Chiron Real Estate Inc. (XRN) Earnings

Management highlights

### Strategic Priorities - Core strategic focus is active capital recycling and portfolio repositioning to reallocate capital from the legacy outpatient medical portfolio to higher-return seniors housing assets, with the goal of building a more durable platform for stronger long-term compound returns. The strategic shift is not a response to operational underperformance of the existing portfolio. - The company will remain disproportionately focused on seniors housing, while pursuing the highest available risk-adjusted returns across all healthcare real estate opportunities. - ### Key Transactional Activity - Closed a $100 million MayWin investment alongside the acquisition of two seniors housing communities. - Completed the sale of seven IRFs to a joint venture, with Chiron retaining a small equity stake to optimize overall exit value. - Entered a contract to sell the Beaumont, Texas surgical hospital for $49 million, at a 5.9% exit cap rate. - Issued $100 million of Series C Convertible Perpetual Preferred equity in the quarter. - The small under 1% of assets held in vacant development land will be used as currency to build partnerships with seniors housing operators, with plans to develop a full-continuum seniors community on the parcel. - ### Leadership Team Expansion - Added four specialized senior leaders with over 100 years of combined seniors housing experience across sourcing, development, operations, and investment management to support the strategic shift, filling key roles including Chief Investment Officer, Chief Development Officer/Head of Seniors Housing, SVP of Seniors Housing, and Chief Operating Officer. - The expanded team brings deep operational and investment expertise to deliver best-in-class management of seniors communities, underwrite new opportunities, and support operating partners. - ### Balance Sheet Status - Ended the quarter with just under 40% leverage and net debt to adjusted EBITDA RE of 6.0x, down from 6.6x in the first quarter of 2026. - No debt maturities until 2028, with $259 million in unutilized borrowing capacity under the company's credit facility. - Cash G&A was $3.8 million in the quarter, down slightly from the first quarter. Short-term G&A will increase due to the expanded leadership team, but is expected to align with portfolio size as the transition progresses.

Guidance

- Same-store normalized NOI growth of 1.7% in the quarter was in line with the full-year guidance issued at the start of 2026, and guidance for full-year same-store performance remains maintained. - Management expects that G&A will be higher in the short term due to the addition of the new senior leadership team, but will align with the size of the repositioned portfolio over the long term. - The company has a robust pipeline of seniors housing investment opportunities, with more prospective deals than available near-term capital, as the team prioritizes high-quality opportunities in targeted MSAs with best-in-class operators.

Segment performance

1. Legacy Outpatient Medical (MOB) Portfolio: Same-store cash NOI increased 0.8% year-over-year, or 1.7% when excluding a one-time non-recurring revenue recovery from a single tenant in the prior year period. Normalized same-store NOI increased 1.7%, in line with full-year guidance. This portfolio is the primary source of capital for the company's strategic shift, and management notes that current market transactions imply the portfolio's value is not fully reflected in Chiron's share price. 2. Seniors Housing Segment: The company closed two newly acquired seniors communities in the quarter (The Landing, a 292-unit stabilized continuum of care community, and The Riviera, a newly opened sister community, totaling 292 luxury units). It also secured the Pinnacle, a marquee luxury seniors community that welcomed its first residents in June 2026, with strong early operating momentum. The company completed $421 million of seniors housing investments in the quarter. 3. Inpatient Rehabilitation Facilities (IRF): Seven facilities were sold to a joint venture in June for $217 million in aggregate value, generating $200 million in gross proceeds, with Chiron retaining a small equity stake. The sale was completed at a 7.3% exit cap rate.

Risks & headwinds

- Forward-looking projections and the portfolio repositioning strategy involve inherent risks and uncertainties that could cause actual results to differ materially from expectations, as detailed in the company's SEC filings. - Full disposition of the legacy outpatient medical portfolio will take time, and optimizing exit value may require retaining partial stakes in assets or completing transactions over a multi-year timeline, delaying full capital recycling into seniors housing. - Market valuation of Chiron's shares does not currently reflect the embedded value of the legacy outpatient portfolio, creating near-term pricing dislocations that may impact near-term capital raising and equity performance.

Analyst Q&A

• Q: What is the strategic focus for new acquisitions after the capital recycling, stabilized assets or development projects? How should investors model the new G&A run rate with the expanded leadership team? /

  A: Chiron's primary focus for new acquisitions is stabilized seniors housing assets. G&A will be higher in the short term after adding the new leadership team, but as the business grows through capital reallocation, G&A as a proportion of the portfolio is expected to end up in line with or better than prior levels. The legacy development land parcel is only ~1% of total assets, so it is not a material part of the company's strategy.

• Q: Why does Chiron retain small stakes in disposed outpatient/IRF assets rather than exiting completely? What does the current seniors housing investment pipeline look like? /

  A: Retaining a small equity stake allows Chiron to maximize overall exit value by meeting investor demand for embedded operating expertise, particularly for assets that require lease reset work over the medium term to unlock full value. The company currently has a very robust pipeline of seniors housing opportunities, with more high-quality prospects than available near-term capital, focused on targeted MSAs and partnerships with proven, best-in-class operators.

• Q: Will Chiron pursue additional asset sales from the legacy outpatient portfolio after the Beaumont sale? /

  A: Yes, Chiron is actively evaluating additional dispositions of legacy outpatient medical assets, working with a broker to determine the optimal structure (individual sales vs. a large portfolio transaction) to maximize value. Proceeds from all sales will continue to be redeployed into higher-return seniors housing assets.

• Q: What is the role of the small MES loan portfolio in Chiron's strategy, and do you plan to grow this segment? /

  A: MES loans currently make up only 33 basis points of Chiron's total assets. They are small, short-term (2-year duration) cash-pay investments with strong credit sponsors, providing solid near-term returns and optionality on underlying assets. Chiron does not plan to meaningfully grow this segment, and it is not a core focus going forward.