CHCT — Community Healthcare Trust Incorporated

Community Healthcare Trust (CHCT) Q4 2025 Earnings Call Summary

1. Key Financial Results and Metrics

• Total Revenue: Increased to $30.9 million, up 5.6% year-over-year but slightly down from $31.1 million in Q3 2025.
• Funds from Operations (FFO): Rose to $13.3 million, a 4.6% increase from $12.7 million in Q4 2024. On a per-share basis, FFO was $0.49, down from $0.50 in Q3 2025.
• Adjusted Funds from Operations (AFFO): Totaled $14.9 million, a 2.1% year-over-year increase. AFFO per share remained at $0.55, consistent with Q4 2024 but down from $0.56 in Q3 2025.
• Occupancy Rate: Increased from 90.1% to 90.6% during the quarter.
• Dividend: Raised to $0.4775 per share, marking an annualized dividend of $1.91.

2. Strategic Updates and Business Highlights

• Tenant Update: A geriatric behavioral hospital operator is in exclusivity for the sale of operations for six properties, with new leases anticipated post-sale.
• Capital Recycling: Sold an inpatient rehab facility at a 7.9% cap rate, resulting in an $11.5 million gain, and reinvested proceeds into a new facility expected to yield a 9.3% return.
• Acquisitions: Acquired three properties in 2025 for $64.5 million, fully leased with long-term leases.
• Future Projects: Five properties under purchase agreements for $122.5 million, expected returns between 9.1% and 9.75%, with anticipated closings extending into 2027.

3. Forward Guidance and Outlook

• Occupancy Expectations: Anticipated to remain stable in the low 90s for the next couple of quarters, with potential increases expected in the second half of 2026 as new leases become economic.
• Transaction Pipeline: Management remains optimistic about future acquisitions, targeting $120 million to $150 million annually when market conditions allow.
• Redevelopment Projects: Two significant redevelopment projects expected to come online in mid to late 2026, contributing to portfolio growth.

4. Bad News, Challenges, or Points of Concern

• Transaction Delays: Progress on the sale of the geriatric behavioral hospital operator has been slower than expected due to due diligence and regulatory issues.
• Market Conditions: The company is being selective in acquisitions due to current stock price levels, which limits capital raising through equity.
• Occupancy Stability: While occupancy increased, management indicated that significant changes in occupancy rates are not expected in the immediate future.

5. Notable Q&A Insights

• Transaction Structure: The planned acquisition of the six hospitals is expected to occur simultaneously, avoiding a staggered closing approach.
• Cap Rate Trends: The company noted stable demand for assets, with expected cap rates for future dispositions around 7.9% and acquisition opportunities in the 9% to 10% range.
• Investment Pipeline: Management expressed confidence in the availability of acquisition opportunities, contingent on favorable market conditions and stock performance.
• Dialysis Term Sheet: The previously mentioned dialysis pipeline is currently on hold, with no immediate plans for new transactions in that area.

This summary encapsulates the key financial metrics, strategic updates, forward-looking statements, challenges, and insights from the Q&A session, providing a balanced view of CHCT's performance and outlook.