Greetings and welcome to the NHI fourth quarter 2025 earnings webcast and conference call. At this time all participants are on a listen only mode and a question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference please press star zero on your telephone keypad and please note this conference is being recorded. I will now turn the conference over to your host, Mr. Dana Hambly, VP of Finance and Investor Relations. Sir, the floor is yours.

Thank you and welcome to the National Health Investors Conference call to review the results for the fourth quarter of 2025. On the call today are Eric Mendelson, President and CEO, Kevin Pascoe, Chief Investment Officer, John Spade, 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's been covered by the financial media. Any statements in this conference call which are not historical facts are forward-looking statements. NHI cautions investors that any forward-looking statement may involve risks or uncertainties and are not guaranteed of future performance. All forward-looking statements represent NHI's judgment as of the date of this conference call. Investors are urged to carefully review various disclosures made by NHI and its periodic reports filed with the Securities and Exchange Commission, including the risk factors and other information disclosed in NHI's Form 10-K for the year-end of December 31, 2025. Copies of these filings are available on the SEC's website at SEC.gov or on NHI's website at NHIREIT.com. In addition, certain terms used in this call are non-GAAP financial measures, reconciliations of which are provided in NHI'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'll now turn the call over to our CEO, Eric Mendelson.

Good morning, and thanks to everyone for joining us today. We 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 paydowns. Reflecting on the full year results, we delivered growth in normalized FFO per share of 10.6% and total FAD growth of 13.7%. This exceeded the midpoints of our initial 2025 guidance by approximately 6% and 5% respectively. Shop NOI increased by approximately 57% compared to 2024 with 7.6% same-store growth and $6 million 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 million in 2025, which was well above our initial guidance of $225 million and was our most active year since 2016. This included investments of $218 million in the fourth quarter alone, setting the company up nicely for strong acquisition growth in 2026. In fact, we've already closed on one deal this year for $105.5 million, our largest shop acquisition to date, and we have an active pipeline of over $488 million, with an additional $111 million under signed letters of intent. The industry tailwinds for senior housing have never been more favorable, and there's little evidence to suggest that this will change in the next several years. According to NICMAP, 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 NICMAP started reporting this information in 2008. Meanwhile, demand is accelerating as the first baby boomers turn 80 this year. NHI 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're 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've increased our SHOP investment by 106% in the last 12 months to approximately $740 million. This has increased our annualized SHOP NOI contribution to 12% of total annualized NOI from 4.5% at the end of 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 TripleNet 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've been overwhelmed by the interest in partnering with NHI, 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 NHI 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. NHI's financial strength is very conducive to supporting growth 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 nhi 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 for shared growth of 1.2 percent 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 million of dispositions of non-strategic 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, NHI is in a 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're as enthusiastic as we've 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 NHI 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 NHI board, and 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'll now turn the call over to Kevin. Kevin.

Thank you, Eric. Starting with investment activity and the pipeline, NHI had a great year in 2025 with $392.4 million in announced investments at an 8.1% average initial yield. As Eric noted, the fourth quarter was particularly active with investments of $217.5 million, and 2026 is off to a solid start. In February, we announced our largest shop acquisition to date of $105.5 million for nine properties in Kentucky, South Carolina, and Tennessee. We expect an initial NOI yield for the first year of approximately 8% and 7.6% 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 million 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 $110.6 million under signed letters of intent, primarily in shop, and we are evaluating an incremental pipeline of $488 million, all in senior housing. This figure excludes any portfolio deals, but I'll add that we are reviewing several of these large potential investments. The acquisition environment will remain incredibly strong for several years, which necessitates that we understand how each of our properties either fits or doesn't fit within NHI'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, Topshop NOI increased by 124.9% compared to the fourth quarter of 2024 due to the transition of seven properties on August 1st and the acquisition of four properties on October 1st. 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 7-8% 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 $4.1 million 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, and stable occupancy and EBITDA coverages. Cash lease revenue increased approximately 7.2% year-over-year, driven primarily by acquisitions, successful transition of properties formerly operated by SLM in annual escalators. Collections of $1.9 million 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 bigford repayment increased by 38 percent to 1.5 million in the fourth quarter and they had an outstanding balance of 7.6 million at december 31st we continue to expect that bigford's cash rental revenue will increase in total dollars at the april 1st rent reset and and we'll be able to provide more details on the next conference call. The pipeline continues to be active with triple net senior housing deals as we don't think every property will 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 $52.1 million, which is now operated by Priority Life Care. It is a new relationship for NHI, but they are a well-established operator with over 60 properties across 12 states. The lease is unique as it's a five-year lease at an initial yield of 8% plus a revenue participation feature that could add another 25 to 50 basis points. Also provisions in the agreement that would convert the property to shop, which we anticipate triggering. That concludes my remarks, and I'll now turn the call over to John to discuss our financial results and guidance.

