10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)
x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2019
OR
¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM             TO

Commission file number: 001-37401

Community Healthcare Trust Incorporated

(Exact Name of Registrant as Specified in Its Charter)

Maryland (State or Other Jurisdiction of Incorporation or Organization) 46-5212033 (I.R.S. Employer Identification No.)

3326 Aspen Grove Drive

Suite 150

Franklin, Tennessee 37067

(Address of Principal Executive Offices) (Zip Code)

(615) 771-3052

(Registrant’s Telephone Number, Including Area Code)

Not Applicable

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each Class	Trading Symbol	Name of each exchange on which registered
Common stock, $0.01 par value per share	CHCT	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  x     No  ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  x     No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated  filer ¨ Accelerated filer x Emerging-growth company x Non-accelerated filer ¨ Smaller reporting  company x

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section13(a) of the Exchange Act. x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). 

Yes  ¨     No x

The Registrant had 18,862,792 shares of Common Stock, $0.01 par value per share, outstanding as of April 30, 2019.

1

COMMUNITY HEALTHCARE TRUST INCORPORATED

FORM 10-Q

March 31, 2019

TABLE OF CONTENTS

		Page
PART I.—FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	3
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Income	4
	Condensed Consolidated Statements of Comprehensive Income	5
	Condensed Consolidated Statements of Stockholders' Equity	6
	Condensed Consolidated Statements of Cash Flows	7
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	28
Item 4.	Controls and Procedures	28
PART II.—OTHER INFORMATION		28
Item 1.	Legal Proceedings	28
Item 1A.	Risk Factors	28
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28
Item 3.	Defaults Upon Senior Securities	29
Item 4.	Mine Safety Disclosures	29
Item 5.	Other Information	29
Item 6.	Exhibits	29
SIGNATURES		31

2

PART I. FINANCIAL INFORMATION

ITEM 1.    FINANCIAL STATEMENTS

COMMUNITY HEALTHCARE TRUST INCORPORATED

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except per share amounts)

	(Unaudited)
	March 31, 2019			December 31, 2018
ASSETS
Real estate properties
Land and land improvements	$	52,520		$	50,270
Buildings, improvements, and lease intangibles	425,763			394,527
Personal property	135			133
Total real estate properties	478,418			444,930
Less accumulated depreciation	(60,544		)	(55,298		)
Total real estate properties, net	417,874			389,632
Cash and cash equivalents	3,868			2,007
Restricted cash	166			385
Other assets, net	34,822			34,546
Total assets	$	456,730		$	426,570
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Debt, net	$	179,117		$	147,766
Accounts payable and accrued liabilities	3,351			3,196
Other liabilities	4,579			3,949
Total liabilities	187,047			154,911
Commitments and contingencies
Stockholders' Equity
Preferred stock, $0.01 par value; 50,000,000 shares authorized; none issued and outstanding	—			—
Common stock, $0.01 par value; 450,000,000 shares authorized; 18,862,792 and 18,634,502 shares issued and outstanding at March 31, 2019 and December 31, 2018, respectively	189			186
Additional paid-in capital	342,654			337,180
Cumulative net income	10,628			9,178
Accumulated other comprehensive (loss) income	(642		)	633
Cumulative dividends	(83,146		)	(75,518		)
Total stockholders’ equity	269,683			271,659
Total liabilities and stockholders' equity	$	456,730		$	426,570

See accompanying notes to the condensed consolidated financial statements.

3

COMMUNITY HEALTHCARE TRUST INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

FOR THE THREE MONTHS ENDED MARCH 31, 2019 AND 2018

(Unaudited; Dollars in thousands, except per share amounts)

	Three Months Ended March 31,
	2019			2018
REVENUES
Rental income	$	12,898		$	11,075
Other operating interest	543			354
	13,441			11,429
EXPENSES
Property operating	3,075			2,364
General and administrative	1,785			1,193
Depreciation and amortization	5,246			4,916
	10,106			8,473
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND OTHER ITEMS	3,335			2,956
Interest expense	(2,054		)	(1,268		)
Interest and other income, net	169			184
INCOME FROM CONTINUING OPERATIONS	1,450			1,872
NET INCOME	$	1,450		$	1,872
NET INCOME PER COMMON SHARE:
Net income per common share – Basic	$	0.06		$	0.09
Net income per common share – Diluted	$	0.06		$	0.09
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING-BASIC	17,954,670			17,573,683
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING-DILUTED	17,954,670			17,573,683

See accompanying notes to the condensed consolidated financial statements.

4

COMMUNITY HEALTHCARE TRUST INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE THREE MONTHS ENDED MARCH 31, 2019 AND 2018

(Unaudited; Dollars in thousands)

			Three Months Ended March 31,
			2019			2018
NET INCOME			$	1,450		$	1,872
	Other comprehensive income (loss):
		(Decrease) increase in fair value of cash flow hedges	(1,213		)	906
		Reclassification for amounts recognized as interest expense	(62		)	68
	Total other comprehensive (loss) income		(1,275		)	974
COMPREHENSIVE INCOME			$	175		$	2,846

See accompanying notes to the condensed consolidated financial statements.

5

COMMUNITY HEALTHCARE TRUST INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited; Dollars in thousands, except per share amounts)

	Preferred Stock			Common Stock			Additional Paid in Capital		Cumulative Net Income		Accumulated Other Comprehensive Income (loss)			Cumulative Dividends			Total Stockholders' Equity
	Shares	Amount		Shares	Amount
Balance at December 31, 2017	—	$	—	18,085,798	$	181	$	324,303	$	4,775	$	258		$	(46,143	)	$	283,374
Stock-based compensation	—	—		94,001	1		615		—		—			—			616
Unrecognized gain on cash flow hedges	—	—		—	—		—		—		906			—			906
Reclassification adjustment for losses included in net income (interest expense)	—	—		—	—		—		—		68			—			68
Net income	—	—		—	—		—		1,872		—			—			1,872
Dividends to common stockholders ($0.3975 per share)	—	—		—	—		—		—		—			(7,226		)	(7,226		)
Balance at March 31, 2018	—	$	—	18,179,799	$	182	$	324,918	$	6,647	$	1,232		$	(53,369	)	$	279,610
Balance at December 31, 2018	—	$	—	18,634,502	$	186	$	337,180	$	9,178	$	633		$	(75,518	)	$	271,659
Issuance of common stock, net of issuance costs	—	—		143,600	2		4,622		—		—			—			4,624
Stock-based compensation	—	—		84,690	1		852		—		—			—			853
Unrecognized loss on cash flow hedges	—	—		—	—		—		—		(1,213		)	—			(1,213		)
Reclassification adjustment for gains included in net income (interest expense)	—	—		—	—		—		—		(62		)	—			(62		)
Net income	—	—		—	—		—		1,450		—			—			1,450
Dividends to common stockholders ($0.4075 per share)	—	—		—	—		—		—		—			(7,628		)	(7,628		)
Balance at March 31, 2019	—	$	—	18,862,792	$	189	$	342,654	$	10,628	$	(642	)	$	(83,146	)	$	269,683

See accompanying notes to the condensed consolidated financial statements.

6

COMMUNITY HEALTHCARE TRUST INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited; Dollars in thousands)

	Three Months Ended March 31,
	2019			2018
OPERATING ACTIVITIES
Net income	$	1,450		$	1,872
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	5,421			5,133
Stock-based compensation	853			616
Straight-line rent receivable	(336		)	(415		)
Deferred income tax expense (benefit)	17			(132		)
Changes in operating assets and liabilities:
Other assets	(194		)	(696		)
Accounts payable and accrued liabilities	155			(309		)
Other liabilities	(36		)	(121		)
Net cash provided by operating activities	7,330			5,948
INVESTING ACTIVITIES
Acquisitions of real estate	(32,743		)	(12,721		)
Acquisitions of notes receivable	—			(2,201		)
Proceeds from the repayment of notes receivable	31			17
Capital expenditures on existing real estate properties	(622		)	(1,444		)
Net cash used in investing activities	(33,334		)	(16,349		)
FINANCING ACTIVITIES
Net repayments on revolving credit facility	(43,000		)	(22,000		)
Term loan borrowings	75,000			40,000
Mortgage note repayments	(27		)	—
Dividends paid	(7,628		)	(7,226		)
Net proceeds from issuance of common stock	4,724			—
Equity issuance costs	(100		)	—
Debt issuance costs	(1,323		)	(218		)
Net cash provided by financing activities	27,646			10,556
Increase in cash and cash equivalents and restricted cash	1,642			155
Cash and cash equivalents and restricted cash, beginning of period	2,392			2,130
Cash and cash equivalents and restricted cash, end of period	$	4,034		$	2,285
Supplemental Cash Flow Information:
Interest paid	$	1,783		$	1,105
Invoices accrued for construction, tenant improvement and other capitalized costs	$	81		$	712
Reclassification between accounts and notes receivable	$	40		$	—
Reclassification of registration statement costs incurred in prior year to equity issuance costs	$	100		$	—
(Decrease) increase in fair value of cash flow hedges	$	(1,213	)	$	906

See accompanying notes to the condensed consolidated financial statements.

7

COMMUNITY HEALTHCARE TRUST INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2019

(Unaudited)

Note 1. Summary of Significant Accounting Policies

Business Overview

Community Healthcare Trust Incorporated (the ‘‘Company’’, ‘‘we’’, ‘‘our’’) was organized in the State of Maryland on March 28, 2014. The Company is a fully-integrated healthcare real estate company that owns and acquires real estate properties that are leased to hospitals, doctors, healthcare systems or other healthcare service providers in our target submarkets. As of March 31, 2019, the Company had investments of approximately $478.4 million in 105 real estate properties, located in 29 states, totaling approximately 2.3 million square feet in the aggregate.

Basis of Presentation

The Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. They do not include all of the information and footnotes required by GAAP for complete financial statements.

This interim financial information should be read in conjunction with the financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

Management believes that all adjustments of a normal, recurring nature considered necessary for a fair presentation have been included. This interim financial information does not necessarily represent or indicate what the operating results will be for the year ending December 31, 2019. All material intercompany accounts and transactions have been eliminated.

Use of Estimates in the Condensed Consolidated Financial Statements

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

Reclassifications

Tenant reimbursements totaling $1.4 million on the Company's Condensed Consolidated Statements of Income for the three months ended March 31, 2018 were reclassified into rental income.

Income Taxes

The Company has elected to be taxed as a real estate investment trust ("REIT"), as defined under the Internal Revenue Code of 1986, as amended (the "Code"). The Company and one subsidiary have also elected for that subsidiary to be treated as a taxable REIT subsidiary ("TRS"), which is subject to federal and state income taxes. No provision has been made for federal income taxes for the REIT; however, the Company has recorded income tax expense or benefit for the TRS to the extent applicable. The Company intends at all times to qualify as a REIT under the Code. The Company must distribute at least 90% per annum of its REIT taxable income to its stockholders (which is computed without regard to the dividends paid deduction or net capital gain and which does not necessarily equal net income as calculated in accordance with GAAP) and meet other requirements to continue to qualify as a REIT.

8

Notes to Condensed Consolidated Financial Statements - Continued

New Accounting Pronouncements

Recently Adopted Accounting Pronouncements

Lease Accounting

In February 2016, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") 2016-02, Leases; in January 2018, the FASB issued ASU 2018-01, Leases - Land Easement Practical Expedient for Transition to Topic 842; in July 2018, the FASB issued ASU 2018-10, Codification Improvements to Topic 842, Leases and ASU 2018-11, Leases - Targeted Improvements; and in December 2018, the FASB issued ASU 2018-20, Narrow-Scope Improvements for Lessors. The Company adopted this group of ASUs, collectively referred to as Topic 842, on January 1, 2019. Topic 842 superseded the existing standards for lease accounting (Topic 840, Leases).

The Company elected to utilize the following practical expedients provided by Topic 842:

• the package of practical expedients that allows an entity not to reassess upon adoption (i) whether an

expired or existing contract contains a lease, (ii) whether a lease classification related to expired or existing

lease arrangements, and (iii) whether costs incurred on expired or existing leases qualify as initial direct

costs, and

• as a lessor, the practical expedient not to separate certain non-lease components, such as common area

maintenance, from the lease component if (i) the timing and pattern of transfer are the same for the nonlease

component and associated lease component, and (ii) the lease component would be classified as an

operating lease if accounted for separately.

Topic 842 requires lessees to record most leases on their balance sheet through a right-of-use ("ROU") model, in

which a lessee records a ROU asset and a lease liability on their balance sheet. Leases with terms that are 12 months or less or leases that are clearly insignificant do not need to be accounted for under the ROU model. Lessees will account for leases as financing or operating leases, with the classification affecting the timing and pattern of expense recognition in the income statement. Lease expense will be recognized based on the effective interest method for leases accounted for as finance leases and on a straight-line basis over the term of the lease for leases accounted for as operating leases.

The accounting by a lessor under Topic 842 is largely unchanged from that of Topic 840. Under Topic 842, lessors

will continue to account for leases as a sales-type, direct-financing, or operating. A lease will be treated as a sale if it

is considered to transfer control of the underlying asset to the lessee. A lease will be classified as direct-financing if

risks and rewards are conveyed without the transfer of control. Otherwise, the lease is treated as an operating lease.

Topic 842 requires accounting for a transaction as a financing in a sale leaseback when the seller-lessee is provided

an option to purchase the property from the landlord at the tenant's option. The Company expects that this provision

could change the accounting for these types of leases in the future. Topic 842 also includes the concept of separating

lease and nonlease components. Under Topic 842, nonlease components, such as common area maintenance, would

be accounted for under Topic 606 and separated from the lease payments. However, the Company elected the lessor practical expedient allowing the Company to not separate these components when certain conditions are met. With this election, the Company combined tenant reimbursements with rental income on its Condensed Consolidated Income Statements. Additionally, we will recognize a charge to rental income for amounts deemed uncollectible. Further, the Company has historically only capitalized direct leasing costs, such as leasing commissions. While the new standard revises the treatment of indirect leasing costs and permits the capitalization and amortization only of direct leasing costs, the Company does not expect an impact to its financial statements related to the capitalization of leasing costs. Also, the Narrow-Scope Improvements for Lessors under ASU 2018-20 allows the Company to continue to exclude from revenue costs paid by our tenants on our behalf directly to third parties, such as property taxes and insurance.

Topic 842 provided two transition alternatives. The Company adopted the standard based on the prospective

optional transition method, in which leases for comparative periods continue to be accounted for in accordance with Topic 840.

9

Notes to Condensed Consolidated Financial Statements - Continued

Upon adoption, where the Company is the lessee, we recorded a right of use asset and a related operating lease liability, each totaling approximately $0.1 million, related to one ground lease which will have minimal impact on the recognition of future ground lease expense. The right of use lease asset is included in other assets and the operating lease liability is included in other liabilities on the Company's Condensed Consolidated Balance Sheet.

Derivatives and Hedge Accounting

In October 2018, the FASB issued an update, ASU 2018-16, Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes to ASC Topic 815, Derivatives and Hedging. ASU 2018-16 expands the list of U.S. benchmark interest rates permitted in the application of hedge accounting by adding the OIS rate based on SOFR as an eligible benchmark interest rate. ASU 2018-16 is effective for interim and annual reporting periods in fiscal years beginning after December 15, 2018. We adopted this update effective January 1, 2019. The adoption of this update did not have an impact on our Condensed Consolidated Financial Statements.

Recently Issued Accounting Pronouncements

Financial Instruments-Credit Losses

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses, which changes the impairment model for most financial assets and certain other instruments. For trade and other receivables, held-to-maturity debt securities, loans and other instruments, companies will be required to use a new current expected credit loss ("CECL") model that generally will result in the earlier recognition of allowances for losses. For available-for-sale debt securities with unrealized losses, companies will measure credit losses in a manner similar to what they do today, except that the losses will be recognized as allowances rather than as reductions in the amortized cost of the securities. Companies will have to disclose significantly more information, including information they use to track credit quality by year of origination for most financing receivables. Companies will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. This standard is effective for the Company on January 1, 2020 with early adoption permitted. In August 2018, the FASB issued a proposal that would amend the ASU to clarify that receivables arising from leases would not be within the scope of the ASU but rather would be accounted for under the leasing standard. The Company continues to monitor the FASB's activity relating to this ASU.

10

Note 2. Real Estate Investments

At March 31, 2019, the Company had investments of approximately $478.4 million in 105 real estate properties. The following table summarizes the Company's real estate investments.

