Good day, everyone, and welcome to the National Health Investors Third Quarter 2026 Earnings Webcast and Conference Call. At this time, all participants are placed on a listen-only mode. If you have any questions or comments during the presentation, you may press star 1 on your phone to enter the question queue at any time, and we'll open the floor for your questions and comments after the presentation. It is now my pleasure to hand the floor over to your host, Dana Hambly, Senior Vice President of Finance. Sir, the floor is yours.

Thank you and welcome to the National Health Investors Third Quarter 2026 conference call. On the call today are Eric Mendelsohn, President and CEO, Kevin Pascoe, Chief Investment Officer, Todd Siefert, Chief Financial Officer, Chris Maingot, Chief Operating Officer, and David Travis, Chief Accounting Officer. Yesterday, NHI released its third quarter results and conference call information for a press release after market close. Today's remarks may include forward-looking statements which are subject to risks or uncertainties and are not guarantees of future performance. Investors are urged to carefully review NHI's filings with the Securities and Exchange Commission, including its Form 10-K for the year ended December 31, 2025, and Form 10-Q for the quarter ended September 30, 2026, for discussion of these risks. Copies of these filings are available on the SEC's website at sec.gov or on NHI's website at nhiread.com. In addition, today's call may include certain non-GAAP financial measures, reconciliations of which are provided in NHI's earnings release, which has been furnished to the SEC on 8K. Listeners are encouraged to review those reconciliations provided in the earnings release together with all other information provided in that release. I'll now turn the call over to our CEO, Eric Mendelsohn.

Good morning, and thank you for joining us. This has been a year of significant transition for NHI. We completed the sale of the NHC portfolio on July 1st, substantially reduced our skilled nursing exposure, and accelerated our investment in private pay senior housing. Our conviction and shop remain strong. We continue to see the most attractive risk-adjusted opportunities for our capital in private pay senior housing. where we believe that the industry backdrop provides powerful and sustained tailwinds for our company. Capturing that opportunity requires both disciplined underwriting and consistent execution. While NHI is focused on the long-term opportunity, we understand the importance of delivering consistent quarterly results and in that regard, our third quarter shop performance fell short of our expectations. Our 15 same-store properties delivered approximately 19.5% year-over-year NOI growth, consistent with our outlook, but recent performance in the non-same-store communities reduced the contribution we expected from the total portfolio in the quarter. We're not satisfied with those results and are addressing the operating performance with our partners. Our longer-term growth outlook for those properties is unchanged. Chris Maingot, our new COO, will discuss the drivers and our response in more detail. The NHC sale provided $555 million in net proceeds to support NHI's repositioning. We expect to recycle more than 95% of those proceeds before year-end, primarily into shop and expected shop transition investments. We've already completed more than $395 million in investments year to date and expect significant additional closings during the fourth quarter. Based on that activity, we expect 2026 to be our second largest investment year in the company's history. This portfolio repositioning enhances our growth profile and the portfolio's valuation potential as we redeploy capital from skilled nursing assets into senior housing. By increasing our exposure to SHOP, we participate directly in operating upside and strengthen NHI's long-term growth profile. Including our October acquisition, SHOP now contributes approximately 18% of total NOI, compared with 9% entering the year. And we expect that share to grow rapidly as our investment focus is primarily towards SHOP opportunities. We are executing this strategy from a strong financial position. Our leverage is less than three times, which is comfortably below the low end of our target range, and we have ample capital available to fund our current pipeline. That flexibility allows us to remain selective to pursue investments that meet our return standards, including low to mid-teens unlevered IRRs. Kevin will provide more details on our investment activity and Todd will review our financial position and full year guidance. We have also strengthened our executive management team and clarified responsibilities to support a larger operating portfolio. Chris is leading our asset management team and the build out of our operating platform, while Kevin is focused entirely on business development and expanding our investment relationship. Together with Todd's financial leadership, this structure gives us greater capacity to grow the portfolio and manage it effectively. We're encouraged by the direction of these changes, and our objective remains high single digit to low double digit organic shop NOI growth. Our priorities are clear. Improve the operating performance, deploy capital thoughtfully, and build the capabilities to support sustainable growth. We believe the strategy and team are in place and we recognize that operating results will be the measure of our success. We are focused on delivering to meet the expectations that we establish and earning your confidence through consistent execution. We have made considerable progress during this transitional year and I have confidence in the company's strategic direction. I believe NHI is exceptionally well positioned to capitalize on the most attractive senior housing environment that I have experienced in my career. I'm excited about the opportunities ahead. With that, I'll turn the call over to Kevin. Kevin.

