CareTrust REIT, Inc.

Ladies and gentlemen, thank you for joining us and welcome to the Care Trust Reads third quarter 2025 operating results webcast and conference call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please raise your hand. If you have dialed in to today's call, please press star 9 to raise your hand and star 6 to unmute when your name is called. I will now hand the conference over to Lauren Beal, Care Trust's Chief Accounting Officer.

Lauren, please go ahead. Thank you, and welcome to Care Trust REIT's third quarter 2025 earnings call. We will make forward-looking statements today based on management's current expectations, including statements regarding future financial performance, dividends, acquisitions, investments, financing plans, business strategies, and growth prospects. These forward-looking statements are subject to risks and uncertainties that could cause actual results to materially differ from our expectations. These risks are discussed in Care Trust REIT's most recent Form 10-K and 10-Q filings with the SEC. We do not undertake a duty to update or revise these statements except as required by law. During the call, the company will reference non-GAAP metrics such as EBITDA, FFO, and FAD. A reconciliation of these measures to the most comparable GAAP financial measures is available in our earnings press release and Q3 2025 non-GAAP reconciliation that are available on the investor relations section of CareTrust website at www.caretrustreit.com. A replay of this call will also be available on the website for a limited period. On the call this morning are Dave Sedgwick, President and Chief Executive Officer, James Collister, Chief Investment Officer, Bill Wagner, Chief Financial Officer, and Derek Bunker, SVP of Strategy and Investor Relations. I'll now turn the call over to Dave Sedgwick, Care Trust REIT's President and CEO. Dave?

Well, thank you, Lauren, and good morning, everybody. Thank you for joining us. This feels a little like deja vu. Around this time last year, we were in the middle of closing on a significant volume of new investments that were to be giving us a running head start coming into 2025. At the time, I said, if you liked our 2024, you're going to love 2025. Well, this time around, I'll say it again. If you liked our 2025, I think you're going to love our 2026. And with only two months remaining, we sure hope you've liked 2025 so far. The third quarter normalized FFO per share of 45 cents, representing approximately 18% growth over the prior year quarter. and the midpoint of our updated full-year guide, also representing approximately 18% year-over-year growth. To start, I'd like to make a few observations. First, I'm extremely proud of the Care Trust team. An exceptional year like this is the direct result of their talent, commitment, and our culture. Our investments team, led by James, are truly rock stars in growing our portfolio, sourcing and sifting through hundreds and hundreds of off-market and brokered opportunities, and navigating complex structuring and closing processes to help us deploy record amounts of capital in back-to-back years. Our asset management team notched several wins this quarter in helping identify and mitigate risk, including a seamless transition of a portfolio of skilled nursing facilities to a new regional operator with a stronger credit and reputation, all without any disruption in operations or rent collection. And our accounting team, led by Lauren, have undertaken a heavy lift, consolidating CareReads books with ours and preparing for some added complexity as we look to build a shop growth engine. And that's just to name a few. Second, I want to express my appreciation and admiration to our operators for their unwavering pursuit of quality care and operational excellence. A few weeks ago, we hosted our annual operator conference in Southern California. welcoming representatives from almost all of our operators for a few days to swap ideas, learn from business leaders within and outside the healthcare space, and recharge a bit. I'm continually reminded that we're privileged to work alongside some of the top operators in the U.S. and U.K. whose superior lease coverage, quality indicators, and ratings continue to set a high standard across the industry. Turning now to an update on the quarter. In the third quarter and since, we closed on $495 million of new investments, bringing our year-to-date total investments to over $1.6 billion. This is a historic amount for us, even eclipsing last year's massive year of $1.5 billion. And now, with a pipeline of $600 million that seems to reload about as fast as we can close on deals, the momentum continues to accelerate, and we're here for it and ready to execute. While we're pleased with the nominal amount of investments, we're also thrilled at the quality of those deals and their transformative impact on Care Trust. I've previously shared about how the first decade of Care Trust has been a success story built primarily around one single engine of growth, U.S. skilled nursing. While we've done triple net deals in seniors housing and have deep familiarity with the space, skilled nursing facilities have been our bread and butter and to be clear, will remain so. In order to position care trust to grow in the next decade, like we did in our first we need another growth engine and we decided to add to for good measure. The second one was officially bolted on to care trust with our UK acquisition in the second quarter since then we've integrated a London based team of professionals and closed on our first follow on transaction there in September. And we're pleased to see the deal pipeline in the UK expand and now account for roughly a third of our $600 million total pipeline. The third engine of growth is shop. While we don't typically speak of deals in our pipeline until they close, we do have an extra dose of confidence in closing our first shop deal before year end, placing all three engines of growth online and hungry going into 2026. As I've said a few times on past calls, If we were only trying to make consensus or focused on our results for this year or next, we may not have expended the significant resources and brainpower on the UK or to prepare for shop. Instead, our sites are set on where we will be in 10 plus years and how we can get there at a similar pace that drove the second highest total shareholder return amongst all REITs over the past decade. It's with that vision that we undertake the transformative investments in the UK and in shop. In that vein, while we will always maintain fiscal discipline and are still a very lean organization, we have invested this year across our team of professionals to absorb our massive recent growth and help position us for success as we continue to expand. We've taken the same approach with our balance sheet, keeping max optionality to pair a unique window of opportunity to capitalize like few others can on the generational demand for post-acute services and housing. So with that in mind, if I compare Care Trust this time last year to where Care Trust is today, I think you're going to love 2026 just as I thought you'd love 25. We are stronger and better across the board. We're a larger REIT with a fortress balance sheet and great liquidity with no near-term debt maturities until 2028. We have a growing portfolio with best-in-class coverage and better diversification across asset mix, operators, geography, and payer mix. We've added talent throughout the organization to support investments, asset management, tax, finance, and data science. And we're about to bolt on the third engine of growth for the next decade with our first shop deal closing before the end of the year. Going into 2026 with a stronger team, better portfolio and greater liquidity, we're poised to keep the flywheel ripping as we aggressively pursue deals across the three large opportunity sets of U.S. skilled nursing, UK care homes and shop. We are not managing the business for the next quarter or year. We have re-engineered care trust for a multi-year era of accelerated growth. With that, I'll hand it off to James for a report on investment activity and the acquisition landscape. James.