(Dollars in thousands)	Number of Facilities	Land and Land Improvements		Buildings, Improvements, and Lease Intangibles		Personal Property		Total		Accumulated Depreciation
Medical office buildings:
Florida	5	$	4,608	$	29,285	$	—	$	33,893	$	4,515
Ohio	6	3,638		26,483		—		30,121		5,508
Texas	3	3,115		15,591		—		18,706		4,456
Illinois	2	1,136		11,831		—		12,967		2,664
Kansas	3	2,455		14,933		—		17,388		4,189
Iowa	1	2,241		9,014		—		11,255		2,468
Other states	15	4,355		35,828		—		40,183		4,649
	35	21,548		142,965		—		164,513		28,449
Physician clinics:
Kansas	2	610		6,921		—		7,531		1,485
Illinois	6	2,888		9,539		—		12,427		540
Florida	4	253		9,484		—		9,737		912
Other states	9	2,903		21,462		—		24,365		3,459
	21	6,654		47,406		—		54,060		6,396
Surgical centers and hospitals:
Louisiana	1	1,683		21,353		—		23,036		1,244
Michigan	2	637		8,278		—		8,915		2,434
Illinois	2	2,349		8,222		—		10,571		1,411
Florida	1	271		7,069		—		7,340		810
Arizona	2	576		5,389		—		5,965		1,603
Other states	7	2,130		17,857		—		19,987		4,074
	15	7,646		68,168		—		75,814		11,576
Specialty centers:
Illinois	3	3,489		24,733		—		28,222		2,117
Other states	22	5,170		38,344		—		43,514		7,331
	25	8,659		63,077		—		71,736		9,448
Behavioral facilities:
West Virginia	1	2,138		22,897		—		25,035		880
Illinois	1	1,300		18,803		—		20,103		1,332
Indiana	2	1,126		6,040		—		7,166		351
Other states	3	1,411		12,840		—		14,251		499
	7	5,975		60,580		—		66,555		3,062
Inpatient rehabilitation facilities:
Texas	1	1,515		27,001		—		28,516		82
	1	1,515		27,001		—		28,516		82
Long-term acute care hospitals:
Indiana	1	523		14,405		—		14,928		1,222
	1	523		14,405		—		14,928		1,222
Corporate property	—	—		2,161		135		2,296		309
Total real estate investments	105	$	52,520	$	425,763	$	135	$	478,418	$	60,544

11

Notes to Condensed Consolidated Financial Statements - Continued

Note 3. Real Estate Leases

The Company’s properties are generally leased pursuant to non-cancelable, fixed-term operating leases with expiration dates through 2034. The Company’s leases generally require the lessee to pay minimum rent, with fixed rent renewal terms or increases based on a Consumer Price Index and and may also include additional rent, which may include taxes (including property taxes), insurance, maintenance and other operating costs associated with the leased property.

Some leases provide the lessee, during the term of the lease, with an option or right of first refusal to purchase the leased property. Some leases also allow the lessee to renew or extend their lease term or in some cases terminate their lease, based on conditions provided in the lease.

Future minimum lease payments under the non-cancelable operating leases due the Company for the years ending December 31, as of March 31, 2019, are as follows (in thousands):

2019 (nine months ending December 31)	$	32,823
2020	41,304
2021	38,200
2022	34,688
2023	30,177
2024 and thereafter	156,754
	$	333,946

Straight-line rental income

Rental income is recognized as earned over the life of the lease agreement on a straight-line basis. Straight-line rent included in rental income was approximately $0.3 million and $0.4 million, respectively, for the three months ended March 31, 2019 and 2018.

Deferred revenue

Rent received but not yet earned is deferred until such time it is earned. Deferred revenue, included in other liabilities, was approximately $1.5 million and $1.6 million, respectively, at March 31, 2019 and December 31, 2018.

Note 4. Real Estate Acquisitions

During the first quarter of 2019, the Company acquired two real estate properties totaling approximately 83,000 square feet for an aggregate purchase price and cash consideration of approximately $32.7 million. Upon acquisition, the properties were 100% leased in the aggregate with lease expirations in 2029. Amounts reflected in revenues and net income for the three months ended March 31, 2019 for these properties were approximately $0.4 million and $0.2 million, respectively. Transaction costs totaling approximately $0.1 million related to these asset acquisitions were capitalized in the period and included in real estate assets.

Note 5. Mortgage and Other Notes Receivable

The Company had one mortgage note receivable outstanding as of December 31, 2017 with a principal balance of $10.6 million and interest receivable of $0.6 million, which is included in other assets. The borrower and several related entities (the "Borrower") filed for voluntary bankruptcy on June 23, 2017. At the time of filing for bankruptcy, the Borrower was current on all obligations to the Company, but no payments were received during the bankruptcy.

On December 28, 2017, the Company purchased $11.45 million face value of certain promissory notes, secured by accounts receivable of the Borrower, for $8.75 million from a syndicate of banks, a $2.7 million discount to face

12

Notes to Condensed Consolidated Financial Statements - Continued

value, and in the first quarter of 2018 acquired $2.2 million of certain promissory notes, secured by the operations of two facilities related to the Borrower, but were not included in the bankruptcy, for a total investment in these promissory notes of approximately $10.95 million.

On April 25, 2018, the Company provided a $23.0 million loan, included in other assets, to a newly formed company (Newco), secured by all assets and ownership interests in seven long-term acute care hospitals and one inpatient rehabilitation hospital that, along with a series of investments by the management of Newco, allowed Newco to acquire certain assets of the Borrower.

Also on April 25, 2018, $10.95 million of the promissory notes discussed above, approximately $0.26 million of interest on those promissory notes, approximately $0.25 million in fees and reimbursement of expenses, and approximately $6.7 million principal and accrued interest related to its mortgage note receivable were satisfied with proceeds from the loan. In addition, the Company received title to the property previously financed by the mortgage note receivable at an approximate $4.5 million valuation. No impairment was recognized by the Company.

Note 6. Debt, net

The table below details the Company's debt as of March 31, 2019 and December 31, 2018.

	Balance as of
(Dollars in thousands)	March 31, 2019		December 31, 2018		Maturity Dates
Revolving Credit Facility	$	—	$	43,000	3/23
A-1 Term Loan, net	49,778		49,759		3/22
A-2 Term Loan, net	49,735		49,722		3/24
A-3 Term Loan, net	74,341		—		3/26
Mortgage Note Payable	5,263		5,285		5/24
	$	179,117	$	147,766

The Company's second amended and restated credit facility (the "Credit Facility") is by and among Community Healthcare OP, LP, the Company, the lenders from time to time party thereto, and SunTrust Bank, as Administrative Agent. The Company’s material subsidiaries are guarantors of the obligations under the Credit Facility. The Company entered into a third amendment to its Credit Facility (the "Third Amendment") on March 29, 2019, which added a $75.0 million term loan (the "A-3 Term Loan"), which matures on March 29, 2026, extended the maturity of the revolving credit facility (the "Revolving Credit Facility") to March 29, 2023, improved pricing on the Credit Facility, and adjusted certain financial covenants. The Company paid approximately $1.3 million in fees and expenses related to the Third Amendment, of which $0.7 million was related to the Revolving Credit Facility and was recorded as deferred financing costs, included in Other Assets, and $0.6 million was related to the A-3 Term Loan and was recorded as deferred financing costs, included in Debt, net, on the Company's Condensed Consolidated Balance Sheet.

The Credit Facility, as amended, provides for a $150.0 million Revolving Credit Facility and $175.0 million in term loans (the "Term Loans"). The Credit Facility, through the accordion feature, allows borrowings up to a total of $525.0 million including the ability to add and fund additional term loans. The Revolving Credit Facility matures on March 29, 2023 and includes one12-month option to extend the maturity date of the Revolving Credit Facility, subject to the satisfaction of certain conditions. The Term Loans include a five-year term loan facility in the aggregate principal amount of $50.0 million (the "A-1 Term Loan"), which matures on March 29, 2022, 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 and the new seven-year, $75.0 million A-3 Term Loan, which matures on March 29, 2026.

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Notes to Condensed Consolidated Financial Statements - Continued

Amounts outstanding under the Revolving Credit Facility, as amended, 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 0.25% 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 0.35% 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 repaid the amounts outstanding under its Revolving Credit Facility with proceeds from the A-3 Term Loan and therefore had the full borrowing capacity under the Revolving Credit Facility of $150.0 million at March 31, 2019.

Amounts outstanding under the Term Loans, as amended, bear annual interest at a floating rate that is based, at the Company’s option, on either: (i) LIBOR plus 1.25% to 2.30% or (ii) a base rate plus 0.25% to 1.30%, in each case, depending upon the Company’s leverage ratio. In addition, the Company is obligated to pay an annual fee equal to 0.35% of the amount of the unused portion of the Term Loans. The Company has entered into interest rate swaps to fix the interest rates on the Term Loans. See Note 7 for more details on the interest rate swaps. At March 31, 2019, the Company had drawn the full $175.0 million under the Term Loans which had a fixed weighted average interest rate under the swaps of approximately 4.569%.

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. The Company was in compliance with its financial covenants under its Credit Facility as of March 31, 2019.

Note 7. Derivative Financial Instruments

Risk Management Objective of Using Derivatives

The Company may use derivative financial instruments, including interest rate swaps, caps, options, floors and other interest rate derivative contracts, to hedge all or a portion of the interest rate risk associated with its borrowings. The principal objective of such arrangements is to minimize the risks and/or costs associated with the Company’s operating and financial structure as well as to hedge specific anticipated transactions. The Company does not intend to utilize derivatives for speculative or other purposes other than interest rate risk management. The use of derivative financial instruments carries certain risks, including the risk that the counterparties to these contractual arrangements are not able to perform under the agreements. To mitigate this risk, the Company only enters into derivative financial instruments with counterparties with high credit ratings and with major financial institutions with which the Company and its affiliates may also have other financial relationships. The Company does not anticipate that any of the counterparties will fail to meet their obligations.

Cash Flow Hedges of Interest Rate Risk

The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps and/or caps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. Interest rate caps designated as cash flow hedges involve the receipt of variable-rate amounts if interest rates rise above the cap strike rate on the contract.

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Notes to Condensed Consolidated Financial Statements - Continued

As of March 31, 2019, the Company had seven outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk for notional amounts totaling $175.0 million. The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the Condensed Consolidated Balance Sheets as of March 31, 2019 and December 31, 2018.

	Asset Derivatives Fair Value at					Liability Derivatives Fair Value at
	March 31, 2019		December 31, 2018		Balance Sheet Classification	March 31, 2019		December 31, 2018		Balance Sheet Classification
Interest rate swaps	$	215	$	902	Other assets	$	857	$	98	Other Liabilities

The changes in the fair value of derivatives designated and that qualify as cash flow hedges are recorded in accumulated other comprehensive income and are subsequently reclassified to interest expense in the period that the hedged forecasted transaction affects earnings.

Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s Term Loans. During the next twelve months, the Company estimates that an additional $0.2 million will be reclassified from other comprehensive income ("OCI") as a decrease to interest expense.

The table below details the location in the financial statements of the gain or loss recognized on interest rate derivatives designated as cash flow hedges for the three months ended March 31, 2019 and 2018.

	Three Months Ended March 31,
(Dollars in thousands)	2019			2018
Amount of unrealized (loss) gain recognized in OCI on derivative	$	(1,213	)	$	906
Amount of (gain) loss reclassified from accumulated OCI into interest expense	$	(62	)	$	68
Total Interest Expense presented in the Condensed Consolidated Statements of Income in which the effects of the cash flow hedges are recorded	$	2,054		$	1,268

Credit-risk-related Contingent Features

As of March 31, 2019, the fair value of derivatives in a net liability position including accrued interest but excluding

any adjustment for nonperformance risk related to these agreements was $0.7 million. As of March 31, 2019, the

Company has not posted any collateral related to these agreements and was not in breach of any agreement

provisions. If the Company had breached any of these provisions, it could have been required to settle its obligations

under the agreements at their aggregate termination value of approximately $0.7 million at March 31, 2019.

Note 8. Stockholders’ Equity

Common Stock

The following table provides a reconciliation of the beginning and ending common stock balances for the three months ended March 31, 2019 and for the year ended December 31, 2018:

	Three Months Ended March 31, 2019	Year Ended December 31, 2018
Balance, beginning of period	18,634,502	18,085,798
Issuance of common stock	143,600	334,700
Restricted stock-based awards	84,690	214,004
Balance, end of period	18,862,792	18,634,502

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Notes to Condensed Consolidated Financial Statements - Continued

ATM Program

On August 7, 2018, the Company entered into an at-the-market offering program ("ATM Program") with Sandler O’Neill & Partners, L.P., Evercore Group L.L.C., SunTrust Robinson Humphrey, Inc., BB&T Capital Markets, a division of BB&T Securities, LLC, Fifth Third Securities, Inc. and Janney Montgomery Scott LLC, as sales agents (collectively, the “Agents”), under which the Company may issue and sell shares of its common stock, par value $0.01 per share (the “Common Stock”), having an aggregate gross sales price of up to $100.0 million (the “Shares”) 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 the first quarter of 2019, the Company issued, through its ATM Program, 143,600 shares of common stock at an average gross sales price of $33.57 per share and received net proceeds of approximately $4.7 million. As of March 31, 2019, the Company had approximately $84.8 million remaining that may be issued under the ATM Program.

Note 9. Net Income Per Common Share

The following table sets forth the computation of basic and diluted net income per common share.

	Three Months Ended March 31, 2019
(Dollars in thousands, except per share data)	2019			2018
Net income	$	1,450		$	1,872
Participating securities' share in earnings	(324		)	(241		)
Net income, less participating securities' share in earnings	$	1,126		$	1,631
Weighted average Common Shares outstanding
Weighted average Common Shares outstanding	18,735,673			18,164,132
Unvested restricted shares	(781,003		)	(590,449		)
Weighted average Common Shares outstanding–Basic	17,954,670			17,573,683
Dilutive potential common shares	—			—
Weighted average Common Shares outstanding –Diluted	17,954,670			17,573,683
Basic Net Income per Common Share	$	0.06		$	0.09
Diluted Net Income per Common Share	$	0.06		$	0.09

Note 10. Incentive Plan

Under the Company's 2014 Incentive Plan, as amended, awards may be made in the form of restricted stock, cash or a combination of both. Compensation expense recognized from the amortization of the value of the Company's officer, employee and director shares over the applicable vesting periods during the three months ended March 31, 2019 and 2018 was approximately $0.9 million and $0.6 million, respectively.

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A summary of the activity under the 2014 Incentive Plan for the three months ended March 31, 2019 and 2018 is included in the table below.

		Three Months Ended March 31,
		2019	2018
Stock-based awards, beginning of period		709,487	512,115
	Stock in lieu of compensation	42,525	47,027
	Stock awards	42,165	46,974
	Total stock granted	84,690	94,001
	Vested shares	—	—
Stock-based awards, end of period		794,177	606,116

Note 11. Other Assets

Items included in Other assets, net on the Company's Condensed Consolidated Balance Sheets as of March 31, 2019 and December 31, 2018 are detailed in the table below.

	Balance as of
(Dollars in thousands)	March 31, 2019		December 31, 2018
Notes receivable	$	24,119	$	24,110
Accounts and interest receivables	2,092		2,158
Straight-line rent receivables	3,593		3,254
Prepaid assets	515		487
Deferred financing costs, net	848		318
Leasing commissions, net	862		790
Deferred tax asset	2,008		2,024
Fair value of interest rate swaps	215		902
Above-market intangible assets, net	162		168
Right of use leased asset	141		—
Other	267		335
	$	34,822	$	34,546

The Company's $24.1 million in notes receivable at March 31, 2019 include mainly the following notes. Interest related to these notes is included in Other Operating Interest on the Company's Condensed Consolidated Statements of Income.

• On April 25, 2018, the Company provided a $23.0 million loan to a newly formed company (Newco), secured by all assets and ownership interests in seven long-term acute care hospitals and one inpatient rehabilitation hospital. The loan, which matures on May 1, 2031, currently bears interest at 9% per annum, with principal payments beginning in May 2021. See Note 5 for more detail.

• On December 31, 2018, the Company entered into notes with a tenant totaling $0.9 million. The notes bear interest at 9% per annum and mature on December 31, 2019.

The Company identified the borrowers of these notes as variable interest entities ("VIEs"), but management determined that the Company was not the primary beneficiary of the VIEs because we lack either directly or through

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related parties any material impact in the activities that impact the borrowers' economic performance. We are not obligated to provide support beyond our stated commitment to the borrowers, and accordingly our maximum exposure to loss as a result of this relationship is limited to the amount of our outstanding notes receivable. The VIEs that we have identified at March 31, 2019 are summarized in the table below.

Classification	Carrying Amount (in millions)		Maximum Exposure to Loss (in millions)
Notes receivable	$	0.9	$	0.9
Note receivable	$	23.0	$	23.0

Highlands Transition Update

As previously announced, the Company experienced payment issues with the old operator of Highlands Hospital ("Highlands"). Effective February 11, 2019, the Company signed a transition agreement (the "Transition Agreement"), to transition the property to a new operator and signed a lease with a new operator.

The old operator and new operator have signed an asset purchase agreement pursuant to which the new operator will take over the facility. In addition, the old operator and new operator have signed a management agreement and the new operator is currently managing Highlands pursuant to the management agreement. The new operator continues to perform due diligence and is in the process of preparing for transfer of licenses and related items customary for these types of transactions. We cannot provide assurance as to the timing, or whether, this transaction will actually close.

The new lease will be effective upon the transfer of the licenses to the new operator, which is anticipated to happen in the second half of 2019. The new lease provides for rental payments approximately equal to the amounts due under the previous agreements with the old operator.

The Company is receiving monthly payments under the Transition Agreement which approximate the amounts due from the old operator under the previous agreements. These payments are to continue as long as the Transition Agreement is in place. The Transition Agreement will terminate when the licenses are transferred to the new operator, at which time the new lease will become effective.

Since the Transition Agreement became effective in February, the Company only received payments during the first quarter for February and March and thus did not recognize revenue for the month of January representing approximately $0.3 million.

In addition, the Company incurred professional fees (legal and accounting) totaling over $0.1 million related to the workout and transition.

The Transition Agreement includes provisions for the Company to receive payment for the amounts due from the old operator that remain unpaid. The Company anticipates collecting all amounts due.

Note 12. Fair Value of Financial Instruments

The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practical to estimate the fair value.

Cash and cash equivalents and restricted cash - The carrying amount approximates the fair value.

