What the changes say
- Tenant and manager operational performance and liquidity continue to drive the company risk profile.
- New disclosures focus on joint venture complexities, shareholder activism, and AI adoption.
- Tax legislation changes, notably the OBBBA, create new compliance risks.
What changed since the prior 10-K
New
- NewRisks Related to Our Business and Operations
We have rights to terminate our management agreements with managers, in whole or with respect to specific properties under certain circumstances, and we may be unable to replace managers if our management agreements are terminated or not renewed
We may be unable to successfully or timely replace property managers in our SHOP segment if our management agreements are terminated.
- NewRisks Related to Our Business and Operations
Significant legal or regulatory proceedings could adversely affect the liquidity, financial condition and results of operations of our tenants, managers and borrowers
Legal and regulatory proceedings against our tenants, managers, or borrowers could adversely affect our financial condition and expose us to uninsured liabilities.
- NewRisks Related to Our Business and Operations
We cannot assure you that any contractual obligations to indemnify, defend and hold us harmless from the liabilities described above will be satisfied by third parties, or that any amounts held in escrow for such purpose will be sufficient
We cannot assure third-party indemnification or escrow adequacy for legal liabilities arising from our properties.
- NewRisks Related to Our Business and Operations
Risks related to our joint venture investments could adversely affect our financial condition and results of operations
Joint venture investments like Timber Ridge OpCo involve partner disputes, lack of sole control, and potential partner insolvency risks.
- NewRisks Related to Our Business and Operations
Stockholder activism efforts could cause us to incur substantial costs, divert management’s attention and have an adverse effect on our business
Activist investor proxy solicitations or proposals could cause substantial costs, stock volatility, and management distraction.
- NewRisks Related to Our Business and Operations
Our use of artificial intelligence could expose us to various risks
Our use of artificial intelligence tools could introduce regulatory compliance costs, competition risks, and operational disruptions.
Dropped
- DroppedRisks Related to Our Business and Operations
We are exposed to risks associated with our investment in Timber Ridge OpCo, including our lack of sole decision-making authority and our reliance on the financial condition of other interests and related healthcare operations of the entity
- DroppedRisks Related to Our Business and Operations
In the event that any of the agreements with our managers are terminated, we can provide no assurances that we could find a replacement manager or that any replacement manager will be successful in managing our SHOP structured communities
- DroppedRisks Related to Our Business and Operations
Settlement provisions contained in the August 2024 forward sale agreements, the ATM forward sale agreements or any other forward sale agreement we may enter into could result in substantial dilution to our earnings per share or result in substantial cash payment obligations
- DroppedRisks Related to Our Business and Operations
In case of our bankruptcy or insolvency, any forward sale agreement then in effect will automatically terminate, and we would not receive the expected proceeds from such forward sale of shares of our common stock
- DroppedRisks Related to Our Business and Operations
We may in the future enter into additional forward sale agreements that subject us to risks similar to those described above
Reworded
- 75% rewrittenRisks Related to Our Business and Operations
We depend on the operating success of our tenants, managers and borrowers and if their financial condition or business prospects deteriorate, our business, financial condition and results of operations could be adversely affected
Updated to cite rising labor costs, inflation, and tenant payment defaults, removing specific reference to Senior Living Management liquidity notices.
Was: We depend on the operating success of our managers, tenants and borrowers and if their financial condition or business prospects deteriorate, our financial condition and results of operations could be adversely affected
- 69% rewrittenRisks Related to Our Business and Operations
A member of our Board of Directors is also the chairman of the board of directors of NHC, and his interests may differ from those of our stockholders
Added that NHC owned 1,630,642 shares of our common stock as of December 31, 2025, and updated NHC revenue contribution to 10.7%.
- 66% rewrittenRisks Related to Our Business and Operations
We are exposed to operational risks with respect to our SHOP structured communities
Expanded operational risks for SHOP structured communities to explicitly list occupancy rates, rental rates, resident attraction, and regulatory compliance.
- 59% rewrittenRisks Related to Our Business and Operations
We are exposed to the risk that we may not be fully indemnified by our tenants, managers and borrowers against future litigation
Clarified that additional insured and indemnification requirements apply specifically to tenants, managers, or borrowers party to the agreement.
Was: We are exposed to the risk that we may not be fully indemnified by our managers, tenants and borrowers against future litigation
- 55% rewrittenRisks Related to Our Status as a REIT
Legislative, regulatory, or administrative tax changes could adversely affect us or our security holders
Added a specific reference to the passing of the OBBBA on July 4, 2025, and its impact on U.S. tax laws.
