Chiron Real Estate Inc Stock

Good morning, ladies and gentlemen, and welcome to the Chiron Real Estate, Inc. Third Quarter 2026 Earnings Conference Call. This call is being recorded on Thursday, November 5, 2026. I would now like to turn the conference over to Jamie Barber, General Counsel. Please go ahead.

Good morning, everyone, and welcome to Chiron Real Estate's Third Quarter 2026 Earnings Conference Call. My name is Jamie Barber, and I'm Chiron Real Estate's General Counsel. On the call today are Mark Decker, Jr., Chief Executive Officer; Matthew Whitlock, Chief Investment Officer; Bobby Zeiler, Chief Development Officer and Head of Seniors Housing; and Bob Kiernan, Chief Financial Officer.

Statements or comments made on this conference call may be forward-looking statements. Forward-looking statements may include, but are not necessarily limited to, financial projections or other statements of the company's plans, objectives, expectations or intentions. These matters involve certain risks and uncertainties. The company's actual results may differ significantly from those projected or suggested from any forward-looking statements due to a variety of factors, which are discussed in detail in our SEC filings.

Additionally, on this call, the company may refer to certain non-GAAP financial measures. You can find a tabular reconciliation of these non-GAAP financial measures to the most currently comparable GAAP numbers in the company's earnings release and in filings with the SEC. Additional information may be found on the Investor Relations page of the company's website at www.chironre.com. I would now like to turn the call over to Mark.

Thank you, Jamie, and good morning. Chiron has made incredible progress this year. We've now closed over $430 million of proprietary seniors housing investments and built a fantastic team. In the third quarter, we continued to move from developing our strategy to execution. That transition is supported by a management team with the investment, operating and financial experience necessary to build a differentiated health care real estate platform.

You'll hear from each of Bob, Matthew and Bobby in a few minutes regarding the ways we've advanced our strategy. Before that, I want to take a moment to speak to what our team views as our highest priority, the disposition of our legacy outpatient medical portfolio. As we discussed during last quarter's earnings call, we've engaged a broker and are in the process of finding the optimal solution for this portfolio. We continue to advance that process and are encouraged by the level of interest we've received.

Because the process is ongoing, we can't provide incremental detail regarding potential counterparty structure, valuation or timing. We continue to make progress on the repositioning of our business, and we'll provide an update as soon as we have something definitive to share. Bob, could you please take us through the quarter?

Thanks, Mark. During the third quarter, NAREIT-defined FFO per share and unit was $0.50, and our core FFO was $0.75 per share and unit. Outpatient Medical same-store cash NOI increased 1.6% on a year-over-year basis, consistent with the expectations we established at the beginning of the year. Third quarter cash G&A of $5.3 million was impacted by $1.2 million of severance and transition costs attributable to changes to our senior leadership team. Absent these changes, cash G&A would have totaled $4.1 million.

Noncash stock compensation also included $800,000 of accelerated vesting associated with these changes. We ended the quarter with $231 million in unutilized borrowing capacity under the credit facility and a leverage ratio of 41% as defined by our credit agreement. Net debt to adjusted EBITDA was 7.1x for the quarter. As a reminder, net debt to EBITDA will fluctuate in the near term as The Riviera and The Pinnacle progress through lease-up and stabilization. Bobby, could you please provide an operating update?

Thanks, Bob. I'll begin with The Landing in Alexandria, Virginia, where third quarter occupancy averaged 95.1%. The Landing serves as a great example of why we're so excited about the foundation of our senior housing portfolio. It's well occupied. The real estate is highly relevant, and we've been able to drive financial performance through disciplined pricing, resident retention and expense management.

At The Riviera, our independent living community adjacent to The Landing, quarterly occupancy averaged 25.6%. Progress has been steady, but we are mindful of the fact that lease-up is rarely linear. As a result, we won't put too much emphasis on any single month. Rather, we're focused on the underlying indicators that support a durable growth profile that will be lead generation, move-in conversions, resident satisfaction and the quality of the revenue we are creating. We are seeing very encouraging progress on those measures. Third quarter lead generation, for example, increased 20% from the second quarter, while initial prospect tours increased a healthy 14%. As a reminder, we expect The Riviera to yield on -- to generate a yield on cost of greater than 7% during the second half of 2028.

We're also excited to have completed the acquisition of The Pinnacle in October. The Pinnacle is a newly constructed 175-home community in North Bethesda that is located across the street from Federal Realty's Pike & Rose mixed-use development. This investment brings our senior housing portfolio to 3 communities and 467 total homes. Our conviction in The Pinnacle begins with the quality of the underlying real estate. It is a brand-new institutional scale community offering independent, assisted living and memory care in one of the most attractive submarkets in the Washington region.

The community welcomed its first residents in June and ended the third quarter at 31% occupied. As with The Riviera, The Pinnacle's current earnings do not reflect the community's stabilized potential. Our focus is on converting the quality of the real estate and the depth of the local market into durable occupancy and NOI growth. We expect The Pinnacle to generate stabilized yield on cost greater than 7% in 2029. Overall, we remain extremely confident in the quality of our portfolio. Our job is to now demonstrate that quality through consistent operating execution. Matthew, could you please discuss how we're approaching the investment pipeline?

Absolutely, and I'm happy to. Thank you, Bobby. Having been here only a short while, I couldn't be more excited for our opportunity to build a differentiated seniors housing portfolio that's positioned to meet the demands of today as well as those of tomorrow. I won't use my time today to reemphasize the incredible supply-demand imbalance in our seniors housing created by the wave of baby boomers reaching their 80th birthdays.

Rather, I'd like to talk a little bit about what we see as relevant real estate and what we are targeting within the broader seniors housing marketplace and the opportunities to invest in them. Out of the 1.9 million or so seniors housing units in the United States, we believe over half of them will not satisfy the demands placed on them by the incoming seniors population. Our team is focused on investment opportunities that will satisfy these demands. More specifically, we're pursuing modern private pay communities, delivering outstanding care in markets capable of supporting pricing power and long-term occupancy.

Our best investments will be ones where the real estate is relevant, the operator is aligned, and we can identify multiple paths to long-term value creation. These paths can include occupancy gains, margin expansion, renovation or modernization and the economies of scale gained through geographic concentration. We've developed a meaningful pipeline of potential investments that meet these criteria. It is a curated opportunity set designed around our investment thesis and objective of assembling a portfolio of relevant, high-demanded communities.

We do not feel compelled to bid on assets that do not fit this criteria, and the majority of our pipeline consists of assets not currently marketed for sale in the larger transaction marketplace. We evaluate each opportunity not only against our investment criteria, but also in light of our available liquidity and the expected sequencing of our broader capital recycling strategy. We are excited by the macroeconomics of seniors housing continuing to support our thesis and perhaps even more so, the opportunities we have and will identify. We are equally excited by the prospect of converting our outpatient medical portfolio into meaningful investment capacity to pursue these opportunities. Mark, I'll turn it back to you.

