COMMUNITY HEALTHCARE TRUST INC MANAGEMENT REPORT ON FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Form 10-K)

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 liquidity. MD&A is provided as a supplement to, and should be
read in conjunction with, the Company's Consolidated Financial Statements and
accompanying notes.

Overview

We were organized in the State of Maryland in March 2014 and began operations
upon the completion of our initial public offering in May 2015. We are a
self-administered, self-managed healthcare REIT that acquires and owns
properties that are leased to hospitals, doctors, healthcare systems or other
healthcare service providers.

Trends and Issues Affecting Results of Operations

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.

Real estate acquisitions
During the year ended December 31, 2021, the Company acquired 13 real estate
properties. Upon acquisition, the properties were 98.3% leased in the aggregate
with lease expirations through 2036.

Acquisition pipeline
The Company has three properties under definitive purchase agreements for an
expected aggregate purchase price of approximately $11.7 million. The Company's
expected aggregate return on these investments is expected to range from
approximately 9.01% to 9.36%. The Company expects to close on these properties
during the first half of 2022; however, the Company cannot provide assurance as
to the timing of when, or whether, these transactions will actually close.

The Company also has four properties under definitive purchase agreements, to be
acquired after completion and occupancy, for an aggregate expected purchase
price of approximately $94.0 million. The Company's expected returns on these
investments are approximately 10.25%. The Company anticipates closing on these
properties from the second quarter of 2022 through the third quarter of 2023;
however, the Company cannot provide assurance as to the timing of when, or
whether, these transactions will actually close.

The Company anticipates funding these investments with cash from operations,
through proceeds from its Credit Facility or from net proceeds from additional
debt or equity offerings.

Leased square footage
As of December 31, 2021, our real estate portfolio was approximately 90.0%
leased. During the year ended December 31, 2021, we had expiring or terminated
leases related to approximately 214,000 square feet, and we leased or renewed
leases related to approximately 319,000 square feet.

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COVID-19 Pandemic
The world was, and continues to be, impacted by the novel coronavirus (COVID-19)
pandemic. COVID-19 and measures to prevent its spread impacted many healthcare
providers, including some of our tenants. During 2020 and 2021, some of them
were not seeing patients, others saw a reduced number of elective procedures
and/or patient visits, while others experienced limited impact, or even saw
improved cash flows from either increases in census or
government funding.

As a result of the pandemic, during 2020 and 2021, the Company entered into
deferral agreements with 18 tenants, with deferrals representing less than one
percent of our annualized rent in the aggregate. All amounts that were due under
the deferral agreements have been repaid.

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. Since the Company's initial public
offering, two of the Company's tenants have exercised their purchase option.
These two properties were sold in 2018 and 2021.

AT December 31, 2021the Company had a total gross investment of approximately $37.1 million in 7 properties with purchase options exercisable at December 31, 2021 which had not been exercised.

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 $360.0 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.

During 2021, the Company issued, through its ATM Program, 823,000 shares of
common stock at an average gross sales price of $47.68 per share and received
net proceeds of approximately $38.4 million after deducting commissions and
offering expenses paid by the Company. As of December 31, 2021, the Company had
approximately $101.0 million remaining that may be issued under the ATM Program.
The proceeds were used to repay outstanding balances under the Company's Credit
Facility, to fund investments, and for general corporate purposes.

Credit Facility
The Company's 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 $250.0 million in Term Loans, as well as an
accordion feature which allows borrowings up to a total of $600.0 million,
including the ability to add and fund additional term loans. Note 5 to the
Consolidated Financial Statements provides more details on the Company's Credit
Facility. At December 31, 2021, 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 December 31, 2021, our debt to total capitalization ratio
(debt plus stockholders' equity plus accumulated depreciation) was approximately
30.9%. The Company was in compliance with its financial covenants under its
Credit Facility as of December 31, 2021.

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The Company also had outstanding at December 31, 2021, a $5.1 million mortgage
note payable, secured by one of its properties, with a maturity date in 2024 and
a fixed interest rate of 4.98%.

Lease Expirations
Approximately 6.3% to 10.8% of our leases will expire in each of the next 5
years. Management expects that many of the tenants will renew their leases, but
in cases where they do not renew, the Company believes it will generally be able
to re-lease the space to existing or new tenants without significant loss of
rental income. See "Properties" in Item 2 for a schedule of the Company's lease
expirations.

