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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2025


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 000-55190

NORTHSTAR HEALTHCARE INCOME, INC.

(Exact Name of Registrant as Specified in its Charter)


Maryland			27-3663988
(State or Other Jurisdiction of			(IRS Employer
Incorporation or Organization)			Identification No.)

575 Lexington Avenue, 14th Floor, New York, NY 10022

(Address of Principal Executive Offices, Including Zip Code)

(929) 777-3135

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common stock, par value $0.01 per share

None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ý No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ý

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date:

The Company has one class of common stock, $0.01 par value per share, 185,712,103 shares outstanding as of May 7, 2025.

NORTHSTAR HEALTHCARE INCOME, INC.

FORM 10-Q

TABLE OF CONTENTS


Index		Page

Part I.	Financial Information	4
Item 1.	Financial Statements	4
	Consolidated Balance Sheets as of March 31, 2025 (unaudited) and December 31, 2024	4
	Consolidated Statements of Operations (unaudited) for the three months ended March 31, 2025 and 2024	5
	Consolidated Statements of Equity (unaudited) for the three months ended March 31, 2025 and 2024	6
	Consolidated Statements of Cash Flow (unaudited) for the three months ended March 31, 2025 and 2024	7
	Notes to Consolidated Financial Statements (unaudited)	8
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	41
Item 4.	Control and Procedures	42
Part II.	Other Information	42
Item 1.	Legal Proceedings	42
Item 1A.	Risk Factors	42
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	43
Item 3.	Defaults Upon Senior Securities	43
Item 4.	Mine Safety Disclosures	43
Item 5.	Other Information	43
Item 6.	Exhibits	44
Signatures		45

Table of Contents

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, or Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or Exchange Act. Forward-looking statements are generally identifiable by use of forward-looking terminology such as “may,” “will,” “should,” “potential,” “intend,” “expect,” “seek,” “anticipate,” “estimate,” “believe,” “could,” “project,” “predict,” “continue,” “future” or other similar words or expressions. Forward-looking statements are not guarantees of performance and are based on certain assumptions, discuss future expectations, describe plans and strategies, contain projections of results of operations or financial condition or state other forward-looking information. Such statements include, but are not limited to, those relating to the operating performance of our investments, our liquidity and financing needs, the impact of the pending merger on our business and operations, the effects of our current strategies and investment activities, our ability to retain our senior executives and other sufficient personnel to manage our business and our ability to effectively deploy capital. Our ability to predict results or the actual effect of plans or strategies is inherently uncertain. Although we believe that the expectations reflected in such forward-looking statements are based on reasonable assumptions, our actual results and performance could differ materially from those set forth in the forward-looking statements and you should not unduly rely on these statements. These forward-looking statements involve risks, uncertainties and other factors that may cause our actual results in future periods to differ materially from those forward-looking statements.

All forward-looking statements included in this Quarterly Report on Form 10-Q are based on information available to us on the date hereof and we are under no duty to update any of the forward-looking statements after the date of this report to conform these statements to actual results.

Factors that could have a material adverse effect on our operations and future prospects are set forth in our filings with the U.S. Securities and Exchange Commission, or the SEC, including Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 and in Part II, Item 1A of this Quarterly Report on Form 10-Q under the heading “Risk Factors.” The risk factors set forth in our filings with the SEC could cause our actual results to differ significantly from those contained in any forward-looking statement contained in this report.

Table of Contents

PART I—Financial Information

Item 1. Financial Statements

NORTHSTAR HEALTHCARE INCOME, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Dollars in Thousands, Except Per Share Data)


	March 31, 2025 (Unaudited)		December 31, 2024
Assets
Cash and cash equivalents	$	322,935	$	312,123
Restricted cash	38,877		40,246
Operating real estate, net	688,713		694,313
Investments in unconsolidated ventures ($740 held at fair value as of March 31, 2025 and December 31, 2024)	740		740
Assets held for sale	—		75,454
Receivables, net	1,091		1,508

Other assets	4,880		5,521
Total assets(1)	$	1,057,236	$	1,129,905

Liabilities
Mortgage notes payable, net	$	773,535	$	856,422

Accounts payable and accrued expenses	46,510		42,694
Other liabilities	1,366		1,760
Total liabilities(1)	821,411		900,876
Commitments and contingencies (Note 12)
Equity
NorthStar Healthcare Income, Inc. Stockholders’ Equity
Preferred stock, $0.01 par value, 50,000,000 shares authorized, no shares issued and outstanding as of March 31, 2025 and December 31, 2024	—		—
Common stock, $0.01 par value, 400,000,000 shares authorized, 185,712,103 shares issued and outstanding as of March 31, 2025 and December 31, 2024	1,857		1,857
Additional paid-in capital	1,717,061		1,716,997
Retained earnings (accumulated deficit)	(1,480,719)		(1,487,732)

Total NorthStar Healthcare Income, Inc. stockholders’ equity	238,199		231,122
Non-controlling interests	(2,374)		(2,093)
Total equity	235,825		229,029
Total liabilities and equity	$	1,057,236	$	1,129,905

_______________________________________

(1)Includes $67.4 million and $169.0 million of assets and liabilities, respectively, of certain VIEs that are consolidated by the Operating Partnership as of March 31, 2025. Refer to Note 2, “Summary of Significant Accounting Policies.”

Refer to accompanying notes to consolidated financial statements (unaudited).

Table of Contents

NORTHSTAR HEALTHCARE INCOME, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in Thousands, Except Per Share Data)

(Unaudited)


	Three Months Ended March 31,
		2025		2024
Property and other revenues
Resident fee income		$	13,436	$	12,296
Rental income		36,834		35,559
Other revenue		3,291		897
Total property and other revenues		53,561		48,752
Expenses
Property operating expenses		33,943		33,381
Interest expense		10,847		12,862
Transaction costs		2,399		16
General and administrative expenses		2,858		3,327
Depreciation and amortization		8,092		8,901
Impairment loss		64		456
Total expenses		58,203		58,943
Other income (expense)
Other income (expense), net		—		1,000
Gain (loss) on investments and other		11,610		150
Income (loss) before equity in earnings (losses) of unconsolidated ventures and income tax expense		6,968		(9,041)
Equity in earnings (losses) of unconsolidated ventures		—		1,014
Income tax expense		(20)		(20)
Net income (loss)		6,948		(8,047)
Net (income) loss attributable to non-controlling interests		65		115
Net income (loss) attributable to NorthStar Healthcare Income, Inc. common stockholders		$	7,013	$	(7,932)
Net income (loss) per share of common stock, basic/diluted(1)		$	0.04	$	(0.04)
Weighted average number of shares of common stock outstanding, basic/diluted(1)		185,712,103		185,712,103
Distributions declared per share of common stock		$	—	$	—

_______________________________________

(1) The Company had 300,333 and 203,742 restricted stock units issued and outstanding as of March 31, 2025 and 2024, respectively. The impact of the restricted stock units on the diluted earnings per share calculation is de minimis for the three months ended March 31, 2025. The restricted stock units have been excluded from the diluted earnings per share calculation as their impact is anti-dilutive due to the net loss generated during the three months ended March 31, 2024.

Refer to accompanying notes to consolidated financial statements (unaudited).

Table of Contents

NORTHSTAR HEALTHCARE INCOME, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY

(Dollars and Shares in Thousands)

(Unaudited)


	Common Stock			Additional Paid-in Capital		Retained Earnings (Accumulated Deficit)		Total Company’s Stockholders’ Equity		Non-controlling Interests		Total Equity
	Shares	Amount
Balance as of December 31, 2023	185,712	$	1,857	$	1,716,757	$	(1,585,725)	$	132,889	$	(1,209)	$	131,680
Amortization of equity-based compensation	—	—		56		—		56		—		56
Non-controlling interests - contributions	—	—		—		—		—		13		13
Non-controlling interests - distributions	—	—		—		—		—		(38)		(38)
Net income (loss)	—	—		—		(7,932)		(7,932)		(115)		(8,047)
Balance as of March 31, 2024 (Unaudited)	185,712	$	1,857	$	1,716,813	$	(1,593,657)	$	125,013	$	(1,349)	$	123,664

Balance as of December 31, 2024	185,712	$	1,857	$	1,716,997	$	(1,487,732)	$	231,122	$	(2,093)	$	229,029
Amortization of equity-based compensation	—	—		64		—		64		—		64
Non-controlling interests - contributions	—	—		—		—		—		16		16
Non-controlling interests - distributions	—	—		—		—		—		(232)		(232)
Net income (loss)	—	—		—		7,013		7,013		(65)		6,948
Balance as of March 31, 2025 (Unaudited)	185,712	$	1,857	$	1,717,061	$	(1,480,719)	$	238,199	$	(2,374)	$	235,825

Refer to accompanying notes to consolidated financial statements (unaudited).

Table of Contents

NORTHSTAR HEALTHCARE INCOME, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in Thousands)

(Unaudited)


	Three Months Ended March 31,
	2025		2024
Cash flows from operating activities:
Net income (loss)	$	6,948	$	(8,047)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Equity in (earnings) losses of unconsolidated ventures	—		(1,014)
Depreciation and amortization	8,092		8,901
Impairment loss	64		456

Amortization of below market debt	242		844


Amortization of deferred financing costs	125		140
Amortization of equity-based compensation	64		56

(Gain) loss on investments and other	(11,610)		178
Change in allowance for uncollectible accounts	184		139

Changes in assets and liabilities:
Receivables, net	173		(438)
Other assets	576		628
Due to related party	—		(121)
Accounts payable and accrued expenses	2,779		(1,203)
Other liabilities	(375)		408
Net cash provided by (used in) operating activities	7,262		927
Cash flows from investing activities:
Capital expenditures for operating real estate	(1,519)		(2,926)
Proceeds from sales of real estate	87,189		11,573







Net cash provided by (used in) investing activities	85,670		8,647
Cash flows from financing activities:

Repayments of mortgage notes	(83,254)		(15,299)


Payments on financing and other obligations	(19)		(13)
Contributions from non-controlling interests	16		13
Distributions to non-controlling interests	(232)		(38)
Net cash provided by (used in) financing activities	(83,489)		(15,337)
Net increase (decrease) in cash, cash equivalents and restricted cash	9,443		(5,763)
Cash, cash equivalents and restricted cash-beginning of period	352,369		92,943
Cash, cash equivalents and restricted cash-end of period	$	361,812	$	87,180


	Three Months Ended March 31,
	2025		2024
Supplemental disclosure of cash flow information:
Cash paid for interest	$	7,956	$	8,673

Supplemental disclosure of non-cash investing and financing activities:
Accrued capital expenditures	$	1,037	$	972
Reclassification of assets held for sale	—		534

Refer to accompanying notes to consolidated financial statements (unaudited).

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NORTHSTAR HEALTHCARE INCOME, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Business and Organization

NorthStar Healthcare Income, Inc., together with its consolidated subsidiaries (the “Company”), owns a diversified portfolio of seniors housing properties, including independent living facilities (“ILFs”), assisted living facilities (“ALFs”) and memory care facilities (“MCFs”) located throughout the United States.

The Company was formed in October 2010 as a Maryland corporation and commenced operations in February 2013. The Company elected to be taxed as a real estate investment trust (“REIT”) under the Internal Revenue Code of 1986, as amended (the “Code”), commencing with the taxable year ended December 31, 2013. The Company has conducted its operations, and intends to do so in the future, so as to continue to qualify as a REIT for U.S. federal income tax purposes.

Substantially all of the Company’s business is conducted through NorthStar Healthcare Income Operating Partnership, LP (the “Operating Partnership”). The Company is the sole general partner of the Operating Partnership. The limited partners of the Operating Partnership are NorthStar Healthcare Income Advisor, LLC and NorthStar Healthcare Income OP Holdings, LLC (the “Special Unit Holder”), which became indirect subsidiaries of the Company on June 9, 2023. NorthStar Healthcare Income Advisor, LLC invested $1,000 in the Operating Partnership in exchange for common units and the Special Unit Holder invested $1,000 in the Operating Partnership and was issued a separate class of limited partnership units (the “Special Units”), which were collectively recorded as non-controlling interests on the accompanying consolidated balance sheets prior to June 9, 2023. As the Company issued shares, it contributed substantially all of the proceeds from its continuous, public offerings to the Operating Partnership as a capital contribution. As of March 31, 2025, the Company’s limited partnership interest in the Operating Partnership, directly or indirectly, was 100%.

The Company’s charter authorizes the issuance of up to 400.0 million shares of common stock with a par value of $0.01 per share and up to 50.0 million shares of preferred stock with a par value of $0.01 per share. The board of directors of the Company (the “Board”) is authorized to amend its charter, without the approval of the stockholders, to increase the aggregate number of authorized shares of capital stock or the number of shares of any class or series that the Company has authority to issue.

The Company raised $2.0 billion in total gross proceeds from the sale of shares of common stock in its continuous, public offerings (the “Offering”), including $232.6 million pursuant to its distribution reinvestment plan (the “DRP”).

The Internalization

From inception through October 21, 2022, the Company was externally managed by CNI NSHC Advisors, LLC or its predecessor (the “Former Advisor”), an affiliate of NRF Holdco, LLC (the “Former Sponsor”). The Former Advisor was responsible for managing the Company’s operations, subject to the supervision of the Board, pursuant to an advisory agreement. On October 21, 2022, the Company completed the internalization of the Company’s management function (the “Internalization”). In connection with the Internalization, the Company agreed with the Former Advisor to terminate the advisory agreement and arranged for the Former Advisor to continue to provide certain services for a transition period.

Merger Agreement

On January 29, 2025, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Compound Holdco LLC, a Delaware limited liability company (the “Parent”), Compound Merger Sub LLC, a Delaware limited liability company and a subsidiary of Parent (the “Merger Sub”), and, solely for purposes of Section 10.14 thereof, Welltower OP LLC, a Delaware limited liability company and a subsidiary of Welltower Inc. (the “Guarantor”). The Merger Agreement provides that, subject to the terms and conditions set forth in the Merger Agreement, the Company will merge with and into Merger Sub, with Merger Sub continuing as the surviving entity (the “Merger”). The Merger Agreement and the transactions contemplated thereby were unanimously approved by the Board.

Upon consummation of the Merger, the Company’s stockholders will receive $3.03 in cash for each share of the Company’s common stock, without interest and subject to any applicable withholding tax obligations.

The completion of the Merger is subject to certain customary closing conditions, including, among others, (1) approval of the Merger by the Company’s stockholders; (2) material compliance with covenants; (3) accuracy of each party’s representations, subject to materiality thresholds; (4) absence of injunctions or orders that prohibit or restrain the consummation of the Merger; (5) the receipt by the Company and Merger Sub of a written legal opinion addressing the Company’s qualification as a REIT; (6) the absence of a material adverse effect on the Company prior to the closing; and (7) the Company’s completion of the distribution of the interests in the limited partners of the Company’s operating partnership to the Company.

