willing to pay for the associated risk, which can result in the company losing out on competitive deal processes.

Q: The company maintains low-to-mid teens same-store shop NOI guidance, and first half 2026 growth is already at 14.1% — how does management view current market conditions for this segment? / A: Management reaffirms the existing low-to-mid teens guidance range, where 2026 results have landed firmly within the range to date. Management sees potential for upside to full-year growth, but retains guidance flexibility while waiting for more visibility into the second half of 2026, and will revisit guidance when more clarity is available.

Q: What is the company's current strategy for exiting the behavioral health segment after closing the RCA loan payoff? / A: Most remaining behavioral health assets are already in the process of being divested, with only the Signature Behavioral psychiatric hospital portfolio remaining. Signature's operator has expressed interest in buying out Sabra's position, and Sabra would be open to a transaction at a compelling valuation. After this exit, the behavioral health segment will make up only 4-5% of total portfolio value, leaving 95% of the portfolio in senior housing and skilled nursing.

Q: Does the recent improvement in the company's cost of capital change the type of assets the firm will pursue, and will management use the new lower leverage buffer to increase leverage back to 5x? / A: Lower cost of capital does not change the company's acquisition strategy or target asset type — the company was already able to complete attractive accretive deals at prior cost of capital levels, and improved capital access only allows for slightly faster execution if market conditions cooperate. Management does not plan to intentionally push leverage back up to the 5x target; the current lower leverage provides strategic flexibility to execute deals even if equity markets are unfavorable, creating additional breathing room for the investment plan.

Q: Why is the company pursuing additional value-add shop investments now that it has already hit its target shop exposure, and how much risk do these investments carry? / A: Management does not plan to stop growing shop exposure after hitting the 40% NOI target, and plans to continue increasing this higher-growth segment exposure. These value-add opportunities are not high-risk: all are already at 80% occupancy, are purchased below replacement cost, and are partnered with existing proven operators with a clear path to 90% occupancy and stabilized 9% yields. Only a small volume of these investments are being pursued, so incremental portfolio risk is very limited.