Notes receivable - The fair value is estimated using cash flow analyses, based on an assumed market rate of interest or at a rate consistent with the rates on notes carried by the Company and are classified as level 2 in the hierarchy.

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Borrowings under our Credit Facility - The carrying amount approximates the fair value because the borrowings are based on variable market interest rates.

Derivative financial instruments - The fair value is estimated using discounted cash flow techniques. These techniques incorporate primarily level 2 inputs. The market inputs are utilized in the discounted cash flow calculation considering the instrument’s term, notional amount, discount rate and credit risk. Significant inputs to the derivative valuation model for interest rate swaps are observable in active markets and are classified as level 2 in the hierarchy.

Mortgage note payable - The fair value is estimated using cash flow analyses which are based on an assumed market rate of interest or at a rate consistent with the rates on mortgage notes assumed by the Company and are classified as level 2 in the hierarchy.

The table below details the fair values and carrying values for our notes receivable, interest rate swaps, and mortgage note payable at March 31, 2019 and December 31, 2018, using level 2 inputs.

	March 31, 2019				December 31, 2018
(Dollars in thousands)	Carrying Value		Fair Value		Carrying Value		Fair Value
Notes receivable	$	24,119	$	23,948	$	24,110	$	23,936
Interest rate swap asset	$	215	$	215	$	902	$	902
Interest rate swap liability	$	857	$	857	$	269	$	269
Mortgage note payable	$	5,365	$	5,277	$	5,391	$	5,307

Note 13. Subsequent Events

Dividend Declared

On May 1, 2019, the Company’s Board of Directors declared a quarterly common stock dividend in the amount of $0.41 per share. The dividend is payable on May 31, 2019 to stockholders of record on May 17, 2019.

Subsequent Acquistion

On April 30, 2019, the Company acquired one real estate property that was newly constructed totaling approximately 81,000 square feet for an aggregate purchase price and cash consideration of approximately $27.0 million. Upon acquisition, the property was 100.0% leased with lease expiration in 2034. The Company funded the acquisition with proceeds from the Company's Revolving Credit Facility totaling $23.0 million with the remainder from cash on hand.

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ITEM 2.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Disclosure Regarding Forward-Looking Statements

This report and other materials that Community Healthcare Trust Incorporated (the "Company") has filed or may file with the Securities and Exchange Commission, as well as information included in oral statements or other written statements made, or to be made, by management of the Company, contain, or will contain, contains statements that are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are generally identifiable by use of forward-looking terminology such as “believes”, “expects”, “may”, “should”, “seeks”, “approximately”, “intends”, “plans”, “estimates”, “anticipates” or other similar words or expressions, including the negative thereof. Forward-looking statements are based on certain assumptions and can include future expectations, future plans and strategies, financial and operating projections or other forward-looking information. Such forward-looking statements reflect management’s current beliefs and are based on information currently available to management. Because forward-looking statements relate to future events, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of the Company’s control. Thus, the Company’s actual results and financial condition may differ materially from those indicated in such forward-looking statements. Some factors that might cause such a difference include the following: general volatility of the capital markets and the market price of the Company’s common stock, changes in the Company’s business strategy, availability, terms and deployment of capital, the Company’s ability to refinance existing indebtedness at or prior to maturity on favorable terms, or at all, changes in the real estate industry in general, interest rates or the general economy, adverse developments related to the healthcare industry, the degree and nature of the Company’s competition, the ability to consummate acquisitions under contract and the other factors described in the section entitled “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, and the Company’s other filings with the Securities and Exchange Commission from time to time. Readers are therefore cautioned not to place undue reliance on the forward-looking statements contained herein which speak only as of the date hereof. The Company intends these forward-looking statements to speak only as of the time of this report and the Company undertakes no obligation to update forward-looking statements, whether as a result of new information, future developments, or otherwise, except as may be required by law.

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

Overview

References such as "we," "us," "our," and "the Company" mean Community Healthcare Trust Incorporated, a Maryland corporation, and its consolidated subsidiaries.

We were organized in the State of Maryland on March 28, 2014. We are a self-administered, self-managed healthcare real estate investment trust, or REIT, that acquires and owns properties that are leased to hospitals, doctors, healthcare systems or other healthcare service providers in our target submarkets.

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Trends and Matters Impacting Operating Results

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 first quarter of 2019, the Company acquired two real estate properties totaling approximately 83,000 square feet for an aggregate purchase price and cash consideration of approximately $32.7 million. Upon acquisition, the properties were 100% leased in the aggregate with lease expirations in 2029.

See Note 4 to the Condensed Consolidated Financial Statements for more details on these acquisitions.

2nd Quarter 2019 Acquisition

On April 30, 2019, the Company acquired one real estate property that was newly constructed totaling approximately 81,000 square feet for an aggregate purchase price and cash consideration of approximately $27.0 million. Upon acquisition, the property was 100.0% leased with lease expiration in 2034. The Company funded the acquisition with proceeds from the Company's Revolving Credit Facility totaling $23.0 million with the remainder from cash on hand.

Acquisition Pipeline

The Company has two properties under definitive purchase agreements for an aggregate expected purchase price of approximately $4.9 million. The Company's expected aggregate returns on these investments range from approximately 9.3% to 9.4%. The Company anticipates the properties will close during the second quarter of 2019. However, the Company is currently performing due diligence procedures customary for these types of transactions and cannot provide assurance as to the timing of when, or whether, the transaction 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 $76.0 million. The Company's expected aggregate returns on these investments is approximately 11.0%. The Company expects to close these properties through the end of 2019; 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 March 31, 2019, our real estate portfolio was approximately 88.9% leased. During the first three months of 2019, we had expiring or terminated leases related to approximately 42,000 square feet and leased or renewed leases relating to approximately 50,000 square feet.

Highlands Transition Update

As previously announced, the Company experienced payment issues with the old operator of Highlands Hospital ("Highlands"). Effective February 11, 2019, the Company signed a transition agreement (the "Transition Agreement"), to transition the property to a new operator and signed a lease with a new operator.

The old operator and new operator have signed an asset purchase agreement pursuant to which the new operator will take over the facility. In addition, the old operator and new operator have signed a management agreement and the new operator is currently managing Highlands pursuant to the management agreement. The new operator continues

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to perform due diligence and is in the process of preparing for transfer of licenses and related items customary for these types of transactions. We cannot provide assurance as to the timing, or whether, this transaction will actually close.

The new lease will be effective upon the transfer of the licenses to the new operator, which is anticipated to happen in the second half of 2019. The new lease provides for rental payments approximately equal to the amounts due under the previous agreements with the old operator.

The Company is receiving monthly payments under the Transition Agreement which approximate the amounts due from the old operator under the previous agreements. These payments are to continue as long as the Transition Agreement is in place. The Transition Agreement will terminate when the licenses are transferred to the new operator, at which time the new lease will become effective.

Since the Transition Agreement became effective in February, the Company only received payments during the first quarter for February and March and thus did not recognize revenue for the month of January representing approximately $0.3 million.

In addition, the Company incurred professional fees (legal and accounting) totaling over $0.1 million related to the workout and transition.

The Transition Agreement includes provisions for the Company to receive payment for the amounts due from the old operator that remain unpaid. The Company anticipates collecting all amounts due.

Though the Company has experienced some short-term effects from the timing of receipts or reimbursement of expenses, the Company does not anticipate any material adverse long-term effect to its cash flows or net income related to the transition or subsequent leasing of this facility.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that are reasonably likely to have a material effect on the Company's consolidated financial condition, results of operations or liquidity.

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 the Consumer Price Index 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.

Seasonality

We do not expect our business to be subject to material seasonal fluctuations.

New Accounting Pronouncements

See Note 1 to the Company’s Condensed Consolidated Financial Statements accompanying this report for information on new accounting standards not yet adopted.

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Results of Operations

The Company's results of operations for the three months ended March 31, 2019 compared to the same period in 2018 have most significantly been impacted by its real estate acquisitions. As of March 31, 2019 and 2018, the Company had investments in real estate properties totaling approximately $478.4 million and $413.3 million, respectively.

Three Months Ended March 31, 2019 Compared to Three Months Ended March 31, 2018

The table below shows our results of operations for the three months ended March 31, 2019 compared to the same period in 2018 and the effect of changes in those results from period to period on our net income.

	Three Months Ended March 31,						Increase (Decrease) to Net Income
(dollars in thousands)	2019			2018			$			%
REVENUES
Rental income	$	12,898		$	11,075		$	1,823		16.5	%
Other operating interest	543			354			189			53.4	%
	13,441			11,429			2,012			17.6	%
EXPENSES
Property operating	3,075			2,364			(711		)	(30.1	)%
General and administrative	1,785			1,193			(592		)	(49.6	)%
Depreciation and amortization	5,246			4,916			(330		)	(6.7	)%
	10,106			8,473			(1,633		)	(19.3	)%
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND OTHER ITEMS	3,335			2,956			379			12.8	%
Interest expense	(2,054		)	(1,268		)	(786		)	(62.0	)%
Other income	169			184			(15		)	(8.2	)%
INCOME FROM CONTINUING OPERATIONS	1,450			1,872			(422		)	(22.5	)%
NET INCOME	$	1,450		$	1,872		$	(422	)	(22.5	)%

Revenues

Revenues increased approximately $1.8 million, or 16.5%, for the three months ended March 31, 2019 compared to the same period in 2018 mainly due to acquisitions of real estate.

Expenses

Property operating expenses increased approximately $0.7 million, or 30.1%, for the three months ended March 31, 2019 compared to the same period in 2018 mainly due to acquisitions of real estate.

General and administrative expenses increased approximately $0.6 million, or 49.6%, for the three months ended March 31, 2019 compared to the same period in 2018. Compensation-related expenses and occupancy costs related to our employees, including the amortization of non-vested restricted common shares issued under our 2014 Incentive Plan and expenses related to the addition of employees increased approximately $0.3 million; and state and federal income taxes and franchise taxes increased approximately $0.3 million in the first quarter of 2019 compared to the same period in 2018.

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Depreciation and amortization expense increased approximately $0.3 million, or 6.7%, for the three months ended March 31, 2019 compared to the same period in 2018. Acquisitions accounted for an increase of approximately $1.0 million, offset by a decrease of approximately $0.7 million in amortization due to fully depreciated real estate lease intangibles which generally have a shorter depreciable life than a building.

Interest expense

Interest expense increased approximately $0.8 million, or 62.0%, for the three months ended March 31, 2019 compared to the same period in 2018 due mainly to additional Term Loan borrowings under its Credit Facility in the first quarters of 2018 and 2019, as well as a higher weighted average debt balance and weighted average interest rate on the Revolving Credit Facility in the first quarter of 2019 compared to the same period in 2018.

Funds from Operations

Funds from operations (“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 and gains or losses from change in control, plus depreciation and amortization related to real estate, plus 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, and after adjustments for unconsolidated partnerships and joint ventures, as well as other items discussed in NAREIT's Funds From Operations White Paper - 2018 Restatement.

Management believes that net income, as defined by GAAP, is the most appropriate earnings measurement. However, management believes FFO and FFO per share to be supplemental measures of a REIT’s performance because they 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 and gains or losses from sales of real estate, all of which are based on historical costs and which may be of limited relevance in evaluating current performance, FFO and FFO per share can facilitate comparisons of operating performance between periods. The Company reports FFO and FFO per share because these measures are observed by management to also be the predominant measures used by the REIT industry and by industry analysts to evaluate REITs and because FFO per share is consistently reported, discussed, and compared by research analysts in their notes and publications about REITs. For these reasons, management has deemed it appropriate to disclose and discuss FFO and FFO per share. However, FFO does not represent cash generated from operating activities determined in accordance with GAAP and is not necessarily indicative of cash available to fund cash needs. FFO should not be considered as an alternative to net income attributable to common stockholders as an indicator of the Company’s operating performance or as an alternative to cash flow from operating activities as a measure of liquidity.

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The table below reconciles FFO to net income for the three months ended March 31, 2019 and 2018, respectively.

	Three Months Ended March 31,
(Dollars in thousands, excepts per share amounts)	2019		2018
Net income	$	1,450	$	1,872
Real estate depreciation and amortization	5,282		4,911
Total adjustments	5,282		4,911
Funds from Operations	$	6,732	$	6,783
Funds from Operations per Common Share-Basic	$	0.38	$	0.39
Funds from Operations per Common Share-Diluted	$	0.37	$	0.38
Weighted Average Common Shares Outstanding-Basic	17,954,670		17,573,683
Weighted Average Common Shares Outstanding-Diluted (1)	18,343,051		17,791,436

(1) Diluted weighted average common shares outstanding for FFO are calculated based on the treasury method, rather than the 2-class method used to calculate earnings per share.

Liquidity 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;

• Dividend payout percentage; and

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

The Company uses these indicators and others to compare its operations to its peers and to help identify areas in which the Company may need to focus its attention.

Sources and Uses of Cash

The Company derives most of its revenues from its real estate property and notes portfolio, collecting rental income, operating expense reimbursements and interest based on contractual arrangements with its tenants and borrowers. 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 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.

The Company's Credit Facility, as amended on March 29, 2019, provides for a $150.0 million Revolving Credit Facility and $175.0 million in Term Loans, as well as an accordion feature which allows borrowings up to a total of $525.0 million, including the ability to add and fund additional term loans. Note 6 to the Condensed Consolidated Financial Statements provides more details on the Company's Credit Facility and the amendment on March 29, 2019. At March 31, 2019, the Company had borrowed $175.0 million in Term Loans and had its full borrowing capacity under the Revolving Credit Facility of $150.0 million. At March 31, 2019, our debt to total book capitalization ratio was approximately 39.9%.

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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 present financing policy prohibits incurring debt (secured or unsecured) in excess of 40% of its total book capitalization. The Company was in compliance with its financial covenants under its Credit Facility as of March 31, 2019.

2nd Quarter 2019 Acquisition

On April 30, 2019, the Company acquired one real estate property that was newly constructed totaling approximately 81,000 square feet for an aggregate purchase price and cash consideration of approximately $27.0 million. Upon acquisition, the property was 100.0% leased with lease expiration in 2034. The Company funded the acquisition with proceeds from the Company's Revolving Credit Facility totaling $23.0 million with the remainder from cash on hand.

Acquisition Pipeline

The Company has two properties under definitive purchase agreements for an aggregate expected purchase price of approximately $4.9 million. The Company's expected aggregate returns on these investments range from approximately 9.3% to 9.4%. The Company anticipates the properties will close during the second quarter of 2019. However, the Company is currently performing due diligence procedures customary for these types of transactions and cannot provide assurance as to the timing of when, or whether, the transaction 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 $76.0 million. The Company's expected aggregate returns on these investments is approximately 11.0%. The Company expects to close these properties through the end of 2019; 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.

Universal Shelf S-3 Registration Statement

The Company has approximately $620.2 million remaining to be issued under its Form S-3 registration statement filed on September 13, 2016 with the Securities and Exchange Commission, and declared effective on September 26, 2016. The registration statement allows us to offer debt or equity securities (or a combination thereof) from time to time.

ATM Program

During the first quarter of 2019, the Company issued, through its ATM Program, 143,600 shares of common stock at an average gross sales price of $33.57 per share and received net proceeds of approximately $4.7 million, as discussed in more detail in Note 8 to the Condensed Consolidated Financial Statements. The proceeds were used to repay outstanding balances under the Company's Credit Facility and for general corporate purposes.

Operating Activities

Cash flows provided by operating activities for the three months ended March 31, 2019 and 2018 were approximately $7.3 million and $5.9 million, respectively. Cash flows provided by operating activities were generally provided by contractual rents, net of expenses, on our real estate property portfolio.

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Investing Activities

Cash flows used in investing activities for the three months ended March 31, 2019 and 2018 were approximately $33.3 million and $16.3 million, respectively. During the three months ended March 31, 2019, the Company invested in two properties for an aggregate cash consideration of approximately $32.7 million. During the three months ended March 31, 2018, the Company invested in three properties for an aggregate cash consideration of approximately $12.7 million. In addition, the Company acquired $2.2 million of certain promissory notes secured by two facilities related to its Borrower, discussed in more detail in Note 5 to the Condensed Consolidated Financial Statements.

Financing Activities

Cash flows provided by financing activities for the three months ended March 31, 2019 and 2018 were approximately $27.6 million and $10.6 million, respectively. During the three months ended March 31, 2019, the Company amended its Credit Facility which provided an additional $75.0 million Term Loan. The Company used the net proceeds from the Term Loan to repay outstanding balances under its Revolving Credit Facility. The Company also sold shares under its ATM Program and received net proceeds of approximately $4.7 million, and paid dividends totaling $7.6 million. During the three months ended March 31, 2018, the Company borrowed $40.0 million under its Term Loans, which was used to repay outstanding amounts on its Revolving Credit Facility, and paid dividends totaling $7.2 million.

Security Deposits

As of March 31, 2019, the Company held approximately $1.1 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.

Dividends

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

On May 1, 2019, the Company’s Board of Directors declared a quarterly common stock dividend in the amount of $0.41 per share. The dividend is payable on May 31, 2019 to stockholders of record on May 17, 2019. This rate equates to an annualized dividend of $1.64 per share.

The ability of the Company to pay dividends is dependent upon its ability to generate cash flows and to make accretive new investments.