Inflation

We believe inflation will have a minimal impact on the operating performance of
our properties. Many of our lease agreements contain provisions designed to
mitigate the adverse impact of inflation. These provisions include clauses that
enable us to receive payment of increased rent pursuant to escalation clauses
which generally increase rental rates during the terms of the leases. These
escalation clauses often provide for fixed rent increases or indexed escalations
(based upon CPI or other measures). However, some of these contractual rent
increases may be less than the actual rate of inflation. Generally, our lease
agreements require the tenant to pay property operating expenses, including
maintenance costs, real estate taxes and insurance. This requirement reduces our
exposure to increases in these costs and property operating expenses resulting
from inflation.

New Accounting Pronouncements
See Note 1 to the Company's Consolidated Financial Statements accompanying this
report for information on new accounting standards not yet adopted.


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Operating results

Our results of operations are most significantly impacted each year by our
acquisitions in and funding of our real estate investments, as well as expenses
related to our employees, professional fees and other costs related to operating
the REIT and its related subsidiaries.

As of December 31, 2021, we had invested approximately $837.1 million in 153
real estate properties (including a portion of one property accounted for as a
financing lease with a gross amount totaling approximately $3.0 million), which
are located in 33 states and total approximately 3.4 million square feet. During
2021, we acquired 13 real estate properties which in the aggregate were 98.3%
leased for cash consideration of approximately $88.1 million. In addition,
during 2021, we invested $14.4 million in notes receivable. During 2020, we
acquired 23 real estate properties and 2 land parcels for cash consideration of
approximately $126.8 million.
Year Ended December 31, 2021 Compared to December 31, 2020

The table below shows our operating results for the year ended December 31, 2021 compared to the same period in 2020 and the effect of changes in these results from period to period on our net earnings.

                                                        For the Year Ended                   Increase (Decrease) to
(Dollars in thousands)                                     December 31,                            Net Income
                                                      2021               2020                 $                   %
REVENUES
Rental income                                     $   87,661          $ 73,925          $   13,736                18.6  %

Other operating interest                               2,918             1,759               1,159                65.9  %
                                                      90,579            75,684              14,895                19.7  %
EXPENSES
Property operating                                    15,158            13,614              (1,544)              (11.3) %
General and administrative                            12,113             8,768              (3,345)              (38.2) %
Depreciation and amortization                         30,401            25,378              (5,023)              (19.8) %

                                                      57,672            47,760              (9,912)              (20.8) %

INCOME FROM CONTINUING OPERATIONS BEFORE INCOME
TAXES AND OTHER ITEMS                                 32,907            27,924               4,983                17.8  %
Gain (loss) on sale of real estate                       237              (313)                550               175.7  %
Interest expense                                     (10,542)           (8,620)             (1,922)              (22.3) %

    Deferred income tax expense                         (167)              (80)                (87)             (108.8) %
Interest and other income, net                            57               166                (109)              (65.7) %
INCOME FROM CONTINUING OPERATIONS                     22,492            19,077               3,415                17.9  %
NET INCOME                                        $   22,492          $ 19,077          $    3,415                17.9  %



Revenues
Revenues increased approximately $14.9 million, or 19.7%, for the year ended
December 31, 2021 compared to the same period in 2020 due mainly to properties
acquired during 2021 and 2020 and interest earned on notes receivable entered
into in 2020 and 2021.


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Expenses

Property operating expenses increased approximately $1.5 million, or 11.3%, for
the year ended December 31, 2021 compared to the same period in 2020 mainly due
to properties acquired during 2021 and 2020.

General and administrative expenses increased approximately $3.3 million, or
38.2%, for the year ended December 31, 2021 compared to the same period in 2020
due mainly to the following:

•Compensation-related expenses related to new employees, compensation increases
and stock issuances totaling approximately $3.1 million, including the non-cash
amortization of non-vested restricted common shares issued of approximately $2.4
million.

• Income, state and local taxes increased by approximately $0.1 million mainly due to properties acquired in 2021 and 2020.

Depreciation and amortization expense increased approximately $5.0 million, or
19.8%, for the year ended December 31, 2021 compared to the same period in 2020
due mainly to the following:

• Depreciation related to properties acquired in 2021 and 2020 represented an increase of approximately $5.9 million;

• Real estate intangible assets acquired before 2020 that became fully amortized resulted in a decrease of approximately $1.6 million; and

• Amortization related to leasehold improvements and other represented an increase of approximately $0.7 million.

