Community Healthcare Trust Incorporated (CHCT): Business Model Canvas [Dec-2025 Updated]

You're looking to cut through the noise and see exactly how Community Healthcare Trust Incorporated (CHCT) makes its money, especially now with interest rates shifting. Honestly, their model is built on a solid foundation: owning about $1.2 billion in essential, non-urban healthcare properties under long-term triple-net leases, which is why investors count on that steady REIT dividend. Still, you need to watch the cost side, as their debt expense climbed 13.1% year-over-year in Q3 2025, even as they project $121.59 million in revenue for the full fiscal year 2025. Dive into the canvas below to see the specific partnerships and activities that keep their 90.7% occupancy rate high and where the near-term capital recycling gains are coming from.

Community Healthcare Trust Incorporated (CHCT) - Canvas Business Model: Key Partnerships

You're looking at how Community Healthcare Trust Incorporated (CHCT) builds and maintains its asset base, which is all about strategic relationships for capital and property flow. These partnerships are the plumbing for their real estate investment trust (REIT) operations.

The core of these partnerships revolves around financing the approximately $1.2 billion in total investments across 200 real estate properties as of September 30, 2025.

• - Regional and community bank lenders for debt financing.
• - Healthcare facility developers for new construction acquisitions.
• - Private physician groups and hospital systems for sale/leaseback deals.
• - Investment banks for capital market transactions and credit facility.
• - 1031 exchange partners for tax-deferred capital recycling.

The reliance on debt, common for a REIT, means the relationship with lenders supporting the $400 million senior unsecured revolving line of credit is critical. This facility, supported by 12 financial institutions, had $256 million drawn as of September 30, 2025.

The capital recycling strategy, which involves selling assets to immediately reinvest in new ones, heavily depends on partners facilitating tax-deferred exchanges. For instance, a disposition of $29.7 million closed on November 25, 2025, was immediately followed by a $28.5 million acquisition utilizing a 1031 exchange on December 2, 2025.

Here's a look at the scale of recent activity that these partnerships enable:

The relationships with healthcare facility developers are key for the pipeline, which includes six properties under definitive purchase agreements for an expected investment of approximately $146.0 million, with anticipated returns ranging from 9.1% to 9.75%.

Dealing with private physician groups and hospital systems often manifests through lease structures or portfolio adjustments. For example, the company is working through the potential sale of a tenant operating six geriatric hospitals, where the buyer would sign new or amended leases. In Q3 2025, this specific tenant only paid approximately $0.2 million in rent and interest. Management noted that recent capital recycling reduced their largest tenant concentration.

The structure of the credit facility itself points to key banking partners. The $400 million facility is managed by Truist Bank as the Administrative Agent and is supported by 12 financial institutions. The weighted average interest rate on the Revolving Line of Credit was 5.3% as of June 30, 2025.

• - The latest quarterly dividend declared in October 2025 was $0.4750 per share.
• - Total revenue for Q3 2025 was $31.1 million.
• - Adjusted Funds From Operations (AFFO) per share for Q3 2025 was $0.56.

Community Healthcare Trust Incorporated (CHCT) - Canvas Business Model: Key Activities

You're mapping out the core engine of Community Healthcare Trust Incorporated (CHCT), and for a healthcare REIT, the key activities revolve around disciplined capital deployment, meticulous asset oversight, and smart financing. Honestly, their success hinges on executing these operational steps consistently, especially given the current interest rate environment.

Sourcing and underwriting off-market property acquisitions

Community Healthcare Trust Incorporated (CHCT) focuses on acquiring essential healthcare properties outside of major urban centers, which management views as an off-market strategy capitalizing on favorable demographic trends. This activity is the primary driver of their asset base growth. As of September 30, 2025, their Gross real estate investments stood at approximately $1,204,425 thousand across 200 total properties.

The pipeline shows this activity is ongoing, even if the pace of annual investment has moderated; the company reported total investments of $36.0 million in 2025 up to the Q2 reporting period. Management is actively working to deploy capital into accretive deals. They have six properties under definitive purchase agreements, representing an expected aggregate purchase price of approximately $146.0 million. The expected returns on this pipeline are targeted between 9.1% and 9.75%.

