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DATE

Friday, May 8, 2026 at 11 a.m. ET

CALL PARTICIPANTS

  • President & Chief Executive Officer — David M. Sedgwick
  • Chief Investment Officer — James B. Callister
  • Chief Financial Officer — Derek J. Bunker

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TAKEAWAYS

  • Investments Closed YTD -- $1.1 billion closed year to date at a blended stabilized yield of approximately 8.9%, with $865 million from 12 transactions since April.
  • Q1 Investment Activity -- $245 million of investments completed in the first quarter at a blended stabilized yield of 8.8%.
  • Portfolio Composition -- Of total investments year to date: approximately $705 million U.S. skilled nursing or senior housing triple-net, $225 million U.S. loans (primarily skilled nursing), about $160 million UK care homes, and the remainder in SHOP assets.
  • Investment Pipeline -- $360 million active pipeline, with over 50% UK care homes, ~20% SHOP opportunities, and the rest in triple-net and minor loan activity.
  • FFO and FAD Growth -- Normalized FFO increased 38% to $107.4 million, and normalized FAD rose 33% to $107.6 million compared to the prior-year quarter.
  • FFO and FAD Per Share -- Normalized FFO per share totaled $0.48, up 14%, and normalized FAD per share was $0.48, up 12% over the prior-year quarter.
  • Dividend Increase -- Quarterly dividend raised by 16.4%.
  • 2026 Guidance Raised -- Updated guidance projects full-year normalized FFO per share up 14.8% and normalized FAD per share up 13.6% from 2025, with midpoint FFO and FAD also up 4.9% and 3.9%, respectively, over the initial 2026 guidance.
  • EBITDAR Rent Coverage -- Overall coverage in stabilized triple-net portfolio stands at 2.25x; EBITDARM coverage at 2.79x.
  • Rent Collections -- 100% collection of contractual rent and interest in the quarter.
  • Balance Sheet Highlights -- $350 million drawn on $1.2 billion unsecured revolving credit facility; $70 million in cash on hand; no scheduled debt maturities before 2028.
  • Leverage Metrics -- Net debt to annualized normalized run-rate EBITDA at 0.6x; net debt to enterprise value at 3.6%.
  • ATM Forward Program -- $129.5 million gross proceeds settled in the first quarter, with additional settlements post-quarter in support of investment activity.
  • Moody’s Upgrade -- Moody’s upgraded CareTrust REIT (CTRE +5.32%) to investment grade post-quarter.
  • SHOP Portfolio Growth -- SHOP investments total four communities after completing the second SHOP deal in May, with management emphasizing disciplined operator selection and growth focus.
  • Operator Quality -- Preliminary internal CMS analysis found CareTrust REIT tenants had higher overall and health inspection star ratings, lower rehospitalization, and higher successful discharge rates compared to sector averages, focusing on facilities leased at least four years.

SUMMARY

Management highlighted the rapid acceleration of investment activity, supported by a sharpened operator partnership strategy across skilled nursing, UK care homes, and SHOP assets. The company received a Moody’s investment grade rating upgrade, which management stated expands access to the debt capital markets and could support potential inaugural high-grade bond issuance. Upwardly revised full-year earnings guidance reflects significant year-to-date deployment and internal improvements, including robust rent coverage and a high rent collection rate. Executives reported that the majority of investments stemmed from relationship-driven and off-market deal sourcing, increasingly critical due to sector-wide cap rate compression and rising competition, particularly in SHOP and UK markets. Company discipline regarding G&A expense, along with targeted investment and financing strategies, was explicitly incorporated in the updated 2026 guidance assumptions and capital plan.