Thank you, Kevin. and hello everyone. This morning I'll 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'll be using average diluted common shares for all per share results. For the quarter ended December 31, 2025, our net income per share was $0.80, cents, a decrease of 15.8% from the prior year. Recall that in the prior year period, we recognized a $6.3 million non-cash gain related to derivative accounting for forward equity sales agreements, as well as the $5 million gain on sales of real estate. With a 12-month period ended December 31, 2025, our net income per share was $3.02 compared to $3.13 in the prior year. Our NAIRED 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 periods NAIRED FFO benefited from the aforementioned $6.3 million gain from derivative accounting. Our normalized FFO results per share for fourth quarter in full year increased 8.9 percent and 10.6 percent with dollar 22 and 4.91 cents per share respectively compared to the prior year periods several one-time items helped us achieve these great normalized episode results during the year we recognized gains from equity method investments of 3.7 million dollars up from 0.4 million dollars in the prior year we also recognized a $3.4 million benefit to our credit loss reserves compared to a credit loss expense of $4.6 million in the prior year. Finally, we recognized $3.9 million in cash rental income upon lease terminations, which excludes non-cash write-offs of straight-line rents receivable and excludes non-cash rental income related to operations transfers that are available 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 $232.1 million, respectively. As Kevin noted, NOI from our 26th property shop segment for the quarter ended December 31st increased 124.9% to $7.3 million compared to the prior year period. Our 15 property same-store shop portfolio NOI declined 0.9% to $3.2 million from the prior year fourth quarter, but was sequentially up 8.7% from the third quarter. Sussequent 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 million. Our 2026 guidance, released last night, included our NOI expectations for these properties to be $39.6 million 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'll 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 47.9 million 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 $6.6 million compared to the year earlier period, while legal expense declined 0.4 million dollars during the quarter we closed on new investments totaling 217.5 million dollars for the year we made 392 million 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 93.3 million dollars 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 for proceeds of approximately $46.2 million at an adjusted forward price of $71.87 per share after fees and forward costs. At December 31, 2025, we had remaining escrow forward equity proceeds of approximately $44.5 million 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 $19.6 million in cash in our balance sheet, $496 million in revolver capacity, and also had $315.8 million available on our ATM, 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 per quarter, and our available liquidity was approximately $875 million, 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 on our investment-grade rating and also reflects the changes to our debt service coverage ratios 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 a record March 3rd to 1st, 2026, and payable May 1st, 2026. Last night, we introduced our full year 2026 guidance, and I previously touched on some of our shop expectations. For 2026, we expect May read FFO and NFFO per share at the midpoints to grow 6.9% and 1.2% respectively. We expect total FAD at the midpoint to grow 7.8% to $250.2 million. Our full year 2026 guidance includes $230 million in additional future investments and an average NOI yield of 7.8% comprise 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 December 31st, 2026. Negotiations are ongoing and 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 through the 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 thank you at this time you'll be conducting our question and answer session if you would like to ask a question please press star one on your telephone keypad a confirmation tone will indicate your line is in the question key.

You may press star 2 if you would like to remove your question from the key. And for participants using speaker equipment, 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. Your line is live.