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(Unaudited)

The Company has made customary representations and warranties and has agreed to certain customary covenants in the Merger Agreement, including, among others, covenants to conduct its business in the ordinary course and maintain its REIT status.

The Company’s stockholders will be asked to vote to approve the Merger at a special meeting of stockholders that will be held on June 4, 2025. Approval of the Merger requires the affirmative vote of the holders of at least a majority of the shares of the Company’s outstanding common stock entitled to vote on the Merger as of the record date for the special meeting.

The Merger is expected to close in June 2025, although there can be no assurances as to when or if the closing will occur.

2. Summary of Significant Accounting Policies

Basis of Accounting

The accompanying consolidated financial statements and related notes of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial reporting and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, certain information and note disclosures normally included in the consolidated financial statements prepared under U.S. GAAP have been condensed or omitted. In the opinion of management, all adjustments considered necessary for a fair presentation of the Company’s financial position, results of operations and cash flows have been included and are of a normal and recurring nature. The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. These consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024, which was filed with the U.S. Securities and Exchange Commission on March 14, 2025.

Reclassifications

Prior period amounts have been reclassified on the consolidated balance sheets and consolidated statement of cash flows from escrow deposit payable to other liabilities to conform to the current period presentation.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company, the Operating Partnership and their consolidated subsidiaries. The Company consolidates entities in which it has a controlling financial interest by first considering if an entity meets the definition of a variable interest entity (“VIE”) for which the Company is deemed to be the primary beneficiary or if the Company has the power to control an entity through majority voting interest or other arrangements. All significant intercompany balances are eliminated in consolidation.

Variable Interest Entities

A VIE is an entity that lacks one or more of the characteristics of a voting interest entity. A VIE is defined as an entity in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. The determination of whether an entity is a VIE includes both a qualitative and quantitative analysis. The Company bases its qualitative analysis on its review of the design of the entity, its organizational structure including decision-making ability and relevant financial agreements and the quantitative analysis on the forecasted cash flow of the entity. The Company reassesses its initial evaluation of an entity as a VIE upon the occurrence of certain reconsideration events.

A VIE must be consolidated only by its primary beneficiary, which is defined as the party who, along with its affiliates and agents, has both the: (i) power to direct the activities that most significantly impact the VIE’s economic performance; and (ii) obligation to absorb the losses of the VIE or the right to receive the benefits from the VIE, which could be significant to the VIE. The Company determines whether it is the primary beneficiary of a VIE by considering qualitative and quantitative factors, including, but not limited to: which activities most significantly impact the VIE’s economic performance and which party controls such activities; the amount and characteristics of its investment; the obligation or likelihood for the Company or other interests to provide financial support; consideration of the VIE’s purpose and design, including the risks the VIE was designed to create and pass through to its variable interest holders and the similarity with and significance to the business activities of the Company and the other interests. The Company reassesses its determination of whether it is the primary beneficiary of a VIE each reporting period. Judgments related to these determinations include estimates about the current and future fair value and performance of investments held by these VIEs and general market conditions.

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(Unaudited)

As of March 31, 2025, the Company has identified certain consolidated and unconsolidated VIEs. Assets of each of the VIEs may only be used to settle obligations of the respective VIE. Creditors of each of the VIEs have no recourse to the general credit of the Company.

Consolidated VIEs

The most significant VIEs of the Company are certain entities that are consolidated by the Operating Partnership. These entities are VIEs because of non-controlling interests owned by third parties, which do not have substantive kick-out or participating rights. Included in operating real estate, net and mortgage notes payable, net on the Company’s consolidated balance sheet as of March 31, 2025 is $62.8 million and $143.5 million, respectively, related to such consolidated VIEs.

Unconsolidated VIEs

As of March 31, 2025, the Company identified unconsolidated VIEs related to its investments in unconsolidated ventures with a carrying value totaling $0.7 million. The Company’s maximum exposure to loss as of March 31, 2025 would not exceed the carrying value of its investment in the VIEs. The Company determined that it is not the primary beneficiary of these VIEs and, accordingly, they are not consolidated in the Company’s financial statements as of March 31, 2025. The Company did not provide financial support to its unconsolidated VIEs during the three months ended March 31, 2025. As of March 31, 2025, there were no explicit arrangements or implicit variable interests that could require the Company to provide financial support to its unconsolidated VIEs.

Voting Interest Entities

A voting interest entity is an entity in which the total equity investment at risk is sufficient to enable it to finance its activities independently and the equity holders have the power to direct the activities of the entity that most significantly impact its economic performance, the obligation to absorb the losses of the entity and the right to receive the residual returns of the entity. The usual condition for a controlling financial interest in a voting interest entity is ownership of a majority voting interest. If the Company has a majority voting interest in a voting interest entity, the entity will generally be consolidated. The Company does not consolidate a voting interest entity if there are substantive participating rights by other parties and/or kick-out rights by a single party or through a simple majority vote.

The Company performs on-going reassessments of whether entities previously evaluated under the voting interest framework have become VIEs, based on certain events, and therefore subject to the VIE consolidation framework.

Investments in Unconsolidated Ventures

The Company will account for an investment under the equity method of accounting if it has the ability to exercise significant influence over the operating and financial policies of an entity, but does not have a controlling financial interest. Under the equity method, the investment is adjusted each period for capital contributions and distributions and its share of the entity’s net income (loss). Capital contributions, distributions and net income (loss) of such entities are recorded in accordance with the terms of the governing documents. An allocation of net income (loss) may differ from the stated ownership percentage interest in such entity as a result of preferred returns and allocation formulas, if any, as described in such governing documents. Equity method investments are recognized using a cost accumulation model, in which the investment is recognized based on the cost to the investor, which includes acquisition fees. The Company records as an expense certain acquisition costs and fees associated with consolidated investments deemed to be business combinations and capitalizes these costs for investments deemed to be acquisitions of an asset, including an equity method investment.

The Company may elect the fair value option of accounting for an investment that would otherwise be accounted for under the equity method. The fair value option election allows an entity to make an irrevocable election of fair value for certain financial assets and liabilities on an instrument-by-instrument basis at the initial or subsequent measurement. The decision to elect the fair value option must be applied to an entire instrument and is irrevocable once elected. Under the fair value option, the Company records its share of the changes to fair value of the investment through gain (loss) on investments and other in the consolidated statements of operations. On June 30, 2023, the Company elected the fair value option method to account for its investment in the Espresso joint venture, which has now liquidated its remaining real estate assets. The Company’s assessment of fair value for its unconsolidated investment in the Espresso joint venture considers the joint venture’s available cash, less wind down costs and other expenses. Refer to Note 4 “Investment in Unconsolidated Ventures” and Note 10 “Fair Value” for further discussion.

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(Unaudited)

Non-controlling Interests

A non-controlling interest in a consolidated subsidiary is defined as the portion of the equity (net assets) in a subsidiary not attributable, directly or indirectly, to the Company. A non-controlling interest is required to be presented as a separate component of equity on the consolidated balance sheets and presented separately as net income (loss) and comprehensive income (loss) attributable to controlling and non-controlling interests. An allocation to a non-controlling interest may differ from the stated ownership percentage interest in such entity as a result of a preferred return and allocation formula, if any, as described in the relevant governing documents.

Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that could affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could materially differ from those estimates and assumptions. Any estimates of the effects of inflation, interest rates, risk of recession and other economic conditions as reflected and/or discussed in these financial statements are based upon the Company's best estimates using information known to the Company as of the date of this Quarterly Report on Form 10-Q. Such estimates may change and the impact of which could be material.

Cash, Cash Equivalents and Restricted Cash

The Company considers all highly-liquid investments with an original maturity date of three months or less to be cash equivalents. Cash, including amounts restricted, may at times exceed the Federal Deposit Insurance Corporation deposit insurance limit of $250,000 per institution. The Company mitigates credit risk by placing cash and cash equivalents with major financial institutions and interest yielding money market funds invested in short-term U.S. government securities. Interest income from these investments are classified as other revenue on the consolidated statements of operations. To date, the Company has not experienced any losses on cash and cash equivalents.

Restricted cash consists of amounts related to operating real estate (escrows for taxes, capital expenditures and security deposits received from residents) and other escrows required by lenders of the Company’s borrowings. In November 2024, the Company extended the maturity date of the borrowings collateralized by the properties of Winterfell portfolio, which required the Company to advance $35 million to be held in escrow and applied to repay the mortgage loans on the original maturity date or any earlier prepayment.

The following table provides a reconciliation of cash, cash equivalents and restricted cash as reported on the consolidated balance sheets to the total of such amounts as reported on the consolidated statements of cash flows (dollars in thousands):


	March 31, 2025 (Unaudited)		December 31, 2024
Cash and cash equivalents	$	322,935	$	312,123
Restricted cash	38,877		40,246
Total cash, cash equivalents and restricted cash	$	361,812	$	352,369

Operating Real Estate

Operating real estate is carried at historical cost less accumulated depreciation. Major replacements and betterments which improve or extend the life of the asset are capitalized and depreciated over their useful life. Ordinary repairs and maintenance are expensed as incurred. Operating real estate is depreciated using the straight-line method over the estimated useful life of the assets, summarized as follows:


Category:						Term:
Building						40 years
Building improvements						Lesser of the useful life or remaining life of the building
Land improvements						10 to 15 years
Tenant improvements						Lesser of the useful life or remaining term of the lease
Furniture, fixtures and equipment						5 to 9 years

Construction costs incurred in connection with the Company’s investments are capitalized and included in operating real estate, net on the consolidated balance sheets. Construction in progress is not depreciated until the asset is available for its intended use.

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(Unaudited)

Lessee Accounting

A leasing arrangement, a right to control the use of an identified asset for a period of time in exchange for consideration, is classified by the lessee either as a finance lease, which represents a financed purchase of the leased asset, or as an operating lease. For leases with terms greater than 12 months, a lease asset and a lease liability are recognized on the balance sheet at commencement date based on the present value of lease payments over the lease term.

Lease renewal or termination options are included in the lease asset and lease liability only if it is reasonably certain that the option to extend would be exercised or the option to terminate would not be exercised. As the implicit rate in most leases are not readily determinable, the Company’s incremental borrowing rate for each lease at commencement date is used to determine the present value of lease payments. Consideration is given to the Company’s recent debt financing transactions, as well as publicly available data for instruments with similar characteristics, adjusted for the respective lease term, when estimating incremental borrowing rates.

Lease expense is recognized over the lease term based on an effective interest method for finance leases and on a straight-line basis for operating leases.

Right of Use (“ROU”) - Finance Assets

The Company has entered into finance leases for equipment which are included in operating real estate, net on the Company’s consolidated balance sheets. As of March 31, 2025, furniture, fixtures and equipment under finance leases totaled $0.3 million. The leased equipment is amortized on a straight-line basis. Payments for finance leases totaled $18,666 and $9,399 for the three months ended March 31, 2025 and 2024, respectively.

The following table presents the future minimum lease payments under finance leases and the present value of the minimum lease payments, which are included in other liabilities on the Company’s consolidated balance sheets (dollars in thousands):


April 1 through December 31, 2025	$	56
Years Ending December 31:
2026	70
2027	55
2028	42
2029	29
Thereafter	7
Total minimum lease payments	$	259
Less: Amount representing interest	(46)
Present value of minimum lease payments	$	213

The weighted average interest rate related to the finance lease obligations is 8.6% with a weighted average lease term of 3.9 years.

As of March 31, 2025, there were no leases that had yet to commence which would create significant rights and obligations to the Company as lessee.

Assets Held For Sale

The Company classifies certain long-lived assets as held for sale once the criteria, as defined by U.S. GAAP, have been met and are expected to sell within one year. Long-lived assets to be disposed of are reported at the lower of their carrying amount or fair value minus cost to sell, with any write-down recorded to impairment loss on the consolidated statements of operations. Depreciation and amortization is not recorded for assets classified as held for sale.

As of March 31, 2025, the Company did not have any assets classified as held for sale. As of December 31, 2024, the Company had five properties classified as held for sale on its consolidated balance sheets, which were sold in January 2025.

Deferred Costs

Deferred costs consist of deferred financing costs. Deferred financing costs represent commitment fees, legal and other third-party costs associated with obtaining financing. These costs are recorded against the carrying value of such financing and are amortized to interest expense over the term of the financing using the effective interest method. Unamortized deferred financing

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(Unaudited)

costs are expensed to gain (loss) on investments and other, when the associated borrowing is repaid before maturity. Costs incurred in seeking financing transactions which do not close are expensed in the period in which it is determined that the financing will not occur.

Derivative Instruments

The Company uses derivative instruments to manage its interest rate risk. The Company’s derivative instruments are recorded at fair value. The accounting for changes in fair value of derivatives depends upon whether or not the Company has elected to designate the derivative in a hedging relationship and the derivative qualifies for hedge accounting. Under hedge accounting, changes in fair value for derivatives are recorded through other comprehensive income. When hedge accounting is not elected, changes in fair value for derivatives are recorded through the income statement.

The Company has interest rate caps that have not been designated for hedge accounting. As of March 31, 2025, the Company has one interest rate cap agreement in place. The fair value of the Company's interest rate cap totaled $0.1 million and $0.2 million as of March 31, 2025 and December 31, 2024, respectively, and is presented in other assets on the consolidated balance sheets. Changes in fair value of derivatives have been recorded in gain (loss) on investments and other in the consolidated statements of operations. The Company recognized losses related to changes in fair value totaling $0.1 million for the three months ended March 31, 2025 and 2024.

Revenue Recognition

Operating Real Estate

Rental income from operating real estate is derived from leasing of space to operators and residents, including rent received from the Company’s net lease properties and rent, ancillary service fees and other related revenue earned from ILF residents. Rental income recognition commences when the operator takes legal possession of the leased space and the leased space is substantially ready for its intended use. The leases are for fixed terms of varying length and generally provide for rentals and expense reimbursements to be paid in monthly installments. Rental income from leases, which includes community and move-in fees, is recognized over the term of the respective leases. ILF resident agreements are generally short-term in nature and may allow for termination with 30 days’ notice.

The Company also generates revenue from operating healthcare properties. Revenue related to operating healthcare properties includes resident room and care charges, ancillary fees and other resident service charges. Rent is charged and revenue is recognized when such services are provided, generally defined per the resident agreement as of the date upon which a resident occupies a room or uses the services. Resident agreements are generally short-term in nature and may allow for termination with 30 days’ notice. Revenue derived from our ALFs and MCFs is recorded in resident fee income in the consolidated statements of operations.

Revenue from operators and residents is recognized at lease commencement only to the extent collection is expected to be probable. This assessment is based on several qualitative and quantitative factors, including and as appropriate, the payment history, ability to satisfy its lease obligations, the value of the underlying collateral or deposit, if any, and current economic conditions. If collection is assessed to not be probable, thereafter lease income recognized is limited to amounts collected, with the reversal of any revenue recognized to date in excess of amounts received. If collection is subsequently reassessed to be probable, revenue is adjusted to reflect the amount that would have been recognized had collection always been assessed as probable.