  • Derek J. Bunker stated updated FFO and FAD guidance assumes no new investments, loans, or equity/debt issuance beyond deals completed year to date and models $145 million in loan repayments by year-end.
  • Existing lending activities principally support real estate acquisitions or are structured with a path to acquisition, with technical accounting for sale-leasebacks occasionally requiring financing receivable classification due to long-dated purchase options.
  • James B. Callister said, "the SNF market is, at this point, a predominantly off-market environment," and cited continued reliance on “relationship-based deals” for sourcing.
  • Cap rates in SHOP have compressed by "50 bps or more" over the last six months according to James B. Callister, with class A primary market assets now starting with "a five handle."
  • Management specified that larger portfolio opportunities pursued are not included within the $360 million reported pipeline unless deemed high certainty, citing recent California deal as an example of pipeline methodology.
  • In the UK care home portfolio acquired from CareTrust REIT, lease coverage is closer to 1.75x to 1.8x and north of 2.0x on an EBITDA basis, which David M. Sedgwick called "phenomenally high" for senior housing triple-net assets.
  • The second SHOP acquisition, located in Prescott, Arizona, involved a long-standing relationship operator, encompasses about 110 assisted living units, and is expected to provide a stabilized year-one yield in the 8% range.
  • Across all platforms, operator selection discipline and deep sector relationships were repeatedly described as central to both financial results and improved care quality outcomes.

INDUSTRY GLOSSARY

  • EBITDAR: Earnings before interest, taxes, depreciation, amortization, and rent; used to gauge tenant or facility financial strength and ability to cover rent payments.
  • EBITDARM: EBITDAR plus management fees (or after management fee add-back); often a measure of health for facilities with third-party management arrangements.
  • SHOP: Senior Housing Operating Portfolio; refers to direct management (and associated NOI exposure) of senior housing assets as opposed to traditional triple-net leases.
  • Triple-net lease: Lease structure where tenants cover property taxes, insurance, and maintenance costs in addition to rent, shifting operating risk to the tenant.
  • FAD: Funds Available for Distribution; REIT-specific measure of true cash flow available to pay dividends after capital expenditures.
  • CMS: Centers for Medicare & Medicaid Services; the U.S. federal agency whose quality star ratings benchmark skilled nursing and healthcare provider performance.

Full Conference Call Transcript

David M. Sedgwick: Thank you, Lauren, and good morning, everybody. Thanks for joining us. The first quarter was a strong start to the year and a continuation of the momentum we have been generating over the past several years. We closed approximately $245 million of investments in the first quarter, and the pace only accelerated from there. Since April, we have closed a dozen separate transactions for approximately $865 million. Just last Friday, on May 1, we closed three of those 12 deals that we have not yet had a chance to announce, including our second SHOP investment. James will provide color on some of the deals we have closed year-to-date and on the reloaded pipeline of $360 million.

Our investments team continues to perform at a phenomenal level. What else can you say? I will just reinforce that SHOP is an important part of our growth story, and you should expect to see us continue to build that part of the portfolio with the same discipline and operator-centered approach we are known for. Deal flow continues to be active and interesting across SHOP, skilled nursing, and UK care homes. A quick acknowledgment to some of our unsung heroes here. Our accounting team proves every day to be the best pound-for-pound accounting team around.

They have shouldered an enormous load onboarding a massive number of new assets and operators across the US and The UK while continuing to support the next wave of growth. Our asset management group continues to do great work curating a strong portfolio and de-risking it as we go. And every other function across the company—legal, tax, finance, operations, data analytics—shows up in a way that allows us to keep executing at a very high level and transforms a growing portfolio into a compounding portfolio.

The results of the hard work and sacrifice of an extraordinary team produced year-over-year FFO per share growth of 14%, a 16.4% increase to the dividend, an upgrade to investment grade by Moody's, and a raise to our FFO per share guidance for the year that, at the midpoint, would be 14.8% higher than 2025. I think you can tell how I feel about my team. Let me talk for a second about our operators. Many of you know I am a recovery nursing home administrator. Several of us here have many years of experience inside the buildings.

We have always hoped that our operating history and DNA would differentiate us in how, where, and with whom we build this portfolio. Our tenants continue to deliver for their employees, residents, patients, and communities. We have recently begun a meaningful study of publicly reported CMS outcomes in our skilled nursing portfolio compared to the rest of the sector. The preliminary findings show that skilled nursing operators who lease from CareTrust REIT, Inc. deliver care that is measurably better than the sector averages.

