Q2 2026 Chiron Real Estate Inc Earnings Call

August 6, 2026

Speaker #1: Good morning, ladies and gentlemen, and welcome to the Kairon Real Estate Incorporated second quarter 2026 earnings call. At this time, all lines are in a listen-only mode.

Operator: Good morning, ladies and gentlemen, and welcome to the Chiron Real Estate Inc. Q2 2026 earnings call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Thursday, 6 August 2026. I would now like to turn the conference over to Jamie Barber, General Counsel.

Rachel Smith: Good morning, ladies and gentlemen, and welcome to the Chiron Real Estate Inc. Q2 2026 earnings call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Thursday, 6 August 2026. I would now like to turn the conference over to Jamie Barber, General Counsel.

Speaker #1: Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star 0 for the operator.

Speaker #1: This call is being recorded on Thursday, August 6, 2026. I would now like to turn the conference over to Jamie Barber, General Counsel.

Speaker #2: Good morning, everyone, and welcome to Kairon Real Estate Inc. second quarter 2026 earnings conference call. My name is Jamie Barber, and I am Kairon's General Counsel.

Jamie Barber: Good morning, everyone, and welcome to Chiron Real Estate Inc.'s Q2 2026 earnings conference call. My name is Jamie Barber, and I am Chiron's General Counsel. On the call today are Mark Decker, Jr., Chief Executive Officer, Matthew Whitlock, Chief Investment Officer, Bobby Zeiller, Chief Development Officer and Head of Seniors Housing, Danica Holley, Chief Administrative Officer, Bob Kiernan, Chief Financial Officer, and Aaron Roseth, Chief Operating Officer. Statements or comments made on this conference call may be forward-looking statements. Forward-looking statements may include, but are not necessarily limited to, financial projections or other statements of the company's plans, objectives, expectations, or intentions. These matters involve certain risks and uncertainties. The company's actual results may differ significantly from those projected or suggested from any forward-looking statements due to a variety of factors, which are discussed in detail in our SEC filings.

Speaker #2: On the call today, are Mark Decker, Jr., Chief Executive Officer; Matthew Whitlock, Chief Investment Officer; Bobby Zyler, Chief Development Officer and Head of Seniors Housing; Anika Holley, Chief Administrative Officer; Bob Kernan, Chief Financial Officer; and Aaron Rosas, Chief Operating Officer.

Speaker #2: Statements or comments made on this conference call may be forward-looking statements. Forward-looking statements may include but are not necessarily limited to: financial projections or other statements of the company's plans, objectives, expectations, or intentions; these matters involve certain risks and uncertainties; the company's actual results may differ significantly from those projected or suggested from any forward-looking statements due to a variety of factors which are discussed in detail in our SEC filings; additionally, on this call, the company may refer to certain non-GAAP financial measures; you can find a tabular reconciliation of these non-GAAP financial measures to the most currently comparable GAAP numbers in the company's earnings release and in filings with the SEC.

Jamie Barber: Additionally, on this call, the company may refer to certain non-GAAP financial measures. You can find a tabular reconciliation of these non-GAAP financial measures to the most currently comparable GAAP numbers in the company's earnings release and filings with the SEC. Additional information may be found on the investor relation page of the company's website at www.chironre.com. I would now like to turn the call over to Mark.

Speaker #2: Additional information may be found on the investor relation page of the company's website at www.kaironre.com. I would now like to turn the call over to Mark.

Speaker #3: Thank you, Jamie, and good morning, everyone. I feel like a kid in a candy store this morning sitting around the table with all this talent.

Mark Decker Jr.: Thank you, Jamie, and good morning, everyone. I feel like a kid in a candy store this morning, sitting around the table with all this talent, I am even more excited that we share the same simple vision to deliver value at the intersection of care, capital, and real estate. I want to start by welcoming Tami Cummings, Aaron Roseth, Matthew Whitlock, and Bobby Zeiller. I would like to thank Bob, Danica, Jamie, and the rest of our team for a tremendously productive five months. I also want to recognize and thank Alfonzo Leon, who stepped down earlier this week as Chief Investment Officer. When we laid out our priorities earlier this year, we said we would focus on active capital allocation, portfolio repositioning, and building the capabilities necessary to support our next phase of growth. Over the last several months, we have made meaningful progress on each of these objectives.

Mark Decker: Thank you, Jamie, and good morning, everyone. I feel like a kid in a candy store this morning, sitting around the table with all this talent, I am even more excited that we share the same simple vision to deliver value at the intersection of care, capital, and real estate. I want to start by welcoming Tami Cummings, Aaron Roseth, Matthew Whitlock, and Bobby Zeiller.

Speaker #3: And I'm even more excited that we share the same simple vision: to deliver value at the intersection of care, capital, and real estates. I want to start by welcoming Tammy Cummings, Aaron Rosas, Matthew Whitlock, and Bobby Zyler.

Speaker #3: And I'd like to thank Bob, Danica, Jamie, and the rest of our team for a tremendously productive five months. I also want to recognize and thank Alfonzo Leon, who stepped down earlier this week as Chief Investment Officer.

Mark Decker: I would like to thank Bob, Danica, Jamie, and the rest of our team for a tremendously productive five months. I also want to recognize and thank Alfonzo Leon, who stepped down earlier this week as Chief Investment Officer. When we laid out our priorities earlier this year, we said we would focus on active capital allocation, portfolio repositioning, and building the capabilities necessary to support our next phase of growth. Over the last several months, we have made meaningful progress on each of these objectives.

Speaker #3: When we laid out our priorities earlier this year, we said we would focus on active capital allocation, portfolio repositioning, and building the capabilities necessary to support our next phase of growth.

