National Healthcare Properties, Inc.

Hello everyone, thank you for joining us and welcome to National Healthcare Properties' second quarter 2026 earnings conference call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. I will now hand the conference over to Mike Ozuna, Director of Investor Relations. Mike, please go ahead.

Welcome to the second quarter 2026 webcast for National Health Care Properties, Inc. All participants will be in listen-only mode. Please note this event is being recorded. Also note that certain statements and assumptions in this webcast presentation, which are not historical facts, will be forward-looking and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to certain assumptions and risk factors which would cause the company's actual results to differ materially from the forward-looking statements. The company refers you to its SEC filings, including its most recent Form 10-K, for a detailed discussion of the risk factors that could cause these differences and impacts in its business. During today's call, the company will also discuss certain non-GAAP financial measures. These measures should not be considered in isolation or as a substitution for the financial results prepared in accordance with GAAP. The company will provide a reconciliation of these measures to the most directly comparable gap measure as part of its second quarter 2026 earnings supplemental on its website at www.nhpreet.com. A question and answer session will follow the prepared remarks. Also, please note that a replay of the webcast will be available on the company's website later today. I would now like to turn the call over to the company's executive management team. Please go ahead, Michael.

Thank you, Mike. Good afternoon and welcome to National Health Care Properties Second Quarter 2026 Earnings Call. I am Michael Anderson, Chief Executive Officer of NHP, and I'm joined today by Drew Babin, our Chief Financial Officer, who will speak to our financial results and outlook in greater detail following my remarks. Last quarter, First Earnings Call was a publicly traded company. We laid out a straightforward agenda. Grow the shop portfolio through disciplined acquisitions with best-in-class operators, concentrate our capital in senior housing, and build a balance sheet consistent with an investment grade unsecured issuer. Second quarter was one of substantial execution against each of those objectives. Beginning with operations, our shop segment delivered same-store cash NOI growth of 20.1% year-over-year, marking another quarter of double-digit growth driven by occupancy rate and margin. Same-store average occupancy reached 84.1%. The same-store cash NOI margin expanded 230 basis points to 22.4%. Importantly, the composition of that growth is maturing in a way we would expect, with both rate and operating leverage contributing to an increase in share as the portfolio approaches stabilization. Drew will walk through the detail. Our three operating partners, Senior Lifestyle, Discovery Senior Living, and Agewell Senior Living, now collectively manage our 56 shop communities. Each continues to demonstrate the quality of resident care and operational discipline that underpin these results, and we're grateful for their partnership as we continue to scale alongside them. turning to external growth, the second quarter and the period immediately following it represented the most active stretch of investment activity in the company's history. In late June, we acquired two senior housing communities in the Midwest totaling 211 units for a purchase price of $98 million, which are being managed by one of our trusted operating partners. In July, we closed on 17 communities comprising 1,003 units across the Midwest, South, Mid-Atlantic, and Pacific Northwest for approximately $182 million. 13 of these communities were acquired through the joint venture with Discovery Senior Living we announced last quarter, in which we hold approximately 98.5% interest. As part of that transaction, we retain a right of first refusal and a purchase option on an additional 13 Discovery managed communities, providing a defined pathway for continued growth with a partner that we know well. Taken together, our 2026 year-to-date acquisitions total 19 properties and 1,214 units for approximately $280 million at a blended year one yield of 7.9% and a projected year three yield of 9.7%. That spread between initial and stabilized yield is deliberate. We're underwriting assets where our operating partners and our asset management team can drive measurable improvement, and we're being paid to do that work. We also have a well-defined near-term pipeline. In late June, we entered into a definitive purchase and sale agreement to acquire three communities in Illinois with 178 units for $30 million. In July, we entered into a definitive agreement to acquire two communities in Florida with 200 units for $90 million. Each of these transactions is expected to close in the third quarter, subject to customary closing conditions and applicable regulatory approvals. In addition to the two previously referenced transactions, on August 4th, we were designated the stocking horse bidder for five shop communities through a bankruptcy proceeding. The acquisition of these communities is subject to an auction process. However, given our stocking horse designation, should we not be successful in acquiring these communities, we will be entitled to a breakup fee and expense reimbursement collectively in excess of $4.8 million. It's important to highlight that a majority of the transaction will be funded with NHP OP units or REIT shares, further deleveraging the balance sheet and adding shop communities in which we have strong conviction around near and long-term growth. On the capital recycling side, We continue to advance the strategic rotation we announced in May. Our agreement to divest the portfolio of 86 outpatient medical facilities for a disposition price of approximately $528 million is now hard. The buyer's due diligence period expired in mid-July and is only subject to lender consent for the loan assumption and other customary closing conditions. We continue to explore strategic opportunities related to the remainder of our OMF portfolio as we focus on completing the reorientation into a full-shot portfolio. will provide further updates as these processes advance. In addition, in May, we entered into a definitive purchasing sale agreement to sell one non-core shop community in California for approximately $42 million. That sale carries a 1.7% cap rate based on trailing 12-month results and further aligns the portfolio with our strategic focus on markets where we have the greatest opportunities for scale and growth. I would also note two items on governance that speak to the company's evolution. We announced the appointment of Al Campbell to our board of directors as an independent director, effective August 10th, Al recently retired from his role as Chief Financial Officer of Mid-America Apartment Communities, a role he held for 14 years through tremendous growth and performance at Mid-America. He brings decades of public company leadership and experience to our board, and we're very pleased to have him joining us. We've also begun another board process to identify a new independent director, further solidifying our commitment to continued enhancement of our company's governance. I'll now hand the call over to Drew Babson, our Chief Financial Officer.