Thanks, Matthew. As we've discussed throughout the year, Chiron is in the middle of a significant transition. Our progress will ultimately be measured by execution and long-term value creation. In the near term, we're focused on realizing value from our outpatient medical properties and investing capital with discipline into seniors housing. Our team is aligned around these priorities, and we look forward to reporting on our progress along the way. Operator, please open the line for questions.

And your first question comes from the line of Juan Sanabria with BMO Capital Markets.

Recognizing it's a fluid situation on the MOB dispositions, hoping you could talk a little bit about how the pricing environment is maybe changing given the interest rate volatility we've seen and kind of what sort of time frame is a reasonable expectation for when a process could be completed in your minds? What would mean success for the team?

Thanks, Juan. Yes, great question. It's -- pricing is definitely eroded in light of the treasury moves. And so I would say it's probably 25 to 50 basis points for medical and probably more specifically our portfolio. And from a timing perspective, really hard to talk about timing. I mean, I'd love to have a good update by the time we're on our next call.

Fair enough. And then just on the eventual redeployment of those proceeds in that capital. Matthew, you mentioned over half of the stock won't meet the boomer demand. So I guess, what do you think is maybe obsolete product? And what is kind of the most appealing or appropriate unit mix or asset type or price point that you think is going to be relevant with the seniors? And how do you align the operators more specifically to have that alignment with Chiron shareholders?

Yes, those great questions. So generally, we define relevance from a couple of different perspectives. #1, the location of the asset within a specific MSA, the architecture and design of the buildings, and that includes both the amenitized space, things like the dining room, the art and craft room, parts of the public areas that are relevant to the incoming baby boomer population. And then we also look at the architecture, design and layout as well as the unit mix of the individual residential units. So currently, there is a demand for larger units that are more amenitized than that type of product that was typically built 10 to 15 years ago.

So the 1.9 million units nationwide in seniors housing, about half of them were built before 2012. Generally speaking, most of the product built before 2012 was designed to meet the demand criteria of the silent generation and the greatest generation. The incoming baby boomers are the first generation in American history to really force their demands on products built for them. So we're looking for units and communities that will appeal to the baby boomer generation.

How we develop alignment of interest with our operators is really a question of geographic concentration and the experience of our operators within the targeted MSAs. So for example, if we were operator aligned in the Pacific Northwest and an opportunity was brought to us, say, east of the Mississippi, just by way of example, we would probably not pursue that acquisition with our geographically focused operator in the Pacific Northwest, but would pursue an operator alignment who had more experience within the MSAs where that targeted acquisition is.

That answer your question?

Your next question comes from the line of Wes Golladay with Baird.

Can you talk about the -- I guess there was a big divergence in pace between The Riviera and The Pinnacle. And I know we don't want to look too much into 1 quarter, but is there anything that, I guess, is going really well at The Pinnacle and anything that you would change at The Riviera? Was the price too high, too low? Just a little more color on that.

Bobby, you can speak to that.

Yes, sure, Wes. Thank you very much. So I think my experience and lease-ups, the lease-ups that I've been involved in, which has been dozens -- there is a nonlinear process to lease up. There are ups and downs with each community as they go for varying factors, both around the community, it could be factors that are differentiated by location, seasonality, et cetera. We have seen both highs and lows in months, which is why we don't focus particularly on months.

As an example, we had the largest move-in month of my career at The Pinnacle in August. There is really no correlation to that other than just an aberration. So we look at the process as a process that will take a couple of years. We look at the fundamentals of lead generation of initial and subsequent tours and both at The Pinnacle and at The Riviera and frankly, at The Landing as well, those fundamental indicators are all very strong. In fact, we had great growth in those numbers at both The Riviera and The Pinnacle. So we're very confident in the long haul that these will be well-performing assets. Their locations, the markets around them, the supply-demand dynamics in each of these markets is exceptional. So we believe both will happen. There's going to probably be a high at The Riviera and a low at The Pinnacle in 1 month. And I think at the end of the day, our focus is on the long term.

Your next question comes from the line of Austin Wurschmidt with KeyBanc Capital Markets.

Just going back to the lease-up. Can you discuss how we should think about flow-through at The Riviera and The Pinnacle as occupancy continues to ramp and whether you are offering concessions today and at what occupancy point maybe we start to see those burn off a bit?

Yes, sure. So we do invest in occupancy. And by that, I mean, we do offer incentives or concessions. We do use the levers to ramp those down over time. So the ideal scenario is that as the occupancy grows, we can ramp those down, so they burn off concurrently. We also use them as a near-term kind of urgency incentive, for example, in areas of the month or areas of the year that are generally slower, we will offer some urgency incentives. Our view on those is that we want to grow occupancy first and foremost. And so we do that with real-time input from the sales teams and the manager.

That's helpful. And then just going back a little bit to how you're thinking about shaping the portfolio on the senior housing side. Given your size range of available proceeds from OM sales, is there a target number of operators you're focused on aligning with? And is that sort of by either regional focus or acuity? Just curious how you think about that.

Yes. This is Matthew. I'll take that question. So ultimately, we'd like to have a lower number of operators that are truly aligned with our investment pursuits as opposed to a lot of one-offs. So where we look in specific geographic regions and where we look for investment opportunities, a lot of thought process goes into who our operating partner would be. And we diligence pretty significantly the experience of that operator within a specific geographic footprint and whether or not we've got proper alignment.

But generally speaking, when we look back on this in a couple of years, and we've got 50 or 60 buildings, it would be my hope that we have 5 operators as opposed to 50. So we would like to have alignment with multiple properties and a lower number of operators. And then just to put a little more color on that, geographic concentration is very important to us. We think that there are boundaries upon which an operating partner may lose efficiency as it relates to our portfolio. So we're very mindful of that. Bob, anything you might want to add?

No, I think that's exactly right.

And your next question comes from the line of Rob Simone with Compass Point.

Just kind of switching over to the senior side or the SHOP side for a second. I was wondering if you could just kind of talk about like maybe the velocity or the volume of transactions that are kind of like out there or coming across your desk and kind of like how you filter that, right? So like if you were to kind of look at x dollars per quarter or per month, how much of that actually qualifies as within your parameters, how much do you pass on, how much do you bid on? And kind of like just what's the run rate that you're underwriting quarter-to-quarter, I guess?

Yes, I'll take that. So we're looking at a tremendous amount of opportunities across the entire landscape for seniors housing. As I mentioned in our opening comments, a lot of those opportunities don't fit our buy box from a relevance perspective. It would not surprise you to suggest that the current market is absolutely a seller's market. There's been a tremendous amount of acquisition activity over the last 2 years. We have seen that transaction activity slow somewhat.

But in answer to your question, of the 10 or so opportunities per month that we're seeing, we're going to be interested in probably 10% of those. A lot of the opportunities are end of fund life dispositions, nonrelevant real estate dispositions, things that really wouldn't attract us or fit into our buy box. I will tell you, though, that we're in active discussions on off-market transactions ranging from single asset transactions to multiple portfolios. And there's a tremendous amount of activity in the off-market side of the investment landscape.