Speaker #3: Over the last several months, we've made meaningful progress on each of these objectives. Before discussing the transformation that's underway, it's important to recognize that our existing portfolio continues to perform well.

Mark Decker Jr.: Before discussing the transformation that is underway, it is important to recognize that our existing portfolio continues to perform well. During the quarter, same-store NOI increased 1.7% on a normalized basis, which is in line with our expectations and the same-store guidance we issued at the beginning of the year. The strategic actions we are taking today are not a response to operational challenges. It is about capital allocation. Outpatient medical can be an excellent investment, but as we have discussed, there are better total returns available within healthcare real estate. With that in mind, I would like to discuss what we are doing to position Chiron for the future. The common thread across everything we are doing is straightforward. We are reallocating resources towards opportunities that we expect to create a more durable and relevant real estate platform that can compound stronger long-term returns. Let us review our recent progress.

Mark Decker: Before discussing the transformation that is underway, it is important to recognize that our existing portfolio continues to perform well. During the quarter, same-store NOI increased 1.7% on a normalized basis, which is in line with our expectations and the same-store guidance we issued at the beginning of the year. The strategic actions we are taking today are not a response to operational challenges. It is about capital allocation. Outpatient medical can be an excellent investment, but as we have discussed, there are better total returns available within healthcare real estate. With that in mind, I would like to discuss what we are doing to position Chiron for the future.

Speaker #3: During the quarter, same store NOI increased 1.7% on a normalized basis, which is in line with our expectations and the same store guidance we issued at the beginning of the year.

Speaker #3: The strategic actions we're taking today are not a response to operational challenges. It's about capital allocation. Outpatient medical can be an excellent investment, but as we've discussed, there are better total returns available within healthcare real estate.

Speaker #3: With that in mind, I'd like to discuss what we're doing to position Kairon for the future. The common thread across everything we're doing is straightforward.

Mark Decker: The common thread across everything we are doing is straightforward. We are reallocating resources towards opportunities that we expect to create a more durable and relevant real estate platform that can compound stronger long-term returns. Let us review our recent progress.

Speaker #3: We're reallocating resources towards opportunities that we expect to create a more durable and relevant real estate platform that can compound stronger long-term returns. And so let's review our recent progress.

Speaker #3: We closed on the $100 million May Wynn investment contemporaneously with the closing of our first two seniors' communities. The landing, a stabilized continuing of care community in Alexandria, Virginia, and the Riviera, a sister community across the courtyard from the landing, which opened this March and is in lease up.

Mark Decker Jr.: We closed on the $100 million Maewyn investment contemporaneously with the closing of our first two seniors communities, The Landing, a stabilized continuum of care community in Alexandria, Virginia, and The Riviera, a sister community across the courtyard from The Landing, which opened this March and is in lease-up. Together, this forms a community of 292 luxury homes. We completed the sale of 7 inpatient rehab facilities to a newly formed joint venture in June at an exit cap rate of 7.3%. This generated approximately $200 million of gross proceeds, we retained a small equity interest in the venture. The combination of these transactions leaves us well-positioned on the balance sheet side, with no maturities until 2028 and less than 40% leverage.

Mark Decker: We closed on the $100 million Maewyn investment contemporaneously with the closing of our first two seniors communities, The Landing, a stabilized continuum of care community in Alexandria, Virginia, and The Riviera, a sister community across the courtyard from The Landing, which opened this March and is in lease-up. Together, this forms a community of 292 luxury homes. We completed the sale of 7 inpatient rehab facilities to a newly formed joint venture in June at an exit cap rate of 7.3%. This generated approximately $200 million of gross proceeds, we retained a small equity interest in the venture. The combination of these transactions leaves us well-positioned on the balance sheet side, with no maturities until 2028 and less than 40% leverage.

Speaker #3: Together, this forms a community of 292 luxury homes. We completed the sale of 7 inpatient rehab facilities to a newly formed joint venture in June at an exit cap rate of $7.3%.

Speaker #3: This generated approximately $200 million of gross proceeds, and we retained a small equity interest in the venture. The combination of these transactions leaves us well-positioned on the balance sheet side with no maturities until 2028 and less than 40% leverage.

Speaker #3: And while I know we all prefer debt-to-EBITDA, given the nature of our lease-up communities, we're going to refer principally to our covenant metrics for a time.

Mark Decker Jr.: While I know we all prefer debt to EBITDA, given the nature of our lease-up communities, we are going to refer principally to our covenant metrics for a time. The team has maintained momentum on asset sales, I am pleased to announce that we are under contract to sell our Beaumont, Texas surgical hospital for a price of $49 million, representing an exit cap rate of 5.9%. Proceeds from these sales will be directed towards assets offering a higher return on capital. The most immediate use will be to complete the previously announced acquisition of The Pinnacle, a marquee luxury community that we put under contract in the Q2. The Pinnacle welcomed its first residence in June, and we could not be more pleased with the early momentum at the community.

Mark Decker: While I know we all prefer debt to EBITDA, given the nature of our lease-up communities, we are going to refer principally to our covenant metrics for a time. The team has maintained momentum on asset sales, I am pleased to announce that we are under contract to sell our Beaumont, Texas surgical hospital for a price of $49 million, representing an exit cap rate of 5.9%. Proceeds from these sales will be directed towards assets offering a higher return on capital. The most immediate use will be to complete the previously announced acquisition of The Pinnacle, a marquee luxury community that we put under contract in the Q2. The Pinnacle welcomed its first residence in June, and we could not be more pleased with the early momentum at the community.

Speaker #3: The team has maintained momentum on asset sales, and I'm pleased to announce that we're under contract to sell our Beaumont, Texas Surgical Hospital for a price of $49 million, representing an exit cap rate of 5.9%.