With respect to the CareTrust REIT, Inc. facilities included in our analysis, we limited it to those facilities that have been under lease for at least four years to give adequate time for star ratings to adjust to the new licensed operators. We are specifically pleased to observe in our initial findings that, compared to all for-profit operators, our tenants achieve higher overall CMS star ratings and higher health inspection star ratings; and compared to all operators, for-profit and nonprofit, our tenants achieve higher quality measure star ratings, lower rehospitalization rates, and higher successful discharge rates. Now let us take a look at how that commitment to quality care translates to the financial health of our operators.

Our overall EBITDAR rent coverage in our stabilized triple-net portfolio remains very strong at 2.25x, and EBITDARM coverage at 2.79x. Broad-based improvements throughout the portfolio continue. We collected 100% of contractual rent and interest in the first quarter, which speaks to the caliber of our tenants and borrowers. Putting it all together, we are in another extraordinary and busy period full of external growth and internal development, as we continue to refine our processes that enable a bigger and better CareTrust REIT, Inc. portfolio. As we continue to position ourselves with urgency to keep the flywheel going, we see steady deal flow across our three growth engines, and the team is firing on all cylinders.

We could not be more excited about where we sit today or about what is still in front of us. With that, I will hand it off to James for a report on investment activity and the acquisition landscape. James?

James B. Callister: Thanks, David. Good morning, everyone. During the first quarter, we completed approximately $245 million of investments at a blended stabilized yield of 8.8%. Q1 activity was anchored by a sale-leaseback of a six-property skilled nursing portfolio in the Mid-Atlantic leased to one of our quality operators at a yield of approximately 9%. Q1 also included a meaningful tranche of UK care home investments, and a small relationship-driven loan secured by a skilled nursing facility operated by one of our existing operators. Since April, we have closed an additional 12 transactions for approximately $865 million at a blended stabilized yield of approximately 8.9%.

Activity was weighted toward U.S. skilled nursing, with a meaningful portion of that volume from an opportunistic transaction with a new operating relationship. The deal came together on a very compressed timeline, and the fact we got it closed is a real testament to the team's solutions-oriented approach and the deep relationships we have cultivated over many years.

Beyond that anchor transaction, the period included: one, additional skilled nursing and senior housing triple-net investments with quality tenants across multiple geographies; two, a number of new and incremental loans either to existing operators or borrowers we have admired and desired to work with; three, our second SHOP investment to bring our total portfolio to four communities; and four, additional UK care home activity. We are particularly encouraged by the pace and size of our UK care home pipeline. Since the beginning of the year, we have continued to build momentum and have closed on investments in 10 care homes across the pond to add to our consistently growing portfolio.

Putting Q1 and post-quarter activity together, year to date, we have closed approximately $1.1 billion of investments at a blended stabilized yield of approximately 8.9%. Of that total, approximately $705 million has been U.S. skilled nursing or senior housing triple-net; roughly $225 million has been U.S. loans, primarily secured by skilled nursing facilities and either closed concurrently with asset acquisitions or in anticipation of such; approximately $160 million has been UK care homes; and the remainder is SHOP. Our investment pipeline today sits at approximately $360 million.

The composition is heavily UK care homes, which represents over half of the quoted pipeline, with another approximately 20% comprised of SHOP opportunities, and the remainder consisting of triple-net—both skilled nursing and seniors housing—and a small amount of loan activity. As always, please remember that when we quote our pipeline, we only include deals that we have a reasonable level of confidence we can lock up and close within the next twelve months, and it does not always include larger portfolios that we are reviewing. A quick note on the current transaction environment. The skilled nursing market remains active, supported by both brokered and proprietary opportunities.

Current skilled nursing deal flow is more heavily weighted to off-market opportunities; thanks to our deep operator relationships and the strength of our existing portfolio, we are well positioned to continue pursuing skilled nursing transactions aggressively but with discipline. In The UK, our pipeline is ahead of schedule and growing. We are very pleased with how our London-based team continues to establish the CareTrust REIT, Inc. culture of “by operators, for operators.” That has expanded our ability to do more deals, meet new operators, and source opportunities through broker-marketed processes and direct relationships. We see meaningful upside there over time.