- 50% rewrittenRisks Related to Our Business and Operations
We are subject to risks related to our investment with Life Care Services for Timber Ridge, an entrance fee CCRC, associated with Type A benefits offered to the residents of the CCRC and related accounting requirements
Added disclosure regarding outstanding resident mortgage loans secured by trust liens on the Timber Ridge property.
- 46% rewrittenRisks Related to Our Business and Operations
Inflation and increased interest rates may adversely affect our business, financial condition and results of operations
Replaced past 40-year high inflation references with current elevated rate conditions and noted potential impacts from Trump administration tariffs and immigration policies.
Was: Inflation and increased interest rates may adversely affect our financial condition and results of operations
- 44% rewrittenRisks Related to Our Debt
Downgrades in our credit ratings could have a material adverse effect on our cost and availability of capital
Removed specific historical credit rating reaffirmation dates and agency rating details from Moody's, Fitch, and S&P Global.
- 37% rewrittenRisks Related to Our Debt
We may need to refinance existing debt or incur additional debt in the future, which may not be available on terms acceptable to us
- 35% rewrittenRisks Related to Our Business and Operations
Adverse developments affecting the financial services industry, including events or concerns involving liquidity, defaults, or non-performance by financial institutions, could adversely affect our business, financial condition, results of operations or our prospects
- 29% rewrittenRisks Related to Our Business and Operations
We are exposed to the risk that our tenants, managers and borrowers may become subject to bankruptcy or insolvency proceedings
Was: We are exposed to the risk that our managers, tenants and borrowers may become subject to bankruptcy or insolvency proceedings
- 26% rewrittenRisks Related to Our Business and Operations
We are exposed to risks related to government regulations and payors, principally Medicare and Medicaid, and the effect of changes to laws, regulations and reimbursement rates on the businesses of our tenants, managers and borrowers
Was: We are exposed to risks related to governmental regulations and payors, principally Medicare and Medicaid, and the effect of changes to laws, regulations and reimbursement rates on our tenants’ and borrowers’ business
- 24% rewrittenRisks Related to Our Business and Operations
The U.S. federal income tax treatment of the cash that we might receive from cash settlement of the forward equity sales agreements is unclear and could jeopardize our ability to meet the REIT qualification requirements
Was: The U.S. federal income tax treatment of the cash that we might receive from cash settlement of the forward sale agreements is unclear and could jeopardize our ability to meet the REIT qualification requirements
- 22% rewrittenRisks Related to Our Organizational Structure
We have ownership limits in our charter with respect to our common stock and other classes of capital stock which may delay, defer or prevent a transaction or a change of control that might involve a premium price for our common stock or might otherwise be in the best interests of our stockholders
- 22% rewrittenRisks Related to Our Business and Operations
We are exposed to the risk that our assets may be subject to impairment charges
All 42 risk factors
Headings as the filing states them, in filing order.
Risks Related to Our Business and Operations
- 01We depend on the operating success of our tenants, managers and borrowers and if their financial condition or business prospects deteriorate, our business, financial condition and results of operations could be adversely affected75% rewritten
- 02We are exposed to the risk that our tenants, managers and borrowers may become subject to bankruptcy or insolvency proceedings29% rewritten
- 03We have rights to terminate our management agreements with managers, in whole or with respect to specific properties under certain circumstances, and we may be unable to replace managers if our management agreements are terminated or not renewedNew
- 04Actual or perceived risks associated with pandemics, epidemics or outbreaks have had, and may in the future, have a material adverse effect on our operators’ business and results of operations
- 05A member of our Board of Directors is also the chairman of the board of directors of NHC, and his interests may differ from those of our stockholders69% rewritten
- 06We are exposed to risks related to government regulations and payors, principally Medicare and Medicaid, and the effect of changes to laws, regulations and reimbursement rates on the businesses of our tenants, managers and borrowers26% rewritten
- 07We are exposed to the risk that the cash flows of our tenants, managers and borrowers may be adversely affected by increased liability claims and liability insurance costs
- 08Significant legal or regulatory proceedings could adversely affect the liquidity, financial condition and results of operations of our tenants, managers and borrowersNew
- 09We cannot assure you that any contractual obligations to indemnify, defend and hold us harmless from the liabilities described above will be satisfied by third parties, or that any amounts held in escrow for such purpose will be sufficientNew
- 10We are exposed to the risk that we may not be fully indemnified by our tenants, managers and borrowers against future litigation59% rewritten
