Key Facts
- Net income (Q2 2026)
- $2.4 million
- Diluted EPS
- $0.06
- FFO per share
- $0.48
- AFFO per share
- $0.56
- Dividend per share
- $0.33 (31% reduction)
- AFFO payout ratio
- Approximately 60%
Background
Community Healthcare Trust Incorporated (NYSE: CHCT) is a real estate investment trust that focuses on owning income-producing properties associated primarily with the delivery of outpatient healthcare services in target sub-markets throughout the United States.
As of June 30, 2026, the company had investments of approximately $1.2 billion in 197 real estate properties, including one property with sales-type leases. The properties are located in 36 states, totaling approximately 4.5 million square feet.
The company announced its results for the three months ended June 30, 2026, on August 4, 2026.
Current Situation
For the three months ended June 30, 2026, the company reported net income of approximately $2.4 million, or $0.06 per diluted common share. Funds from operations (FFO) and adjusted funds from operations (AFFO) totaled $0.48 and $0.56 per diluted common share, respectively.
The Board of Directors unanimously declared a quarterly common stock dividend of $0.33 per share, payable on August 31, 2026, to stockholders of record as of August 19, 2026. This represents a 31% reduction from the prior dividend payment and lowers the company's AFFO payout ratio to approximately 60%.
The company also announced a new strategic Investor Presentation, filed as Exhibit 99.3 on Form 8-K, highlighting leadership's steps to rightsize the dividend to fund growth. The company is enhancing its capital allocation policy to focus on acquisitions, redevelopment, occupancy growth, and operating improvements.
| Metric | Value |
|---|---|
| Net income | $2.4 million |
| Diluted EPS | $0.06 |
| FFO per share | $0.48 |
| AFFO per share | $0.56 |
| Dividend per share | $0.33 |
| Dividend reduction | 31% |
| AFFO payout ratio | ~60% |
Impacts
The dividend reduction is expected to provide an additional $25 million to $30 million of retained capital over the next two years. This capital is intended to fund accretive acquisitions, portfolio reinvestments, and occupancy improvements.
The company has four properties under definitive purchase agreements, with an aggregate expected purchase price of approximately $99.0 million. Expected returns on these investments are approximately 9.1% to 9.75%. The company anticipates closing on one property in the third quarter of 2026, another in the fourth quarter of 2026, and the remaining two in 2027, but cannot provide assurance as to timing or whether these transactions will close.
During the second quarter of 2026, the company sold a property, received net proceeds of approximately $0.4 million, and recorded a $46,000 gain on sale. The company did not issue any shares under its ATM program during the quarter.
Future Outlook
Scenario analysis: The possibilities below are not certain predictions.
The company's key strategic priorities for the next 18-24 months include occupancy improvement to 92%, portfolio reinvestment with 9-12% yields on capital, strategic capital recycling with over $70 million of marketed dispositions, and acquisition growth beginning with the current $99 million pipeline under contract with 9-10% expected yields and approximately 2.5% escalators.
The company is also monitoring the sale of a geriatric behavioral hospital operator, a tenant in six of its properties. The tenant paid $0.4 million in rent in the second quarter of 2026, an increase of $0.1 million from the first quarter. In July 2025, the tenant signed a Letter of Intent for the sale of its business to a behavioral healthcare provider. The buyer is finalizing due diligence and has entered the drafting phase of definitive purchase documents, including new leases on the six hospitals. The company cannot provide assurance regarding the timing or certainty of the closing.
If the acquisitions close as anticipated, the company could expand its portfolio and increase rental income. If the tenant sale completes, the company may secure new leases on the six properties. However, if these transactions do not close, the company's growth and occupancy targets may be delayed.
Source: prnewswire.com