For the three months ended March 31, 2025 and 2024, total property and other revenue includes variable lease revenue of $3.7 million and $3.5 million, respectively. Variable lease revenue includes ancillary services provided to residents, as well as non-recurring services and fees at the Company’s operating facilities.

Impairment on Operating Real Estate and Investments in Unconsolidated Ventures

Operating Real Estate and Assets Held for Sale

The Company’s real estate portfolio is reviewed on a quarterly basis, or more frequently as necessary, to assess whether there are any indicators that the value of its operating real estate may be impaired or that its carrying value may not be recoverable. A property’s value may be impaired if the Company’s estimate of the aggregate expected future undiscounted cash flow generated by the property is less than the carrying value. In conducting this review, the Company considers U.S. macroeconomic factors, real estate and healthcare sector conditions, together with asset specific and other factors. To the extent an impairment has

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(Unaudited)

occurred, the loss is measured as the excess of the carrying value of the property over the estimated fair value and recorded as impairment loss in the consolidated statements of operations.

Real estate held for sale is stated at the lower of its carrying amount or estimated fair value less disposal cost, with any write-down to disposal cost recorded as an impairment loss. For any increase in fair value less disposal cost subsequent to classification as held for sale, the impairment may be reversed, but only up to the amount of cumulative loss previously recognized.

The Company considered the potential impact of the lasting effects of inflation, elevated interest rates, risk of recession and other economic conditions on the future net operating income of its real estate held for investment as an indicator of impairment. Fair values were estimated based upon the income capitalization approach, using net operating income for each property and applying indicative capitalization rates.

During the three months ended March 31, 2025, the Company recorded impairment losses on its operating real estate totaling $0.1 million for property damage sustained by a facility within the Winterfell portfolio.

During the three months ended March 31, 2024, the Company recorded impairment losses on its operating real estate totaling $0.5 million to reflect the market value of a land parcel within the Rochester portfolio designated as held for sale and for property damage sustained by facilities within the Winterfell and Aqua portfolios.

Investments in Unconsolidated Ventures

The Company reviews its investments in unconsolidated ventures on a quarterly basis, or more frequently as necessary, to assess whether there are any indicators that the value may be impaired or that its carrying value may not be recoverable. An investment is considered impaired if the projected net recoverable amount over the expected holding period is less than the carrying value. In conducting this review, the Company considers global macroeconomic factors, including real estate sector conditions, together with investment specific and other factors. To the extent an impairment has occurred on the Company’s investment in unconsolidated ventures, and is considered to be other than temporary, the loss is measured as the excess of the carrying value of the investment over the estimated fair value and recorded in impairment loss in the consolidated statements of operations.

During the three months ended March 31, 2025 and 2024, the Company did not record impairment on its investments in unconsolidated ventures.

Credit Losses on Receivables

The current expected credit loss model, in estimating expected credit losses over the life of a financial instrument at the time of origination or acquisition, considers historical loss experiences, current conditions and the effects of reasonable and supportable expectations of changes in future macroeconomic conditions. The Company assesses the estimate of expected credit losses on a quarterly basis or more frequently as necessary. The Company considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts.

The Company measures expected credit losses of receivables on a collective basis when similar risk characteristics exist. If the Company determines that a particular receivable does not share risk characteristics with its other receivables, the Company evaluates the receivable for expected credit losses on an individual basis.

When developing an estimate of expected credit losses on receivables, the Company considers available information relevant to assessing the collectability of cash flows. This information may include internal information, external information, or a combination of both relating to past events, current conditions, and reasonable and supportable forecasts. The Company considers relevant qualitative and quantitative factors that relate to the environment in which the Company operates and are specific to the borrower.

Further, the fair value of the collateral, less estimated costs to sell, may be used when determining the allowance for credit losses for a receivable for which the repayment is expected to be provided substantially through the sale of the collateral when the borrower is experiencing financial difficulty.

As of March 31, 2025, the Company has not recorded an allowance for credit losses on its receivables.

Acquisition Fees and Expenses

The Company expensed certain acquisition costs and fees associated with transactions deemed to be business combinations and capitalized these costs for transactions deemed to be acquisitions of an asset, including an equity investment.

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(Unaudited)

Equity-Based Compensation

The Company accounts for equity-based compensation awards using the fair value method, which requires an estimate of fair value of the award at the time of grant. All fixed equity-based awards to directors, which have no vesting conditions other than time of service, are amortized to compensation expense over the awards’ vesting period on a straight-line basis. Equity-based compensation is classified within general and administrative expenses in the consolidated statements of operations.

Income Taxes

The Company elected to be taxed as a REIT and to comply with the related provisions of the Code beginning in its taxable year ended December 31, 2013. Accordingly, the Company will generally not be subject to U.S. federal income tax to the extent of its distributions to stockholders as long as certain asset, gross income and share ownership tests are met. To maintain its qualification as a REIT, the Company must annually distribute dividends equal to at least 90.0% of its REIT taxable income (with certain adjustments) to its stockholders and meet certain other requirements. The Company believes that all of the criteria to maintain the Company’s REIT qualification have been met for the applicable periods.

For the taxable year ended December 31, 2024, the Company anticipates that its REIT taxable income, if any, will be offset by its net operating loss carry-forward and as such, the Company is not subject to the distribution requirements. The Company’s most recently filed tax return is for the year ended December 31, 2023 and includes a net operating loss carry-forward of $349.2 million.

If the Company were to fail to meet these requirements, it would be subject to U.S. federal income tax and potential interest and penalties, which could have a material adverse impact on its results of operations and amounts available for distributions to its stockholders. The Company’s accounting policy with respect to interest and penalties is to classify these amounts as a component of income tax expense, where applicable. The Company has assessed its tax positions for all open tax years, which include 2020 to 2024, and concluded there were no material uncertainties to be recognized. The Company may also be subject to certain state, local and franchise taxes. Under certain circumstances, federal income and excise taxes may be due on its undistributed taxable income.

The Company made a joint election to treat certain subsidiaries as taxable REIT subsidiaries (“TRS”) which may be subject to U.S. federal, state and local income taxes. In general, a TRS of the Company may perform services for managers/operators/residents of the Company, hold assets that the Company cannot hold directly and may engage in any real estate or non-real estate related business.

Certain subsidiaries of the Company are subject to taxation by federal and state authorities for the periods presented. Income taxes are accounted for by the asset/liability approach in accordance with U.S. GAAP. Deferred taxes, if any, represent the expected future tax consequences when the reported amounts of assets and liabilities are recovered or paid. Such amounts arise from differences between the financial reporting and tax bases of assets and liabilities and are adjusted for changes in tax laws and tax rates in the period which such changes are enacted. A provision for income tax represents the total of income taxes paid or payable for the current period, plus the change in deferred taxes. Current and deferred taxes are provided on the portion of earnings (losses) recognized by the Company with respect to its interest in the TRS.

The Company recorded an income tax expense of $20,000 for the three months ended March 31, 2025 and 2024.

Deferred income tax assets and liabilities are calculated based on temporary differences between the Company’s U.S. GAAP consolidated financial statements and the federal and state income tax basis of assets and liabilities as of the consolidated balance sheet date. The Company evaluates the realizability of its deferred tax assets (e.g., net operating loss and capital loss carryforwards) and recognizes a valuation allowance if, based on the available evidence, it is more likely than not that some portion or all of its deferred tax assets will not be realized. When evaluating the realizability of its deferred tax assets, the Company considers estimates of expected future taxable income, existing and projected book/tax differences, tax planning strategies available and the general and industry specific economic outlook. This realizability analysis is inherently subjective, as it requires the Company to forecast its business and general economic environment in future periods. Changes in estimate of deferred tax asset realizability, if any, are included in provision for income tax expense in the consolidated statements of operations. The Company has a deferred tax asset and continues to have a full valuation allowance recognized, as there are no changes in the facts and circumstances to indicate that the Company should release the valuation allowance.

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(Unaudited)

The components of the Company’s deferred tax assets as of March 31, 2025 and December 31, 2024 are as follows (in thousands):


	March 31, 2025 (Unaudited)		December 31, 2024
Fixed assets and other	$	866	$	833
Net operating losses	16,489		16,500
Total deferred tax assets	$	17,355	$	17,333
Valuation allowance	(17,355)		(17,333)
Net deferred income tax assets	$	—	$	—

Recent Accounting Pronouncements

Accounting Standards Adopted in 2025

None.

Future Application of Accounting Standards

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires disclosure of incremental income tax information within the rate reconciliation and expanded disclosures of income taxes paid, among other disclosure requirements. ASU No. 2023-09 is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company plans to adopt ASU No. 2023-09 in its Annual Report on Form 10-K for the fiscal year ended December 31, 2025 and does not anticipate the application of the accounting standards will have a material impact on the Company’s financial statements.

In November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expenses Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which is intended to enhance transparency of income statement disclosures primarily through additional disaggregation of relevant expense captions. The standard is effective for annual reporting periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027, with prospective or retrospective application permitted. The Company is currently evaluating the impact of adopting this new standard on the Company’s financial statements.

3. Operating Real Estate

The following table presents operating real estate, net (dollars in thousands):


	March 31, 2025 (Unaudited)		December 31, 2024
Land	$	94,528	$	94,528
Land improvements	8,672		8,543
Buildings and improvements	760,750		759,876

Construction in progress	202		145
Furniture, fixtures and equipment	94,462		93,030
Subtotal	$	958,614	$	956,122
Less: Accumulated depreciation	(269,901)		(261,809)
Operating real estate, net	$	688,713	$	694,313

For the three months ended March 31, 2025 and 2024, depreciation expense was $8.1 million and $8.8 million, respectively.

Within the table above, operating real estate has been reduced by accumulated impairment losses of $130.7 million and $130.6 million as of March 31, 2025 and December 31, 2024, respectively. For the three months ended March 31, 2025 and 2024, impairment losses, as presented on the consolidated statements of operations, for the Company’s operating real estate and properties held for sale totaled $0.1 million and $0.5 million, respectively. Refer to Note 2, “Summary of Significant Accounting Policies” for further discussion.

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(Unaudited)

The following table presents the managers of the Company’s operating real estate (dollars in thousands):


	As of March 31, 2025		Three Months Ended March 31, 2025
Manager	Properties Under Management	Units Under Management	Resident Fee and Rental Revenues		% of Total Property and Other Revenues
Solstice Senior Living	32	3,969	$	36,689	73.0	%
Watermark Retirement Communities(1)	4	418	5,869		11.6	%
Arete Living	5	453	6,271		12.5	%
Integral Senior Living	1	40	1,296		2.6	%
Subtotal	42	4,880	50,125		99.7	%
Properties sold in 2025(2)	5	653	145		0.3	%
Total			$	50,270	100.0	%

______________________________________

(1)Excludes properties sold in the first quarter of 2025 and the Rochester Sub-Portfolio, which was placed into a receivership in October 2023.

(2)In January 2025, the Company sold one property that was managed by Watermark Retirement Communities and four net lease properties operated by Arcadia Management.

Rochester Sub-Portfolio

As a result of the mortgage loan payment defaults in July 2023, on October 30, 2023, the Rochester Sub-Portfolio (as defined in Note 5, “Borrowings”) was placed into a receivership. The receiver now has effective control of the properties until ownership of the properties transfers to the lender or its designee.

As a result of the Company’s loss of control, the Company discontinued recognizing revenues and expenses related to the Rochester Sub-Portfolio as of October 30, 2023 and derecognized the properties and related assets from the Company’s financial statements, which resulted in a $59.0 million loss recognized in accordance with ASC 610-20, “Gains and Losses from the Derecognition of Nonfinancial Assets” during the year ended December 31, 2023.

4. Investments in Unconsolidated Ventures

The Company’s investments in unconsolidated ventures are accounted for under the equity method or fair value option. The following table presents the Company’s investments in unconsolidated ventures (dollars in thousands):


			Carrying Value				Equity in Earnings (Losses)
			March 31, 2025 (Unaudited)		December 31, 2024		Three Months Ended March 31,
Portfolio	Acquisition Date	Ownership					2025		2024
Espresso(1)	Jul-2015	36.7%	$	740	$	740	$	—	$	—
Trilogy(2)	Dec-2015	24.0%	—		—		—		1,052
Solstice	Jul-2017	20.0%	—		—		—		(38)
Investments in Unconsolidated Ventures			$	740	$	740	$	—	$	1,014

_______________________________________

(1)The Company elected the fair value option to account for its interest in Espresso on June 30, 2023, which resulted in no equity in earnings (losses) recorded subsequent to the accounting policy election.

(2)Represents the Company’s proportionate share of earnings through the date of sale of the Company’s ownership interest on September 20, 2024.

Espresso

During the year ended December 31, 2023, FC Domino Acquisition, LLC (“Espresso”) completed the sale of its remaining sub-portfolios. The Company’s elected the fair value option method to account for its investment in Espresso on June 30, 2023. The Company’s assessment of fair value for its investment in Espresso considers the joint venture’s available cash, less wind down costs and other expenses. During the three months ended March 31, 2025, the Company did not record any changes to the fair value of its investment in Espresso.

Trilogy

Trilogy REIT Holdings, LLC (“Trilogy”) indirectly owns integrated senior health campuses, providing services associated with ILFs, ALFs, MCFs and skilled nursing facilities, located in the Midwest, which are all operating properties managed pursuant to a management agreement with Trilogy Management Services, as well as ancillary services businesses, including a therapy

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(Unaudited)

business and a pharmacy business. Affiliates of American Healthcare REIT, Inc. (“AHR”) own the controlling interest of Trilogy.

The Company, acting through subsidiaries of its operating partnership, entered into a membership interest purchase agreement (the “Option Agreement”) on November 3, 2023 with AHR and its subsidiary granting to AHR the right to purchase all of the Company’s ownership interest in Trilogy and on September 20, 2024, the Company completed the sale in accordance with the Option Agreement, which resulted in net cash proceeds, after transaction costs, received by the Company totaling $254.0 million.

Solstice

Solstice Senior Living, LLC (“Solstice”), the manager of the Winterfell portfolio, is a joint venture between affiliates of Integral Senior Living, LLC (“ISL”), a management company of ILFs, ALFs and MCFs founded in 2000, which owns 80.0%, and the Company, which owns 20.0%.

During the year ended December 31, 2024, Solstice recorded a non-cash expense accrual related to performance-based compensation for its executive team. The Company’s proportionate share of the expenses accrual reduced the carrying value of its investment in Solstice to zero as of December 31, 2024.