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ITEM 3. Quantitative and Qualitative Disclosures about Market Risk

Our future income, cash flows and fair values relevant to financial instruments are dependent upon prevailing market interest rates. Market risk refers to the risk of loss from adverse changes in market prices and interest rates. We may use certain derivative financial instruments to manage, or hedge, interest rate risks related to our borrowings. We will not use derivatives for trading or speculative purposes and only enter into contracts with major financial institutions based upon their credit rating and other factors. An interest rate swap is a contractual agreement entered into by two counterparties under which each agrees to make periodic payments to the other for an agreed period of time based on a notional amount of principal. Under the most common form of interest rate swap, known from our perspective as a floating-to-fixed interest rate swap, a series of floating, or variable, rate payments on a notional amount of principal is exchanged for a series of fixed interest rate payments on such notional amount.

ITEM 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(b) and 15d-15(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), as of the end of the period covered by this report. Based on this evaluation, Company’s management has concluded that, as of the end of such period, the Company’s disclosure controls and procedures were effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Company in the reports it files or submits under the Exchange Act.

Changes In Internal Control Over Financial Reporting

There were no changes in our system of internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended March 31, 2019 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1.    LEGAL PROCEEDINGS

The Company may, from time to time, be involved in litigation arising in the ordinary course of business or which may be expected to be covered by insurance. The Company is not aware of any pending or threatened litigation that, if resolved against the Company, would have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows.

ITEM 1A.    RISK FACTORS

In addition to the other information set forth in this quarterly report, an investor should consider the risk factors included in its Annual Report on Form 10-K for the year ended December 31, 2018, and other reports that may be filed by the Company.

ITEM 2.   UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

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ITEM 3.   DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.   MINE SAFETY DISCLOSURES

None.

ITEM 5.   OTHER INFORMATION

None.

ITEM 6.    EXHIBITS

The exhibits required by Item 601 of Regulation S-X which are filed with this report are listed in the Exhibit Index and are hereby incorporated in by reference.

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EXHIBIT INDEX

Exhibit Number	Description
3.1	Corporate Charter of Community Healthcare Trust Incorporated, as amended (1)
3.2	Bylaws of Community Healthcare Trust Incorporated, as amended (2)
10.1 *	Third Amendment to the Second Amended and Restated Credit Facility
10.2	Third Amendment to Employment Agreement between Community Healthcare Trust Incorporated and Timothy G. Wallace (3)
10.3	Third Amendment to Employment Agreement between Community Healthcare Trust Incorporated and W. Page Barnes (4)
10.4	Amended and Restated Employment Agreement, dated March 11, 2019, between the Company and W. Page Barnes (5)
10.5	Employment Agreement, dated March 11, 2019, between the Company and David H. Dupuy (6)
10.6	Third Amendment to Employment Agreement between Community Healthcare Trust Incorporated and Leigh Ann Stach (7)
31.1 *	Certification of the Chief Executive Officer of Community Healthcare Trust Incorporated pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Rule 302 of the Sarbanes-Oxley Act of 2002
31.2 *	Certification of the Chief Financial Officer of Community Healthcare Trust Incorporated pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Rule 302 of the Sarbanes-Oxley Act of 2002
32.1 **	Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB	XBRL Taxonomy Extension Labels Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

(1) Filed as Exhibit 3.1 to Amendment No. 2 to the Registration Statement on Form S-11 of the Company filed with the Securities and Exchange Commission on May 6, 2015 (Registration No. 333-203210)and incorporated herein by reference.

(2) Filed as Exhibit 3.2 to the Registration Statement on Form S-11 of the Company filed with the Securities and Exchange Commission on April 2, 2015 (Registration No. 333-203210)and incorporated herein by reference.

(3) Filed as Exhibit 10.1 to the Form 8-K of the Company filed with the Securities and Exchange Commission on January 3, 2019 (File No. 001-37401) and incorporated herein by reference.

(4) Filed as Exhibit 10.2 to the Form 8-K of the Company filed with the Securities and Exchange Commission on January 3, 2019 (File No. 001-37401) and incorporated herein by reference.

(5) Filed as Exhibit 10.2 to the Form 8-K of the Company filed with the Securities and Exchange Commission on March 11, 2019 (File No. 001-37401) and incorporated herein by reference.

(6) Filed as Exhibit 10.1 to the Form 8-K of the Company filed with the Securities and Exchange Commission on March 11, 2019 (File No. 001-37401) and incorporated herein by reference.

(7) Filed as Exhibit 10.3 to the Form 8-K of the Company filed with the Securities and Exchange Commission on January 3, 2019 (File No. 001-37401) and incorporated herein by reference.

_________

* Filed herewith.

** Furnished herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: May 7, 2019

COMMUNITY HEALTHCARE TRUST INCORPORATED
By:	/s/ Timothy G. Wallace
	Timothy G. Wallace
	Chief Executive Officer and President
By:	/s/ David H. Dupuy
	David H. Dupuy
	Executive Vice President and Chief Financial Officer

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EX-10.1

Exhibit 10.1

THIRD AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT

THIS THIRD AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT dated as of March 29, 2019 (the “Agreement”), is executed by each of the Lenders hereto, SUNTRUST BANK, as Administrative Agent (the “Administrative Agent”), COMMUNITY HEALTHCARE OP, LP, a Delaware limited partnership (the “Borrower”), COMMUNITY HEALTHCARE TRUST INCORPORATED, a Maryland corporation (the “REIT Guarantor”), the Subsidiary Loan Parties and the other parties hereto.

WHEREAS, the Borrower, the REIT Guarantor, the financial institutions signatory thereto and their assignees thereunder (the “Lenders”), the Administrative Agent, and the other parties thereto, have entered into that certain Second Amended and Restated Credit Agreement dated as of March 29, 2017 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”);

WHEREAS, pursuant to Section 2.23 of the Credit Agreement, the Borrower may request Incremental Term Loans in the form of Non-Conforming Credit Extensions in accordance with the terms and conditions of the Credit Agreement;

WHEREAS, the Borrower has notified the Administrative Agent of its request for Non-Conforming Credit Extensions and corresponding Incremental Term Loans (the “A-3 Term Loans” and the Term Loan Commitments relating thereto, the “A-3 Term Loan Commitments”) pursuant to Section 2.23 of the Credit Agreement in an aggregate principal amount equal to $75,000,000;

WHEREAS, certain Persons party to this Agreement willing to provide A-3 Term Loan Commitments with respect to the A-3 Term Loans (such Persons, and any permitted assignees thereof, the “A-3 Term Loan Lenders”) have indicated their willingness to make such A-3 Term Loans on the terms and subjects to the conditions herein; and

WHEREAS, the Borrower and REIT Guarantor have requested to make certain amendments to the Credit Agreement as set forth herein and the Administrative Agent and the Lenders have agreed to such amendments on the terms and conditions set forth herein.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged by the parties hereto, the parties hereto hereby agree as follows:

Section 1. A-3 Term Loans.

(a) Subject to the terms and conditions set forth herein, on the date all of the conditions precedent in Section 3 below are satisfied or waived in accordance with the terms hereof (the “Third Amendment Closing Date”), each A-3 Term Loan Lender severally (and not jointly) agrees to make an A-3 Term Loan to the Borrower in a principal amount equal to the amount corresponding to such A-3 Term Loan Lender’s “A-3 Term Loan Commitment” as set forth on Schedule I attached hereto. Each A-3 Term Loan Commitment shall be a “Term Loan Commitment” for all purposes under the Credit Agreement. Each A-3 Term Loan made by an A-3 Term Loan Lender pursuant to this Agreement shall have the terms set forth herein and in the Credit Agreement (as amended by this Agreement). If for any reason $75,000,000 of the aggregate amount of the A-3 Term Loan Commitments is not fully drawn on the Third Amendment Closing Date, the undrawn portion thereof shall automatically terminate and be cancelled on the Third Amendment Closing Date. Amounts repaid or prepaid on the A-3 Term Loans may not be reborrowed. The A-3 Term Loans may be, from time to time, Base Rate Loans or Eurodollar Loans or a combination thereof. All obligations with respect to the A-3 Term Loans shall be due and payable in full on the A-3 Term Loan Maturity Date.

(b)Use of Proceeds. The proceeds of the A-3 Term Loans shall be used to (i) finance future acquisitions of Properties not prohibited by the Credit Agreement, (ii) refinance existing Indebtedness of the Borrower and (iii) finance the payment of fees, commissions and expenses incurred in connection with the execution and delivery of this Agreement and the Borrowing of the A-3 Term Loans hereunder (the foregoing under this Section 1(b), collectively, the “Transactions”).

(c)A-3 Term Loan Lenders. Each A-3 Term Loan Lender (i) confirms that a copy of the

Credit Agreement and the other applicable Loan Documents, together with copies of the financial statements referred to therein and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Agreement and make the A-3 Term Loan, have been made available to such A-3 Term Loan Lender; (ii) agrees that it will, independently and without reliance upon the Administrative Agent, Fifth Third Bank, BB&T Capital Markets, SunTrust Robinson Humphrey, Inc. (each a “Lead Arranger”), each in its capacity as a joint lead arranger and bookrunner with respect to this Agreement, or any other Lender or agent and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement or the other applicable Loan Documents, including this Agreement; and (iii) appoints and authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such powers under the Credit Agreement and the other Loan Documents as are delegated to the Administrative Agent by the terms thereof, together with such powers as are reasonably incidental thereto.

(d)Credit Agreement Governs Terms. Each reference to a “Term Loan”, “Term Loans” or “Incremental Term Loan” in the Credit Agreement shall be deemed to include the A-3 Term Loans and the A-3 Term Loans shall be subject to the provisions, including any provisions restricting the rights, or regarding the obligations, of the Loan Parties or any provisions regarding the rights of the Term Loan Lenders, of the Credit Agreement and the other Loan Documents. Without limiting the foregoing, the A-3 Term Loans (and all interest and other amounts payable thereon or with respect thereto) shall be (i) “Obligations” under and as defined in the Credit Agreement, (ii) secured by the Collateral under the relevant Collateral Documents and (iii) guaranteed under the Guaranty and Security Agreement, in each case, on a pari passu basis with all Revolving Loans, Swingline Loans and other Term Loans.

Section 2. Specific Amendments to Credit Agreement. Subject to the satisfaction of the conditions precedent set forth in Section 3 below, the parties hereto agree that the Credit Agreement is amended as follows:

(a)    Section 1.1 of the Credit Agreement is hereby amended by deleting the definitions of “Class”, “Stated Termination Date”, “Term Loans” and “Termination Date in their entirety and substituting the following in lieu thereof:

“Class”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans, Swingline Loans, A-1 Term Loans, A-2 Term Loans, A-3 Term Loans or Incremental Term Loans and when used in reference to any Commitment, refers to whether such Commitment is a Revolving Commitment, a Swingline Commitment, an A-1 Term Loan Commitment, an A-2 Term Loan Commitment, an A-3 Term Loan Commitment or an Incremental Commitment. Incremental Term Loans that have different terms and conditions from those of other Classes (together with the Commitments in respect thereof) shall be construed to be in different Classes.

“Stated Termination Date” shall mean March 29, 2023, as such date may be extended pursuant to Section 2.5.

“Term Loans” shall mean all A-1 Term Loans, A-2 Term Loans, A-3 Term Loans and any Incremental Term Loan made by a Term Loan Lender to the Borrower pursuant to Section 2.23, in the aggregate or any of them, as the context may require.    

“Termination Date” shall mean (a) with respect to Revolving Loans, Swingline Loans and the Revolving Commitments, the Revolving Commitment Termination Date, (b) with respect A-1 Term Loans, the A-1 Term Loan Maturity Date, (c) with respect to A-2 Term Loans, the A-2 Term Loan Maturity Date, (d) with respect to A-3 Term Loans, the A-3 Term Loan Maturity Date and (e) with respect to any other Class of Term Loans, the “Termination Date” specified for such Class of Term Loans in the Loan Documents establishing such Class of Term Loans.

(b)    Section 1.1 of the Credit Agreement is hereby amended by deleting the definition of “Funds From Operations” in its entirety and inserting the following definition of “Adjusted Funds From Operations” in the appropriate alphabetical order:

“Adjusted Funds From Operations” shall mean, with respect to a Person and for a given period, (i) net income (or loss) of such Person for such period determined on a consolidated basis, minus (or plus) (ii) gains (or losses) from debt restructuring and sales of property or assets during such period, plus (iii) depreciation with respect to such Person’s real property and amortization (including any amortization costs related to Accounting Standards Codification 842 but excluding amortization of deferred financing costs) of such Person for such period, plus (iv) any non-cash compensation expense attributable to grants of stock options, such Person’s deferred compensation plan, restricted stock or similar rights to officers, directors and employees of such Person, plus (v) write-offs or adjustments of straight-line rent, plus (or minus) (vi) non-cash impairment losses (or recoveries) of real estate properties or other investment assets; plus (vii) non-recurring charges, including, without limitation, acquisition expenses, non-cash charges related to the write-off of deferred equity and financing costs, plus (or minus) (viii) other non-cash losses (or gains) included in the financial statements provided pursuant to Sections 5.1(a) and (b) hereof, all after adjustment for Unconsolidated Affiliates. Adjustments for Unconsolidated Affiliates will be calculated to reflect funds from operations on the same basis.

(c)    Section 1.1 of the Credit Agreement is further amended by (i) replacing the reference to “Level 3” in the definition of “Applicable Margin” with “Level 4” and (ii) replacing the table in the definition of “Applicable Margin” in its entirety with the following:

Pricing Grid
Level	Leverage Ratio	Applicable Margin for Revolving Loans that are Eurodollar Loans	Applicable Margin for Revolving Loans that are Base Rate Loans	Applicable Margin for A-1 Term Loans that are Eurodollar Loans	Applicable Margin for A-1 Term Loans that are Base Rate Loans	Applicable Margin for A-2 Term Loans that are Eurodollar Loans	Applicable Margin for A-2 Term Loans that are Base Rate Loans	Applicable Margin for A-3 Term Loans that are Eurodollar Loans	Applicable Margin for A-3 Term Loans that are Base Rate Loans
1	Less than or equal to 0.20 to 1.00	1.25%	0.25%	1.25%	0.25%	1.45%	0.45%	1.65%	0.65%
2	Less than or equal to 0.30 to 1.00 and greater than 0.20 to 1.00	1.40%	0.40%	1.40%	0.40%	1.60%	0.60%	1.80%	0.80%
3	Less than or equal to 0.40 to 1.00 and greater than 0.30 to 1.00	1.65%	0.65%	1.65%	0.65%	1.85%	0.85%	2.05%	1.05%
4	Greater than 0.40 to 1.00	1.90%	.90%	1.90%	.90%	2.10%	1.10%	2.30%	1.30%

(d)    Section 1.1 of the Credit Agreement is further amended by adding the following definitions in the appropriate alphabetical order:

“A-3 Term Loan” shall mean a term loan made by an A-3 Term Loan Lender to the Borrower pursuant to Third Amendment.

“A-3 Term Loan Commitment” shall mean, with respect to each A-3 Term Loan

Lender, the obligation of such A-3 Term Loan Lender to make an A-3 Term Loan on the Third Amendment Closing Date, in the principal amount not exceeding the amount set forth with respect to such A-3 Term Loan Lender on Schedule I. The aggregate principal amount of all A-3 Term Loan Lender’s A-3 Term Loan Commitments as of the Third Amendment Closing Date is $75,000,000.

“A-3 Term Loan Lender” shall mean shall mean each Lender with an A-3 Term

Loan Commitment or holding an outstanding A-3 Term Loan.

“A-3 Term Loan Maturity Date” shall mean the earlier of (i) March 29, 2026 and (ii) the date on which all amounts outstanding under this Agreement have been declared, or have automatically become, due and payable (whether by acceleration or otherwise) in accordance with the terms herein.

“Beneficial Ownership Certification” shall mean a certification regarding beneficial ownership as required by the Beneficial Ownership Regulation.

“Beneficial Ownership Regulation” shall mean 31 CFR § 1010.230.

“Screen Rate” shall mean the rate specified in clause (i) of the definition of “Adjusted LIBOR”.

“Third Amendment” shall mean that certain Third Amendment to Second Amended and Restated Credit Agreement dated March 29, 2019 among the Loan Parties, the Administrative Agent and the Lenders party thereto.

“Third Amendment Closing Date” shall have the meaning given such term in Section 1 of the Third Amendment.

(e)    The Credit Agreement is further amended by inserting the Section 1.5 immediately following Section 1.4 thereof:

Section 1.5.Divisions. For all purposes under the Loan Documents, in connection with any division or plan of division under Delaware law (or any comparable event under a different jurisdiction’s laws): (a) if any asset, right, obligation or liability of any Person becomes the asset, right, obligation or liability of a different Person, then it shall be deemed to have been transferred from the original Person to the subsequent Person, and (b) if any new Person comes into existence, such new Person shall be deemed to have been organized on the first date of its existence by the holders of its equity interests at such time.

(f)    The Credit Agreement is further amended by deleting Section 2.5(a)(v) thereof in its entirety and substituting in lieu thereof the following:

(v)    the payment to the Administrative Agent for the ratable benefit of the Revolving Lenders of an extension fee of 0.15% of the Aggregate Revolving Commitment Amount at the time of such extension;

(g)    The Credit Agreement is further amended by deleting clause (b) of Section 2.14 thereof in its entirety and substituting in lieu thereof the following:

(b)    The Borrower agrees to pay to the Administrative Agent for the account of each Revolving Lender an unused fee (the “Unused Fee”), which shall accrue from the Third Amendment Closing Date through and including the Revolving Commitment Termination Date at a per annum rate equal to (i) 0.25% of the daily amount of the unused Revolving Commitment of such Lender at any time that the Revolving Credit Exposure is less than or equal to 33.3% of the Aggregate Revolving Commitment Amount or (ii) 0.20% of the daily amount of the unused Revolving Commitment of such Lender at any time that the Revolving Credit Exposure is greater than 33.3% of the Aggregate Revolving Commitment Amount. For purposes of computing the Unused Fee, the Revolving Commitment of each Revolving Lender shall be deemed used to the extent of the outstanding Revolving Loans and LC Exposure, but not Swingline Exposure, of such Lender.