Thanks, Dave. Good morning, everyone. During the third quarter, we completed approximately $59 million of investments, including the transition of several buildings previously leased to Covenant Care to existing and new tenants in a transaction that we feel secures the clinical and financial performance of those facilities for years to come. We also closed on our first UK transaction following the care repeal, a two-pack of homes leased to an existing quality operator. In the period since, we closed on another $437 million of investments, the bulk of which occurred across two large portfolio deals comprising 12 skilled nursing facilities and one majority SNF campus across the Southeast and Mid-Atlantic. The first of these transactions, located in the South, is our first with a large regional operator known for quality care that we've admired for some time, and we could not be more excited to add them to the portfolio. The Mid-Atlantic transaction was structured as a sale-leaseback and adds several facilities to our portfolio with an existing quality operator. Our relationship with that operator originated as part of our commitment a few years ago to lend with a purpose, and we are thrilled to see our lending program continue to bear fruit in the form of additional real estate acquisition opportunities. We're thrilled to get these transactions across the finish line. Since quarter-end, we also closed on a California skilled nursing facility with an existing operator and on a two-building portfolio of assisted living communities, triple net lease to a new operator. Overall, the blended stabilized yield on the post-quarter-end tranche of investments is approximately 8.8%. As we look forward, our investment pipeline remains strong, sitting at approximately $600 million. The quoted pipeline is approximately half U.S. skilled nursing, a third UK care homes, and the remainder shop, and a few strategic loans. It includes some singles and doubles, as well as some mid- to large-sized portfolio transactions. Please remember that when we quote our pipe, we only include deals that we have a reasonable level of confidence that we can lock up and close within the next 12 months. Our investment pipeline remains active, with a mix of broker transactions and proprietary opportunities generated through our operator relationships and other channels. We are seeing sustained deal flow across skilled nursing and seniors housing sectors, including both triple net and shop formats, and a measured but meaningful rise in overall transaction activity, particularly in seniors housing and the care home market. Our disciplined underwriting approach combined with a primary emphasis on operator relationships and a commitment to creative, collaborative deal structuring will continue to help fuel growth across the skilled nursing, seniors housing, and UK care home market sectors. And with that, I'll turn it over to Bill.

