10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)
☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2023
OR
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM             TO

Commission file number: 001-37401

Community Healthcare Trust Incorporated

(Exact Name of Registrant as Specified in Its Charter)

Maryland	46-5212033
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

3326 Aspen Grove Drive

Suite 150

Franklin, Tennessee 37067

(Address of Principal Executive Offices) (Zip Code)

(615) 771-3052

(Registrant’s Telephone Number, Including Area Code)

Not Applicable

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

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

Title of each Class	Trading Symbol	Name of each exchange on which registered
Common stock, $0.01 par value per share	CHCT	New York Stock Exchange

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  ☒     No  ☐

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  ☒     No  ☐

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 ☐ Emerging-growth company ☐ Non-accelerated filer ☐ Smaller reporting  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 Section13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). 

Yes  ☐     No ☒

The Registrant had 26,304,425 shares of Common Stock, $0.01 par value per share, outstanding as of April 26, 2023.

1

COMMUNITY HEALTHCARE TRUST INCORPORATED

FORM 10-Q

March 31, 2023

TABLE OF CONTENTS

		Page
PART I.—FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	3
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Operations	4
	Condensed Consolidated Statements of Comprehensive (Loss) Income	5
	Condensed Consolidated Statements of Stockholders' Equity	6
	Condensed Consolidated Statements of Cash Flows	8
	Notes to Condensed Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	31
Item 4.	Controls and Procedures	31
PART II.—OTHER INFORMATION		33
Item 1.	Legal Proceedings	33
Item 1A.	Risk Factors	33
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	33
Item 3.	Defaults Upon Senior Securities	33
Item 4.	Mine Safety Disclosures	33
Item 5.	Other Information	33
Item 6.	Exhibits	33
SIGNATURES		35

    

2

PART I. FINANCIAL INFORMATION

ITEM 1.    FINANCIAL STATEMENTS

COMMUNITY HEALTHCARE TRUST INCORPORATED

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars and shares in thousands, except per share amounts)

	(Unaudited)
	March 31, 2023		December 31, 2022
ASSETS
Real estate properties
Land and land improvements	$	122,702	$	117,657
Buildings, improvements, and lease intangibles	848,060		825,257
Personal property	264		253
Total real estate properties	971,026		943,167
Less accumulated depreciation	(174,346)		(165,341)
Total real estate properties, net	796,680		777,826
Cash and cash equivalents	3,666		11,233
Restricted cash	959		835
Other assets, net	84,989		86,531
Total assets	$	886,294	$	876,425
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Debt, net	$	365,061	$	352,997
Accounts payable and accrued liabilities	10,478		11,377
Other liabilities, net	16,240		15,237
Total liabilities	391,779		379,611
Commitments and contingencies
Stockholders' Equity
Preferred stock, $0.01 par value; 50,000 shares authorized; none issued and outstanding	—		—
Common stock, $0.01 par value; 450,000 shares authorized; 26,274 and 25,897 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively	263		259
Additional paid-in capital	648,384		625,136
Cumulative net income	74,220		81,142
Accumulated other comprehensive income	15,684		22,667
Cumulative dividends	(244,036)		(232,390)
Total stockholders’ equity	494,515		496,814
Total liabilities and stockholders' equity	$	886,294	$	876,425

See accompanying notes to the condensed consolidated financial statements.

3

COMMUNITY HEALTHCARE TRUST INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022

(Unaudited; Dollars and shares in thousands, except per share amounts)

	Three Months Ended March 31,
	2023		2022
REVENUES
Rental income	$	26,128	$	22,604
Other operating interest	1,048		877
	27,176		23,481
EXPENSES
Property operating	4,873		4,091
General and administrative (1)	16,205		3,316
Depreciation and amortization	9,018		7,942
	30,096		15,349
(LOSS) INCOME BEFORE INCOME TAXES AND OTHER ITEMS	(2,920)		8,132
Interest expense	(3,992)		(2,626)
Deferred income tax expense	(35)		17
Interest and other income	25		1
NET (LOSS) INCOME	$	(6,922)	$	5,524
NET (LOSS) INCOME PER COMMON SHARE:
Net (loss) income per common share – Basic	$	(0.32)	$	0.21
Net (loss) income per common share – Diluted	$	(0.32)	$	0.21
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING-BASIC	24,227		23,570
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING-DILUTED	24,227		23,570
___________
(1) General and administrative expenses for the three months ended March 31, 2023 included stock-based compensation expense totaling approximately $14.3 million, including the accelerated amortization of stock-based compensation totaling approximately $11.8 million recognized upon the passing of our former CEO and President. General and administrative expenses for the three months ended March 31, 2022 included stock-based compensation expense totaling approximately $2.1 million.

See accompanying notes to the condensed consolidated financial statements.

4

COMMUNITY HEALTHCARE TRUST INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022

(Unaudited; Dollars in thousands)

			Three Months Ended March 31,
			2023		2022
NET (LOSS) INCOME			$	(6,922)	$	5,524
	Other comprehensive (loss) income:
		(Decrease) increase in fair value of cash flow hedges	(4,973)		11,407
		Reclassification for amounts recognized as interest expense	(2,010)		1,115
	Total other comprehensive (loss) income		(6,983)		12,522
COMPREHENSIVE (LOSS) INCOME			$	(13,905)	$	18,046

See accompanying notes to the condensed consolidated financial statements.

5

COMMUNITY HEALTHCARE TRUST INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

FOR THE THREE MONTHS ENDED MARCH 31, 2023

(Unaudited; Dollars and shares in thousands, except per share amounts)

	Preferred Stock			Common Stock			Additional Paid in Capital		Cumulative Net Income		Accumulated Other Comprehensive Income		Cumulative Dividends		Total Stockholders' Equity
	Shares	Amount		Shares	Amount
Balance at December 31, 2022	—	$	—	25,897	$	259	$	625,136	$	81,142	$	22,667	$	(232,390)	$	496,814
Issuance of common stock, net of issuance costs	—	—		249	3		8,903		—		—		—		8,906
Stock-based compensation, net of forfeitures	—	—		128	1		14,345		—		—		—		14,346
Decrease in fair value of cash flow hedges	—	—		—	—		—		—		(4,973)		—		(4,973)
Reclassification for amounts recognized as interest expense	—	—		—	—		—		—		(2,010)		—		(2,010)
Net loss	—	—		—	—		—		(6,922)		—		—		(6,922)
Dividends to common stockholders ($0.4475 per share)	—	—		—	—		—		—		—		(11,646)		(11,646)
Balance at March 31, 2023	—	$	—	26,274	$	263	$	648,384	$	74,220	$	15,684	$	(244,036)	$	494,515

See accompanying notes to the condensed consolidated financial statements.

6

COMMUNITY HEALTHCARE TRUST INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

FOR THE THREE MONTHS ENDED MARCH 31, 2022

(Unaudited; Dollars and shares in thousands, except per share amounts)

	Preferred Stock			Common Stock			Additional Paid in Capital		Cumulative Net Income		Accumulated Other Comprehensive (Loss) Income		Cumulative Dividends		Total Stockholders' Equity
	Shares	Amount		Shares	Amount
Balance at December 31, 2021	—	$	—	24,983	$	250	$	595,624	$	59,123	$	(4,980)	$	(187,905)	$	462,112
Stock issuance costs	—	—		—	—		(197)		—		—		—		(197)
Stock-based compensation, net of forfeitures	—	—		89	1		2,121		—		—		—		2,122
Increase in fair value of cash flow hedges	—	—		—	—		—		—		11,407		—		11,407
Reclassification for amounts recognized as interest expense	—	—		—	—		—		—		1,115		—		1,115
Net income	—	—		—	—		—		5,524		—		—		5,524
Dividends to common stockholders ($0.4375 per share)	—	—		—	—		—		—		—		(10,969)		(10,969)
Balance at March 31, 2022	—	$	—	25,072	$	251	$	597,548	$	64,647	$	7,542	$	(198,874)	$	471,114

See accompanying notes to the condensed consolidated financial statements.

7

COMMUNITY HEALTHCARE TRUST INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited; Dollars in thousands)

	Three Months Ended March 31,
	2023		2022
OPERATING ACTIVITIES
Net (loss) income	$	(6,922)	$	5,524
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization	9,018		7,942
Other amortization	265		216
Stock-based compensation	2,547		2,122
Accelerated amortization of stock-based compensation	11,799		—
Straight-line rent receivable	(917)		(820)
Deferred income tax expense (benefit)	35		(17)
Changes in operating assets and liabilities:
Other assets	(2,390)		(844)
Accounts payable and accrued liabilities	133		352
Other liabilities	(870)		(73)
Net cash provided by operating activities	12,698		14,402
INVESTING ACTIVITIES
Acquisitions of real estate	(23,895)		(5,845)
Funding of notes receivable	(1,295)		(1,500)
Proceeds from the repayment of notes receivable	750		750
Capital expenditures on existing real estate properties	(4,138)		(1,892)
Net cash used in investing activities	(28,578)		(8,487)
FINANCING ACTIVITIES
Net borrowings on revolving credit facility	12,000		4,000
Mortgage note repayments	(32)		(40)
Dividends paid	(11,646)		(10,969)
Proceeds from issuance of common stock	8,215		—
Equity issuance costs	(100)		(74)
Net cash provided by (used for) financing activities	8,437		(7,083)
Decrease in cash and cash equivalents and restricted cash	(7,443)		(1,168)
Cash and cash equivalents and restricted cash, beginning of period	12,068		2,867
Cash and cash equivalents and restricted cash, end of period	$	4,625	$	1,699
Supplemental Cash Flow Information:
Interest paid (net of capitalized interest)	$	3,866	$	2,476
Invoices accrued for construction, tenant improvement and other capitalized costs	$	3,274	$	982
Reclassification of registration statement costs incurred in prior year to equity issuance costs	$	52	$	119
(Decrease) increase in fair value of cash flow hedges	$	(4,973)	$	11,407
Income taxes paid	$	60	$	12
Capitalized interest	$	192	$	228
Net proceeds accrued for common stock issued in March with cash settlement in April	$	732	$	—

See accompanying notes to the condensed consolidated financial statements.

8

COMMUNITY HEALTHCARE TRUST INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2023

(Unaudited)

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business Overview

Community Healthcare Trust Incorporated (the ‘‘Company’’, ‘‘we’’, ‘‘our’’) was organized in the State of Maryland on March 28, 2014. The Company is a fully-integrated healthcare real estate company that owns and acquires real estate properties that are leased to hospitals, doctors, healthcare systems or other healthcare service providers. As of March 31, 2023, the Company had investments of approximately $974.0 million in 181 real estate properties (including a portion of one property accounted for as a sales-type lease with a gross amount totaling approximately $3.0 million). The properties are located in 34 states, totaling approximately 4.0 million square feet in the aggregate and were approximately 91.6% leased at March 31, 2023 with a weighted average remaining lease term of approximately 7.4 years. Any references to square footage, property count, or occupancy percentages, and any amounts derived from these values in these notes to the Condensed Consolidated Financial Statements, are outside the scope of our independent registered public accounting firm's review.

Basis of Presentation

The Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. They do not include all of the information and footnotes required by GAAP for complete financial statements. This interim financial information should be read in conjunction with the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. Management believes that all adjustments of a normal, recurring nature considered necessary for a fair presentation have been included. This interim financial information does not necessarily represent or indicate what the operating results will be for the year ending December 31, 2023. All intercompany accounts and transactions have been eliminated.

Use of Estimates in the Condensed Consolidated Financial Statements

Preparation of the Condensed Consolidated Financial Statements in accordance with GAAP requires management to make estimates and assumptions that affect amounts reported in the Condensed Consolidated Financial Statements and accompanying notes. Actual results may materially differ from those estimates.

Cash and Cash Equivalents and Restricted Cash

Cash and cash equivalents includes short-term investments with original maturities of three months or less when purchased. Restricted cash consists of amounts held by the lender of our mortgage note payable to provide for future real estate tax, insurance expenditures and tenant improvements related to one property. The carrying amounts approximate fair value due to the short term maturity of these investments. The following table provides a reconciliation of cash and cash equivalents and restricted cash:

	Balance as of March 31,
(Dollars in thousands)	2023		2022
Cash and cash equivalents	$	3,666	$	1,178
Restricted cash	959		521
Cash, cash equivalents and restricted cash	$	4,625	$	1,699

Income Taxes

The Company has elected to be taxed as a real estate investment trust ("REIT"), as defined under the Internal Revenue Code of 1986, as amended (the "Code"). The Company and two subsidiaries have also elected for those subsidiaries to be treated as taxable REIT subsidiaries ("TRSs"), which are subject to federal and state income taxes. No provision has been made for federal income taxes for the REIT; however, the Company has recorded income tax

9

Notes to Condensed Consolidated Financial Statements - Continued

expense or benefit for the TRSs to the extent applicable. The Company also evaluates the realizability of its deferred tax assets and will record valuation allowances if it is determined that more likely than not the asset will not be recovered. The Company intends at all times to qualify as a REIT under the Code. The Company must distribute at least 90% per annum of its REIT taxable income to its stockholders (which is computed without regard to the dividends paid deduction or net capital gain and which does not necessarily equal net income as calculated in accordance with GAAP) and meet other requirements to continue to qualify as a REIT.

NOTE 2. REAL ESTATE PROPERTIES

As of March 31, 2023, we had investments of approximately $974.0 million in 181 real estate properties (including a portion of one property accounted for as a financing lease with a gross amount totaling approximately $3.0 million). The Company's investments are diversified by property type, geographic location, and tenant as shown in the following tables:

Property Type	# of Properties	Gross Investment (in thousands)
Medical Office Building	82	$	370,918
Inpatient Rehabilitation Facilities	7	151,234
Acute Inpatient Behavioral	5	130,410
Specialty Centers	37	119,618
Physician Clinics	30	86,496
Surgical Centers and Hospitals	10	55,974
Behavioral Specialty Facilities	9	44,455
Long-term Acute Care Hospitals	1	14,937
Total	181	$	974,042

State	# of Properties	Gross Investment (in thousands)
Texas	15	$	138,931
Illinois	16	121,640
Ohio	25	110,087
Florida	22	94,375
All Others	103	509,009
Total	181	$	974,042

Primary Tenant	# of Properties	Gross Investment (in thousands)
LifePoint Health (1)	5	$	82,113
US Healthvest	3	77,964
All Others	173	813,965
Total	181	$	974,042
_________
(1) During the first quarter of 2023, Everest Rehabilitation assigned its leases to LifePoint Health on four properties in which the Company had a gross investment totaling $80.7 million at March 31, 2023.

10

Notes to Condensed Consolidated Financial Statements - Continued

NOTE 3. REAL ESTATE LEASES

Lessor Accounting

The Company’s properties are generally leased pursuant to non-cancelable, fixed-term operating leases with expiration dates through 2039. The Company’s leases generally require the lessee to pay minimum rent, with fixed rent renewal terms or increases based on a Consumer Price Index and may also include additional rent, which may include the reimbursement of taxes (including property taxes), insurance, maintenance and other operating costs associated with the leased property.

Some leases provide the lessee, during the term of the lease, with an option or right of first refusal to purchase the leased property. Some leases also allow the lessee to renew or extend their lease term or in some cases terminate their lease, based on conditions provided in the lease.

Future minimum lease payments under the non-cancelable operating leases due to the Company for the years ending December 31, as of March 31, 2023, are as follows (in thousands):

2023 (nine months ended December 31)	$	67,851
2024	86,063
2025	79,894
2026	70,085
2027	64,285
2028 and thereafter	367,034
	$	735,212

Rental income is recognized as earned over the life of the lease agreement on a straight-line basis when collection of rental payments over the term of the lease is probable. Straight-line rent included in rental income was approximately $0.9 million and $0.8 million, respectively, for the three months ended March 31, 2023 and 2022.

Purchase Option Provisions

Certain of the Company's leases provide the lessee with a purchase option or a right of first refusal to purchase the leased property. The purchase option provisions generally allow the lessee to purchase the leased property at fair value or at an amount greater than the Company's gross investment in the leased property at the time of the purchase. At March 31, 2023, the Company had an aggregate gross investment of approximately $40.7 million in 12 real estate properties with purchase options exercisable at March 31, 2023 that had not been exercised.

Sales-type Lease

The Company has a portion of one property accounted for as a sales-type lease with a gross amount totaling approximately $3.0 million included in other assets, net on the Company's Condensed Consolidated Balance Sheets. Future lease payments due to the Company under this lease for the years ending December 31, as of March 31, 2023, are as follows (in thousands):

2023 (nine months ended December 31)	$	253
2024	346
2025	356
2026	367
2027	378
2028 and thereafter	5,210
Total undiscounted lease receivable	6,910
Discount	(3,877)
Lease receivable	$	3,033

11

Notes to Condensed Consolidated Financial Statements - Continued

The Company recognized interest income of approximately $0.1 million and $0.1 million, respectively, during the three months ended March 31, 2023 and 2022 related to this lease which is included in other operating interest on the Company's Consolidated Statements of Operations.

Lessee Accounting

At March 31, 2023, the Company was obligated, as the lessee, under four non-prepaid ground leases accounted for as operating leases with expiration dates, including renewal options, through 2076, and two non-prepaid ground leases accounted for as financing leases with expiration dates through 2109, including renewal options. Any rental increases related to the Company's ground leases are generally either stated or based on the Consumer Price Index. The Company's future lease payments under these non-prepaid ground leases were as follows (in thousands):

	Operating		Financing
2023 (nine months ended December 31)	$	32	$	106
2024	43		154
2025	44		154
2026	44		154
2027	45		154
2028 and thereafter	1,148		6,956
Total undiscounted lease payments	1,356		7,678
Discount	(573)		(4,400)
Lease liabilities	$	783	$	3,278

The following table discloses other information regarding the ground leases.

	Three Months Ended March 31,
	2023		2022
Operating leases:
Weighted-average remaining lease term in years (including renewal options)	36.03		36.73
Weighted-average discount rate	4.0	%	4.0	%
Financing leases:
Weighted-average remaining lease term in years (including renewal options)	40.56		36.75
Weighted-average discount rate	4.2	%	4.1	%

12

Notes to Condensed Consolidated Financial Statements - Continued

NOTE 4. REAL ESTATE ACQUISITIONS

During the first quarter of 2023, the Company acquired seven real estate properties. Upon acquisition, the properties were 100.0% leased in the aggregate with lease expirations through 2031. Amounts reflected in revenues and net (loss) income for these properties for the three months ended March 31, 2023 were approximately $0.5 million and $0.1 million, respectively, and transaction costs totaling approximately $0.4 million were capitalized relating to these property acquisitions.

Location	Property Type (1)	Date Acquired	Purchase Price		Cash Consideration		Real Estate		Other (2)		Square Footage
			(000's)		(000's)		(000's)		(000's)
LaGrange, GA	MOB	01/18/23	$	8,007	$	8,087	$	8,118	$	(31)	55,310
West Point, GA	MOB	01/18/23	811		819		822		(3)		5,600
Canton, OH	MOB	01/30/23	3,669		3,706		4,287		(581)		27,920
Scranton, PA	MOB	02/23/23	1,957		2,165		2,317		(152)		22,743
Scranton, PA	MOB	02/23/23	2,207		2,366		2,340		26		15,768
Lagrange, GA	MOB	03/06/23	6,469		6,458		6,622		(164)		31,473
Lagrange, GA	MOB	03/06/23	249		294		300		(6)		2,972
			$	23,369	$	23,895	$	24,806	$	(911)	161,786
(1) MOB - Medical Office Building
(2) Includes other assets acquired, liabilities assumed, and above and below-market intangibles recognized at acquisition.