5. Borrowings

The following table presents the Company’s mortgage notes payable (dollars in thousands):


				March 31, 2025 (Unaudited)				December 31, 2024
	Recourse vs. Non-Recourse(1)	Maturity	Contractual Interest Rate(2)	Principal Amount(3)		Carrying Value(3)		Principal Amount(3)		Carrying Value(3)

Aqua Portfolio
Frisco, TX	Non-recourse	Feb 2026	SOFR + 2.91%	$	26,000	$	25,867	$	26,000	$	25,832
Milford, OH	Non-recourse	Sep 2026	SOFR + 2.79%	17,959		17,876		18,014		17,914
Rochester Portfolio
Rochester, NY(4)	Non-recourse	Jul 2023	SOFR + 2.45%	99,786		99,786		99,786		99,786
Arbors Portfolio(5)
Various locations	Non-recourse	Repaid	3.99%	—		—		79,293		79,282
Winterfell Portfolio(6)
Various locations	Non-recourse	Jun 2026	4.17%	566,503		565,175		570,047		568,435
Pacific Northwest Portfolio(7)
Various locations	Non-recourse	Feb 2027	4.66%	64,970		64,831		65,332		65,173
Mortgage notes payable, net				$	775,218	$	773,535	$	858,472	$	856,422

_______________________________________

(1)Subject to non-recourse carve-outs.

(2)Floating-rate borrowings total $143.7 million of principal outstanding as of March 31, 2025 and reference one-month of the Secured Overnight Financing Rate (“SOFR”).

(3)The difference between principal amount and carrying value of mortgage notes payable is attributable to deferred financing costs, net for all borrowings, other than for the Winterfell portfolio, which is attributable to below market debt intangibles.

(4)Composed of seven individual mortgage notes payable secured by the Rochester Sub-Portfolio (as defined below), which are cross-collateralized and in default and were accelerated in July 2023.

(5)Composed of four individual mortgage notes payable secured by four ALFs, cross-collateralized and subject to cross-default.

(6)Composed of 32 individual mortgage notes payable secured by 32 ILFs, cross-collateralized and subject to cross-default.

(7)Composed of five individual mortgage notes payable secured by five ALFs, cross-collateralized and subject to cross-default.

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(Unaudited)

The following table presents future scheduled principal payments on mortgage notes payable as of March 31, 2025 (dollars in thousands):


April 1 through December 31, 2025(1)	$	146,197
Years Ending December 31:
2026	566,625
2027	62,396

Total	$	775,218

_______________________________________

(1)Includes the outstanding principal of the Rochester Sub-Portfolio Loan (as defined below), which is in default.

Rochester Sub-Portfolio Loan

In July 2023, the Company elected not to use cash reserves to pay July debt service on seven cross-defaulted and cross-collateralized mortgage notes with an aggregate principal amount outstanding of $99.8 million (the “Rochester Sub-Portfolio Loan") secured by five ILFs and two ALFs (the “Rochester Sub-Portfolio") that did not generate sufficient cash flow to pay debt service in full. The Rochester Sub-Portfolio Loan is non-recourse to the Company, subject to limited customary exceptions.

As a result of the payment default, on October 25, 2023, the lender filed a complaint seeking the appointment of a receiver and foreclosure on the underlying properties and to enforce its rights in its collateral under the loan documents and, on October 30, 2023, the Rochester Sub-Portfolio was placed into a receivership to facilitate an orderly transition of the operations, and eventually ownership, of the properties.

Once legal ownership of the Rochester Sub-Portfolio transfers and the obligations under the Rochester Sub-Portfolio Loan are extinguished, the Company expects to recognize a gain related to the debt extinguishment in accordance with ASC 470, “Debt.” However, until the extinguishment occurs, default interest expense and any other expenses related to the Rochester Sub-Portfolio Loan will continue to accrue. As of March 31, 2025, $99.8 million of outstanding mortgage debt and $23.0 million of accrued interest expense were included on the Company's consolidated balance sheets related to the Rochester Sub-Portfolio Loan.

6. Related Party Arrangements

Former Advisor

In connection with the Internalization, on October 21, 2022, the advisory agreement was terminated and, along with the Operating Partnership and the Former Advisor, the Company entered into a Transition Services Agreement (the “TSA”) to facilitate an orderly transition of the Company’s management of its operations. As of December 31, 2023, the TSA was effectively terminated.

Prior to the Internalization, the Former Advisor was responsible for managing the Company’s affairs on a day-to-day basis and for identifying, acquiring, originating and asset managing investments on behalf of the Company. For such services, to the extent permitted by law and regulations, the Former Advisor received fees and reimbursements from the Company.

Investments in Unconsolidated Ventures

Solstice, the manager of the Winterfell portfolio, is a joint venture between affiliates of Integral Senior Living (“ISL”), which owns 80.0%, and the Company, which owns 20.0%. For the three months ended March 31, 2025, the Company recognized property management fees and other incentive fees expense of $3.0 million to Solstice related to the Winterfell portfolio.

7. Equity-Based Compensation

The Company adopted a long-term incentive plan, as amended (the “Plan”), which it may use to attract and retain qualified officers, directors, employees and consultants, as well as an independent directors compensation plan, which is a component of the Plan. Under the Plan, 2.0 million shares of restricted common stock were eligible to be issued for any equity-based awards granted under the Plan.

Pursuant to the Plan, as of March 31, 2025, the Company’s independent directors were granted a total of 159,932 shares of restricted common stock and 300,333 restricted stock units totaling $1.3 million and $1.0 million, respectively, based on the share price on the date of each grant.

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(Unaudited)

The restricted common stock and restricted stock units granted generally vest quarterly over two years in equal installments and will become fully vested on the earlier occurrence of: (i) the termination of the independent director’s service as a director due to his or her death or disability; or (ii) a change in control of the Company. The restricted stock units are convertible, on a one-for-one basis, into shares of the Company’s common stock upon the earlier occurrence of: (i) the termination of the independent director’s service as a director; or (ii) a change in control of the Company.

The Company recognized equity-based compensation expense of $63,750 and $56,250 for the three months ended March 31, 2025 and 2024, respectively. Equity-based compensation expense is recorded in general and administrative expenses in the consolidated statements of operations.

Unrecognized expense related to unvested restricted stock units totaled $191,250 and $255,000 as of March 31, 2025 and December 31, 2024, respectively. Unvested restricted stock units totaled 71,248 and 94,201 as of March 31, 2025 and December 31, 2024, respectively.

8. Stockholders’ Equity

Common Stock

The Company stopped accepting subscriptions for its Offering on December 17, 2015 and all of the shares initially registered for its Offering were issued on or before January 19, 2016. The Company issued 173.4 million shares of common stock generating gross proceeds of $1.7 billion, excluding proceeds from the DRP.

Distribution Reinvestment Plan

The Company adopted the DRP through which common stockholders were able to elect to reinvest an amount equal to the distributions declared on their shares in additional shares of the Company’s common stock in lieu of receiving cash distributions. Since inception, the Company issued 25.7 million shares of common stock, generating gross offering proceeds of $232.6 million pursuant to the DRP. No selling commissions or dealer manager fees were paid on shares issued pursuant to the DRP. In April 2022, the Board elected to suspend the DRP, effective April 30, 2022.

Distributions

Effective February 1, 2019, the Board determined to stop the declaration and payment of regular recurring distributions in order to preserve capital and liquidity.

On April 20, 2022, the Board declared a special distribution of $0.50 per share for each stockholder of record on May 2, 2022 totaling approximately $97.0 million.

Share Repurchase Program

The Company adopted a share repurchase program that enabled stockholders to sell their shares to the Company in limited circumstances and could be amended, suspended, or terminated at any time. The Company previously funded repurchase requests with cash on hand, borrowings or other available capital. In April 2020, the Board determined to suspend all repurchases under the share repurchase program effective April 30, 2020 in order to preserve capital and liquidity and does not currently anticipate resuming the share repurchase program.

9. Non-controlling Interests

Operating Partnership

Non-controlling interests included the aggregate limited partnership interests in the Operating Partnership held by limited partners, other than the Company. Income (loss) attributable to the non-controlling interests was based on the limited partners’ ownership percentage of the Operating Partnership. The Company acquired limited partner interests in 2023 as part of the consideration for the sale of certain investments in unconsolidated ventures and, as a result, the Company’s limited partnership interest in the Operating Partnership, directly or indirectly, is 100%. Income (loss) allocated to the Operating Partnership non-controlling interests for the period prior to June 9, 2023 was de minimis.

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Other

Other non-controlling interests represent third-party equity interests in ventures that are consolidated with the Company’s financial statements. Net loss attributable to the other non-controlling interests was $0.1 million for the three months ended March 31, 2025 and 2024.

10. Fair Value

Fair Value Measurement

The fair value of financial instruments is categorized based on the priority of the inputs to the valuation technique and categorized into a three-level fair value hierarchy. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure the financial instruments fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.

Financial assets and liabilities recorded at fair value on the consolidated balance sheets are categorized based on the inputs to the valuation techniques as follows:

Level 1.Quoted prices for identical assets or liabilities in an active market.

Level 2.Financial assets and liabilities whose values are based on the following:

a.Quoted prices for similar assets or liabilities in active markets.

b.Quoted prices for identical or similar assets or liabilities in non-active markets.

c.Pricing models whose inputs are observable for substantially the full term of the asset or liability.

d.Pricing models whose inputs are derived principally from or corroborated by observable market data for substantially the full term of the asset or liability.

Level 3.Prices or valuation techniques based on inputs that are both unobservable and significant to the overall fair value measurement.

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(Unaudited)

Derivative Instruments

Derivative instruments consist of interest rate contracts and foreign exchange contracts that are generally traded over-the-counter, and are valued using a third-party service provider. Quotations on over-the-counter derivatives are not adjusted and are generally valued using observable inputs such as contractual cash flows, yield curve, foreign currency rates and credit spreads, and are classified as Level 2 of the fair value hierarchy. Although credit valuation adjustments, such as the risk of default, rely on Level 3 inputs, these inputs are not significant to the overall valuation of its derivatives. As a result, derivative valuations in their entirety are classified as Level 2 of the fair value hierarchy.

Fair Value Hierarchy

Financial assets recorded at fair value on a recurring basis are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The following table presents financial assets that were accounted for at fair value on a recurring basis as of March 31, 2025 and December 31, 2024 by level within the fair value hierarchy (dollars in thousands):


	March 31, 2025 (Unaudited)						December 31, 2024
	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Financial assets:
Derivative assets - interest rate caps	$	—	$	118	$	—	$	—	$	184	$	—
Investment in Espresso joint venture	—		—		740		—		—		740

Derivative Assets - Interest Rate Caps

The fair value of the Company’s interest rate caps are determined using models developed by the respective counterparty that use the market standard methodology of discounting the future expected cash receipts that would occur if variable interest rates rise above the strike rate of the caps. The floating interest rates used in the calculation of projected receipts on the caps are based on an expectation of future interest rates derived from observable market interest rate curves and volatilities.

Investment in Espresso Joint Venture

During the year ended December 31, 2023, Espresso completed the sale of its remaining assets. The Company’s assessment of fair value for its investment in Espresso takes into consideration its proportionate share of available cash, less wind down costs and other expenses. During the three months ended March 31, 2025, the Company did not record any changes to the fair value of its investment in the Espresso joint venture. During the year ended December 31, 2024, the Company recorded a change to the fair value of its investment in Espresso totaling $0.6 million as a result of lower than anticipated wind down costs, which increased the fair value of its investment to $0.7 million as of December 31, 2024.

The following table presents the change in fair value of the Company’s investment in Espresso using unobservable Level 3 inputs for the three months ended March 31, 2025 and the year ended December 31, 2024 (dollars in thousands):


	Three Months Ended		Year Ended
	March 31, 2025 (Unaudited)		December 31, 2024

Beginning balance	$	740	$	142
Cash distributions received	—		—
Mark-to-market adjustment	—		598
Ending balance	$	740	$	740

Fair Value of Financial Instruments

U.S. GAAP requires disclosure of fair value about all financial instruments. The following disclosure of estimated fair value of financial instruments was determined by the Company using available market information and appropriate valuation methodologies. Considerable judgment is necessary to interpret market data and develop estimated fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realize on disposition of the financial instruments. The use of different market assumptions and/or estimation methodologies may have a material effect on estimated fair value.

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(Unaudited)

The following table presents the principal amount, carrying value and fair value of certain financial assets and liabilities (dollars in thousands):


	March 31, 2025 (Unaudited)						December 31, 2024
	Principal Amount		Carrying Value		Fair Value		Principal Amount		Carrying Value		Fair Value
Financial liabilities:(1)
Mortgage notes payable, net	$	775,218	$	773,535	$	745,057	$	858,472	$	856,422	$	826,009

_______________________________________

(1)The fair value of other financial instruments not included in this table is estimated to approximate their carrying value.

Disclosure about fair value of financial instruments is based on pertinent information available to management as of the reporting date. Although management is not aware of any factors that would significantly affect fair value, such amounts have not been comprehensively revalued for purposes of these consolidated financial statements since that date and current estimates of fair value may differ significantly from the amounts presented herein.

Mortgage Notes Payable

The Company primarily uses rates currently available with similar terms and remaining maturities to estimate fair value. These measurements are determined using comparable U.S. Treasury and SOFR rates as of the end of the reporting period. These fair value measurements are based on observable inputs and, as such, are classified as Level 2 of the fair value hierarchy.

Nonrecurring Fair Values

The Company measures fair value of certain assets on a nonrecurring basis when events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. Adjustments to fair value generally result from the application of lower of amortized cost or fair value accounting for assets held for sale or otherwise or write-down of asset values due to impairment.

The following table summarizes the fair value and impairment losses of Level 3 assets which have been measured at fair value on a nonrecurring basis at the time of impairment during the periods presented (dollars in thousands):


	Three Months Ended				Year Ended
	March 31, 2025 (Unaudited)				December 31, 2024
	Fair Value		Impairment Losses(1)		Fair Value		Impairment Losses(1)
Operating real estate, net	$	—	$	—	$	12,191	$	3,000
Assets held for sale	—		—		680		304

_______________________________________

(1)Excludes impairment losses for property damage sustained by facilities.

Operating Real Estate, Net

Operating real estate that is impaired is carried at fair value at the time of impairment. Impairment was driven by various factors that impacted undiscounted future net cash flows, including declines in operating performance, market growth assumptions and expected margins to be generated by the properties. Fair value of impaired operating real estate is generally estimated based upon various approaches including third party appraisals, offer prices and discounted cash flow analyses using terminal capitalization rates and discount rates. During the year ended December 31, 2024, the Company performed a discounted cash flow analysis, which assumed a terminal capitalization rate of 7.75% and a discount rate of 9.25%, to estimate the fair value of the Oak Cottage property at the time of impairment.