In SHOP, while the market remains highly competitive and cap rates keep compressing, we are an active player and continue to see significant opportunity to grow that portfolio over the next several years with the right operators and the right assets. Our disciplined underwriting framework, combined with a strong focus on long-term operator relationships and a commitment to creative, collaborative transaction structuring, will continue to drive sustainable growth across the skilled nursing, senior housing, and UK care home sectors. With that, I will turn it over to Derek to review our quarterly financial results.

Derek J. Bunker: Thanks, James. For the quarter, normalized FFO increased 38% over the prior-year quarter to $107.4 million, and normalized FAD increased 33% to $107.6 million. On a per-share basis, normalized FFO was $0.48, an increase of 14% over the prior-year quarter, and normalized FAD was also $0.48, an increase of 12% over the same period. Turning to the balance sheet and capital markets activity, during the first quarter, we settled $129.5 million of gross proceeds under our ATM forward program. Subsequent to quarter end, we settled the remaining outstanding forwards totaling [inaudible] million of forward equity contracts outstanding at March 31, bringing our year-to-date total settled forwards to roughly [inaudible] million of gross proceeds in support of our recent investment activity.

As of May 7, we had $350 million drawn on our $1.2 billion unsecured revolving credit facility and approximately $70 million in cash on hand. We continue to have no scheduled debt maturities prior to 2028. As David mentioned, subsequent to quarter end, we also received an investment grade rating upgrade from Moody's. This recognition of our balance sheet strength and disciplined approach to capital structure further expands our access to debt capital and supports our ability to fund continued growth on attractive terms. In yesterday's press release, we raised our 2026 full-year guidance, projecting full-year normalized FFO per share of $[inaudible] to $[inaudible] and normalized FAD per share of $1.98 to $2.02.

The midpoints of our updated normalized FFO and normalized FAD guidance represent increases of 14.8% and 13.6%, respectively, over 2025 results, and increases of 4.9% and 3.9%, respectively, compared to the initial 2026 guidance ranges we issued in February.

The updated guidance is based on a weighted average diluted share count of 234 million shares and includes the following key assumptions: first, no new investments, loans, or dispositions beyond those made year to date; second, no new debt or equity issuances beyond those made year to date; third, 2.5% inflation-based rent escalators under our long-term triple-net leases; fourth, $145 million of loans to be fully repaid throughout the remainder of the year; and fifth, no material change in the sterling-to-dollar spot exchange rate. Additional guidance measures are detailed in the press release yesterday. Lastly, our liquidity continues to remain strong.

As I mentioned, we have approximately $70 million of cash on hand, $850 million of availability under our revolving credit facility, and roughly $879 million of capacity on our ATM program. Net debt to annualized normalized run-rate EBITDA was 0.6x at quarter end, well below our long-term target leverage range of 4x to 5x, and net debt to enterprise value was approximately 3.6%. Aided by an investment grade credit profile, we have ample dry powder and multiple levers across our capital toolkit to continue funding our recent pace of investment activity. And with that, I will turn it back to David.

David M. Sedgwick: Thanks, Derek. We hope that the report has been helpful. We appreciate all the interest and support. We would be happy to take your questions at this time.

Operator: We will now open the call for questions. If you would like to ask a question, please press 1 on your telephone keypad. To withdraw your question, press 1 again. Please pick up your handset when asking a question. If you are muted locally, please remember to unmute your device. Please standby while we compile the Q&A roster. Your first question comes from Farrell Granath with Bank of America. Please go ahead.

Farrell Granath: I want to dig in a little bit deeper on your comments about larger portfolio considerations that are not currently contemplated in guidance. Can you give a little detail on maybe some larger portfolios you were evaluating year to date that potentially you passed on and maybe why that would have happened?