Thank you, Eric, and good morning. I'll begin with our recent investment activity and pipeline, then discuss our business development priorities and the broader investment environment. Year-to-date, we have completed $396.2 million in investments at an average yield of 7.5%. That includes $320 million of shop investments at an average year-one yield of 7.3% after routine CapEx. Our shop acquisitions have averaged approximately $223,000 per unit, well below estimated replacement costs, providing an attractive basis for operating growth. We recently completed $51.4 million in investments on two properties where we previously held $42.3 million in construction loans. Our incremental capital investment was a modest $9 million net of the proceeds of these loan payoffs. These transactions demonstrate our loan to own strategy, allowing us to not only establish strategic relationships during development, but ultimately acquire the completed and stabilized properties. Turning to the pipeline, we currently have $285 million under signed letters of intent, including approximately $190 million that we expect to close during the fourth quarter. Those anticipated closings would bring our total 2026 investment to approximately $590 million. The properties we expect to acquire before year-end will initially be structured under net leases with anticipated conversions to shop in 2027. This structure allows us to complete the acquisitions in 2026 within the timeframe for our planned Section 1031 exchanges with a clear path for future participation in the operating performance going forward. Beyond the signed LOIs, we are evaluating approximately 400 million comprised primarily in shop. We continue to see active flow of investments and enter 2027 with a substantial pipeline. Our focus is on communities in primary and secondary markets with identifiable opportunities to increase NOI through incremental occupancy gains Price and Growth, Expense Management, and Targeted Capital Investment. We continue to expect high single-digit to low double-digit organic NOI growth supported by specific operating goals with our operating partners at each property. Existing relationships remain an important source of investment activity. All investments completed year-to-date have been relationship-driven. As our SHOP portfolio expands, we intend to build meaningful scale with select groups of operators Adding communities to establish relationships allows us to leverage prior diligence, supports more efficient asset management, and deepens alignment with our operators. Recent interest rate movements have prompted additional discussion and negotiations, although we have not yet seen meaningful change in pricing. If higher financing costs persist, this could moderate competition for acquisitions and make new development more difficult to justify. We believe our access to capital, ability to execute, and strong operator relationships position us well as a reliable partner in that environment. We continue to make progress on resolving lingering issues for a subset of the same store shop portfolio where we believe capital could be more productively redeployed. We will provide further details as our plans are finalized. We are pleased with this year's investment activity and the opportunities ahead. Our priority remains disciplined growth acquiring communities at an extractive basis, expanding strategic operator relationships, and investing where we see the strongest potential for long-term returns. With that, I'll turn the call over to Chris to discuss portfolio performance and our operating initiatives.