Assets Held For Sale

Assets held for sale are carried at the lower of amortized cost or fair value. Assets held for sale that were written down to fair value are generally valued using either broker opinions of value, or a combination of market information, including third-party appraisals and indicative sale prices, adjusted as deemed appropriate by management to account for the inherent risk associated with specific properties. In all cases, the fair value of assets held for sale is reduced for estimated selling costs. As of March 31, 2025, the Company did not have any assets classified as held for sale. During the year ended December 31, 2024, the Company used estimated net sales proceeds to determine the fair value for assets that required impairment at the time of reclassification to held for sale, which included two land parcels within the Rochester portfolio.

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(Unaudited)

11. Segment Reporting

As of March 31, 2025, the Company operated its business through two reportable segments: operating investments and net lease investments. The prior period segment information provided has been updated to conform to the current period presentation. Within its operating investments segment, the Company owns seniors housing properties, including ILFs, ALFs and MCFs located throughout the United States and operated pursuant to management agreements. Within its net lease investments segment, the Company owned four ALFs located in New York, which were sold in January 2025. Non-segment revenue consists primarily of interest income earned on corporate cash and cash equivalents and non-segment assets consist of corporate cash and cash equivalents. The accounting policies for the segments are the same as those described in the summary of significant accounting policies. Refer to Note 2, “Summary of Significant Accounting Policies” for further discussion.

The Company’s chief operating decision maker (“CODM”) is the Chief Executive Officer of the Company. The Company evaluates performance of its segments based on consolidated net operating income (“NOI”), defined as property and other revenues, less property operating expenses, as presented on the consolidated statements of operations. NOI provides useful information to stockholders and provides management with a performance measure to compare the Company's operating results to the operating results of other healthcare real estate companies between periods on a consistent basis. The CODM uses NOI to make decisions about resource allocations, primarily during the annual budget and forecasting process, and to assess the property-level performance of the Company’s seniors housing properties.

The following tables present information for the reportable segments (in thousands):


Three Months Ended March 31, 2025	Operating Investments		Net Lease Investments		Non-Segment		Total
Resident fee income	$	13,436	$	—	$	—	$	13,436
Rental income	36,689		145		—		36,834
Other revenue(1)	94		—		3,197		3,291
Total property and other revenues	$	50,219	$	145	$	3,197	$	53,561
Less(2):
Salaries and wages	15,529		—		—		15,529
Utilities	3,507		—		—		3,507
Food and beverage	2,543		—		—		2,543
Repairs and maintenance	3,196		—		—		3,196
Real estate and business taxes	2,148		—		—		2,148
Property management and incentive fees	3,657		—		—		3,657
Marketing	1,137		—		—		1,137
Insurance	1,013		—		—		1,013
Other segment expenses(3)	1,213		—		—		1,213
Total property operating expenses	33,943		—		—		33,943
Net operating income	$	16,276	$	145	$	3,197	$	19,618
Less:
Interest expense							(10,847)
Transaction costs							(2,399)
General and administrative expenses							(2,858)
Depreciation and amortization							(8,092)
Impairment loss							(64)
Other income (expense), net							—
Gain (loss) on investments and other							11,610
Equity in earnings (losses) of unconsolidated ventures							—
Income tax expense							(20)
Net income (loss)							$	6,948

Total capital expenditures	$	1,519	$	—	$	—	$	1,519

_______________________________________

(1)Primarily consists of interest income earned on corporate cash and cash equivalents.

(2)The significant expense categories and amounts align with the information that is regularly provided to the CODM.

(3)Other segment expenses include property administration, bad debt, resident life, travel and entertainment and other property operating expenses.

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NORTHSTAR HEALTHCARE INCOME, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)


Three Months Ended March 31, 2024	Operating Investments		Net Lease Investments		Non-Segment		Total
Resident fee income	$	12,296	$	—	$	—	$	12,296
Rental income	35,559		—		—		35,559
Other revenue(1)	17		—		880		897
Total property and other revenues	$	47,872	$	—	$	880	$	48,752
Less(2):
Salaries and wages	15,607		—		—		15,607
Utilities	3,300		—		—		3,300
Food and beverage	2,524		—		—		2,524
Repairs and maintenance	3,525		—		—		3,525
Real estate and business taxes	2,388		—		—		2,388
Property management and incentive fees	2,440		—		—		2,440
Marketing	1,130		—		—		1,130
Insurance	1,273		—		—		1,273
Other segment expenses(3)	1,194		—		—		1,194
Total property operating expenses	33,381		—		—		33,381
Net operating income	$	14,491	$	—	$	880	$	15,371
Less:
Interest expense							(12,862)
Transaction costs							(16)
General and administrative expenses							(3,327)
Depreciation and amortization							(8,901)
Impairment loss							(456)
Other income (expense), net							1,000
Gain (loss) on investments and other							150
Equity in earnings (losses) of unconsolidated ventures							1,014
Income tax expense							(20)
Net income (loss)							$	(8,047)

Total capital expenditures	$	2,926	$	—	$	—	$	2,926

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(1)Primarily consists of interest income earned on corporate cash and cash equivalents.

(2)The significant expense categories and amounts align with the information that is regularly provided to the CODM.

(3)Other segment expenses include property administration, bad debt, resident life, travel and entertainment and other property operating expenses.

The following table presents total assets by segment (dollars in thousands):


	March 31, 2025 (Unaudited)		December 31, 2024
Assets:
Operating investments	$	744,155	$	756,188
Net lease investments	—		71,301
Non-segment	313,081		302,416
Total assets	$	1,057,236	$	1,129,905

12. Commitments and Contingencies

As of March 31, 2025, the Company believes there are no material unrecorded contingencies that would affect its results of operations, cash flows or financial position.

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NORTHSTAR HEALTHCARE INCOME, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Litigation and Claims

The Company may be involved in various litigation matters arising in the ordinary course of its business. Although the Company is unable to predict with certainty the eventual outcome of any litigation, any current legal proceedings are not expected to have a material adverse effect on its financial position or results of operations.

The Company’s managers may be involved in various litigation matters arising in the ordinary course of their business. The unfavorable resolution of any such actions, investigations or claims could, individually or in the aggregate, materially adversely affect such managers’ or the Company’s liquidity, financial condition or results of operations, which, in turn, could have a material adverse effect on the Company.

Environmental Matters

The Company follows a policy of monitoring its properties for the presence of hazardous or toxic substances. While there can be no assurance that a material environmental liability does not exist at its properties, the Company is not currently aware of any environmental liability with respect to its properties that would have a material effect on its consolidated financial position, results of operations or cash flows. Further, the Company is not aware of any material environmental liability or any unasserted claim or assessment with respect to an environmental liability that it believes would require additional disclosure or the recording of a loss contingency.

General Uninsured Losses

The Company obtains various types of insurance to mitigate the impact of professional liability, property, business interruption, liability, flood, windstorm, earthquake, environmental and terrorism related losses. The Company attempts to obtain appropriate policy terms, conditions, limits and deductibles considering the relative risk of loss, the cost of such coverage and current industry practice. Disruptions in insurance markets may increase the costs of coverage and result in the Company retaining more risk, to the extent it is more commercially reasonable to do so. In addition, there are also certain types of extraordinary losses, such as those due to acts of war or other events, that may be either uninsurable or not economically insurable.

Solstice Incentive Fees

On November 1, 2022, each of the management agreements with Solstice for the Winterfell portfolio properties were amended to include, among other things, a long-term incentive fee (the “Incentive Fee”) payable to Solstice if the Winterfell portfolio achieved certain performance goals related to growth in net operating income through 2025.

In the event that the aggregate net operating income generated by the Winterfell portfolio exceeds certain performance goals for the twelve months ending December 31, 2025, or an earlier date if the Winterfell portfolio is sold and Solstice is terminated as the manager, the Company may be required to pay to Solstice an amount equal to 5-20% of the aggregate net operating income for that period in excess of the performance target, calculated in accordance with the terms of the management agreements and subject to the terms and conditions set forth in the management agreements, payable on or before March 2026.

The Company determined that it is probable that the Incentive Fee will be payable based on performance achieved by the Winterfell portfolio during the year ended December 31, 2024, and, as a result, accrued an estimated reserve of $6.0 million as of December 31, 2024. During the three months ended March 31, 2025, the Company increased its estimated reserve by $1.1 million as a result of performance achieved by the Winterfell portfolio during the three months ended March 31, 2025.

13. Subsequent Events

There were no material events which have occurred subsequent to March 31, 2025 through the issuance of the consolidated financial statements.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with our consolidated financial statements and notes thereto included in Part I, Item 1. “Financial Statements” and the risk factors in Part II, Item 1A. “Risk Factors.” References to “we,” “us,” “our,” or “NorthStar Healthcare” refer to NorthStar Healthcare Income, Inc. and its subsidiaries unless the context specifically requires otherwise.

Overview

We own a diversified portfolio of seniors housing properties, including independent living facilities, or ILFs, assisted living facilities, or ALFs, and memory care facilities, or MCFs, located throughout the United States.

We were formed in October 2010 as a Maryland corporation and commenced operations in February 2013. We elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended, or the Code, commencing with the taxable year ended December 31, 2013. We conduct our operations so as to continue to qualify as a REIT for U.S. federal income tax purposes.

We raised $2.0 billion in total gross proceeds from the sale of shares of our common stock in our continuous, public offerings, including $232.6 million pursuant to our distribution reinvestment plan, or the DRP, collectively referred to as our Offering.

The Internalization

From inception through October 21, 2022, we were externally managed by CNI NSHC Advisors, LLC or its predecessor, or the Former Advisor, an affiliate of NRF Holdco, LLC, or the Former Sponsor. The Former Advisor was responsible for managing our operations, subject to the supervision of our board of directors, or the Board, pursuant to an advisory agreement. On October 21, 2022, we completed the internalization of our management function, or the Internalization. In connection with the Internalization, we agreed with the Former Advisor to terminate the advisory agreement.

Merger Agreement

On January 29, 2025, we entered into an Agreement and Plan of Merger, or the Merger Agreement, with Compound Holdco LLC, a Delaware limited liability company, or the Parent, Compound Merger Sub LLC, a Delaware limited liability company and a subsidiary of Parent, or the Merger Sub, and, solely for purposes of Section 10.14 thereof, Welltower OP LLC, a Delaware limited liability company and a subsidiary of Welltower Inc., or the Guarantor. The Merger Agreement provides that, subject to the terms and conditions set forth in the Merger Agreement, we will merge with and into Merger Sub, with Merger Sub continuing as the surviving entity, or the Merger. The Merger Agreement and the transactions contemplated thereby were unanimously approved by our Board.

Upon consummation of the Merger, our stockholders will receive $3.03 in cash for each share of our common stock, without interest and subject to any applicable withholding tax obligations.

The completion of the Merger is subject to certain customary closing conditions, including, among others, (1) approval of the Merger by our stockholders; (2) material compliance with covenants; (3) accuracy of each party’s representations, subject to materiality thresholds; (4) absence of injunctions or orders that prohibit or restrain the consummation of the Merger; (5) the receipt by us and Merger Sub of a written legal opinion addressing our qualification as a REIT; (6) the absence of a material adverse effect on us prior to the closing; and (7) our completion of the distribution of the interests in the limited partners of our operating partnership to NorthStar Healthcare.

We have made customary representations and warranties and have agreed to certain customary covenants in the Merger Agreement, including, among others, covenants to conduct our business in the ordinary course and maintain our REIT status.

Our stockholders will be asked to vote to approve, among other things, the Merger at a special meeting of stockholders that will be held on June 4, 2025. Approval of the Merger requires the affirmative vote of the holders of at least a majority of the shares of our outstanding common stock entitled to vote on the Merger as of the record date for the special meeting.

The Merger is expected to close in June 2025, although there can be no assurances as to when or if the closing will occur.

Our Strategy

Our primary objective is to maximize value and generate liquidity for stockholders. The key elements of our strategy include:

•Grow the Operating Income Generated by Our Portfolio. We are focused on growing the net operating income generated by our properties, through active portfolio management and selectively deploying capital expenditures to improve occupancy and resident rates while managing expenses, in an effort to enhance the overall value of our assets.

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•Pursue Disposition Opportunities that Maximize Value. We pursue dispositions of assets and portfolios where we believe the disposition will achieve a desired return or strategic outcome, with the goal of maximizing value for stockholders overall. Consistent with this strategy, we are presently pursuing the Merger, as described above.

Key Dispositions and Liquidity Update

•In January 2025, we completed the sale of the four net lease properties in the Arbors portfolio for $81.0 million. The sale generated net proceeds of $1.2 million, after the repayment of outstanding borrowings of $79.1 million and transaction costs.

•In January 2025, we completed the sale of the remaining property within the Rochester portfolio for $7.0 million. The sale generated net proceeds of $6.6 million, after transaction costs.

•As of May 5, 2025, we had approximately $335.2 million of unrestricted cash, a significant portion of which has been placed in interest yielding money market funds invested in short-term U.S. government securities.

Market Update

Current market conditions impacting property-level performance are generally favorable. Average occupancy for the seniors housing industry increased to 87.4% for the first quarter of 2025, up 30 basis points from the previous quarter and surpassed the pre-pandemic average of 87.1% in March 2020. Supply and demand fundamentals remained strong in the first quarter of 2025, with unit inventory growth of 1.3% year-over-year. Access to capital and cost of capital, as well as construction costs, remain significant headwinds to seniors housing development (sources: NIC MAP Vision 1Q2025 Market Fundamentals Report of the Top 32 metropolitan markets).

Operating Performance

The following is a summary of the performance of our seniors housing properties for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024. For additional information on financial results, refer to “—Results of Operations.”

The following table presents a summary of average occupancy of our seniors housing investments by property manager:


		Average Quarterly Occupancy
Manager	Units Under Management	Q1 2025		Q1 2024		Change
Solstice Senior Living	3,969	91.5	%	89.1	%	2.4	%
Watermark Retirement Communities(1)	418	87.6	%	84.2	%	3.4	%
Arete Living	453	91.6	%	89.6	%	2.0	%
Integral Senior Living	40	83.0	%	76.4	%	6.6	%
Seniors Housing Investments	4,880	91.1	%	88.6	%	2.5	%

_______________________________________

(1)Average quarterly occupancy excludes properties sold.

