NATIONAL HEALTH INVESTORS INC (NHI)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Unless the context otherwise requires, references throughout this document to “NHI” or the “Company” include National Health Investors, Inc. and its consolidated subsidiaries. In accordance with the “Plain English” guidelines of the Securities and Exchange Commission (“SEC”), this Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2026 (“Quarterly Report”) has been written in the first person. In this document, the words “we”, “our”, “ours” and “us” refer only to National Health Investors, Inc. and its consolidated subsidiaries and not any other person.

Cautionary Statement Regarding Forward-Looking Statements

This Quarterly Report and other materials we have filed or may file with the SEC, as well as information included in oral statements made, or to be made, by our senior management, contain certain “forward-looking statements” as that term is defined by the Private Securities Litigation Reform Act of 1995. All statements regarding our expected future financial position, results of operations, cash flows, funds from operations, continued performance improvements, ability to service and refinance our debt obligations, ability to finance growth opportunities and similar statements including, without limitation, those containing words such as “may”, “will”, “should”, “believes”, “anticipates”, “expects”, “intends”, “estimates”, “plans”, “projects”, “target”, “likely” and other similar expressions are forward-looking statements.

Forward-looking statements involve known and unknown risks and uncertainties that may cause our actual results in future periods to differ materially from those projected or contemplated in forward-looking statements as a result of factors including, but not limited to including, the following:

•We depend on the operating success of our tenants, borrowers and managers, and if their financial condition or business prospects deteriorate, our business, financial condition and results of operations could be adversely affected;

•Our tenants, borrowers and managers may become subject to bankruptcy or insolvency proceedings;

•A small number of tenants in our portfolio account for a significant percentage of the rental income we expect to generate from our portfolio, and the failure of any of these tenants to meet their obligations to us could materially and adversely affect our business, financial condition and results of operations;

•We may be unable to replace our managers if the management agreements are terminated or not renewed;

•Actual or perceived risks associated with pandemics, epidemics or outbreaks have had, and may in the future have, a material adverse effect on our operators’ businesses and results of operations;

•We are exposed to risks related to government regulations and payors, principally Medicare and Medicaid, and the effect of changes to laws, regulations and reimbursement rates on the businesses of our tenants, borrowers and managers;

•The cash flows of our tenants, borrowers and managers may be adversely affected by increased liability claims and liability insurance costs;

•Significant legal or regulatory proceedings could adversely affect the liquidity, financial condition and results of operations of our tenants, borrowers and managers;

•We may not be fully indemnified by our tenants, borrowers and managers against future litigation;

•We depend on the success of property development and construction activities, which may fail to achieve the operating results we expect;

•The illiquidity of real estate investments could impede our ability to respond to adverse changes in the performance of our properties;

•Our investments are concentrated in healthcare properties;

•We are subject to risks related to our investment with Life Care Services for Timber Ridge, an entrance fee continuing care retirement community (“CCRC”), associated with Type A benefits offered to the residents of the CCRC and the related accounting requirements;

•Risks related to our joint venture investments could adversely affect our financial condition and results of operations;

•Inflation and increased interest rates may adversely affect our business, financial condition and results of operations;

•Adverse developments affecting the financial services industry, including events or concerns involving liquidity, defaults or non-performance by financial institutions, could adversely affect our business, financial condition, results of operations or prospects;

•Adverse geopolitical developments could have a material adverse impact on our business;

•We are exposed to operational risks with respect to our senior housing operating portfolio (“SHOP”) structured communities;

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•A cybersecurity incident or other form of data breach involving our business and its information could cause a loss of confidential consumer and other personal information, give rise to remediation and other expenses, expose us to liability under privacy and security and consumer protection laws, subject us to federal and state governmental inquiries, damage our reputation and otherwise be disruptive to our business;

•We are exposed to risks related to environmental laws and the costs associated with liabilities related to hazardous substances;

•We are subject to risks of damage from catastrophic weather and other natural or man-made disasters and the physical effects of climate change;

•We depend on the success of our future acquisitions and investments;

•We depend on our ability to reinvest cash in real estate investments in a timely manner and on acceptable terms;

•Competition for acquisitions may result in increased market prices for properties;

•We depend on our ability to retain our management team and other personnel, and our ability to attract suitable replacements should any such personnel leave;

•We are exposed to the risk that our assets may be subject to impairment charges;

•Stockholder activism efforts could cause us to incur substantial costs, divert management’s attention and have an adverse effect on our business;

•Our ability to raise capital through equity sales is dependent, in part, on the market price of our common stock, and our failure to meet market expectations with respect to our business, or other factors we do not control, could negatively impact such market price and availability of equity capital;

•The United States (“U.S.”) federal income tax treatment of the cash that we might receive from cash settlement of our forward equity sales agreements is unclear and could jeopardize our ability to meet the real estate investment trust (“REIT”) qualification requirements;