Thank you, James. It's been a privilege for me to serve our colleagues, board, and shareholders since Care Trust inception through such an exciting time in our growth story. As previously announced, I will be retiring as CFO at the end of the year and transitioning the role to Derek Bunker, our current SVP of Strategy and Investor Relations. While Derek joined us only this year to help lead the UK acquisition, we've known him for many years as he's been active in the post-acute healthcare space. This year, we worked closely together on a thoughtful succession plan, and I have every confidence that he is well prepared to lead the finance organization into its next chapter. With that, I'll turn the call over to Derek to review our quarterly financial results.

Thank you, Bill. For the quarter, Normalized FFO increased 55.5% over the prior year quarter to $94.7 million, and normalized FAD increased 50.6% to $93.1 million. On a per-share basis, normalized FFO increased $0.07 or 18.4% to $0.45 per share, and normalized FAD increased $0.05 or 12.8% to $0.44 per share. During the third quarter, we paid off the secured notes and revolvers assumed in the care read transaction. And we entered into interest rate swaps to fix the rate on our $500 million term loan for a period of three years. They go forward all in rate of 4.6%. Also during the quarter, we raised $736 million of gross proceeds from an equity issuance. These proceeds allowed us to fund third quarter investments and the transactions announced yesterday. as well as completely pay down our revolver as of September 30. As of today, we have approximately $380 million available for future issuance under our ATM program. In yesterday's press release, we adjusted guidance for this year to a range of $176 to $177 for both normalized FFO and normalized FAD per share. Our equity follow-on in August gave us incredible flexibility to close our near-term pipe while maintaining agility going into 2026 and beyond. But the timing gap between funding and closings that somewhat lagged represented a short-term headwind. As we've now deployed most of that capital and replenished the pipe, all while maintaining net debt to EBITDA around 1.1 times, we're excited about our ability to continue growing as we prepare to enter 2026. With that said, we'll give full year 26 guidance with our Q4 and full year 2025 updates. In addition to the assumptions set forth in our press release yesterday, the updated 2025 guidance assumes the following total cash rental revenues of approximately 344 to 345 million and straight line rent of approximately 9 million interest income from financing receivables of 12 million interest income of approximately 96 million interest expense of approximately 44 million. which includes roughly $5 million of amortization of deferred financing fees, income tax expense of approximately $5 million, and G&A expense of approximately $52 to $53 million, including roughly $12 million of stock compensation. Lastly, our liquidity continues to remain strong. In addition to approximately $334 million of cash on hand as of November 5th, we have full capacity available on our $1.2 billion revolver. And despite our record pace of investments, we continue to maintain low leverage with net debt to EBITDA of 0.43 times, net debt to enterprise value of 2.4%, and a fixed charge coverage ratio of 11 times each as of quarter end. And with that, I will turn it back to Dave.

Great. Thanks, Derek. Well, we hope you found this report helpful and happy to take your questions now.

We will now begin the question and answer session. If you would like to ask a question, please raise your hand now. If you have dialed in to today's call, please press star nine to raise your hand and star six to unmute. Please stand by while we compile the Q&A roster. Your first question comes from the line of Jonathan Hughes with Raymond James. Jonathan, your line is now open. Please go ahead.

Hey, good morning out there on the West Coast. Thanks for the prepared remarks and commentary. Just a question for James. It's great seeing the investment activity in the replenished pipeline. I was hoping you could maybe share expected yields across the three buckets of SNFs, UK care homes, and seniors housing. And are you seeing those compressed as the outlook continues to improve and work out? Thanks.