Speaker #3: Proceeds from these sales will be directed towards assets offering a higher return on capital. The most immediate use will be to complete the previously announced acquisition of the Pinnacle, a Marquis luxury community that we put under contract in the second quarter.

Speaker #3: The Pinnacle Welcome, its first residence in June, and we couldn't be more pleased with the early momentum at the community. We remain active in evaluating further dispositions from our outpatient medical platform.

Mark Decker Jr.: We remain active in evaluating further dispositions from our outpatient medical platform, or our outpatient medical portfolio, excuse me, including through individual sales or larger portfolio transactions. See no shortage of opportunities to redeploy these proceeds in a way that will drive our long-term return on capital higher and deliver value to our shareholders. While there's been a lot of transactional activity, the biggest story is our leadership team. Executing on a transition of this magnitude and then building the business we envision requires specialized expertise, and we've spent considerable time strengthening the organization accordingly. Over the past several weeks, we've welcomed Tami Cummings, Aaron Roseth, Matthew Whitlock, and Bobby Zeiller into leadership roles at Chiron. Together, they bring more than 100 years of experience sourcing, developing, operating, and managing seniors housing communities. Most importantly, these additions are highly complementary.

Mark Decker: We remain active in evaluating further dispositions from our outpatient medical platform, or our outpatient medical portfolio, excuse me, including through individual sales or larger portfolio transactions. See no shortage of opportunities to redeploy these proceeds in a way that will drive our long-term return on capital higher and deliver value to our shareholders. While there's been a lot of transactional activity, the biggest story is our leadership team. Executing on a transition of this magnitude and then building the business we envision requires specialized expertise, and we've spent considerable time strengthening the organization accordingly. Over the past several weeks, we've welcomed Tami Cummings, Aaron Roseth, Matthew Whitlock, and Bobby Zeiller into leadership roles at Chiron. Together, they bring more than 100 years of experience sourcing, developing, operating, and managing seniors housing communities. Most importantly, these additions are highly complementary.

Speaker #3: Our outpatient medical portfolio, excuse me, including through individual sales or larger portfolio transactions, and see no shortage of opportunities to redeploy these proceeds in a way that will drive our long-term return on capital higher and deliver value to our shareholders.

Speaker #3: While there's been a lot of transactional activity, the biggest story is our leadership team. Executing on a transition of this magnitude and then building the business we envision requires specialized expertise, and we've spent considerable time strengthening the organization accordingly.

Speaker #3: Over the past several weeks, we've welcomed Tammy Cummings, Aaron Rosas, Matthew Whitlock, and Bobby Zyler into leadership roles at Kairon. Together, they bring more than 100 years of experience sourcing, developing, operating, and managing senior housing communities.

Speaker #3: Most importantly, these additions are highly complementary. This is an operational business, and to be a good partner, we need a strong operator's eyes. With Tammy Cummings, our new SVP of Seniors Housing, we've added decades of operating experience to ensure that our communities are managed in a best-in-class fashion.

Mark Decker Jr.: This is an operational business, and to be a good partner, we need a strong operator's eyes. With Tami Cummings, our new SVP of seniors housing, we've added decades of operating experience to ensure that our communities are managed in a best-in-class fashion. To be a great partner with operators and deliver a consistent experience for our team in the street, we need an organization that remains curious and focused on constant improvement. Aaron Roseth, who led a best-in-class architecture firm with industry-leading profitability, is skilled at both running large gray matter organizations and building deep client relationships. Together with Danica, who's in many ways the heart and soul of our company, we are seeking to become the best partner we can. Matthew joins us as Chief Investment Officer with three decades of seniors housing thought leadership and experience on all sides of the business.

Mark Decker: This is an operational business, and to be a good partner, we need a strong operator's eyes. With Tami Cummings, our new SVP of seniors housing, we've added decades of operating experience to ensure that our communities are managed in a best-in-class fashion. To be a great partner with operators and deliver a consistent experience for our team in the street, we need an organization that remains curious and focused on constant improvement. Aaron Roseth, who led a best-in-class architecture firm with industry-leading profitability, is skilled at both running large gray matter organizations and building deep client relationships. Together with Danica, who's in many ways the heart and soul of our company, we are seeking to become the best partner we can. Matthew joins us as Chief Investment Officer with three decades of seniors housing thought leadership and experience on all sides of the business.

Speaker #3: To be a great partner with operators and deliver consistent experience for our team and the street, we need an organization that remains curious and focused on constant improvement.

Speaker #3: Aaron Rosas, who led a best-in-class architecture firm with industry-leading profitability, is skilled at both running large gray matter organizations and building deep client relationships.

Speaker #3: Together with Danica, who's in many ways the heart and soul of our company, we are seeking to become the best partner we can. Matthew joins us as Chief Investment Officer, with three decades of senior housing thought leadership and experience on all sides of the business.

Speaker #3: He will be the tip of the spear as we seek to deploy capital wisely. Bobby is Kairon's Chief Development Officer and Head of Seniors.

Mark Decker Jr.: He will be the tip of the spear as we seek to deploy capital wisely. Bobby is Chiron's Chief Development Officer and head of seniors. Bobby literally built the Bedrock Communities that we purchased from Silverstone, which he led. In addition to constructing communities, he has a great way with people, and ultimately, I think his superpower is working with operators with a focus on empathy and respect as well as accountability, and most importantly, an eye to what sustains a great customer experience for our residents. Together, these leaders expand our ability to identify opportunities, underwrite risk, support operators, work as an effective team, and maximize performance across the portfolio. We believe Chiron now has the leadership platform necessary to deliver on our vision. Finally, I'd like to address valuation. We continue to believe the market's not fully recognizing the value embedded within our legacy outpatient medical portfolio.