•Our use of artificial intelligence could expose us to various risks;

•We may need to refinance existing debt or incur additional debt in the future, which may not be available on terms acceptable to us;

•We have covenants related to our indebtedness which impose certain operational limitations, and a breach of those covenants could materially adversely affect our financial condition and results of operations;

•Downgrades in our credit ratings could have a material adverse effect on our costs and availability of capital;

•We rely on external sources of capital to fund our future capital needs, and if we encounter difficulty in obtaining such capital, we may not be able to make future investments necessary to grow our business or meet maturing commitments;

•We depend on revenues derived mainly from fixed rate investments in real estate assets, while a portion of our debt used to finance those investments bears interest at variable rates, which subjects us to interest rate risk;

•We depend on the ability to continue to qualify for taxation as a REIT for U.S. federal income tax purposes;

•There are no assurances of our ability to pay dividends in the future;

•Complying with REIT requirements may cause us to forego otherwise attractive acquisition opportunities or liquidate otherwise attractive investments, which could materially hinder our performance;

•Our ownership of and relationship with any taxable REIT subsidiaries (“TRS”) that we have formed, or will form, will be limited, and a failure to comply with the limits would jeopardize our REIT status and may result in the application of a 100% excise tax;

•Legislative, regulatory or administrative tax changes could adversely affect us or our security holders;

•We have ownership limits in our charter with respect to our common stock and other classes of capital stock which may delay, defer or prevent a transaction or a change of control that might involve a premium price for our common stock or might otherwise be in the best interests of our stockholders;

•We are subject to certain provisions of Maryland law, and in our charter and bylaws that could hinder, delay or prevent a change in control transaction, even if the transaction involves a premium price for our common stock or our stockholders believe such transaction to be otherwise in their best interests; and

•We may not be able to successfully redeploy the net proceeds from the sale of the National HealthCare Corporation (“NHC”) properties in a manner that generates comparable returns.

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Reference “Part I, Item 1, Business”, “Part I, Item 1A, Risk Factors” and the notes to our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2025 (“Annual Report”) and additionally “Part II, Item 1A, Risk Factors” in this Quarterly Report for a further discussion of these risks, various governmental regulations and other operating factors relating to the healthcare industry and the risk factors inherent therein. You should carefully consider these risks before making any investment decisions related to us. These risks and uncertainties are not the only ones facing us. There may be additional risks that we do not presently know of and/or that we currently deem immaterial. If any of the risks actually occur, our business, financial condition, results of operations and cash flows could be materially and adversely affected. In that case, the market price of our common stock could decline, and you may lose part or all of your investment. Given these risks and uncertainties, we can give no assurance that these forward-looking statements will, in fact, occur. We caution readers not to place undue reliance on such forward-looking statements, which speak only as of the dates made. We undertake no obligation to revise or update any of the forward-looking statements to reflect subsequent events or circumstances except to the extent required by applicable law.

Executive Overview

National Health Investors, Inc., established in 1991 as a Maryland corporation, is a self-managed REIT. We own, lease, operate and finance the development of high-quality real estate properties throughout the United States, focusing on senior housing communities and medical facilities. We operate through two reportable segments, Real Estate Investments and SHOP. Our investments in senior housing communities (“SHO”) include independent living facilities (“ILF”), assisted living facilities (“ALF”), entrance fee communities (“EFC”) and senior living campuses (“SLC”). Our investments in medical facilities include skilled nursing facilities (“SNF”) and hospitals (“HOSP”). Our investments across both segments are funded primarily through (i) operating cash flows, (ii) debt and (iii) sales of equity securities.

In our Real Estate Investments segment, our revenues primarily consist of the rental income we generate from triple-net leases with third-party healthcare operators at our owned properties. We also generate revenues from interest income on financing arrangements we provide to our tenants, or their affiliates, and other third-party healthcare operators. Our financing arrangements include mortgages, construction loans, mezzanine lo

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The information set forth below is intended to provide readers with an understanding of our financial condition, changes in financial condition and results of operations. Our discussion and analysis are primarily based on our consolidated financial statements for the years presented and should be read together with the notes thereto contained in this Annual Report. This section generally discusses our results of operations for the year ended December 31, 2025 compared to the year ended December 31, 2024. For a discussion of our results of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023, please refer to “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report for the fiscal year ended December 31, 2024, which we filed with the SEC on February 25, 2025.

The discussion below contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those which are discussed in “Part I, Item 1A. Risk Factors” of this Annual Report. Also, reference “Cautionary Statement Regarding Forward-Looking Statements” preceding Part I of this Annual Report.