Yes. The only thing I'd add is just to say we have a lot more opportunities than and capital that we think makes sense.

Your next question comes from the line of Rich Anderson with Cantor Fitzgerald.

I'm happy to be here on my first Chiron call. So Mark, I know you're not going to talk about the MOB sale process and specifics. But is there a short-term outcome where you sell a big chunk of it all at once or all of it all at once and then you have this dip in sort of the earnings profile of the company and then a bounce back up once you deploy it. Is that -- could there be sort of an EKG type of thing that happens to earnings over the next couple of years? Is that a reasonable way to think about the transformational process of the company?

An earnings heart attack. I could read the headline now from you, Richard. Good to have you on. Yes, that is possible. I think as we've talked about with investors on prior calls, there's sort of the absolute last dollar value maximization might be selling 180 buildings to 180 different buyers. The best capital markets answer is probably don't go for every last dollar, but move quickly. And I would say we're biased towards that. And I don't think that those 2 outcomes are 10% apart. They're probably a couple of hundred basis points apart. But we definitely believe there is value in speed. So yes, that's possible, for sure.

Okay. And then an interesting observation around the market for senior housing units, half of which are in your bread basket or could be. But the baby boomers are just now turning 80, right? And if average first year in a senior housing home is 83, isn't it really 10 years from now or 5 years from now where you really start to see that demand start to pick up from that generation because the range of baby I just Googled the 62 to 80 right now. Anyone who's 62 is probably not moving in the next 20 years. But I'm just curious about how you view the cadence of demand for that business and how it aligns with what you're doing as a company?

Yes. So I'll take that. So demand for the units is part of it, but the supply imbalance is a very significant portion of it. Largely, there's been -- I would tell you that there's an incredibly low new development. So the supply of new product has really been constrained, and that's a function of construction debt in the marketplace, yield on cost for a developer and the risk associated with building new. Now I don't think that's forever, but it certainly has been for the last 3 or 4 years, a really curtailed development pipeline.

The other part of that is while this is the leading edge of the baby boomers, it's important to realize that there's not a gap. The tail end of the silent generation is still coming. It's an incredibly wealthy demographic subset. And as you Google, there's 10,000 people turning 80 every single day. So while the baby boomer is a massive wave of new prospective residents, the tailwind of the silent generation is still coming. So we feel that overall, the national occupancy is above 90%. It's above that, which it was prior to COVID. So there's never-ending demand for seniors housing product. There's a very limited supply of new product coming on. So we do feel very strongly that there's current demand and that demand will only grow as the baby boomer wave moves into their 80s.

Great color there. Just real quick, I like the 5 operator focus for 50 buildings. It's nice, easy, 5 for 50. But how much more can you get out of the Greystone-Silverstone arrangement in your mind?

So they're certainly an operating partner of ours, and we have a specific geographic focus with Greystone here in Metro D.C. So they are absolutely a candidate for us as we look at other opportunities in this geographic region. I would also mention that they're not the only operating partner that we could align with. But right now, we have full confidence in their ability to lease up the assets that we've acquired.

Your next question comes from the line of Dave Rogers with Raymond James.

I wanted to ask about acuity. In terms of the lease-up of the existing assets, are you seeing anything interesting, different unique with regards to the lease-up acuity levels? And then maybe the same question with respect to where you're thinking about for acquisitions. Do you have targeted acuity levels that you'd like to kind of hit over time? Any additional thoughts there would be helpful.

Sure. Let me -- this is Bobby. Let me take that for a second, and Matthew can add. I think what we've seen, one of the key visions of Chiron is that we are investing in full continuum assets that have both independent, assisted and memory care, which gives us an opportunity to seek out both early baby boomers, those that are younger and also be able to respond to those with additional care needs. One of the things and the phenomenon that we've seen and we like and really support our communities is that as care needs change, they matriculate in the community. So this is an age-in-place model.

And I think we see that in terms of the lease-up of the communities, one of the reasons why we are so bullish on both The Pinnacle and The Riviera is that it is an IL community that brings people in earlier, healthier and then they can matriculate to additional care when they need it. We have seen a little longer lead cycle and timing to bring independent living residents in. It's more of an elective decision. On the assisted living and memory care side, it tends to be a little shorter and more needs-based. But we think having full continuum assets that have all of those care levels gives us the opportunity to respond to all the different needs in senior housing.

Yes, I think that's exactly right, Bobby. And what I would add is that baby boomers in the tail end of a silent generation are looking to go to a place to live rather than going to a place to die. And so their research into what community they want to move into has a lot to do with the programmable space in the community, the size and layout of their residential unit. And as Bobby said, their ability to receive care as they age in place. So in terms of acquisition criteria, we are not looking at -- very rarely do we look at a single level of care opportunity, and we're much more focused on a continuum of care. And in a perfect world, we can present an opportunity for a prospective resident to move in an independent living and handle their needs all the way through the end of life.

Great. Maybe a follow-up on your comments about development and not enough assets out there. You do have a Chief Development Officer and a parcel of land. Any updates on kind of what you're thinking there is, understanding that the transition here is early, but just kind of curious if you're getting more comfortable with moving forward.

Yes. So we had an opportunity to acquire a very strategic piece of land, which we did. We've had some very interesting and exciting conversations about that piece of land. And I think we're not in a position to kind of go into full details, but certainly will soon, but it's an interesting opportunity for us to continue to build our portfolio.

Last question for me. Maybe for Mark and Bob together. I wanted to think about the transition away from OM and into SHOP. And I guess I'm curious about the balance sheet, right, with the preferred leverage kind of approaching 10x and you're switching out of a 60% margin business into a 25% margin business that grows faster. So how are the banks, how are the lenders kind of thinking about what that transition needs to look like as you sell OM, how much do you have to put into the leverage component of the company to make sure that everybody is happy on the lending side?

Do you want to start, Bob?

Do you want to try to do it together. Yes. I mean look, the banks have been very supportive. They liked our business before, and we're very supportive in terms of pricing in terms and all of that. And with the move into actually had a bank update meeting about 6 weeks ago. And I think the feedback we got coming away from that was a lot of support for the team. It's a strong team that was evident to all of them, and we had our entire bank group plus a few folks that aren't currently lending money to us at this time.

But look, I think they're excited about a business that can really grow. And I think they see our vision as another good provider to operators of real estate partnership is one that can be meaningful for their business as well. So they've been very -- and we've also shared with them, as we've shared with you and others, our intent to run at lower leverage overall. So if that's available to us, we'll absolutely do that. And I think that is appealing to them as well.

Your next question comes from the line of Rob Stevenson with [ Huntington ].

Can you talk about the current leasing activity and any upcoming known move-outs of significance in the OMF portfolio?

Yes. Do you want to take that?