Mark Decker: He will be the tip of the spear as we seek to deploy capital wisely. Bobby is Chiron's Chief Development Officer and head of seniors. Bobby literally built the Bedrock Communities that we purchased from Silverstone, which he led. In addition to constructing communities, he has a great way with people, and ultimately, I think his superpower is working with operators with a focus on empathy and respect as well as accountability, and most importantly, an eye to what sustains a great customer experience for our residents. Together, these leaders expand our ability to identify opportunities, underwrite risk, support operators, work as an effective team, and maximize performance across the portfolio. We believe Chiron now has the leadership platform necessary to deliver on our vision. Finally, I'd like to address valuation. We continue to believe the market's not fully recognizing the value embedded within our legacy outpatient medical portfolio.

Speaker #3: Bobby literally built the Bedrock communities that we purchased from Silverstone, which he led. And in addition to constructing communities, he has a great way with people and ultimately, I think, his superpower is working with operators with a focus on empathy and respect, as well as accountability and, most importantly, an eye to what sustains a great customer experience for our residents.

Speaker #3: Together, these leaders expand our ability to identify opportunities, underwrite risk, support operators, work as an effective team, and maximize performance across the portfolio. We believe Kairon now has the leadership platform necessary to deliver on our vision.

Speaker #3: Finally, I'd like to address valuation. We continue to believe the market's not fully recognizing the value embedded within our legacy outpatient medical portfolio. Our belief is supported by a growing body of public and private market transaction activity that demonstrates the robust institutional demand for outpatient medical real estate at cap rates that compare favorably to the implied valuation of our MOB portfolio.

Mark Decker Jr.: Our belief is supported by a growing body of public and private market transaction activity that demonstrates the robust institutional demand for outpatient medical real estate at cap rates that compare favorably to the implied valuation of our MOB portfolio. We've highlighted this on page 14 of our most recent investor presentation. We can't control where the market values our shares in the near term. What we can control is disciplined execution. We believe that it's prudent to lean into this pricing dislocation and sell assets which we believe will offer meaningful upside that's not currently reflected in our stock price and allow us to reallocate capital into higher returning assets. Taken together, we believe the company is better positioned today than it was six months ago. We have enhanced our leadership capabilities, made meaningful progress on our portfolio transition, and established a clear roadmap for continued execution.

Mark Decker: Our belief is supported by a growing body of public and private market transaction activity that demonstrates the robust institutional demand for outpatient medical real estate at cap rates that compare favorably to the implied valuation of our MOB portfolio. We've highlighted this on page 14 of our most recent investor presentation. We can't control where the market values our shares in the near term. What we can control is disciplined execution. We believe that it's prudent to lean into this pricing dislocation and sell assets which we believe will offer meaningful upside that's not currently reflected in our stock price and allow us to reallocate capital into higher returning assets. Taken together, we believe the company is better positioned today than it was six months ago. We have enhanced our leadership capabilities, made meaningful progress on our portfolio transition, and established a clear roadmap for continued execution.

Speaker #3: We've highlighted this on page 14 of our most recent investor presentation. We can't control where the market values our shares in the near term.

Speaker #3: What we can control is disciplined execution. We believe that it's prudent to lean into this pricing dislocation and sell assets which we believe will offer meaningful upside that's not currently reflected in our stock price and allow us to reallocate capital into higher returning assets.

Speaker #3: Taken together, we believe the company is better positioned today than it was six months ago. We have enhanced our leadership capabilities, made meaningful progress on our portfolio transition, and established a clear roadmap for continued execution.

Speaker #3: With that, I'll turn the call over to Bob to provide additional details on our financial and operating results for the quarter.

Mark Decker Jr.: With that, I'll turn the call over to Bob to provide additional details on our financial and operating results for the quarter.

Mark Decker: With that, I'll turn the call over to Bob to provide additional details on our financial and operating results for the quarter.

Speaker #2: Thanks, Mark. Regarding our second quarter results, they redefined FFO per share and unit, was 88 cents, and our core FFO was $1.04 per share and unit.

Bob Kiernan: Thanks, Mark. Regarding our Q2 results, GAAP-defined FFO per share and unit was $0.88, and our Core FFO was $1.04 per share and unit. Driven by the timing of our investment and disposition activity, net debt to adjusted EBITDAre was 6.0 times to the quarter compared to 6.6 in Q1. Our same-store cash NOI increased 0.8% on a year-over-year basis. This increase was consistent with our expectations and was adversely impacted by a one-time non-recurring revenue recovery recognized in the prior year period related to a single tenant. Excluding this asset, same-store cash NOI growth would have been 1.7%. Our cash G&A for Q2 was $3.8 million. It's down slightly from Q1 of this year.

Speaker #2: Driven by the timing of our investment and disposition activity, net debt to adjusted EBITDA was $6.0 times to the quarter compared to $6.6 in the first quarter.

Speaker #2: Our same-store cash NOI increased 0.8% on a year-over-year basis. This increase was consistent with our expectations and was adversely impacted by a one-time non-recurring revenue recovery recognized in the prior year period related to a single tenant.

Speaker #2: Excluding this asset, same-store cash NOI growth would have been 1.7%. Our cash GNA for the second quarter was 3.8 million, is down slightly from the first quarter of this year.

Speaker #2: Looking ahead, while we expect that the changes in senior management will increase, our GNA costs in the short term we believe that as we reposition the investment portfolio, our costs will be in line with the size of our portfolio.

Bob Kiernan: Looking ahead, while we expect that the changes in senior management will increase our G&A costs in the short term, we believe that as we reposition the investment portfolio, our costs will be in line with the size of our portfolio. Regarding our equity capital, we're pleased to have issued the $100 million of Series C convertible perpetual preferred stock in the quarter. The sale of our 7 inpatient rehab facilities at an aggregate value of $217 million demonstrates our ability to recycle capital at an attractive rate. We ended the quarter with $259 million in unutilized borrowing capacity under our credit facility and our leverage ratio of just under 40%. Mark, would you like to provide any closing remarks?