Gain (loss) on sale of real estate
During the fourth quarter of 2021, the Company sold one of its properties for
approximately $1.3 million and recognized a gain on sale of approximately $0.2
million.

During the second quarter of 2020, the Company sold a land parcel related to one
of its properties for net proceeds of approximately $0.2 million and recognized
a loss on sale of approximately $0.3 million.

Interest expense
Interest expense increased approximately $1.9 million, or 22.3%, for the year
ended December 31, 2021 compared to the same period in 2020 due mainly to the
refinancing of the Credit Facility in March 2021 as discussed in Note 5 to the
Consolidated Financial Statements.

Year ended December 31, 2020 Compared to December 31, 2019

See "Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations - Results of Operations" in our 2020 Annual Report on Form
10-K for a comparison of the year ended December 31, 2020 compared to December
31, 2019, which is incorporated by reference.



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Cash 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;

• Percentage of distribution of dividends; and

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

The Company uses these and other indicators to benchmark its operations against those of its peers and to help identify areas where 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,
collecting rental income and operating expense reimbursements based on
contractual arrangements with its tenants. These sources of revenue represent
our primary source of liquidity to fund our dividends, general and
administrative expenses, property operating expenses, interest expense on our
Credit Facility and other expenses incurred related to managing our existing
portfolio and investing in additional properties. To the extent additional
resources are needed, the Company will fund its investment activity generally
through equity or debt issuances, including our at-the-market equity offering
program, 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.

Operating Activities
Cash flows provided by operating activities for the years ended December 31,
2021, 2020 and 2019 were approximately $56.3 million, $48.4 million, and $32.4
million, respectively. Cash flows provided by operating activities for the years
ended December 31, 2021, 2020 and 2019 were generally provided by contractual
rents and interest on notes receivables, net of property operating expenses not
reimbursed by the tenants and general and administrative expenses.

Investing Activities
Cash flows used in investing activities for the years ended December 31, 2021,
2020 and 2019 were approximately $104.4 million, $125.1 million, and $153.2
million, respectively. During 2021, the Company invested in 13 real estate
properties for an aggregate cash consideration of approximately $88.1 million
and sold one property for net proceeds of approximately $1.3 million. During
2020, the Company invested in 23 real estate properties and 2 land parcels for
an aggregate cash consideration of approximately $126.8 million and sold a land
parcel related to one of its properties for net proceeds of approximately $0.2
million. During 2019, the Company invested in 15 real estate properties for cash
consideration of approximately $150.0 million. In addition, during 2021 and
2020, the Company acquired or funded notes receivable of approximately $14.4
million and $1.8 million, respectively, and received payments in 2021, 2020 and
2019 on notes of approximately $4.0 million, $10.3 million, and $1.2 million,
respectively. Also, the Company funded capital expenditures, including tenant
improvements, during 2021, 2020 and 2019 totaling $7.2 million, $7.0 million,
and $4.4 million, respectively.

Financing Activities
Cash flows provided by financing activities for the years ended December 31,
2021, 2020 and 2019 were approximately $48.1 million, $77.6 million, and $120.4
million, respectively. During 2021, 2020 and 2019, the Company paid dividends
totaling $42.4 million, $38.0 million and $31.9 million, respectively. During
2021, 2020 and 2019, the Company completed equity offerings under its
at-the-market program, resulting in net proceeds, net of
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underwriters' discount and offering costs, of approximately $38.2 million, $97.7
million and $106.8 million, respectively. During 2021 and 2019, the Company
repaid, on a net basis, approximately $21.0 million and $28.0 million,
respectively, on its Revolving Credit Facility, and in 2020, the Company
borrowed, on a net basis, approximately $18.0 million on its Revolving Credit
Facility. During 2021 and 2019, the Company amended its Credit Facility and
borrowed $125.0 million, and $75.0 million, respectively, in Term Loans under
its Credit Facility and incurred $1.6 million and $1.3 million, respectively, in
additional debt issuance costs, and in 2021 repaid a $50.0 million Term Loan
under its Credit Facility.

Automatic Shelf Registration Statement
On November 5, 2019, the Company filed an automatic shelf registration statement
on Form S-3 with the SEC. 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.

Security Deposits
As of December 31, 2021, the Company held approximately $4.6 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.