Yes, I can start. I mean the -- you saw occupancy tick down a little bit in the third quarter. But again, that was, I think, expected as we talked about same-store running at 1.6% and where it's trending for the full year. We're -- from an occupancy perspective, we have no -- there's no significant no move-outs. Again, we look for -- our retention is around 70% for the quarter, and it's really been running as expected at this point.

Okay. So I mean, that 70%, 75% retention is reasonable to assume on the sort of, call it, 14 and change of that leases by ABR that are rolling in '27. I'm just trying to figure out where occupancy is heading both in terms of earnings contribution and also the impact of vacancy on of potential value on a sale.

Yes. That's fair, Rob. I mean there's nothing -- again, it's not -- again, it's not that volatile. I mean it should be in that same range with -- again, we talked about it in that range, but with the potential upside from there.

Okay. And then just given the comments of the last couple of questions revolving around sort of leverage and capital, et cetera, how much liquidity dry powder, however you want to term it, do you guys have today to even do sort of a smaller shop acquisition versus really needing to at least sell a decent chunk of OMF assets before your next meaningful shop buy?

Yes. I mean I would think about it as currently pretty modest, but we have, call it, $1.5 billion-ish of seed corn in the form of the outpatient medical. So we've been able to so far kind of match buys and sells, and hopefully, we can continue to do that.

Your next question comes from the line of John Massocca with B. Riley Securities.

Maybe with that last question in mind, is the move in cap rates for outpatient medical impacting like the return threshold or hurdles you're looking for in senior housing investments? Are you kind of matching those one for one? Or is it because of the strategic shift, you're a little bit more agnostic around how those kind of yields are trending?

Yes. I mean in my opinion, we're talking about pretty fine motor kind of adjustments, a quarter basis -- 25 basis points or 0.5 point. Fact is, the outpatient medical business is a high single-digit unlevered IRR business and the senior housing is low double-digit unlevered IRR. So there's a couple of hundred basis points of real spread there and a lot of good -- I mean, I think the demographic forces are real and good for both.

And again, it isn't a question that we think -- we've talked a lot about outpatient medical. There's nothing wrong with that business. It's just to try to have earnings growth at sub-40% of leverage with an economic picture at our size. It's just a game that we'd like to have someone else play. So I think our ability to be more meaningful in senior housing is clearly evident to us. I would say, over the last 6 to 9 months, we've grown in conviction around that. So I feel better about it today than I've ever felt about it.

And then going back to the rise in interest rates, has that impacted meaningfully the velocity of transaction activity in the outpatient medical space? Does it also change your thinking or influence your thinking at all as to a focus on larger portfolio transactions versus kind of individual sales or even like the pace of disposition activity and reinvestment?

I would say no, not really. I mean we're not kind of sellers of convenience. We're focused on strategy. We've been very clear about that to the market kind of in every direction. So I mean, we're going to be thoughtful and measured and try to maximize the outcome as best we can. But I would say there's still a very strong bid. I mean there are people who have been in the medical space for 20-plus years, like our partners at Heitman, who feel like this is a great vintage, and they're very excited about medical.

And there's groups that are new -- relatively new to the space and look at the [ SLA ] and have looked at [ NHP ] looked at some of these assets that have traded in volume and thought we like the underlying thesis, and we want to get in that. So there are -- I'd say the sort of old reliable players and there's lots of newcomers and generally a very positive outlook on the space. So that's good news for us in terms of the weather, I guess, so to speak, that we're kind of out in. And so all positive there. Cost of money changed 25 to 50 basis points, like we said, like that's a real thing. But I would say most people's thesis on the space is intact. And that's all about the demographics, discount to replacement costs, current marks on rents versus what's possible. And I think that's a strong thesis.

There are no further questions at this time. I will now turn the call over to Mark Decker. Please continue.

Thank you so much. Listen, we appreciate everyone's time and interest. And hopefully, we'll see some of you guys at NAREIT in a couple of weeks. Thanks so much, and we'll talk soon.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.

Good morning, ladies and gentlemen, and welcome to the Chiron Real Estate, Inc. Second Quarter 2026 Earnings Call. [Operator Instructions] This call is being recorded on Thursday, August 6, 2026.

I would now like to turn the conference over to Jamie Barber, General Counsel.

Good morning, everyone, and welcome to Chiron Real Estate, Inc.'s Second Quarter 2026 Earnings Conference Call. My name is Jamie Barber, and I am Chiron's General Counsel. On the call today are Mark Decker, Jr., Chief Executive Officer; Matthew Whitlock, Chief Investment Officer; Bobby Zeiller, Chief Development Officer and Head of Seniors Housing; Danica Holley, Chief Administrative Officer; Bob Kiernan, Chief Financial Officer; and Aaron Roseth, Chief Operating Officer.

Statements or comments made on this conference call may be forward-looking statements. Forward-looking statements may include, but are not necessarily limited to, financial projections or other statements of the company's plans, objectives, expectations or intentions. These matters involve certain risks and uncertainties. The company's actual results may differ significantly from those projected or suggested from any forward-looking statements due to a variety of factors, which are discussed in detail in our SEC filings.

Additionally, on this call, the company may refer to certain non-GAAP financial measures. You can find a tabular reconciliation of these non-GAAP financial measures to the most currently comparable GAAP numbers in the company's earnings release and in filings with the SEC. Additional information may be found on the Investor Relations page of the company's website at www.chironre.com.

I would now like to turn the call over to Mark.

Thank you, Jamie, and good morning, everyone. I feel like a kid in a candy store this morning sitting around the table with all this talent, and I'm even more excited that we share the same simple vision to deliver value at the intersection of care, capital and real estate.

I want to start by welcoming Tami Cumings, Aaron Roseth, Matthew Whitlock and Bobby Zeiller. And I'd like to thank Bob, Danica, Jamie and the rest of our team for a tremendously productive 5 months. I also want to recognize and thank Alfonzo Leon, who stepped down earlier this week as Chief Investment Officer.

When we laid out our priorities earlier this year, we said we would focus on active capital allocation, portfolio repositioning and building the capabilities necessary to support our next phase of growth. Over the last several months, we've made meaningful progress on each of these objectives. Before discussing the transformation that's underway, it's important to recognize that our existing portfolio continues to perform well.

During the quarter, same-store NOI increased 1.7% on a normalized basis, which is in line with our expectations and the same-store guidance we issued at the beginning of the year. The strategic actions we're taking today are not a response to operational challenges. It's about capital allocation. Outpatient medical can be an excellent investment. But as we've discussed, there are better total returns available within health care real estate.

With that in mind, I'd like to discuss what we're doing to position Chiron for the future. The common thread across everything we're doing is straightforward. We're reallocating resources towards opportunities that we expect to create a more durable and relevant real estate platform that can compound stronger long-term returns.

And so let's review our recent progress. We closed on the $100 million May win investment contemporaneously with the closing of our first 2 seniors communities, the Landing, a stabilized continuum of care community in Alexandria, Virginia; and the Riviera, a sister community across the courtyard from the Landing, which opened this March and is in lease-up.