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Net Operating Income

We use net operating income, or NOI, as a supplemental measure to evaluate the profitability and performance of our business. We define NOI as defined as property and other revenues, less property operating expenses. The following table presents our consolidated NOI (dollars in thousands):


	Three Months Ended March 31,	Increase (Decrease)
		2025		2024		Amount		%
Same store property and other revenues(1)
Resident fee income		$	13,436	$	12,259	$	1,177	9.6	%
Rental income		36,689		33,679		3,010		8.9	%
Other revenue		94		17		77		452.9	%
Total same store property and other revenues		50,219		45,955		4,264		9.3	%
Same store property operating expenses(1)
Salaries and wages		15,529		15,170		359		2.4	%
Utilities		3,507		3,176		331		10.4	%
Food and beverage		2,543		2,430		113		4.7	%
Repairs and maintenance		3,196		3,402		(206)		(6.1)	%
Real estate and business taxes		2,148		2,197		(49)		(2.2)	%
Property management fee		2,554		2,345		209		8.9	%
Marketing		1,134		1,066		68		6.4	%
Insurance		964		1,227		(263)		(21.4)	%
All other expenses		1,071		1,080		(9)		(0.8)	%
Total same store property operating expenses		32,646		32,093		553		1.7	%
Same store NOI(1)		$	17,573	$	13,862	$	3,711	26.8	%
Non-same store NOI		(1,152)		629		(1,781)		(283.1)	%
Corporate NOI(2)		3,197		880		2,317		263.3	%
Total NOI(3)		$	19,618	$	15,371	$	4,247	27.6	%

_______________________________________

(1)Same store represents the revenues and expenses of our investments, excluding properties sold during the three months ended March 31, 2025, the Rochester Sub-Portfolio (as defined in “—Our Investments”) and the estimated expense accrued for the Incentive Fee ( as defined in “—Our Investments”) payable to the Winterfell manager.

(2)Consists primarily of interest income earned on corporate-level cash and cash equivalents.

(3)For a reconciliation of our consolidated NOI to net income (loss) as presented in accordance with U.S. GAAP in our consolidated financial statements for the three months ended March 31, 2025 and 2024, refer to “—Non-GAAP Financial Measures.”

Same Store NOI

During the three months ended March 31, 2025, the average occupancy for our operating investments improved by 2.5%, as compared to the corresponding period of the prior year, to 91.1%. The favorable seniors housing market conditions and our investment of capital to enhance the facilities of our properties contributed to the increase in occupancy. With our properties approaching stabilized occupancy levels, the managers of our operating investments have been focused on implementing resident rate increases and generating higher revenues, which outpaced the impact of inflation on variable operating costs over the same period. While certain operating expenses remained elevated, same store NOI increased 26.8% during the three months ended March 31, 2025, as compared to the corresponding period of the prior year.

Our Investments

We operate our seniors housing investments portfolio through two reportable segments: operating investments and net lease investments. Our operating investments segment includes properties operated pursuant to management agreements with managers, in which we own a controlling interest. Our net lease investments segment includes properties operated under net leases with an operator, in which we own a controlling interest. In January 2025, we completed the sale of all four properties in our net lease investment segment. We also hold assets outside of our reportable business segments, which include corporate assets, primarily cash and cash equivalents, as well as unconsolidated joint venture investments, in which we own a minority, non-controlling interest.

For financial information regarding our reportable segments, refer to Note 11, “Segment Reporting” in our accompanying consolidated financial statements included in Part I, Item 1. “Financial Statements.”

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The following table and charts present a summary of our seniors housing investments portfolio as of March 31, 2025 (dollars in thousands):


			Properties(1)
Investment Portfolio	Amount(2)		ILF	ALF	MCF	Total	Locations	Ownership Interest
Winterfell	$	759,658	32	—	—	32	12 U.S. States	100.0%
Pacific Northwest	96,314		—	5	—	5	Washington/Oregon	100.0%
Aqua	86,897		2	1	1	4	Texas/Ohio	97.0%

Oak Cottage	15,745		—	—	1	1	California	100.0%



Total Investments	$	958,614	34	6	2	42

_______________________________________

(1)Classification based on predominant services provided, but may include other services.

(2)Amount represents gross real estate carrying value, net of impairment, before accumulated depreciation, as presented in our consolidated financial statements as of March 31, 2025. For additional information, refer to “Note 3, Operating Real Estate” of Part I, Item 1. “Financial Statements.”


Property Type(1)						Geographic Location

_______________________________________

(1)Classification based on predominant services provided, but may include other services.

Our seniors housing investments include the following types of properties:

•Independent living facilities. ILFs are properties with central dining facilities that provide services that include security, housekeeping, nutrition and laundry services. ILFs are designed specifically for independent seniors who are able to live on their own, but desire the security and conveniences of community living. ILFs typically offer several services covered under a regular monthly fee. Fees at these communities are paid from private sources. As of March 31, 2025, we had 34 ILFs in our operating investments segment.

•Assisted living facilities. ALFs provide services that include minimal assistance for activities in daily living and permit residents to maintain some of their privacy and independence as they do not require constant supervision and assistance. Services may be bundled within one monthly fee or based on the care needs of the resident and usually include meals and dining, daily housekeeping, laundry, medical reminders and 24-hour availability of assistance. Revenues generated by ALFs primarily come from private pay sources, including private insurance, and government reimbursement programs, such as Medicaid, to a lesser extent. As of March 31, 2025, we had six properties that are predominantly ALFs in our operating investments segment.

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•Memory care facilities. MCFs offer specialized options for seniors with Alzheimer’s disease and other forms of dementia. These facilities offer dedicated care and specialized programming for various conditions relating to memory loss in a secured environment. Residents require a higher level of care and more assistance with activities of daily living than in ALFs. Therefore, these facilities have staff available 24 hours a day to respond to the unique needs of their residents. Fees at these communities are paid primarily from private sources and, to a lesser extent, government reimbursement, such as Medicaid. As of March 31, 2025, we had two properties that are predominantly MCFs in our operating investments segment.

Managers

The following table presents the managers of our seniors housing investments portfolio (dollars in thousands):


	As of March 31, 2025		Three Months Ended March 31, 2025
Manager	Properties Under Management	Units Under Management	Resident Fee and Rental Revenues		% of Total Resident Fee and Rental Revenues

Solstice Senior Living	32	3,969	$	36,689	73.0	%
Watermark Retirement Communities(1)	4	418	5,869		11.6	%
Arete Living	5	453	6,271		12.5	%
Integral Senior Living	1	40	1,296		2.6	%
Subtotal	42	4,880	50,125		99.7	%
Properties sold in 2025(2)	5	653	145		0.3	%
Total			$	50,270	100.0	%

_______________________________________

(1)Excludes properties sold in the first quarter of 2025 and the Rochester Sub-Portfolio, which was placed into a receivership in October 2023.

(2)In January 2025, we sold one property that was managed by Watermark Retirement Communities and four net lease properties operated by Arcadia Management.

Operating Investments

We engage independent managers to operate these facilities pursuant to management agreements, including procuring supplies, hiring and training all employees, entering into all third-party contracts for the benefit of the property, including resident/patient agreements, complying with laws and regulations, including but not limited to healthcare laws, and providing resident care and services, in exchange for a management fee. As a result, we must rely on our managers’ personnel, expertise, technical resources and information systems, risk management processes, proprietary information, good faith and judgment to manage our operating properties efficiently and effectively. We also rely on our managers to set appropriate resident fees, to provide accurate property-level financial results in a timely manner and otherwise operate our seniors housing facilities in compliance with the terms of our management agreements and all applicable laws and regulations.

Our management agreements generally provide for monthly management fees which are calculated based on various performance measures, including revenue, net operating income and other objective financial metrics. We are also required to reimburse our managers for expenses incurred in the operation of the properties, as well as to indemnify our managers in connection with potential claims and liabilities arising out of the operation of the properties. Our management agreements are terminable after a stated term with certain renewal rights, though we have the ability to terminate earlier upon certain events with or without the payment of a fee.

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The following table presents a summary of the terms of our management agreements:

Manager

Portfolio

Properties

Expiration Date

Management Fees

Solstice Senior Living

Winterfell

October 2025

•5% of monthly gross revenues, subject to certain exclusions

•7% of actual costs of certain capital projects

•Additional fees if net operating income exceeds annual target

•Additional fees if net operating income long-term growth is achieved

Watermark Retirement Communities(1)

Aqua

December 2025

•5% of monthly gross revenues, subject to certain exclusions

Aqua

February 2026

Arete Living

Pacific Northwest

January 2026

•4% of monthly gross revenues, plus 3% of monthly net operating income subject to certain exclusions

•Additional fees if net operating income exceeds annual target

Integral Senior Living

Oak Cottage

April 2026

•Greater of 5% of monthly gross revenues, subject to certain exclusions, or $12,000 per month

•Additional fees if net operating income exceeds annual target

_______________________________________

(1)Affiliates of Watermark also own a 3% non-controlling interest in the Aqua portfolio, which may impact various rights and economics under the management agreements.

Certain managed seniors housing properties are held through joint ventures, where an affiliate of the manager owns a 3% non-controlling interest, primarily to create alignment and incentives for the manager to perform. In addition, we own a 20% interest in Solstice Senior Living, LLC, or Solstice, a management platform formed with affiliates of Integral Senior Living, or ISL, the manager of the Winterfell portfolio, which gives us additional rights and minority protections.

On November 1, 2022, each of the management agreements with Solstice for the Winterfell portfolio properties were amended to include, among other things, a long-term incentive fee, or the Incentive Fee, payable to Solstice if the Winterfell portfolio achieved certain performance goals related to growth in net operating income through 2025.

In the event that the aggregate net operating income generated by the Winterfell portfolio exceeds certain performance goals for the twelve months ending December 31, 2025, or an earlier date if the Winterfell portfolio is sold and Solstice is terminated as the manager, we may be required to pay to Solstice amount equal to 5-20% of the aggregate net operating income for that period in excess of the performance target, calculated in accordance with the terms of the management agreements and subject to the terms and conditions set forth in the management agreements, payable on or before March 2026.

We determined that it is probable that the Incentive Fee will be payable based on performance achieved by the Winterfell portfolio during the year ended December 31, 2024, and, as a result, accrued an estimated reserve of $6.0 million as of December 31, 2024. During the three months ended March 31, 2025, we increased the estimated reserve by $1.1 million as a result of performance achieved by the Winterfell portfolio during the three months ended March 31, 2025.

Properties Sold

In our operating investments segment, in January 2025, we sold the remaining property within the Rochester portfolio managed by Watermark. The sale generated net proceeds totaling $6.6 million after transaction costs. We continue to have legal ownership of seven seniors housing properties, or the Rochester Sub-Portfolio, securing seven individual mortgage notes payable, or the Rochester Sub-Portfolio Loan, which were placed into a receivership in October 2023. We continue to work with the receiver and its advisors to facilitate an orderly transition of the ownership of the properties.

Our net lease investments segment included four ALF properties located in New York, or the Arbors portfolio, operated by Arcadia Management under net leases, which was sold in January 2025. The sale generated net proceeds of $1.2 million, after the repayment of outstanding borrowings of $79.1 million and transaction costs. Since February 2021, the operator failed to remit rent in full and comply with other contractual terms of its lease agreements, which resulted in a default under the operator’s leases. The sale allowed us to repay all outstanding borrowings in advance of a February 2025 debt maturity and exit an underperforming portfolio with a defaulted lease.

Unconsolidated Investments

As of March 31, 2025, our remaining unconsolidated investment with ongoing operations is our 20.0% minority interest in Solstice, the management platform formed with affiliates of ISL to exclusively manage one of our operating investments, the Winterfell portfolio.

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Critical Accounting Policies and Estimates

Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States, or U.S. GAAP, which requires the use of estimates and assumptions that involve the exercise of judgment and that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.

Certain accounting policies are considered to be critical accounting policies. Critical accounting policies are those that are most important to the portrayal of our financial condition and results of operations and require management’s subjective and complex judgments, and for which the impact of changes in estimates and assumptions could have a material effect on our financial statements. We believe that all of the decisions and assessments upon which our financial statements are based were reasonable at the time made, based upon information available to us at that time.

For a summary of our accounting policies, refer to Note 2, “Summary of Significant Accounting Policies” in our accompanying consolidated financial statements included in Part I, Item 1. “Financial Statements.”

Impairment

We believe impairment to be a critical accounting estimate based on the nature of our operations and/or because it requires significant management judgment and assumptions. Our investments are reviewed on a quarterly basis, or more frequently as necessary, to assess whether there are any indicators that the value of our investments may be impaired or that carrying value may not be recoverable. In conducting these reviews, we consider macroeconomic factors, including healthcare sector conditions, together with asset and market specific circumstances, among other factors. To the extent an impairment has occurred, the loss will be measured as the excess of the carrying value of the investment over the estimated fair value. Fair values can be estimated based upon the income capitalization approach, using net operating income and applying indicative capitalization and discount rates or sales comparison approach, using what other purchasers and sellers in the market have agreed to as price for comparable investments.

During the three months ended March 31, 2025, we recorded impairment losses on our operating real estate totaling $0.1 million for property damage sustained by a facility within the Winterfell portfolio. During the three months ended March 31, 2025, we did not record impairment on our investments in unconsolidated ventures.

Accumulated impairment losses totaled $130.7 million for operating real estate that we continue to hold as of March 31, 2025. Refer to our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 for additional information regarding impairment recorded in prior years.

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Results of Operations

Comparison of the three months ended March 31, 2025 to March 31, 2024 (dollars in thousands):


	Three Months Ended March 31,	Increase (Decrease)
		2025		2024		Amount		%
Property and other revenues
Resident fee income		$	13,436	$	12,296	$	1,140	9.3	%
Rental income		36,834		35,559		1,275		3.6	%
Other revenue		3,291		897		2,394		266.9	%
Total property and other revenues		53,561		48,752		4,809		9.9	%
Expenses
Property operating expenses		33,943		33,381		562		1.7	%
Interest expense		10,847		12,862		(2,015)		(15.7)	%
Transaction costs		2,399		16		2,383		NM
General and administrative expenses		2,858		3,327		(469)		(14.1)	%
Depreciation and amortization		8,092		8,901		(809)		(9.1)	%
Impairment loss		64		456		(392)		(86.0)	%
Total expenses		58,203		58,943		(740)		(1.3)	%
Other income (expense), net		—		1,000		(1,000)		(100.0)	%
Gain (loss) on investments and other		11,610		150		11,460		NM
Equity in earnings (losses) of unconsolidated ventures		—		1,014		(1,014)		(100.0)	%
Income tax expense		(20)		(20)		—		—	%
Net income (loss)		$	6,948	$	(8,047)	$	14,995	186.3	%

Rochester Sub-Portfolio

In October 2023, as a result of the payment default in July 2023 on the Rochester Sub-Portfolio Loan, Fannie Mae, as the lender, filed a complaint seeking the appointment of a receiver and foreclosure on the Rochester Sub-Portfolio and to enforce its rights in its collateral under the loan documents. On October 30, 2023, the properties underlying the Rochester Sub-Portfolio Loan were placed into a receivership. Although we continue to have legal ownership of the Rochester Sub-Portfolio until transferred to Fannie Mae or its designee, the receiver now has effective control of the properties and, as of the date of the receivership order, we discontinued recognizing revenues and expenses related to the Rochester Sub-Portfolio and derecognized the properties and related assets from our financial statements. However, until legal ownership of the Rochester Sub-Portfolio is transferred through a sale or foreclosure and the associated debt extinguished, we continue to recognize liabilities associated with the Rochester Sub-Portfolio Loan.

