Business Context and Reporting Period
Company: Community Healthcare Trust Inc (CHCT)
Filing Type: Form 10-Q (Unaudited)
Reporting Period: Quarter ended March 31, 2026
Business Overview: A self-administered, self-managed healthcare REIT owning 198 properties (approx. 4.5 million sq. ft.) leased to hospitals and healthcare providers across 36 states. As of March 31, 2026, the portfolio was 89.8% leased with a weighted average remaining lease term of 7.2 years.
Key Financial Metrics
| Metric (in thousands, except per share) | Q1 2026 | Q1 2025 |
|---|---|---|
| Revenues | $31,524 | $30,078 |
| Net Income | $2,548 | $1,591 |
| Net Income Per Share (Diluted) | $0.07 | $0.03 |
| Funds from Operations (FFO) | $13,399 | $12,668 |
| FFO Per Share (Diluted) | $0.49 | $0.47 |
| Adjusted FFO (AFFO) | $15,350 | $14,739 |
| Net Operating Income (NOI) | $25,155 | $23,983 |
| Net Cash Provided by Operating Activities | $13,740 | $14,409 |
| Total Debt, Net | $559,260 | $532,199 |
| Cash and Cash Equivalents | $2,617 | $3,340 |
Material Changes vs. Prior Period
- Revenue Growth: Total revenues increased 4.8% to $31.5 million, driven primarily by a $2.1 million increase from property acquisitions in 2025 and 2026. This was partially offset by a $0.6 million decrease due to dispositions.
- Profitability: Net income rose 60.2% to $2.5 million, largely due to higher rental income and a decrease in depreciation and amortization expenses ($0.3 million reduction) resulting from fully amortized lease intangibles.
- Interest Expense: Increased 7.0% to $6.8 million due to a higher weighted average balance on the Credit Facility.
- Portfolio Activity:
- Acquisitions: Acquired one Inpatient Rehabilitation Facility (IRF) in Florida for $28.5 million in February 2026.
- Dispositions: Sold a property in Florida for net proceeds of $5.2 million, recording an immaterial loss.
- Debt Position: Total debt increased by $27.1 million, primarily due to net borrowings of $27.0 million on the Revolving Credit Facility to fund acquisitions and operations.
Guidance, Outlook, and Risks
- Dividends: The Board declared a quarterly dividend of $0.48 per share (annualized $1.92), payable May 22, 2026. This represents an increase from the prior quarter's $0.4775.
- Acquisition Pipeline: Four properties under definitive purchase agreements with an aggregate expected price of $99.0 million, anticipated to close in 2026 and 2027.
- Interest Rate Risk: On March 29, 2026, interest rate swaps fixing $75.0 million of the Revolving Credit Facility matured. This portion is now subject to floating rates (approx. 5.3% as of March 31, 2026). The Company has not yet replaced these hedges.
- Liquidity: The Company maintains $115.0 million of remaining borrowing capacity on its $400.0 million Revolving Credit Facility and $300.0 million available under its At-The-Market (ATM) equity program.
- Contingencies: The Company holds notes receivable from a tenant (geriatric behavioral hospitals) that were placed on non-accrual status in 2024 and 2025 due to collectability concerns. Significant credit loss reserves ($19.7 million total) have been recorded, reducing the carrying value to near zero.
Investor Verification Checklist
- Interest Rate Exposure: Verify the impact of the $75.0 million floating-rate exposure on future interest expense given current rate environments.
- Tenant Concentration: Review the status of the geriatric behavioral hospital tenant notes receivable and the potential for further credit losses or recovery.
- Acquisition Funding: Confirm the funding sources for the $99.0 million acquisition pipeline, specifically reliance on the Revolving Credit Facility versus equity issuance.
- Occupancy Trends: Monitor the 89.8% occupancy rate and the net leasing activity (176k sq. ft. expiring vs. 136k sq. ft. leased/renewed) in Q1 2026.
- Dividend Coverage: Assess AFFO coverage of the increased dividend rate ($0.48/share) against historical payout ratios.