- 11We depend on the success of property development and construction activities, which may fail to achieve the operating results we expect
- 12We are exposed to the risk that the illiquidity of real estate investments could impede our ability to respond to adverse changes in the performance of our properties
- 13Our investments are concentrated in healthcare properties
- 14We are subject to risks related to our investment with Life Care Services for Timber Ridge, an entrance fee CCRC, associated with Type A benefits offered to the residents of the CCRC and related accounting requirements50% rewritten
- 15Risks related to our joint venture investments could adversely affect our financial condition and results of operationsNew
- 16Inflation and increased interest rates may adversely affect our business, financial condition and results of operations46% rewritten
- 17Adverse developments affecting the financial services industry, including events or concerns involving liquidity, defaults, or non-performance by financial institutions, could adversely affect our business, financial condition, results of operations or our prospects35% rewritten
- 18Adverse geopolitical developments could have a material adverse impact on our business
- 19We are exposed to operational risks with respect to our SHOP structured communities66% rewritten
- 20We are exposed to risks related to environmental laws and the costs associated with liabilities related to hazardous substances
- 21We are subject to risks of damage from catastrophic weather and other natural or man-made disasters and the physical effects of climate change
- 22We depend on the success of our future acquisitions and investments
- 23We depend on our ability to reinvest cash in real estate investments in a timely manner and on acceptable terms
- 24Competition for acquisitions may result in increased prices for properties
- 25We depend on our ability to retain our management team and other personnel and attract suitable replacements should any such personnel leave
- 26We are exposed to the risk that our assets may be subject to impairment charges22% rewritten
- 27Stockholder activism efforts could cause us to incur substantial costs, divert management’s attention and have an adverse effect on our businessNew
- 28Our ability to raise capital through equity sales is dependent, in part, on the market price of our common stock, and our failure to meet market expectations with respect to our business, or other factors we do not control, could negatively impact such market price and availability of equity capital
- 29The U.S. federal income tax treatment of the cash that we might receive from cash settlement of the forward equity sales agreements is unclear and could jeopardize our ability to meet the REIT qualification requirements24% rewritten
- 30Our use of artificial intelligence could expose us to various risksNew
Risks Related to Our Debt
- 31We may need to refinance existing debt or incur additional debt in the future, which may not be available on terms acceptable to us37% rewritten
- 32We have covenants related to our indebtedness which impose certain operational limitations and a breach of those covenants could materially adversely affect our financial condition and results of operations
- 33Downgrades in our credit ratings could have a material adverse effect on our cost and availability of capital44% rewritten
- 34We rely on external sources of capital to fund future capital needs, and if we encounter difficulty in obtaining such capital, we may not be able to make future investments necessary to grow our business or meet maturing commitments
- 35We depend on revenues derived mainly from fixed rate investments in real estate assets, while a portion of our debt used to finance those investments bears interest at variable rates, which subjects us to interest rate risk
Risks Related to Our Status as a REIT
- 36We depend on the ability to continue to qualify for taxation as a REIT for U.S. federal income tax purposes
- 37There are no assurances of our ability to pay dividends in the future
- 38Complying with the REIT requirements may cause us to forego otherwise attractive acquisition opportunities or liquidate otherwise attractive investments, which could materially hinder our performance
- 39Our ownership of and relationship with any TRS that we have formed or will form will be limited, and a failure to comply with the limits would jeopardize our REIT status and may result in the application of a 100% excise tax
- 40Legislative, regulatory, or administrative tax changes could adversely affect us or our security holders55% rewritten
Risks Related to Our Organizational Structure
- 41We have ownership limits in our charter with respect to our common stock and other classes of capital stock which may delay, defer or prevent a transaction or a change of control that might involve a premium price for our common stock or might otherwise be in the best interests of our stockholders22% rewritten
- 42We are subject to certain provisions of Maryland law and our charter and bylaws that could hinder, delay or prevent a change in control transaction, even if the transaction involves a premium price for our common stock or our stockholders believe such transaction to be otherwise in their best interests
Other National Health Investors 10-Ks
- FY2024 10-K risk factors41 risks
Concentrated healthcare real estate exposure dominates risks, including extensive reliance on specific operators, tenants, and borrowers.
Filed Feb 25, 2025
About this page
The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.