Credit Facility
The Company's third amended and restated credit facility (the "Credit Facility")
is by and among Community Healthcare Trust Incorporated, as borrower, and a
syndicate of lenders with Truist Bank serving as Administrative Agent. The
Company's material subsidiaries are guarantors of the obligations under the
Credit Facility.

The Credit Facility allows the Company to borrow, through the accordion feature,
up to $600.0 million, including the ability to add and fund incremental term
loans. The Credit Facility extended the revolving credit facility (the
"Revolving Credit Facility") maturity to March 19, 2026, removed collateral
security provisions, repaid the five-year term loan facility in the aggregate
principal amount of $50.0 million (the "A-1 Term Loan") which was set to mature
on March 29, 2022, entered into a new 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, provided the Company the ability to apply lower
margins to its annual interest rate after it obtains an investment grade rating
of BBB-/Baa3 (or the equivalent) from a rating agency, and modified its debt
covenants.

The Credit Facility provides for a $150.0 million Revolving Credit Facility and
$250.0 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 of the Revolving Credit Facility, subject to the satisfaction of
certain conditions. The Term Loans include a seven-year term loan facility in
the aggregate principal amount of $50.0 million (the "A-2 Term Loan"), which
matures on March 29, 2024, 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, and a seven-year term loan facility in the aggregate principal
amount of $125.0 million, which matures on March 19, 2028. Loans under the
Credit Facility are interest only with principal amounts due as of each
facility's applicable maturity date.

Amounts outstanding under the Revolving Credit Facility bear annual interest at
a floating rate that is based, at the Company's option, on either: (i) LIBOR
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 borrowing capacity remaining of approximately $138.0 million at
December 31, 2021.

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Amounts outstanding under the Term Loans bear annual interest at a floating rate
that is based, at the Company's option, on either: (i) LIBOR 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 to the Consolidated
Financial Statements for more details on the interest rate swaps. At
December 31, 2021, the Company had $250.0 million outstanding under the Term
Loans which had a fixed weighted average interest rate under the swaps of
approximately 3.95%.

The Company’s ability to borrow under the Credit Facility is subject to its continued compliance with a number of customary affirmative and negative covenants, including limitations on liens, indebtedness, distributions, mergers, consolidations, investments, restricted payments and asset sales, as well as in the form of financial preservation clauses. The Company was in compliance with its financial covenants under its credit facility at
December 31, 2021.

LIBOR Transition
As discussed in Part I, Item 1A. Risk Factors, banks will no longer be persuaded
or compelled to submit one-week and two-month rates for the calculation of LIBOR
or issue LIBOR-based debt or use LIBOR in contracts after 2021. All other LIBOR
settings will effectively cease after June 30, 2023, and it is expected that
LIBOR will no longer be used after this date. The Company has been closely
evaluating the potential impacts of the transition. The Company has only one
material contract, its Credit Facility, which is indexed to LIBOR. The Credit
Facility contains a hardwired fallback provision for replacing LIBOR with SOFR,
or in certain circumstances, an alternative benchmark. Furthermore, the Company
plans to transition its existing LIBOR-based derivative exposure in advance of
the June 30, 2023 date when applicable LIBOR will no longer be published. For
any residual exposure after the end of 2021, the Company expects to leverage
relevant contractual and statutory solutions to transition such exposure.

Mortgage Note Payable
In 2018, we acquired a building and assumed a $5.4 million mortgage note
payable, secured by the building. The building had a $7.0 million carrying value
at December 31, 2021. The mortgage note amortizes monthly at a fixed interest
rate of 4.98% with a balloon payment upon maturity on May 1, 2024. Principal
repayments due on the mortgage note are approximately $0.1 million, $0.1 million
and $4.8 million for the years ended December 31, 2022, 2023, and 2024.

Ground leases
At December 31, 2021, the Company was obligated, as the lessee, under four
non-prepaid ground leases accounted for as operating leases with expiration
dates through 2076, including renewal options, and one non-prepaid ground lease
accounted for as a financing lease with an expiration date through 2085,
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
December 31, 2021, the Company's aggregate obligation under these ground leases
was approximately $7.6 million. See Note 3 to the Consolidated Financial
Statements.

Acquisition Pipeline
The Company has three properties under definitive purchase agreements for an
expected aggregate purchase price of approximately $11.7 million. The Company's
expected aggregate return on these investments is expected to range from
approximately 9.01% to 9.36%. The Company expects to close on these properties
during the first half of 2022; however, the Company cannot provide assurance as
to the timing of when, or whether, these transactions will actually close.