Speaker #2: Regarding our equity capital, we're pleased to have issued the $100 million of Series C convertible perpetual preferred in the quarter. The sale of our seven inpatient rehab facilities and aggregate value of $217 million demonstrates our ability to recycle capital and attractive rate.

Speaker #2: We ended the quarter with $259 million in unutilized borrowing capacity under our credit facility and our leverage ratio of just under 40%. Mark, would you like to provide any closing remarks?

Speaker #3: Thanks, Bob. Before opening the call for questions, I'd like to leave everyone with one final thought. The story at Kairon today is not about aspirations.

Mark Decker Jr.: Thanks, Bob. Before opening the call for questions, I'd like to leave everyone with one final thought. The story at Chiron today is not about aspirations, it's about execution. Over the last several quarters, we've built a strategy, assembled a team, raised fresh capital, completed acquisitions, and successfully recycled assets. Our entire team is laser-focused on building Chiron into a best-in-class organization. We're excited to share more about the business. Operator, please open the line.

Mark Decker: Thanks, Bob. Before opening the call for questions, I'd like to leave everyone with one final thought. The story at Chiron today is not about aspirations, it's about execution. Over the last several quarters, we've built a strategy, assembled a team, raised fresh capital, completed acquisitions, and successfully recycled assets. Our entire team is laser-focused on building Chiron into a best-in-class organization. We're excited to share more about the business. Operator, please open the line.

Speaker #3: It's about execution. Over the last several quarters, we've built a strategy, assembled a team, raised fresh capital, completed acquisitions, and successfully recycled assets. There's certainly more work ahead, but our entire team is laser-focused on building Kairon into a best-in-class organization.

Speaker #3: We're excited to share more about the business, operator, please open the line.

Speaker #1: And thank you. We will now begin our question and answer session. Should you have a question, please press the star followed by the one on your touchtone phone.

Operator: Thank you. We will now begin our question and answer session. Should you have a question, please press the star followed by the one on your touch tone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press the star followed by the two. If you're using a speakerphone, please lift the handset first before pressing any keys. We have our first question from Juan Sanabria with BMO Capital Markets.

Speaker #1: You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press the star followed by the two.

Speaker #1: And if you're using a speakerphone, please lift the handset first before pressing any keys. We have our first question from Juan Sanabria with BMO Capital Markets.

Speaker #4: Hi, good morning. Thanks for the time and congrats on the new team and being assembled, I guess. Just hoping, Mark, maybe you could talk a little bit about the strategy here going forward and what types of assets you're looking for.

Juan Sanabria: Hi, good morning. Thanks for the time, and congrats on the new team and being assembled, I guess. Just hoping, Mark, maybe you could talk a little bit about the strategy here going forward and what types of assets you're looking for. As part of that, the plans for the Reston Land parcel acquisition you announced with results yesterday.

Speaker #4: And as part of that, kind of the plans for the rest in land parcel acquisition you announced with results yesterday.

Speaker #3: Sure. Thanks, Juan. Well, the strategy is, as we've outlined, to be focused on seniors' housing and, I mean, honestly, the rest in land. We have a great plan for.

Mark Decker Jr.: Sure. Thanks, Juan. The strategy is, as we've outlined, to be focused on seniors housing and honestly, the Reston Land, we have a great plan for. I would remind you it's about 1% of assets, and we'll tell you more as that plan unfolds. Short version, we're going to use it as currency to build rapport with operators. It's shovel-ready in great silos.

Mark Decker: Sure. Thanks, Juan. The strategy is, as we've outlined, to be focused on seniors housing and honestly, the Reston Land, we have a great plan for. I would remind you it's about 1% of assets, and we'll tell you more as that plan unfolds. Short version, we're going to use it as currency to build rapport with operators. It's shovel-ready in great silos.

Speaker #3: It's I would remind you, it's less than it's about 1% of assets. And we'll tell you more as that plan unfolds. But short version, we're going to use it as currency to build rapport with operators.

Speaker #3: And it's shovel-ready in great demos.

Speaker #4: Sorry, maybe I wasn't super clear. Just I guess as the focus to be more on development assets that require patience and lease up or more stabilized assets in terms of the acquisitions of capital recycling.

Juan Sanabria: Sorry. Maybe I wasn't super clear. I guess is the focus to be more on development assets that require patience in lease-up or more stabilized assets in terms of the acquisitions of capital recycling?

Mark Decker Jr.: Definitely more stabilized assets.

Mark Decker: Definitely more stabilized assets.

Speaker #3: Definitely more stabilized assets.

Speaker #4: Great. And then I think Bob alluded to it or how should we think about the pro forma GNA run rate with the additions to the team?

Juan Sanabria: Great. I think Bob alluded to it. How should we think about the pro forma G&A run rate with the additions to the team?

Speaker #3: I mean, for the time, it'll be higher. But I mean, I would say, Juan, we're really doing this as a growth-oriented team and a growth-oriented business with a source of capital that's right in front of us in the form of the outpatient medical assets and so our expectation is the business will grow and mature and our GNA will be in line or better.

Mark Decker Jr.: I think for the time it'll be higher. I would say, Juan, we're really viewing this as a growth-oriented team and a growth-oriented business with a source of capital that's right in front of us in the form of the outpatient medical assets. Our expectation is the business will grow and mature and our G&A will be in line or better.

Mark Decker: I think for the time it'll be higher. I would say, Juan, we're really viewing this as a growth-oriented team and a growth-oriented business with a source of capital that's right in front of us in the form of the outpatient medical assets. Our expectation is the business will grow and mature and our G&A will be in line or better.