Total Property and Other Revenues

The following table presents total property and other revenues (dollars in thousands):


	Three Months Ended March 31,	Increase (Decrease)
		2025		2024		Amount		%
ILF properties		$	36,689	$	33,679	$	3,010	8.9	%
ALF/MCF properties		13,436		12,259		1,177		9.6	%
Same store subtotal		50,125		45,938		4,187		9.1	%

Properties sold		145		1,917		(1,772)		(92.4)	%
Other revenue		3,291		897		2,394		266.9	%
Total property and other revenues		$	53,561	$	48,752	$	4,809	9.9	%

On a same store basis, property and other revenues increased $4.2 million during the three months ended March 31, 2025, as compared to the corresponding period of the prior year. Revenues generated by our operating properties increased as a result of improved occupancy and higher market rates for new residents and in-place rates for existing residents. Other revenue, which consists of interest earned on cash and cash equivalents, increased during the three months ended March 31, 2025, as compared to the corresponding period of the prior year, due to higher cash balances.

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Property Operating Expenses

The following table presents property operating expenses (dollars in thousands):


	Three Months Ended March 31,	Increase (Decrease)
		2025		2024		Amount		%
ILF properties		$	22,989	$	22,738	$	251	1.1	%
ALF/MCF properties		9,657		9,355		302		3.2	%
Same store subtotal		32,646		32,093		553		1.7	%
Winterfell Manager Incentive Fee		1,103		—		1,103		NA

Properties sold		194		1,288		(1,094)		(84.9)	%
Total property operating expenses		$	33,943	$	33,381	$	562	1.7	%

On a same store basis, operating expenses increased $0.6 million during the three months ended March 31, 2025, as compared to the corresponding period of the prior year. The increase was primarily due to higher wages and benefits, food and beverage and utilities costs, which was partially offset by lower insurance premiums and repairs and maintenance costs.

During the three months ended March 31, 2025, we increased the estimated reserve related to the Incentive Fee payable to the Winterfell manager by $1.1 million. For additional information, refer to “—Our Investments.”

Interest Expense

The following table presents interest expense incurred on our borrowings (dollars in thousands):


	Three Months Ended March 31,	Increase (Decrease)
		2025		2024		Amount		%
ILF properties		$	6,203	$	6,973	$	(770)	(11.0)	%
ALF/MCF properties		1,554		1,563		(9)		(0.6)	%
Same store subtotal		7,757		8,536		(779)		(9.1)	%
Rochester Sub-Portfolio		2,805		3,095		(290)		(9.4)	%
Properties sold		285		1,231		(946)		(76.8)	%
Total interest expense		$	10,847	$	12,862	$	(2,015)	(15.7)	%

On a same store basis, interest expense decreased $0.8 million during the three months ended March 31, 2025, as compared to the corresponding period of the prior year. Interest expense on our fixed-rate debt declined as a result of continued principal amortization and a decrease in the average mortgage notes principal balances, as compared to the corresponding period of the prior year.

Interest expense for the Rochester Sub-Portfolio Loan decreased during the three months ended March 31, 2025, as compared to the corresponding period of the prior year, due to a lower Secured Overnight Financing Rate, or SOFR. We continue to recognize default interest, which commenced in July 2023 and will continue to accrue until the loan is extinguished.

Transaction Costs

Transaction costs increased $2.4 million during the three months ended March 31, 2025, as compared to the corresponding period of the prior year. During the three months ended March 31, 2025, transaction costs consisted primarily of legal and professional fees incurred in connection with the Merger. For additional information regarding the Merger, refer to “—Overview.” During the three months ended March 31, 2024, transaction costs consisted primarily of legal and professional fees incurred for corporate strategic initiatives.

General and Administrative Expenses

Corporate cost savings of $0.5 million were realized during the three months ended March 31, 2025, as compared to the corresponding period of the prior year, primarily due to lower audit related costs and employee compensation expense.

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Depreciation and Amortization

The following table presents depreciation and amortization (dollars in thousands):


	Three Months Ended March 31,	Increase (Decrease)
		2025		2024		Amount		%
ILF properties		$	6,493	$	6,213	$	280	4.5	%
ALF/MCF properties		1,599		1,608		(9)		(0.6)	%
Same store subtotal		8,092		7,821		271		3.5	%

Properties sold		—		1,080		(1,080)		(100.0)	%
Total depreciation and amortization		$	8,092	$	8,901	$	(809)	(9.1)	%

On a same store basis, depreciation and amortization expense increased $0.3 million during the three months ended March 31, 2025, as compared to the corresponding period of the prior year, primarily as a result of additional capital improvements completed at the facilities within our Winterfell portfolio.

Impairment Loss

For the three months ended March 31, 2025, we recorded impairment losses on our operating real estate totaling $0.1 million for property damage sustained by a facility within the Winterfell portfolio.

For the three months ended March 31, 2024, we recorded impairment losses on our operating real estate totaling $0.5 million to reflect the market value of a land parcel within the Rochester portfolio designated as held for sale and for property damage sustained by facilities within the Winterfell and Aqua portfolios.

Other Income (Expense), Net

For the three months ended March 31, 2025, we did not recognize other income or other expense. For the three months ended March 31, 2024, other income consisted of a consent fee received from the majority partner of the Trilogy joint venture.

Gain (Loss) on Investments and Other

During the three months ended March 31, 2025, we recognized gains on the sale of operating real estate, which totaled $11.7 million. The gains on sales were partially offset by losses recognized on a mortgage interest rate cap.

During the three months ended March 31, 2024, we recognized a gain on an insurance settlement within our Winterfell portfolio. The gain was partially offset by net losses recognized on mortgage interest rate caps.

Equity in Earnings (Losses) of Unconsolidated Ventures

The following table presents the equity in earnings (losses) of our unconsolidated ventures (dollars in thousands):


	Three Months Ended March 31,			Increase (Decrease)
	2025	2024		Amount		%
Solstice		$	—	$	(38)	$	38	(100.0)	%
Trilogy		—		1,052		(1,052)		100.0	%




Total equity in earnings (losses)		$	—	$	1,014	$	(1,014)	100.0	%

We did not recognize equity in earnings (losses) during the three months ended March 31, 2025, as compared to $1.0 million of earnings recognized during the corresponding period of the prior year, as a result of the sale of our ownership interest in Trilogy on September 20, 2024.

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Non-GAAP Financial Measures

We consider certain non-GAAP financial measures, including Funds from Operations, or FFO, Modified Funds from Operations, or MFFO, and NOI, to be useful supplemental measures of our operating performance. These non-GAAP financial measures are not equivalent or an alternative to net income (loss) or cash flow provided by operating activities determined in accordance with U.S. GAAP and should not be construed to be more relevant or accurate than the U.S. GAAP methodology in evaluating our operating performance. In addition, these non-GAAP financial measures are not necessarily indicative of cash flow available to fund our cash needs, including our ability to make distributions to our stockholders.

Funds from Operations and Modified Funds from Operations

We compute FFO in accordance with the standards established by the National Association of Real Estate Investment Trusts, or NAREIT, as net income (loss) (computed in accordance with U.S. GAAP), excluding gains (losses) from sales of depreciable property, the cumulative effect of changes in accounting principles, real estate-related depreciation and amortization, impairment on depreciable property owned directly or indirectly and after adjustments for unconsolidated ventures.

Due to certain of the unique features of publicly-registered, non-traded REITs, the IPA, an industry trade group, standardized a performance measure known as MFFO and recommends the use of MFFO for such REITs. Management believes MFFO is a useful performance measure to evaluate our business and further believes it is important to disclose MFFO in order to be consistent with the IPA recommendation and other non-traded REITs. Neither the SEC nor any other regulatory body has approved the acceptability of the adjustments that we use to calculate MFFO. In the future, the SEC or another regulatory body may decide to standardize permitted adjustments across the non-listed REIT industry and we may need to adjust our calculation and characterization of MFFO.

We define MFFO in accordance with the concepts established by the IPA. Our computation of MFFO may not be comparable to other REITs that do not calculate MFFO using the same method MFFO is calculated using FFO. FFO, as defined by NAREIT, is a computation made by analysts and investors to measure a real estate company’s operating performance. The IPA’s definition of MFFO excludes from FFO the following items:

•acquisition fees and expenses;

•non-cash amounts related to straight-line rent and the amortization of above or below market and in-place intangible lease assets and liabilities (which are adjusted in order to reflect such payments from an accrual basis of accounting under U.S. GAAP to a cash basis of accounting);

•amortization of a premium and accretion of a discount on debt investments;

•non-recurring impairment of real estate-related investments that meet the specified criteria identified in the rules and regulations of the SEC;

•realized gains (losses) from the early extinguishment of debt;

•realized gains (losses) on the extinguishment or sales of hedges, foreign exchange, securities and other derivative holdings except where the trading of such instruments is a fundamental attribute of our business;

•unrealized gains (losses) from fair value adjustments on real estate securities, including CMBS and other securities, interest rate swaps and other derivatives not deemed hedges and foreign exchange holdings;

•unrealized gains (losses) from the consolidation from, or deconsolidation to, equity accounting;

•adjustments related to contingent purchase price obligations; and

•adjustments for consolidated and unconsolidated partnerships and joint ventures calculated to reflect MFFO on the same basis as above.

MFFO does have certain limitations. For instance, realized gains (losses) from acquisitions and dispositions and other adjustments listed above are not reported in MFFO, even though such realized gains (losses) and other adjustments could affect our operating performance and cash available for distribution. Any mark-to-market or fair value adjustments may be based on many factors, including current operational or individual property issues or general market or overall industry conditions. Investors should note that while impairment charges are excluded from the calculation of MFFO, investors are cautioned that due to the fact that impairments are based on estimated future undiscounted cash flow and the relatively limited term of a non-traded REIT’s anticipated operations, it could be difficult to recover any impairment charges through operational net revenues or cash flow prior to any liquidity event. MFFO is not a useful measure in evaluating net asset value, since impairment is taken into

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account in determining net asset value but not in determining MFFO. In addition, MFFO may not be a useful measure of our operating performance or as a comparable measure to other typical non-traded REITs if we do not continue to operate in a similar manner to other non-traded REITs.

The following table presents a reconciliation of net income (loss) attributable to common stockholders to FFO and MFFO attributable to common stockholders (dollars in thousands):


	Three Months Ended March 31,
		2025		2024
Funds from operations:
Net income (loss) attributable to NorthStar Healthcare Income, Inc. common stockholders		$	7,013	$	(7,932)
Adjustments:
Depreciation and amortization		8,092		8,901
Depreciation and amortization related to non-controlling interests		(22)		(33)
Depreciation and amortization related to unconsolidated ventures		—		4,042
(Gain) loss from sales of property		(11,735)		38
Gain (loss) from sales of property related to non-controlling interests		21		(1)
Impairment losses of depreciable real estate		64		456
Impairment loss on real estate related to non-controlling interests		—		(3)
Funds from operations attributable to NorthStar Healthcare Income, Inc. common stockholders		$	3,433	$	5,468
Modified funds from operations:
Funds from operations attributable to NorthStar Healthcare Income, Inc. common stockholders		$	3,433	$	5,468
Adjustments:
Transaction costs		2,399		16
Amortization of premiums, discounts and fees on investments and borrowings		375		1,005
(Gain) loss on investments and other		125		(188)
Adjustments related to unconsolidated ventures(1)		—		480
Adjustments related to non-controlling interests		(4)		(7)
Modified funds from operations attributable to NorthStar Healthcare Income, Inc. common stockholders		$	6,328	$	6,774

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(1)Primarily our proportionate share of liability extinguishment gains and losses, loan loss reserves, transaction costs and amortization of above/below market debt adjustments, straight-line rent adjustments, impairment of goodwill, debt and deferred financing costs, recorded by the joint ventures of our investments in unconsolidated ventures.

Net Operating Income

We believe NOI provides useful information to stockholders and provides our management with a performance measure to compare our operating results to the operating results of other real estate companies between periods on a consistent basis. We define NOI as property and other revenues, less property operating expenses. Refer to “—Results of Operations” for additional information on NOI and same store NOI. We define same store as our investments, excluding properties sold as of March 31, 2025, the Rochester Sub-Portfolio and the estimated expense accrued for the Incentive Fee payable to the Winterfell manager.

The following table reconciles net income (loss), computed in accordance with U.S. GAAP, to NOI (in thousands):


	Three Months Ended March 31,
		2025		2024
Net income (loss)		$	6,948	$	(8,047)
Adjustments:
Income tax expense		20		20
Equity in (earnings) losses of unconsolidated ventures		—		(1,014)
(Gain) loss on investments and other		(11,610)		(150)
Other (income) expense, net		—		(1,000)
Impairment loss		64		456
Depreciation and amortization		8,092		8,901
General and administrative expenses		2,858		3,327
Transaction costs		2,399		16
Interest expense		10,847		12,862
Net operating income		$	19,618	$	15,371

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Liquidity and Capital Resources

Our current principal liquidity needs are to fund: (i) operating expenses, including corporate general and administrative expenses; (ii) principal and interest payments on our borrowings and other commitments; and (iii) capital expenditures.

Our current primary sources of liquidity include the following: (i) cash on hand; (ii) proceeds that may be generated from investment sales and realizations; and (iii) cash flow generated by our investments.

As of May 5, 2025, we had approximately $335.2 million of unrestricted cash, a significant portion of which has been placed in interest yielding money market funds invested in short-term U.S. government securities. We currently believe that our capital resources are sufficient to meet our capital needs for the next 12 months.

Cash From Operations

We primarily generate cash flow from operations through net operating income from our operating properties. Net cash provided by operating activities was $7.3 million for the three months ended March 31, 2025.

We are exposed to various operational risks, including the impact of labor costs, inflationary pressures and interest rates, of our properties. We expect that these factors will continue to materially impact our cash flow generated by our investments.

Borrowings

We typically have financed our investments with medium to long-term, non-recourse mortgage loans, though our borrowing levels and terms vary depending upon the nature of the assets and the related financing.

During the three months ended March 31, 2025, we paid $4.1 million and $8.0 million in recurring, scheduled principal and interest payments, respectively, on borrowings.

We have $610.5 million of borrowings that mature in 2026, including $566.5 million of borrowings collateralized by our Winterfell portfolio. We may be unable to extend or refinance these borrowings without a significant pay down of existing loan balances. Our ability to refinance these borrowings and/or sell assets will be significantly impacted by market conditions, over which we have no control. Further, given the nature of our assets and the materiality of this portfolio, we may not be able to respond quickly to changes in market conditions.

