Revenue Growth
Total revenue increased to $31.5 million in Q1 2026 from $30.1 million in Q1 2025, representing 4.8% year-over-year growth and 1.9% quarter-over-quarter growth, driven by higher rental income from recent acquisitions and increased property operating expense recoveries.
FFO and AFFO Improvement
Funds from operations (FFO) rose to $13.4 million, a 5.8% increase year-over-year. FFO per diluted share increased $0.02 to $0.49 year-over-year. Adjusted FFO (AFFO) totaled $15.4 million, up 4.1% year-over-year, with AFFO per diluted share up $0.01 to $0.56.
Dividend Increase and Consistent Payout Policy
Declared and increased the quarterly dividend to $0.48 per common share (annualized $1.92). Management highlighted that the company has raised its dividend every quarter since IPO.
Accretive Acquisition and Attractive Yield Profile
Acquired an inpatient rehabilitation facility for $28.5 million after construction, entering a lease through 2044 with an anticipated cash yield of ~9.3% and 2% annual escalators.
Signed Pipeline of Forward Commitments
Signed definitive purchase and sale agreements for four properties to be acquired post-completion for an aggregate expected investment of $99 million with expected returns of 9.1%–9.75%; management expects to close two properties in 2026 and two in 2027.
Redevelopment Progress and Near-Term NOI Contribution
Three properties are undergoing redevelopment/renovation with long-term tenants to follow. The largest project, a behavioral healthcare facility, received its certificate of occupancy in March and is expected to commence its lease and contribute NOI during 2026.
Tenant Rent Increase and Transaction Progress
A behavioral hospital tenant in six properties paid approximately $300,000 in the quarter, up $100,000 from the prior quarter. The tenant signed a letter of intent (7/17/2025) to sell operations to a buyer who is in exclusivity and completing diligence and lease documentation, with management actively engaged.
Capital Recycling Discipline and Funding Position
Completed dispositions (e.g., Fort Myers building for ~$5.2 million net proceeds; prior disposition ~$700k) and did not issue shares under the ATM. Management expects to fund near-term acquisitions through selected asset sales and revolver availability while maintaining modest leverage.