The Company also has four properties under definitive purchase agreements, to be
acquired after completion and occupancy, for an aggregate expected purchase
price of approximately $94.0 million. The Company's expected returns on these
investments are approximately 10.25%. The Company anticipates closing on these
properties from the second quarter of 2022 through the third quarter of 2023;
however, the Company cannot provide assurance as to the timing of when, or
whether, these transactions will actually close.
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The Company anticipates funding these investments with cash from operations,
through proceeds from its Credit Facility or from net proceeds from additional
debt or equity offerings.

Tenant Improvements
The Company may provide tenant improvement allowances in new or renewal leases
for the purpose of refurbishing or renovating tenant space. The Company may also
assume tenant improvement obligations included in leases acquired in its real
estate acquisitions. As of December 31, 2021 and 2020, the Company had
approximately $10.4 million and $2.3 million, respectively, in commitments for
tenant improvements. Five of these projects totaling $8.5 million, represent
redevelopment projects of the buildings into different healthcare uses backed by
long term leases. The Company anticipates funding these investments with cash
from operations, through proceeds from its Credit Facility or from net proceeds
from additional debt or equity offerings.

Capital Improvements
The Company has entered into contracts with various vendors for various capital
improvement projects related to its portfolio. As of December 31, 2021 and 2020,
the Company had commitments of approximately $0.9 million and $1.5 million,
respectively, in commitments for capital improvement projects. The Company
anticipates funding these investments with cash from operations, through
proceeds from its Credit Facility or from net proceeds from additional debt or
equity offerings.

Dividends

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

In 2021, 2020 and 2019, the Company paid cash dividends in the amount of
$1.725 per share, $1,685 per share and $1,645 per share, respectively.

At February 10, 2022the Board of Directors of the Company has declared a quarterly common stock dividend in the amount of $0.4375 per share. The dividend is payable on March 1, 2022 to shareholders of record on February 22, 2022. The Company’s ability to pay dividends depends on its ability to generate cash flow and make new accretive investments.

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.
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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 Consolidated Financial Statements and other financial data
included elsewhere in this Annual Report on Form 10-K.

Funds From Operations (“FFO”) and Adjusted Funds From Operations (“AFFO”)

FFO and FFO per share are operating performance measures 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.

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 the net income of FFOs and AFFOs for the years ended
December 31, 20212020 and 2019.

                                                                Year Ended December 31,
(Amounts in thousands, except per share amounts)            2021          2020          2019
Net income                                               $ 22,492      $ 19,077      $  8,376
Real estate depreciation and amortization                  30,624        

25,615 22,377

Income tax expense (1)                                          -             -         1,321
(Gain) loss from sales of real estate                        (237)          313             -
Total adjustments                                          30,387        25,928        23,698
FFO                                                      $ 52,879      $ 45,005      $ 32,074
Straight-line rent                                         (3,569)       (3,211)       (2,052)
Stock-based compensation                                    7,164         4,767         3,844
AFFO                                                     $ 56,474      $ 46,561      $ 33,866

FFO per diluted common share                             $   2.20      $   2.03      $   1.67
AFFO per diluted common share                            $   2.35      $   

2.10 $1.77

Weighted average number of ordinary shares outstanding – diluted (2) 24,012 22,179 19,164

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____________________________

(1) In the fourth quarter of 2018, the Company recorded a $5.0 million
impairment related to its mezzanine loan with Highland Hospital and recorded a
related tax benefit and deferred tax asset of approximately $1.3 million. This
deferred tax asset was impaired in the fourth quarter of 2019 and the tax
benefit was reversed resulting in tax expense of $1.3 million. The Company
believes that the mezzanine loan is incidental to the main operations of the
Company. As such, the Company has excluded the impairment of the note receivable
and the related tax impact from its calculation of FFO.
(2) Diluted weighted average common shares outstanding for FFO are calculated
based on the treasury method, rather than the 2-class method.

Net operating profit (“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 losses on the sale of real
estate properties or other investments, interest expense, deferred income tax
expense, and interest and other income, net. 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.

The table below reconciles net income to NOI for the years ended December 31,
2021, 2020, and 2019.