Thank you, Kevin. It's a privilege to join you today as NHI's Chief Operating Officer. I joined NHI because I believe the company is well positioned to be the capital partner of choice for senior housing operators. It's track record of building long-term relationships, fees and team, access to capital, and growing commitment to shop were key factors that attracted me to the company. Over the past three months, I've spent considerable time with our team and operating partners getting to know the portfolio. That work has only reinforced my confidence in the opportunity ahead. It has also helped us identify some near-term priorities and opportunities for improvement, which I'll touch on in a moment. Let me start with our third quarter results. Total shop NOI increased 134% through significant contributions from acquisitions over the past 12 months. And the same store portfolio grew NOI 19.5% year over year. While the growth was substantial, the quarterly result was below our expectations. Occupancy growth during the summer selling season was slower than we anticipated. The reflected transition-related operating disruptions and slower growth at certain legacy holiday communities. Unusually high one-time expenses at select operators also impacted the quarter. Our immediate priority is improving revenue growth, with particular attention to communities where filling vacant units offers the greatest REF PAR opportunity. We've been working with our operating partners to ensure they have in place fully staffed sales positions, rent-ready inventory, pricing, and incentives that align with local market conditions. We also introduced targeted short-term incentives for community teams that select properties to support sales activity. The sequential increase in recurring capital expenditures largely reflected spending to prepare vacant units for occupancy. Having that inventory available is essential to converting tours to move-ins. As we execute on these properties, we see some encouraging signs in occupancy over the past three months. Consistent with typical seasonal patterns in senior housing, we expect occupancy to taper as we move through the holiday season. Moving incentives and variability in holiday-related expenses may also temper the near-term financial benefit of that progress. At the recently acquired communities, we view these transition-related disruptions as temporary We continue to believe these investments can perform in line with our underwriting and are working to get performance on the right track. We are currently partnering with our operators to develop the 2027 operating budget and business plans. We enter that process with a clear view of the growth opportunities across the portfolio, the communities that warrant the greatest attention, and the actions needed to improve performance. Our approach is tailored to each community and includes identifying revenue enhancing capital projects and directing resources where we see the greatest potential return. To support this work, we've also made some changes to our internal organization. We have realigned our asset management team by investment type and functional expertise, establishing separate teams dedicated to shop and to triple net and loans with clear responsibilities and expectations for each. Data-driven decision-making will be central to our approach. To support that commitment, we have bolstered our data and analytics team. This team will strengthen our portfolio insights while improving our tools, processes, and technologies. By combining community operating data with broader market and customer information, we aim to identify opportunities earlier, work more efficiently, and help our team and operating partners improve performance. We are recruiting for several positions to support these efforts. Over time, I believe this approach can support organic shop NOI growth in the high single digit to low double digit range. Our priority is improving execution and establishing a more consistent operating trajectory. Turning to TripleNet portfolio. The portfolio continues to provide a solid foundation with healthy EBITDARM coverage across the major asset classes. Bickford paid more than a million dollars in percentage rent during the quarter, modestly ahead of our guidance assumptions. My first three months have only strengthened my confidence in NHI's opportunity. Our focus is on translating that opportunity into consistent operating performance as we grow, and I look forward to doing so alongside our team and operating partners. With that, I'll turn the call over to Todd to discuss our financial results.

Thank you, Chris, and hello, everyone. Let me start by providing details on our third quarter financial results, followed by a brief discussion about our balance sheet and liquidity, and conclude with our revised guidance. For the quarter ended September 30th, 2026, our net income per share was $11.47 compared to 69 cents per share in the prior year third quarter. The significant increase was driven by a $541.6 million gain on the sale of the NHC portfolio. We also recognize $9.9 million impairment on a property that was classified as held for sale during the quarter and has subsequently been sold in the fourth quarter. Nary FFO and normalized FFO for the third quarter were $1.12 per share, respectively, compared to $1.09 and $1.32 per share, respectively, in the prior year period. Nareit FFO and Normalized FFO for the third quarter of 2026 included $1.1 million in transaction costs related to acquisitions we decided not to pursue. Nareit FFO and Normalized FFO in the third quarter of 2025 included approximately $3.9 million in cash rental income related to lease terminations on seven properties previously leased to Discovery Senior Living that were part of our shop transition. The third quarter of 2025 also included approximately $9.7 million in rental income from NHC. FAD for the third quarter decreased by approximately $5.2 million compared to the prior year period. The decrease was driven primarily by the sale of the NHC portfolio, and the prior year's discovery lease termination accounted for approximately 13.6 million of the decline. This was offset by acquisitions completed since the end of last year's third quarter. Our cash rental income of 58.4 million declined by 12.9 million compared to the prior year's third quarter due to the items I just reviewed and other dispositions partially offset by acquisitions completed over the past year. Total shop NOI increased by 134% to $11.5 million. Interest income from mortgages and other notes declined by 20.6% to $5.1 million due to lower outstanding notes receivable balances. We also earned approximately $2.9 million of interest on NHC sale proceeds held for future Section 1031 exchanges. General and administrative expenses for the third quarter increased 26.8% to $8 million compared to $6.3 million in the third quarter last year as the company continues to ramp its shop growth strategy, which contributed to a $1 million increase in compensation costs. Legal expense of $1 million consisted primarily of costs incurred on a large shop transaction that we stopped pursuing during the quarter as referenced earlier. Interest expense for the third quarter decreased 9% year-over-year due to lower average debt outstanding. Turning to our balance sheet and liquidity, our reported net debt to adjusted EBITDA ratio at September 30th was 3.6 times. Adjusting for the $340 million available for future Section 1031 exchanges, our net debt to adjusted EBITDA was 2.4 times. We have a $100 million private placement note due in January 2027, which we expect to repay by the end of 2026. We have no other debt maturities until 2028. Our available liquidity at September 30th was approximately $1 billion, consisting of $497 million of available revolver capacity, $500 million under our recently refreshed ATM program, and cash on hand. We also had approximately $340 million in restricted cash and deposits held for future qualified Section 1031 acquisitions at the end of the quarter. With the investments that we expect to close by the end of the year, we do not expect a special dividend will be required for federal income tax purposes. Regarding the quarterly dividend, our Board of Directors declared a quarterly dividend of $0.94 per share payable January 29, 2027 the stockholders of record on December 31st, 2026. As announced last night, we revised our four-year guidance to a range of $4.68 to $4.70 per share for both NAE REIT and normalized NFFO and $236.6 million to $237.7 million for funds available for distribution. The revised FAD range represents a $5 million reduction at the midpoint. The revised guidance incorporates approximately $2.3 million in reduced shop NOI from the 42 properties in the portfolio at September 30th, an increased recurring capex of approximately $2.8 million. As Chris discussed, we accelerated certain routine capital expenditures that are supporting occupancy gains. These items are partially offset by stronger performance and expectations elsewhere in the organization compared to our prior guidance. That concludes our prepared remarks. Thank you again for joining us today. Operator, please open the line for questions.