Hey, Jonathan, sure. I think across the three spectrums, I mean, I don't think there's going to be too big of a surprise. I think across SNFs, you're going to see typically, you know, with a nine handle on it for the yield, I think that, you know, now and again, we find deals where we'll trade a little bit of yield for coverage. We like that trade off in some deals to sleep better at night. In the UK, you know, it's going to be, you know, pre-tax leakage somewhere. around 8 1⁄2 or higher. And then I think in seniors, there's really a range, Jonathan, depending on the age, the CapEx needs, the market. You do see a little bit of compression in rates in seniors' housing, for sure. I think that, you know, depending on the market and the need for CapEx, we're still going to look for something that gives us a year one yield of seven or higher.

Okay. And are there any loans or preferred investments in the pipeline, or do they all be simple? I can't remember.

There's a couple of strategic loans or preferred, but not anything meaningful, really, Jonathan.

Okay. And then just one more from me for Bill or Derek. I'm not sure who wants to answer, but just given that duration gap or timing mismatch mentioned in the guidance update, I believe you have a forward component for equity raises. Are there any plans to utilize that in the future and try and minimize that duration gap?

Yeah, hey Jonathan, it's Derek. You know, we look at everything case by case and try to match up the duration of funding with the pipeline. So I wouldn't say never, but the pipeline seems to be closing at a pretty brisk pace and replenished at an equally brisk pace. So it hasn't made a ton of sense to kind of go down that route yet, but we'll keep that option open for the future.

Thank you, Bill. I want to say I've enjoyed the time spent together the past 10 years. Congrats on a great career and enjoy your free time. And Derek, congrats on the fall.

Thanks Jonathan.

Your next question comes from the line of Michael Carroll with RBC. Michael, your line is now open. Please go ahead.

Yep, thanks. Can you guys provide some color on the type of investments that Care Trust has made to kind of build out its seniors housing operating portfolio? I mean, when did those investments start and should we expect like this kind of flow into 2026 with higher GNAs, you kind of build out that platform?

Yeah, I'd say we started in earnest at the very, very end of last year with bringing on a senior investment professional, added to that in the middle of the year some more bandwidth on the investment team and then data science and asset management as we near the end of this year. So not to mention tax and accounting as well. So it's been a process that's kind of I think as we go into the new year and we'll have that first deal online, we'll probably look to add, I don't know, two or three more people potentially throughout next year related to shop.

Okay. And then can you kind of talk a little bit about the shop deals that you're looking at right now? And I know there's a few larger portfolios that might come with platforms. I mean, is that interesting to you or is it not needed anymore just given these investments you've highlighted that you already made in the shop platform? So you don't really need to bring on a new platform right now.

Yeah, I think what we've done is decided to not just wait on the sidelines for a perfect large portfolio deal to fall in our lap, and we wanted to get after it, and that's what we've done. And so we've tied up this smaller shop deal, built the infrastructure to suit that pipeline, and I think that can now grow and scale pretty well. And like... like always, we'll look at anything that hits the market of any size. And if it makes sense, we'll pursue it.

Okay, great. Great. Appreciate it. And Bill, thanks. Congrats on your retirement. Thank you.

Your next question comes from the line of Farrell Granath with Bank of America. Farrell, your line is open. Please go ahead.

Hello, thank you. This is Farrell Granite. I first just wanted to ask about what you're seeing in the markets compared to the UK and the US. I know you had added some commentary about that US skilled nursing was your bread and butter, but it seemed like there had been some greater opportunities picking up in the UK, which didn't, I guess, fully get incorporated into what we saw close only a few UK care homes. So I was curious if you could add in, is it greater competition, opportunistic pricing, for what you're seeing.

