Covered on FFO — after a cut, and still loss-making on GAAP. A quarterly payer at $0.24 a share, $0.96 annualized. Second-quarter normalized FFO was $0.41 a share against the $0.24 dividend — about a 59% payout on that measure — and funds available for distribution of $109.4 million carried a company-reported 76% payout, so the current rate is covered on the measures that matter for a REIT. The record around it is why this is a warning, not a clean pass: the dividend was cut from $0.31 to $0.24 in May 2025 and has been flat since, the second quarter still produced a GAAP net loss of $0.13 a share, and leverage runs at 5.6× net debt to adjusted EBITDA. Offsetting that, same-store cash NOI grew 5.1% year over year, same-store occupancy reached nearly 93% with 88.5% tenant retention, and management raised 2026 normalized FFO guidance to $1.62–$1.66 a share. For a REIT, the House reads FFO and FAD — never the EPS payout, which depreciation makes meaningless.
Key risk: Medical-office leasing and tenant health — occupancy, retention and rent spreads at 501 consolidated properties across 26 states are what fund the dividend, and a leasing slip or a refinancing at higher rates would squeeze the FAD cushion first.
Changes if: The FAD payout pushes past 76% toward 100%, normalized FFO falls below the $1.62–$1.66 guidance range, or occupancy and retention slip. The cushion, not the yield, decides this card.
- ✓FFO coverage check: Second-quarter normalized FFO of $0.41 a share covered the $0.24 dividend at about a 59% payout, and FAD of $109.4 million carried a company-reported 76% payout — covered on both REIT cash measures, with same-store cash NOI up 5.1% year over year.
- !Growth check: The quarterly dividend was cut from $0.31 to $0.24 in May 2025 and has been flat since, and the second quarter still showed a GAAP net loss of $0.13 a share. Guidance was raised, but the dividend has not yet grown back toward its old rate.
- !Leverage check: Run-rate net debt to adjusted EBITDA of 5.6× at June 30, 2026 is on the heavy side for a REIT, mitigated by $700 million of 3.00% exchangeable notes issued in the quarter to repay the $600 million notes due 2026 and a new $400 million delayed-draw term loan due 2029.
What this grade doesn't say: It screens the dividend only — covered, real, compounding. It says nothing about valuation or price: a well-covered payer can still be overpriced, and its price can still fall.