(h)    The Credit Agreement is further amended by deleting Section 2.16 thereof in its entirety and substituting in lieu thereof the following:

Section 2.16.    Inability to Determine Interest Rates.

(a)    If, prior to the commencement of any Interest Period for any Eurodollar Borrowing:

(i)    the Administrative Agent shall have determined (which determination shall be conclusive and binding upon the Borrower) that, by reason of circumstances affecting the relevant interbank market, adequate and reasonable means do not exist for ascertaining the Adjusted LIBOR (including, without limitation, because the Screen Rate is not available or published on a current basis) for such Interest Period, or

(ii)    the Administrative Agent shall have received notice from the Required Lenders that the Adjusted LIBOR for such Interest Period will not adequately and fairly reflect the cost to such Lenders of making, funding or maintaining their Eurodollar Loans for such Interest Period,

then the Administrative Agent shall give written notice thereof (or telephonic notice, promptly confirmed in writing) to the Borrower and to the Lenders as soon as practicable thereafter.  Until the Administrative Agent shall notify the Borrower and the Lenders that the circumstances giving rise to such notice no longer exist, (i) the obligations of the Lenders to make Eurodollar Loans or to continue or convert outstanding Loans as or into Eurodollar Loans shall be suspended and (ii) all such affected Loans shall be converted into Base Rate Loans on the last day of the then current Interest Period applicable thereto unless the Borrower prepays such Loans in accordance with this Agreement.  Unless the Borrower notifies the Administrative Agent at least one (1) Business Day before the date of any Eurodollar Borrowing for which a Notice of Borrowing or a Notice of Conversion/Continuation has previously been given that it elects not to borrow, continue or convert to a Eurodollar Borrowing on such date, then such Borrowing shall be made as, continued as or converted into a Base Rate Borrowing.

(b)    If at any time the Administrative Agent determines (which determination shall be conclusive absent manifest error) that (i) the circumstances set forth in clause (a)(i) above have arisen and such circumstances are unlikely to be temporary or (ii) the circumstances set forth in clause (a)(i) above have not arisen but the supervisor for the administrator of the Screen Rate or a Governmental Authority having jurisdiction over the Administrative Agent has made a public statement identifying a specific date after which the Screen Rate shall no longer be used for determining interest rates for loans, then the Administrative Agent and the Borrower shall endeavor to establish an alternate rate of interest to the Screen Rate that gives due consideration to the then prevailing market convention for determining a rate of interest for syndicated loans in the United States at such time, and shall enter into an amendment to this Agreement to reflect such alternate rate of interest and such other related changes to this Agreement as may be applicable (but for the avoidance of doubt, such related changes shall not include a reduction of the Applicable Margin).  Notwithstanding anything to the contrary in Section 10.2, such amendment shall become effective without any further action or consent of any other party to this Agreement so long as the Administrative Agent shall not have received, within five (5) Business Days of the date notice of such alternate rate of interest is provided to the Lenders, a written notice from the Required Lenders stating that such Required Lenders object to such amendment.  Until an alternate rate of interest shall be determined in accordance with this clause (b) (but, in the case of the circumstances described in clause (ii) of the first sentence of this Section 2.16(b), only to the extent the Screen Rate for the applicable currency and/or such Interest Period is not available or published at such time on a current basis), (x) any Notice of Conversion/Continuation that requests the conversion of any Borrowing to, or continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective, and (y) if any Notice of Borrowing or Notice of Swingline Borrowing requests a Eurodollar Borrowing, such Borrowing shall be made as a Base Rate Borrowing; provided, that, if such alternate rate of interest shall be less than zero, such rate shall be deemed to be zero for the purposes of this Agreement.

(i)    The Credit Agreement is further amended by deleting Section 2.23(a)(i) thereof in its entirety and substituting in lieu thereof the following:

(i)    from and after the Third Amendment Closing Date, the aggregate principal amount of all such Incremental Commitments and Incremental Term Loans made pursuant to this Section shall not exceed $200,000,000 (the “Maximum Commitment Amount”);

(j)    The Credit Agreement is further amended by deleting Section 2.23(a)(iv) thereof in its entirety and substituting in lieu thereof the following:

(iv)    (v) any Non-Conforming Credit Extension shall have a maturity date no earlier than the latest Termination Date then in effect for Term Loans and shall have a Weighted Average Life to Maturity (as defined below) no shorter than that of any Term Loans made pursuant to Sections 2.27, 2.28 and 2.23, (w) any incremental Revolving Commitments provided pursuant to this Section shall be on the same terms as the Revolving Commitments, (x) any incremental A-1 Term Loans provided pursuant to this Section shall be on the same terms as the A-1 Term Loans, (y) any incremental A-2 Term Loans provided pursuant to this Section shall be on the same terms as the A-2 Term Loans and (z) any incremental A-3 Term Loans provided pursuant to this Section shall be on the same terms as the A-3 Term Loans.

(k)    The Credit Agreement is further amended by inserting the Section 4.26 immediately following Section 4.25 thereof:

Section 4.26.    Beneficial Ownership Certification. As of the Third Amendment Closing Date, the information included in the Beneficial Ownership Certification, if delivered, is true and correct in all respects.

(l)    The Credit Agreement is further amended by deleting Section 5.1(f) thereof in its entirety and substituting in lieu thereof the following:

(f)    as soon as available and in any event within 60 days after the end of the calendar year, forecasts and a pro forma budget prepared on a quarterly basis for the succeeding Fiscal Year, containing an income statement, balance sheet and statement of cash flow for the REIT Guarantor and its Subsidiaries;

(m)    The Credit Agreement is further amended by inserting the Section 5.17 immediately following Section 5.16 thereof:

Section 5.17.    Beneficial Ownership Regulation. The Borrowers will (a) notify the Administrative Agent and each Lender that previously received a Beneficial Ownership Certification of any change in the information provided in the Beneficial Ownership Certification that would result in a change to the list of beneficial owners identified therein and (b) promptly upon the reasonable request of the Administrative Agent or any Lender, provide the Administrative Agent or such Lender, as the case may be, any information or documentation reasonably requested by it for purposes of complying with the Beneficial Ownership Regulation.

    (n)    The Credit Agreement is further amended by deleting Section 6.1 thereof in its entirety and substituting in lieu thereof the following:

Section 6.1.    Leverage Ratio. The Leverage Ratio shall not exceed 60.0% at any time.

(o)    The Credit Agreement is further amended by deleting Section 6.2 thereof in its entirety and substituting in lieu thereof the following:

Section 6.2.    Fixed Charge Coverage Ratio. The Fixed Charge Coverage Ratio shall not be less than 1.50 to 1.00 at any time.

(p)    The Credit Agreement is further amended by deleting Section 6.4 thereof in its entirety and substituting in lieu thereof the following:

Section 6.4.    Unencumbered Leverage Ratio. The Unencumbered Leverage Ratio shall not exceed 60.0% at any time.

(q)    The Credit Agreement is further amended by deleting Section 6.5 thereof in its entirety and substituting in lieu thereof the following:

Section 6.5.    Restricted Payments

(a)    During each Fiscal Quarter ending (1) December 31, 2017, March 31, 2018 and June 30, 2018, the REIT Guarantor and the Borrower shall not, and shall not permit any of their respective Subsidiaries to, make any Restricted Payments during such period in excess of the greater of (i) $7,500,000 and (ii) the amount required for the REIT Guarantor to maintain its status as a REIT, (2) September 30, 2018 and December 31, 2018, the REIT Guarantor and the Borrower shall not, and shall not permit any of their respective Subsidiaries to, make any Restricted Payments during such period in excess of the greater of (i) $8,000,000 and (ii) the amount required for the REIT Guarantor to maintain its status as a REIT, (3) March 31, 2019, the REIT Guarantor and the Borrower shall not, and shall not permit any of their respective Subsidiaries to, make any Restricted Payments during such period in excess of the greater of (i) $8,000,000 and (ii) the amount required for the REIT Guarantor to maintain its status as a REIT and (4) June 30, 2019, the REIT Guarantor and the Borrower shall not, and shall not permit any of their respective Subsidiaries to, make any Restricted Payments during such period in excess of the greater of (i) $8,200,000 and (ii) the amount required for the REIT Guarantor to maintain its status as a REIT; and

(b)    On and at all times after July 1, 2019, the REIT Guarantor and the Borrower shall not, and shall not permit any of their respective Subsidiaries to, make any Restricted Payments during the Applicable Period most recently ended in excess of the greater of (i) 95.0% of Adjusted Funds From Operations of the REIT Guarantor for such Applicable Period and (ii) the amount required for the REIT Guarantor to maintain its status as a REIT.

Notwithstanding the foregoing, (i) but subject to the following clause (ii), if a Default or

Event of Default exists, the REIT Guarantor and the Borrower shall not, and shall not permit any of their respective Subsidiaries to, make any Restricted Payments in excess of the amount permitted pursuant to the foregoing clauses (a)(1)(ii), (a)(2)(ii) and (b)(ii) and (ii) if an Event of Default specified in Section 8.1(a), (b), (g), (h), or (i) shall exist, or if as a result of the occurrence of any other Event of Default any of the Obligations have been accelerated, the REIT Guarantor and the Borrower shall not, and shall not permit any Subsidiary to, make any Restricted Payments to any Person other than to the Borrower or any Subsidiary Loan Party.

(r)    The Credit Agreement is further amended by deleting Schedule I thereto and substituting in lieu thereof Schedule I attached hereto.

Section 3. Conditions Precedent. The effectiveness of this Agreement is subject to receipt by the Administrative Agent of each of the following, each in form and substance reasonably satisfactory to the Administrative Agent:

(a)    a counterpart of this Agreement duly executed by the Borrower, the REIT Guarantor, the Administrative Agent all Lenders and the Exiting Lender;

(b)    any promissory notes requested by the Lenders pursuant to Section 2.23(c)(iv);

(c)    a Reaffirmation of Guaranty and Security Agreement substantially in the form of Exhibit 3.1(b)(iii) to the Credit Agreement, duly executed by the Borrower and the other Loan Parties (the “Reaffirmation of Guaranty and Security Agreement”);

(d)    a certificate of the Secretary or Assistant Secretary of each Loan Party substantially in the form of Exhibit 3.1(b)(iv) to the Credit Agreement, (A) attaching and certifying copies of (1) its bylaws, partnership agreement, limited liability company agreement or comparable organizational document, and (2) the resolutions of its board of directors or other equivalent governing body, or comparable organizational documents and authorizations, authorizing the execution, delivery and performance of the Loan Documents to which it is a party and (B) certifying the name, title and true signature of each officer of such Loan Party executing the Loan Documents to which it is a party;

(e)    certified copies of the articles or certificate of incorporation, certificate of organization or limited partnership, or other registered organizational documents of each Loan Party, together with certificates of good standing or existence, as may be available from the Secretary of State of the jurisdiction of organization of such Loan Party (other than CHCT Maryland, LLC and CHCT Tennessee, LLC) and each other jurisdiction where such Loan Party is required to be qualified to do business as a foreign corporation;

(f)    a favorable written opinion of Baker, Donelson, Bearman, Caldwell & Berkowitz, PC, counsel to the Loan Parties (including Maryland counsel to the REIT Guarantor), addressed to the Administrative Agent, the Issuing Bank and each of the Lenders, and covering such matters relating to the Loan Parties, the Loan Documents, the Collateral and the transactions contemplated therein as the Administrative Agent or the Required Lenders shall reasonably request;

(g)    a certificate substantially in the form of Exhibit 3.1(b)(vii) to the Credit Agreement, dated the Third Amendment Closing Date and signed by a Responsible Officer and the chief financial officer of the REIT Guarantor and the Borrower, certifying that, after giving effect to the funding of all Borrowings, the issuance of any initial Letters of Credit, and the consummation of the transactions contemplated to occur on the Third Amendment Closing Date (including the execution and delivery of the Loan Documents), (A) no Default or Event of Default exists, (B) all representations and warranties of each Loan Party set forth in the Loan Documents are true and correct in all material respects (or in the case of representations and warranties that are expressly qualified by a Material Adverse Effect or other materiality qualifier, in all respects) and (C) each Loan Party is Solvent;

(h)    a duly executed Notice of Borrowing for the Borrowing of the A-3 Term Loans and any initial Revolving Borrowing or Swingline Borrowing;

(i)    a duly executed funds disbursement agreement, together with a report setting forth the sources and uses of the proceeds of any such initial Borrowing;

(j)    a duly completed and executed Compliance Certificate, including calculations of the Financial Covenants hereof as of December 31, 2018, calculated on a pro forma basis as if the Borrowing of the A-3 Term Loans and any initial Revolving Borrowing had been funded as of the first day of the relevant period for testing compliance (and setting forth in reasonable detail such calculations);

(k)    all documents, reports, certificates and other information requested by Administrative Agent in connection with the Unencumbered Pool Properties and the determination to include such Properties in the Unencumbered Pool Value hereunder (which shall include, at a minimum, each item required pursuant to Section 3.4 to the Credit Agreement not previously delivered to the Administrative Agent);

(l)    copies of all consents, approvals, authorizations, registrations and filings and orders required or advisable to be made or obtained under any Requirement of Law, or by any Contractual Obligation of any Loan Party, by the REIT Guarantor, the Borrower or any of their respective Subsidiaries in connection with the Loan Documents or any of the transactions contemplated thereby, and such consents, approvals, authorizations, registrations, filings and orders shall be in full force and effect and all applicable waiting periods shall have expired, and no investigation or inquiry by any governmental authority regarding the Commitments or any transaction being financed with the proceeds thereof shall be ongoing;

(m)    copies of all Material Agreements requested by Administrative Agent;

(n)    if requested by the Administrative Agent, certificates of insurance, in form and detail acceptable to the Administrative Agent, describing the types and amounts of insurance (property and liability) maintained by any of the Loan Parties;

(o)    copies of all documentation and information required by any Governmental Authority under the Patriot Act and other applicable “know your customer” and anti-money laundering laws;

(p)    each Loan Party or Subsidiary thereof that qualifies as a “legal entity customer” under the Beneficial Ownership Regulation shall, collectively, have delivered to the Administrative Agent, and any Lender requesting the same, one Beneficial Ownership Certification in relation to each such Loan Party or such Subsidiary, in each case, at least five (5) Business Days prior to the date of closing;

(q)     payment of all fees, expenses and other amounts due and payable on or prior to the Third Amendment Closing Date, including, without limitation, reimbursement or payment of all out-of-pocket expenses of the Administrative Agent, the Joint Lead Arrangers and their Affiliates (including reasonable fees, charges and disbursements of counsel to the Administrative Agent) required to be reimbursed or paid by the Borrower hereunder, under any other Loan Document and under any agreement with the Administrative Agent or the Joint Lead Arrangers; and

(r)    all such other documents, certificates and information as the Administrative Agent or the Required Lenders shall have reasonably requested.

Section 4. Representations and Warranties. Each Loan Party hereby represents and warrants as follows:

(a)    at the time of and immediately after giving effect to this Agreement, all representations and warranties of each Loan Party set forth in the Loan Documents are true and correct in all material respects (other than those representations and warranties that are expressly qualified by a Material Adverse Effect or other materiality, in which case such representations and warranties are true and correct in all respects and the representations and warranties in Section 4.1(a) of the Credit Agreement regarding the good standing of CHCT Maryland, LLC and CHCT Tennessee, LLC, which the Loan Parties shall deliver evidence of the good standing of such entities on or before April 5, 2019) on and as of the date of this Agreement, in each case before and after giving effect thereto, except to the extent made as of a specific date (in which case such representations and warranties shall be true and correct in all material respects (or all respects, as applicable) as of such date);

(b)    the execution, delivery and performance by such Loan Party of this Agreement are within such Loan Party’s organizational powers and have been duly authorized by all necessary organizational and, if required, shareholder, partner or member action and (i) do not require any consent or approval of, registration or filing with, or any action by, any Governmental Authority, except those as have been obtained or made and are in full force and effect and except for filings necessary to perfect or maintain perfection of the Liens created under the Loan Documents, (ii) will not violate any Requirement of Law applicable to the REIT Guarantor, the Borrower or any Subsidiary Loan Party or any judgment, order or ruling of any Governmental Authority, (iii) will not violate or result in a default under any Contractual Obligation of the REIT Guarantor, the Borrower or any Subsidiary Loan Party or give rise to a right thereunder to require any payment to be made by the REIT Guarantor, the Borrower or any Subsidiary Loan Party and (iv) will not result in the creation or imposition of any Lien on any asset of the REIT Guarantor, the Borrower or any Subsidiary Loan Party, except Liens (if any) created under the Loan Documents;

(c)     this Agreement has been duly executed and delivered by such Loan Party, and constitutes a valid and binding obligation of such Loan Party, enforceable against it in accordance with its terms except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity;

(d)     on and as of the date hereof and immediately after giving effect to this Agreement, no Default or Event of Default exists; and

(e)    since the Closing Date, there has been no change which has had or could reasonably be expected to have a Material Adverse Effect.

