Note 7 - Long-term Leases

9 Months Ended

Sep. 30, 2025

Notes to Financial Statements

Lessee, Operating and Finance Leases [Text Block]

Note 7 – Long-Term Leases

Operating Leases

At September 30, 2025, we lease from NHI the real property of 32 skilled nursing facilities and three independent living centers under one lease agreement. As part of the lease agreement, we sublease four Florida skilled nursing facilities to a third-party operator. We have two remaining contractual options to renew the lease for 5-year periods commencing January 1, 2027 and January 1, 2032, with a base rent for each renewal term equal to the fair rental value of the leased property as negotiated between the parties, without including any value attributable to improvements to the leased property voluntarily made by us at our expense. See Note 16 - Contingencies and Commitments and Note 17 - Subsequent Events for further discussion of the lease and our notice of exercise of the next renewal option.

The percentage rent is based on a quarterly calculation of revenue increases and is payable on a quarterly basis. Total facility rent expense to NHI was $9,911,000 and $10,085,000 for the three months ended September 30, 2025 and 2024, respectively. Total facility rent expense to NHI was $29,725,000 and $29,371,000 for the nine months ended September 30, 2025 and 2024, respectively.

Minimum Lease Payments

The following table summarizes the maturity of our operating lease liabilities as of September 30, 2025 (in thousands):

	Operating Leases
2026	$	35,675
2027		10,948
2028		2,149
2029		1,753
2030		1,506
Thereafter		10,712
Total minimum lease payments		62,743
Less: amounts representing interest		(7,799	)
Present value of future minimum lease payments		54,944
Less: current portion		(33,198	)
Noncurrent lease liabilities	$	21,746