                                                     Year Ended December 31,
(In thousands)                                   2021          2020          2019
Net income                                    $ 22,492      $ 19,077      $  8,376
General and administrative                      12,113         8,768         7,719
Depreciation and amortization                   30,401        25,378        

22,225

(Gain) loss on disposal of depreciable assets (237) 313

     -
Interest expense                                10,542         8,620         9,301
Deferred income taxes                              167            80         1,430
Interest and other income, net                     (57)         (166)         (437)
NOI                                           $ 75,421      $ 62,070      $ 48,614


EBITDAre and adjusted EBITDAre

The Company uses the NAREIT definition of EBITDAre which is net income 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.


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The table below reconciles net profit to EBITDAre and Adjusted EBITDAre for the years ended December 31, 20212020 and 2019.

                                                     Year Ended December 31,
(In thousands)                                   2021          2020          2019
Net income                                    $ 22,492      $ 19,077      $  8,376
Interest expense                                10,542         8,620         9,301
Depreciation and amortization                   30,401        25,378        

22,225

Deferred income taxes                              167            80        

1,430

(Gain) loss on disposal of depreciable fixed assets (237) 313

EBITDAre                                      $ 63,365      $ 53,468      $ 

41,332

Non-cash stock-based compensation expense 7,164 4,767

 3,844
Adjusted EBITDAre                             $ 70,529      $ 58,235      $ 45,176



Critical Accounting Policies

Our Consolidated Financial Statements are prepared in conformity with GAAP and
the rules and regulations of the SEC. In preparing the Consolidated Financial
Statements, management is required to exercise judgment and make assumptions and
estimates that may impact the carrying value of assets and liabilities and the
reported amounts of revenues and expenses. Actual results could differ from
those estimates. Set forth below is a summary of our accounting policies that we
believe are critical to the preparation of our Consolidated Financial
Statements. Our accounting policies are more fully discussed in Note 1 to the
Consolidated Financial Statements.

Principles of Consolidation
Our Consolidated Financial Statements may include the accounts of the Company,
its wholly owned subsidiaries, joint ventures, partnerships and variable
interest entities, or VIEs, where the Company controls the operating activities.
All material intercompany accounts, transactions, and balances have been
eliminated.

Management must make judgments regarding the Company's level of influence or
control over an entity and whether or not the Company is the primary beneficiary
of a variable interest entity. Consideration of various factors include, but is
not limited to, the Company's ability to direct the activities that most
significantly impact the entity's governing body, the size and seniority of the
Company's investment, the Company's ability and the rights of other investors to
participate in policy making decisions, the Company's ability to replace the
manager and/or liquidate the entity. Management's ability to correctly assess
its influence or control over an entity when determining the primary beneficiary
of a VIE affects the presentation of these entities in the Company's
Consolidated Financial Statements. If it is determined that the Company is the
primary beneficiary of a VIE, the Company's Consolidated Financial Statements
would consolidate the VIE rather than the Company's pro rata results of its
variable interest in the VIE. The Company would depend on the VIE to provide
timely financial information and would rely on the interest control of the VIE
to provide accurate financial information. Untimely or inaccurate financial
information provided to the Company or deficiencies in the VIE's internal
controls over financial reporting could impact the Company's Consolidated
Financial Statements and its internal control over financial reporting.

Accounting for Acquisitions of Real Estate Properties
Real estate property acquisitions are accounted for as a business combination or
an asset acquisition under Accounting Standards Update ("ASU") No. 2017-01,
Business Combinations (Topic 805): Clarifying the Definition of a Business. An
acquisition accounted for as a business combination is recorded at fair value
and related closing costs are expensed as incurred. An acquisition accounted for
as an asset acquisition is recorded at its purchase price, inclusive of
acquisition costs, which is allocated among the acquired assets and assumed
liabilities based upon their relative fair values at the date of acquisition.
The Company expects that substantially all of its acquisitions will be accounted
for as asset acquisitions.

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The allocation of real estate property acquisitions may include land and land
improvements, building and building improvements, and identified intangible
assets and liabilities (consisting of above- and below-market leases, in-place
leases, and tenant relationships) based on the evaluation of information and
estimates available at that date, and the allocation of the purchase price is
based on these assessments. The acquisition date fair values of the tangible and
intangible assets and acquired liabilities are estimated based on information
obtained from multiple sources as a result of pre-acquisition due diligence, tax
records, and other sources, including third-party valuations. Based on these
estimates, we recognize the acquired assets and liabilities based on their
estimated fair values. We expense transaction costs associated with business
combinations in the period incurred. The fair value of tangible property assets
acquired considers the value of the property as if vacant determined by a
combination of comparable sales, replacement cost, income valuation approach and
other relevant data. The determination of fair value involves the use of
significant judgment and estimation. We value land based on various inputs,
which may include internal analysis of recently acquired properties, existing
comparable properties within our portfolio, or third party appraisals or
valuations based on comparable sales.

