Community Healthcare Trust Reports Third Quarter Results for 2025 with Financial Insights

Community Healthcare Trust Reports Q3 2025 Results

Community Healthcare Trust Incorporated (NYSE: CHCT) has announced its financial performance for the three months ending June 30, 2025. The company has faced challenges in the healthcare real estate sector, posting a significant net loss of approximately $12.6 million, which translates to a loss of $0.50 per diluted share.

Key Financial Metrics

In terms of funds from operations (FFO) and adjusted funds from operations (AFFO), the firm reported FFO of $0.23 and AFFO of $0.50 per diluted share for the quarter. The recent performance has been influenced by several notable factors, including a $1.7 million reserve on interest receivable linked to a tenant that operates geriatric behavioral hospitals. The company recognizes that the collection of this receivable is highly uncertain, leading to the aforementioned reserve which adversely affected the FFO and AFFO figures by $0.06 per diluted share.

Moreover, the organization recorded an $8.7 million credit loss reserve on notes receivable from the same tenant. However, as these notes are seen as incidental to CHCT's primary business activities of acquiring and leasing real estate, this credit loss reserve is excluded in the calculation of FFO, thereby not impacting it directly.

Recent Developments

In a plot twist, on July 17, 2025, the tenant signed a Letter of Intent (LOI) to sell its business to another behavioral healthcare provider, which includes commitments for new leases related to six geriatric hospitals owned by CHCT. This transaction's completion remains uncertain, marking it as a pivotal point in CHCT's future direction.

Another critical development came with the termination of the company’s former Executive Vice President of Asset Management on May 31, 2025. As a result of this termination, restricted shares totaling 198,015 vested, and associated compensation charges reached $5.9 million, affecting the company’s operational expenses and reducing FFO per diluted common share by approximately $0.22.

Investment Transactions

In spite of these challenges, CHCT has also focused on its investment strategy. The firm successfully acquired a behavioral specialty facility for about $9.7 million with an expected stabilized return of approximately 9.5%. This transaction, however, was initially classified as a financing activity due to its timing in relation to the lease commencement, only being recorded officially when the lease took effect.

Additionally, CHCT has taken steps to divest properties, selling a building in Ohio for proceeds of approximately $0.6 million and recognizing a gain of $0.2 million. The company has also recently amended an operating lease that transformed into a sales-type lease, marking a gain of about $1.3 million.

In a more recent acquisition, on July 9, 2025, CHCT purchased an inpatient rehabilitation facility in Florida for approximately $26.5 million, fully leased with a lease expiring in 2040. This acquisition was funded from the company's revolving credit facility.

Furthermore, CHCT has six properties under definitive purchase agreements slated for acquisition upon completion, with an expected total purchase price of around $146.0 million. The anticipated returns on these investments range from 9.1% to 9.75%, with the company expressing optimism for closures throughout 2025 to 2027.

Dividend Declaration

Reflecting its ongoing commitment to shareholders, the Board of Directors has declared a quarterly dividend of $0.4725 per common share, set for distribution on August 22, 2025. This decision indicates a confidence in the company’s ability to manage its cash flow amidst current uncertainties.

Conclusion

As Community Healthcare Trust navigates through this challenging period, it remains committed to its strategy of investing in income-producing properties linked to outpatient healthcare services. The implications of recent developments will significantly shape the company’s trajectory moving forward. For further details on the company's operational updates and financial performance, stakeholders are encouraged to visit CHCT’s official website.