David M. Sedgwick: Well, when we quote our pipeline, as you know, we have the custom of not including larger portfolios that we are pursuing, because even though we may have a strong interest in them, sometimes they are fishing expeditions by the sellers and they may not be real. It is a lower probability of landing those, and a prime example is what just happened with this large deal in California. That was something that actually materialized very quickly that could not have been included in our previously quoted pipeline. So that is just our practice to not get too ahead of things. Sometimes the deals, either we decide to pass on them or they decide to go a different direction.

Farrell Granath: Okay. Thank you. And also, in some of the previous earnings calls of peers, we have heard added commentary of increasing competition also in the SNF market—that it has been difficult to transact, less product is coming to the market, and also this larger increase in private capital. I am curious if you can add a little bit more color on the skilled nursing side—how you are able to source so many deals and maybe where you are sourcing them.

James B. Callister: Sure, Farrell. This is James. I would say that the SNF market is, at this point, a predominantly off-market environment, if you will, and I think that it has, for a little while, been predominantly relationship-driven. It is a little bit more unpredictable because you are not getting a constant flow of broker deals like you are maybe in SHOP. But I think it has been like that for a while, and I think that the track record we have shows that relationships are just super important.

You are typically not going to find a bread-and-butter sale-leaseback at a 9.5% yield with no creativity needed like you may have five years ago, but that has been the case for a while now. So I think it just takes increased creativity. It takes relationship-based deals, and you really have to rely on the off-market relationships in the SNF market today. And I think our track record shows that we have been doing that successfully.

Farrell Granath: Great. Thank you so much.

David M. Sedgwick: Thanks, Farrell.

Operator: Your next question comes from Austin Todd Wurschmidt with KeyBanc Capital Markets. Please go ahead.

Austin Todd Wurschmidt: Hi. Good morning, everybody. David or Derek, with the dual investment grade rating and continued improvement in your long-term cost of capital, how do you think of the benefit of achieving this goal, and then utilizing that for maybe some strategic opportunities or even the flexibility it gives for your ability to source even some of the larger portfolios from time to time?

Derek J. Bunker: Hey, Austin. I think you hit it in your question there. We have been fortunate to have strong access and support from capital markets to really underwrite and pursue a lot of our activity. With the added benefit of the upgrade from Moody's recently, it only gives us more optionality and expands our access, I think deeper, if we do decide to do an inaugural issuance in the high-grade market. That is certainly on our radar, especially as we grow and start to pad out the balance sheet a little bit. We are excited about it.

We really like what we see in the pipeline and beyond just for the next several years, so having that option—we are really excited about it.

Austin Todd Wurschmidt: And maybe David or James, within SHOP, you have talked a lot about the competition of the investment landscape. What has been your hit rate on deals that you have bid on? And are off-market opportunities, as you continue to develop even more relationships similar to what you referenced in skilled, the best way to grow that portfolio? What is the current process and strategy to continue to build that out within that segment?

James B. Callister: Yeah, Austin, you make a really good point. In SHOP right now, given the amount of competition, if we do get an off-market deal or some other in or unique relationship on a deal that comes through, we are going to prioritize that, see if it works, and make a more heavy run at it. As far as hit rate, it is a small percentage of deals that we see come across the desk that we decide to bid on, and a smaller percentage that we decide to really push and start to stretch a little bit. For the deals that we really push and stretch, I do not know the exact hit rate—it is a competitive market right now.

Given the cost of capital we have and the access to capital, if we really decide we want the deal and it fits for us and we are going to stretch, there is a pretty good chance we are going to be in the last one or two and hopefully get it. But overall, it is a pretty low hit rate just given the number of deals that are coming across right now, and much of that low hit rate is based on the fact that we do not elect to pursue most of what comes across the desk.

Austin Todd Wurschmidt: And then just lastly, how much would you say cap rates have compressed since you really started to evaluate transactions?

James B. Callister: In SHOP, if we are talking about rate compression, it is hard to put an exact number on it. There is a range in SHOP between class A in a primary market versus the best few buildings in a secondary or tertiary market. Right now, it feels like class A in a primary market is going to have a five handle on it, and you go up the range from there. I would say in the last six months, cap rates have probably compressed 50 bps or more.

David M. Sedgwick: Thanks, Austin.