The following table summarizes the relative fair values of the assets acquired and liabilities assumed in the property acquisitions for the three months ended March 31, 2023.

			Relative Fair Value		Estimated Useful Life
			(in thousands)		(in years)
Land and land improvements			$	4,961	7.4
Building and building improvements			16,791		23.2
Intangibles:
	At-market lease intangibles		3,054		3.5
	Above-market lease intangibles		199		3.3
	Below-market lease intangibles		(1,188)		5.8
		Total intangibles	2,065
Accounts payable, accrued liabilities and other liabilities assumed			(46)
Accounts receivable and other assets acquired			224
Prorated rent, interest and operating expense reimbursement amounts collected			(100)
	Total cash consideration		$	23,895

13

Notes to Condensed Consolidated Financial Statements - Continued

NOTE 5. DEBT, NET

The table below details the Company's debt as of March 31, 2023 and December 31, 2022.

	Balance as of
(Dollars in thousands)	March 31, 2023		December 31, 2022		Maturity Dates
Credit Facility:
Revolving Credit Facility	$	12,000	$	—	3/26
A-3 Term Loan, net	74,639		74,609		3/26
A-4 Term Loan, net	124,437		124,409		3/28
A-5 Term Loan, net	149,091		149,059		3/30
Mortgage Note Payable, net	4,894		4,920		5/24
	$	365,061	$	352,997

On December 14, 2022, Community Healthcare Trust Incorporated, as borrower, entered into a first amendment (the "First Amendment") to the third amended and restated credit agreement (the "Credit Facility") by and among Community Healthcare Trust Incorporated, as borrower, the several banks and financial institutions party thereto as lenders, and Truist Bank, as administrative agent. The First Amendment amended the Credit Facility to, among other things, (i) establish a new seven-year and three-month term loan facility in the aggregate principal amount of $150.0 million (the "A-5 Term Loan"), which matures on March 14, 2030 and (ii) replace LIBOR as a benchmark interest rate for loans under the Credit Facility with SOFR. The proceeds from the A-5 Term Loan were used in part to repay the seven-year term loan facility in the aggregate principal amount of $50.0 million (the "A-2 Term Loan") which was set to mature on March 29, 2024.

The Credit Facility allows the Company to borrow, through the accordion feature, up to $700.0 million, including the ability to add and fund incremental term loans. The Company's material subsidiaries are guarantors of the obligations under the Credit Facility.

The Credit Facility provides for a $150.0 million Revolving Credit Facility and $350.0 million in term loans (the "Term Loans"). The Revolving Credit Facility matures on March 19, 2026 and includes one 12-month option to extend the maturity date, subject to the satisfaction of certain conditions. The Term Loans include a seven-year term loan facility in the aggregate principal amount of $75.0 million (the "A-3 Term Loan"), which matures on March 29, 2026, a seven-year term loan facility in the aggregate principal amount of $125.0 million (the "A-4 Term Loan"), which matures on March 19, 2028, and the A-5 Term Loan, which matures on March 14, 2030.

Under the First Amendment, amounts outstanding under the Revolving Credit Facility will bear interest at a floating rate based on the Company's option, on either: (i) adjusted term SOFR or adjusted daily simple SOFR plus 1.25% to 1.90% or (ii) a base rate plus 0.25% to 0.90% in each case, depending upon the Company’s leverage ratio. In addition, the Company is obligated to pay an annual fee equal to 0.20% of the amount of the unused portion of the Revolving Credit Facility if amounts borrowed are greater than 33.3% of the borrowing capacity under the Revolving Credit Facility and 0.25% of the unused portion of the Revolving Credit Facility if amounts borrowed are less than or equal to 33.3% of the borrowing capacity under the Revolving Credit Facility. The Company had $12.0 million outstanding under the Revolving Credit Facility with a weighted average interest rate of 6.55% and a borrowing capacity remaining of $138.0 million at March 31, 2023.

Under the First Amendment, amounts outstanding under the Term Loans will bear interest at a floating rate that is based, at the Company's option, on either (i) adjusted term SOFR or adjusted daily SOFR plus 1.45% to 2.30% or (ii) a base rate plus 0.45% to 1.30%, in each case, depending upon the Company’s leverage ratio. The Company has entered into interest rate swaps to fix the interest rates on the Term Loans. See Note 6 – Derivative Financial Instruments for more details on the interest rate swaps. At March 31, 2023, the Company had $350.0 million outstanding under the Term Loans which had a fixed weighted average interest rate under the swaps of approximately 4.3%.

14

Notes to Condensed Consolidated Financial Statements - Continued

The Company’s ability to borrow under the Credit Facility is subject to its ongoing compliance with a number of customary affirmative and negative covenants, including limitations with respect to liens, indebtedness, distributions, mergers, consolidations, investments, restricted payments and asset sales, as well as financial maintenance covenants. The Company was in compliance with its financial covenants under its Credit Facility as of March 31, 2023.

Mortgage Note Payable

The Company's mortgage note payable is secured by a building which had a $6.4 million carrying balance at March 31, 2023. The mortgage note amortizes monthly at a fixed interest rate of 4.98% with a balloon payment of approximately $4.8 million due upon maturity on May 1, 2024.

NOTE 6. DERIVATIVE FINANCIAL INSTRUMENTS

Risk Management Objective of Using Derivatives

The Company may use derivative financial instruments, including interest rate swaps, caps, options, floors and other interest rate derivative contracts, to hedge all or a portion of the interest rate risk associated with its borrowings. The principal objective of such arrangements is to minimize the risks and/or costs associated with the Company’s operating and financial structure as well as to hedge specific anticipated transactions. The Company does not intend to utilize derivatives for speculative or other purposes other than interest rate risk management. The use of derivative financial instruments carries certain risks, including the risk that the counterparties to these contractual arrangements are not able to perform under the agreements. To mitigate this risk, the Company only enters into derivative financial instruments with counterparties with high credit ratings and with major financial institutions with which the Company and its affiliates may also have other financial relationships. The Company does not anticipate that any of the counterparties will fail to meet their obligations.

Cash Flow Hedges of Interest Rate Risk

The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish these objectives, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.

As of March 31, 2023, the Company had seventeen outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk for notional amounts totaling $350.0 million, including two forward-starting interest rate swaps for notional amounts totaling $50.0 million, which will not become effective until March 29, 2024.

Tabular Disclosure of Fair Value of Derivative Instruments on the Balance Sheet

The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the Condensed Consolidated Balance Sheets as of March 31, 2023 and December 31, 2022.

	Asset Derivatives Fair Value at					Liability Derivatives Fair Value at
(Dollars in thousands)	March 31, 2023		December 31, 2022		Balance Sheet Classification	March 31, 2023		December 31, 2022		Balance Sheet Classification
Interest rate swaps	$	16,397	$	22,667	Other assets, net	$	712	$	—	Other liabilities, net

The changes in the fair value of derivatives designated and that qualify as cash flow hedges are recorded in accumulated other comprehensive income ("AOCI") and are subsequently reclassified to interest expense in the period that the hedged forecasted transaction affects earnings.

Amounts reported in AOCI related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s Term Loans. During the next twelve months, the Company estimates that an additional $8.5 million will be reclassified from AOCI as a decrease to interest expense.

15

Notes to Condensed Consolidated Financial Statements - Continued

Tabular Disclosure of the Effect of Cash Flow Hedge Accounting on Accumulated Other Comprehensive Income

The table below details the location in the financial statements of the gain or loss recognized on interest rate derivatives designated as cash flow hedges for the three months ended March 31, 2023 and 2022.

	Three Months Ended March 31,
(Dollars in thousands)	2023		2022
Amount of unrealized (loss) gain recognized in OCI on derivatives	$	(4,973)	$	11,407
Amount of (gain) loss reclassified from AOCI into interest expense	$	(2,010)	$	1,115
Total interest expense presented in the Condensed Consolidated Statements of Operations in which the effects of the cash flow hedges are recorded	$	3,992	$	2,626

Tabular Disclosures of Offsetting Derivatives

The tables below present a gross presentation, the effects of offsetting, and a net presentation of the Company's derivatives as of March 31, 2023 and December 31, 2022. The net amounts of derivative assets or liabilities can be reconciled to the tabular disclosure of fair value. The tabular disclosure of fair value provides the location that derivative assets and liabilities are presented on the Condensed Consolidated Balance Sheets.

Offsetting of Derivative Assets (as of March 31, 2023)
							Gross Amounts Not Offset in the Condensed Consolidated Balance Sheets
(In thousands)	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Condensed Consolidated Balance Sheet		Net Amounts of Assets in the Condensed Consolidated Balance Sheets		Financial Instruments		Cash Collateral Received		Net Amount
Derivatives	$	16,397	$	—	$	16,397	$	(712)	$	—	$	15,685

Offsetting of Derivative Liabilities (as of March 31, 2023)
							Gross Amounts Not Offset in the Condensed Consolidated Balance Sheets
(In thousands)	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Condensed Consolidated Balance Sheet		Net Amounts of Liabilities in the Condensed Consolidated Balance Sheets		Financial Instruments		Cash Collateral Received		Net Amount
Derivatives	$	(712)	$	—	$	(712)	$	712	$	—	$	—

Offsetting of Derivative Assets (as of December 31, 2022)
							Gross Amounts Not Offset in the Condensed Consolidated Balance Sheets
(In thousands)	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Condensed Consolidated Balance Sheet		Net Amounts of Assets in the Condensed Consolidated Balance Sheets		Financial Instruments		Cash Collateral Received		Net Amount
Derivatives	$	22,667	$	—	$	22,667	$	—	$	—	$	22,667

16

Notes to Condensed Consolidated Financial Statements - Continued

Offsetting of Derivative Liabilities (as of December 31, 2022)

Gross Amounts Not Offset in the Condensed Consolidated Balance Sheets

(In thousands)

Gross Amounts of Recognized Liabilities

Gross Amounts Offset in the Condensed Consolidated Balance Sheet

Net Amounts of Liabilities in the Condensed Consolidated Balance Sheets

Financial Instruments

Cash Collateral Received

Net Amount

Derivatives

$

—

$

—

$

—

$

—

$

—

$

—

Credit-risk-related Contingent Features

As of March 31, 2023, the Company did not have any derivatives in a net liability position. As of March 31, 2023, the Company had not posted any collateral related to these agreements and was not in breach of any agreement provisions. If the Company terminated these interest rate swaps or breached any of these provisions, it could have been required to settle its obligations under the agreements at their aggregate termination value.

NOTE 7. STOCKHOLDERS' EQUITY

Common Stock

The following table provides a reconciliation of the beginning and ending common stock balances for the three months ended March 31, 2023 and for the year ended December 31, 2022:

(In thousands)	Three Months Ended March 31, 2023	Year Ended December 31, 2022
Balance, beginning of period	25,897	24,983
Issuance of common stock	249	600
Restricted stock issued	129	318
Restricted stock withheld and forfeited	(1)	(4)
Balance, end of period	26,274	25,897

ATM Program

The Company has an at-the-market offering program ("ATM Program"), with Piper Sandler & Co., Evercore Group L.L.C., Truist Securities, Inc., Regions Securities LLC, Robert W. Baird & Co. Incorporated, Fifth Third Securities, Inc. and Janney Montgomery Scott LLC, as sales agents (collectively, the “Agents”). Under the ATM Program, the Company may issue and sell shares of its common stock, having an aggregate gross sales price of up to $500.0 million. The shares of common stock may be sold from time to time through or to one or more of the Agents, as may be determined by the Company in its sole discretion, subject to the terms and conditions of the agreement and applicable law.

The Company's activity under the ATM Program during the three months ended March 31, 2023 is detailed in the table below. As of March 31, 2023, the Company had approximately $469.9 million remaining that may be issued under the ATM Program.

	Three Months Ended March 31, 2023
Shares issued (in thousands)	249
Net proceeds received (in millions) (1)	$8.9
Average gross sales price per share	$36.69
___________
(1) Net proceeds received includes shares sold on March 30, 2023 and reflected in shares outstanding at March 31, 2023, for which $0.7 million of cash proceeds was received by the Company on April 3, 2023.

17

Notes to Condensed Consolidated Financial Statements - Continued

NOTE 8. NET (LOSS) INCOME PER COMMON SHARE

The following table sets forth the computation of basic and diluted net (loss) income per common share for the three months ended March 31, 2023 and 2022, respectively.

	Three Months Ended March 31,
(In thousands, except per share data)	2023		2022
Net (loss) income	$	(6,922)	$	5,524
Participating securities' share in earnings	(822)		(658)
Net (loss) income, less participating securities' share in earnings	$	(7,744)	$	4,866
Weighted average Common Shares outstanding
Weighted average Common Shares outstanding	26,043		25,060
Unvested restricted shares	(1,816)		(1,490)
Weighted average Common Shares outstanding–Basic	24,227		23,570
Dilutive potential common shares	—		—
Weighted average Common Shares outstanding –Diluted	24,227		23,570
Basic Net (Loss) Income per Common Share	$	(0.32)	$	0.21
Diluted Net (Loss) Income per Common Share	$	(0.32)	$	0.21

NOTE 9. STOCK INCENTIVE PLAN

A summary of the activity under the Company's 2014 Incentive Plan, as amended, for the three months ended March 31, 2023 and 2022 is included in the table below, as well as compensation expense recognized from the amortization of the value of shares over the applicable vesting periods.

		Three Months Ended March 31,
(Dollars and shares in thousands)		2023		2022
Stock-based awards, beginning of period		1,708		1,416
	Stock in lieu of compensation	62		44
	Stock awards	67		48
	Total stock granted	129		92
	Vested shares	—		(5)
	Forfeited shares	(1)		(1)
Stock-based awards, end of period		1,836		1,502
Amortization expense (1)		$	14,346	$	2,122
___________
(1) Amortization expense for the three months ended March 31, 2023 includes the accelerated amortization totaling $11.8 million recognized upon the passing of our former CEO and President.

Accelerated Amortization of Restricted Stock

The Company's former CEO and President, Timothy Wallace, passed away on March 3, 2023. At the time of his passing, Mr. Wallace had 624,725 shares of restricted stock that had not been fully amortized. Upon his passing, Mr. Wallace's unvested shares of restricted stock vested in accordance with the terms of his employment agreement, and the Company accelerated the unamortized remaining balance of deferred compensation related to his unvested shares and recognized an additional $11.8 million of amortization expense in the first quarter of 2023.

18

Notes to Condensed Consolidated Financial Statements - Continued

NOTE 10. OTHER ASSETS, NET

Other assets, net on the Company's Condensed Consolidated Balance Sheets as of March 31, 2023 and December 31, 2022 are detailed in the table below.

	Balance as of
(Dollars in thousands)	March 31, 2023		December 31, 2022
Notes receivable	$	33,250	$	32,705
Accounts and interest receivable	5,387		2,679
Straight-line rent receivable	16,342		15,429
Prepaid assets	1,341		980
Deferred financing costs, net	630		683
Leasing commissions, net	2,036		1,848
Deferred tax assets, net	271		306
Fair value of interest rate swaps	16,397		22,667
Above-market lease intangible assets, net	2,441		2,399
Sales-type lease receivable	3,033		3,035
Financing right-of-use asset	2,530		2,545
Operating lease right-of-use assets	751		759
Other	580		496
	$	84,989	$	86,531

The Company's notes receivable mainly included:

•At March 31, 2023 and December 31, 2022, notes receivable included a $8.3 million and $9.0 million, respectively, term loan, secured by all assets and ownership interests in seven long-term acute care hospitals and one inpatient rehabilitation hospital owned by the borrower. The term loan will be repaid in equal monthly installments of $250,000 through the maturity date of December 31, 2025 and bears interest at 9% per annum.

•At March 31, 2023 and December 31, 2022, notes receivable included a $17.0 million term loan and a $5.5 million and $5.0 million, respectively, revolving credit facility, secured by assets and ownership interests of six geriatric behavioral hospitals and affiliated companies all of which are co-borrowers on the loans. The term loan bears interest at 9% per annum, with interest only payments due initially and then equal monthly installments of principal payments due beginning March 31, 2024. The term loan facility matures on December 31, 2032. The revolving credit facility bears interest at 9% per annum and matures on December 31, 2025. In addition, the Company has committed to fund, at the Company’s discretion, additional amounts, up to $5.0 million with interest at 9% per annum on any amount funded, that may be used by the borrower to pay existing liabilities of co-borrowers. The term loan, the revolving credit facility and the additional commitment all include a 3% non-cash interest charge that is due and payable upon the earlier of the repayment or maturity of each note.

•At March 31, 2023 and December 31, 2022, notes receivable included a $2.5 million and $1.7 million, respectively, revolving credit facility. Commencing on October 1, 2023, the revolving credit facility will be repaid in equal monthly installments of $40,000 through the maturity date of April 1, 2027. The revolving credit facility bears interest at 9% per annum, as well as a 3% non-cash interest charge that is due and payable upon the earlier of the repayment or maturity of the note.

19

Notes to Condensed Consolidated Financial Statements - Continued

The Company identified the borrowers of these notes as variable interest entities ("VIEs"), but management determined that the Company was not the primary beneficiary of the VIEs because we lack either directly or through related parties any material decision-making rights or control of the entities that impact the borrowers' economic performance. We are not obligated to provide support beyond our stated commitment to the borrowers, and accordingly our maximum exposure to loss as a result of this relationship is limited to the amount of our outstanding notes receivable. The VIEs that we have identified at March 31, 2023 are summarized in the table below.

Classification	Carrying Amount (in thousands)		Maximum Exposure to Loss (in thousands)
Note receivable (term loan)	$	8,250	$	8,250
Note receivable (revolving credit facility)	$	5,500	$	5,500
Note receivable (term loan)	$	17,000	$	17,000
Note receivable (revolving credit facility)	$	2,500	$	2,500

NOTE 11. OTHER LIABILITIES, NET

Other liabilities, net on the Company's Condensed Consolidated Balance Sheets as of March 31, 2023 and December 31, 2022 are detailed in the table below.

	Balance as of
(Dollars in thousands)	March 31, 2023		December 31, 2022
Prepaid rent	$	4,862	$	3,853
Security deposits	3,615		5,766
Below-market lease intangibles, net	2,144		1,075
Fair value of interest rate swaps	712		—
Financing lease liability	3,278		3,279
Operating lease liability	783		786
Other	846		478
	$	16,240	$	15,237

NOTE 12. FAIR VALUE OF FINANCIAL INSTRUMENTS

The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practical to estimate the fair value.

Cash and cash equivalents and restricted cash - The carrying amount approximates the fair value.

Notes receivable - The fair value is estimated using cash flow analyses, based on an assumed market rate of interest or at a rate consistent with the rates on notes carried by the Company and are classified as level 2 inputs in the hierarchy.

Borrowings under our Credit Facility - The carrying amount approximates the fair value because the borrowings are based on variable market interest rates. The fair value estimates were determined using level 2 inputs.

Derivative financial instruments (Interest rate swaps) - The fair value is estimated using discounted cash flow techniques. These techniques incorporate primarily level 2 inputs. The market inputs are utilized in the discounted cash flow calculation considering the instrument’s term, notional amount, discount rate and credit risk. Significant inputs to the derivative valuation model for interest rate swaps are observable in active markets and are classified as level 2 inputs in the hierarchy.