Executive Overview

National Health Investors, Inc., established in 1991 as a Maryland corporation, is a self-managed REIT. We own, lease, operate and finance the development of high-quality real estate properties, focusing on senior housing communities and medical facilities. We operate through two reportable segments, Real Estate Investments and SHOP. Our investments in senior housing communities, also referred to as SHOs, include ILFs, ALFs, EFCs and SLCs. Our investments in medical facilities include SNFs and HOSPs.

In our Real Estate Investments segment, our revenues primarily relate to triple-net leases with third-party operators at our properties. Additionally, we recognize interest income from financing arrangements we provide to our tenants, operators, or affiliates of our tenants and operators, and other third parties primarily for construction, renovation and expansion projects, funding of working capital or corporate needs and the acquisition of real estate properties. In our SHOP segment, we own and operate senior housing communities and generate revenues from resident fees and services. We utilize third-party managers to operate these properties on our behalf and pay a management fee for their services. Our investments across both segments are funded primarily through (i) operating cash flows, (ii) debt offerings, revolving lines of credit and term loans and (iii) sales of equity securities.

Real Estate Investments Portfolio

As of December 31, 2025, our investments comprising the Real Estate Investments segment included real estate properties and financing arrangements involving 189 properties located in 32 states, excluding one property classified as assets held for sale. The aggregate gross carrying value of these owned properties was $2.7 billion, which included 110 SHOs, 65 SNFs and one HOSP leased to 31 tenants. The aggregate gross carrying value of our mortgage and other notes receivable was $218.7 million, excluding $15.4 million of credit loss reserves.

Our tenant leases are typically structured as triple-net leases and relate to single-tenant properties having an initial lease term of 10 to 15 years with one or more five-year extension options. Most of our tenant leases contain annual rent escalators, which may be fixed or variable. Lease payments due to us that are subject to a variable rent escalator are typically determined annually and calculated using a variable index, such as the consumer price index (“CPI”) or an index that is dependent on a future date and indeterminable at the inception of the lease.

Senior Housing Operating Portfolio

As of December 31, 2025, our investments included in the SHOP segment consisted of 17 ILFs, six SLCs and three ALFs located in 13 states with a combined total of 3,009 units. The aggregate gross carrying value of these properties was $634.3 million. We have structured the operations at these senior housing communities to comply with the requirements of RIDEA and to utilize our TRS for activities that would otherwise be non-qualifying for REIT purposes.

The properties are operated by third-party managers in exchange for a management fee from us, and as such, we are not directly exposed to the credit risk of the managers in the same manner or to the same extent as we are related to our triple-net tenant leases. However, we rely on the managers’ personnel, expertise, technical resources and information systems, proprietary information, good faith and judgment to manage our communities efficiently and effectively. We also rely on the managers to set appropriate resident fees and to operate our communities in compliance with the terms of our management agreements and all applicable laws and regulations.

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Classifications of Real Estate Properties

We classify our investments in real estate properties as either SHOs or medical facilities and further classify our SHOs as either need-driven or discretionary properties based on the differing credit risk profiles represented by the underlying revenue sources.

A summary of each of these classifications follows:

Need-Driven Senior Housing

Need-driven senior housing properties include ALFs and SLCs which primarily attract private payment for services from residents who require assistance with activities of daily living. Need-driven properties are subject to regulatory oversight.

Discretionary Senior Housing

Discretionary senior housing properties include ILFs and EFCs which primarily attract private payment for services from residents who are making the lifestyle choice of living in an age-restricted, multi-family community that offers social programs, meals, housekeeping, and in some cases, access to healthcare services. Discretionary properties are subject to limited regulatory oversight. There is a correlation between demand for this type of community and the strength of the housing market.

Medical Facilities

Medical facilities within our Real Estate Investments segment receive payment for services primarily from Medicare, Medicaid and health insurance. These properties include SNFs and HOSPs that attract patients who have a need for acute or complex medical attention, preventative medicine or rehabilitation services. Medical facilities are subject to federal and state regulatory oversight and, in the case of hospitals, Joint Commission accreditation.

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Investment Portfolio Summary

The following tables summarize information related to the investment portfolios of our Real Estate Investments and SHOP segments as of and for the year ended December 31, 2025 ($ in thousands):

1    The total number of properties, as presented in the table above, excludes our corporate office building and one property in the Real Estate Investments segment that was classified as assets held for sale as of December 31, 2025.

2    The total gross carrying amount, as presented in the table above, excludes $2.6 million related to our corporate office and equipment, $4.8 million related to one property in the Real Estate Investments segment that was classified as assets held for sale as of December 31, 2025 and $15.4 million of credit loss reserves related to our mortgage and other notes receivable investments.

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1    The total number of properties, as presented in the table above, excludes our corporate office building and one property in the Real Estate Investments segment that was classified as assets held for sale as of December 31, 2025.

2    The total gross carrying amount, as presented in the table above, excludes $2.6 million r

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