Operator: Your next question comes from Juan Sanabria with BMO Capital Markets. Please go ahead.

Juan Sanabria: Hi. Good morning. I was hoping you could talk a little bit about the loan book. It has grown as a preponderance of the transactions that you did in the first quarter when including the financing receivables. How big are you comfortable with that getting, and can you give color on some of the loans you did? Any options for the operators to buy back the real estate we should be thinking about, or just generally more color on those investments?

David M. Sedgwick: Juan, this is David. Our strategy with respect to lending was really established a few years ago and has been a key determinant for the explosive growth that we have had. The key feature of that strategy is that we will only do loans if they include real estate acquisitions or we are confident that they will lead to real estate acquisitions, and the activity that you have seen recently fits and checks those boxes. The real estate that we have acquired came with some loans that were necessary to get the deals done.

Even on the financing receivable side, it is a little bit misleading because it is more of an accounting rule that causes what we consider a sale-leaseback to be accounted for as a financing receivable because of the purchase options. But because those purchase options are so far out—nine or ten years—we view that much more as a sale-leaseback. Technically, it will look like the loan book has grown more than it really will feel like it for the next ten years.

Juan Sanabria: Great. And then just curious on seniors housing on the SHOP side—how you are thinking about what markets you are looking to target and the type of assets, whether they are core, core-plus, value-add. Where do you think there is the best opportunity for the company?

James B. Callister: We are still pretty agnostic on market. We want primary, secondary, and some tertiary, but we are going to look at it on a deal-by-deal basis and pursue it opportunistically. We want to underwrite to a low double-digit IRR, and we see a lot of paths to get there. Not every deal has the same path, so we do not have one box it has to fit. We look at each deal and ask: what is this deal’s path to a low double-digit IRR, and do we have confidence in that path? If we do, we will make a run at it; if we do not, we will pass.

That path is different if you are in a primary market than if you are in secondary or tertiary. Typically, we want to be in one of the one, two, maybe three best facilities in a market. We want an operator that is a regional sharpshooter with experience in that area, that has reporting capabilities to help us on the SHOP side, and that has a proven track record in that market of success. Those are the parameters around where we are pursuing deals in SHOP right now.

Operator: Your next question comes from Michael Carroll with RBC Capital Markets. Please go ahead.

Michael Albert Carroll: Thanks. James, I wanted to talk a little bit more about valuation across property types. SHOP cap rates have come in. What about skilled nursing facilities and the UK care homes? Have those markets been any more competitive over the past few quarters, and how are you thinking about the competitive landscape there?

James B. Callister: In skilled nursing, I do not feel like it has changed that much in the past year. You have a lot of family office and fierce competition. It is fewer buyers in the U.S. SNF side, but it is the same groups. We see the same players on really every deal. So there is still a lot of competition, but it is the same players. I have not seen cap rates change much—maybe a little bit. We have had to, for bigger deals, go below a 9% yield on the lease to get the deal if it is big enough and the right operator.

In The UK, there is a little bit of increased competition, but for product we are looking at, yields are still going to be in the mid-8s for us. That is pretty typical. It is more like a seniors housing asset over there, so that is pretty typical for seniors housing triple-net deals here. We like that kind of yield and basis. So, yes, there is maybe a little uptick in competition in The UK, but nothing comparable to the uptick in SHOP competition you see here.

Michael Albert Carroll: And then can you provide us some details on the recent SHOP deal? Is that with a relationship operator that you could grow with, and was it in a primary or secondary market? How should we think about that specific transaction?

James B. Callister: Prescott, Arizona was done with a relationship operator we have known for a long time. This is the first deal with them, but we have known them for a very long time. We have sought to do deals with them for a long time. They are the current operator in the building. We had a great relationship with the seller—we have been buying buildings from them for the last few years and hope to continue to buy buildings from them in the future. It is about 110 units of assisted living. The going-in estimated year-one yield is going to be in the 8s.

We like the market, we like this operator, and we would like to grow with them and think that we will. We like the path to get us to that low double-digit IRR. It is a pretty stable asset, so it is not in lease-up or another turnaround situation. It is really just making some tweaks to optimize the performance a bit to get us to that low double-digit IRR.