20

Notes to Condensed Consolidated Financial Statements - Continued

Mortgage note payable - The fair value is estimated using cash flow analyses which are based on an assumed market rate of interest or at a rate consistent with the rates on mortgage notes assumed by the Company and are classified as level 2 inputs in the hierarchy.

The table below details the fair values and carrying values for our notes receivable, interest rate swaps, and mortgage note payable at March 31, 2023 and December 31, 2022, using level 2 inputs.

	March 31, 2023				December 31, 2022
(Dollars in thousands)	Carrying Value		Fair Value		Carrying Value		Fair Value
Notes receivable	$	33,250	$	33,319	$	32,705	$	32,716
Interest rate swap asset	$	16,397	$	16,397	$	22,667	$	22,667
Interest rate swap liability	$	712	$	712	$	—	$	—
Mortgage note payable (principal amount)	$	4,915	$	4,766	$	4,947	$	4,761

NOTE 13. SUBSEQUENT EVENTS

Dividend Declared

On April 27, 2023, the Company’s Board of Directors declared a quarterly common stock dividend in the amount of $0.45 per share. The dividend is payable on May 26, 2023 to stockholders of record on May 12, 2023.

21

ITEM 2.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Disclosure Regarding Forward-Looking Statements

This report and other materials that Community Healthcare Trust Incorporated (the "Company") has filed or may file with the Securities and Exchange Commission, as well as information included in oral statements or other written statements made, or to be made, by management of the Company, contain, or will contain, statements that are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are generally identifiable by use of forward-looking terminology such as “believes”, “expects”, “may”, "will', “should”, “seeks”, “approximately”, “intends”, “plans”, “estimates”, “anticipates” or other similar words or expressions, including the negative thereof. Forward-looking statements are based on certain assumptions and can include future expectations, future plans and strategies, financial and operating projections or other forward-looking information. Such forward-looking statements reflect management’s current beliefs and are based on information currently available to management. Because forward-looking statements relate to future events, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of the Company’s control. Thus, the Company’s actual results and financial condition may differ materially from those indicated in such forward-looking statements. Some factors that might cause such a difference include the following: general volatility of the capital markets and the market price of the Company’s common stock, changes in the Company’s business strategy, availability, terms and deployment of capital, the Company’s ability to refinance existing indebtedness at or prior to maturity on favorable terms, or at all, changes in the real estate industry in general, interest rates or the general economy, adverse developments related to the healthcare industry, changes in governmental regulations, the degree and nature of the Company’s competition, the ability to consummate acquisitions under contract, catastrophic or extreme weather and other natural events and the physical effects of climate change, the occurrence of cyber incidents, effects on global and national markets as well as businesses resulting from increased inflation, rising interest rates, supply chain disruptions, labor conditions, the COVID-19 pandemic, and/or the conflict between Russia and Ukraine, and the other factors described in the section entitled “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, and the Company’s other filings with the Securities and Exchange Commission from time to time. Readers are therefore cautioned not to place undue reliance on the forward-looking statements contained herein which speak only as of the date hereof. The Company intends these forward-looking statements to speak only as of the time of this report and the Company undertakes no obligation to update forward-looking statements, whether as a result of new information, future developments, or otherwise, except as may be required by law.

The purpose of this Management's Discussion and Analysis ("MD&A") is to provide an understanding of the Company's consolidated financial condition, results of operations and cash. MD&A is provided as a supplement to, and should be read in conjunction with, the Company's Condensed Consolidated Financial Statements and accompanying notes.

Overview

References such as "we," "us," "our," and "the Company" mean Community Healthcare Trust Incorporated, a Maryland corporation, and its consolidated subsidiaries.

We were organized in the State of Maryland on March 28, 2014. We are a self-administered, self-managed healthcare real estate investment trust, or REIT, that acquires and owns properties that are leased to hospitals, doctors, healthcare systems or other healthcare service providers.

Trends and Matters Impacting Operating Results

Management monitors factors and trends that it believes are important to the Company and the REIT industry in order to gauge their potential impact on the operations of the Company. Certain of the factors and trends that management believes may impact the operations of the Company are discussed below.

22

Management's Discussion and Analysis of Financial Condition and Results of Operations - Continued

Real Estate Acquisitions

During the first three months of 2023, the Company acquired seven real estate properties totaling approximately 161,786 square feet for an aggregate purchase price of approximately $23.4 million and cash consideration of approximately $23.9 million. Upon acquisition, the properties were 100.0% leased in the aggregate with lease expirations through 2031. These acquisitions were funded with cash on hand and proceeds from the Company's Revolving Credit Facility. See Note 4 – Real Estate Acquisitions to the Condensed Consolidated Financial Statements for more details on these acquisitions.

Acquisition Pipeline

The Company has four properties under definitive purchase agreements for an aggregate expected purchase price of approximately $19.7 million. The Company's expected returns on these investments range from 9.16% to 9.25%. The Company expects to close on these properties in the second quarter of 2023; however, the Company cannot provide assurance as to the timing of when, or whether, these transactions will actually close.

The Company also has nine properties under definitive purchase agreements, to be acquired after completion and occupancy, for an aggregate expected purchase price of approximately $214.5 million. The Company's expected return on these investments will approximate 9.75% to 10.25%. The Company anticipates closing on these properties throughout 2023, 2024 and 2025; however, the Company cannot provide assurance as to the timing of when, or whether, these transactions will actually close.

Leased Square Footage

As of March 31, 2023, our real estate portfolio was approximately 91.6% leased. During the first three months of 2023, we had expiring or terminated leases related to approximately 114,000 square feet, and we leased or renewed leases relating to approximately 82,000 square feet.

Purchase Option Provisions

Certain of the Company's leases provide the lessee with a purchase option or a right of first refusal to purchase the leased property. The purchase option provisions generally allow the lessee to purchase the leased property at fair value or at an amount greater than the Company's gross investment in the leased property at the time of the purchase.

At March 31, 2023, the Company had an aggregate gross investment of approximately $40.7 million in 12 real estate properties with purchase options exercisable at March 31, 2023 that had not been exercised.

Inflation

Inflation has been increasing significantly and a prolonged period of high and persistent inflation could cause an increase in our expenses, capital expenditures, and cost of our variable-rate borrowings which could have a material impact on our financial position or results of operations. Many of our lease agreements contain provisions designed to mitigate the adverse impact of inflation, including annual rent increases based on stated increases or CPI increases. In response to inflationary pressures, the Federal Reserve began raising interest rates in 2022 and has indicated that it foresees further interest rates throughout 2023 and 2024. Higher interest rates imposed by the Federal Reserve to address inflation may adversely impact real estate asset values and increase our interest expense on our variable-rate borrowings under our revolving credit facility.

23

Management's Discussion and Analysis of Financial Condition and Results of Operations - Continued

Results of Operations

The Company's results of operations for the three months ended March 31, 2023 compared to the same periods in 2022 were impacted by real estate acquisitions, capital market activity, the amortization of non-cash compensation, including the non-cash accelerated amortization of unvested restricted shares upon the passing of the Company's CEO and President, as well as other items discussed in more detail below.

Three Months Ended March 31, 2023 Compared to Three Months Ended March 31, 2022

The table below shows our results of operations for the three months ended March 31, 2023 compared to the same period in 2022 and the effect of changes in those results from period to period on our net (loss) income.

	Three Months Ended March 31,				Increase (Decrease) to Net income
(Dollars in thousands)	2023		2022		$		%
REVENUES
Rental income	$	26,128	$	22,604	$	3,524	15.6	%
Other operating interest	1,048		877		171		19.5	%
	27,176		23,481		3,695		15.7	%
EXPENSES
Property operating	4,873		4,091		(782)		(19.1)	%
General and administrative	16,205		3,316		(12,889)		n/m
Depreciation and amortization	9,018		7,942		(1,076)		(13.5)	%
	30,096		15,349		(14,747)		(96.1)	%
INCOME BEFORE INCOME TAXES AND OTHER ITEMS	(2,920)		8,132		(11,052)		(135.9)	%
Interest expense	(3,992)		(2,626)		(1,366)		(52.0)	%
Deferred income tax (expense) benefit	(35)		17		(52)		n/m
Interest and other income	25		1		24		n/m
NET (LOSS) INCOME	$	(6,922)	$	5,524	$	(12,446)	(225.3)	%

n/m - not meaningful

Revenues

Rental income increased approximately $3.5 million, or 15.6%, for the three months ended March 31, 2023 compared to the same period in 2022. Income on properties acquired during 2022 and 2023 increased rental income by approximately $3.0 million.

Other operating interest increased $0.2 million, or 19.5%, for the three months ended March 31, 2023 compared to the same period in 2022. This increase in interest was due to additional amounts funded under existing notes receivable.

Expenses

Property operating expenses increased approximately $0.8 million, or 19.1%, for the three months ended March 31, 2023 compared to the same period in 2022. Expenses on properties acquired during 2022 and 2023 increased property operating expenses by approximately $0.7 million.

General and administrative expenses increased approximately $12.9 million for the three months ended March 31, 2023 compared to the same period in 2022 due to several factors. Shares of non-vested restricted common shares granted in 2023 and 2022 resulted in an increase of approximately $0.4 million in non-cash amortization expense in 2023 compared to 2022; salary and other compensation-related expenses increased approximately $0.3 million in 2023 compared to 2022; and professional and service fees increased approximately $0.4 million in 2023 compared to 2022. Also, the Company's former CEO and President, Timothy Wallace, passed away on March 3, 2023. Upon his passing, Mr. Wallace's unvested shares of restricted stock vested in accordance with the terms of his employment

24

Management's Discussion and Analysis of Financial Condition and Results of Operations - Continued

agreement, and the Company accelerated the unamortized remaining balance of deferred compensation related to his unvested shares and recognized an additional $11.8 million of amortization expense in the first quarter of 2023.

Depreciation and amortization expense increased approximately $1.1 million, or 13.5%, for the three months ended March 31, 2023 compared to the same period in 2022. This increase was comprised mainly of the following:

•Acquisitions of real estate in 2023 and 2022 resulted in an increase of approximately $1.3 million;

•Tenant improvements and other capital expenditures resulted in an increase of approximately $0.2 million; and

•Fully amortized real estate lease intangibles which generally have a shorter depreciable life than a building resulted in a decrease of approximately $0.4 million.

Interest expense

Interest expense increased approximately $1.4 million, or 52.0%, for the three months ended March 31, 2023 compared to the same period in 2022. Contractual interest due under the Credit Facility increased approximately $1.3 million due to the Credit Facility refinancing in the fourth quarter of 2022, along with a rise in interest rates.

Non-GAAP Financial Measures and Key Performance Indicators

Management considers certain non-GAAP financial measures and key performance indicators to be useful supplemental measures of the Company's operating performance. A non-GAAP financial measure is generally defined as one that purports to measure financial performance, financial position or cash flows, but excludes or includes amounts that would not be so adjusted in the most comparable measure determined in accordance with GAAP. The Company reports non-GAAP financial measures because these measures are observed by management to also be among the most predominant measures used by the REIT industry and by industry analysts to evaluate REITs. For these reasons, management deems it appropriate to disclose and discuss these non-GAAP financial measures. Set forth below are descriptions of the non-GAAP financial measures management considers relevant to the Company's business and useful to investors, as well as reconciliations of those measures to the most directly comparable GAAP financial measure.

The non-GAAP financial measures and key performance indicators presented herein are not necessarily identical to those presented by other real estate companies due to the fact that not all real estate companies use the same definitions. These measures should not be considered as alternatives to net income, as indicators of the Company's financial performance, or as alternatives to cash flow from operating activities as measures of the Company's liquidity, nor are these measures necessarily indicative of sufficient cash flow to fund all of the Company's needs. Management believes that in order to facilitate a clear understanding of the Company's historical consolidated operating results, these measures should be examined in conjunction with net income and cash flows from operations as presented in the Condensed Consolidated Financial Statements and other financial data included elsewhere in this Quarterly Report on Form 10-Q.

Funds from Operations ("FFO") and Adjusted Funds from Operations ("AFFO")

FFO is an operating performance measure adopted by the National Association of Real Estate Investment Trusts, Inc. (“NAREIT”). NAREIT defines FFO as the most commonly accepted and reported measure of a REIT’s operating performance equal to net income (calculated in accordance with GAAP), excluding gains or losses from the sale of certain real estate assets, gains and losses from change in control, impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity, plus depreciation and amortization related to real estate properties, and after adjustments for unconsolidated partnerships and joint ventures. NAREIT also provides REITs with an option to exclude gains, losses and impairments of assets that are incidental to the main business of the REIT from the calculation of FFO.

25

Management's Discussion and Analysis of Financial Condition and Results of Operations - Continued

In addition to FFO, the Company presents AFFO and AFFO per share. The Company defines AFFO as FFO, excluding certain expenses related to closing costs of properties acquired accounted for as business combinations and mortgages funded, excluding straight-line rent and the amortization of stock-based compensation, and including or excluding other non-cash items from time to time. AFFO presented herein may not be comparable to similar measures presented by other real estate companies due to the fact that not all real estate companies use the same definition.

Management believes that net income, as defined by GAAP, is the most appropriate earnings measurement. However, management believes FFO, AFFO, FFO per share and AFFO per share provide an understanding of the operating performance of the Company’s properties without giving effect to certain significant non-cash items, primarily depreciation and amortization expense. Historical cost accounting for real estate assets in accordance with GAAP assumes that the value of real estate assets diminishes predictably over time. However, real estate values instead have historically risen or fallen with market conditions. The Company believes that by excluding the effect of depreciation, amortization, impairments and gains or losses from sales of real estate, losses and impairment of incidental assets, all of which are based on historical costs and which may be of limited relevance in evaluating current performance, FFO, AFFO, FFO per share and AFFO per share can facilitate comparisons of operating performance between periods.

The table below reconciles net (loss) income to FFO and AFFO for the three months ended March 31, 2023 compared to the same period in 2022.

	Three Months Ended March 31,
(In thousands, except per share amounts)	2023		2022
Net (loss) income	$	(6,922)	$	5,524
Real estate depreciation and amortization	9,088		8,001
FFO	$	2,166	$	13,525
Straight-line rent	(917)		(820)
Stock-based compensation	2,547		2,122
Accelerated amortization of stock-based compensation	11,799		—
AFFO	$	15,595	$	14,827
FFO per diluted common share (1)	$	0.09	$	0.56
AFFO per diluted common share	$	0.62	$	0.61
Weighted average common shares outstanding - diluted (2)	25,298		24,344

___________________

(1) In the first quarter of 2023, the Company accelerated the amortization of stock-based compensation totaling $11.8 million, impacting FFO per diluted share by $0.47, upon the passing of our former CEO and President.

(2) Diluted weighted average common shares outstanding for FFO and AFFO are calculated based on the treasury method, rather than the 2-class method used to calculate earnings per share.

Net Operating Income ("NOI")

NOI is a key performance indicator. NOI is defined as net income or loss, computed in accordance with GAAP, generated from our total portfolio of properties and other investments before general and administrative expenses, depreciation and amortization expense, gains or loss on the sale of real estate properties or other investments, interest expense, and income tax expense. We believe that NOI provides an accurate measure of operating performance of our operating assets because NOI excludes certain items that are not associated with management of the properties. The Company's use of the term NOI may not be comparable to that of other real estate companies as they may have different methodologies for computing NOI.

26

Management's Discussion and Analysis of Financial Condition and Results of Operations - Continued

The table below reconciles net (loss) income to NOI for the three months ended March 31, 2023 compared to the same period in 2022.

		Three Months Ended March 31,
(In thousands)		2023		2022
Net (loss) income		$	(6,922)	$	5,524
	General and administrative (1)	4,406		3,316
	Accelerated amortization of stock-based compensation	11,799		—
	Depreciation and amortization	9,018		7,942
	Interest expense	3,992		2,626
	Deferred income tax expense (benefit)	35		(17)
	Interest and other income	(25)		(1)
NOI		$	22,303	$	19,390
__________
(1) Excludes accelerated amortization of stock-based compensation shown separately below.

EBITDAre and Adjusted EBITDAre

The Company uses the NAREIT definition of EBITDAre which is net income or loss plus interest expense, income tax expense, and depreciation and amortization, plus losses or minus gains on the disposition of depreciable property, including losses/gains on change of control, plus impairment write-downs of depreciable property and of investments in unconsolidated affiliates caused by a decrease in value of depreciable property in the affiliate, plus or minus adjustments to reflect the entity's share of EBITDAre of unconsolidated affiliates and consolidated affiliates with non-controlling interest. The Company also presents Adjusted EBITDAre which is EBITDAre before non-cash stock-based compensation expense.

We consider EBITDAre and Adjusted EBITDAre important measures because they provide additional information to allow management, investors, and our current and potential creditors to evaluate and compare our core operating results and our ability to service debt.

The table below reconciles net (loss) income to EBITDAre and Adjusted EBITDAre for the three months ended March 31, 2023 compared to the same period in 2022.

		Three Months Ended March 31,
(In thousands)		2023		2022
Net (loss) income		$	(6,922)	$	5,524
	Interest expense	3,992		2,626
	Depreciation and amortization	9,018		7,942
	Deferred income tax expense (benefit)	35		(17)
EBITDAre		$	6,123	$	16,075
	Non-cash stock-based compensation expense (1)	2,547		2,122
	Accelerated amortization of non-cash stock-based compensation expense	11,799		—
Adjusted EBITDAre		$	20,469	$	18,197
____________
(1) Excludes accelerated amortization of stock-based compensation shown separately below.

27

Management's Discussion and Analysis of Financial Condition and Results of Operations - Continued

Liquidity and Capital Resources

The Company monitors its liquidity and capital resources and relies on several key indicators in its assessment of capital markets for financing acquisitions and other operating activities as needed, including the following:

•Leverage ratios and financial covenants included in our Credit Facility;

•Dividend payout percentage; and

•Interest rates, underlying treasury rates, debt market spreads and equity markets.

The Company uses these indicators and others to compare its operations to its peers and to help identify areas in which the Company may need to focus its attention.

Sources and Uses of Cash

The Company derives most of its revenues from its real estate properties. Our rental income represents our primary source of liquidity to fund our dividends, general and administrative expenses, property operating expenses, capital improvements on our properties, interest expense on our Credit Facility, and other expenses incurred related to managing our existing portfolio. To the extent additional resources are needed, the Company will fund its investment activity generally through equity or debt issuances either in the public or private markets or through proceeds from our Credit Facility.

The Company expects to meet its liquidity needs through cash on hand, cash flows from operations and cash flows from sources discussed above. The Company believes that its liquidity and sources of capital are adequate to satisfy its cash requirements. The Company cannot, however, be certain that these sources of funds will be available at a time and upon terms acceptable to the Company in sufficient amounts to meet its liquidity needs.

Credit Facility

The Company's first amendment (the "First Amendment") to the third amended and restated credit facility (the "Credit Facility") provides for a $150.0 million Revolving Credit Facility that matures on March 19, 2026 and includes one 12-month option to extend the maturity date, and $350.0 million in Term Loans, as well as an accordion feature which allows borrowings up to a total of $700.0 million, including the ability to add and fund additional term loans. Note 5 – Debt, net to the Condensed Consolidated Financial Statements provides more details on the Company's Credit Facility. At March 31, 2023, the Company had borrowing capacity remaining under the Revolving Credit Facility of approximately $138.0 million.

