The seniors housing REIT posted narrowing losses and improving cash flows as it prepares for a transformative acquisition expected to close in March 2026.

March 10, 2026

Revenue Growth Accelerates Across Segments

CNL Healthcare Properties, a Maryland-based real estate investment trust focused on seniors housing, disclosed its full-year 2025 financial results showing continued improvement in operating performance even as the company moves toward a major corporate transaction. The company entered into a merger agreement with Sonida Senior Living in November 2025 in a deal valued at approximately $1.80 billion that would see Sonida acquire all outstanding shares of CNL through a combination of cash and stock.

Under the terms of the agreement, each share of CNL common stock will be converted into Sonida Senior Living shares based on a specified exchange ratio, along with $2.32 per share in cash. The exchange ratio is subject to collar mechanisms tied to the trading price of Sonida stock. The transaction is expected to close on March 11, 2026, pending the satisfaction of customary closing conditions.

CNL reported total revenues of approximately $392.6 million for the year ended December 31, 2025, representing a 7.3 percent increase over the $366.0 million recorded in 2024. Revenue growth was driven primarily by resident fees and services, which climbed to $364.2 million from $338.7 million in the prior year. Rental income and related revenues also edged higher, reaching $28.5 million compared to $27.3 million in 2024.

The company’s disaggregated revenue data showed strength across all care types. Assisted living led the portfolio, generating $185.3 million and accounting for roughly 50.9 percent of resident fees and services. Independent living contributed $91.7 million, while memory care brought in $69.4 million. The total unit count held steady at 6,194 across the portfolio.

Losses Narrow Significantly

Despite continued net losses, the company made meaningful progress toward profitability. Net loss attributable to common stockholders narrowed to $8.8 million, or $0.05 per share, compared to a loss of $14.5 million, or $0.08 per share, in 2024 and a loss of $25.7 million, or $0.15 per share, in 2023.

Operating income rose to $33.8 million from $30.9 million the previous year. However, interest expense and loan cost amortization of $43.6 million continued to weigh on the bottom line, although that figure represented a decline from $45.9 million in 2024. Net operating income reached $112.1 million, up from $103.7 million in 2024, reflecting improving property-level economics.

Property operating expenses increased to $262.5 million from $245.5 million, largely in line with revenue growth from managed communities. General and administrative expenses rose to $12.7 million from $8.8 million, while asset management fees remained relatively flat at $13.8 million.

Balance Sheet and Debt Profile

As of December 31, 2025, total assets stood at approximately $1.29 billion, down modestly from $1.32 billion at the end of 2024. Real estate investment properties had a net carrying value of $1.21 billion after accumulated depreciation of $575.1 million. Cash increased to $56.0 million from $44.0 million at year-end 2024.

Total stockholders’ equity declined to $686.2 million from $711.8 million, reflecting ongoing net losses and distributions to shareholders. The company declared cash distributions of approximately $17.8 million during the year, consistent with 2024 and 2023 levels. All distributions for the past three years were characterized entirely as return of capital for tax purposes.

On the debt side, the company streamlined its obligations. CNL repaid its remaining $15.8 million mortgage loan in March 2025 using its revolving credit facility. As of year-end, all indebtedness consisted of $565.0 million under the company’s unsecured credit facilities, comprising a $350.0 million term loan and $215.0 million drawn on a $250.0 million revolving credit facility. The weighted average interest rate fell to approximately 3.79 percent from 4.43 percent a year earlier.

Debt Maturity and Merger Timing

A critical consideration is that the entire $565.0 million in outstanding debt matures in May 2026. Management acknowledged that the company does not have sufficient cash on hand to satisfy these obligations. The expectation is that the merger with Sonida Senior Living will close before the maturity date, with the credit facilities being repaid from net sales proceeds.

In the event that closing conditions cause delays beyond the May maturity date, the company indicated it would seek an extension from its lender group. Management expressed confidence in obtaining such an extension based on historical relationships and preliminary feedback from lenders, though any extension would likely involve a fee.

Portfolio and Leasing Activity

As of year-end, CNL owned interests in 70 properties across 26 states, including 69 seniors housing communities and one vacant land parcel. The company leased 15 properties to two tenants under triple-net arrangements with a weighted average remaining lease term of 5.0 years. In May 2025, the company executed new leases covering 13 properties with one tenant, extending terms through May 2030. Future minimum lease payments under these operating leases totaled approximately $147.1 million.

Strengthening Cash Flows

Operating cash flows strengthened considerably, reaching $50.4 million compared to $40.3 million in 2024 and $32.0 million in 2023. Capital expenditures of $15.5 million were slightly below prior-year levels. The company ended the year with cash and restricted cash of $57.7 million, up from $45.6 million at the end of 2024.

The financial statements were audited by PricewaterhouseCoopers, which issued an unqualified opinion and identified the analysis of real estate assets for indicators of impairment as a critical audit matter. The state of Texas represented the largest geographic concentration, accounting for approximately 20.6 percent of total revenues in 2025.