Michael Albert Carroll: Lastly, Derek, can you talk about CareTrust REIT, Inc.'s desire to enter the debt markets? Should we think about another bond being pound-denominated to naturally hedge some of your UK exposure, or more U.S. dollar–denominated debt?

Derek J. Bunker: Thanks, Mike. If we do something this year—and we are exploring that option pretty deeply—you will see it denominated in USD. We are conscious and aware of our exposure to the pound sterling, and we really like our current program. It is going very well, and paired with the pipeline, which has been growing consistently and exceeding our expectations a bit due to the team there, we feel like we are sort of naturally hedged a little bit in terms of buying pounds and being short dollars. Given the pricing differential, we will continue to put things on our balance sheet here and keep it denominated in USD as we explore it.

Operator: Your next question comes from Michael Goldsmith with UBS. Please go ahead.

Analyst: Yeah, thanks. This is Justin Hospik on for Michael Goldsmith. I noticed that occupancy in your skilled nursing portfolio was up in Q4 2025. Is that primarily due to recently acquired properties, and how do you feel occupancy will trend this year? If pre-COVID SNF occupancy was roughly 80%, does the demographic tailwind push that number up significantly over the coming years?

David M. Sedgwick: Skilled nursing has been on a steady, modest incline since it bottomed out in 2021. It is difficult to say one quarter versus the other exactly what happened across the portfolio of our size, but the direction of travel, we believe, will continue to be what it has been. The difference in the coming years is that it is going to start ramping up significantly. The demographics are inevitable, and that is part of the basis for the SHOP and skilled nursing excitement and investment by institutional investors. While we are in the 80% range in our portfolio today, five to seven years from now, I think it is going to be dramatically different.

Analyst: Great. And then last one for me. Can you walk through the increase in the guidance for G&A, and the changes in interest income and interest expense as well?

Derek J. Bunker: The increase in G&A is almost entirely due to hitting key KPIs for STI given our performance and guide for FFO and investment spend to date. We started with a modest accrual and are catching up. We are also continuing to build out the team a little bit to support overall growth across the organization, rounding out the team coming off a couple years of growth. Interest income and expense is moving around in part because of us drawing down the revolver this quarter to date to fund the acquisitions, and our guidance does not incorporate the pipeline or future acquisitions—it is a snapshot running out the interest income and interest expense.

David M. Sedgwick: Thanks, Justin.

Operator: Your next question comes from Richard Anderson with Cantor Fitzgerald. Please go ahead.

Richard Anderson: Hey, thanks. Good morning. Are you finding that building out your SHOP platform is proving to be more challenging than perhaps you thought going in? Back at NAREIT when you made your first SHOP deal, it seemed like momentum would build quickly. It has been a little slow, perhaps to your credit that you are not growing for the sake of growth. Are you surprised by how tough it is to move the needle in building the SHOP platform while some peers are pacing themselves faster?

David M. Sedgwick: On some level, it has been a little bit surprising—not so much that it has been competitive, because we knew as we were entering it that it is a very competitive scene. One of the surprises has been to see how aggressive some of our competitors’ underwriting has been. Even for deals that, like James talked about, we really like and stretch for, we sometimes get beat by folks that do not have the cost of capital that we do. I think it may speak a little bit, Richard, to us being agnostic across three growth engines.

We have not painted ourselves into a corner with respect to having to do SHOP or feeling compelled to put money to work there. That really is our advantage because we have the freedom to maintain the discipline that we have built the CareTrust REIT, Inc. portfolio on. We are pleased with what we have done so far. I think we will continue to grow it, and over time it will become meaningful, and our confidence in the deals that we do get is very high.

Richard Anderson: When you talk about larger portfolio deals not included in the $360 million pipeline, are there any larger SHOP deals in that universe?

David M. Sedgwick: No, I do not think so. The chunkier deals we are evaluating right now are in The UK and U.S. SNF.

Richard Anderson: OHI has talked about applying RIDEA to their UK business. Is that on the table for you, or are you too new there at this juncture?