The Company’s ability to borrow under the Credit Facility is subject to its ongoing compliance with a number of customary affirmative and negative covenants, including limitations with respect to liens, indebtedness, distributions, mergers, consolidations, investments, restricted payments and asset sales, as well as financial maintenance covenants. Also, the Company’s current financing policy prohibits aggregate debt (secured or unsecured) in excess of 40% of the Company's total capitalization, except for short-term, transitory periods. At March 31, 2023, our debt to total capitalization ratio (debt plus stockholders' equity plus accumulated depreciation) was approximately 35.3%. The Company was in compliance with its financial covenants under its Credit Facility as of March 31, 2023.

Mortgage Note Payable

The Company also had outstanding at March 31, 2023, a $4.9 million mortgage note payable, secured by one of its properties. The mortgage note amortizes monthly at a fixed interest rate of 4.98% with a balloon payment of approximately $4.8 million due upon maturity on May 1, 2024. The Company expects to fund the balloon payment with proceeds from the Company's ATM Program or proceeds from the Company's Revolving Credit Facility.

28

Management's Discussion and Analysis of Financial Condition and Results of Operations - Continued

Ground Leases

At March 31, 2023, the Company was obligated, as the lessee, under four non-prepaid ground leases accounted for as operating leases with expiration dates, including renewal options, through 2076, and two non-prepaid ground leases accounted for as financing leases with expiration dates through 2109, including renewal options. Any rental increases related to the Company's ground leases are generally either stated or based on the Consumer Price Index. At March 31, 2023, the Company's aggregate obligation under these ground leases was approximately $9.0 million. See Note 3 – Real Estate Leases to the Condensed Consolidated Financial Statements.

Acquisition Pipeline

The Company has 4 properties under definitive purchase agreements for an aggregate expected purchase price of approximately $19.7 million. The Company's expected returns on these investments range from 9.16% to 9.25%. The Company expects to close on these properties in the second quarter of 2023; however, the Company cannot provide assurance as to the timing of when, or whether, these transactions will actually close. The Company expects to fund these acquisitions with proceeds from the Company's ATM Program or proceeds from the Company's Revolving Credit Facility.

The Company also has nine properties under definitive purchase agreements, to be acquired after completion and occupancy, for an aggregate expected purchase price of approximately $214.5 million. The Company's expected return on these investments will approximate 9.75% to 10.25%. The Company anticipates closing on these properties throughout 2023, 2024 and 2025; however, the Company cannot provide assurance as to the timing of when, or whether, these transactions will actually close. The Company expects to fund these acquisitions with proceeds from the Company's ATM Program or proceeds from the Company's Revolving Credit Facility or other debt or equity financings.

Tenant Improvements and Capital Improvements

Subject to Company approval, we may fund or reimburse tenants for tenant improvements, which are allowed for in certain leases, of up to approximately $12.7 million as of March 31, 2023.

The Company has also entered into contracts regarding certain capital expenditures with remaining commitments totaling approximately $4.9 million as of March 31, 2023. Reimbursement of these expenditures by our tenants will be determined by each tenant's lease.

The Company expects to fund these obligations with cash on hand, proceeds from the Company's ATM Program, proceeds from the Company's Revolving Credit Facility, or other debt or equity offerings.

Notes Receivable

The Company had entered into notes with one tenant with a maximum commitment remaining to fund totaling $5.0 million at March 31, 2023. See Note 10 – Other Assets, net to the Condensed Consolidated Financial Statements.

Automatic Shelf Registration Statement

On November 2, 2022, the Company filed an automatic shelf registration statement on Form S-3 with the Securities and Exchange Commission. The registration statement is for an indeterminate number of securities and is effective for three years. Under this registration statement, the Company has the capacity to offer and sell from time to time various types of securities, including common stock, preferred stock, depository shares, rights, debt securities, warrants and units.

Operating Activities

Cash flows provided by operating activities for the three months ended March 31, 2023 and 2022 were approximately $12.7 million and $14.4 million, respectively. Cash flows provided by operating activities were generally provided by contractual rents and interest on our notes receivable, net of property operating expenses not reimbursed by the tenants and general and administrative expenses.

29

Management's Discussion and Analysis of Financial Condition and Results of Operations - Continued

Investing Activities

Cash flows used in investing activities for the three months ended March 31, 2023 and 2022 were approximately $28.6 million and $8.5 million, respectively. During the three months ended March 31, 2023, the Company invested in seven properties for an aggregate cash consideration of approximately $23.9 million and funded notes totaling approximately $1.3 million. Also, during the three months ended March 31, 2023, the Company received payments on its notes totaling $0.8 million and funded capital expenditures on its existing portfolio totaling approximately $4.1 million.

During the three months ended March 31, 2022, the Company invested in two properties for an aggregate cash consideration of approximately $5.8 million and funded notes receivable totaling approximately $1.5 million. Also, during the three months ended March 31, 2022, the Company received payments on its notes receivable totaling $0.8 million and funded capital expenditures on its existing portfolio totaling approximately $1.9 million.

Financing Activities

Cash flows provided by financing activities for the three months ended March 31, 2023 were approximately $8.4 million and cash used for financing activities for the three months ended March 31, 2022 were approximately $7.1 million. During the three months ended March 31, 2023, the Company borrowed $12.0 million under its Revolving Credit Facility, completed equity offerings under its at-the-market program, resulting in net proceeds, net of underwriters' discount and offering costs, of approximately $8.1 million and paid dividends totaling approximately $11.6 million.

During the three months ended March 31, 2022, the Company borrowed $4.0 million under its Revolving Credit Facility and paid dividends totaling approximately $11.0 million.

Security Deposits

As of March 31, 2023, the Company held approximately $3.6 million in security deposits for the benefit of the Company in the event the obligated tenant fails to perform under the terms of its respective lease. Generally, the Company may, at its discretion and upon notification to the tenant, draw upon the security deposits if there are any defaults under the leases.

Dividends

The Company is required to pay dividends to its stockholders at least equal to 90% of its taxable income in order to maintain its qualification as a REIT.

On April 27, 2023, the Company’s Board of Directors declared a quarterly common stock dividend in the amount of $0.45 per share. The dividend is payable on May 26, 2023 to stockholders of record on May 12, 2023. This rate equates to an annualized dividend of $1.80 per share.

The ability of the Company to pay dividends is dependent upon its ability to generate cash flows and to make accretive new investments.

30

Corporate Responsibility

The Company is committed to conducting its business according to the highest ethical standards and upholding its corporate responsibilities as a public company operating for the benefit of its stockholders. To that end, the Company modified its Governance Committee to be the Environmental, Social, and Governance (“ESG”) Committee with a revised charter included on the Company’s website at www.chct.reit. Among other duties, the ESG Committee meets at least annually to review and recommend to the Board the general strategy and initiatives regarding ESG matters, including the Company’s internal and external communications and disclosures.

The Company’s Board of Directors has adopted a revised Code of Ethics and Business Conduct that not only applies to its directors, officers, and other employees but also extends the Company's expectations that its vendors, service providers, contractors, and consultants will embrace the Company's commitment to integrity and personal responsibility by complying with this Code at all times. The Code of Ethics and Business Conduct includes the Company’s commitment to promote high standards of integrity by conducting its affairs honestly and ethically and to include in its periodic reports or other publicly available documents information and metrics related to internal monitoring, whistleblower, or reporting systems.

The Company’s whistleblower policy prohibits the Company and its affiliates and their officers, employees and agents from discharging, demoting, suspending, threatening, harassing or in any other manner discriminating against any employee for raising a concern. If an employee desires to raise a concern in a confidential or anonymous manner, the concern may be directed to the whistleblower officer at the Company’s whistleblower hotline. During the quarter ended March 31, 2023, the whistleblower officer received no whistleblower complaints.

The Company’s Information Technology infrastructure is cloud-based, utilizing Software as a Service (“SaaS”) applications for substantially all of its software requirements. Management has formed an IT Committee consisting of the Chief Executive Officer, Chief Financial Officer, and the Vice President of Information Technology to review and discuss information security matters and cyber security risks. The committee meets at least twice a year and reports to the Board of Directors as needed. The Company has adopted the Center of Internet Security (CIS) v8 IG1 cyber security controls including adopting an annual information security training program for its employees. The Company has partnered with a global cyber security leader to continuously and proactively manage and mitigate the ever growing list of cyber threats. As part of the managed monitoring and remediation platform, the Company benefits from a $100,000 breach prevention warranty. Since the Company’s inception, the Company has not had a security breach resulting in expenses, penalties or settlements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our future income, cash flows and fair values relevant to financial instruments are dependent upon prevailing market interest rates. Market risk refers to the risk of loss from adverse changes in market prices and interest rates. We may use certain derivative financial instruments to manage, or hedge, interest rate risks related to our borrowings. We will not use derivatives for trading or speculative purposes and only enter into contracts with major financial institutions based upon their credit rating and other factors. An interest rate swap is a contractual agreement entered into by two counterparties under which each agrees to make periodic payments to the other for an agreed period of time based on a notional amount of principal. Under the most common form of interest rate swap, known from our perspective as a floating-to-fixed interest rate swap, a series of floating, or variable, rate payments on a notional amount of principal is exchanged for a series of fixed interest rate payments on such notional amount. During the three months ended March 31, 2023, there were no material changes in the quantitative and qualitative disclosures about market risks presented in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

31

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), as of the end of the period covered by this report. Based on this evaluation, the Company’s Chief Executive Officer and Chief Financial Officer has concluded that, as of the end of such period, the Company’s disclosure controls and procedures were effective.

Changes In Internal Control Over Financial Reporting

There were no changes in our system of internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended March 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

32

PART II. OTHER INFORMATION

ITEM 1.    LEGAL PROCEEDINGS

The Company may, from time to time, be involved in litigation arising in the ordinary course of business or which may be expected to be covered by insurance. The Company is not aware of any pending or threatened litigation that, if resolved against the Company, would have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows.

ITEM 1A.    RISK FACTORS

In addition to the other information set forth in this Quarterly Report on Form 10-Q, an investor should consider the risk factors included in its Annual Report on Form 10-K for the year ended December 31, 2022 and other reports that may be filed by the Company. There were no material changes in the risk factors presented in the Company's Annual Report on Form 10-K for the year ended December 31, 2022.

ITEM 2.   UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

During the three months ended March 31, 2023, the Company canceled shares of Company common stock to satisfy employee tax withholding obligations payable upon the vesting of non-vested shares, as follows:

Period	Total Number of Shares Purchased	Average Price Paid per share		Total Number of Shares purchased as part of publicly announced plans or programs	Maximum Number of Shares that may yet be purchased under the plans or programs
January 1 - January 31	98	$	37.77	—	—
February 1 - February 28	—	$	—	—	—
March 1 - March 31	—	$	—	—	—
Total	98

ITEM 3.   DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.   MINE SAFETY DISCLOSURES

None.

ITEM 5.   OTHER INFORMATION

None.

ITEM 6.    EXHIBITS

The exhibits required by Item 601 of Regulation S-K which are filed with this report are listed in the Exhibit Index and are hereby incorporated in by reference.

33

EXHIBIT INDEX

Exhibit No.	Description
3.1	Corporate Charter of Community Healthcare Trust Incorporated, as amended (1)
3.2	Amended and Restated Bylaws of Community Healthcare Trust Incorporated (2)
10.1 †	Amended and Restated Employment Agreement between Community Healthcare Trust Incorporated and David H. Dupuy (3)
10.2 †	Fourth Amendment to Employment Agreement between Community Healthcare Trust Incorporated and David H. Dupuy (4)
10.3 †	Fourth Amendment to Employment Agreement between Community Healthcare Trust Incorporated and Leigh Ann Stach (5)
10.4 †	Second Amendment to Employment Agreement between Community Healthcare Trust Incorporated and Timothy L. Meyer (6)
31.1 *	Certification of the Chief Executive Officer and Chief Financial Officer of Community Healthcare Trust Incorporated pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Rule 302 of the Sarbanes-Oxley Act of 2002
32.1 **	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	Inline XBRL Instance Document
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Labels Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition 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)

___________________

(1)Filed as Exhibit 3.1 to Amendment No. 2 to the Registration Statement on Form S-11 of the Company filed with the Securities and Exchange Commission on May 6, 2015 (Registration No. 333-203210) and incorporated herein by reference.

(2)Filed as Exhibit 3.2 to the Quarterly Report on Form 10-Q of the Company filed with the Securities and Exchange Commission on November 3, 2020 (File No. 001-37401) and incorporated herein by reference.

(3)Filed as Exhibit 10.1 to the Form 8-K of the Company filed with the Securities and Exchange Commission on April 10, 2023 (File No. 001-37401) and incorporated herein by reference.

(4)Filed as Exhibit 10.2 to the Form 8-K of the Company filed with the Securities and Exchange Commission on January 4, 2023 (File No. 001-37401) and incorporated herein by reference.

(5)Filed as Exhibit 10.3 to the Form 8-K of the Company filed with the Securities and Exchange Commission on January 4, 2023 (File No. 001-37401) and incorporated herein by reference.

(6)Filed as Exhibit 10.4 to the Form 8-K of the Company filed with the Securities and Exchange Commission on January 4, 2023 (File No. 001-37401) and incorporated herein by reference.

*    Filed herewith.

**    Furnished herewith.

†    Denotes executive compensation plan or arrangement.

34

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.

Date: May 2, 2023

COMMUNITY HEALTHCARE TRUST INCORPORATED
By:	/s/ David H. Dupuy
	David H. Dupuy
	Chief Executive Officer and Chief Financial Officer

35

EX-31.1

Exhibit 31.1

Community Healthcare Trust Incorporated

Quarterly Certification

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, David H. Dupuy, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Community Healthcare Trust Incorporated;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 2, 2023

/s/ David H. Dupuy

David H. Dupuy

Chief Executive Officer and Chief Financial Officer

EX-32.1

Exhibit 32.1

Community Healthcare Trust Incorporated

Certification Pursuant to

18 U.S.C. Section 1350,

as Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report on Form 10-Q of Community Healthcare Trust Incorporated (the "Company") for the period ended March 31, 2023, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, David H. Dupuy, Chief Executive Officer and Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

i.The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and

ii.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 2, 2023

/s/ David H. Dupuy

David H. Dupuy

Chief Executive Officer and
Chief Financial Officer

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Cover Page - shares	3 Months Ended
	Mar. 31, 2023	Apr. 26, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2023
Document Transition Report	false
Entity File Number	001-37401
Entity Registrant Name	Community Healthcare Trust Inc
Entity Incorporation, State or Country Code	MD
Entity Tax Identification Number	46-5212033
Entity Address, Address Line One	3326 Aspen Grove Drive
Entity Address, Address Line Two	Suite 150
Entity Address, City or Town	Franklin
Entity Address, State or Province	TN
Entity Address, Postal Zip Code	37067
City Area Code	615
Local Phone Number	771-3052
Title of 12(b) Security	Common stock, $0.01 par value per share
Trading Symbol	CHCT
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Emerging Growth Company	false
Entity Small Business	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		26,304,425
Amendment Flag	false
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q1
Entity Central Index Key	0001631569
Current Fiscal Year End Date	--12-31

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CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Real estate properties
Land and land improvements	$ 122,702	$ 117,657
Buildings, improvements, and lease intangibles	848,060	825,257
Personal property	264	253
Total real estate properties	971,026	943,167
Less accumulated depreciation	(174,346)	(165,341)
Total real estate properties, net	796,680	777,826
Cash and cash equivalents	3,666	11,233
Restricted cash	959	835
Other assets, net	84,989	86,531
Total assets	886,294	876,425
Liabilities
Debt, net	365,061	352,997
Accounts payable and accrued liabilities	10,478	11,377
Other liabilities, net	16,240	15,237
Total liabilities	391,779	379,611
Commitments and contingencies
Stockholders' Equity
Preferred stock, $0.01 par value; 50,000 shares authorized; none issued and outstanding	0	0
Common stock, $0.01 par value; 450,000 shares authorized; 26,274 and 25,897 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively	263	259
Additional paid-in capital	648,384	625,136
Cumulative net income	74,220	81,142
Accumulated other comprehensive income	15,684	22,667
Cumulative dividends	(244,036)	(232,390)
Total stockholders’ equity	494,515	496,814
Total liabilities and stockholders' equity	$ 886,294	$ 876,425

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Mar. 31, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	50,000,000	50,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	450,000,000	450,000,000
Common stock, shares issued (in shares)	26,274,000	25,897,000
Common stock, shares outstanding (in shares)	26,274,000	25,897,000

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands		3 Months Ended
		Mar. 31, 2023	Mar. 31, 2022
REVENUES
Rental income		$ 26,128	$ 22,604
Other operating interest		1,048	877
Total revenue		27,176	23,481
EXPENSES
Property operating		4,873	4,091
General and administrative	[1]	16,205	3,316
Depreciation and amortization		9,018	7,942
Total expenses		30,096	15,349
(LOSS) INCOME BEFORE INCOME TAXES AND OTHER ITEMS		(2,920)	8,132
Interest expense		(3,992)	(2,626)
Deferred income tax expense		(35)	17
Interest and other income		25	1
Net (loss) income		$ (6,922)	$ 5,524
NET (LOSS) INCOME PER COMMON SHARE:
Net (loss) income per common share – basic (in dollars per share)		$ (0.32)	$ 0.21
Net (loss) income per common share – diluted (in dollars per share)		$ (0.32)	$ 0.21
Weighted average common shares outstanding - basic (in shares)		24,227	23,570
Weighted average common shares outstanding - diluted (in shares)		24,227	23,570

[1] (1) General and administrative expenses for the three months ended March 31, 2023 included stock-based compensation expense totaling approximately $14.3 million, including the accelerated amortization of stock-based compensation totaling approximately $11.8 million recognized upon the passing of our former CEO and President. General and administrative expenses for the three months ended March 31, 2022 included stock-based compensation expense totaling approximately $2.1 million.

