Community Healthcare Trust Reports Q2 Financial Results

Summary of Financial Results

Community Healthcare Trust Incorporated (NYSE: CHCT) recently announced its financial performance for the quarter ending June 30, 2025. The company reported a net loss of approximately $12.6 million or $0.50 per diluted common share. The funds from operations ("FFO") and adjusted funds from operations ("AFFO") during this period amounted to $0.23 and $0.50 per diluted common share, respectively.

Factors Influencing Financial Outcomes

A number of items impacted the results for the described period. One significant concern was the collectability of receivables from a geriatric behavioral hospital tenant, leading the company to establish a reserve of $1.7 million on its interest receivable, negatively affecting both FFO and AFFO by $0.06 per diluted share. Additionally, a credit loss reserve totaling $8.7 million related to its notes receivable with the same tenant was recorded. This reserve will not impact the company's calculations of FFO but reflects the cautious approach the management takes regarding receivables.

On July 17, 2025, the said tenant signed a Letter of Intent (LOI) to transfer their business to a behavioral healthcare provider, which would require new lease agreements for the six hospitals owned by Community Healthcare Trust. However, the conclusion of this deal remains uncertain.

In personnel news, the company terminated its former Executive Vice President of Asset Management, effective May 31, 2025. This resulted in the vesting of approximately 198,015 unvested restricted shares and 18,275 restricted stock units. The termination also triggered severance costs totaling around $5.9 million due to accelerated amortization of stock-based compensation, reducing FFO by roughly $0.22 per diluted share.

Investments and Transactions

Earlier in 2025, Community Healthcare Trust acquired a behavioral specialty facility for approximately $9.7 million. Initially classified as a sale-leaseback transaction, it transitioned to a recognized real estate asset when the lease commenced in the second quarter of 2025. This project exemplifies the company's strategic focus on investing in quality facilities to bolster its portfolio.

In a notable transaction during the second quarter, the company sold a property in Ohio for net proceeds of approximately $0.6 million, realizing a gain of $0.2 million. Moreover, an operating lease on another property was amended, resulting in a sales-type lease that contributed to additional gains of around $1.3 million on the balance sheets.

A significant addition was made on July 9, 2025, with the acquisition of an inpatient rehabilitation facility constructed in Florida for approximately $26.5 million, fully leased to a tenant until 2040. This acquisition highlights the company's commitment to acquiring essential healthcare properties that promise stable returns of approximately 9.4%.

Community Healthcare Trust continues to strengthen its portfolio with six properties under definitive purchase agreements, anticipated to close at costs nearing $146 million. The expected return on these investments ranges between 9.1% and 9.75%, showcasing the company's prospective growth in the coming years.

Dividend Declaration

Moving to shareholder compensation, the Company’s Board of Directors declared a quarterly common stock dividend of $0.4725 per share. This dividend is set to be payable to stockholders of record on August 8, 2025, reflecting the company's ongoing commitment to providing value to its investors.

About Community Healthcare Trust Incorporated

Community Healthcare Trust Incorporated is a real estate investment trust (REIT) dedicated to owning income-producing properties that primarily facilitate outpatient healthcare services throughout key sub-markets in the United States. As of June 30, 2025, the company boasts investments worth approximately $1.2 billion in about 200 real estate properties, covering roughly 4.5 million square feet across 36 states.

For additional details regarding the Company’s operations and quarterly performance, those interested may contact the company directly at 615-771-3052. Further formal documentation continues to be accessible through official communication channels.

Frequently Asked Questions

What were Community Healthcare Trust's Q2 results?

The company reported a net loss of $12.6 million, with FFO at $0.23 per share.

What factors negatively impacted financial performance?

Issues with collecting receivables from a tenant necessitated large reserves impacting overall earnings.

Can you explain the recent acquisitions?

The company committed to various strategic properties, including a rehabilitation facility in Florida and others under definitive agreements.

When is the next dividend payment due?

The next dividend of $0.4725 is payable on August 22, 2025.

How significant is the company's total asset value?

Community Healthcare Trust has approximately $1.2 billion in real estate assets across 200 properties.

About The Author

Dedicated Author and financial expert Logan Wright here, 29 years old. After earning an economics degree, I spent a number of years working in different financial industries. My great passion is enabling everyone, from any background or experience level, to understand and be literate in financial matters.

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