Active asset management and lease enforcement

Once a property is acquired, the key activity shifts to ensuring long-term, stable rental income from those assets. This involves rigorous lease enforcement and proactive management to maintain high occupancy and favorable lease terms. The portfolio's stability is reflected in its Weighted Average remaining lease term (WALT) of 6.7 years as of September 30, 2025.

The portfolio-wide leased percentage, excluding assets held for sale, was 90.1% at the end of the third quarter of 2025. A specific asset management challenge involves a geriatric behavioral hospital tenant across six properties, which only paid approximately $0.2 million in rent and interest during Q3 2025, indicating active, non-standard lease enforcement or resolution activity.

Here's a quick look at the portfolio scale and key metrics as of September 30, 2025:

Capital raising and debt management

Managing the balance sheet is critical, especially for a REIT that uses debt to fund growth while trying to avoid equity dilution at perceived low stock prices. Community Healthcare Trust Incorporated (CHCT) reported a total Net Debt of approximately $530.1 million as of Q3 2025.

This leverage is visible in the Debt-to-Equity (D/E) ratio, which stood at 124.2%, meaning debt funded more than equity in the capital structure. The Debt to Total Capitalization ratio was 43.1%. A significant portion of their borrowings is short-term, with $256.0 million drawn on their Revolving Line of Credit. To manage the cost of this debt, management has interest rate swaps hedging $350.0 million of notional debt.

The cost of this debt is broken down by facility:

• Weighted average interest rate per annum on Term Loans: 4.7%.
• Weighted average interest rate per annum on Revolving Line of Credit: 5.4%.

The company is actively pursuing a leverage-neutral funding model, prioritizing capital recycling over new equity issuance.

Redevelopment and renovation of existing portfolio assets

While the core activity is acquisition, the pipeline suggests involvement in the development lifecycle. The Q3 2025 acquisition of an inpatient rehabilitation facility in Florida for approximately $26.5 million was completed upon construction. This indicates that Community Healthcare Trust Incorporated (CHCT) is involved in funding or overseeing the final stages of development projects to bring them to a 100% leased, stabilized state before taking ownership and commencing rent collection.

Maintaining REIT compliance and managing investor relations

This activity ensures the company adheres to IRS rules for REIT status and keeps the shareholder base supportive of the dividend strategy. Community Healthcare Trust Incorporated (CHCT) has maintained a streak of quarterly dividend increases since its IPO. The latest declared quarterly dividend in October 2025 was $0.4750 per share, translating to an annualized rate of $1.90 per share.

The dividend coverage, based on projected 2025 FFO, is tight, but the payout is covered by core cash flow metrics. The payout ratio against Adjusted Funds From Operations (AFFO) was 84.8%. The company's long-term performance is a key part of investor relations, showing a total shareholder return of 250% since inception.

Key investor metrics as of late 2025:

• Quarterly Dividend Declared (Oct 2025): $0.4750 per share.
• Annualized Dividend Rate: $1.90 per share.
• AFFO per diluted share (Q3 2025): $0.56.
• Stock Price at Quarter End (Sept 30, 2025): $15.30.

Finance: draft 13-week cash view by Friday.

Community Healthcare Trust Incorporated (CHCT) - Canvas Business Model: Key Resources

You're looking at the core assets Community Healthcare Trust Incorporated (CHCT) relies on to generate its revenue stream, which is almost entirely rental income from specialized medical properties. These resources are the foundation of their strategy, focusing on non-urban markets.

The physical assets are substantial. As of September 30, 2025, Community Healthcare Trust Incorporated (CHCT) held investments valued at approximately $1.2 billion across 200 real estate properties. 200 properties are spread across 36 states. The total square footage owned as of June 30, 2025, was 4,525,053 square feet. This portfolio is managed under long-term agreements.

The lease structure is a key resource for stability. The weighted average remaining lease term across the portfolio, as of June 30, 2025, stood at 6.6 years. Furthermore, 30.1% of annualized lease revenue extends beyond the year 2034, locking in cash flow for the long haul.