Section 5. No Further Waivers; Ratification of Liability. Except as expressly waived hereby, the Credit Agreement and each of the other Loan Documents shall remain in full force and effect in accordance with their respective terms. Each Loan Party hereby ratifies, confirms and reaffirms its respective liabilities, payment and performance obligations (contingent or otherwise) and agreements under the Credit Agreement and the other Loan Documents to which it is a party, and the liens and security interests granted, created and perfected thereby. This Agreement shall not constitute a modification of the Credit Agreement or a course of dealing with the Administrative Agent or any Lender at variance with the Credit Agreement such as to require further notice by the Administrative Agent or any Lender to require strict compliance with the terms of the Credit Agreement and the other Loan Documents in the future, except as expressly set forth herein. This Agreement contains the entire agreement among the Loan Parties and the Lenders contemplated by this Agreement. No Loan Party has any knowledge of any challenge to the Administrative Agent’s or any Lender’s claims arising under the Loan Documents or the effectiveness of the Loan Documents. Except as expressly set forth in the foregoing waiver, the Administrative Agent and the Lenders reserve all rights, privileges and remedies under the Loan Documents.

Section 6. No Novation. Nothing in this Agreement is intended, or shall be construed, to constitute a novation or an accord and satisfaction of any of the Obligations or to modify, affect or impair the perfection, priority or continuation of the security interests in, security titles to or other Liens on any Collateral for the Obligations.

Section 7. Allocations.

(a)    The Administrative Agent, the Borrower and each Lender agree that on the Third Amendment Closing Date, the outstanding Revolving Loans and the participation interests of the Revolving Lenders in any outstanding Letters of Credit and Swingline Loans shall be allocated among the Revolving Lenders in accordance with their respective Pro Rata Share of the Aggregate Revolving Commitments calculated based on the Revolving Commitments of the Revolving Lenders set forth on Schedule I attached hereto (the “Post-Amendment Commitment Percentage”). To effect such allocations, each Revolving Lender whose Post-Amendment Commitment Percentage exceeds the amount of such Revolving Lender’s Pro Rata Share of the Aggregate Revolving Commitments immediately prior to the effectiveness of this Agreement and any Revolving Lender providing a new Revolving Commitment shall make a Revolving Loan in such amount as is necessary so that the aggregate principal amount of Revolving Loans held by such Lender shall equal such Lender’s Post-Amendment Commitment Percentage of the aggregate outstanding principal amount of the Revolving Loans as of the Third Amendment Closing Date. The Administrative Agent shall make such amounts of the proceeds of such Revolving Loans available (a) to each Revolving Lender whose Post-Amendment Commitment Percentage is less than the amount of such Lender’s Pro Rata Share of the Aggregate Revolving Commitments immediately prior to the effectiveness of this Agreement as is necessary so that the aggregate principal amount of Revolving Loans held by such Lender shall equal such Lender’s Post-Amendment Commitment Percentage of the aggregate outstanding principal amount of the Revolving Loans as of the Third Amendment Closing Date and (b) to the Exiting Lender (as defined below) as is necessary to repay in full the Revolving Loans owing to the Exiting Lender. Except for any notes to be provided to the Revolving Lenders in the principal amount of their respective Revolving Commitments, no other documents, instruments or fees (other than fees set forth in Section 3(q) above) shall be, or shall be required to be, executed or paid in connection with such allocations (all of which are hereby waived, as necessary).

(b)    The Administrative Agent, the Borrower and each Term Lender agree that upon the effectiveness of this Agreement, the outstanding principal amount of each such Term Lender’s A-1 Term Loan and A-2 Term Loan is as set forth on Schedule I attached hereto. Simultaneously with the effectiveness of this Agreement, the principal amount of all outstanding A-1 Term Loans and A-2 Term Loans shall be reallocated among the Term Lenders in accordance with their respective Pro Rata Share of the A-1 Term Loans and A-2 Term Loans, respectively (determined in accordance with the amount of each Lender’s Loan set forth on Schedule I attached hereto), and in order to effect such reallocations, each Lender whose Loan exceeds its Loan immediately prior to the effectiveness of this Agreement (each an “Assignee Lender”) shall be deemed to have purchased at par a portion of all right, title and interest in, and all obligations in respect of, the A-1 Term Loan and A-2 Term Loan of the Exiting Lender (defined below), so that the outstanding principal amount of the A-1 Term Loan and A-2 Term Loan of each Lender will be as set forth on Schedule I attached hereto. Such purchases shall be deemed to have been effected by way of, and subject to the terms and conditions of, Assignment and Acceptance without the payment of any related assignment fee, and, except for replacement notes to be provided to the Assignee Lenders in the principal amounts of their respective A-1 Term Loans and A-2 Term Loans upon the effectiveness of this Agreement, no other documents or instruments shall be, or shall be required to be, executed in connection with such assignments (all of which are hereby waived). The parties hereto confirm that the aggregate outstanding principal amount of the A-1 Term Loans and A-2 Term Loans immediately prior to the Third Amendment Closing Date is equal to the aggregate outstanding principal amount of the A-1 Term Loans and A-2 Term Loans, respectively, immediately after giving effect to the Agreement.

(c)    On the Third Amendment Closing Date and upon the purchase in full at par of the outstanding principal balance of the A-1 Term Loan and A-2 Term Loan of Cadence Bank (the “Exiting Lender”), the Revolving Commitment of the Exiting Lender shall be terminated, all outstanding amounts due under the Credit Agreement and the other Loan Documents to the Exiting Lender on the Third Amendment Closing Date shall be paid in full, and the Exiting Lender shall cease to be a Lender under the Credit Agreement.

(d)    The Administrative Agent, the Borrower and each Lender confirms the amount of each such Lender’s Revolving Commitment and Term Loans immediately following the Third Amendment Closing Date are as set forth on Schedule I attached hereto.

Section 8. Release. In consideration of the waivers contained herein, each of the Loan Parties hereby waives and releases the Lenders, the Administrative Agent, the Swingline Lender and the Issuing Bank from any and all claims and defenses, known or unknown, existing on the date hereof with respect to the Credit Agreement and the other Loan Documents and the transactions contemplated thereby.

Section 9. Further Assurances. The REIT Guarantor and the Borrower agree to take all further actions and execute such other documents and instruments as the Administrative Agent may from time to time reasonably request to carry out the transactions contemplated by this Agreement, the Loan Documents and all other agreements executed and delivered in connection herewith.

Section 10. Costs and Expenses. The REIT Guarantor and the Borrower agree to pay on demand all reasonable, documented out-of-pocket costs and expenses incurred in connection with the preparation, execution and delivery of this Agreement and the other instruments and documents to be delivered hereunder or in connection with the Credit Agreement with respect to the matters covered hereby, including, without limitation, the reasonable, documented fees, charges and disbursements of counsel for the Administrative Agent with respect thereto and with respect to advising the Administrative Agent as to its rights and responsibilities hereunder and thereunder.

Section 11. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York.

Section 12. Loan Document. This Agreement shall be deemed to be a Loan Document for all purposes.

Section 13. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which, taken together, shall constitute one and the same instrument. Delivery of an executed counterpart to this Agreement by facsimile or other electronic method of transmission shall be as effective as delivery of a manually executed counterpart hereof.

Section 14. Severability. In case any provision of or obligation under this Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.

Section 15. Headings. Headings and captions used in this Agreement are included for convenience of reference only and shall not be given any substantive effect.

[Signatures on Next Page]

IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment to Second Amended and Restated Credit Agreement to be duly executed as of the date first above written.

BORROWER: COMMUNITY HEALTHCARE OP, LP

By:/s/ W. Page Barnes                

Name: W. Page Barnes

Title: Executive Vice President

REIT GUARANTOR:                COMMUNITY HEALTHCARE TRUST                          INCORPORATED

By:/s/ W. Page Barnes                

Name: W. Page Barnes

Title: Executive Vice President

SUBSIDIARY LOAN PARTIES:            CHCT ALABAMA, LLC

CHCT ARIZONA, LLC

CHCT COLORADO, LLC

CHCT CONNECTICUT, LLC

CHCT CONNECTICUT II, LLC

CHCT FLORIDA, LLC

CHCT GEORGIA, LLC

CHCT IDAHO, LLC

CHCT ILLINOIS, LLC

CHCT INDIANA, LLC

CHCT IOWA, LLC

CHCT KANSAS, LLC

CHCT KENTUCKY, LLC

CHCT LENDING, LLC

CHCT LOUISIANA, LLC

CHCT MARYLAND, LLC

CHCT MASSACHUSETTS, LLC

CHCT MICHIGAN, LLC

CHCT MISSISSIPPI, LLC

CHCT NEVADA, LLC

CHCT NEW JERSEY, LLC

CHCT NEW YORK, LLC

CHCT NORTH CAROLINA, LLC

CHCT OHIO, LLC

CHCT OKLAHOMA, LLC

CHCT PENNSYLVANIA, LLC

CHCT SOUTH CAROLINA, LLC

CHCT TENNESSEE, LLC

CHCT TEXAS, LLC

CHCT VIRGINIA, LLC

CHCT WISCONSIN, LLC

COMMUNITY HEALTHCARE TRUST, LLC

COMMUNITY HEALTHCARE TRUST SERVICES, INC.

CHCT CALIFORNIA, LLC

CHCT WEST VIRGINIA, LLC

By:/s/ W. Page Barnes                

Name: W. Page Barnes

Title: Executive Vice President

ADMINISTRATIVE AGENT

AND LENDERS: SUNTRUST BANK, as Administrative Agent, as the Issuing Bank, as the Swingline Lender and as a Lender

By:    /s Anton Brykalin                

Name: Anton Brykalin

Title: Vice President

FIFTH THIRD BANK, as a Lender

By:    /s/ Vera B. McEvoy                

Name: Vera B. McEvoy

Title: Director II

FIRST TENNESSEE BANK, NA, as a Lender

By:    /s/ Cathy Wind            

Name: Cathy Wind

Title: Senior Vice President

BRANCH BANKING AND TRUST COMPANY, as a Lender

By:    /s/ Courtney W. Jones            

Name: Courtney W. Jones

Title: Vice President

CADENCE BANK, N.A., as an Exiting Lender

By:    /s/ William H. Crawford                

Name: William H. Crawford

Title: Executive Vice President

CAPSTAR BANK, as a Lender

By:    /s/ David A. Bertani                

Name: David A. Bertani

Title: Senior Vice President

FRANKLIN SYNERGY BANK, as a Lender

By:    /s/ Lisa Fletcher                

Name: Lisa Fletcher

Title: Senior Vice President

PINNACLE BANK, as a Lender

By:    /s/ Allison H. Jones                

Name: Allison H. Jones

Title: Senior Vice President

SYNOVUS BANK, as a Lender

By:    /s/ W. Spencer Ragland            

Name: W. Spencer Ragland

Title: Senior Director, Corporate Banking

BANCORPSOUTH, as a Lender

By:    /s/ Randall P. Robinson                

Name: Randall P. Robinson

Title: Senior Vice President

SCHEDULE I

COMMITMENT AMOUNTS

Lender	Revolving Commitment Amount	A-1 Term Loans	A-2 Term Loans	A-3 Term Loan Commitment
SunTrust Bank	$38,000,000	$9,611,111	$9,611,111	$18,000,000
Fifth Third Bank	$23,000,000	$8,861,111	$8,861,111	$13,000,000
Branch Banking and Trust Company	$23,000,000	$8,861,111	$8,861,111	$13,000,000
First Tennessee Bank, NA	$20,000,000	$6,666,667	$6,666,667	$9,000,000
Pinnacle Bank	$10,000,000	$6,666,667	$6,666,667	$9,000,000
Synovus Bank	$10,000,000	$4,000,000	$0	$9,000,000
Franklin Synergy Bank	$10,000,000	$3,333,333	$3,333,333	$0
Bancorp South	$6,000,000	$0	$4,000,000	$4,000,000
CapStar Bank	$10,000,000	$2,000,000	$2,000,000	$0
Total	$150,000,000	$50,000,000	$50,000,000	$75,000,000

EX-31.1

Exhibit 31.1

Community Healthcare Trust Incorporated

Quarterly Certification

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Timothy G. Wallace, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Community Healthcare Trust Incorporated;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 7, 2019

/s/ Timothy G. Wallace

Timothy G. Wallace

Chief Executive Officer and President

EX-31.2

Exhibit 31.2

Community Healthcare Trust Incorporated

Quarterly Certification

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, David H. Dupuy, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Community Healthcare Trust Incorporated;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 7, 2019

/s/ David H. Dupuy

David H. Dupuy

Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

Community Healthcare Trust Incorporated

Certification Pursuant to

18 U.S.C. Section 1350,

as Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report on Form 10-Q of Community Healthcare Trust Incorporated (the "Company") for the period ended March 31, 2019, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Timothy G. Wallace, Chief Executive Officer and President of the Company, and I, David H. Dupuy, Executive Vice President and Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 7, 2019

/s/ Timothy G. Wallace

Timothy G. Wallace

Chief Executive Officer and President

/s/ David H. Dupuy

David H. Dupuy

Executive Vice President and Chief Financial Officer

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2019	Apr. 30, 2019
Document and Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q1
Entity Registrant Name	Community Healthcare Trust Inc
Entity Central Index Key	0001631569
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Emerging Growth Company	true
Entity Ex Transition Period	true
Entity Small Business	true
Entity Common Stock, Shares Outstanding		18,862,792

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Real estate properties
Land and land improvements	$ 52,520	$ 50,270
Buildings, improvements, and lease intangibles	425,763	394,527
Personal property	135	133
Total real estate properties	478,418	444,930
Less accumulated depreciation	(60,544)	(55,298)
Total real estate properties, net	417,874	389,632
Cash and cash equivalents	3,868	2,007
Restricted cash	166	385
Other assets, net	34,822	34,546
Total assets	456,730	426,570
Liabilities
Debt, net	179,117	147,766
Accounts payable and accrued liabilities	3,351	3,196
Other liabilities	4,579	3,949
Total liabilities	187,047	154,911
Commitments and contingencies
Stockholders' Equity
Preferred stock, $0.01 par value; 50,000,000 shares authorized; none issued and outstanding	0	0
Common stock, $0.01 par value; 450,000,000 shares authorized; 18,862,792 and 18,634,502 shares issued and outstanding at March 31, 2019 and December 31, 2018, respectively	189	186
Additional paid-in capital	342,654	337,180
Cumulative net income	10,628	9,178
Accumulated other comprehensive (loss) income	(642)	633
Cumulative dividends	(83,146)	(75,518)
Total stockholders’ equity	269,683	271,659
Total liabilities and stockholders' equity	$ 456,730	$ 426,570

XML

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2019	Dec. 31, 2018
Statement of Financial Position [Abstract]
Preferred Stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred Stock, shares authorized	50,000,000	50,000,000
Preferred Stock, shares issued	0	0
Preferred Stock, shares outstanding	0	0
Common Stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common Stock, shares authorized	450,000,000	450,000,000
Common Stock, shares issued	18,862,792	18,634,502
Common Stock, shares outstanding	18,862,792	18,634,502

XML

Condensed Consolidated Statements of Income - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
REVENUES
Rental income	$ 12,898	$ 11,075
Revenues	13,441	11,429
EXPENSES
Property operating	3,075	2,364
General and administrative	1,785	1,193
Depreciation and amortization	5,246	4,916
Expenses	10,106	8,473
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND OTHER ITEMS	3,335	2,956
Interest expense	(2,054)	(1,268)
Interest and other income, net	169	184
INCOME FROM CONTINUING OPERATIONS	1,450	1,872
NET INCOME	$ 1,450	$ 1,872
NET INCOME PER COMMON SHARE:
Net income per common share – Basic (in dollars per share)	$ 0.06	$ 0.09
Net income per common share – Diluted (in dollars per share)	$ 0.06	$ 0.09
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING-BASIC (in shares)	17,954,670	17,573,683
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING-DILUTED (in shares)	17,954,670	17,573,683
Other operating interest
REVENUES
Revenue	$ 543	$ 354

XML

Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Statement of Comprehensive Income [Abstract]
NET INCOME	$ 1,450	$ 1,872
Other comprehensive income (loss):
(Decrease) increase in fair value of cash flow hedges	(1,213)	906
Reclassification for amounts recognized as interest expense	62	(68)
Total other comprehensive (loss) income	(1,275)	974
COMPREHENSIVE INCOME	$ 175	$ 2,846

XML

Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Total	Common Stock [Member]	Additional Paid in Capital [Member]	Cumulative Net Income [Member]	Accumulated Other Comprehensive Income [Member]	Cumulative Dividends [Member]
Beginning Balance at Dec. 31, 2017	$ 283,374	$ 181	$ 324,303	$ 4,775	$ 258	$ (46,143)
Beginning Balance, shares at Dec. 31, 2017		18,085,798
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation, shares		94,001
Stock-based compensation	616	$ 1	615
Unrecognized gain (loss) on cash flow hedges	906				906
Reclassification adjustment for (gains) losses included in net income (interest expense)	68				68
Net income	1,872			1,872
Dividends to common stockholders	(7,226)					(7,226)
Ending Balance, shares at Mar. 31, 2018		18,179,799
Ending Balance at Mar. 31, 2018	279,610	$ 182	324,918	6,647	1,232	(53,369)
Beginning Balance at Dec. 31, 2017	$ 283,374	$ 181	324,303	4,775	258	(46,143)
Beginning Balance, shares at Dec. 31, 2017		18,085,798
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock, net of issuance costs (in shares)	334,700
Ending Balance, shares at Dec. 31, 2018		18,634,502
Ending Balance at Dec. 31, 2018	$ 271,659	$ 186	337,180	9,178	633	(75,518)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock, net of issuance costs (in shares)	143,600	143,600
Issuance of common stock, net of issuance costs	$ 4,624	$ 2	4,622
Stock-based compensation, shares		84,690
Stock-based compensation	853	$ 1	852
Unrecognized gain (loss) on cash flow hedges	(1,213)				(1,213)
Reclassification adjustment for (gains) losses included in net income (interest expense)	(62)				(62)
Net income	1,450			1,450
Dividends to common stockholders	(7,628)					(7,628)
Ending Balance, shares at Mar. 31, 2019		18,862,792
Ending Balance at Mar. 31, 2019	$ 269,683	$ 189	$ 342,654	$ 10,628	$ (642)	$ (83,146)

