Summary of NHPAP Q2 2021 Earnings Call

1Key Financial Results and Metrics

Net Operating Income (NOI): Increased in the Medical Office Building (MOB) portfolio compared to Q2 2020.

Net Leverage: Decreased to 38.5% from 41.2% in the previous quarter.

Portfolio Size: Owned 195 properties totaling approximately 9.1 million rentable square feet across 33 states.

Occupancy Rates:

MOB portfolio: 90.9% occupied.

Shop portfolio: 73.2% occupied, up 0.5% from the previous quarter.

Triple-Net leased properties: 100% occupied.

Rent Collection: Approximately 100% of original cash rent collected from MOB and Triple-Net tenants for the last four quarters.

Acquisitions: Closed on seven MOB acquisitions for $36.9 million; a forward pipeline of over $167 million in acquisitions at a 7.7% cap rate.

2Strategic Updates and Business Highlights

Focus on MOB and senior housing properties, which represent 91% of NOI.

Enhanced capital expenditures of over $5.4 million year-to-date to improve Shop assets.

Development of a robust acquisition pipeline and proactive asset management strategies.

Successful sale of a development property in Florida for $95.7 million, enhancing financial flexibility.

Continued emphasis on tenant quality and relationships to ensure operational success.

3Forward Guidance and Outlook

Expectation of increased occupancy in MOB and Triple-Net portfolios to 91.8%, adding nearly $360,000 in annualized straight-line rent.

Anticipation of a rebound in Shop occupancy as COVID-19 impacts lessen.

Management remains focused on positioning HTI for a potential liquidity event in the future, with ongoing monitoring of market conditions for acquisition opportunities.

4Bad News, Challenges, or Points of Concern

Shop portfolio occupancy remains low at 73.2%, impacted by COVID-19, although showing signs of stabilization.

The need for ongoing capital improvements and strategic initiatives to recover occupancy in the Shop segment.

Distribution policy amendments due to COVID-19 uncertainties, with cash distributions being paid in arrears and subject to liquidity conditions.

5Notable Q&A Insights

Management emphasized the importance of strong tenant relationships, especially during the pandemic.

The team’s experience and proactive management strategies were highlighted as critical to maintaining high rent collection rates.

Future focus on enhancing the Shop portfolio and driving occupancy recovery, with specific initiatives in lead generation and digital marketing to attract residents. Overall, HTI's Q2 2021 performance reflects a solid recovery trajectory with strategic initiatives aimed at enhancing portfolio quality and operational performance, despite ongoing challenges in the Shop segment due to the pandemic.