In recognizing identified intangible assets and liabilities of an acquired
property, the value of above- or below-market leases is estimated based on the
present value (using a discount rate which reflects the risks associated with
the leases acquired) of the difference between contractual amounts to be
received pursuant to the leases and management's estimate of market lease rates
measured over a period equal to the estimated remaining term of the lease. In
the case of a below-market lease, we also evaluate any renewal options
associated with that lease to determine if the intangible should include those
periods. The capitalized above-market or below-market lease intangibles are
amortized as a reduction from or an addition to rental income over the estimated
remaining term of the respective leases.

In determining the value of in-place leases and tenant relationships, we
consider current market conditions and costs to execute similar leases in
arriving at an estimate of the carrying costs during the expected lease-up
period from vacant to existing occupancy. In estimating carrying costs, we
include real estate taxes, insurance, other property operating expenses,
estimates of lost rental revenue during the expected lease-up periods, and costs
to execute similar leases, including leasing commissions. The values assigned to
in-place leases and tenant relationships are amortized over the estimated
remaining term of the lease. If a lease terminates prior to its scheduled
expiration, all unamortized costs related to that lease are written off.

Long-lived Asset Impairments
The Company may need to assess the potential for impairment of identifiable,
definite-lived, intangible assets and long-lived assets, including real estate
properties, whenever events occur or a change in circumstances indicates that
the carrying value might not be fully recoverable. Indicators of impairment may
include significant under-performance of an asset relative to historical or
expected operating results; significant changes in the Company's use of assets
or the strategy for its overall business; plans to sell an asset before its
depreciable life has ended; the expiration of a significant portion of leases in
a property; or significant negative economic trends or negative industry trends
for the Company or its operators. In addition, the Company's review for possible
impairment may include those assets subject to purchase options and those
impacted by casualties, such as tornadoes and hurricanes. If management
determines that the carrying value of the Company's assets may not be fully
recoverable based on the existence of any of the factors above, or others,
management would measure and record an impairment charge based on the estimated
fair value of the property or the estimated fair value less costs to sell the
property.

Revenue Recognition
The primary source of revenue for the Company is generated through its leasing
arrangements with its tenants which is accounted for under Accounting Standards
Codification Topic 842 ("ASC Topic 842"), or through notes with its borrowers
which is covered under ASC 310. The Company's rental income and interest income
are recognized based on contractual arrangements with its tenants and borrowers.
From the inception of a lease, if collection of substantially all of the lease
payments is probable for a tenant, then rental income is recognized as earned
over the life of the lease agreement on a straight-line basis. Recognizing
rental revenue on a straight-line basis for leases may result in recognizing
revenue in amounts more or less than amounts currently due from tenants. If
management determines that collection of substantially all of a lease's payments
is not probable, it will revert to recognizing such
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lease payments on a cash basis and will reverse any recorded receivables related
to that lease. In the event that management subsequently determines collection
of substantially all of that lease's receivable is probable, management will
reinstate and record all such receivables for the lease in accordance with the
lease.

The Company recognizes operating expense recoveries in the period that
applicable expenses are incurred. Other variable payments, such as late fees and
sales tax are recognized based on the contractual terms of its leases. Income
received but not yet earned is deferred until such time it is earned. Prepaid
rent is included in other liabilities on the Consolidated Balance Sheets.

Allowance for Credit Losses
ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments uses an
expected credit loss ("CECL") model in evaluating the collectability of notes
receivable and other financial instruments. The CECL impairment model requires
an estimate of expected credit losses, measured over the contractual life of an
instrument, that considers forecasts of future economic conditions in addition
to information about past events and current conditions. Under the CECL model,
the Company estimates credit losses over the entire contractual term of the
instrument from the date of initial recognition of that instrument and is
required to record a credit loss expense (or reversal) in each reporting period.
At December 31, 2021 and 2020, the Company did not have any material expected
credit losses and, therefore, did not record any credit losses.

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

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