Liquidity and capital structure are also critical resources, especially for funding growth without immediate equity dilution. Community Healthcare Trust Incorporated (CHCT) secured a significant financing tool in late 2024. Here's a snapshot of the key quantitative resources as of mid-to-late 2025:

The management team's expertise is evidenced by their strategic deployment of capital into specific asset types and geographies. They are actively growing the asset base through acquisitions, with a pipeline that signals future resource deployment. For instance, they had six properties under definitive purchase agreements for an aggregate expected purchase price of approximately $146.0 million. Also, they signed a term sheet for dialysis clinic funding up to $60.0 million.

The operational cash flow supports the asset base. Cash from Operations (CFO) for the trailing twelve months ending Q3 2025 was $56.59 million. They are actively managing their debt profile, having used proceeds from the Revolving Credit Facility to fund recent acquisitions, such as a $26.5 million facility in Q3 2025. Finance: draft 13-week cash view by Friday.

Community Healthcare Trust Incorporated (CHCT) - Canvas Business Model: Value Propositions

You're looking at the core benefits Community Healthcare Trust Incorporated (CHCT) offers to its stakeholders, which are deeply rooted in the structure of its real estate portfolio. This isn't just about owning buildings; it's about the specific, predictable cash flow those buildings generate from essential healthcare tenants.

The primary value proposition for investors centers on stable, predictable income. Community Healthcare Trust Incorporated has a history of commitment to its shareholders, evidenced by the recent declaration of a quarterly common stock dividend of $0.4750 per share for the quarter ended September 30, 2025. This rate translates to an annualized dividend of $1.90 per share. To give you a sense of the current market perception of this income stream, the dividend yield was reported at 12.35% as of the third quarter of 2025.

For healthcare providers, CHCT offers capital liquidity, often through sale/leaseback transactions. This allows operators to free up capital tied in real estate to reinvest directly into patient care or operations. The portfolio itself is geographically diverse, with investments across 36 states as of September 30, 2025.

The focus of the portfolio is on essential, non-urban outpatient healthcare facilities. This strategic placement outside major metropolitan areas is key to their stability. As of the end of the third quarter of 2025, Community Healthcare Trust Incorporated owned 200 properties in total. The operational health of this portfolio is quite strong, with the reported percentage leased standing at 90.1%, excluding assets held for sale.

A major component underpinning the stability is the lease structure. Community Healthcare Trust Incorporated relies on the triple-net lease structure. Honestly, this structure shifts the responsibility for property taxes, insurance, and maintenance directly to the tenant, which is exactly how CHCT minimizes its own operating risk. This is a classic income-investor play.

Here's a quick look at some key metrics from the Q3 2025 snapshot that support these value propositions:

The focus on growth through acquisition also reinforces the value proposition for future income. In the third quarter of 2025, the company closed on an inpatient rehabilitation facility in Florida for approximately $26.5 million, with an expected return of 9.4%. Furthermore, Community Healthcare Trust Incorporated was actively managing its capital by planning the sale of an inpatient rehabilitation facility in the fourth quarter of 2025, anticipating a gain of approximately $11.5 million.

The pipeline for future income is also visible in their forward agreements. They had six properties under definitive purchase agreements, with expected returns ranging from 9.1% to 9.75%, anticipated to close between the fourth quarter of 2025 and 2027. This active management of assets-buying high-yield properties and recycling capital from others-is central to maintaining that stable dividend growth you're looking for.

The value proposition can be summarized by the following key structural elements:

• - Stable, predictable income stream via REIT dividend.
• - Capital liquidity for healthcare providers via sale/leaseback.
• - Focus on essential, non-urban outpatient facilities.
• - High occupancy rate of 90.1% across the portfolio.
• - Triple-net lease structure minimizing tenant operating risk for CHCT.

Finance: draft 13-week cash view by Friday.

Community Healthcare Trust Incorporated (CHCT) - Canvas Business Model: Customer Relationships

You're managing relationships in a sector where long-term stability is the name of the game, and for Community Healthcare Trust Incorporated (CHCT), that stability is built on the structure of its leases and how management handles tenant lifecycle events. It's not just about collecting rent; it's about actively managing the asset base through the tenant relationship.