Speaker #4: Great. Thank you.

Juan Sanabria: Great. Thank you.

Speaker #3: Thanks, Juan.

Mark Decker Jr.: Thanks, Juan.

Mark Decker: Thanks, Juan.

Speaker #1: Our next question comes from Wes Golliday with Baird.

Operator: Our next question comes from Wes Golladay with Baird.

Speaker #5: Hey, yeah. Good morning, everyone. Maybe a follow-up to Juan's question on the development parcel. Do you have an idea what you want to do?

Wes Golladay: Hey. Good morning, everyone. Maybe a follow-up to Juan's question on the development parcel. Do you have an idea what you want to do? Would it be an active adult or would it be more up the acuity curve? Maybe talk about the competitive landscape in that market.

Speaker #5: Would it be an active adult or would it be more up the acuity curve? And maybe talk about the competitive landscape in that market?

Speaker #3: Yeah. Again, I think you're probably overemphasizing a 1% investment, but it's your time. So, I mean, yeah, it would likely be a full continuum community.

Mark Decker Jr.: Yeah, again, I think you're probably overemphasizing a 1% investment, but it's your time. Yeah, it would be a likely full continuum community. It's right down the middle of the fairway in terms of demographics. I would expect we'll come up with some thoughtful way to partner with someone on an earnings-oriented manner.

Mark Decker: Yeah, again, I think you're probably overemphasizing a 1% investment, but it's your time. Yeah, it would be a likely full continuum community. It's right down the middle of the fairway in terms of demographics. I would expect we'll come up with some thoughtful way to partner with someone on an earnings-oriented manner.

Speaker #3: It's kind of right down the middle of the fairway in terms of demographics. And I would expect we'll come up with some thoughtful way to partner with someone on an earnings-oriented manner.

Speaker #5: Okay. And then maybe going back to the team build-out, do you have the team in place or are you still looking to fill any positions?

Wes Golladay: Okay. Then maybe going back to the team build-out, do you have the team in place or are you still looking to fill any positions?

Speaker #3: We're in I think we're in a great spot.

Mark Decker Jr.: I think we're in a great spot.

Mark Decker: I think we're in a great spot.

Speaker #5: Okay. And then the last one for me, do you have made the pivot to senior housing, but you're still remaining opportunistic in OM? Is that going to be part of the playbook going forward?

Wes Golladay: Okay. Then last one from me. You have made the pivot to seniors housing, but you're still remaining opportunistic in OM. Is that going to be part of the playbook going forward?

Speaker #3: Yeah. I mean, I think the playbook is really to try to generate the best returns on capital possible. And work with partners who value what we're up to.

Mark Decker Jr.: Yeah. I think the playbook is really to try to generate the best returns on capital possible and work with partners who value what we're up to. We're very focused proportionally on seniors housing.

Mark Decker: Yeah. I think the playbook is really to try to generate the best returns on capital possible and work with partners who value what we're up to. We're very focused proportionally on seniors housing.

Speaker #3: But I mean, we're very focused proportionally on senior housing.

Speaker #5: Okay. Thanks a lot.

Wes Golladay: Okay. Thanks a lot.

Speaker #3: Thank you.

Mark Decker Jr.: Thank you.

Mark Decker: Thank you.

Speaker #1: Our next question is from Dave Rogers with Raymond James.

Operator: Our next question is from David Rodgers with Raymond James.

Operator: Our next question is from Dave Rodgers with Raymond James.

Speaker #6: Yeah, good morning, Mark. Wanted to follow up, I guess, on some of those same questions. But you mentioned valuation in your opening. And setting aside the right value for now, historically, in the space, best way to highlight value, eliminate loans, eliminate mezzanine, eliminate joint ventures, get to a clean portfolio, and kind of highlight that.

David Rodgers: Yeah. Good morning, Mark. Wanted to follow up, I guess, on some of those same questions. You mentioned valuation in your opening, setting aside the right value for now historically in the space, best way to highlight value, eliminate loans, eliminate mezzanine, eliminate joint ventures, get to a clean portfolio and highlight that. Obviously some of the steps in the quarter aren't going in that direction. I guess, do you see just a longer exit than maybe people have originally anticipated from your comments from the outpatient medical? Is it that you're trying to maintain some level of earnings or cash flow for debt coverage? What's the rationale, I guess, for staying involved in these businesses given how good seniors is today?

Dave Rodgers: Yeah. Good morning, Mark. Wanted to follow up, I guess, on some of those same questions. You mentioned valuation in your opening, setting aside the right value for now historically in the space, best way to highlight value, eliminate loans, eliminate mezzanine, eliminate joint ventures, get to a clean portfolio and highlight that. Obviously some of the steps in the quarter aren't going in that direction. I guess, do you see just a longer exit than maybe people have originally anticipated from your comments from the outpatient medical? Is it that you're trying to maintain some level of earnings or cash flow for debt coverage? What's the rationale, I guess, for staying involved in these businesses given how good seniors is today?

Speaker #6: And obviously, some of the steps in the quarter aren't going in that direction. So I guess do you see just a longer axis and maybe people have originally anticipated from your comments from the outpatient medical?

Speaker #6: Is it that you’re trying to maintain some level of earnings or cash flow for debt coverage? I mean, what’s the rationale, I guess, for staying involved in these businesses given how good Seniors is today?

Speaker #3: You're talking about the two loans?

Mark Decker Jr.: You're talking about the two loans?

Mark Decker: You're talking about the two loans?

Speaker #6: Yeah. I mean, a combination of the loans, the active adult, and just kind of like where do you want to be in that spectrum?