Thank you and good morning. I first just wanted to start off with a question on the same-store shop guidance for 2026. I know that last quarter there was some commentary around taking corrective measures and that we could potentially expect double digits in 2026 in that same-store portfolio. So, curious of this initial guidance, is this reflective of just what you're seeing today, teacher plans of these corrective measures, which could potentially provide greater upside to that guidance?

Sure. This is Kevin. I would tell you, overall, just the way we conduct ourselves is we want to deliver something that we feel very confident that we can achieve, and there should be opportunity within the portfolio from there. So it's a bit of an under-promise, over-deliver. 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 100% occupied, so that will be additive. those units don't come on until May and we expect that they will grow through the balance of the year we're not expecting everybody to move in all at once you know so we've got a number of things that we're focused on with the portfolio we're focused on the sales pipeline building the funnel you 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.

Great. Thank you. And also just touching on your shop pipeline, especially seeing the momentum that you've picked up in the second half of 25 and then now what we've seen under LOI and in the pipeline for 26, is it fair to expect that that momentum can continue going forward into to 26th of the level that you're potentially able to achieve now?

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

Thank you. Thank you. Our next question is coming from Austin Werschmidt with KeyBank Capital Markets. Your line is live.

Thanks, and good morning, everybody. Just, Eric, I wanted to go back to NHC, and I'm wondering, does 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'll reach a resolution in the next three to nine months?

Hey, Austin. This is Eric. We're in the thick of it right now, so I would describe our posture as we're in a quiet period regarding NHC.

Understood. Appreciate that. And then from the shop challenges that you guys have faced and, you know, you've talked about where, you know, you would have expected annualized NOI to restabilize a couple years ago. So, I mean, has that changed your approach to either underwriting new deals or how you're structuring management agreements to provide, you know, any added flexibility moving forward?

Sure, this is Kevin Gould, but we're also focused on more senior housing campus-style products, ones that have assisted in memory care. You recall these are former holiday properties that, you know, we're not the only ones that have had some issues with. But making sure that we have a bit of that continuum or if the senior housing, the need-driven component is a component to the deal. I think it's something that we're focused on. And as we touch on our management agreements are such that we do have flexibility should we need to make a change. You know, that's never our – never a desire of ours. Changes are very disruptive to the property. But, you know, if we need to, then we have that ability.

Got it. And then just last one, you know, Eric, you highlighted the targeting of secondary suburban markets for deals. What's sort of the long-term growth profile for those markets, just given, you know, demographics and affordability? And how would you characterize the labor pool for the markets that you're focused on?

Great question, Austin. We definitely pay attention to labor. For example, 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's no secret that there's a lot of migration from coastal areas to places like Tennessee and other places in the Midwest where housing is more affordable and the cost of living is more affordable. So for the time being, as we look at Bickford and other Midwestern operators, they're able to staff their buildings with full-time employees and not have to utilize any agency labor.

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

Well, you look at our pipeline, we're pleasantly surprised at the number of deals and opportunities we're seeing now that we're 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.

Thanks for the comments.

Thank you. Our next question is coming from Juan Sanabria with BMO Capital Markets. Your line is live. Good morning.

Just hoping you could help us think about job growth and the guidance for 26, recognizing there's some struggles with the ex-holiday portfolio, but maybe if you can compare and contrast what's not in the same show pool and how that's performing versus the same store pool and kind of the expectations on occupancy and rep poor just so we can get a kind of more holistic picture rather than just focusing on same store. Sure.

This is Kevin. I'll try and address your question. If I missed something, please re-ask the question. But when we're looking at what's not in same store right now, recall that two of them wanted to transition from a triple net to shop the other is transition to a new operator so we do have some transitional impacts that were we had through the first part or sorry the second half of 2025 and then only the newest will have some transitional impacts that we experienced in 2026 there's only been one of those that was the current manager though that group is performing to expectation you know feel very good about where they're at from an operation standpoint but overall we'll be looking at is making sure that they're putting in the right systems and people feel like they've done a very good job with that they're building their funnels we're able to pass through some rate increases but we're doing that responsibly to make sure that we're not losing occupancy while we go through these transitions so So when we are to look at this, it's 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 Sincere 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're feeling good about where we're at with those operators. You'll see those roll into the same store starting fourth quarter of this year. So you'll have a little more incremental visibility on that piece here in the next couple quarters.