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Income Statement [Abstract]
Stock-based compensation expense	$ 14,300	$ 2,100
Accelerated amortization of stock-based compensation	$ 11,799	$ 0

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Statement of Comprehensive Income [Abstract]
NET (LOSS) INCOME	$ (6,922)	$ 5,524
Other comprehensive (loss) income:
(Decrease) increase in fair value of cash flow hedges	(4,973)	11,407
Reclassification for amounts recognized as interest expense	(2,010)	1,115
Total other comprehensive (loss) income	(6,983)	12,522
COMPREHENSIVE (LOSS) INCOME	$ (13,905)	$ 18,046

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CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY - USD ($) $ in Thousands	Total	Preferred Stock	Common Stock	Additional Paid in Capital	Cumulative Net Income	Accumulated Other Comprehensive Income	Cumulative Dividends
Beginning balance (in shares) at Dec. 31, 2021		0
Beginning balance at Dec. 31, 2021	$ 462,112	$ 0	$ 250	$ 595,624	$ 59,123	$ (4,980)	$ (187,905)
Balance, beginning of period (in shares) at Dec. 31, 2021	24,983,000		24,983,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock, net of issuance costs	$ (197)			(197)
Stock-based compensation, net of forfeitures (in shares)			89,000
Stock-based compensation, net of forfeitures	2,122		$ 1	2,121
Decrease in fair value of cash flow hedges	11,407					11,407
Reclassification for amounts recognized as interest expense	1,115					1,115
Net (loss) income	5,524				5,524
Dividends to common stockholders	(10,969)						(10,969)
Ending balance (in shares) at Mar. 31, 2022		0
Ending balance at Mar. 31, 2022	471,114	$ 0	$ 251	597,548	64,647	7,542	(198,874)
Balance, end of period (in shares) at Mar. 31, 2022			25,072,000
Beginning balance (in shares) at Dec. 31, 2021		0
Beginning balance at Dec. 31, 2021	$ 462,112	$ 0	$ 250	595,624	59,123	(4,980)	(187,905)
Balance, beginning of period (in shares) at Dec. 31, 2021	24,983,000		24,983,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock, net of issuance costs (in shares)	600,000
Ending balance (in shares) at Dec. 31, 2022	0	0
Ending balance at Dec. 31, 2022	$ 496,814	$ 0	$ 259	625,136	81,142	22,667	(232,390)
Balance, end of period (in shares) at Dec. 31, 2022	25,897,000		25,897,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock, net of issuance costs (in shares)	249,000		249,000
Issuance of common stock, net of issuance costs	$ 8,906		$ 3	8,903
Stock-based compensation, net of forfeitures (in shares)			128,000
Stock-based compensation, net of forfeitures	14,346		$ 1	14,345
Decrease in fair value of cash flow hedges	(4,973)					(4,973)
Reclassification for amounts recognized as interest expense	(2,010)					(2,010)
Net (loss) income	(6,922)				(6,922)
Dividends to common stockholders	$ (11,646)						(11,646)
Ending balance (in shares) at Mar. 31, 2023	0	0
Ending balance at Mar. 31, 2023	$ 494,515	$ 0	$ 263	$ 648,384	$ 74,220	$ 15,684	$ (244,036)
Balance, end of period (in shares) at Mar. 31, 2023	26,274,000		26,274,000

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CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Parenthetical) - $ / shares	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Statement of Stockholders' Equity [Abstract]
Dividends to common stockholders, per share (in dollars per share)	$ 0.4475	$ 0.4375

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
OPERATING ACTIVITIES
Net (loss) income	$ (6,922)	$ 5,524
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization	9,018	7,942
Other amortization	265	216
Stock-based compensation	2,547	2,122
Accelerated amortization of stock-based compensation	11,799	0
Straight-line rent receivable	(917)	(820)
Deferred income tax expense (benefit)	35	(17)
Changes in operating assets and liabilities:
Other assets	(2,390)	(844)
Accounts payable and accrued liabilities	133	352
Other liabilities	(870)	(73)
Net cash provided by operating activities	12,698	14,402
INVESTING ACTIVITIES
Acquisitions of real estate	(23,895)	(5,845)
Funding of notes receivable	(1,295)	(1,500)
Proceeds from the repayment of notes receivable	750	750
Capital expenditures on existing real estate properties	(4,138)	(1,892)
Net cash used in investing activities	(28,578)	(8,487)
FINANCING ACTIVITIES
Net borrowings on revolving credit facility	12,000	4,000
Mortgage note repayments	(32)	(40)
Dividends paid	(11,646)	(10,969)
Proceeds from issuance of common stock	8,215	0
Equity issuance costs	(100)	(74)
Net cash provided by (used for) financing activities	8,437	(7,083)
Decrease in cash and cash equivalents and restricted cash	(7,443)	(1,168)
Cash and cash equivalents and restricted cash, beginning of period	12,068	2,867
Cash and cash equivalents and restricted cash, end of period	4,625	1,699
Supplemental Cash Flow Information:
Interest paid (net of capitalized interest)	3,866	2,476
Invoices accrued for construction, tenant improvement and other capitalized costs	3,274	982
Reclassification of registration statement costs incurred in prior year to equity issuance costs	52	119
(Decrease) increase in fair value of cash flow hedges	(4,973)	11,407
Income taxes paid	60	12
Capitalized interest	192	228
Net proceeds accrued for common stock issued in March with cash settlement in April	$ 732	$ 0

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Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2023

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business Overview

Community Healthcare Trust Incorporated (the ‘‘Company’’, ‘‘we’’, ‘‘our’’) was organized in the State of Maryland on March 28, 2014. The Company is a fully-integrated healthcare real estate company that owns and acquires real estate properties that are leased to hospitals, doctors, healthcare systems or other healthcare service providers. As of March 31, 2023, the Company had investments of approximately $974.0 million in 181 real estate properties (including a portion of one property accounted for as a sales-type lease with a gross amount totaling approximately $3.0 million). The properties are located in 34 states, totaling approximately 4.0 million square feet in the aggregate and were approximately 91.6% leased at March 31, 2023 with a weighted average remaining lease term of approximately 7.4 years. Any references to square footage, property count, or occupancy percentages, and any amounts derived from these values in these notes to the Condensed Consolidated Financial Statements, are outside the scope of our independent registered public accounting firm's review.

Basis of Presentation

The Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. They do not include all of the information and footnotes required by GAAP for complete financial statements. This interim financial information should be read in conjunction with the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. Management believes that all adjustments of a normal, recurring nature considered necessary for a fair presentation have been included. This interim financial information does not necessarily represent or indicate what the operating results will be for the year ending December 31, 2023. All intercompany accounts and transactions have been eliminated.

Use of Estimates in the Condensed Consolidated Financial Statements

Preparation of the Condensed Consolidated Financial Statements in accordance with GAAP requires management to make estimates and assumptions that affect amounts reported in the Condensed Consolidated Financial Statements and accompanying notes. Actual results may materially differ from those estimates.

Cash and Cash Equivalents and Restricted Cash

Cash and cash equivalents includes short-term investments with original maturities of three months or less when purchased. Restricted cash consists of amounts held by the lender of our mortgage note payable to provide for future real estate tax, insurance expenditures and tenant improvements related to one property. The carrying amounts approximate fair value due to the short term maturity of these investments. The following table provides a reconciliation of cash and cash equivalents and restricted cash:

	Balance as of March 31,
(Dollars in thousands)	2023		2022
Cash and cash equivalents	$	3,666	$	1,178
Restricted cash	959		521
Cash, cash equivalents and restricted cash	$	4,625	$	1,699

Income Taxes

The Company has elected to be taxed as a real estate investment trust ("REIT"), as defined under the Internal Revenue Code of 1986, as amended (the "Code"). The Company and two subsidiaries have also elected for those subsidiaries to be treated as taxable REIT subsidiaries ("TRSs"), which are subject to federal and state income taxes. No provision has been made for federal income taxes for the REIT; however, the Company has recorded income tax

expense or benefit for the TRSs to the extent applicable. The Company also evaluates the realizability of its deferred tax assets and will record valuation allowances if it is determined that more likely than not the asset will not be recovered. The Company intends at all times to qualify as a REIT under the Code. The Company must distribute at least 90% per annum of its REIT taxable income to its stockholders (which is computed without regard to the dividends paid deduction or net capital gain and which does not necessarily equal net income as calculated in accordance with GAAP) and meet other requirements to continue to qualify as a REIT.

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Real Estate Properties

3 Months Ended

Mar. 31, 2023

Real Estate [Abstract]

Real Estate Properties

REAL ESTATE PROPERTIES

As of March 31, 2023, we had investments of approximately $974.0 million in 181 real estate properties (including a portion of one property accounted for as a financing lease with a gross amount totaling approximately $3.0 million). The Company's investments are diversified by property type, geographic location, and tenant as shown in the following tables:

Property Type	# of Properties	Gross Investment (in thousands)
Medical Office Building	82	$	370,918
Inpatient Rehabilitation Facilities	7	151,234
Acute Inpatient Behavioral	5	130,410
Specialty Centers	37	119,618
Physician Clinics	30	86,496
Surgical Centers and Hospitals	10	55,974
Behavioral Specialty Facilities	9	44,455
Long-term Acute Care Hospitals	1	14,937
Total	181	$	974,042

State	# of Properties	Gross Investment (in thousands)
Texas	15	$	138,931
Illinois	16	121,640
Ohio	25	110,087
Florida	22	94,375
All Others	103	509,009
Total	181	$	974,042

Primary Tenant	# of Properties	Gross Investment (in thousands)
LifePoint Health (1)	5	$	82,113
US Healthvest	3	77,964
All Others	173	813,965
Total	181	$	974,042
_________
(1) During the first quarter of 2023, Everest Rehabilitation assigned its leases to LifePoint Health on four properties in which the Company had a gross investment totaling $80.7 million at March 31, 2023.

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Real Estate Leases

3 Months Ended

Mar. 31, 2023

Leases [Abstract]

Real Estate Leases

REAL ESTATE LEASES

Lessor Accounting

The Company’s properties are generally leased pursuant to non-cancelable, fixed-term operating leases with expiration dates through 2039. The Company’s leases generally require the lessee to pay minimum rent, with fixed rent renewal terms or increases based on a Consumer Price Index and may also include additional rent, which may include the reimbursement of taxes (including property taxes), insurance, maintenance and other operating costs associated with the leased property.

Some leases provide the lessee, during the term of the lease, with an option or right of first refusal to purchase the leased property. Some leases also allow the lessee to renew or extend their lease term or in some cases terminate their lease, based on conditions provided in the lease.

Future minimum lease payments under the non-cancelable operating leases due to the Company for the years ending December 31, as of March 31, 2023, are as follows (in thousands):

2023 (nine months ended December 31)	$	67,851
2024	86,063
2025	79,894
2026	70,085
2027	64,285
2028 and thereafter	367,034
	$	735,212

Rental income is recognized as earned over the life of the lease agreement on a straight-line basis when collection of rental payments over the term of the lease is probable. Straight-line rent included in rental income was approximately $0.9 million and $0.8 million, respectively, for the three months ended March 31, 2023 and 2022.

Purchase Option Provisions

Certain of the Company's leases provide the lessee with a purchase option or a right of first refusal to purchase the leased property. The purchase option provisions generally allow the lessee to purchase the leased property at fair value or at an amount greater than the Company's gross investment in the leased property at the time of the purchase. At March 31, 2023, the Company had an aggregate gross investment of approximately $40.7 million in 12 real estate properties with purchase options exercisable at March 31, 2023 that had not been exercised.

Sales-type Lease

The Company has a portion of one property accounted for as a sales-type lease with a gross amount totaling approximately $3.0 million included in other assets, net on the Company's Condensed Consolidated Balance Sheets. Future lease payments due to the Company under this lease for the years ending December 31, as of March 31, 2023, are as follows (in thousands):

2023 (nine months ended December 31)	$	253
2024	346
2025	356
2026	367
2027	378
2028 and thereafter	5,210
Total undiscounted lease receivable	6,910
Discount	(3,877)
Lease receivable	$	3,033

The Company recognized interest income of approximately $0.1 million and $0.1 million, respectively, during the three months ended March 31, 2023 and 2022 related to this lease which is included in other operating interest on the Company's Consolidated Statements of Operations.

Lessee Accounting

At March 31, 2023, the Company was obligated, as the lessee, under four non-prepaid ground leases accounted for as operating leases with expiration dates, including renewal options, through 2076, and two non-prepaid ground leases accounted for as financing leases with expiration dates through 2109, including renewal options. Any rental increases related to the Company's ground leases are generally either stated or based on the Consumer Price Index. The Company's future lease payments under these non-prepaid ground leases were as follows (in thousands):

	Operating		Financing
2023 (nine months ended December 31)	$	32	$	106
2024	43		154
2025	44		154
2026	44		154
2027	45		154
2028 and thereafter	1,148		6,956
Total undiscounted lease payments	1,356		7,678
Discount	(573)		(4,400)
Lease liabilities	$	783	$	3,278

The following table discloses other information regarding the ground leases.

	Three Months Ended March 31,
	2023		2022
Operating leases:
Weighted-average remaining lease term in years (including renewal options)	36.03		36.73
Weighted-average discount rate	4.0	%	4.0	%
Financing leases:
Weighted-average remaining lease term in years (including renewal options)	40.56		36.75
Weighted-average discount rate	4.2	%	4.1	%

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Real Estate Acquisitions

3 Months Ended

Mar. 31, 2023

Business Combination and Asset Acquisition [Abstract]

Real Estate Acquisitions

REAL ESTATE ACQUISITIONS

During the first quarter of 2023, the Company acquired seven real estate properties. Upon acquisition, the properties were 100.0% leased in the aggregate with lease expirations through 2031. Amounts reflected in revenues and net (loss) income for these properties for the three months ended March 31, 2023 were approximately $0.5 million and $0.1 million, respectively, and transaction costs totaling approximately $0.4 million were capitalized relating to these property acquisitions.

Location	Property Type (1)	Date Acquired	Purchase Price		Cash Consideration		Real Estate		Other (2)		Square Footage
			(000's)		(000's)		(000's)		(000's)
LaGrange, GA	MOB	01/18/23	$	8,007	$	8,087	$	8,118	$	(31)	55,310
West Point, GA	MOB	01/18/23	811		819		822		(3)		5,600
Canton, OH	MOB	01/30/23	3,669		3,706		4,287		(581)		27,920
Scranton, PA	MOB	02/23/23	1,957		2,165		2,317		(152)		22,743
Scranton, PA	MOB	02/23/23	2,207		2,366		2,340		26		15,768
Lagrange, GA	MOB	03/06/23	6,469		6,458		6,622		(164)		31,473
Lagrange, GA	MOB	03/06/23	249		294		300		(6)		2,972
			$	23,369	$	23,895	$	24,806	$	(911)	161,786
(1) MOB - Medical Office Building
(2) Includes other assets acquired, liabilities assumed, and above and below-market intangibles recognized at acquisition.

The following table summarizes the relative fair values of the assets acquired and liabilities assumed in the property acquisitions for the three months ended March 31, 2023.

			Relative Fair Value		Estimated Useful Life
			(in thousands)		(in years)
Land and land improvements			$	4,961	7.4
Building and building improvements			16,791		23.2
Intangibles:
	At-market lease intangibles		3,054		3.5
	Above-market lease intangibles		199		3.3
	Below-market lease intangibles		(1,188)		5.8
		Total intangibles	2,065
Accounts payable, accrued liabilities and other liabilities assumed			(46)
Accounts receivable and other assets acquired			224
Prorated rent, interest and operating expense reimbursement amounts collected			(100)
	Total cash consideration		$	23,895

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Debt, net

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

Debt, net

DEBT, NET

The table below details the Company's debt as of March 31, 2023 and December 31, 2022.

	Balance as of
(Dollars in thousands)	March 31, 2023		December 31, 2022		Maturity Dates
Credit Facility:
Revolving Credit Facility	$	12,000	$	—	3/26
A-3 Term Loan, net	74,639		74,609		3/26
A-4 Term Loan, net	124,437		124,409		3/28
A-5 Term Loan, net	149,091		149,059		3/30
Mortgage Note Payable, net	4,894		4,920		5/24
	$	365,061	$	352,997

On December 14, 2022, Community Healthcare Trust Incorporated, as borrower, entered into a first amendment (the "First Amendment") to the third amended and restated credit agreement (the "Credit Facility") by and among Community Healthcare Trust Incorporated, as borrower, the several banks and financial institutions party thereto as lenders, and Truist Bank, as administrative agent. The First Amendment amended the Credit Facility to, among other things, (i) establish a new seven-year and three-month term loan facility in the aggregate principal amount of $150.0 million (the "A-5 Term Loan"), which matures on March 14, 2030 and (ii) replace LIBOR as a benchmark interest rate for loans under the Credit Facility with SOFR. The proceeds from the A-5 Term Loan were used in part to repay the seven-year term loan facility in the aggregate principal amount of $50.0 million (the "A-2 Term Loan") which was set to mature on March 29, 2024.

The Credit Facility allows the Company to borrow, through the accordion feature, up to $700.0 million, including the ability to add and fund incremental term loans. The Company's material subsidiaries are guarantors of the obligations under the Credit Facility.

The Credit Facility provides for a $150.0 million Revolving Credit Facility and $350.0 million in term loans (the "Term Loans"). The Revolving Credit Facility matures on March 19, 2026 and includes one 12-month option to extend the maturity date, subject to the satisfaction of certain conditions. The Term Loans include a seven-year term loan facility in the aggregate principal amount of $75.0 million (the "A-3 Term Loan"), which matures on March 29, 2026, a seven-year term loan facility in the aggregate principal amount of $125.0 million (the "A-4 Term Loan"), which matures on March 19, 2028, and the A-5 Term Loan, which matures on March 14, 2030.

Under the First Amendment, amounts outstanding under the Revolving Credit Facility will bear interest at a floating rate based on the Company's option, on either: (i) adjusted term SOFR or adjusted daily simple SOFR plus 1.25% to 1.90% or (ii) a base rate plus 0.25% to 0.90% in each case, depending upon the Company’s leverage ratio. In addition, the Company is obligated to pay an annual fee equal to 0.20% of the amount of the unused portion of the Revolving Credit Facility if amounts borrowed are greater than 33.3% of the borrowing capacity under the Revolving Credit Facility and 0.25% of the unused portion of the Revolving Credit Facility if amounts borrowed are less than or equal to 33.3% of the borrowing capacity under the Revolving Credit Facility. The Company had $12.0 million outstanding under the Revolving Credit Facility with a weighted average interest rate of 6.55% and a borrowing capacity remaining of $138.0 million at March 31, 2023.

Under the First Amendment, amounts outstanding under the Term Loans will bear interest at a floating rate that is based, at the Company's option, on either (i) adjusted term SOFR or adjusted daily SOFR plus 1.45% to 2.30% or (ii) a base rate plus 0.45% to 1.30%, in each case, depending upon the Company’s leverage ratio. The Company has entered into interest rate swaps to fix the interest rates on the Term Loans. See Note 6 – Derivative Financial Instruments for more details on the interest rate swaps. At March 31, 2023, the Company had $350.0 million outstanding under the Term Loans which had a fixed weighted average interest rate under the swaps of approximately 4.3%.

The Company’s ability to borrow under the Credit Facility is subject to its ongoing compliance with a number of customary affirmative and negative covenants, including limitations with respect to liens, indebtedness, distributions, mergers, consolidations, investments, restricted payments and asset sales, as well as financial maintenance covenants. The Company was in compliance with its financial covenants under its Credit Facility as of March 31, 2023.

Mortgage Note Payable

The Company's mortgage note payable is secured by a building which had a $6.4 million carrying balance at March 31, 2023. The mortgage note amortizes monthly at a fixed interest rate of 4.98% with a balloon payment of approximately $4.8 million due upon maturity on May 1, 2024.

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Derivative Financial Instruments

3 Months Ended

Mar. 31, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

DERIVATIVE FINANCIAL INSTRUMENTS

Risk Management Objective of Using Derivatives

The Company may use derivative financial instruments, including interest rate swaps, caps, options, floors and other interest rate derivative contracts, to hedge all or a portion of the interest rate risk associated with its borrowings. The principal objective of such arrangements is to minimize the risks and/or costs associated with the Company’s operating and financial structure as well as to hedge specific anticipated transactions. The Company does not intend to utilize derivatives for speculative or other purposes other than interest rate risk management. The use of derivative financial instruments carries certain risks, including the risk that the counterparties to these contractual arrangements are not able to perform under the agreements. To mitigate this risk, the Company only enters into derivative financial instruments with counterparties with high credit ratings and with major financial institutions with which the Company and its affiliates may also have other financial relationships. The Company does not anticipate that any of the counterparties will fail to meet their obligations.

Cash Flow Hedges of Interest Rate Risk

The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish these objectives, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.

As of March 31, 2023, the Company had seventeen outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk for notional amounts totaling $350.0 million, including two forward-starting interest rate swaps for notional amounts totaling $50.0 million, which will not become effective until March 29, 2024.