Together, this forms a community of 292 luxury homes. We completed the sale of 7 inpatient rehab facilities to a newly formed joint venture in June at an exit cap rate of 7.3%. This generated approximately $200 million of gross proceeds, and we retained a small equity interest in the venture. The combination of these transactions leaves us well positioned on the balance sheet side with no maturities until 2028 and less than 40% leverage. And while I know we all prefer debt to EBITDA, given the nature of our lease-up communities, we're going to refer principally to our covenant metrics for a time.

The team has maintained momentum on asset sales, and I'm pleased to announce that we're under contract to sell our Beaumont, Texas Surgical Hospital for a price of $49 million, representing an exit cap rate of 5.9%. Proceeds from these sales will be directed towards assets offering a higher return on capital. The most immediate use will be to complete the previously announced acquisition of the Pinnacle, a marquee luxury community that we put under contract in the second quarter.

The Pinnacle welcomed its first residents in June, and we couldn't be more pleased with the early momentum of the community. We remain active in evaluating further dispositions from our outpatient medical platform -- or outpatient medical portfolio, excuse me, including through individual sales or larger portfolio transactions and see no shortage of opportunities to redeploy these proceeds in a way that will drive our long-term return on capital higher and deliver value to our shareholders.

While there's been a lot of transactional activity, the biggest story is our leadership team. Executing on a transition of this magnitude and then building the business we envision requires specialized expertise, and we've spent considerable time strengthening the organization accordingly.

Over the past several weeks, we've welcomed Tami Cumings, Aaron Roseth, Matthew Whitlock and Bobby Zeiller into leadership roles at Chiron. Together, they bring more than 100 years of experience sourcing, developing, operating and managing senior housing communities. Most importantly, these additions are highly complementary. This is an operational business and to be a good partner, we need a strong operator's eyes. With Tami Cumings, our new SVP of Seniors Housing, we've added decades of operating experience to ensure that our communities are managed in a best-in-class fashion.

To be a great partner with operators and deliver a consistent experience for our team in the Street, we need an organization that remains curious and focused on constant improvement. Aaron Roseth, who led a best-in-class architecture firm with industry-leading profitability, is skilled at both running large gray matter organizations and building deep client relationships. Together with Danica, who's in many ways, the heart and soul of our company, we are seeking to become the best partner we can.

Matthew joins us as Chief Investment Officer with 3 decades of senior housing, thought leadership and experience on all sides of the business. He will be the tip of the spear as we seek to deploy capital wisely. Bobby is Chiron's Chief Development Officer and Head of Seniors. Bobby literally built the Bedrock communities that we purchased from Silverstone, which he led. And in addition to constructing communities, he has a great way with people and ultimately, I think his superpower is working with operators with a focus on empathy and respect as well as accountability and most importantly, an eye to what sustains a great customer experience for our residents.

Together, these leaders expand our ability to identify opportunities, underwrite risk, support operators, work as an effective team and maximize performance across the portfolio. We believe Chiron now has the leadership platform necessary to deliver on our vision. Finally, I'd like to address valuation. We continue to believe the market is not fully recognizing the value embedded within our legacy outpatient medical portfolio. Our belief is supported by a growing body of public and private market transaction activity that demonstrates the robust institutional demand for outpatient medical real estate at cap rates that compare favorably to the implied valuation of our MOB portfolio.

We've highlighted this on Page 14 of our most recent investor presentation. We can't control where the market values our shares in the near term. What we can control is disciplined execution. We believe that it's prudent to lean into this pricing dislocation and sell assets, which we believe will offer meaningful upside that's not currently reflected in our stock price and allow us to reallocate capital into higher returning assets. Taken together, we believe the company is better positioned today than it was 6 months ago. We have enhanced our leadership capabilities, made meaningful progress on our portfolio transition and established a clear road map for continued execution.

With that, I'll turn the call over to Bob to provide additional details on our financial and operating results for the quarter.

Thanks, Mark. Regarding our second quarter results, NAREIT defined FFO per share and unit was $0.88 and our core FFO was $1.04 per share and unit. Driven by the timing of our investment and disposition activity, net debt to adjusted EBITDAre was 6.0x for the quarter compared to 6.6 in the first quarter.

Our same-store cash NOI increased 0.8% on a year-over-year basis. This increase was consistent with our expectations and was adversely impacted by a onetime nonrecurring revenue recovery recognized in the prior year period related to a single tenant. Excluding this asset, same-store cash NOI growth would have been 1.7%. Our cash G&A for the second quarter was $3.8 million, is down slightly from the first quarter of this year.

Looking ahead, while we expect that the changes in senior management will increase our G&A costs in the short term, we believe that as we reposition the investment portfolio, our costs will be in line with the size of our portfolio. Regarding our equity capital, we're pleased to have issued the $100 million of Series C convertible perpetual preferred in the quarter. The sale of our 7 inpatient rehab facilities at an aggregate value of $217 million demonstrates our ability to recycle capital at an attractive rate. We ended the quarter with $259 million in unutilized borrowing capacity under our credit facility and our leverage ratio of just under 40%.

Mark, would you like to provide any closing remarks?

Thanks, Bob. Before opening the call for questions, I'd like to leave everyone with one final thought. The story at Chiron today is not about aspirations. It's about execution. Over the last several quarters, we've built a strategy, assembled a team, raised fresh capital, completed acquisitions and successfully recycled assets. There's certainly more work ahead, but our entire team is laser-focused on building Chiron into a best-in-class organization. We're excited to share more about the business.

Operator, please open the line.

[Operator Instructions] We have our first question from Juan Sanabria with BMO Capital Markets.

Congrats on the new team and being assembled, I guess. Just hoping, Mark, maybe you could talk a little bit about the strategy here going forward and what types of assets you're looking for? And as part of that, kind of the plans for the Reston Land parcel acquisition you announced with results yesterday.

Sure. Thanks, Juan. Well, the strategy is, as we've outlined, to be focused on seniors housing. And I mean, honestly, the Reston Land, we have a great plan for. It's -- I would remind you, it's less than -- it's about 1% of assets, and we'll tell you more as that plan unfolds. But short version, we're going to use it as currency to build rapport with operators. And it's shovel-ready and great [indiscernible].

Sorry, maybe I wasn't super clear. Just I guess, is the focus to be more on development assets that require patients and lease-up or more stabilized assets in terms of the acquisitions of capital recycling?

Definitely more stabilized assets.

Great. And then I think Bob alluded to it. How should we think about the pro forma G&A run rate with the additions to the team?

I mean for the time, it will be higher. But I mean I would say, Juan, we're really viewing this as a growth-oriented team and a growth-oriented business with a source of capital that's right in front of us in the form of the outpatient medical assets. And so our expectation is the business will grow and mature and our G&A will be in line or better.

Our next question comes from Wes Golladay with Baird.