XML

Condensed Consolidated Statements of Stockholders' Equity (Parenthetical) - $ / shares	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Cumulative Dividends [Member]
Dividends to common stockholders, per share (in dollars per share)	$ 0.4075	$ 0.3975

XML

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
OPERATING ACTIVITIES
Net income	$ 1,450	$ 1,872
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	5,421	5,133
Stock-based compensation	853	616
Straight-line rent receivable	(336)	(415)
Deferred income tax expense (benefit)	17	(132)
Changes in operating assets and liabilities:
Other assets	(194)	(696)
Accounts payable and accrued liabilities	155	(309)
Other liabilities	(36)	(121)
Net cash provided by operating activities	7,330	5,948
INVESTING ACTIVITIES
Acquisitions of real estate	(32,743)	(12,721)
Acquisitions of notes receivable	0	(2,201)
Proceeds from the repayment of notes receivable	31	17
Capital expenditures on existing real estate properties	(622)	(1,444)
Net cash used in investing activities	(33,334)	(16,349)
FINANCING ACTIVITIES
Net repayments on revolving credit facility	(43,000)	(22,000)
Term loan borrowings	75,000	40,000
Mortgage note repayments	(27)	0
Dividends paid	(7,628)	(7,226)
Net proceeds from issuance of common stock	4,724	0
Equity issuance costs	(100)	0
Debt issuance costs	(1,323)	(218)
Net cash provided by financing activities	27,646	10,556
Increase in cash and cash equivalents and restricted cash	1,642	155
Cash and cash equivalents and restricted cash, beginning of period	2,392	2,130
Cash and cash equivalents and restricted cash, end of period	4,034	2,285
Supplemental Cash Flow Information:
Interest paid	1,783	1,105
Invoices accrued for construction, tenant improvement and other capitalized costs	81	712
Reclassification between accounts and notes receivable	40	0
Reclassification of registration statement costs incurred in prior year to equity issuance costs	100	0
(Decrease) increase in fair value of cash flow hedges	$ (1,213)	$ 906

XML

Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2019

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Business Overview

Community Healthcare Trust Incorporated (the ‘‘Company’’, ‘‘we’’, ‘‘our’’) was organized in the State of Maryland on March 28, 2014. The Company is a fully-integrated healthcare real estate company that owns and acquires real estate properties that are leased to hospitals, doctors, healthcare systems or other healthcare service providers in our target submarkets. As of March 31, 2019, the Company had investments of approximately $478.4 million in 105 real estate properties, located in 29 states, totaling approximately 2.3 million square feet in the aggregate.

Basis of Presentation

The Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. They do not include all of the information and footnotes required by GAAP for complete financial statements.

This interim financial information should be read in conjunction with the financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

Management believes that all adjustments of a normal, recurring nature considered necessary for a fair presentation have been included. This interim financial information does not necessarily represent or indicate what the operating results will be for the year ending December 31, 2019. All material intercompany accounts and transactions have been eliminated.

Use of Estimates in the Condensed Consolidated Financial Statements

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

Reclassifications

Tenant reimbursements totaling $1.4 million on the Company's Condensed Consolidated Statements of Income for the three months ended March 31, 2018 were reclassified into rental income.

Income Taxes

The Company has elected to be taxed as a real estate investment trust ("REIT"), as defined under the Internal Revenue Code of 1986, as amended (the "Code"). The Company and one subsidiary have also elected for that subsidiary to be treated as a taxable REIT subsidiary ("TRS"), which is subject to federal and state income taxes. No provision has been made for federal income taxes for the REIT; however, the Company has recorded income tax expense or benefit for the TRS to the extent applicable. The Company intends at all times to qualify as a REIT under the Code. The Company must distribute at least 90% per annum of its REIT taxable income to its stockholders (which is computed without regard to the dividends paid deduction or net capital gain and which does not necessarily equal net income as calculated in accordance with GAAP) and meet other requirements to continue to qualify as a REIT.

New Accounting Pronouncements

Recently Adopted Accounting Pronouncements

Lease Accounting

In February 2016, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") 2016-02, Leases; in January 2018, the FASB issued ASU 2018-01, Leases - Land Easement Practical Expedient for Transition to Topic 842; in July 2018, the FASB issued ASU 2018-10, Codification Improvements to Topic 842, Leases and ASU 2018-11, Leases - Targeted Improvements; and in December 2018, the FASB issued ASU 2018-20, Narrow-Scope Improvements for Lessors. The Company adopted this group of ASUs, collectively referred to as Topic 842, on January 1, 2019. Topic 842 superseded the existing standards for lease accounting (Topic 840, Leases).

The Company elected to utilize the following practical expedients provided by Topic 842:

• the package of practical expedients that allows an entity not to reassess upon adoption (i) whether an

expired or existing contract contains a lease, (ii) whether a lease classification related to expired or existing

lease arrangements, and (iii) whether costs incurred on expired or existing leases qualify as initial direct

costs, and

• as a lessor, the practical expedient not to separate certain non-lease components, such as common area

maintenance, from the lease component if (i) the timing and pattern of transfer are the same for the nonlease

component and associated lease component, and (ii) the lease component would be classified as an

operating lease if accounted for separately.

Topic 842 requires lessees to record most leases on their balance sheet through a right-of-use ("ROU") model, in

which a lessee records a ROU asset and a lease liability on their balance sheet. Leases with terms that are 12 months or less or leases that are clearly insignificant do not need to be accounted for under the ROU model. Lessees will account for leases as financing or operating leases, with the classification affecting the timing and pattern of expense recognition in the income statement. Lease expense will be recognized based on the effective interest method for leases accounted for as finance leases and on a straight-line basis over the term of the lease for leases accounted for as operating leases.

The accounting by a lessor under Topic 842 is largely unchanged from that of Topic 840. Under Topic 842, lessors

will continue to account for leases as a sales-type, direct-financing, or operating. A lease will be treated as a sale if it

is considered to transfer control of the underlying asset to the lessee. A lease will be classified as direct-financing if

risks and rewards are conveyed without the transfer of control. Otherwise, the lease is treated as an operating lease.

Topic 842 requires accounting for a transaction as a financing in a sale leaseback when the seller-lessee is provided

an option to purchase the property from the landlord at the tenant's option. The Company expects that this provision

could change the accounting for these types of leases in the future. Topic 842 also includes the concept of separating

lease and nonlease components. Under Topic 842, nonlease components, such as common area maintenance, would

be accounted for under Topic 606 and separated from the lease payments. However, the Company elected the lessor practical expedient allowing the Company to not separate these components when certain conditions are met. With this election, the Company combined tenant reimbursements with rental income on its Condensed Consolidated Income Statements. Additionally, we will recognize a charge to rental income for amounts deemed uncollectible. Further, the Company has historically only capitalized direct leasing costs, such as leasing commissions. While the new standard revises the treatment of indirect leasing costs and permits the capitalization and amortization only of direct leasing costs, the Company does not expect an impact to its financial statements related to the capitalization of leasing costs. Also, the Narrow-Scope Improvements for Lessors under ASU 2018-20 allows the Company to continue to exclude from revenue costs paid by our tenants on our behalf directly to third parties, such as property taxes and insurance.

Topic 842 provided two transition alternatives. The Company adopted the standard based on the prospective

optional transition method, in which leases for comparative periods continue to be accounted for in accordance with Topic 840.

Upon adoption, where the Company is the lessee, we recorded a right of use asset and a related operating lease liability, each totaling approximately $0.1 million, related to one ground lease which will have minimal impact on the recognition of future ground lease expense. The right of use lease asset is included in other assets and the operating lease liability is included in other liabilities on the Company's Condensed Consolidated Balance Sheet.

Derivatives and Hedge Accounting

In October 2018, the FASB issued an update, ASU 2018-16, Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes to ASC Topic 815, Derivatives and Hedging. ASU 2018-16 expands the list of U.S. benchmark interest rates permitted in the application of hedge accounting by adding the OIS rate based on SOFR as an eligible benchmark interest rate. ASU 2018-16 is effective for interim and annual reporting periods in fiscal years beginning after December 15, 2018. We adopted this update effective January 1, 2019. The adoption of this update did not have an impact on our Condensed Consolidated Financial Statements.

Recently Issued Accounting Pronouncements

Financial Instruments-Credit Losses

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses, which changes the impairment model for most financial assets and certain other instruments. For trade and other receivables, held-to-maturity debt securities, loans and other instruments, companies will be required to use a new current expected credit loss ("CECL") model that generally will result in the earlier recognition of allowances for losses. For available-for-sale debt securities with unrealized losses, companies will measure credit losses in a manner similar to what they do today, except that the losses will be recognized as allowances rather than as reductions in the amortized cost of the securities. Companies will have to disclose significantly more information, including information they use to track credit quality by year of origination for most financing receivables. Companies will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. This standard is effective for the Company on January 1, 2020 with early adoption permitted. In August 2018, the FASB issued a proposal that would amend the ASU to clarify that receivables arising from leases would not be within the scope of the ASU but rather would be accounted for under the leasing standard. The Company continues to monitor the FASB's activity relating to this ASU.

XML

Real Estate Investments

3 Months Ended

Mar. 31, 2019

Real Estate [Abstract]

Real Estate Investments

Real Estate Investments

At March 31, 2019, the Company had investments of approximately $478.4 million in 105 real estate properties. The following table summarizes the Company's real estate investments.

(Dollars in thousands)	Number of Facilities	Land and Land Improvements		Buildings, Improvements, and Lease Intangibles		Personal Property		Total		Accumulated Depreciation
Medical office buildings:
Florida	5	$	4,608	$	29,285	$	—	$	33,893	$	4,515
Ohio	6	3,638		26,483		—		30,121		5,508
Texas	3	3,115		15,591		—		18,706		4,456
Illinois	2	1,136		11,831		—		12,967		2,664
Kansas	3	2,455		14,933		—		17,388		4,189
Iowa	1	2,241		9,014		—		11,255		2,468
Other states	15	4,355		35,828		—		40,183		4,649
	35	21,548		142,965		—		164,513		28,449
Physician clinics:
Kansas	2	610		6,921		—		7,531		1,485
Illinois	6	2,888		9,539		—		12,427		540
Florida	4	253		9,484		—		9,737		912
Other states	9	2,903		21,462		—		24,365		3,459
	21	6,654		47,406		—		54,060		6,396
Surgical centers and hospitals:
Louisiana	1	1,683		21,353		—		23,036		1,244
Michigan	2	637		8,278		—		8,915		2,434
Illinois	2	2,349		8,222		—		10,571		1,411
Florida	1	271		7,069		—		7,340		810
Arizona	2	576		5,389		—		5,965		1,603
Other states	7	2,130		17,857		—		19,987		4,074
	15	7,646		68,168		—		75,814		11,576
Specialty centers:
Illinois	3	3,489		24,733		—		28,222		2,117
Other states	22	5,170		38,344		—		43,514		7,331
	25	8,659		63,077		—		71,736		9,448
Behavioral facilities:
West Virginia	1	2,138		22,897		—		25,035		880
Illinois	1	1,300		18,803		—		20,103		1,332
Indiana	2	1,126		6,040		—		7,166		351
Other states	3	1,411		12,840		—		14,251		499
	7	5,975		60,580		—		66,555		3,062
Inpatient rehabilitation facilities:
Texas	1	1,515		27,001		—		28,516		82
	1	1,515		27,001		—		28,516		82
Long-term acute care hospitals:
Indiana	1	523		14,405		—		14,928		1,222
	1	523		14,405		—		14,928		1,222
Corporate property	—	—		2,161		135		2,296		309
Total real estate investments	105	$	52,520	$	425,763	$	135	$	478,418	$	60,544

XML

Real Estate Leases

3 Months Ended

Mar. 31, 2019

Leases [Abstract]

Real Estate Leases

Real Estate Leases

The Company’s properties are generally leased pursuant to non-cancelable, fixed-term operating leases with expiration dates through 2034. The Company’s leases generally require the lessee to pay minimum rent, with fixed rent renewal terms or increases based on a Consumer Price Index and and may also include additional rent, which may include taxes (including property taxes), insurance, maintenance and other operating costs associated with the leased property.

Some leases provide the lessee, during the term of the lease, with an option or right of first refusal to purchase the leased property. Some leases also allow the lessee to renew or extend their lease term or in some cases terminate their lease, based on conditions provided in the lease.

Future minimum lease payments under the non-cancelable operating leases due the Company for the years ending December 31, as of March 31, 2019, are as follows (in thousands):

2019 (nine months ending December 31)	$	32,823
2020	41,304
2021	38,200
2022	34,688
2023	30,177
2024 and thereafter	156,754
	$	333,946

Straight-line rental income

Rental income is recognized as earned over the life of the lease agreement on a straight-line basis. Straight-line rent included in rental income was approximately $0.3 million and $0.4 million, respectively, for the three months ended March 31, 2019 and 2018.

Deferred revenue

Rent received but not yet earned is deferred until such time it is earned. Deferred revenue, included in other liabilities, was approximately $1.5 million and $1.6 million, respectively, at March 31, 2019 and December 31, 2018.

XML

Real Estate Acquisitions

3 Months Ended

Mar. 31, 2019

Business Combinations [Abstract]

Real Estate Acquisitions

Real Estate Acquisitions

During the first quarter of 2019, the Company acquired two real estate properties totaling approximately 83,000 square feet for an aggregate purchase price and cash consideration of approximately $32.7 million. Upon acquisition, the properties were 100% leased in the aggregate with lease expirations in 2029. Amounts reflected in revenues and net income for the three months ended March 31, 2019 for these properties were approximately $0.4 million and $0.2 million, respectively. Transaction costs totaling approximately $0.1 million related to these asset acquisitions were capitalized in the period and included in real estate assets.

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Mortgage and Other Notes Receivable

3 Months Ended

Mar. 31, 2019

SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Abstract]

Mortgage and Other Notes Receivable

Mortgage and Other Notes Receivable

The Company had one mortgage note receivable outstanding as of December 31, 2017 with a principal balance of $10.6 million and interest receivable of $0.6 million, which is included in other assets. The borrower and several related entities (the "Borrower") filed for voluntary bankruptcy on June 23, 2017. At the time of filing for bankruptcy, the Borrower was current on all obligations to the Company, but no payments were received during the bankruptcy.

On December 28, 2017, the Company purchased $11.45 million face value of certain promissory notes, secured by accounts receivable of the Borrower, for $8.75 million from a syndicate of banks, a $2.7 million discount to face value, and in the first quarter of 2018 acquired $2.2 million of certain promissory notes, secured by the operations of two facilities related to the Borrower, but were not included in the bankruptcy, for a total investment in these promissory notes of approximately $10.95 million.

On April 25, 2018, the Company provided a $23.0 million loan, included in other assets, to a newly formed company (Newco), secured by all assets and ownership interests in seven long-term acute care hospitals and one inpatient rehabilitation hospital that, along with a series of investments by the management of Newco, allowed Newco to acquire certain assets of the Borrower.

Also on April 25, 2018, $10.95 million of the promissory notes discussed above, approximately $0.26 million of interest on those promissory notes, approximately $0.25 million in fees and reimbursement of expenses, and approximately $6.7 million principal and accrued interest related to its mortgage note receivable were satisfied with proceeds from the loan. In addition, the Company received title to the property previously financed by the mortgage note receivable at an approximate $4.5 million valuation. No impairment was recognized by the Company.

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Debt, net

3 Months Ended

Mar. 31, 2019

Debt Disclosure [Abstract]

Debt, net

Debt, net

The table below details the Company's debt as of March 31, 2019 and December 31, 2018.

	Balance as of
(Dollars in thousands)	March 31, 2019		December 31, 2018		Maturity Dates
Revolving Credit Facility	$	—	$	43,000	3/23
A-1 Term Loan, net	49,778		49,759		3/22
A-2 Term Loan, net	49,735		49,722		3/24
A-3 Term Loan, net	74,341		—		3/26
Mortgage Note Payable	5,263		5,285		5/24
	$	179,117	$	147,766

The Company's second amended and restated credit facility (the "Credit Facility") is by and among Community Healthcare OP, LP, the Company, the lenders from time to time party thereto, and SunTrust Bank, as Administrative Agent. The Company’s material subsidiaries are guarantors of the obligations under the Credit Facility. The Company entered into a third amendment to its Credit Facility (the "Third Amendment") on March 29, 2019, which added a $75.0 million term loan (the "A-3 Term Loan"), which matures on March 29, 2026, extended the maturity of the revolving credit facility (the "Revolving Credit Facility") to March 29, 2023, improved pricing on the Credit Facility, and adjusted certain financial covenants. The Company paid approximately $1.3 million in fees and expenses related to the Third Amendment, of which $0.7 million was related to the Revolving Credit Facility and was recorded as deferred financing costs, included in Other Assets, and $0.6 million was related to the A-3 Term Loan and was recorded as deferred financing costs, included in Debt, net, on the Company's Condensed Consolidated Balance Sheet.