Tabular Disclosure of Fair Value of Derivative Instruments on the Balance Sheet

The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the Condensed Consolidated Balance Sheets as of March 31, 2023 and December 31, 2022.

	Asset Derivatives Fair Value at					Liability Derivatives Fair Value at
(Dollars in thousands)	March 31, 2023		December 31, 2022		Balance Sheet Classification	March 31, 2023		December 31, 2022		Balance Sheet Classification
Interest rate swaps	$	16,397	$	22,667	Other assets, net	$	712	$	—	Other liabilities, net

The changes in the fair value of derivatives designated and that qualify as cash flow hedges are recorded in accumulated other comprehensive income ("AOCI") and are subsequently reclassified to interest expense in the period that the hedged forecasted transaction affects earnings.

Amounts reported in AOCI related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s Term Loans. During the next twelve months, the Company estimates that an additional $8.5 million will be reclassified from AOCI as a decrease to interest expense.

Tabular Disclosure of the Effect of Cash Flow Hedge Accounting on Accumulated Other Comprehensive Income

The table below details the location in the financial statements of the gain or loss recognized on interest rate derivatives designated as cash flow hedges for the three months ended March 31, 2023 and 2022.

	Three Months Ended March 31,
(Dollars in thousands)	2023		2022
Amount of unrealized (loss) gain recognized in OCI on derivatives	$	(4,973)	$	11,407
Amount of (gain) loss reclassified from AOCI into interest expense	$	(2,010)	$	1,115
Total interest expense presented in the Condensed Consolidated Statements of Operations in which the effects of the cash flow hedges are recorded	$	3,992	$	2,626

Tabular Disclosures of Offsetting Derivatives

The tables below present a gross presentation, the effects of offsetting, and a net presentation of the Company's derivatives as of March 31, 2023 and December 31, 2022. The net amounts of derivative assets or liabilities can be reconciled to the tabular disclosure of fair value. The tabular disclosure of fair value provides the location that derivative assets and liabilities are presented on the Condensed Consolidated Balance Sheets.

Offsetting of Derivative Assets (as of March 31, 2023)
							Gross Amounts Not Offset in the Condensed Consolidated Balance Sheets
(In thousands)	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Condensed Consolidated Balance Sheet		Net Amounts of Assets in the Condensed Consolidated Balance Sheets		Financial Instruments		Cash Collateral Received		Net Amount
Derivatives	$	16,397	$	—	$	16,397	$	(712)	$	—	$	15,685

Offsetting of Derivative Liabilities (as of March 31, 2023)
							Gross Amounts Not Offset in the Condensed Consolidated Balance Sheets
(In thousands)	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Condensed Consolidated Balance Sheet		Net Amounts of Liabilities in the Condensed Consolidated Balance Sheets		Financial Instruments		Cash Collateral Received		Net Amount
Derivatives	$	(712)	$	—	$	(712)	$	712	$	—	$	—

Offsetting of Derivative Assets (as of December 31, 2022)
							Gross Amounts Not Offset in the Condensed Consolidated Balance Sheets
(In thousands)	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Condensed Consolidated Balance Sheet		Net Amounts of Assets in the Condensed Consolidated Balance Sheets		Financial Instruments		Cash Collateral Received		Net Amount
Derivatives	$	22,667	$	—	$	22,667	$	—	$	—	$	22,667

Offsetting of Derivative Liabilities (as of December 31, 2022)

Gross Amounts Not Offset in the Condensed Consolidated Balance Sheets

(In thousands)

Gross Amounts of Recognized Liabilities

Gross Amounts Offset in the Condensed Consolidated Balance Sheet

Net Amounts of Liabilities in the Condensed Consolidated Balance Sheets

Financial Instruments

Cash Collateral Received

Net Amount

Derivatives

$

—

$

—

$

—

$

—

$

—

$

—

Credit-risk-related Contingent Features

As of March 31, 2023, the Company did not have any derivatives in a net liability position. As of March 31, 2023, the Company had not posted any collateral related to these agreements and was not in breach of any agreement provisions. If the Company terminated these interest rate swaps or breached any of these provisions, it could have been required to settle its obligations under the agreements at their aggregate termination value.

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Stockholders' Equity

3 Months Ended

Mar. 31, 2023

Equity [Abstract]

Stockholders' Equity

STOCKHOLDERS' EQUITY

Common Stock

The following table provides a reconciliation of the beginning and ending common stock balances for the three months ended March 31, 2023 and for the year ended December 31, 2022:

(In thousands)	Three Months Ended March 31, 2023	Year Ended December 31, 2022
Balance, beginning of period	25,897	24,983
Issuance of common stock	249	600
Restricted stock issued	129	318
Restricted stock withheld and forfeited	(1)	(4)
Balance, end of period	26,274	25,897

ATM Program

The Company has an at-the-market offering program ("ATM Program"), with Piper Sandler & Co., Evercore Group L.L.C., Truist Securities, Inc., Regions Securities LLC, Robert W. Baird & Co. Incorporated, Fifth Third Securities, Inc. and Janney Montgomery Scott LLC, as sales agents (collectively, the “Agents”). Under the ATM Program, the Company may issue and sell shares of its common stock, having an aggregate gross sales price of up to $500.0 million. The shares of common stock may be sold from time to time through or to one or more of the Agents, as may be determined by the Company in its sole discretion, subject to the terms and conditions of the agreement and applicable law.

The Company's activity under the ATM Program during the three months ended March 31, 2023 is detailed in the table below. As of March 31, 2023, the Company had approximately $469.9 million remaining that may be issued under the ATM Program.

	Three Months Ended March 31, 2023
Shares issued (in thousands)	249
Net proceeds received (in millions) (1)	$8.9
Average gross sales price per share	$36.69
___________
(1) Net proceeds received includes shares sold on March 30, 2023 and reflected in shares outstanding at March 31, 2023, for which $0.7 million of cash proceeds was received by the Company on April 3, 2023.

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Net (Loss) Income Per Common Share

3 Months Ended

Mar. 31, 2023

Earnings Per Share [Abstract]

Net (Loss) Income Per Common Share

NET (LOSS) INCOME PER COMMON SHARE

The following table sets forth the computation of basic and diluted net (loss) income per common share for the three months ended March 31, 2023 and 2022, respectively.

	Three Months Ended March 31,
(In thousands, except per share data)	2023		2022
Net (loss) income	$	(6,922)	$	5,524
Participating securities' share in earnings	(822)		(658)
Net (loss) income, less participating securities' share in earnings	$	(7,744)	$	4,866
Weighted average Common Shares outstanding
Weighted average Common Shares outstanding	26,043		25,060
Unvested restricted shares	(1,816)		(1,490)
Weighted average Common Shares outstanding–Basic	24,227		23,570
Dilutive potential common shares	—		—
Weighted average Common Shares outstanding –Diluted	24,227		23,570
Basic Net (Loss) Income per Common Share	$	(0.32)	$	0.21
Diluted Net (Loss) Income per Common Share	$	(0.32)	$	0.21

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Stock Incentive Plan

3 Months Ended

Mar. 31, 2023

Share-Based Payment Arrangement [Abstract]

Stock Incentive Plan

STOCK INCENTIVE PLAN

A summary of the activity under the Company's 2014 Incentive Plan, as amended, for the three months ended March 31, 2023 and 2022 is included in the table below, as well as compensation expense recognized from the amortization of the value of shares over the applicable vesting periods.

		Three Months Ended March 31,
(Dollars and shares in thousands)		2023		2022
Stock-based awards, beginning of period		1,708		1,416
	Stock in lieu of compensation	62		44
	Stock awards	67		48
	Total stock granted	129		92
	Vested shares	—		(5)
	Forfeited shares	(1)		(1)
Stock-based awards, end of period		1,836		1,502
Amortization expense (1)		$	14,346	$	2,122
___________
(1) Amortization expense for the three months ended March 31, 2023 includes the accelerated amortization totaling $11.8 million recognized upon the passing of our former CEO and President.

Accelerated Amortization of Restricted Stock

The Company's former CEO and President, Timothy Wallace, passed away on March 3, 2023. At the time of his passing, Mr. Wallace had 624,725 shares of restricted stock that had not been fully amortized. Upon his passing, Mr. Wallace's unvested shares of restricted stock vested in accordance with the terms of his employment agreement, and the Company accelerated the unamortized remaining balance of deferred compensation related to his unvested shares and recognized an additional $11.8 million of amortization expense in the first quarter of 2023.

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Other Assets, net

3 Months Ended

Mar. 31, 2023

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Other Assets, net

OTHER ASSETS, NET

Other assets, net on the Company's Condensed Consolidated Balance Sheets as of March 31, 2023 and December 31, 2022 are detailed in the table below.

	Balance as of
(Dollars in thousands)	March 31, 2023		December 31, 2022
Notes receivable	$	33,250	$	32,705
Accounts and interest receivable	5,387		2,679
Straight-line rent receivable	16,342		15,429
Prepaid assets	1,341		980
Deferred financing costs, net	630		683
Leasing commissions, net	2,036		1,848
Deferred tax assets, net	271		306
Fair value of interest rate swaps	16,397		22,667
Above-market lease intangible assets, net	2,441		2,399
Sales-type lease receivable	3,033		3,035
Financing right-of-use asset	2,530		2,545
Operating lease right-of-use assets	751		759
Other	580		496
	$	84,989	$	86,531

The Company's notes receivable mainly included:

•At March 31, 2023 and December 31, 2022, notes receivable included a $8.3 million and $9.0 million, respectively, term loan, secured by all assets and ownership interests in seven long-term acute care hospitals and one inpatient rehabilitation hospital owned by the borrower. The term loan will be repaid in equal monthly installments of $250,000 through the maturity date of December 31, 2025 and bears interest at 9% per annum.

•At March 31, 2023 and December 31, 2022, notes receivable included a $17.0 million term loan and a $5.5 million and $5.0 million, respectively, revolving credit facility, secured by assets and ownership interests of six geriatric behavioral hospitals and affiliated companies all of which are co-borrowers on the loans. The term loan bears interest at 9% per annum, with interest only payments due initially and then equal monthly installments of principal payments due beginning March 31, 2024. The term loan facility matures on December 31, 2032. The revolving credit facility bears interest at 9% per annum and matures on December 31, 2025. In addition, the Company has committed to fund, at the Company’s discretion, additional amounts, up to $5.0 million with interest at 9% per annum on any amount funded, that may be used by the borrower to pay existing liabilities of co-borrowers. The term loan, the revolving credit facility and the additional commitment all include a 3% non-cash interest charge that is due and payable upon the earlier of the repayment or maturity of each note.

•At March 31, 2023 and December 31, 2022, notes receivable included a $2.5 million and $1.7 million, respectively, revolving credit facility. Commencing on October 1, 2023, the revolving credit facility will be repaid in equal monthly installments of $40,000 through the maturity date of April 1, 2027. The revolving credit facility bears interest at 9% per annum, as well as a 3% non-cash interest charge that is due and payable upon the earlier of the repayment or maturity of the note.

The Company identified the borrowers of these notes as variable interest entities ("VIEs"), but management determined that the Company was not the primary beneficiary of the VIEs because we lack either directly or through related parties any material decision-making rights or control of the entities that impact the borrowers' economic performance. We are not obligated to provide support beyond our stated commitment to the borrowers, and accordingly our maximum exposure to loss as a result of this relationship is limited to the amount of our outstanding notes receivable. The VIEs that we have identified at March 31, 2023 are summarized in the table below.

Classification	Carrying Amount (in thousands)		Maximum Exposure to Loss (in thousands)
Note receivable (term loan)	$	8,250	$	8,250
Note receivable (revolving credit facility)	$	5,500	$	5,500
Note receivable (term loan)	$	17,000	$	17,000
Note receivable (revolving credit facility)	$	2,500	$	2,500

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Other Liabilities, net

3 Months Ended

Mar. 31, 2023

Other Liabilities Disclosure [Abstract]

Other Liabilities, net

OTHER LIABILITIES, NET

Other liabilities, net on the Company's Condensed Consolidated Balance Sheets as of March 31, 2023 and December 31, 2022 are detailed in the table below.

	Balance as of
(Dollars in thousands)	March 31, 2023		December 31, 2022
Prepaid rent	$	4,862	$	3,853
Security deposits	3,615		5,766
Below-market lease intangibles, net	2,144		1,075
Fair value of interest rate swaps	712		—
Financing lease liability	3,278		3,279
Operating lease liability	783		786
Other	846		478
	$	16,240	$	15,237

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Fair Value of Financial Instruments

3 Months Ended

Mar. 31, 2023

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

FAIR VALUE OF FINANCIAL INSTRUMENTS

The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practical to estimate the fair value.

Cash and cash equivalents and restricted cash - The carrying amount approximates the fair value.

Notes receivable - The fair value is estimated using cash flow analyses, based on an assumed market rate of interest or at a rate consistent with the rates on notes carried by the Company and are classified as level 2 inputs in the hierarchy.

Borrowings under our Credit Facility - The carrying amount approximates the fair value because the borrowings are based on variable market interest rates. The fair value estimates were determined using level 2 inputs.

Derivative financial instruments (Interest rate swaps) - The fair value is estimated using discounted cash flow techniques. These techniques incorporate primarily level 2 inputs. The market inputs are utilized in the discounted cash flow calculation considering the instrument’s term, notional amount, discount rate and credit risk. Significant inputs to the derivative valuation model for interest rate swaps are observable in active markets and are classified as level 2 inputs in the hierarchy.

Mortgage note payable - The fair value is estimated using cash flow analyses which are based on an assumed market rate of interest or at a rate consistent with the rates on mortgage notes assumed by the Company and are classified as level 2 inputs in the hierarchy.

The table below details the fair values and carrying values for our notes receivable, interest rate swaps, and mortgage note payable at March 31, 2023 and December 31, 2022, using level 2 inputs.

	March 31, 2023				December 31, 2022
(Dollars in thousands)	Carrying Value		Fair Value		Carrying Value		Fair Value
Notes receivable	$	33,250	$	33,319	$	32,705	$	32,716
Interest rate swap asset	$	16,397	$	16,397	$	22,667	$	22,667
Interest rate swap liability	$	712	$	712	$	—	$	—
Mortgage note payable (principal amount)	$	4,915	$	4,766	$	4,947	$	4,761

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Subsequent Events

3 Months Ended

Mar. 31, 2023

Subsequent Events [Abstract]

Subsequent Events

SUBSEQUENT EVENTS

Dividend Declared

On April 27, 2023, the Company’s Board of Directors declared a quarterly common stock dividend in the amount of $0.45 per share. The dividend is payable on May 26, 2023 to stockholders of record on May 12, 2023.

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2023

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. They do not include all of the information and footnotes required by GAAP for complete financial statements. This interim financial information should be read in conjunction with the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. Management believes that all adjustments of a normal, recurring nature considered necessary for a fair presentation have been included. This interim financial information does not necessarily represent or indicate what the operating results will be for the year ending December 31, 2023. All intercompany accounts and transactions have been eliminated.

Use of Estimates in the Condensed Consolidated Financial Statements

Use of Estimates in the Condensed Consolidated Financial Statements

Preparation of the Condensed Consolidated Financial Statements in accordance with GAAP requires management to make estimates and assumptions that affect amounts reported in the Condensed Consolidated Financial Statements and accompanying notes. Actual results may materially differ from those estimates.

Cash and Cash Equivalents

Cash and Cash Equivalents and Restricted CashCash and cash equivalents includes short-term investments with original maturities of three months or less when purchased.

Restricted Cash

Restricted cash consists of amounts held by the lender of our mortgage note payable to provide for future real estate tax, insurance expenditures and tenant improvements related to one property. The carrying amounts approximate fair value due to the short term maturity of these investments.

Income Taxes

Income Taxes

The Company has elected to be taxed as a real estate investment trust ("REIT"), as defined under the Internal Revenue Code of 1986, as amended (the "Code"). The Company and two subsidiaries have also elected for those subsidiaries to be treated as taxable REIT subsidiaries ("TRSs"), which are subject to federal and state income taxes. No provision has been made for federal income taxes for the REIT; however, the Company has recorded income tax

expense or benefit for the TRSs to the extent applicable. The Company also evaluates the realizability of its deferred tax assets and will record valuation allowances if it is determined that more likely than not the asset will not be recovered. The Company intends at all times to qualify as a REIT under the Code. The Company must distribute at least 90% per annum of its REIT taxable income to its stockholders (which is computed without regard to the dividends paid deduction or net capital gain and which does not necessarily equal net income as calculated in accordance with GAAP) and meet other requirements to continue to qualify as a REIT.

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Summary of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2023

Accounting Policies [Abstract]

Schedule of cash and cash equivalents

The following table provides a reconciliation of cash and cash equivalents and restricted cash:

	Balance as of March 31,
(Dollars in thousands)	2023		2022
Cash and cash equivalents	$	3,666	$	1,178
Restricted cash	959		521
Cash, cash equivalents and restricted cash	$	4,625	$	1,699

Restrictions on cash and cash equivalents

The following table provides a reconciliation of cash and cash equivalents and restricted cash:

	Balance as of March 31,
(Dollars in thousands)	2023		2022
Cash and cash equivalents	$	3,666	$	1,178
Restricted cash	959		521
Cash, cash equivalents and restricted cash	$	4,625	$	1,699

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Real Estate Properties (Tables)

3 Months Ended

Mar. 31, 2023

Real Estate [Abstract]

Schedule of real estate property investments

The Company's investments are diversified by property type, geographic location, and tenant as shown in the following tables:

Property Type	# of Properties	Gross Investment (in thousands)
Medical Office Building	82	$	370,918
Inpatient Rehabilitation Facilities	7	151,234
Acute Inpatient Behavioral	5	130,410
Specialty Centers	37	119,618
Physician Clinics	30	86,496
Surgical Centers and Hospitals	10	55,974
Behavioral Specialty Facilities	9	44,455
Long-term Acute Care Hospitals	1	14,937
Total	181	$	974,042

State	# of Properties	Gross Investment (in thousands)
Texas	15	$	138,931
Illinois	16	121,640
Ohio	25	110,087
Florida	22	94,375
All Others	103	509,009
Total	181	$	974,042

Primary Tenant	# of Properties	Gross Investment (in thousands)
LifePoint Health (1)	5	$	82,113
US Healthvest	3	77,964
All Others	173	813,965
Total	181	$	974,042
_________
(1) During the first quarter of 2023, Everest Rehabilitation assigned its leases to LifePoint Health on four properties in which the Company had a gross investment totaling $80.7 million at March 31, 2023.

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Real Estate Leases (Tables)

3 Months Ended

Mar. 31, 2023

Leases [Abstract]

Schedule of future minimum lease payments for operating leases

Future minimum lease payments under the non-cancelable operating leases due to the Company for the years ending December 31, as of March 31, 2023, are as follows (in thousands):

2023 (nine months ended December 31)	$	67,851
2024	86,063
2025	79,894
2026	70,085
2027	64,285
2028 and thereafter	367,034
	$	735,212

Sales-type maturity

Future lease payments due to the Company under this lease for the years ending December 31, as of March 31, 2023, are as follows (in thousands):

2023 (nine months ended December 31)	$	253
2024	346
2025	356
2026	367
2027	378
2028 and thereafter	5,210
Total undiscounted lease receivable	6,910
Discount	(3,877)
Lease receivable	$	3,033

Schedule of operating lease payments

The Company's future lease payments under these non-prepaid ground leases were as follows (in thousands):

	Operating		Financing
2023 (nine months ended December 31)	$	32	$	106
2024	43		154
2025	44		154
2026	44		154
2027	45		154
2028 and thereafter	1,148		6,956
Total undiscounted lease payments	1,356		7,678
Discount	(573)		(4,400)
Lease liabilities	$	783	$	3,278

Schedule of finance lease payments

The Company's future lease payments under these non-prepaid ground leases were as follows (in thousands):

	Operating		Financing
2023 (nine months ended December 31)	$	32	$	106
2024	43		154
2025	44		154
2026	44		154
2027	45		154
2028 and thereafter	1,148		6,956
Total undiscounted lease payments	1,356		7,678
Discount	(573)		(4,400)
Lease liabilities	$	783	$	3,278

Ground leases

The following table discloses other information regarding the ground leases.