Long-term, contractual relationships via NNN leases

The foundation of Community Healthcare Trust Incorporated (CHCT)'s customer relationship model is the triple-net lease (NNN) structure. This arrangement places the responsibility for property taxes, insurance, and maintenance directly on the tenant, which is why you see a stellar gross profit margin of nearly 80.78% in Q2 2025. This structure is designed for predictable, long-term cash flow.

The commitment to long duration is clear in the portfolio metrics as of early Q4 2025. The weighted average lease term sits at 6.6 years, which helps stagger lease expirations. Furthermore, a significant portion of the revenue base is locked in for the long haul; approximately 30.1% of annualized lease revenue extends beyond the year 2034. To give you a sense of the contracted future income stream, the company reports future minimum lease payments under non-cancelable operating leases totaling $780.1 million, with substantial payments due in 2026 and beyond.

Consistent dividend increases for common stock investors

For the equity investors, the relationship is cemented by a commitment to consistent return. Community Healthcare Trust Incorporated (CHCT) has maintained a streak of increasing its dividend every quarter since its Initial Public Offering. As of late 2025, the annual dividend payout stands at $1.90 per share, translating to a dividend yield of 12.43% based on the November 7, 2025 ex-dividend date. The latest declared quarterly dividend was $0.475 per share, paid on November 21, 2025. The average dividend growth rate for the stock over the past three years is reported at 2.27%. Even looking back to February 2025, the board had passed a 0.5% increase to the quarterly dividend to $0.4675 per share, or an annualized rate of $1.87 per share at that time.

Here's a snapshot of the commitment to shareholder returns:

Proactive engagement with tenants facing financial distress (e.g., geriatric behavioral hospital)

When a tenant struggles, Community Healthcare Trust Incorporated (CHCT) gets directly involved, which is a critical part of managing the relationship beyond the contract terms. You saw this play out with the geriatric behavioral hospital operator, which was a tenant in six of the Company's properties. This operator represented $3.2 million in annual base rent before the issues surfaced.

The proactive steps taken in 2025 show management's approach:

• In Q1 2025, the tenant paid only $0.2 million in rent and interest.
• In Q2 2025, the company recorded a $1.7 million reserve on its interest receivable and an $8.7 million credit loss reserve on notes receivable related to this tenant.
• On July 17, 2025, the tenant signed a Letter of Intent (LOI) for the sale of its business to a new behavioral healthcare provider.
• The potential sale includes the buyer signing new or amended leases for the six geriatric hospitals.
• In Q3 2025, the tenant paid approximately $0.2 million in rent and interest again, showing some continued, albeit partial, activity while the sale was pending.

This situation highlights the active dialogue management maintains to secure a long-term resolution, potentially leading to new, more stable lease agreements.

Direct and high-touch management for redevelopment projects

For properties undergoing development or significant tenant improvements, the relationship shifts to direct, high-touch management to ensure the asset is ready for revenue generation. This is where capital commitments become the tangible measure of management involvement.

As of early Q4 2025, the company had specific capital allocated to these hands-on projects:

• Total committed tenant improvements were approximately $28.2 million.
• Of that total, $10.3 million was specifically earmarked for two redevelopment projects backed by long-term leases.
• Overall capital improvement contracts totaled approximately $3.3 million, with $1.9 million allocated to four redevelopment projects.

Two properties were expected to commence leases in Q2 2025, showing the pipeline of these high-touch projects moving into revenue-generating status. Finance: draft 13-week cash view by Friday.

Community Healthcare Trust Incorporated (CHCT) - Canvas Business Model: Channels

You're looking at how Community Healthcare Trust Incorporated (CHCT) gets its properties, communicates with the market, and manages its income streams. It's all about direct action and managing a finite asset base.

Direct acquisition team for off-market property sourcing.

Community Healthcare Trust Incorporated (CHCT) focuses on smaller, off-market healthcare facilities to drive its pipeline. The pipeline activity shows this channel in action:

• Aggregate expected purchase price for six properties under definitive agreements as of September 30, 2025: approximately $146.0 million.
• Expected returns on these pipeline investments range from 9.1% to 9.75%.
• Acquisition in Q3 2025: one inpatient rehabilitation facility for a purchase price of approximately $26.5 million.
• Recent capital recycling involved a $28.5 million acquisition on December 2, 2025.

Investor Relations department for NYSE-listed common stock.

