Community Healthcare Trust Incorporated

For the second quarter of 2026, total revenue was $31.2 million; property operating expenses were $5.9 million; G&A was $4.9 million; and interest expense was $7.4 million. FFO was $13.2 million, or $0.48 per diluted common share, and AFFO was $15.4 million, or $0.56 per diluted common share; AFFO per share was steady versus the first quarter of 2026. Management also said the dividend will be reduced from $0.48 to $0.33 per share, which they expect will retain $25 million to $30 million over the next 2 years. Forward-looking targets included 90.5% occupancy by year-end 2026, 92% occupancy over the next 18 months, and $85 million to $90 million of acquisitions in 2026; they also said the capital plan could support an incremental $0.06 to $0.07 of AFFO growth per year assuming a 9% to 10% yield.

David Dupuy framed the quarter around a strategic reset aimed at restarting growth rather than waiting for a better market. He said the dividend cut is intended to free capital for acquisitions and reinvestment, and he laid out four priorities: occupancy improvement, portfolio reinvestment, strategic capital recycling and accelerated acquisition growth. His tone was constructive and confident, repeatedly saying the plan is clear, achievable and supported by stronger leasing momentum, lower future expirations and a better-organized team.

William Monroe focused on the capital allocation math behind the dividend change. He said retaining $25 million to $30 million over 2 years, or up to $15 million per year, could enable up to an incremental $25 million per year of acquisition or reinvestment capacity on a leverage-neutral basis around 40% debt to capitalization, which he estimated could drive $0.06 to $0.07 of annual AFFO growth assuming a 9% to 10% yield. He also said the company will move to an annual dividend review and intends to maintain an AFFO payout ratio of approximately 60% to 65%. On the quarter, he cited revenue of $31.2 million, property operating expenses of $5.9 million, G&A of $4.9 million, interest expense of $7.4 million, FFO of $0.48 per share and AFFO of $0.56 per share.

Analysts pressed on the occupancy target, the pace of redevelopment and speculative-suite spending, the dividend policy, and whether management is waiting on the behavioral-hospital transaction. Management said most of the $70 million of assets in market are 100% occupied, with a few empty buildings, and emphasized that occupancy should improve as lease expirations roll off in 2027-2029. On the behavioral-hospital deal, Dupuy said the buyer is advancing through diligence and definitive documentation, with a third-quarter signed agreement targeted and a year-end close possible, but he also noted the business has performed better and other potential suitors exist if needed.