	Three Months Ended March 31,
	2023		2022
Operating leases:
Weighted-average remaining lease term in years (including renewal options)	36.03		36.73
Weighted-average discount rate	4.0	%	4.0	%
Financing leases:
Weighted-average remaining lease term in years (including renewal options)	40.56		36.75
Weighted-average discount rate	4.2	%	4.1	%

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Real Estate Acquisitions (Tables)

3 Months Ended

Mar. 31, 2023

Business Combination and Asset Acquisition [Abstract]

Schedule of acquisitions

Location	Property Type (1)	Date Acquired	Purchase Price		Cash Consideration		Real Estate		Other (2)		Square Footage
			(000's)		(000's)		(000's)		(000's)
LaGrange, GA	MOB	01/18/23	$	8,007	$	8,087	$	8,118	$	(31)	55,310
West Point, GA	MOB	01/18/23	811		819		822		(3)		5,600
Canton, OH	MOB	01/30/23	3,669		3,706		4,287		(581)		27,920
Scranton, PA	MOB	02/23/23	1,957		2,165		2,317		(152)		22,743
Scranton, PA	MOB	02/23/23	2,207		2,366		2,340		26		15,768
Lagrange, GA	MOB	03/06/23	6,469		6,458		6,622		(164)		31,473
Lagrange, GA	MOB	03/06/23	249		294		300		(6)		2,972
			$	23,369	$	23,895	$	24,806	$	(911)	161,786
(1) MOB - Medical Office Building
(2) Includes other assets acquired, liabilities assumed, and above and below-market intangibles recognized at acquisition.

Schedule of assets acquired and liabilities assumed

he following table summarizes the relative fair values of the assets acquired and liabilities assumed in the property acquisitions for the three months ended March 31, 2023.

			Relative Fair Value		Estimated Useful Life
			(in thousands)		(in years)
Land and land improvements			$	4,961	7.4
Building and building improvements			16,791		23.2
Intangibles:
	At-market lease intangibles		3,054		3.5
	Above-market lease intangibles		199		3.3
	Below-market lease intangibles		(1,188)		5.8
		Total intangibles	2,065
Accounts payable, accrued liabilities and other liabilities assumed			(46)
Accounts receivable and other assets acquired			224
Prorated rent, interest and operating expense reimbursement amounts collected			(100)
	Total cash consideration		$	23,895

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Debt, net (Tables)

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

Schedule of debt

The table below details the Company's debt as of March 31, 2023 and December 31, 2022.

	Balance as of
(Dollars in thousands)	March 31, 2023		December 31, 2022		Maturity Dates
Credit Facility:
Revolving Credit Facility	$	12,000	$	—	3/26
A-3 Term Loan, net	74,639		74,609		3/26
A-4 Term Loan, net	124,437		124,409		3/28
A-5 Term Loan, net	149,091		149,059		3/30
Mortgage Note Payable, net	4,894		4,920		5/24
	$	365,061	$	352,997

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Derivative Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of fair value of derivative instruments on balance sheet

The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the Condensed Consolidated Balance Sheets as of March 31, 2023 and December 31, 2022.

	Asset Derivatives Fair Value at					Liability Derivatives Fair Value at
(Dollars in thousands)	March 31, 2023		December 31, 2022		Balance Sheet Classification	March 31, 2023		December 31, 2022		Balance Sheet Classification
Interest rate swaps	$	16,397	$	22,667	Other assets, net	$	712	$	—	Other liabilities, net

The tabular disclosure of fair value provides the location that derivative assets and liabilities are presented on the Condensed Consolidated Balance Sheets.

Offsetting of Derivative Assets (as of March 31, 2023)
							Gross Amounts Not Offset in the Condensed Consolidated Balance Sheets
(In thousands)	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Condensed Consolidated Balance Sheet		Net Amounts of Assets in the Condensed Consolidated Balance Sheets		Financial Instruments		Cash Collateral Received		Net Amount
Derivatives	$	16,397	$	—	$	16,397	$	(712)	$	—	$	15,685

Offsetting of Derivative Liabilities (as of March 31, 2023)
							Gross Amounts Not Offset in the Condensed Consolidated Balance Sheets
(In thousands)	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Condensed Consolidated Balance Sheet		Net Amounts of Liabilities in the Condensed Consolidated Balance Sheets		Financial Instruments		Cash Collateral Received		Net Amount
Derivatives	$	(712)	$	—	$	(712)	$	712	$	—	$	—

Offsetting of Derivative Assets (as of December 31, 2022)
							Gross Amounts Not Offset in the Condensed Consolidated Balance Sheets
(In thousands)	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Condensed Consolidated Balance Sheet		Net Amounts of Assets in the Condensed Consolidated Balance Sheets		Financial Instruments		Cash Collateral Received		Net Amount
Derivatives	$	22,667	$	—	$	22,667	$	—	$	—	$	22,667

Offsetting of Derivative Liabilities (as of December 31, 2022)

Gross Amounts Not Offset in the Condensed Consolidated Balance Sheets

(In thousands)

Gross Amounts of Recognized Liabilities

Gross Amounts Offset in the Condensed Consolidated Balance Sheet

Net Amounts of Liabilities in the Condensed Consolidated Balance Sheets

Financial Instruments

Cash Collateral Received

Net Amount

Derivatives

$

—

$

—

$

—

$

—

$

—

$

—

Schedule of derivative Income

The table below details the location in the financial statements of the gain or loss recognized on interest rate derivatives designated as cash flow hedges for the three months ended March 31, 2023 and 2022.

	Three Months Ended March 31,
(Dollars in thousands)	2023		2022
Amount of unrealized (loss) gain recognized in OCI on derivatives	$	(4,973)	$	11,407
Amount of (gain) loss reclassified from AOCI into interest expense	$	(2,010)	$	1,115
Total interest expense presented in the Condensed Consolidated Statements of Operations in which the effects of the cash flow hedges are recorded	$	3,992	$	2,626

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Stockholders' Equity (Tables)

3 Months Ended

Mar. 31, 2023

Equity [Abstract]

Schedule of reconciliation of common stock

The following table provides a reconciliation of the beginning and ending common stock balances for the three months ended March 31, 2023 and for the year ended December 31, 2022:

(In thousands)	Three Months Ended March 31, 2023	Year Ended December 31, 2022
Balance, beginning of period	25,897	24,983
Issuance of common stock	249	600
Restricted stock issued	129	318
Restricted stock withheld and forfeited	(1)	(4)
Balance, end of period	26,274	25,897

Schedule of ATM Program

As of March 31, 2023, the Company had approximately $469.9 million remaining that may be issued under the ATM Program.

	Three Months Ended March 31, 2023
Shares issued (in thousands)	249
Net proceeds received (in millions) (1)	$8.9
Average gross sales price per share	$36.69
___________
(1) Net proceeds received includes shares sold on March 30, 2023 and reflected in shares outstanding at March 31, 2023, for which $0.7 million of cash proceeds was received by the Company on April 3, 2023.

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Net (Loss) Income Per Common Share (Tables)

3 Months Ended

Mar. 31, 2023

Earnings Per Share [Abstract]

Schedule of (loss) income per share

The following table sets forth the computation of basic and diluted net (loss) income per common share for the three months ended March 31, 2023 and 2022, respectively.

	Three Months Ended March 31,
(In thousands, except per share data)	2023		2022
Net (loss) income	$	(6,922)	$	5,524
Participating securities' share in earnings	(822)		(658)
Net (loss) income, less participating securities' share in earnings	$	(7,744)	$	4,866
Weighted average Common Shares outstanding
Weighted average Common Shares outstanding	26,043		25,060
Unvested restricted shares	(1,816)		(1,490)
Weighted average Common Shares outstanding–Basic	24,227		23,570
Dilutive potential common shares	—		—
Weighted average Common Shares outstanding –Diluted	24,227		23,570
Basic Net (Loss) Income per Common Share	$	(0.32)	$	0.21
Diluted Net (Loss) Income per Common Share	$	(0.32)	$	0.21

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Stock Incentive Plan (Tables)

3 Months Ended

Mar. 31, 2023

Share-Based Payment Arrangement [Abstract]

Summary of nonvested restricted stock activity

A summary of the activity under the Company's 2014 Incentive Plan, as amended, for the three months ended March 31, 2023 and 2022 is included in the table below, as well as compensation expense recognized from the amortization of the value of shares over the applicable vesting periods.

		Three Months Ended March 31,
(Dollars and shares in thousands)		2023		2022
Stock-based awards, beginning of period		1,708		1,416
	Stock in lieu of compensation	62		44
	Stock awards	67		48
	Total stock granted	129		92
	Vested shares	—		(5)
	Forfeited shares	(1)		(1)
Stock-based awards, end of period		1,836		1,502
Amortization expense (1)		$	14,346	$	2,122
___________
(1) Amortization expense for the three months ended March 31, 2023 includes the accelerated amortization totaling $11.8 million recognized upon the passing of our former CEO and President.

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Other Assets, net (Tables)

3 Months Ended

Mar. 31, 2023

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Schedule of other assets

Other assets, net on the Company's Condensed Consolidated Balance Sheets as of March 31, 2023 and December 31, 2022 are detailed in the table below.

	Balance as of
(Dollars in thousands)	March 31, 2023		December 31, 2022
Notes receivable	$	33,250	$	32,705
Accounts and interest receivable	5,387		2,679
Straight-line rent receivable	16,342		15,429
Prepaid assets	1,341		980
Deferred financing costs, net	630		683
Leasing commissions, net	2,036		1,848
Deferred tax assets, net	271		306
Fair value of interest rate swaps	16,397		22,667
Above-market lease intangible assets, net	2,441		2,399
Sales-type lease receivable	3,033		3,035
Financing right-of-use asset	2,530		2,545
Operating lease right-of-use assets	751		759
Other	580		496
	$	84,989	$	86,531

Schedule of VIEs

The VIEs that we have identified at March 31, 2023 are summarized in the table below.

Classification	Carrying Amount (in thousands)		Maximum Exposure to Loss (in thousands)
Note receivable (term loan)	$	8,250	$	8,250
Note receivable (revolving credit facility)	$	5,500	$	5,500
Note receivable (term loan)	$	17,000	$	17,000
Note receivable (revolving credit facility)	$	2,500	$	2,500

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Other Liabilities, net (Tables)

3 Months Ended

Mar. 31, 2023

Other Liabilities Disclosure [Abstract]

Schedule of other liabilities

Other liabilities, net on the Company's Condensed Consolidated Balance Sheets as of March 31, 2023 and December 31, 2022 are detailed in the table below.

	Balance as of
(Dollars in thousands)	March 31, 2023		December 31, 2022
Prepaid rent	$	4,862	$	3,853
Security deposits	3,615		5,766
Below-market lease intangibles, net	2,144		1,075
Fair value of interest rate swaps	712		—
Financing lease liability	3,278		3,279
Operating lease liability	783		786
Other	846		478
	$	16,240	$	15,237

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Fair Value of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2023

Fair Value Disclosures [Abstract]

Fair Value, by balance sheet grouping

The table below details the fair values and carrying values for our notes receivable, interest rate swaps, and mortgage note payable at March 31, 2023 and December 31, 2022, using level 2 inputs.

	March 31, 2023				December 31, 2022
(Dollars in thousands)	Carrying Value		Fair Value		Carrying Value		Fair Value
Notes receivable	$	33,250	$	33,319	$	32,705	$	32,716
Interest rate swap asset	$	16,397	$	16,397	$	22,667	$	22,667
Interest rate swap liability	$	712	$	712	$	—	$	—
Mortgage note payable (principal amount)	$	4,915	$	4,766	$	4,947	$	4,761

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Summary of Significant Accounting Policies - Additional Information (Details) $ in Thousands, ft² in Millions	Mar. 31, 2023 USD ($) ft² real_estate_property state	Dec. 31, 2022 USD ($)
Accounting Policies [Abstract]
Total real estate properties | $	$ 974,042
Number of real estate properties | real_estate_property	181
Number of properties held for investment in financing lease | real_estate_property	1
Lease receivable | $	$ 3,033	$ 3,035
Number of states | state	34
Area of real estate property (in square feet) | ft²	4.0
Percentage leased	91.60%
Remaining lease term	7 years 4 months 24 days

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Summary of Significant Accounting Policies - Cash and Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022	Mar. 31, 2022	Dec. 31, 2021
Accounting Policies [Abstract]
Cash and cash equivalents	$ 3,666	$ 11,233	$ 1,178
Restricted cash	959	835	521
Cash, cash equivalents and restricted cash	$ 4,625	$ 12,068	$ 1,699	$ 2,867

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Real Estate Properties - Additional Information (Details) $ in Thousands	Mar. 31, 2023 USD ($) real_estate_property	Dec. 31, 2022 USD ($)
Real Estate [Abstract]
Total real estate properties | $	$ 974,042
Number of real estate properties | real_estate_property	181
Number of properties held for investment in financing lease | real_estate_property	1
Financing lease liability | $	$ 3,278	$ 3,279

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Real Estate Properties - Schedule of Real Estate Property Investments (Details) $ in Thousands	Mar. 31, 2023 USD ($) real_estate_property
Real Estate Properties [Line Items]
Number of real estate properties | real_estate_property	181
Total real estate properties | $	$ 974,042
LifePoint Health
Real Estate Properties [Line Items]
Number of real estate properties | real_estate_property	5
Total real estate properties | $	$ 82,113
US Healthvest
Real Estate Properties [Line Items]
Number of real estate properties | real_estate_property	3
Total real estate properties | $	$ 77,964
All Others
Real Estate Properties [Line Items]
Number of real estate properties | real_estate_property	173
Total real estate properties | $	$ 813,965
Everest Rehabilitation
Real Estate Properties [Line Items]
Number of real estate properties | real_estate_property	4
Total real estate properties | $	$ 80,700
Texas
Real Estate Properties [Line Items]
Number of real estate properties | real_estate_property	15
Total real estate properties | $	$ 138,931
Illinois
Real Estate Properties [Line Items]
Number of real estate properties | real_estate_property	16
Total real estate properties | $	$ 121,640
Ohio
Real Estate Properties [Line Items]
Number of real estate properties | real_estate_property	25
Total real estate properties | $	$ 110,087
Florida
Real Estate Properties [Line Items]
Number of real estate properties | real_estate_property	22
Total real estate properties | $	$ 94,375
All Others
Real Estate Properties [Line Items]
Number of real estate properties | real_estate_property	103
Total real estate properties | $	$ 509,009
Medical Office Building
Real Estate Properties [Line Items]
Number of real estate properties | real_estate_property	82
Total real estate properties | $	$ 370,918
Inpatient Rehabilitation Facilities
Real Estate Properties [Line Items]
Number of real estate properties | real_estate_property	7
Total real estate properties | $	$ 151,234
Acute Inpatient Behavioral
Real Estate Properties [Line Items]
Number of real estate properties | real_estate_property	5
Total real estate properties | $	$ 130,410
Specialty Centers
Real Estate Properties [Line Items]
Number of real estate properties | real_estate_property	37
Total real estate properties | $	$ 119,618
Physician Clinics
Real Estate Properties [Line Items]
Number of real estate properties | real_estate_property	30
Total real estate properties | $	$ 86,496
Surgical Centers and Hospitals
Real Estate Properties [Line Items]
Number of real estate properties | real_estate_property	10
Total real estate properties | $	$ 55,974
Behavioral Specialty Facilities
Real Estate Properties [Line Items]
Number of real estate properties | real_estate_property	9
Total real estate properties | $	$ 44,455
Long-term Acute Care Hospitals
Real Estate Properties [Line Items]
Number of real estate properties | real_estate_property	1
Total real estate properties | $	$ 14,937

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Real Estate Leases - Future Minimum Lease Payments Under Non-cancelable Operating Leases (Details) $ in Thousands	Mar. 31, 2023 USD ($)
Leases [Abstract]
2023 (nine months ended December 31)	$ 67,851
2024	86,063
2025	79,894
2026	70,085
2027	64,285
2028 and thereafter	367,034
Total	$ 735,212

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Real Estate Leases - Additional Information (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2023 USD ($) lease real_estate_property	Mar. 31, 2022 USD ($)	Dec. 31, 2022 USD ($)
Concentration Risk [Line Items]
Straight line rent	$ 917	$ 820
Real estate investment property, net	$ 796,680		$ 777,826
Number of real estate properties | real_estate_property	181
Number of properties held for investment in financing lease | real_estate_property	1
Lease receivable	$ 3,033		$ 3,035
Interest income	$ 100	$ 100
Number of operating leases | lease	4
Number of finance leases | lease	2
Four Real Estate Property
Concentration Risk [Line Items]
Real estate investment property, net	$ 40,700
Number of real estate properties | real_estate_property	12

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Real Estate Leases - Lease Receivable (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Leases [Abstract]
2023 (nine months ended December 31)	$ 253
2024	346
2025	356
2026	367
2027	378
2028 and thereafter	5,210
Total undiscounted lease receivable	6,910
Discount	(3,877)
Lease receivable	$ 3,033	$ 3,035

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Real Estate Leases - Future Lease Payments Under Non-prepaid Ground Leases (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Operating
2023 (nine months ended December 31)	$ 32
2024	43
2025	44
2026	44
2027	45
2028 and thereafter	1,148
Total undiscounted lease payments	1,356
Discount	(573)
Lease liabilities	783	$ 786
Financing
2023 (nine months ended December 31)	106
2024	154
2025	154
2026	154
2027	154
2028 and thereafter	6,956
Total undiscounted lease payments	7,678
Discount	(4,400)
Lease liabilities	$ 3,278	$ 3,279

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Real Estate Leases - Ground Leases (Details)	Mar. 31, 2023	Mar. 31, 2022
Operating leases:
Weighted-average remaining lease term in years (including renewal options)	36 years 10 days	36 years 8 months 23 days
Weighted-average discount rate	4.00%	4.00%
Financing leases:
Weighted-average remaining lease term in years (including renewal options)	40 years 6 months 21 days	36 years 9 months
Weighted-average discount rate	4.20%	4.10%

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Real Estate Acquisitions - Additional Information (Details) - Acquisitions Of Properties During Q1 2023 $ in Millions	3 Months Ended
	Mar. 31, 2023 USD ($) real_estate_property
Business Acquisition [Line Items]
Number of real estate properties acquired | real_estate_property	7
Percentage of properties that were leased at acquisition	100.00%
Pro forma information, revenue of acquiree since acquisition date, actual	$ 0.5
Pro forma information, income of acquiree since acquisition date, actual	0.1
Transaction costs	$ 0.4