David Rodgers: Yeah. A combination of the loans, the active adult, and just where do you want to be in that spectrum? Again, the IRF JV that you did, why not exit that outright? Why stay in some of these businesses, I think is the question of why continue to allocate capital there. Even though you sold them, you're still allocating capital to the IRFs as opposed to allocating that full capital into seniors.

Dave Rodgers: Yeah. A combination of the loans, the active adult, and just where do you want to be in that spectrum? Again, the IRF JV that you did, why not exit that outright? Why stay in some of these businesses, I think is the question of why continue to allocate capital there. Even though you sold them, you're still allocating capital to the IRFs as opposed to allocating that full capital into seniors.

Speaker #6: And again, the Earth JV that you did, why not exit that outright? Why stay in some of these businesses? I think it's kind of the question of why continue to allocate capital there, even though you sold them.

Speaker #6: You're still allocating capital to the Earth as opposed to allocating that full capital into seniors.

Speaker #3: Yeah, fair question. I mean, listen, I think I don't know what everyone's expectations are for the axis. Of how long this will take, but I think it's reasonable to assume it'll take more time than immediate.

Mark Decker Jr.: Yeah, fair question. Listen, I don't know what everyone's expectations are for the axis of how long this will take, but I think it's reasonable to assume it'll take more time than immediate. Some of these things, it just depends. If you think about the IRF business, that's really a niche within a niche, and there is some kind of mid-duration leasing work to be done there. That is how we think we optimize value and to get the best price. That's a space where Investors want some expertise. They value our expertise there. We think that there is an opportunity to reset those leases, but it isn't today. It's four and a half years from now.

Mark Decker: Yeah, fair question. Listen, I don't know what everyone's expectations are for the axis of how long this will take, but I think it's reasonable to assume it'll take more time than immediate. Some of these things, it just depends. If you think about the IRF business, that's really a niche within a niche, and there is some kind of mid-duration leasing work to be done there. That is how we think we optimize value and to get the best price. That's a space where Investors want some expertise. They value our expertise there. We think that there is an opportunity to reset those leases, but it isn't today. It's four and a half years from now.

Speaker #3: And some of these things that just depends. I mean, if you think about the Earth business, that's really a niche within a niche. And there is some kind of mid-duration leasing work to be done there that is how we think we optimize value.

Speaker #3: And to get the best price that's a space where money investors want some expertise. So they value our expertise there. We think that there is an opportunity to reset those leases, but it isn't today.

Speaker #3: It's four and a half years from now. So I think to get the execution we got there, which was outstanding from a cap rate and valuation perspective, that's what we needed to do to drive the best value for the company.

Mark Decker Jr.: I think to get the execution we got there, which was outstanding from a cap rate and valuation perspective, that's what we needed to do to drive the best value for the company. That's really how we're focused. I think you'll continue to see that. I think if you looked at the quarter, we announced $421 million of seniors investments, and we announced a $15 million land piece and $5 million of mezzanine loans. I should think those are reasonable proportions to expect going forward.

Mark Decker: I think to get the execution we got there, which was outstanding from a cap rate and valuation perspective, that's what we needed to do to drive the best value for the company. That's really how we're focused. I think you'll continue to see that. I think if you looked at the quarter, we announced $421 million of seniors investments, and we announced a $15 million land piece and $5 million of mezzanine loans. I should think those are reasonable proportions to expect going forward.

Speaker #3: And that's really how we're focused. So I think you'll continue to see that. I mean, I think if you looked at the quarter, we announced 421 million dollars of seniors investments, and we announced a 15 million dollar land piece and 5 million dollars of mez loans and I should think those are reasonable proportions.

Speaker #3: To expect going forward.

Speaker #6: And then maybe just on your last comment, that was all helpful. Thank you. That last comment about kind of the senior side of the business, can you talk about maybe what the pipeline of assets that you're looking at today looking forward as you are trying to make that shift?

David Rodgers: Maybe just on your last comment, that was all helpful. Thank you. That last comment about kind of the senior side of the business, can you talk about maybe what the pipeline of assets that you're looking at today, looking forward as you are trying to make that shift? Is that continuing to grow? Are we waiting for the new team members to kind of take a look at that and kind of redefine where we want to go? How do you think about kind of what that pipeline looks like today?

Dave Rodgers: Maybe just on your last comment, that was all helpful. Thank you. That last comment about kind of the senior side of the business, can you talk about maybe what the pipeline of assets that you're looking at today, looking forward as you are trying to make that shift? Is that continuing to grow? Are we waiting for the new team members to kind of take a look at that and kind of redefine where we want to go? How do you think about kind of what that pipeline looks like today?

Speaker #6: Is that continuing to grow? Are we waiting for the new team members to kind of take a look at that and kind of redefine where we want to go?

Speaker #6: How do you think about kind of what that pipeline looks like today?

Speaker #3: To quote our president, it's huge. No, listen, we have lots of good ideas Matthew who's sitting next to me and can speak to this himself has we have a very large pipeline more ideas, I'd say, than capital right now.

Mark Decker Jr.: To quote our president, "It's huge." No, listen, we have lots of good ideas. Matthew, who's sitting next to me, can speak to this himself. Look, we have a very large pipeline. More ideas, I'd say, than capital right now. The art of it for us is to deliver some proceeds for those investments. Matthew, you want to speak to that for a second?

Mark Decker: To quote our president, "It's huge." No, listen, we have lots of good ideas. Matthew, who's sitting next to me, can speak to this himself. Look, we have a very large pipeline. More ideas, I'd say, than capital right now. The art of it for us is to deliver some proceeds for those investments. Matthew, you want to speak to that for a second?

Speaker #3: And so the art of it for us is to get out of those deliver some proceeds for those investments. So Matthew, you want to speak to that for a second?