Maybe a follow-up to Juan's question on the development parcel. Do you have an idea what you want to do? Would it be an active adult? Or would it be more of the acuity curve? And maybe talk about the competitive landscape in that market?

Yes. Again, I think you're probably overemphasizing a 1% investment, but it's your time. So I mean, yes, it would be a likely full continuum community. It's kind of right down the middle of fairway in terms of demographics. And I would expect we'll come up with some thoughtful way to partner with someone on an earnings-oriented manner.

Okay. And then maybe going back to the team build-out. Do you have the team in place? Are you still looking to fill any positions?

We're in -- I think we're in a great spot.

Okay. And then last one for me. You have made the pivot to senior housing, but you're still remaining opportunistic in OM. Is that going to be part of the playbook going forward?

Yes. I mean I think the playbook is really to try to generate the best returns on capital possible and work with partners who value what we're up to. But I mean, we're very focused proportionately on senior housing.

Our next question is from Dave Rodgers with Raymond James.

Mark, I wanted to follow up, I guess, on some of those same questions. But you mentioned valuation in your opening. And setting aside the right value for now historically in the space, best way to highlight value, eliminate loans, eliminate mezzanine, eliminate joint ventures, get to a clean portfolio and kind of highlight that.

And obviously, some of the steps in the quarter aren't going in that direction. So I guess, do you see just a longer access than maybe people have originally anticipated from your comments from the outpatient medical? Is it that you're trying to kind of maintain some level of earnings or cash flow for debt coverage? I mean what's the rationale, I guess, for staying involved in these businesses given how good seniors is today?

You're talking about the 2 loans?

Yes. I mean a combination of the loans, the active adult and just kind of like where do you want to be in that spectrum? And again, the IRF JV that you did, why not exit that outright? Why stay in some of these businesses? I think it is kind of the question of why continue to allocate capital there, even though you sold some, you're still allocating capital to the IRFs as opposed to allocating that full capital into seniors.

Yes, fair question. I mean, listen, I think -- I don't know what everyone's expectations are for the access of how long this will take, but I think it's reasonable to assume it will take more time than immediate. And some of these things, it just depends. I mean if you think about the IRF business, that's really a niche within a niche. And there is some kind of mid-duration leasing work to be done there that is how we think we optimize value and to get the best price, that's a space where money -- investors want some expertise.

So they value our expertise there. We think that there is an opportunity to reset those leases, but it isn't today, it's 4.5 years from now. So I think to get the execution we got there, which was outstanding from a cap rate and valuation perspective, that's what we needed to do to drive the best value for the company, and that's really how we're focused. So I think you'll continue to see that. I mean I think if you looked at the quarter, we announced $421 million of seniors investments, and we announced a $15 million land piece and $5 million of mezz loans, and I should think those are like reasonable proportions to expect going forward.

And then maybe just on your last comment, that was all helpful. That last comment about kind of the senior side of the business. Can you talk about maybe what the pipeline of assets that you're looking at today looking forward as you are trying to make that shift? Is that continuing to grow? Are we waiting for the new team members to kind of take a look at that and kind of redefine where we want to go? How do you think about kind of what that pipeline looks like today?

To quote our President, it's huge. No, listen, we have lots of good ideas. Matthew, who's sitting next to me and can speak to this himself has -- look, we have a very large pipeline, more ideas, I'd say, than capital right now. And so the art of it for us is to get out of those find deliver some proceeds for those investments.

But Matthew, do you want to speak to that for a second?

Yes. Thanks, Mark. Just to let you know, we've already begun developing a pretty robust pipeline of investment opportunities. We're focusing on investments, which will provide long-term earnings growth and as importantly, partnership opportunities with best-in-class operators.

We're -- the sky is the limit, our canvas is blank, but we're concentrating on specific MSAs and specific operating partners who have shown time and again their ability to operate efficiently and also to provide the best living and care experience to the residents.

We have our next question from Gaurav Mehta with Alliance Global Partners.

I wanted to ask you on the asset sales. Are you looking to sell any more assets after Beaumont sales?

Sorry, I didn't catch the last part. Are we looking to sell what? More...

Are you looking to sell any more assets after the Beaumont sale?

Yes. Yes. Yes. I mean we've hired a broker to help us evaluate the best way to do that in a way that maximizes value. So kind of looking at the portfolio, we could obviously sell it in 180 pieces, there are 5 or 1, and there's a lot of considerations that go into that, but that's how we're exploring it right now.

Okay. And second question on the mezz loans that you guys did. Is there rationale for mezz loans to generate some income? And then how do you think about mezz loans as a percentage of your assets? Are you looking to grow that part of your portfolio?

Yes. I mean those are really, one, small 33 basis points of the whole book, if you will. And two, they're cash pay. They're with an outstanding sponsor with an outstanding credit. We have all the docs. It's pretty easy for us to do those. So I would say we just look at that as a nice way to generate some return on capital where we get our money back in 2 years and have optionality on those assets. So that's sort of the why of it.

There are no further questions at this time. I will now turn the call over to Mark for closing remarks.

Well, thanks, everybody. We appreciate everyone's time and attention. And as we like to point out, the transition is underway. Capital allocation is improving, and there's outstanding value in our stock today. We look forward to talking to you next quarter.

Ladies and gentlemen, this concludes today's conference. We thank you for your participation. You may now disconnect.

Good morning, ladies and gentlemen, and welcome to the Chiron Real Estate, Inc. First Quarter 2026 Earnings Conference Call. [Operator Instructions] This call is being recorded on Thursday, May 7, 2026. I would now like to turn the conference call over to Mr. Jamie Barber, General Counsel. Please go ahead.

Good morning, everyone, and welcome to Chiron Real Estate's First Quarter 2026 Earnings Conference Call. My name is Jamie Barber, and I'm Chiron's General Counsel. On the call today are Mark Decker, Jr., Chief Executive Officer; Bob Kiernan, Chief Financial Officer; Alfonzo Leon, Chief Investment Officer; and Danica Holley, Chief Operating Officer.

Statements or comments made on this conference call may be forward-looking statements. Forward-looking statements may include, but are not necessarily limited to, financial projections or other statements of the company's plans, objectives, expectations or intentions. These matters involve certain risks and uncertainties.

The company's actual results may differ significantly from those projected or suggested from any forward-looking statements due to a variety of factors, which are discussed in detail in our SEC filings. Additionally, on this call, the company may refer to certain non-GAAP financial measures. You can find a tabular reconciliation of these non-GAAP financial measures to the most current comparable GAAP numbers in the company's earnings release and filings with the SEC. Additional information may be found on the Investor Relations page of the company's website at www.chironre.com. I would like to now turn the call over to Mark.

Thank you, Jamie, and good morning, everyone. The first quarter marks a pivotal moment for Chiron as we thoughtfully reposition into a leading platform designed to deliver exceptional value to essential health care operators. While the company continued to perform across its existing outpatient medical portfolio, the more consequential development was the significant progress made in repositioning Chiron for growth.