Okay. That's helpful. And just maybe going back to, I think, maybe trying to ask us this question in a different way. I guess, you know, holidays may be a unique situation, but I guess what have you learned that you think prepares you better to deal with kind of the growing pains in shop or under transitions, et cetera, that should give us confidence about investments or activity in shop as you look to grow pretty significantly with a pretty compelling opportunity to go forward with supply to demand?

Hey, Juan, this is Eric. I would just remind everyone that the holiday shop was more of a science experiment that we backed into when holidays sold to Atria and Well Tower. We've put a lot of capex in those buildings, we've changed managers, and as we compare them to the same holiday buildings that are at Ventos and Well Tower, from what we're able to surmise we're doing as good or better than they are with those buildings. Our new shop portfolio, the not same store, I feel very positive on. I would also point out that it's 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'll 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.

And just last question for me. You know, how should we think about the pricing power and the ability to drive rate in some of these secondary markets? I'm not sure, kind of, the affluence around some of these assets or the ability to drive pricing with the target customers.

Sure. Kevin, again, every market is different. We are underwriting the local market fundamentals of each building that we're looking at. So each one is very hard to give a generalization here on how we're looking at those because they're all, again, they're all different. One thing I will say, though, is based on the margins where they're at, if you can increase rates 5% a year and hold your expenses to less than 4%, that's going to be 7% to 8% growth. So we think that that is very achievable, 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're building a very good portfolio, like our operating partners and their ability to pass through those increases, if not more. You know, that's kind of in line with what we've seen with our triple net portfolio as well, so I think we can do as good or better. so that's our opportunity though as John mentioned in his comments if we can continue to get some margin expansion as we grow the shop segment that's going to add additional growth for us.

Thanks for that, I appreciate it Thank you Our next question is coming from John Kilachowski with Wells Fargo, your line is live Good morning, this is Casey and for John, thanks for taking the question just to switch gears a little bit on the $1,100 million of dispositions and guidance with a little bit higher than we were expecting here. Can you walk us through what's driving a higher volume, specifically what assets are being sold, and is primarily like just capital recycling into shop or pruning non-core assets?

This is Kevin. It's really an operator relationship situation coupled with the underlying assets not being core to NHI so the profile of the communities is largely senior housing but they're not relationships we're going to grow they're triple net in nature and they're intensive from a asset management standpoint so we feel if we can move the capital to those two relationships where we're going to have additional growth not only from a whether it's a whether it's a triple net or a shop deal that we do from the proceeds you know something where we're going to get additional volume out of that customer be less intensive from a asset management standpoint meaning we're 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 we've hired a fair amount of folks for asset management we're building out that our bench and our analytics competencies that feel good about where we're at, but we need to make sure we're focusing them on the pieces that are going to be meaningful to NHI. And that's 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're focusing our team.

That's great. And just a quick follow-up on NHG to the extent you're able to comment. If you do renew the lease, how does that impact what you could reposition or sell versus our earlier discussions where you were talking about locating the shop from this portfolio? Would it be like an all or nothing scenario?

Could you ask that again? So if we do renew the lease, then what?

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 locating some capital.

Fair question. And I'll 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.

Thank you. Our next question is coming from Rich Anderson with Cantor Fitzgerald. Your line is live.

Hey, team. So the 7.7% to 8% shop same-store and all-wide guidance, just to clarify, that's still just a 15-legacy holiday asset. Is that correct?

Yes, John. Yes, that's correct.

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? So you sort of get a step up after you sort of, you know, address some of the issues that are going on in the legacy portfolio. Is that the right way to think about it?

Yes.

Okay. I'm obviously leading up here. So at 9.3% of the portfolio today, SHOP, or as of the end of the year, what's your target in terms of how big SHOP can become as a percentage of the total? And do you still think that you're competitive from a growth perspective? Because, you know, you're seeing, you know, 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'm just curious how you're approaching the same-store profile of shop going forward and how big it could be in a couple of years.