Speaker #7: Yeah, thanks, Mark. Just to let you know, we've already begun developing a pretty robust pipeline of investment opportunities. We're focusing on investments which will provide long-term earnings growth.

Matthew Whitlock: Yeah. Thanks, Mark. Just to let you know, we've already begun developing a pretty robust pipeline of investment opportunities. We're focusing on investments which will provide long-term earnings growth, excuse me, and as importantly, partnership opportunities with best-in-class operators. The sky's the limit. Our canvas is blank, but we're concentrating on specific MSAs and specific operating partners who have shown time and again their ability to operate efficiently and also to provide the best living and care experience to the residents.

Speaker #7: Excuse me. And, as importantly, partnership opportunities with best-in-class operators. Where the sky's the limit and our canvas is blank, but we're concentrating on specific MSAs and specific operating partners who have shown, time and again, their ability to operate efficiently and also to provide the best living and care experience to the residents.

Speaker #6: All right. Thank you.

David Rodgers: All right. Thank you.

Dave Rodgers: All right. Thank you.

Speaker #3: Thanks, David.

Mark Decker Jr.: Thanks, David.

Mark Decker: Thanks, David.

Speaker #1: We have our next question from Gaurav Mehta with Alliance Global Partners.

Operator: We have our next question from Gaurav Mehta with Alliance Global Partners.

Speaker #8: Yeah, thank you. Good morning. I wanted to ask you on the asset sales. Are you looking to sell any more assets after Beaumont sales?

Gaurav Mehta: Thank you. Good morning. I wanted to ask you on the asset sales, are you looking to sell any more assets after Beaumont sale?

Speaker #3: Sorry, I didn't catch the last part. Are we looking to sell what? More?

Mark Decker Jr.: Sorry, I didn't catch the last part. Are we looking to sell what? More assets?

Mark Decker: Sorry, I didn't catch the last part. Are we looking to sell what? More assets?

Speaker #8: Are you looking to sell any more assets after the Beaumont sales?

Gaurav Mehta: Are you looking to sell any more assets after the Beaumont sale?

Speaker #3: Yes. Yep. Yes. I mean, we've hired a broker to help us evaluate the best way to do that in a way that maximizes value.

Mark Decker Jr.: Yes. We've hired a broker to help us evaluate the best way to do that in a way that maximizes value. Kind of looking at the portfolio, we could obviously sell it in 180 pieces or five or one, there's a lot of considerations that go into that. That's how we're exploring it right now.

Mark Decker: Yes. We've hired a broker to help us evaluate the best way to do that in a way that maximizes value. Kind of looking at the portfolio, we could obviously sell it in 180 pieces or five or one, there's a lot of considerations that go into that. That's how we're exploring it right now.

Speaker #3: So kind of looking at the portfolio, we could obviously sell it in 180 pieces or 5 or 1 and there's a lot of considerations that go into that.

Speaker #3: But that's how we're exploring it right now.

Speaker #8: Okay. And second question on the mez loans that you guys did. Is the rationale for mez loans to generate some income? And then how do you think about mez loans as a percentage of your assets?

Gaurav Mehta: Okay. Second question on the mezzanine loans that you guys did. Is it rational for mezzanine loans to generate some income? How do you think about mezzanine loans as a percentage of your assets? Are you looking to grow that part of your portfolio?

Speaker #8: Are you looking to grow that part of your portfolio?

Speaker #3: Yeah. I mean, those are really only a small 33 basis points of the whole book, if you will. And two, they're cash pay. They're with an outstanding sponsor, with outstanding credit.

Mark Decker Jr.: Yeah, those are really one small 33 basis points of the whole book, if you will, and two, they're cash pay. They're with an outstanding sponsor, with an outstanding credit. We have all the docs. It's pretty easy for us to do those. I would say, we just look at that as a nice way to generate some return on capital where we get our money back in two years and have optionality on those assets. That's sort of the why of it.

Mark Decker: Yeah, those are really one small 33 basis points of the whole book, if you will, and two, they're cash pay. They're with an outstanding sponsor, with an outstanding credit. We have all the docs. It's pretty easy for us to do those. I would say, we just look at that as a nice way to generate some return on capital where we get our money back in two years and have optionality on those assets. That's sort of the why of it.

Speaker #3: We have all the docs. It's pretty easy for us to do those. So I would say we just look at that as a nice way to generate some return on capital where we get our money back in two years.

Speaker #3: And have optionality on those assets. So that's sort of the why of it.

Speaker #8: Okay. All right. Thank you. That's all I had.

Gaurav Mehta: Okay. All right. Thank you. That's all I had.

Speaker #3: Thanks.

Mark Decker Jr.: Thanks.

Mark Decker: Thanks.

Speaker #1: There are no further questions at this time. I will now turn the call over to Mark for closing remarks.

Operator: There are no further questions at this time. I will now turn the call over to Mark for closing remarks.

Speaker #3: Well, thanks, everybody. We appreciate everyone's time and attention. And as Lee likes to point out, the transition is underway, capital allocation is improving, and there's outstanding value in our stock today.

Mark Decker Jr.: Well, thanks everybody. We appreciate everyone's time and attention, and as we like to point out, the transition's underway, capital allocation is improving, and there's outstanding value in our stock today. We look forward to talking to you next quarter.

Mark Decker: Well, thanks everybody. We appreciate everyone's time and attention, and as we like to point out, the transition's underway, capital allocation is improving, and there's outstanding value in our stock today. We look forward to talking to you next quarter.

Speaker #3: We look forward to talking to you next quarter.

Operator: Ladies and gentlemen, this concludes today's conference. We thank you for your participation. You may now disconnect.

Q2 2026 Chiron Real Estate Inc Earnings Call

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