The quality and pace of these investments reinforces our conviction that there is a great opportunity for a focused solutions-oriented capital provider capable of creativity and speed. Senior housing remains a highly fragmented and relationship-driven business, and Chiron is establishing itself as a credible and constructive partner within that ecosystem.

And this matters. Studies show that seniors in well-designed communities experienced a 20% reduction in social isolation and a 15% increase in cognitive function. We envision Chiron as a trusted partner to leading operators, driving innovation and setting new standards in the industry by focusing on evidence-based design and care models.

We believe we can build something truly special. Following the transactions announced last night, Chiron will have over 25% of our asset value in senior housing operating properties or SHOP, representing a substantial advancement of the plans we announced in February. We believe this transition improves Chiron's relevance within the health care delivery universe, positively altering our long-term earnings growth profile, portfolio quality and opportunity set.

Over time, these elements will result in a better business that should support a stronger and more differentiated cost of capital. We published updated investor materials last night that provide additional detail on each of the announced investments, but I'd like to briefly highlight our strategic rationale.

Our key criteria when evaluating senior housing investments are the operator, market and real estate. Beginning with the operating team, our partners on each of these investments will be Silverstone Senior Living, the original developer and asset manager, and Greystone, which will continue as the operator. Preserving continuity across development ownership and operations was an important consideration for us.

We believe maintaining an aligned and experienced team optimizes resident and associate experience, lease-up execution and long-term financial performance. Our evaluation of these opportunities began in January when dialogue with Silverstone revealed an opportunity to solve a capital structure issue. Silverstone had developed two exceptional communities in Potomac Yards, but the existing ownership was split between two institutions, jeopardizing the best outcome due to fund life challenges and evolving strategic priorities.

Chiron was able to provide a permanent capital solution that aligns and consolidates these communities while preserving the operating platform that's thriving. The first of these communities, the Landing, features 163 luxury homes that offer independent assisted and memory care living. The Landing achieved occupancy stabilization in 2025 and is now approaching financial stabilization through the burn-off of lease-up concessions.

Situated across the shared courtyard on the same land parcel is the Riviera, a newly delivered 129-home luxury independent living community that opened in March of 2026 and is now in the early stages of lease-up. Together, the Landing and Riviera comprise a vibrant community of 292 highly differentiated senior homes in one of the most affluent and supply-constrained submarkets in the Washington, D.C. metro. From a financial perspective, the pairing is particularly attractive because the communities sit at opposite ends of the maturation curve.

The Landing is entering stabilized cash flow while the Riviera is beginning lease-up. This creates a natural internal earnings progression over the next several years. We underwrote both communities to stabilize yields in excess of seven using untrended rents. This basis implies the assets have potential to deliver a double-digit unlevered return, and we believe the long-term durability of demand is supported by favorable household wealth characteristics, strong home values and a very limited forward development pipeline.

Chiron's ability to execute efficiently as capital partner with Silverstone and Greystone earned us the opportunity to expand our relationship and acquire the Pinnacle, a 175-home luxury senior housing community currently nearing completion of construction in North Bethesda, directly across from Federal Realty's Pike & Rose, one of the strongest mixed-use destinations in the region.

Because the community remains under construction, our contract provides flexibility around closing timing this fall with anticipated settlement windows from August to November. As with the Riviera and Landing, we believe that the Pinnacle sits in an exceptionally attractive demographic pocket characterized by high household income, strong barriers to entry and limited competing supply.

It is exactly the type of highly desirable and relevant senior housing that we believe will form the foundation of Chiron's long-term growth strategy. Given the magnitude of our portfolio transition, the Board has made the decision to reduce the monthly distribution to a new annual run rate of $1.92 per share or $0.16 per month, starting with the July payment. While current income remains an important part of our value proposition to shareholders, we believe retained cash flow represents one of our most valuable internal sources of equity.

This change provides Chiron with $15 million in additional capital per year, which alongside capital recycling gives us an ability to self-fund accretive investments and better control the pace of our strategic evolution. This is a capital allocation decision. In the current environment, every dollar retained and deployed into growth investments has the potential to create more long-term value than every dollar distributed, all without relying on equity capital markets.

Private market transactions continue to highlight our recycling opportunity. While Chiron's current share price implies a cap rate of 9%, recent comparable transactions, specifically the Sila take-private and the NHP outpatient medical sale have been executed at cap rates between 7.3% and 7.9%, a 100 to 150 basis point arbitrage.

By prioritizing internal capital recycling and retained cash flow over common equity issuance at these levels, we're ensuring that the long-term value created by the execution of our strategic plan accrues directly to our existing shareholders. Next, I'd like to talk about Maewyn Capital Partners' $100 million strategic investment into Chiron as this transaction provides us growth capital at an attractive price and more.

Maewyn's investment provides Chiron with dedicated long-duration growth capital from a sponsor with deep public real estate experience and a singular focus on per share value creation. Just as importantly, Charles Fitzgerald, Founder and Managing Partner at Maewyn, is expected to join Chiron's Board of Directors later this month.

Charles brings nearly 3 decades of investing experience across listed real estate securities with a career built around valuation discipline, underwriting rigor and identifying opportunities that create alpha. As Chiron transitions from a historically passive net lease owner into a more active capital recycling and external growth platform, that perspective becomes increasingly valuable.

The next chapter of value creation for Chiron will be determined by our ability to consistently allocate capital towards the highest risk-adjusted opportunities across acquisitions, dispositions, development funding and portfolio repositioning. We believe Charles' addition to the Board strengthens that framework by adding an experienced shareholder lens. Charles knows this space well and shares our view that we can build something special.

Best-in-class companies have demonstrated that superior long-term shareholder returns are created through active portfolio construction and disciplined capital deployment. Chiron is building that capability. With Maewyn as both capital partner and Board-level strategic adviser, the company gains funding flexibility and an experienced external investor perspective. This also extends our ability to think like owners.

On a fully diluted as converted basis, over 20% of our company's ownership is sitting around the Board table. Between Maewyn's capital commitment and dispositions subject to LOI, Chiron has approximately $300 million of capital sources to fund the roughly $425 million of identified investments. Because the $176 million Pinnacle closing is not anticipated until this fall, we do have some time to execute upon further outpatient medical sales to advance the portfolio transition.

Together, all this means Chiron has the assets, capital and investment alignment necessary to pursue this transition with greater speed, rigor and accountability to shareholder returns, and we're already moving fast, leading to a lot of progress in a very short period of time. I want to recognize the efforts of our team, Board, partners and counterparties in bringing these ideas into reality. Thank you all. I know you're listening. With that, I'll turn it over to Bob to provide an update on first quarter operating performance across the portfolio.

