SNDA

Core Operational Momentum

• The company has transitioned from a foundation-building stabilization phase to a compounding growth phase in 2026, with fundamental momentum delivering strong Q2 results. Sequential occupancy growth continued into Q3, with total portfolio occupancy rising 40 basis points in July compared to June.
• The newly created Chief Operating Officer role was filled by Anton Nikodemus, a 30-year industry veteran tasked with embedding a consistent hospitality-driven operating culture across the growing portfolio, driving resident retention, referrals, and sustainable pricing power.

CHP Acquisition Integration

• Integration of C&L Healthcare Properties (CHP), acquired in March 2026, remains on schedule. As of July 1, 14 CHP communities (over 25% of the CHP portfolio) have transitioned to Sonita management, with smooth execution. Six communities transitioned in May delivered over 60% year-over-year NOI improvement and an 850 basis point NOI margin expansion.
• The company's proprietary operating platform, SPIN (Sonita Performance Insight Navigator), unifies real-time data on occupancy, pricing, labor, and resident care across over 100 communities. Each new acquisition adds to SPIN's dataset, improving predictive insights for clinical resident profiles and labor efficiency.

Capital Allocation & Acquisition Strategy

• Investment strategy is return-focused (not category-focused), with all capital deployment measured on per-share free cash flow and net asset value creation. The company prioritizes high-quality assets purchased at a discount to replacement cost in favorable supply/demand markets, with multiple levers for growth rather than reliance on cap rate compression.
• Regional market density is a core strategic priority, with existing concentrated positions in Dallas-Fort Worth, Northern Florida, and Atlanta delivering benefits including better market data, stronger referral networks, higher purchasing power, and labor efficiencies. The company is also targeting additional density in the Midwest, Mid-Atlantic, Carolinas, and Virginia.
• The $88 million of currently contracted acquisitions are expected to generate mid-teens levered IRR and be accretive to normalized FFO and NAV per share on a stabilized basis, with a deeper pipeline of additional opportunities remaining active.
• The Stone joint venture (formed 2024 to acquire four distressed Midwest communities) delivered 5.6x NOI growth, enabling a cash-out refinancing that returned all invested capital to partners while retaining the portfolio for ongoing upside. The 2024 acquisition cohort is currently yielding 11.5% on cost, with further upside remaining.

Balance Sheet Strength

• Recent balance sheet actions have strengthened financial flexibility: a $380 million 5-year term loan refinancing extended the maturity profile, with 97% of total debt now maturing in 2029 or later (43% maturing 2031 or later) eliminating near-term refinancing risk.
• Pro forma total debt is ~$1.6 billion, with a weighted average interest rate of 5.43%. 86% of debt is fixed-rate or hedged. The company has ~$166 million in immediate revolving credit availability to fund future acquisitions, and raised $27.3 million via an at-the-market equity offering in July to equitize near-term pipeline acquisitions. The company is targeting a leverage range of 6 to 6.5x.

• Management expects to begin issuing full-year 2027 normalized FFO guidance after completing CHP integration and digesting the current acquisition pipeline. The exact timing of guidance launch depends on integration progress.
• Management sees long-term stabilized same-store occupancy reaching the low to mid-90%, which is viewed as achievable with no major near-term headwinds to continued occupancy growth; the actual pace of improvement will depend on operational execution and market conditions.
• NOI margin expansion is expected to continue as the same-store portfolio matures, SPIN platform adoption increases, newly acquired communities stabilize, and the company realizes scale purchasing benefits from the combined CHP portfolio.
• The company expects the 2025 acquisition cohort to continue delivering strong occupancy and NOI growth, which will add material year-over-year same-store NOI contribution when these assets move to the same-store segment in 2027.