Well, in terms of growth of NOI for the company, we've told people that last year we doubled from 5 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's achievable and on track. And I understand we have some catching up to do, but as you can see by our pipeline numbers, it's easier to find new deals when you're 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 isn't getting the margins that they could?

Okay, so it's 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, stabilized but you know still you know as you as you point out margin story and something in the 10% range on a you know foreseeable future type of that's fair that's fair okay rich this is John look let's just be honest about a little bit about the makeup of our shop portfolio it was comprised of the assets which Eric touched on before it's also comprised these assets that we transitioned away from discovery to sincere and that was the whole point of my discussing the return on invested capital that we're currently experiencing we strongly believe in the in the potential of these assets we got to unlock you know the the margin to improve that and that's why we're we're talking about that and at the same time growth will help us improve our metrics over time as well okay switching gears on the outlook for this year and the six excuse me 7.6 million of remaining big for rent repayment left on the table do you expect that all to be paid back in the next year or two like what's what's what's the cadence of that that payback well Kevin the what I would

Yes, how you think about it is once the rent reset happens, there's less cash flow overall to pay. At least that is not something that we're just going to let go for free. So we'll be discussing with them what type of alternative there are to pay that remaining balance or various other things that we can negotiate over that give NHI 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 had them revise the formula and have them pay it out. Because we're not looking to take every last dollar from them. They still have to be able to make sure they pay their people and invest in the company. So we're going to be mindful of that, but, you know, it's not going to just go away. NHI will get value out of it.

Kevin, that's April, right? Lastly, so Doc is drawing some attention to CCRCs these days. I'm wondering, you know, when you think about your CCRC portfolio, interest-free portfolio, if you're seeing any more activity on the ground in terms of transactions and, you know, renewed interest in the space. Any comment there?

So it's always been something that we've had an eye on. We are also mindful of our concentrations there and don't want to make sure we get upside So we will continue to look at those opportunities. There's a few in the marketplace that we've been looking at, but we're also going to make sure we're rigorous with our underwriting criteria. So it's on the table, but not necessarily a direct focus, but something that we'll approach opportunistically. We have some great operating partners that do that space very well, so it's something I think we should continue to look at. Okay.

Thanks very much.

Thank you.

Thank you. As a reminder, ladies and gentlemen, if you have any questions or comments, please press star 1 on your telephone keypad. Our next question is coming from Armateo Ocasania with Deutsche Bank.

Your line is live. yes good morning everyone quick question again on the Bigford 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 kind of done the structure where you know rather than getting deferred rents you just kind of lowered the value of any kind of acquisitions you were buying from Bigford 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's what I think, right. Sorry, Ty, on this part of your question there, you were asking what value we can get from Bigford in lieu of cash.

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 Bigford. Is that kind of more of what we should expect to see?

Well, I don't want to guide you where rent sits going forward this month.

Okay.

But, yes, you're on the right track in terms of what value is out there. We've built several buildings with Bigford. There's still another one remaining that could have some value like that or some other developments that we had looked at in the past. there's just some reimagination of the portfolio whether we prune a little bit I wouldn't I wouldn't think those are going to be huge numbers of buildings but there is potentially some addition by subtraction that can help us get additional rent so you know we're we have a number of options but there is a formula in place in terms of how rent gets reset that would be the baseline for what we think we believe that we're going to continue to get the aggregate number of rent that Bigford paid and then some going forward. And just as a reminder, they paid $5.3 million last year. So they've been really moving down that repayment number at a steady fit. And we're happy with where we're at with them. We've got a little more work to do.

Gotcha. And then one follow-up. With the MHC reset, and 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 negotiating with NHP?

We're in the thick of it right now, Tayo, so I just have to be careful what I say.

Fair enough. All right. Thank you.

Thanks, Tayo.

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. Thanks, everyone, for joining today and for your interest, and we'll see you at conference sometime soon thank you ladies and gentlemen this does conclude today's call and you may disconnect your lines up this time and we thank you for your participation