David M. Sedgwick: I think there will be a time when that opportunity presents itself for us, and we should be ready to do that.

Richard Anderson: Thanks very much.

Operator: Your next question comes from Michael Stroyeck with Green Street. Please go ahead.

Michael Stroyeck: Thanks, and good morning. Now that there has been some time since the original Care REIT acquisition, how is that portfolio performing relative to expectations, and where does EBITDAR coverage on that initial deal sit today?

David M. Sedgwick: It is an appropriate question for today because today marks the one-year anniversary of us closing that deal. In most cases, it is ahead of schedule. Importantly, the team that we inherited there—we are very pleased with the quality of that team and their openness, acceptance, and adoption of us, becoming truly a CareTrust REIT, Inc. arm in The UK. That is important because all the success that we have throughout the organization is really based on the culture and the people that we have in the company, and that is what has produced the results. I thought if we could do in 2026 a couple hundred million dollars of new investments in The UK, that would be great.

Remember when we acquired Care, their pipeline was basically starting from a standing start because they had a real restriction to access to capital before we acquired them. To see the amount of acquisitions that we have done and the pipeline continue to build as it has is really good. With respect to lease coverage, it continues to be phenomenally high, particularly when you think about what these assets are. These are really senior housing assets. In the United States, back when triple-net seniors housing deals were still getting done, lease coverages would be about 1.1x or somewhere around there. We are much higher than that—closer to 1.75x to 1.8x, north of 2.0x on an EBITDA basis.

To have that type of security on senior housing properties is a really strong foundation from which to grow.

Michael Stroyeck: Understood. And then going back to the debt discussion, with that investment grade rating from Moody's, what sort of rate do you think you could issue at today?

Derek J. Bunker: I would love to signal exactly what it would be, but broadly, if we are doing a ten-year, you are probably looking at a 130 to 140 basis points spread.

Michael Stroyeck: Great. Thanks.

Operator: Your next question comes from Wesley Golladay with Baird. Please go ahead.

Wesley Golladay: Good morning, everyone. I want to go back to the comment about better CMS outcomes. I imagine your background helps you work with the operators, and there is also probably a component of identifying a good operator out of the gate. How transferable is that skill set to The UK and to U.S. SHOP?

David M. Sedgwick: The skill of identifying, vetting, and selecting quality operators is definitely transferable, although I am not sure that skill set needs to be transferred to the team there because they evidently already had it, as evidenced by the very strong lease coverage and the quality operators that we were able to inherit. We are really pleased, by and large, with the operators that they selected there before we got there, and we feel like we are definitely in sync as we evaluate new operators for The UK.

Wesley Golladay: Alright. Thank you.

David M. Sedgwick: Thanks, Wes.

Operator: Your next question comes from Vikram Malhotra with Mizuho. Please go ahead.

Analyst: Hi, thank you. This is Jody on behalf of Vikram. For the new operator you have in the sale-leaseback transaction, is there an opportunity to grow that relationship by the Genesis assets? And second, what is your view on sustained double-digit FAD growth from here?

James B. Callister: I will take the first part. The Genesis bankruptcy does not have much, if any, real estate in it, really. So it is probably yet to be determined if we grow with that operator based on those assets. There is certainly nothing in discussion at the current time. We will definitely look to grow with them in other asset bases and other deals that we bring them or they bring us. We really like them, so we look forward to growing with them moving forward.

Analyst: And on sustained double-digit FAD growth?

Derek J. Bunker: I will take that one. We are really pleased and excited about both the progress we have made on our investments and our integration as well as the outlook. As David mentioned in his prepared remarks, we do not plan on slowing down. We are still extremely bullish about all three of our growth segments, and it is really up to us to execute on that.

Operator: There are no further questions at this time. I will now turn the call back to David M. Sedgwick for closing remarks.

David M. Sedgwick: I really appreciate everybody's time, questions, and interest. I appreciate our board, our shareholders, especially our team here and operators who make it all happen. If you have further questions, you know where to find us. Have a great weekend.

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