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Real Estate Acquisitions - Summary of Real Estate Acquisitions (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2023 USD ($) ft²
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Square footage (in square feet) | ft²	4,000,000
Acquisitions Of Properties During Q1 2023
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Purchase Price	$ 23,369
Cash Consideration	23,895
Real Estate	24,806
Other (2)	$ (911)
Square footage (in square feet) | ft²	161,786
Acquisitions Of Properties During Q1 2023 | LaGrange, GA
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Purchase Price	$ 8,007
Cash Consideration	8,087
Real Estate	8,118
Other (2)	$ (31)
Square footage (in square feet) | ft²	55,310
Acquisitions Of Properties During Q1 2023 | West Point, GA
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Purchase Price	$ 811
Cash Consideration	819
Real Estate	822
Other (2)	$ (3)
Square footage (in square feet) | ft²	5,600
Acquisitions Of Properties During Q1 2023 | Canton, OH
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Purchase Price	$ 3,669
Cash Consideration	3,706
Real Estate	4,287
Other (2)	$ (581)
Square footage (in square feet) | ft²	27,920
Acquisitions Of Properties During Q1 2023 | Scranton, PA
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Purchase Price	$ 1,957
Cash Consideration	2,165
Real Estate	2,317
Other (2)	$ (152)
Square footage (in square feet) | ft²	22,743
Acquisitions Of Properties During Q1 2023 | Scranton, PA
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Purchase Price	$ 2,207
Cash Consideration	2,366
Real Estate	2,340
Other (2)	$ 26
Square footage (in square feet) | ft²	15,768
Acquisitions Of Properties During Q1 2023 | Lagrange, GA
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Purchase Price	$ 6,469
Cash Consideration	6,458
Real Estate	6,622
Other (2)	$ (164)
Square footage (in square feet) | ft²	31,473
Acquisitions Of Properties During Q1 2023 | Lagrange, GA
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Purchase Price	$ 249
Cash Consideration	294
Real Estate	300
Other (2)	$ (6)
Square footage (in square feet) | ft²	2,972

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Real Estate Acquisitions - Assets Acquired and Liabilities Assumed (Details) - Series of Individually Immaterial Asset Acquisitions $ in Thousands	3 Months Ended
	Mar. 31, 2023 USD ($)
Business Acquisition [Line Items]
Land and land improvements	$ 4,961
Building and building improvements	16,791
Intangibles:
Below-market lease intangibles	$ (1,188)
Below market lease useful life (in years)	5 years 9 months 18 days
Total intangibles	$ 2,065
Accounts payable, accrued liabilities and other liabilities assumed	(46)
Accounts receivable and other assets acquired	224
Prorated rent, interest and operating expense reimbursement amounts collected	(100)
Total cash consideration	23,895
At-market lease intangibles
Intangibles:
Lease intangibles	$ 3,054
Intangibles useful life (in years)	3 years 6 months
Above-market lease intangibles
Intangibles:
Lease intangibles	$ 199
Intangibles useful life (in years)	3 years 3 months 18 days
Land and land improvements
Business Acquisition [Line Items]
Estimated useful life (in years)	7 years 4 months 24 days
Building and building improvements
Business Acquisition [Line Items]
Estimated useful life (in years)	23 years 2 months 12 days

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Debt, net - Schedule of Debt (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Debt, net	$ 365,061	$ 352,997
Mortgage Note Payable, net
Debt Instrument [Line Items]
Debt, net	4,894	4,920
Revolving Credit Facility | Line of Credit | Third Amended And Restated Credit Facility
Debt Instrument [Line Items]
Debt, net	12,000	0
A-3 Term Loan, net | Term Loan | Third Amended And Restated Credit Facility
Debt Instrument [Line Items]
Debt, net	74,639	74,609
A-4 Term Loan, net | Term Loan | Third Amended And Restated Credit Facility
Debt Instrument [Line Items]
Debt, net	124,437	124,409
A-5 Term Loan, net | Term Loan | Third Amended And Restated Credit Facility
Debt Instrument [Line Items]
Debt, net	$ 149,091	$ 149,059

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Debt, net - Narrative (Details)	Dec. 14, 2022 USD ($) option	Mar. 31, 2023 USD ($)	Dec. 31, 2022 USD ($)
Line of Credit Facility [Line Items]
Amount outstanding		$ 365,061,000	$ 352,997,000
Real estate investment property, net		796,680,000	777,826,000
Mortgage Note Payable, net
Line of Credit Facility [Line Items]
Amount outstanding		$ 4,894,000	4,920,000
Fixed interest rate (in percent)		4.98%
Debt instrument, balloon payment to be paid		$ 4,800,000
Mortgage Note Payable, net | Building
Line of Credit Facility [Line Items]
Real estate investment property, net		6,400,000
Third Amended And Restated Credit Facility | A-5 Term Loan, net | Term Loan
Line of Credit Facility [Line Items]
Face amount	$ 150,000,000
Debt term (in years)	7 years 3 months
Amount outstanding		149,091,000	149,059,000
Third Amended And Restated Credit Facility | Revolving Credit Facility | Line of Credit
Line of Credit Facility [Line Items]
Maximum borrowing capacity	$ 150,000,000
Number of options to extend | option	1
Length of extension	12 months
Amount outstanding		$ 12,000,000	0
Weighted average interest rate percentage		6.55%
Remaining borrowing capacity		$ 138,000,000
Third Amended And Restated Credit Facility | Revolving Credit Facility | Line of Credit | SOFR | Minimum
Line of Credit Facility [Line Items]
Variable rate percentage	1.25%
Third Amended And Restated Credit Facility | Revolving Credit Facility | Line of Credit | SOFR | Maximum
Line of Credit Facility [Line Items]
Variable rate percentage	1.90%
Third Amended And Restated Credit Facility | Revolving Credit Facility | Line of Credit | Base Rate | Minimum
Line of Credit Facility [Line Items]
Variable rate percentage	0.25%
Third Amended And Restated Credit Facility | Revolving Credit Facility | Line of Credit | Base Rate | Maximum
Line of Credit Facility [Line Items]
Variable rate percentage	0.90%
Third Amended And Restated Credit Facility | Term Loan | Line of Credit
Line of Credit Facility [Line Items]
Maximum borrowing capacity	$ 350,000,000
Third Amended And Restated Credit Facility | A-2 Term Loan, net | Term Loan
Line of Credit Facility [Line Items]
Face amount	$ 50,000,000
Debt term (in years)	7 years
Third Amended And Restated Credit Facility | Credit Facility, Accordion Feature
Line of Credit Facility [Line Items]
Maximum borrowing capacity	$ 700,000,000
Third Amended And Restated Credit Facility | A-3 Term Loan, net | Term Loan
Line of Credit Facility [Line Items]
Face amount	$ 75,000,000
Debt term (in years)	7 years
Amount outstanding		74,639,000	74,609,000
Third Amended And Restated Credit Facility | A-4 Term Loan, net | Term Loan
Line of Credit Facility [Line Items]
Face amount	$ 125,000,000
Debt term (in years)	7 years
Amount outstanding		124,437,000	$ 124,409,000
Third Amended And Restated Credit Facility | Revolving Credit Facility, Unused Borrowing Capacity Rate 1 | Line of Credit
Line of Credit Facility [Line Items]
Unused borrowing commitment fee percentage	0.20%
Percentage of borrowing capacity outstanding	33.30%
Third Amended And Restated Credit Facility | Revolving Credit Facility, Unused Borrowing Capacity Rate 2 | Line of Credit
Line of Credit Facility [Line Items]
Unused borrowing commitment fee percentage	0.25%
Percentage of borrowing capacity outstanding	33.30%
First Amended And Restated Credit Facility | Term Loan
Line of Credit Facility [Line Items]
Amount outstanding		$ 350,000,000
Weighted average interest rate percentage		4.30%
First Amended And Restated Credit Facility | Term Loan | SOFR | Minimum
Line of Credit Facility [Line Items]
Variable rate percentage	1.45%
First Amended And Restated Credit Facility | Term Loan | SOFR | Maximum
Line of Credit Facility [Line Items]
Variable rate percentage	2.30%
First Amended And Restated Credit Facility | Term Loan | Base Rate | Minimum
Line of Credit Facility [Line Items]
Variable rate percentage	0.45%
First Amended And Restated Credit Facility | Term Loan | Base Rate | Maximum
Line of Credit Facility [Line Items]
Variable rate percentage	1.30%

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Derivative Financial Instruments - Narrative (Details) $ in Millions	3 Months Ended
	Mar. 31, 2023 USD ($) derivative_instrument
Derivative [Line Items]
Cash flow hedges reclassified to interest expense	$ 8.5
Cash Flow Hedging | Interest Rate Contract
Derivative [Line Items]
Number outstanding interest rate derivatives | derivative_instrument	17
Notional amount	$ 350.0
Cash Flow Hedging | Interest Rate Swap
Derivative [Line Items]
Number outstanding interest rate derivatives | derivative_instrument	2
Notional amount	$ 50.0

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Derivative Financial Instruments - Fair Value Balance Sheet (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Derivatives, Fair Value [Line Items]
Interest rate swap asset	$ 16,397	$ 22,667
Interest rate swap liability	$ 712	$ 0
Derivative Asset, Statement of Financial Position [Extensible Enumeration]	Other assets, net	Other assets, net
Derivative Liability, Statement of Financial Position [Extensible Enumeration]	Other liabilities, net	Other liabilities, net
Cash Flow Hedging | Interest rate swaps | Designated as Hedging Instrument
Derivatives, Fair Value [Line Items]
Interest rate swap asset	$ 16,397	$ 22,667
Interest rate swap liability	$ 712	$ 0

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Derivative Financial Instruments - Cash Flow Hedging (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Derivative Instruments, Gain (Loss) [Line Items]
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration]	Interest Expense	Interest Expense
Interest Rate Contract | Cash Flow Hedging
Derivative Instruments, Gain (Loss) [Line Items]
Amount of unrealized (loss) gain recognized in OCI on derivatives	$ (4,973)	$ 11,407
Total interest expense presented in the Condensed Consolidated Statements of Operations in which the effects of the cash flow hedges are recorded	3,992	2,626
Interest Rate Contract | Cash Flow Hedging | Interest Expense
Derivative Instruments, Gain (Loss) [Line Items]
Amount of (gain) loss reclassified from AOCI into interest expense	$ (2,010)	$ 1,115

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Derivative Financial Instruments - Offsetting of Derivative Assets and Liability (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Derivative Asset [Abstract]
Gross Amounts of Recognized Assets	$ 16,397	$ 22,667
Gross Amounts Offset in the Condensed Consolidated Balance Sheet	0	0
Net Amounts of Assets in the Condensed Consolidated Balance Sheets	16,397	22,667
Gross amounts not offset in the condensed Consolidated balance sheets, financial instruments	(712)	0
Gross amounts not offset in the condensed consolidated balance sheets, net amount	0	0
Gross amounts not offset in the condensed consolidated balance sheets, cash collateral received	15,685	22,667
Derivative Liability [Abstract]
Gross Amounts of Recognized Liabilities	(712)	0
Gross Amounts Offset in the Condensed Consolidated Balance Sheet	0	0
Net Amounts of Liabilities in the Condensed Consolidated Balance Sheets	(712)	0
Gross amounts not offset in the condensed consolidated balance sheets, financial instruments	712	0
Gross amounts not offset in the condensed consolidated balance sheets, cash collateral received	0	0
Gross amounts not offset in the condensed consolidated balance sheets, net amount	$ 0	$ 0

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Stockholders' Equity - Reconciliation of Common Stock (Details) - shares shares in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance, beginning of period (in shares)	25,897	24,983
Issuance of common stock, net of issuance costs (in shares)	249	600
Restricted stock issued (in shares)	129	318
Restricted stock withheld and forfeited (in shares)	(1)	(4)
Balance, end of period (in shares)	26,274	25,897

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Stockholders' Equity - Additional Information (Details) - At The Market Offering Program - Common Stock $ in Millions	3 Months Ended
	Mar. 31, 2023 USD ($)
Subsidiary, Sale of Stock [Line Items]
Value of shares authorized	$ 500.0
Shares available for issuance (in shares)	$ 469.9

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Stockholders' Equity - ATM Program (Details) - Common Stock - At The Market Offering Program - USD ($) $ / shares in Units, shares in Thousands, $ in Millions		3 Months Ended
	Mar. 30, 2023	Mar. 31, 2023
Class of Stock [Line Items]
Sale of stock, number of shares issued in transaction (in shares)		249
Net proceeds received	$ 0.7	$ 8.9
Average gross sales price per share (in dollars per share)		$ 36.69

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Net (Loss) Income Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Earnings Per Share [Abstract]
Net (loss) income	$ (6,922)	$ 5,524
Participating securities' share in earnings	(822)	(658)
Net (loss) income, less participating securities' share in earnings	$ (7,744)	$ 4,866
Weighted average Common Shares outstanding
Weighted average common shares outstanding (in shares)	26,043	25,060
Unvested restricted shares (in shares)	(1,816)	(1,490)
Weighted average common shares outstanding – basic (in shares)	24,227	23,570
Dilutive potential common share (in shares)	0	0
Weighted average common shares outstanding –diluted (in shares)	24,227	23,570
Basic net (loss) income per common share (in dollars per share)	$ (0.32)	$ 0.21
Diluted net (loss) income per common share (in dollars per share)	$ (0.32)	$ 0.21

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Stock Incentive Plan (Details) - USD ($) $ in Thousands		3 Months Ended
	Mar. 03, 2023	Mar. 31, 2023	Mar. 31, 2022
Stock-based awards:
Stock-based compensation expense		$ 14,300	$ 2,100
Accelerated amortization of stock-based compensation		11,799	$ 0
Restricted Common Stock | Former CEO and President
Stock-based awards:
Share based payment award, accelerated vesting (in shares)	624,725
Accelerated amortization of stock-based compensation		$ 11,800
2014 Incentive Plan | Restricted Common Stock
Stock-based awards:
Stock-based awards, beginning of period (in shares)		1,708,000	1,416,000
Granted (in shares)		129,000	92,000
Vested (in shares)		0	(5,000)
Forfeited (in shares)		(1,000)	(1,000)
Stock-based awards, end of period (in shares)		1,836,000	1,502,000
Stock-based compensation expense		$ 14,346	$ 2,122
2014 Incentive Plan | Stock in lieu of compensation
Stock-based awards:
Granted (in shares)		62,000	44,000
2014 Incentive Plan | Stock awards
Stock-based awards:
Granted (in shares)		67,000	48,000

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Other Assets, net - Other Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Notes receivable	$ 33,250	$ 32,705
Accounts and interest receivable	5,387	2,679
Straight-line rent receivable	16,342	15,429
Prepaid assets	1,341	980
Deferred financing costs, net	630	683
Leasing commissions, net	2,036	1,848
Deferred tax assets, net	271	306
Fair value of interest rate swaps	16,397	22,667
Above-market lease intangible assets, net	2,441	2,399
Sales-type lease receivable	3,033	3,035
Financing right-of-use asset	2,530	2,545
Operating lease right-of-use assets	751	759
Other	580	496
Other assets, net	$ 84,989	$ 86,531

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Other Assets, net - Narrative (Details)	3 Months Ended
	Mar. 31, 2023 USD ($) hospital	Dec. 31, 2022 USD ($)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Notes receivable	$ 33,250,000	$ 32,705,000
Note receivable (term loan) | Variable Interest Entity, Not Primary Beneficiary
Accounts, Notes, Loans and Financing Receivable [Line Items]
Notes receivable	$ 8,250,000
Notes Receivable
Accounts, Notes, Loans and Financing Receivable [Line Items]
Note receivable interest rate	9.00%
Additional funding	$ 5,000,000
Non-cash interest rate	3.00%
Notes Receivable | Note receivable (term loan)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Notes receivable	$ 8,300,000	9,000,000
Payment received	$ 250,000
Note receivable interest rate	9.00%
Notes Receivable | Note receivable (revolving credit facility)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Payment received	$ 40,000
Note receivable (term loan) | Variable Interest Entity, Not Primary Beneficiary
Accounts, Notes, Loans and Financing Receivable [Line Items]
Notes receivable	17,000,000	17,000,000
Note receivable (revolving credit facility) | Variable Interest Entity, Not Primary Beneficiary
Accounts, Notes, Loans and Financing Receivable [Line Items]
Notes receivable	5,500,000	5,000,000
Note receivable (revolving credit facility) | Variable Interest Entity, Not Primary Beneficiary
Accounts, Notes, Loans and Financing Receivable [Line Items]
Notes receivable	$ 2,500,000	$ 1,700,000
Long-Term Acute Care Hospitals | Note receivable (term loan)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of properties used to secure notes by borrower | hospital	7
Inpatient Rehabilitation Facilities | Note receivable (term loan)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of properties used to secure notes by borrower | hospital	1
Geriatric Behavioral Hospital
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of properties used to secure notes by borrower | hospital	6
Revolving Credit Facility | Notes Receivable
Accounts, Notes, Loans and Financing Receivable [Line Items]
Note receivable interest rate	9.00%
Revolving Credit Facility | Note receivable (revolving credit facility)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Note receivable interest rate	9.00%
Non-cash interest rate	3.00%

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Other Assets, net - VIEs (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Variable Interest Entity [Line Items]
Carrying amount	$ 33,250	$ 32,705
Variable Interest Entity, Not Primary Beneficiary | Note receivable (term loan)
Variable Interest Entity [Line Items]
Carrying amount	8,250
Maximum exposure to loss	8,250
Variable Interest Entity, Not Primary Beneficiary | Note receivable (revolving credit facility)
Variable Interest Entity [Line Items]
Carrying amount	5,500	5,000
Maximum exposure to loss	5,500
Variable Interest Entity, Not Primary Beneficiary | Note receivable (term loan)
Variable Interest Entity [Line Items]
Carrying amount	17,000	17,000
Maximum exposure to loss	17,000
Variable Interest Entity, Not Primary Beneficiary | Note receivable (revolving credit facility)
Variable Interest Entity [Line Items]
Carrying amount	2,500	$ 1,700
Maximum exposure to loss	$ 2,500

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Other Liabilities, net (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022	Mar. 31, 2022
Other Liabilities Disclosure [Abstract]
Prepaid rent	$ 4,862	$ 3,853
Security deposits	3,615	5,766
Below-market lease intangibles, net	2,144	1,075
Fair value of interest rate swaps	712	$ 0
Finance Lease, Liability, Statement of Financial Position [Extensible Enumeration]		Other liabilities, net	Other liabilities, net
Financing lease liability	3,278	$ 3,279
Operating lease, liability, statement of financial position		Other liabilities, net	Other liabilities, net
Operating lease liability	783	$ 786
Other	846	478
Other liabilities, net	$ 16,240	$ 15,237

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Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Notes receivable	$ 33,250	$ 32,705
Interest rate swap asset	16,397	22,667
Interest rate swap liability	712	0
Carrying Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Notes receivable	33,250	32,705
Mortgage note payable (principal amount)	4,915	4,947
Carrying Value | Interest rate swaps
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Interest rate swap asset	16,397	22,667
Interest rate swap liability	712	0
Fair Value | Fair Value, Inputs, Level 2
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Notes receivable	33,319	32,716
Mortgage note payable (principal amount)	4,766	4,761
Fair Value | Interest rate swaps | Fair Value, Inputs, Level 2
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Interest rate swap asset	16,397	22,667
Interest rate swap liability	$ 712	$ 0

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Subsequent Events (Details)	Apr. 27, 2023 $ / shares
Subsequent Event
Subsequent Event [Line Items]
Dividend declared (in dollars per share)	$ 0.45