Certainly. Everyone at this time will be conducting a question and answer session. If you have any questions or comments, please press star 1 on your phone at this time. We do ask that while posing your question, please pick up your handset if you're listening on speakerphone to provide optimum sound quality. And once again, if you have any questions or comments, please press star 1 on your phone. Your first question is coming from Juan Sanabria from BMO Capital Markets. Your line is live.

Hi, good morning. Thanks for your time. Just hoping you could expand a little bit on what drove the shop underperformance relative to expectations. Was it Smaller assets, older assets, any particular operators to call out? Is there any reliance on third-party referrals? Just hoping to dig a little bit under the surface just to get a better understanding.

Yeah. Hey, this is Chris. First of all, great to be here on my first NHI call. Breaking that down a little bit, definitely it was a revenue issue. I'll put it in two different buckets. As it relates to our new acquisitions, In those particular transactions, we did experience operator transitions, and with any operator transition, there tends to be some disruption. I think the disruption here was a little bit more pronounced. We saw some pretty local mom and pop type family businesses being sold to more sophisticated incoming operators. And with that, there's a level of complexity as you introduce new technologies and so forth. So the pickup there was a little slower than we expected. We did see in a portfolio, you know, the incoming occupancy was below where we thought the starting point would be. and then we saw in another portfolio just some immediate move outs. Ultimately, and I've been to a number of these assets and portfolios, we believe in these deals, we think the long term business plan is in line with our underwriting and I would even tell you that over the last couple months we've seen kind of those green shoots as the team has stabilized, as the new operator systems have have all been implemented and so forth. We're starting to see that pick up again. The other bucket I would tell you is that on the same store, while the pool of assets performed in line, there is a cohort there that continues to lag that brought down our overall occupancy and our overall variance to forecast.

Great. Thank you. And then maybe you could talk a little bit about how we should think about G&A. You've made some additions. I've noted you're looking to hire more people and spending more in CapEx and refreshing and maybe taking care of some deferred CapEx and maybe how those should trend into 27 just to kind of level some expectations going forward.