Sonita Seniors Living reports portfolio results across three segments: same store, non-same store, and triple net lease. 1) Same store segment: Weighted average occupancy increased 240 basis points year-over-year to 87.8%. 54% of same store communities now have occupancy above 90% (up from 43% in Q2 2025), while communities with occupancy below 80% declined to 20% from 30% year-over-year. Same-store revenue per occupied room (REF4) grew 4.9% year-over-year. Net Operating Income (NOI) grew 16.9% year-over-year, with NOI margin expanding 250 basis points to 32.6%. Total labor costs as a percentage of revenue declined 130 basis points year-over-year to 40.4%, a portfolio low. Revenue flow-through to incremental profit hit 63.4% year-over-year. 2) Total portfolio (including newly acquired, non-stabilized assets): Total NOI grew 17.5% year-over-year, weighted average occupancy increased 170 basis points to 86.6%, and REF4 grew 4.9%. Overall portfolio NOI margin was 29.9%. The 2025 acquisition cohort (four communities) saw occupancy increase 1400 basis points to 70.4% since Q4 2025, with NOI margin rising from negative 1% in Q4 2025 to 15% in Q2 2026. 3) Triple net lease segment: Includes 15 communities with operating leases maturing between May 2030 and July 2032, all with 5-year renewal options. 14 non-core communities (representing less than 2% of Q2 total NOI) are marked for disposition as part of the company's capital recycling strategy.

• Forward-looking statements are subject to material risk that actual results may differ materially from projections, with key risk factors detailed in the company's SEC filings (Form 10-K, Form 10-Q, and Form 8-K). Pro forma combined results for pre-acquisition periods do not reflect actual historical performance and may not be predictive of future results.
• Pro forma financial information for the CHP acquisition was not prepared in compliance with Regulation SX Article 11, and carries inherent limitations for comparative analysis.
• Cap rates for the triple net lease portfolio carry market uncertainty, and the projected spread for capital recycling into higher-growth assets is an estimate that may not be realized in an actual market transaction.
• Newly acquired cohorts (2025, current pipeline) are still in stabilization, so projected upside may take longer to achieve than currently expected, and occupancy gains may be slower than forecast.
• While the company has not experienced meaningful barriers to deal sourcing due to its strategy of transitioning acquired assets to its own operating platform, it is possible that some sellers will exclude Sonita from bidding to retain incumbent third-party operators.

Q: When will the company start issuing normalized FFO guidance, and what is the long-term stabilized occupancy target for the portfolio? How do the new COO hire and SPIN platform support occupancy growth?

A: The company plans to begin issuing full-year 2027 normalized FFO guidance once CHP integration and pipeline acquisition onboarding are complete. Management views long-term stabilized occupancy in the low to mid-90% as achievable with no major near-term headwinds to continued growth. The new COO will strengthen customer and resident experience to drive retention and referrals, while SPIN provides real-time data to balance occupancy growth with appropriate rate increases as occupancy rises above 90%.

Q: What is the timing and expected economic upside of the triple net portfolio capital recycling strategy? Can sellers exclude Sonita from deals due to its plan to transition operations, and what new markets are targeted for density?

A: The company will evaluate potential disposition of triple net assets over the next 6 to 12 months; it is in no hurry as these are stable cash-flowing assets. Management expects a 100 to 200 basis point cap rate spread when recycling capital into higher-growth operating assets. Seller hesitancy to work with Sonita has not been a meaningful barrier, and the company maintains flexibility to keep incumbent operators for strategic deals. Beyond existing core markets, the company is targeting additional density in the Midwest, Carolinas, Virginia, and the Mid-Atlantic.

Q: Can the company realize scale purchasing savings from the CHP acquisition by 2027, and what types of acquisitions are in the current pipeline?

A: The company is already renegotiating shared vendor contracts to capture scale savings, and most vendor contracts are short-term (one year or less), so there are no barriers to capturing these benefits by 2027. The current pipeline is consistent with past successful acquisitions: mostly value-add assets below full stabilization, typically in the mid to high 80% occupancy range, purchased at discounts to replacement cost, where Sonita's operating model can drive occupancy and rate improvements.

Q: How much of the 240 basis point year-over-year same-store occupancy gain is attributable to SPIN and operational improvements, and does SPIN expand the M&A pipeline?

A: The occupancy gain reflects a balanced mix across the portfolio: legacy same-store assets deliver steady growth, while newly transitioned 2024 and 2025 acquisition cohorts still carry significant upside. SPIN strengthens underwriting by letting the team apply real-world operating data from existing clusters to new acquisition opportunities, enabling faster underwriting of off-market deals and improving the probability of successful, accretive transactions. SPIN reinforces the company's focus on core dense markets rather than opening new untested markets.