Yeah. Hi, Phyllis James. I think that, you know, I think you have to look back a little bit in terms of when we acquired CareReit, you know, they'd really been at a standstill for a number of years. So it takes time to build that pipeline up and get those deals under contract and going and ultimately closed. So I think that you see when we talk about, you know, nearly you know, a third of our pipe right now being UK that you see that pipeline swelling and getting more, you know, productive and busier. And we definitely see the trend going that way. I think that, you know, there are some recently announced very large transactions in the UK. I think there's definitely significant activity there and we'll continue to, you know, we think we remain competitive and the market we're looking at over there, and we continue to see the pipeline grow like we have. Really, since closing the Cary deal, there's been a continual but consistent slow growth in the size of the pipe there.

Okay, thank you. And I just wanted to touch on how you had mentioned the investment into a data science platform. I'm just curious what kind of application you would expect to use that for, and maybe where we could see that show up in the portfolio going forward.

Well, our investment in data science is going to really have a global reach throughout the company across all departments, making us smarter and faster across the board. There's an obvious application to the shop business and wanting to be a real value-add capital partner for the folks managing those properties for us. But we really do expect to see a positive impact both to productivity, decision-making, and efficiency throughout the whole organization as we continue to scale.

Thank you, and congratulations to both Bill and Derek.

Thanks, Carol. Your next question comes from the line of Juan Sanabria with BMO Capital Markets. Juan, your line is unmuted. Please go ahead.

Good morning, and thanks for the time. I guess just for the team as a whole, just curious on how we should think about G&A. I recognize it's early to give any sort of 26 official guidance, but any sort of parameters on how big the G&A cost line could grow next year would be appreciated.

Sure. Hey, Juan. Yeah, you know, we mentioned part of the pickup this year has been tied to STIs. We've hit some pretty high targets, both in growth and performance, and that'll obviously reset going into next year. So there's a little bit of a pickup there, counter to kind of piggybacking off of Dave's answer just a few questions ago about some investments in our team throughout the organization to both prepare for shop as well as just the continued growth that we've seen last year and this year. So I think, you know, looking out on Q4, it'll look probably similar to Q3. But going into next year, you're going to kind of see some puts and takes there. We'll have more color, obviously, next quarter. But I think you'll see, you know, hopefully some of those productivity gains and then offsetting the reset from the STI. And then in our favor, just probably looking, you know, kind of on track to what Q3 and Q4 are looking like.

Great. Thank you. And then just curious, we've seen some of your peers kind of look at different opportunities to grow in skilled nursing via RIDEA or OPCO investments. Curious on the appetite or lack thereof to do something similar and, uh, pursue skilled nursing OPCO or RIDEA investments.

Yeah, it is interesting. I think that, um, I, I, I would, uh, I would never say never. And I would say that, um, you know, for the right operator, right deal, we could consider something. Nothing in our pipeline or anything that we're actively working on contemplates that, but also found some of those plays recently really interesting. Thank you.

And congratulations, Matt. Thanks.

Your next question comes from the line of Austin Werschmitt with KeyBank Capital Markets. Austin, your line is open. Please go ahead.

Great. Thanks. Just going back to the shop deals in the pipeline, Dave, I know you've been focused on finding the right operator. And just wondering if when we see the initial shop deals cross and close, should we assume that those have been struck with kind of a future pipeline in mind? And that's going to be sort of an expansive relationship. And then, you know, at this point in time, is there any specific number of operators that you're initially targeting?

So I think we'll approach SHOP as we have with skilled nursing. We'll take it case by case. And some deals will come with a pipeline of growth attached, and others won't. But I think with anybody that we will do a deal with, we'll likely want to expand that relationship, whether there's a predefined path or not. That's how we'll approach it.

And then I don't recall if you've discussed this or not, but is the shop engine of growth, is that strictly a domestic strategy or something that could also expand into the UK?

Right now we're focused on the US, but again, like I said in the previous question, I would never say never. I think there would be conceivably application to that in the UK in the future as well.

Thanks. Then just one last one for me, just going to the lease transitions in the third quarter. Can you specifically kind of discuss how you were, you know, able to achieve the rent increase on those transitions and how that coverage level compares to, you know, where it stood previously and just, you know, overall kind of why that made sense. Thanks.