Thanks, Mark. NAREIT-defined FFO per share and unit was $0.97 for the quarter. Core FFO was $1.11 per share and unit. Net debt to adjusted EBITDA was 6.6x for the quarter, a reduction of 0.4x from the first quarter of last year. Same-store cash NOI, which includes all assets owned by Chiron for at least 15 months, increased 3.2% on a year-over-year basis.

As we embark on the portfolio changes highlighted by Mark, we withdrew our 2026 earnings guidance. It is important to note that this change wasn't due to any negative event, but was done to better focus on our portfolio transition and building long-term shareholder value. As it relates to items like our cash and noncash G&A expenses as well as our capital expenditures included in FAD, our full year expectations are in line with our previous communications.

Mark, would you like to provide some closing thoughts?

Thanks, Bob. These announcements represent the beginning of Chiron's repositioning. The work ahead now centers on disciplined execution, lease-up performance, capital recycling and continued sourcing of investments that further enhance our ability to create value.

Finally, I'd like to thank Henry Cole and Ron Marston for their service as directors. They're both leaving the Board at our upcoming election. Our team appreciates the creativity, wisdom and care they brought to the boardroom, and we wish them the very best.

And with that, operator, we'll take questions. Thank you.

[Operator Instructions] And your first question comes from John Massocca from B. Riley.

So maybe kind of going to the $450 million of investments, understanding capital recycling is part of this. You have the Maewyn preferred investments. Is there anything else you kind of have out there or thoughts in mind to kind of bridge the funding gap maybe to fully kind of pay for those investments over time? I'm just kind of curious if everything is going to be kind of accounted for with some of your historical transaction activity, capital recycling in the Maewyn funds.

So just to make sure I understand the question, you're saying, do we have the funds for the $425 million we just announced? Or are you asking about something in the future?

Yes, just for the $425 million announced.

Yes. So we have a couple of hundred million under LOI. We have -- so we talked last quarter about the IRF JV as well as the CHRISTUS asset in Beaumont, Texas. The IRFs are under LOI. They're not done yet. So that would be our most likely use of proceeds.

The CHRISTUS ought to follow after that. And then between now and I'd say, November 1 at the latest, we'll likely dispose of some other outpatient medical. And that would get you to leverage-neutral proceeds.

Okay. And I guess kind of maybe going forward, as you look to kind of grow the senior housing portfolio, where do you kind of view Chiron's niche within that kind of investment universe? Are you going to be primarily focused on like early-stage development type transactions? Just kind of curious how you kind of expect to play in the larger universe of senior housing, especially given how kind of competitive it can be with some of the larger REITs?

Yes. Well, I think what -- where you're least likely to find us competing is just in an auction. So I think the way we are trying to be valuable and interesting to operators and developers is by being thoughtful and creative and listening well and trying to help them find solutions. So if you're selling something and all you care about is cash, then it's really simple. It's just about who can pay the most and who can do it the fastest and who's the most certain.

And I think in many instances, we can compete well on those dynamics. But if you add any other variable, it starts to get complicated and you might be able to drive more value there or you might just be able to -- by caring about that fourth or fifth thing that the seller cares about, you might be able to do something that other people can't do. So it's super situational.

I mean what we've done here with Silverstone is, in my mind, spectacular, and we're going to try to do more of these, but these are hard to do. And if it's for sale, you just have to pay the most. We're trying not to just do that. We're trying to find ways where we can build relationships that are truly additive for both parties.

So we're seeking win-wins. I think there's lots of room in the market for people that have capital thoughtfulness and are actually interested in a long-term relationship and a win-win. So we'll compete on that basis, and I think we'll win our fair share.

Okay. And then given some of the M&A activity you talked about earlier in the call and just the overall kind of asset sales, I mean, is there a plan for additional kind of strategic dispositions of some of the historical assets as you look to kind of transition the portfolio more towards senior housing? I mean, would this be something you'd sell in a granular fashion? Or would it be -- would you look to kind of larger strategic transactions?

Yes. Yes. I mean, look, I'm not trying to be coy, but we know -- I would say that we think of our outpatient medical as a strong performing store of value. And to the extent we can find things that we think drive higher and better, higher quality better growing cash flows, we will trade out of them.

And that's the arbitrage that exists. So I think in a perfect world, a girl can dream, we actually get a cost of capital and we can externally grow like many of the other folks in our space, but we don't need that to effectuate a pretty powerful change in the portfolio. So we have rough and tough $1.25 billion of capital to play with, if you will.

And your next question comes from Wes Golladay from Baird.

I guess can you talk about how you see leverage going over the next -- call it year? And then where do you ultimately want to get to, understanding that these are stabilizing assets?

Yes. Well, I'll take the last one first. The ultimate goal would be investment-grade access to the bond market. We're too small for that. But from a metrics perspective, that's what we're after. So that way we always have a little bit of capacity. So specifically how that goes over the next 12 months really depends on what comes in front of us from an opportunity perspective.

Okay. And then on the investment front, you had these unique opportunities that came your way. Do you still have a pipeline you're working on? Or do you want to digest these acquisitions for a little while and get the funding secured for these? Or do you keep going after it?

I mean both. Job one is get these closed, integrate them execute on the plan that we've underwritten and are excited about. And -- but we can do more than one thing at once. And so we'll also -- I mean, listen, we're always looking. And I think there's lots of interesting things out there, and it's about finding good situations where we can sync up. So we're absolutely going to continue to do that. But first things first, we got to do a good job with -- we don't get more stuff if you break the toys you have.

And your last question comes from Gaurav Mehta from Alliance Global Partners.

I wanted to ask you on the pending acquisitions. It seems like the three of them are in D.C. metro area. Is that something by choice? Or is that just the opportunity presented in that area?

I mean I would say that, that's kind of a happy coincidence. I mean it feels good. That's a home game for us. We're based here in D.C. I'm from this area, so are many of the folks on our team. So -- but I wouldn't say that was because we said we have to do the first thing in Washington.

It just -- it worked out that way, and that probably may have helped us with more comfort with respect to specific submarkets and things like that, but we can underwrite things anywhere.

Okay. Second question on dispositions. Outside of $200 million of pending asset sales, I think you also list $125 million of maybe expected additional dispositions. Are those pending or those are just target dispositions that can happen in the future?

Those are in the future.

Okay. And then lastly, in the earnings deck, you point out -- to long-term earnings growth of 6%. When should we expect your portfolio to get to that sort of long-term growth rate?

Honestly, it really -- it kind of depends on what else comes up on the buy side and how we fund that. But I'd say our present trough is probably next quarter and we probably start to stabilize in '27, '28 -- I mean as we said, I think we put it in our book second half of '28. So...

[Operator Instructions] At this time, there are no further questions. I will turn the conference back over to Mr. Mark Decker.

Well, thanks, everybody. We appreciate the interest. And if you're going to be at BMO's conference next week, we'll hope to see you there. Otherwise, we'll see you maybe at NAREIT in New York. Thanks, everybody.

Ladies and gentlemen, this does conclude your conference call for today. We thank you very much for your participation. You may now disconnect. Have a great day, everyone.