Community Healthcare Trust Incorporated

Welcome to Community Health Care Trust's 2026 Second Quarter Earnings Release Conference Call. On the call today, the company will discuss its 2026 Second Quarter financial results. It will also discuss progress made in various aspects of its business. Following the remarks, the phone lines will be opened for a question and answer session. The company's earnings release was distributed last evening. and has also been posted on its website, www.chst.reit. The company wants to emphasize that some of the information that may be discussed on this call will be based on information as of today, August 5th, 2026 and may contain forward-looking statements that involve risk and uncertainty. Actual results may differ materially from those set forth in such statements. For a discussion of these risks and uncertainties, you should review the company's disclosures regarding forward-looking statements in its earnings release as well as its risk factors and MD&A in its SEC filings. The company undertakes no obligation to update forward-looking statements. whether as the result of new information, future developments, or otherwise except as may be required by law. During this call, the company will discuss GAAP and non-GAAP financial measures. A reconciliation between the two is available in its earnings release, which is posted on its website. Call participants are advised that this conference call is being recorded for playback purposes. An archive of the call will be made available on the company's investor relations website for approximately 30 days and is the property of the company. This call may not be recorded or otherwise reproduced or distributed without the company's prior written permission. Now I would like to turn the call over to Dave Dupuy, CEO of Community Healthcare Trust.

Great. Thank you, Cindy, and good morning, everyone.

Thank you for joining us for Community Health Care Trust's second quarter 2026 conference call. Joining me on the call today are Bill Monroe, our Chief Financial Officer, Leigh Ann Stach, our Chief Accounting Officer, and Mark Kearns, our SVP of Asset Management. Before we begin, I'd like to remind everyone that our earnings release and supplemental data report were released last night and furnished on Form 8K along with our quarterly report on Form 10-Q. Additionally, we included in our Form 8-K a new strategic plan investor presentation, which is also available in the investor relations section of our website. We encourage you to reference this presentation along with today's remarks. The Board and senior leadership have spent considerable time developing CHCT's strategic plan for renewed growth. and I'm excited to share an overview with you today. First, we are rightsizing our quarterly dividend from 48 cents to 33 cents per share. This decision allows us to retain capital directly for accretive acquisitions and long-term portfolio growth. We expect this reduction to free up 25 to 30 million in capital over the next two years. Combined with our capital recycling program, this incremental cash flow will accelerate our portfolio investments and fund our acquisition pipeline. Crucially, we expect these investments to be highly accretive to AFFO growth and shareholder value, all while maintaining our current target leverage levels. As part of this capital realignment, we are focusing on four core strategic priorities to drive growth and elevate the overall quality of our portfolio. Those are occupancy improvement, Portfolio Reinvestment, Strategic Capital Recycling, and Accelerated Acquisition Growth. Our first priority is occupancy improvement. We see a clear, tangible path to reaching 92% occupancy over the next 18 months. Our 2026 leasing budget targets a 70 basis point increase in occupancy to 90.5% by year end. Year to date, we have already signed new leases totaling over 100,000 square feet surpassing our total volume for all of 2025. Leasing activity remains strong across the majority of our footprint, and we expect these tailwinds to continue into 2027. This momentum is driven by the strategic market positioning of our assets, along with a broader supply shortage of quality healthcare properties. Fully achieving these occupancy gains and rent growth represents up to $6 million in NOI upsides. Our second strategic priority is portfolio reinvestment. We are deploying targeted capital into redevelopment projects alongside high-quality tenants with long-term leases already in place. These projects offer compelling risk-adjusted returns with a 9% to 12% yield on cost. A prime example is our recently completed behavioral hospital in Lafayette, Louisiana, a joint venture between Ochsner Health and Ocean's Behavioral Health, with a lease commencement that occurred early in the third quarter. Additionally, we are selectively building out speculative suites in high demand markets. Proactively preparing these spaces allows us to capture prospective healthcare tenants faster, accelerating both occupancy gains and NOI realization. Our third priority is strategic capital recycling. Since launching this initiative in 2025, CHCT has sold seven properties generating $38.5 million in net proceeds. We currently have more than $70 million of assets in the market. We expect these disposition proceeds to fund our high-yield acquisition pipeline while keeping leverage modest. We view this as truly strategic recycling, whereby we are exiting select assets to fund high conviction opportunities, like our attractive inpatient rehab facility pipeline, while simultaneously enhancing the credit quality and profile of our overall portfolio. Finally, our fourth priority is accelerating acquisition growth. In addition to improved occupancy and portfolio performance, acquisitions will be an important growth driver for CHCT. Over the last two years, acquisition volume moderated to 64.5 million and 72.1 million. By combining our capital recycling proceeds with the capital freed up from our dividend rightsizing, we have unlocked the liquidity necessary to step up our acquisition velocity. We expect to close on 85 to 90 million in acquisitions in 2026, and we anticipate activity to increase in 2027 as this newly unlocked growth capital compounds. In short, we believe the strategic plan is clear and achievable positioning us to improve our portfolio, increase our acquisition cadence, and drive accretive AFFO growth. Next, I'd like to walk through a few key operational updates from the second quarter. During the second quarter, the Geriatric Behavioral Hospital operator, which leases six of our properties, paid approximately $370,000 in rent, representing a $70,000 increase over the first quarter. As previously noted, this tenant signed a letter of intent with an experienced behavioral health care operator to acquire the operations of all six facilities under exclusivity. Since then, the buyers made significant progress. They are now finalizing legal and business due diligence and have moved into drafting definitive purchase agreements, which includes new leases for CHCT's six properties. Given the steady momentum through the second quarter and into July, We anticipate a signed purchase agreement during the third quarter, targeting a transaction close by year end. While the deal is progressing constructively, transactions of this nature remain subject to final documentation and closing conditions. We cannot guarantee a closed transaction, but we remain fully committed to keeping you updated as key milestones are reached. Also in May, we sold one building in Batesville, Mississippi, and received net proceeds of approximately $460,000 resulting in a small gain on the property sale. We also have signed definitive purchase and sale agreements for four properties to be acquired after completion and occupancy for an aggregate expected investment of $99 million. The expected return on these investments should range from 9.1 to 9.75%. We expect to close on one of these properties in the third quarter and another in the fourth quarter of 2026 and the remaining two in the second half of 2027. That takes care of the items I wanted to cover, so I'll hand things off to Bill to provide additional details on our financial results for the quarter. Thank you, Dave.