Well, we had a couple. I think you are talking probably covenant care. Um, so covenant care was, you might, you may remember a couple of years ago, their, their coverage was, was awfully tight and was a source of watch list type of conversation on calls and with investors. Um, they had been for sale for a number of years and we, uh, decided to, to be more proactive about it and got involved in, um, in the acquisition of Covenant Care and then transitioning those assets to stable, strong hands that were not, you know, backed by a group that wanted to sell. And to bring in proven quality operators like we did into that portfolio, put any concerns that we had there to rest.

Great. Thanks for the time. Thanks, Austin.

Your next question comes from the line of John Palosky with Green Street. John, your line is open. Please go ahead.

Great morning. Thanks for the time. My first question is on the UK care home portfolio. I know coverage levels were stable quarter over quarter, but they are down a touch from the coverage levels you disclosed in May. Can you remind me what specifically has driven potentially soft revenue or outsized expenses since you closed the portfolio to drive that takedown in coverage?

I wouldn't call it anything thematic or general there. I think it's just idiosyncratic across the board and not a cause for any concern for us.

Okay. Second question is a follow-up to Juan's. Derek, I didn't quite follow the response. Did I interpret it right that the absolute dollars of GNAs is going to start settling out at these Q3 and Q4 levels, or is there another year of outsized growth ahead?

Yeah, I mean, look, there's a lot of puts and takes. We've grown a tremendous amount. We're building up shop. And so each quarter, as we assess our needs, we'll probably continue to invest in both our team and platform to make sure we're meeting both the acquisitions that we've closed over the past two years, as well as the pipeline and really what's kind of funneling into the pipeline. The one that is resetting is the STI, and that's been kind of a big pickup from this year over the prior year. That will reset. But obviously, we've made further investments. So without trying to kind of steal the thunder from next quarter, because I know that everyone's anxiously awaiting it, I think that's just sort of the puts and takes there. It's going to be elevated because of those investments in team, but there's a little bit of a pickup when we reset that STI. Okay, thank you.

Your next question comes from the line of John Kilachowski with Wells Fargo. John, your line is unmuted. Please go ahead.

John, we don't hear anything.

John, as a reminder, it is star six to unmute.

Hi, can you hear me now? We sure can. Fantastic. Thank you. Good morning out there. Dave, in the press release, you made the comment that the pipeline is swelling. I'm just kind of curious, this time, last year versus right now, would you say that the opportunity set looks even bigger for you, kind of implying the potential for a larger 26 than 25? And then on top of that, I'd love to know how much of this pipeline is sort of being populated by that the off-market deals that you were able to source from those loans that you've made previously and maybe what you think that runway is for you?

John, from your lips, you know what I mean? We certainly believe that the opportunity set today versus 12 months ago is expanded. 12 months ago, we had one sandbox to play in, and now we've got really three. And so we do see a big potential for another significant year of growth next year. We only have really visibility into our pipeline, though, so it's hard to predict exactly how it will all shake out. but we, I would say, are more bullish than ever based on the fact that the team's bigger and stronger. We've got more engines of growth to fuel, and there's plenty of activity in the funnel deal flow above our stated pipe.

Got it. Thank you. And then you know, maybe on the shop deals, just a little bit on underwriting, you know, could you remind us where these assets will land on the risk curve? You know, what IRRs are you targeting and what are your expectations for stabilized occupancy and margins on these assets?

Yeah. I mean, we're, we're looking generally speaking, double digit, low double digit IRRs, uh, on all of these and that, you know, there's different ways to start and end there, but, um, That's generally where we're at. And in terms of occupancy, again, it's going to be case by case. Ultimately, I think that we're hoping to get to stabilization in the low 90%. But I think that as you look over the course of a decade, that realistically the demographics are going to be really pushing that up.

Got it. Well, Thanks, David. And Bill, congrats again on a great career. Congrats, Derek, on the new role. Thanks, John.