Our charter limits us from incurring borrowings that would exceed 300.0% of our net assets. We cannot exceed this limit unless any excess in borrowing over such level is approved by a majority of our independent directors. We would need to disclose any such approval to our stockholders in our next quarterly report along with the justification for such excess. An approximation of this leverage limitation is 75.0% of our assets, other than intangibles, before deducting loan loss reserves, other non-cash reserves and depreciation. As of March 31, 2025, our leverage was 53.2% of our assets, other than intangibles, before deducting non-cash reserves and depreciation.

For additional information regarding our borrowings, including principal repayments, timing of maturities and loans currently in default, refer to Item 3. “Quantitative and Qualitative Disclosures About Market Risk” and Note 5, “Borrowings” in our accompanying consolidated financial statements included in Part I, Item 1. “Financial Statements.”

Capital Expenditures Activities

We are responsible for capital expenditures for our seniors housing properties. We have made significant investments in capital expenditures to increase operating income and enhance the overall value of certain properties and in order to maintain market position, functional and operating standards. We will continue to invest going forward, although we expect aggregate spending to be less than prior years. Further, the Merger Agreement contains restrictions on our ability to make certain capital expenditures. During the three months ended March 31, 2025, cash used for capital expenditures at our investments totaled $1.5 million.

Realization and Disposition of Investments

We pursue dispositions of assets and portfolios where we believe the disposition will achieve a desired return or strategic outcome, improve our liquidity position and generate value for stockholders.

The sales of our seniors housing investments completed during the three months ended March 31, 2025 generated net proceeds of approximately $7.8 million after the repayment of outstanding borrowings and transaction costs. Refer to “—Key Dispositions and Liquidity Update” for additional information.

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Distributions

To continue to qualify as a REIT, we are required to distribute annually dividends equal to at least 90% of our taxable income, subject to certain adjustments, to stockholders. We have generated net operating losses for tax purposes and, accordingly, are currently not required to make distributions to our stockholders to qualify as a REIT. Refer to “—Distributions Declared and Paid” for further information regarding our distributions.

Based on the current forecasted cash flow of our investments and cash needs to operate our business, we do not anticipate paying recurring distributions. Instead, and only in the event the Merger is not completed and the Merger Agreement is terminated, the Board will evaluate special distributions in connection with any sales and other realizations of investments on a case-by-case basis based on, among other factors, current and projected liquidity needs.

Share Repurchases

We adopted a share repurchase program effective August 7, 2012, which enabled stockholders to sell their shares to us in limited circumstances and could be amended, suspended, or terminated at any time. On April 7, 2020, our Board suspended all repurchases under our existing share repurchase program effective April 30, 2020 in order to preserve capital and liquidity. We do not currently anticipate resuming the share repurchase program. If we have sufficient capital available, at this stage in our life cycle, we believe that returning capital to stockholders through special distributions, rather than repurchases, is a better use of that capital.

Cash Flows

The following presents a summary of our consolidated statements of cash flows (dollars in thousands):


	Three Months Ended March 31,				Increase (Decrease)
Cash flows provided by (used in):	2025		2024
Operating activities	$	7,262	$	927		$	6,335
Investing activities	85,670		8,647			77,023
Financing activities	(83,489)		(15,337)			(68,152)
Net increase (decrease) in cash, cash equivalents and restricted cash	$	9,443	$	(5,763)		$	15,206

Operating Activities

Net cash provided by operating activities improved from $0.9 million for the three months ended March 31, 2024 to $7.3 million for the three months ended March 31, 2025, primarily due to increases in occupancy and rates at our operating investments resulting in higher rent and resident fees collected.

Investing Activities

Our cash flows from investing activities are primarily proceeds from investment dispositions, net of any capital expenditures. Net cash provided by investing activities increased from $8.6 million for the three months ended March 31, 2024 to $85.7 million for the three months ended March 31, 2025, primarily due to increased property sales activity during the three months ended March 31, 2025, as compared to the corresponding period of the prior year.

Financing Activities

Our net cash from financing activities are primarily principal amortization and repayment of our mortgage notes payable. Net cash used in financing activities increased from $15.3 million for the three months ended March 31, 2024 to $83.5 million for the three months ended March 31, 2025, primarily due to the repayment of $79.1 million of outstanding mortgage principal balances for the four net lease properties in the Arbors portfolio.

Off-Balance Sheet Arrangements

As of March 31, 2025, we are not dependent on the use of any off-balance sheet financing arrangements for liquidity. We have made investments in unconsolidated ventures. Refer to Note 4, “Investments in Unconsolidated Ventures” in Part I, Item 1. “Financial Statements.” for a discussion of such unconsolidated ventures in our consolidated financial statements. In each case, our exposure to loss is limited to the carrying value of our investment.

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Distributions Declared and Paid

From inception through March 31, 2025, we declared $530.9 million in distributions and generated cumulative FFO of $205.0 million. From April 5, 2013, the date of our first investment, through December 31, 2017, we paid monthly distributions in an amount that was equivalent to an annualized distribution of $0.675 per share of our common stock. In order to better align the distribution with anticipated cash flows from operations, beginning in January 1, 2018 through January 31, 2019, we paid monthly distributions in an amount that was equivalent to an annualized distribution of $0.3375 per share of our common stock. Effective February 1, 2019, our Board stopped recurring distributions in order to preserve capital and liquidity. In May 2022, we paid a special distribution in the amount of $0.50 per share of our common stock. During the three months ended March 31, 2025, we did not declare any distributions to stockholders.

To the extent distributions are paid from sources other than FFO, the ownership interest of our public stockholders may be diluted. Future distributions declared and paid may exceed FFO and cash flow provided by operations. FFO, as defined, may not reflect actual cash available for distributions.

Related Party Arrangements

Former Advisor

In connection with the Internalization, on October 21, 2022, the advisory agreement was terminated and, along with the Operating Partnership and the Former Advisor, we entered into a Transition Services Agreement, or TSA, to facilitate an orderly transition of the management of our operations. As of December 31, 2023, the TSA was effectively terminated.

Prior to the Internalization, the Former Advisor was responsible for managing our affairs on a day-to-day basis and for identifying, acquiring, originating and asset managing investments on our behalf. For such services, to the extent permitted by law and regulations, the Former Advisor received fees and reimbursements from us.

Investments in Joint Ventures

Solstice, the manager of our Winterfell portfolio, is a joint venture between affiliates of ISL, which owns 80.0%, and us, which owns 20.0%. For the three months ended March 31, 2025, we recognized property management fees and other incentive fees expense totaling $3.0 million to Solstice related to the Winterfell portfolio.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

The principal market risks affecting us are interest rate risk and inflation risk. These risks are dependent on various factors beyond our control, including monetary and fiscal policies, domestic and international economic conditions and political considerations. Our market risk sensitive assets, liabilities and related derivative positions (if any) are held for investment and not for trading purposes.

Interest Rate Risk

We have exposure to the impact of interest rate changes primarily through our borrowing activities. To limit this exposure, we have generally sought long-term debt financing on a fixed-rate basis. However, certain of our borrowings are subject to variable-rate interest.

The following table presents a summary of our borrowings as of March 31, 2025 (dollars in thousands):


Borrowing Type	Loan Count	Interest Rate(1)		Principal Outstanding		% of Outstanding Debt
Fixed-rate debt	37	4.2	%	$	631,473	81.3	%
Floating-rate debt	2	7.0	%	43,959		5.7	%
Rochester Sub-Portfolio Loan(2)	7	10.8	%	99,786		13.0	%
Total/Weighted Average	46	5.2	%	$	775,218	100.0	%

_______________________________________

(1)Represents the weighted average interest rate effective as of March 31, 2025. The interest rate on our floating-rate debt reflects the rate before the impact the interest rate cap in place. The interest rate on the Rochester Sub-Portfolio Loan includes the additional default interest rate of 4%, which commenced in July 2023 and will continue to accrue until the loan is extinguished.

(2)The Rochester Sub-Portfolio Loan is comprised of seven individual floating-rate mortgage notes payable in payment default, cross-collateralized and subject to cross-default, secured by five ILFs and two ALFs, which have been placed into a receivership.

When borrowing at variable rates, we seek the lowest margins available and evaluate hedging opportunities. The interest rate on our floating-rate borrowings is a fixed spread over an index such as SOFR and typically reprices every 30 days. For our floating-rate borrowings, we have entered into interest rate caps that involve the receipt of variable amounts from a counterparty if

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interest rates rise above the strike rate on the contract in exchange for an up-front premium. As of March 31, 2025, excluding the Rochester Sub-Portfolio Loan, one of our two floating-rate loans is hedged with a contract in place through the third quarter of 2025 and had an effectively capped interest rate of 5.6%. Based on market interest rates of March 31, 2025, a hypothetical 100 basis point increase on the interest rate for our floating-rate loan without an interest rate cap in place would increase our interest expense by $0.3 million.

Increases in market interest rates typically result in a decrease in the fair value of fixed-rate borrowings, while decreases in market interest rates typically result in an increase in the fair value of fixed-rate borrowings. While changes in market interest rates affect the fair value of our fixed-rate borrowings, these changes do not affect the interest expense associated with our fixed-rate borrowings. Therefore, interest rate risk does not have a significant impact on our fixed-rate borrowings until their maturity or earlier prepayment and refinancing. If we seek to refinance our fixed-rate borrowings, whether at maturity or otherwise, and interest rates have risen, our future earnings and cash flows could be adversely affected by additional borrowing costs. Conversely, lower interest rates at the time of refinancing may reduce our overall borrowing costs. Further, the fair value of the real estate collateral for our borrowings may be negatively impacted by rising interest rates.

Inflation Risk

Many of our costs are subject to inflationary pressures. These include labor, repairs and maintenance, food costs, utilities, insurance and other operating costs. Higher rates of inflation affecting the economy may substantially affect the operating margins of our investments. While our managers have an ability to partially offset cost inflation by increasing the rates charged to residents, this ability is often limited by competitive conditions, affordability and timing, which may lag behind cost volatility. Therefore, there can be no assurance that cost increases can be offset by increased rates charged to residents in real time or that increased rates will not result in occupancy declines.

Item 4. Controls and Procedures

Internal Control over Financial Reporting

Changes in Internal Control over Financial Reporting.

There have not been any changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the most recent fiscal quarter that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Disclosure Controls and Procedures

Our management established and maintains disclosure controls and procedures that are designed to ensure that material information relating to us and our subsidiaries required to be disclosed in reports that are filed or submitted under the Securities Exchange Act of 1934, as amended, or Exchange Act, are recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.

As of the end of the period covered by this report, management conducted an evaluation as required under Rules 13a-15(b) and 15d-15(b) under the Exchange Act, under the supervision and with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act).

Based on this evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures are effective. Notwithstanding the foregoing, a control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that it will detect or uncover failures to disclose material information otherwise required to be set forth in the Company’s periodic reports.

Part II—Other Information.

Item 1. Legal Proceedings

We may be involved in various litigation matters arising in the ordinary course of our business. Although we are unable to predict with certainty the eventual outcome of any litigation, in the opinion of management, any current legal proceedings are not expected to have a material adverse effect on our financial position or results of operations.

Item 1A. Risk Factors

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If we pay distributions from sources other than our cash flow provided by operations, we will have less cash available for investments and your overall return may be reduced.

Our organizational documents permit us to pay distributions from any source, including offering proceeds, borrowings or sales of assets or we may make distributions in the form of taxable stock dividends. We have not established a limit on the amount of proceeds we may use to fund distributions. We have funded distributions in the past in excess of our cash flow from operations and may continue to do so in the future. If we pay distributions from sources other than our cash flow provided by operations, such as using the proceeds of asset sales, our book value may be negatively impacted and the value of our shares will be reduced.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

We adopted a share repurchase program in 2012, which enabled stockholders to sell their shares to us in limited circumstances and could be amended, suspended and terminated by our Board at any time in their sole discretion (subject to certain notice requirements set forth in the share repurchase program). On April 7, 2020, in accordance with the terms of our share repurchase program, our Board suspended all repurchases under the share repurchase program effective April 30, 2020 in order to preserve capital and liquidity and does not currently anticipate resuming the share repurchase program.

We did not repurchase any shares of common stock during the three months ended March 31, 2025.

Unregistered Sales of Equity Securities

We did not issue any shares of common stock during the three months ended March 31, 2025.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Securities Trading Plans of Directors and Executive Officers

During our last fiscal quarter, no director or officer, as defined in Rule 16a-1(f), adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” each as defined in Regulation S-K Item 408.

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EXHIBIT INDEX


Exhibit Number						Description of Exhibit
3.1						Articles of Amendment and Restatement of NorthStar Healthcare Income, Inc. (filed as Exhibit 3.1 to Pre-Effective Amendment No. 7 to the Company’s Registration Statement on Form S-11 (File No. 333-170802) and incorporated herein by reference)
3.2						Certificate of Correction of the Articles of Amendment and Restatement of NorthStar Healthcare Income, Inc. (filed as Exhibit 3.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2012 and incorporated herein by reference)
3.3						Fourth Amended and Restated Bylaws of NorthStar Healthcare Income, Inc. (filed as Exhibit 3.3 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2013 and incorporated herein by reference)
2.1^						Agreement and Plan of Merger, dated as of January 29, 2025, by and among NorthStar Healthcare Income, Inc., Compound Holdco LLC, Compound Merger Sub LLC and Welltower OP LLC (filed as Exhibit 2.1 to the Company’s Current Report on 8-K filed on January 30, 2025 and incorporated herein by reference)
10.1*						Gross-Up Agreement, dated as of January 29, 2025, by and between NorthStar Healthcare Income, Inc. and Kendall Young
10.2*						Gross-Up Agreement, dated as of January 29, 2025, by and between NorthStar Healthcare Income, Inc. and Ann Harrington
10.3*						Best-Net Cut-Back Agreement, dated as of January 29, 2025, by and between NorthStar Healthcare Income, Inc. and Nicholas Balzo





















31.1*						Certification by the Chief Executive Officer pursuant to 17 CFR 240.13a-14(a)/15(d)-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*						Certification by the Chief Financial Officer pursuant to 17 CFR 240.13a-14(a)/15(d)-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1**						Certification by the Chief Executive Officer pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2**						Certification by the Chief Financial Officer pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS*						XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH*						Inline XBRL Taxonomy Extension Schema Document
101.CAL*						Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*						Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*						Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*						Inline XBRL Taxonomy Extension Presentation Linkbase Document
104						Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

______________________________________________________

* Filed herewith

** Furnished herewith

^ Schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company hereby undertakes to furnish supplemental copies of any of the omitted schedules upon request by the SEC.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

NorthStar Healthcare Income, Inc.

Date:

May 8, 2025

By:

/s/ KENDALL K. YOUNG

Name:

Kendall K. Young

Title:

Chief Executive Officer, President and Director

By:

/s/ NICHOLAS R. BALZO

Name:

Nicholas R. Balzo

Title:

Chief Financial Officer and Treasurer

NorthStar Healthcare Income, Inc. 10-Q