Hey, Juan. This is Eric. On the G&A We're definitely beefing up our operations. As you know, I come from an operations background. So if we're going to do this, we have to do it right. We need more asset managers. We need some boots on the ground. We need some analysts. As Chris mentioned, we're beefing up our data analytics with people. So you've seen that happening in real time and We're obviously doing that ahead of the NOI that's going to show up from the new acquisitions, so it looks a little lopsided. I'll give you that. On the CapEx for the buildings, we're really interested in CapEx that will move the needle on presentation and curb appeal. We've been putting a lot of CapEx in our shop buildings that are what I call stealth improvements, new roofing. New Boilers. Nobody sees that when they're touring a building. They want to see new furniture, new carpet. They want that new building smell. So that's the kind of CapEx that we're focused on at the moment.

And just as a quick follow-up, that CapEx was originally considered or incorporated into the underwriting and it's just been brought forward or is this over and above what you had originally expected?

I would say it's over and above. because of some of the stealth improvements that we've had to do that were not budgeted. Right now, Chris is doing a detailed budgeting process with all the operators so that we don't have any surprises in the future.

Thank you.

Hey, good morning, guys. This is Jesus for Jamie. Thanks for taking the question. Just kind of focusing on the 11 properties here entering the same store shop pool in the fourth quarter. Can you just talk about like the NOI growth profile you're expecting on those assets? You know, it's just more continue rolling into the same store pool in the coming quarters.

The 11 assets, the new incoming assets? Correct. Oh, thanks, Jamie. I think we feel good about Good about the growth of those assets going forward. Fundamentally, they're in line with our view of the kind of go-forward business plan there.

Part of the strategy of diving into shop like this is we buy buildings and markets that are showing a lot of promise that have less competition and the buildings have room for growth. We understand that the market wants high single-digit, low double-digit occupancy, so a lot of our buildings are in the low to mid-80s, so it gives us that upside. Anything to add to that, Kevin?

Well, I would remind you, too, that one of those is a conversion, and we already have unlocked some value out of that from converting it from a lease to shop. So we've seen that in our numbers. We expect more growth out of them. That's the whole reason we did that in the first place. And the other ones are performing in line with expectation. We still think there's more growth to come. I think that's a function of what we've seen this quarter is we still expect more, and we believe they'll get there.

That's great, guys. And just on the remaining 1031 redeployment here, can you just talk about how the exchange deadline is influencing your evaluation of the remaining acquisition opportunities and the progress you're making towards that target?

Hey, Seuss, this is Kevin again. I would tell you that, as Todd said, we pretty much have those dollars allocated. We feel very good about the assets we have under LOI, as I mentioned earlier. appreciate the color. Thanks, guys.

Thank you. Your next question is coming from Farrell Granath from Bank of America. Your line is live.

Hi, good morning. This is Andrew Real on with Farrell. Thanks for taking our questions. You mentioned this focused plan to strengthen shop performance. Just wondering, If you could spend a little more time maybe discussing what those key initiatives are, maybe the major milestones you're watching for, and then ultimately how you're thinking about a timeline for those to translate into improved NOI growth.

Yeah, thanks, Andrew. First of all, moving the top line on our shop portfolio is priority one, probably priority one, two, and three. Coming into this, if I take a look at it in three different buckets, from an asset standpoint, our priority immediately was to try to get move-ins. And so we instituted a plan to really just try to make sure that our operators had the nuts and bolts in place, which was, as I kind of mentioned in the opening remarks, do we have salespeople in the buildings? Are we priced appropriately? Do we have vacant rent-ready rooms? and then are we incentivizing people? So an initial push to try to get occupancy and as I kind of mentioned before, we have seen an uptick in our occupancy in August, September and October and so some of those things are bearing some fruit. Secondly, we have kind of bifurcated the portfolio into some buckets so that we have a good view of which of the assets we need to lean into as Eric kind of mentioned on the CapEx front. where do we want to invest and how do we think about each of the assets and what are the individual levers that we want to pull on those assets in order to get the rev par growth that we need to achieve. Lastly, we're in the process of doing the budget and that's critical. Timing is perfect. There we're building out our 2027 business plan and with that comes kind of CapEx and some support. On the operator front, we like the operating group that we have that's in place. We are working with them on those business plans. And we're also evaluating ways that we can work with them in tandem and where we can bring our resources to the table so that we can get joint performance. And then lastly, from a team standpoint, and this has already gone into effect. We have taken the asset management team, we've broken it down, we now have a dedicated team purpose for the shop portfolio and then one for TripleNet and for the loans. And then we will be building, we have analysts and support groups that support the asset managers and we'll be building that out as we kind of go into 2027. And as Eric kind of mentioned, A heavy focus on data and analytics and trying to make us smarter about our assets, help our operators, and drive growth. So hopefully that answers your question.