The Investor Relations department manages communication for the NYSE-listed common stock, especially when management is cautious about issuing equity. Here are the key metrics from the September 30, 2025 snapshot:

The department noted no shares were issued under the ATM program during the third quarter of 2025.

Direct communication with tenants for rent collection and lease renewals.

This channel is critical for maintaining the $1.2 billion investment portfolio across 200 properties. Lease management data shows the current status:

• Portfolio leased percentage as of September 30, 2025: 90.1%.
• Weighted Average remaining lease term: 6.7 years.
• Future minimum lease payments under non-cancelable operating leases: $780.1 million.
• Lease activity in Q1 2025: 168,000 square feet leased or renewed, exceeding 166,000 square feet of expiring/terminated leases.
• Specific tenant activity: A geriatric behavioral hospital operator, a tenant in six properties, paid rent and interest of approximately $0.2 million in Q3 2025.

Real estate brokers for selective property dispositions.

Brokers facilitate capital recycling, which funds new acquisitions. Dispositions in 2025 include:

The November 25, 2025, disposition allowed Community Healthcare Trust Incorporated (CHCT) to reinvest proceeds at approximately 140 basis points premium to the disposition cap rate.

Community Healthcare Trust Incorporated (CHCT) - Canvas Business Model: Customer Segments

You're looking at the core groups Community Healthcare Trust Incorporated (CHCT) serves, which directly dictates the long-term lease structures that underpin their revenue. It's a focused strategy, really, targeting specific operators and investors who value that niche exposure.

Healthcare Providers: Physician groups, specialty centers, and rehab operators.

These operators are the direct users of the real estate. CHCT owns a portfolio of 200 real estate properties with 314 tenants across 36 states as of September 30, 2025. The focus is on income-producing properties associated primarily with outpatient healthcare services. You need to see the asset mix to understand who these providers are:

The company maintains significant tenant concentration risk, but it's spread across a few major players; the top two tenants account for 16.3% of annualized rent. That's the quick math on who is paying the bills.

Behavioral and Inpatient Rehabilitation Facility Operators.

This group is a key focus area, evidenced by recent capital deployment. Inpatient Rehabilitation Facilities make up 19.4% of the portfolio as of Q3 2025. Just last quarter, CHCT acquired one such facility in Florida for approximately $26.5 million, with a lease expiring in 2040, expecting a return of about 9.4%. Also, note the exposure to behavioral health; a tenant in six properties paid rent and interest of only about $0.2 million in Q3 2025, following significant credit loss reserves recorded earlier in the year, which is defintely something to watch.

Tenants in non-urban, secondary, and tertiary US markets.

CHCT explicitly targets properties primarily outside of major urban centers. This strategy aims to avoid competitive bidding situations for smaller, off-market healthcare facilities. Geographically, the portfolio is spread, but the largest concentrations as of Q3 2025 are:

• Texas: 16.9% of gross investment.
• Illinois: 11.7% of gross investment.
• Ohio: 9.8% of gross investment.
• Florida: 8.1% of gross investment.
• Pennsylvania: 5.9% of gross investment.

All other states combined represent 47.6% of the portfolio.

Common Stock Investors: Seeking high dividend yield and real estate exposure.

For the equity side, the appeal is the consistent income stream. Community Healthcare Trust Incorporated has increased its dividend every quarter since its IPO. The latest declared common stock cash dividend for the quarter ended September 30, 2025, was $0.475 per share, which equates to an annualized dividend of $1.90 per share. Based on recent pricing, the Forward Dividend Yield sits at a substantial 12.84%. The payout ratio against Adjusted Funds From Operations (AFFO) for that quarter was a manageable 84.8%, showing the dividend is covered by core cash flow. The last ex-dividend date was Nov 7, 2025.

Community Healthcare Trust Incorporated (CHCT) - Canvas Business Model: Cost Structure

The Cost Structure for Community Healthcare Trust Incorporated centers on financing its real estate portfolio and deploying capital into new, accretive assets, while managing overhead and debt service.

• High interest expense on debt, which climbed 13.1% YoY in Q3 2025.
• General and administrative (G&A) expenses, including management compensation.
• Property operating expenses (minimal due to NNN structure).
• Costs associated with property acquisitions and due diligence.
• Dividend payments, forecast to be around $53.5 million for 2025.