Your next question comes from the line of Richard Anderson with Cantor Fitzgerald. Richard, your line is open. Please go ahead.

Rich, we don't hear you.

Sorry about that. Can you hear me now? We sure do. Okay, great. Sorry. I'll get this right eventually. And congrats to you, Dave, for the CFO upgrade. So... That's a joke. So I want to – of course, a joke, Bill. Good luck to you. The decision to move on to shop, you know, the worst-kept secret, not even a secret, but, you know, all looking forward to that. But, you know, when you think about what you guys have accomplished over the past several years, it's been impressive, obviously, in terms of the external growth. But in year two – You're sort of left with the same organic growth profile, at least in the current portfolio, you know, kind of low, low single digit type of growth rate. What has been the what's the motivation for shop? Is it to to expand your external growth, you know, sort of net? Or is it acknowledgement from you that you want to really kind of deliver a better organic growth story to investors going forward? What's the motivation in your mind?

That's a great question, and it really is 1A, 1B there. They're both compelling reasons for us to bring this shop engine online. Like I said in my prepared remarks, if we're really managing to hit a quarter or two or a year, it's just not worth the brain damage. the UK wouldn't have been worth the brain damage for that matter because we have so much opportunity in the near term on the U.S. skilled nursing, but we're really trying to think long term. And if I'm thinking about 10, 15, 20 years of care trust, to be able to maintain a high rate of growth in an area that we feel like would be sticking to our knitting and then shop is a natural addition and it's worth the investment.

Okay. Fair enough. In terms of shop, you kind of talked about this in a sort of a tertiary way, but you see you're sort of targeting more stabilized assets out of the gate. Are you, are you comfortable going all in value add or, you know, what, what sort of the mentality around, you know, your shop execution, you know, kind of out of the gate.

Yeah, I'd say that we're going to bring a very similar attitude to it that we do to skilled nursing. And that's really reflective of the priority of who that operator is and playing to their skill set. Not every operator in skilled nursing land or seniors housing land are turnaround artists. And not everybody is a good match for every geography. So really the What we get paid to do, I think, is to match the right operator with the right opportunity. And that means that we have a fairly wide playing field there. We can do stabilized. We can do turnaround. I think it would probably, but having said all that, I think a real tough turnaround in a tough market that requires a ton of CapEx is probably not going to be high on our list.

Okay. Fair enough. And then just quickly, uh, the obligatory PACs question, you know, they got their forbearance extension to November 30th. Um, you know, what are your thoughts around a possible delisting there? If that's an outcome, you know, any perspective that you could provide at all on PACs, uh, you know, assuming 30th comes and goes and we still have nothing. I'm just curious, you know, where you stand on that. Thanks.

Yeah. We really don't have any update or comment on PACS until they report.

Okay, fair enough. Thanks, everyone. Thanks, Rich.

Your next question comes from the line of Wes Galladay with FAIR. Wes, your line is now open. Please go ahead.

Wes, we don't hear you. Oh, can you hear me now?

Yes, we can.

Awesome.

Okay.

Got to unmute it. Yeah, I just want to follow up on Rich's question, you know, maybe refine the buy box a little bit more. Do you have a preference for higher acuity assets? Would you do IL? Do you have a preference for campuses? What are you looking for there? We're omnivorous. Okay. So what about from a price point, do you have a preference for, would you do all markets? Would you have a preference for middle markets or anything along those lines?

I think we're probably going to be most competitive in call it, you know, strong secondary markets. Um, we, I think if, if we found some really nice number one, number two in the market of a secondary market, um, That seems like a really natural fit for us.

Okay. Congratulations, Bill and Derek. Thank you. Thanks, Liz.

There are no further questions at this time. I will now turn the call back to Dave Sedgwick for closing remarks. Dave?

All right. Well, thank you. Thank you, everybody, for your interest and questions. We're super bullish on... Going into 26 and the next several years, as you can tell. If you've got any other questions, you know where to reach us. Have a great rest of the day.

Thank you. This concludes today's call. Thank you for attending. You may now disconnect.