Got it. No, thank you. That's helpful color. And maybe just as a follow-up, in the prepared remarks, you noted some costs tied to a larger shop transaction that you chose to stop pursuing. I guess, you know, what drove that decision and how are you thinking about portfolio size opportunities from here?

We're always – this is Eric – we're always chasing large portfolios when they're available. That makes sense for us in this particular instance. We got to a point in our diligence and our contract negotiations that we felt that the terms were out of market. So we made our best and final offer and we had to walk away. So there was a lot of diligence, a lot of site visits, a lot of lawyers fees and inspection fees, but You know, those are the costs of pursuing a marquee deal.

Okay, thank you very much.

Thank you. Your next question is coming from Austin Warschmidt from KeyBank Capital Markets. Your line is live.

Great, thanks. Kevin, you talked a little bit about making progress on some lingering issues for some of the same-store shop assets that you intend on potentially selling. What amount of proceeds would you expect from selling these assets, and is there anything beyond this amount that you guys are considering from a capital recycling perspective to support further growth in the shop?

Hey, Austin. Kevin, we're looking at proceeds that would be north of $100 million should we elect to sell. I think that is the likely scenario, but we're still looking through some different scenarios and keeping our options open. But regardless, the redeployment of that capital would be additive for us, not only from an asset management standpoint where we can have focus on more growth-oriented properties, but really just from a capital allocation standpoint. I feel like they're better served elsewhere. Again, more growth, but also likely more accretion. So just a reallocation of our current capital.

And then with respect, could you speak more broadly with respect to the, I think it was seven assets that you transitioned in August of last year, how those specifically have performed relative to underwriting following the transition?

Thanks, Austin. Yeah, a bit of a mixed bag. We've got a few communities that are high flyers that we'll be leaning into, and then we've got some other ones that we're nursing and bringing along. occupancy has been a little bit more stagnant than we would have liked, but we have seen again some pickup here coming out of third quarter.

Got it. And then maybe just one last one for Eric. My understanding has been the last one and a half, two years has been spent sort of building out the infrastructure internally to prepare for building out shop. I guess beyond maybe some of the data and analytics team, that Chris talked about in the prepared remarks. What's still missing from the formula to allow you guys to get ahead of some of these challenges that operators and assets are facing and sort of limiting, I guess, the impact it's having on growth on a go-forward basis?

I'd say we're 75% to 80% there with our hiring. I feel good about the team that's in place. I feel good about the infrastructure. As we add buildings, we'll add asset management, we'll add accounting folks, but that can happen in tandem with the acquisitions, and I'd say we're 80% there on all the hiring.

Thanks for the time.

Thank you. And once again, everyone, if you have any questions or comments, please press star then one on your phone. Your next question is coming from Rob Stevenson from Huntington. Your line is live.

Good morning, guys. Most of my questions have been answered, but just wanted to one on the guidance. So 468 to 470, I think that's implying 114 to 116 versus the 112 guidance. that you did in the third quarter. What's driving that two to four cent sequential pickup given the holiday season? Is that just redeployment of the remaining NHC proceeds?

Rob, it's Dana. I mean, the simplest piece is we had the transaction costs in the third quarter. That was 1.1 million. We'll pick that. I obviously won't repeat in the fourth quarter. And then there were some other puts and takes. I think, obviously, we've talked about Shopped quite a bit. I think we did a little bit better in the triple net. Cumulatively, everything else kind of evens out. But again, we'll pick up a couple cents in the fourth quarter on just not having the transaction costs.

Okay, that's helpful. Thanks, guys. Appreciate it. See you next week.

Yep.

Thank you. Eric Mendelsohn, President and CEO for Closing Remarks. Please go ahead.

Thanks, everyone, for your time and attention today, and we'll probably see you at NAIRI next week.