Interest expense for the third quarter of 2025 reached $7.1 million, up from $6.6 million in Q2 2025, driven by increased borrowings under the revolving credit facility to fund acquisitions. The company has approximately $180 million of floating rate exposure on its revolver borrowings, making interest expense sensitive to Federal Open Market Committee (FOMC) rate changes.

General and administrative expenses show volatility due to non-recurring items. Total G&A expense in Q2 2025 was $10.6 million, but this included a $5.9 million charge for severance and transition-related payments. Excluding this, the recurring G&A was $4.7 million for Q2 2025, which was a reduction of approximately $400,000 quarter-over-quarter. For context, G&A expenses were reported as $19 million in 2024.

Property operating expenses remain relatively low, consistent with a Triple Net (NNN) lease structure where tenants cover most property costs. For Q3 2025, these expenses saw a slight decrease year-over-year by approximately $50,000. For the three months ended June 30, 2025, property operating expenses were $5,585 thousand.

Capital deployment is a significant cost driver, reflecting the growth strategy. Community Healthcare Trust Incorporated closed on an inpatient rehab facility in Q3 2025 for approximately $26.5 million. In the first nine months of 2025 alone, the company acquired two healthcare properties for roughly $36.0 million. Furthermore, the company has six properties under definitive purchase agreements, representing a projected investment of approximately $146.0 million.

The commitment to shareholder returns is a fixed, large cash outflow. The forecast for total dividend payments for the full 2025 fiscal year is around $53.5 million. The quarterly dividend was increased to $0.4750 per share for the third quarter of 2025, implying an annualized dividend of $1.90 per share.

Here is a breakdown of key cost components based on recent reporting periods:

The dividend payout ratio, based on the forecast, is projected to be high, with the AFFO dividend payout ratio remaining strong at 85% for Q3 2025. Finance: draft 13-week cash view by Friday.

Community Healthcare Trust Incorporated (CHCT) - Canvas Business Model: Revenue Streams

You're looking at the core engine of Community Healthcare Trust Incorporated (CHCT), which, like most healthcare REITs, is built for predictable, long-term cash flow. The revenue streams are straightforward, which is what investors in this space generally want to see.

Primary Revenue Stream: Rental Income

The overwhelming majority of Community Healthcare Trust Incorporated (CHCT)'s top line comes from rental income generated by its portfolio of income-producing real estate properties, which are almost exclusively under long-term triple-net leases. This structure means the tenants handle most property operating expenses, which helps stabilize Community Healthcare Trust Incorporated (CHCT)'s net revenue.

Here's a look at the revenue performance leading into the end of 2025:

The projected full fiscal year 2025 revenue lands right around $121.59 million, showing continued, albeit modest, growth from the $115.79 million recorded in 2024. That growth is the result of successfully integrating new assets into the portfolio.

Incidental Income and Volatility

While rent is the main event, you also have to account for other items, especially interest income from notes receivable, which Community Healthcare Trust Incorporated (CHCT) considers incidental to its core leasing business. This stream can introduce volatility, as we saw in the second quarter of 2025.

For instance, in Q2 2025, the company recorded a negative impact due to a reversal of interest receivable totaling $1.7 million related to one specific tenant, alongside an $8.7 million credit loss reserve on notes receivable from that same operator. That's the risk you take when you have notes receivable that aren't perfectly aligned with your primary lease revenue.

Gains from Capital Recycling

Capital recycling-selling assets to fund new, potentially higher-yielding acquisitions-is a key component of portfolio management for Community Healthcare Trust Incorporated (CHCT). This generates non-recurring gains.

We saw this in action recently:

• Gain recognized on a real estate sale in Q2 2025: approximately $1.3 million.
• Recent disposition value as part of a 1031 exchange announced in December 2025: $29.7 million.
• Acquisition pipeline targeted for 2025-2027: approximately $146.0 million in definitive purchase agreements.

These dispositions allow Community Healthcare Trust Incorporated (CHCT) to reinvest proceeds, often at a higher capitalization rate, which supports future rental income growth. Finance: draft 13-week cash view by Friday.