The Credit Facility, as amended, provides for a $150.0 million Revolving Credit Facility and $175.0 million in term loans (the "Term Loans"). The Credit Facility, through the accordion feature, allows borrowings up to a total of $525.0 million including the ability to add and fund additional term loans. The Revolving Credit Facility matures on March 29, 2023 and includes one12-month option to extend the maturity date of the Revolving Credit Facility, subject to the satisfaction of certain conditions. The Term Loans include a five-year term loan facility in the aggregate principal amount of $50.0 million (the "A-1 Term Loan"), which matures on March 29, 2022, 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 and the new seven-year, $75.0 million A-3 Term Loan, which matures on March 29, 2026.

Amounts outstanding under the Revolving Credit Facility, as amended, 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 0.25% 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 0.35% 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 repaid the amounts outstanding under its Revolving Credit Facility with proceeds from the A-3 Term Loan and therefore had the full borrowing capacity under the Revolving Credit Facility of $150.0 million at March 31, 2019.

Amounts outstanding under the Term Loans, as amended, bear annual interest at a floating rate that is based, at the Company’s option, on either: (i) LIBOR plus 1.25% to 2.30% or (ii) a base rate plus 0.25% to 1.30%, in each case, depending upon the Company’s leverage ratio. In addition, the Company is obligated to pay an annual fee equal to 0.35% of the amount of the unused portion of the Term Loans. The Company has entered into interest rate swaps to fix the interest rates on the Term Loans. See Note 7 for more details on the interest rate swaps. At March 31, 2019, the Company had drawn the full $175.0 million under the Term Loans which had a fixed weighted average interest rate under the swaps of approximately 4.569%.

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. The Company was in compliance with its financial covenants under its Credit Facility as of March 31, 2019.

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Derivative Financial Instruments

3 Months Ended

Mar. 31, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

Derivative Financial Instruments

Risk Management Objective of Using Derivatives

The Company may use derivative financial instruments, including interest rate swaps, caps, options, floors and other interest rate derivative contracts, to hedge all or a portion of the interest rate risk associated with its borrowings. The principal objective of such arrangements is to minimize the risks and/or costs associated with the Company’s operating and financial structure as well as to hedge specific anticipated transactions. The Company does not intend to utilize derivatives for speculative or other purposes other than interest rate risk management. The use of derivative financial instruments carries certain risks, including the risk that the counterparties to these contractual arrangements are not able to perform under the agreements. To mitigate this risk, the Company only enters into derivative financial instruments with counterparties with high credit ratings and with major financial institutions with which the Company and its affiliates may also have other financial relationships. The Company does not anticipate that any of the counterparties will fail to meet their obligations.

Cash Flow Hedges of Interest Rate Risk

The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps and/or caps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. Interest rate caps designated as cash flow hedges involve the receipt of variable-rate amounts if interest rates rise above the cap strike rate on the contract.

As of March 31, 2019, the Company had seven outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk for notional amounts totaling $175.0 million. The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the Condensed Consolidated Balance Sheets as of March 31, 2019 and December 31, 2018.

	Asset Derivatives Fair Value at					Liability Derivatives Fair Value at
	March 31, 2019		December 31, 2018		Balance Sheet Classification	March 31, 2019		December 31, 2018		Balance Sheet Classification
Interest rate swaps	$	215	$	902	Other assets	$	857	$	98	Other Liabilities

The changes in the fair value of derivatives designated and that qualify as cash flow hedges are recorded in accumulated other comprehensive income and are subsequently reclassified to interest expense in the period that the hedged forecasted transaction affects earnings.

Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s Term Loans. During the next twelve months, the Company estimates that an additional $0.2 million will be reclassified from other comprehensive income ("OCI") as a decrease to interest expense.

The table below details the location in the financial statements of the gain or loss recognized on interest rate derivatives designated as cash flow hedges for the three months ended March 31, 2019 and 2018.

	Three Months Ended March 31,
(Dollars in thousands)	2019			2018
Amount of unrealized (loss) gain recognized in OCI on derivative	$	(1,213	)	$	906
Amount of (gain) loss reclassified from accumulated OCI into interest expense	$	(62	)	$	68
Total Interest Expense presented in the Condensed Consolidated Statements of Income in which the effects of the cash flow hedges are recorded	$	2,054		$	1,268

Credit-risk-related Contingent Features

As of March 31, 2019, the fair value of derivatives in a net liability position including accrued interest but excluding

any adjustment for nonperformance risk related to these agreements was $0.7 million. As of March 31, 2019, the

Company has not posted any collateral related to these agreements and was not in breach of any agreement

provisions. If the Company had breached any of these provisions, it could have been required to settle its obligations

under the agreements at their aggregate termination value of approximately $0.7 million at March 31, 2019.

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Stockholders' Equity

3 Months Ended

Mar. 31, 2019

Equity [Abstract]

Stockholders' Equity

Stockholders’ Equity

Common Stock

The following table provides a reconciliation of the beginning and ending common stock balances for the three months ended March 31, 2019 and for the year ended December 31, 2018:

	Three Months Ended March 31, 2019	Year Ended December 31, 2018
Balance, beginning of period	18,634,502	18,085,798
Issuance of common stock	143,600	334,700
Restricted stock-based awards	84,690	214,004
Balance, end of period	18,862,792	18,634,502

ATM Program

On August 7, 2018, the Company entered into an at-the-market offering program ("ATM Program") with Sandler O’Neill & Partners, L.P., Evercore Group L.L.C., SunTrust Robinson Humphrey, Inc., BB&T Capital Markets, a division of BB&T Securities, LLC, Fifth Third Securities, Inc. and Janney Montgomery Scott LLC, as sales agents (collectively, the “Agents”), under which the Company may issue and sell shares of its common stock, par value $0.01 per share (the “Common Stock”), having an aggregate gross sales price of up to $100.0 million (the “Shares”) 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 the first quarter of 2019, the Company issued, through its ATM Program, 143,600 shares of common stock at an average gross sales price of $33.57 per share and received net proceeds of approximately $4.7 million. As of March 31, 2019, the Company had approximately $84.8 million remaining that may be issued under the ATM Program.

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Net Income Per Common Share

3 Months Ended

Mar. 31, 2019

Earnings Per Share [Abstract]

Net Income Per Common Share

Net Income Per Common Share

The following table sets forth the computation of basic and diluted net income per common share.

	Three Months Ended March 31, 2019
(Dollars in thousands, except per share data)	2019			2018
Net income	$	1,450		$	1,872
Participating securities' share in earnings	(324		)	(241		)
Net income, less participating securities' share in earnings	$	1,126		$	1,631
Weighted average Common Shares outstanding
Weighted average Common Shares outstanding	18,735,673			18,164,132
Unvested restricted shares	(781,003		)	(590,449		)
Weighted average Common Shares outstanding–Basic	17,954,670			17,573,683
Dilutive potential common shares	—			—
Weighted average Common Shares outstanding –Diluted	17,954,670			17,573,683
Basic Net Income per Common Share	$	0.06		$	0.09
Diluted Net Income per Common Share	$	0.06		$	0.09

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Incentive Plan

3 Months Ended

Mar. 31, 2019

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Incentive Plan

Incentive Plan

Under the Company's 2014 Incentive Plan, as amended, awards may be made in the form of restricted stock, cash or a combination of both. Compensation expense recognized from the amortization of the value of the Company's officer, employee and director shares over the applicable vesting periods during the three months ended March 31, 2019 and 2018 was approximately $0.9 million and $0.6 million, respectively.

A summary of the activity under the 2014 Incentive Plan for the three months ended March 31, 2019 and 2018 is included in the table below.

		Three Months Ended March 31,
		2019	2018
Stock-based awards, beginning of period		709,487	512,115
	Stock in lieu of compensation	42,525	47,027
	Stock awards	42,165	46,974
	Total stock granted	84,690	94,001
	Vested shares	—	—
Stock-based awards, end of period		794,177	606,116

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Other Assets

3 Months Ended

Mar. 31, 2019

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Other Assets

Other Assets

Items included in Other assets, net on the Company's Condensed Consolidated Balance Sheets as of March 31, 2019 and December 31, 2018 are detailed in the table below.

	Balance as of
(Dollars in thousands)	March 31, 2019		December 31, 2018
Notes receivable	$	24,119	$	24,110
Accounts and interest receivables	2,092		2,158
Straight-line rent receivables	3,593		3,254
Prepaid assets	515		487
Deferred financing costs, net	848		318
Leasing commissions, net	862		790
Deferred tax asset	2,008		2,024
Fair value of interest rate swaps	215		902
Above-market intangible assets, net	162		168
Right of use leased asset	141		—
Other	267		335
	$	34,822	$	34,546

The Company's $24.1 million in notes receivable at March 31, 2019 include mainly the following notes. Interest related to these notes is included in Other Operating Interest on the Company's Condensed Consolidated Statements of Income.

• On April 25, 2018, the Company provided a $23.0 million loan to a newly formed company (Newco), secured by all assets and ownership interests in seven long-term acute care hospitals and one inpatient rehabilitation hospital. The loan, which matures on May 1, 2031, currently bears interest at 9% per annum, with principal payments beginning in May 2021. See Note 5 for more detail.

• On December 31, 2018, the Company entered into notes with a tenant totaling $0.9 million. The notes bear interest at 9% per annum and mature on December 31, 2019.

The Company identified the borrowers of these notes as variable interest entities ("VIEs"), but management determined that the Company was not the primary beneficiary of the VIEs because we lack either directly or through related parties any material impact in the activities that impact the borrowers' economic performance. We are not obligated to provide support beyond our stated commitment to the borrowers, and accordingly our maximum exposure to loss as a result of this relationship is limited to the amount of our outstanding notes receivable. The VIEs that we have identified at March 31, 2019 are summarized in the table below.

Classification	Carrying Amount (in millions)		Maximum Exposure to Loss (in millions)
Notes receivable	$	0.9	$	0.9
Note receivable	$	23.0	$	23.0

Highlands Transition Update

As previously announced, the Company experienced payment issues with the old operator of Highlands Hospital ("Highlands"). Effective February 11, 2019, the Company signed a transition agreement (the "Transition Agreement"), to transition the property to a new operator and signed a lease with a new operator.

The old operator and new operator have signed an asset purchase agreement pursuant to which the new operator will take over the facility. In addition, the old operator and new operator have signed a management agreement and the new operator is currently managing Highlands pursuant to the management agreement. The new operator continues to perform due diligence and is in the process of preparing for transfer of licenses and related items customary for these types of transactions. We cannot provide assurance as to the timing, or whether, this transaction will actually close.

The new lease will be effective upon the transfer of the licenses to the new operator, which is anticipated to happen in the second half of 2019. The new lease provides for rental payments approximately equal to the amounts due under the previous agreements with the old operator.

The Company is receiving monthly payments under the Transition Agreement which approximate the amounts due from the old operator under the previous agreements. These payments are to continue as long as the Transition Agreement is in place. The Transition Agreement will terminate when the licenses are transferred to the new operator, at which time the new lease will become effective.

Since the Transition Agreement became effective in February, the Company only received payments during the first quarter for February and March and thus did not recognize revenue for the month of January representing approximately $0.3 million.

In addition, the Company incurred professional fees (legal and accounting) totaling over $0.1 million related to the workout and transition.

The Transition Agreement includes provisions for the Company to receive payment for the amounts due from the old operator that remain unpaid. The Company anticipates collecting all amounts due.

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Fair Value of Financial Instruments

3 Months Ended

Mar. 31, 2019

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practical to estimate the fair value.

Cash and cash equivalents and restricted cash - The carrying amount approximates the fair value.

Notes receivable - The fair value is estimated using cash flow analyses, based on an assumed market rate of interest or at a rate consistent with the rates on notes carried by the Company and are classified as level 2 in the hierarchy.

Borrowings under our Credit Facility - The carrying amount approximates the fair value because the borrowings are based on variable market interest rates.

Derivative financial instruments - The fair value is estimated using discounted cash flow techniques. These techniques incorporate primarily level 2 inputs. The market inputs are utilized in the discounted cash flow calculation considering the instrument’s term, notional amount, discount rate and credit risk. Significant inputs to the derivative valuation model for interest rate swaps are observable in active markets and are classified as level 2 in the hierarchy.

Mortgage note payable - The fair value is estimated using cash flow analyses which are based on an assumed market rate of interest or at a rate consistent with the rates on mortgage notes assumed by the Company and are classified as level 2 in the hierarchy.

The table below details the fair values and carrying values for our notes receivable, interest rate swaps, and mortgage note payable at March 31, 2019 and December 31, 2018, using level 2 inputs.

	March 31, 2019				December 31, 2018
(Dollars in thousands)	Carrying Value		Fair Value		Carrying Value		Fair Value
Notes receivable	$	24,119	$	23,948	$	24,110	$	23,936
Interest rate swap asset	$	215	$	215	$	902	$	902
Interest rate swap liability	$	857	$	857	$	269	$	269
Mortgage note payable	$	5,365	$	5,277	$	5,391	$	5,307

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Subsequent Events

3 Months Ended

Mar. 31, 2019

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

Dividend Declared

On May 1, 2019, the Company’s Board of Directors declared a quarterly common stock dividend in the amount of $0.41 per share. The dividend is payable on May 31, 2019 to stockholders of record on May 17, 2019.

Subsequent Acquistion

On April 30, 2019, the Company acquired one real estate property that was newly constructed totaling approximately 81,000 square feet for an aggregate purchase price and cash consideration of approximately $27.0 million. Upon acquisition, the property was 100.0% leased with lease expiration in 2034. The Company funded the acquisition with proceeds from the Company's Revolving Credit Facility totaling $23.0 million with the remainder from cash on hand.

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2019

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. They do not include all of the information and footnotes required by GAAP for complete financial statements.

This interim financial information should be read in conjunction with the financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

Management believes that all adjustments of a normal, recurring nature considered necessary for a fair presentation have been included. This interim financial information does not necessarily represent or indicate what the operating results will be for the year ending December 31, 2019. All material intercompany accounts and transactions have been eliminated.

Use of Estimates in the Condensed Consolidated Financial Statements

Use of Estimates in the Condensed Consolidated Financial Statements

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

Reclassifications

Reclassifications

Tenant reimbursements totaling $1.4 million on the Company's Condensed Consolidated Statements of Income for the three months ended March 31, 2018 were reclassified into rental income.

Income Taxes

Income Taxes

The Company has elected to be taxed as a real estate investment trust ("REIT"), as defined under the Internal Revenue Code of 1986, as amended (the "Code"). The Company and one subsidiary have also elected for that subsidiary to be treated as a taxable REIT subsidiary ("TRS"), which is subject to federal and state income taxes. No provision has been made for federal income taxes for the REIT; however, the Company has recorded income tax expense or benefit for the TRS to the extent applicable. The Company intends at all times to qualify as a REIT under the Code. The Company must distribute at least 90% per annum of its REIT taxable income to its stockholders (which is computed without regard to the dividends paid deduction or net capital gain and which does not necessarily equal net income as calculated in accordance with GAAP) and meet other requirements to continue to qualify as a REIT.

New Accounting Pronouncements

New Accounting Pronouncements

Recently Adopted Accounting Pronouncements

Lease Accounting

In February 2016, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") 2016-02, Leases; in January 2018, the FASB issued ASU 2018-01, Leases - Land Easement Practical Expedient for Transition to Topic 842; in July 2018, the FASB issued ASU 2018-10, Codification Improvements to Topic 842, Leases and ASU 2018-11, Leases - Targeted Improvements; and in December 2018, the FASB issued ASU 2018-20, Narrow-Scope Improvements for Lessors. The Company adopted this group of ASUs, collectively referred to as Topic 842, on January 1, 2019. Topic 842 superseded the existing standards for lease accounting (Topic 840, Leases).

The Company elected to utilize the following practical expedients provided by Topic 842:

• the package of practical expedients that allows an entity not to reassess upon adoption (i) whether an

expired or existing contract contains a lease, (ii) whether a lease classification related to expired or existing

lease arrangements, and (iii) whether costs incurred on expired or existing leases qualify as initial direct

costs, and

• as a lessor, the practical expedient not to separate certain non-lease components, such as common area

maintenance, from the lease component if (i) the timing and pattern of transfer are the same for the nonlease

component and associated lease component, and (ii) the lease component would be classified as an

operating lease if accounted for separately.

Topic 842 requires lessees to record most leases on their balance sheet through a right-of-use ("ROU") model, in

which a lessee records a ROU asset and a lease liability on their balance sheet. Leases with terms that are 12 months or less or leases that are clearly insignificant do not need to be accounted for under the ROU model. Lessees will account for leases as financing or operating leases, with the classification affecting the timing and pattern of expense recognition in the income statement. Lease expense will be recognized based on the effective interest method for leases accounted for as finance leases and on a straight-line basis over the term of the lease for leases accounted for as operating leases.

The accounting by a lessor under Topic 842 is largely unchanged from that of Topic 840. Under Topic 842, lessors

will continue to account for leases as a sales-type, direct-financing, or operating. A lease will be treated as a sale if it

is considered to transfer control of the underlying asset to the lessee. A lease will be classified as direct-financing if

risks and rewards are conveyed without the transfer of control. Otherwise, the lease is treated as an operating lease.

Topic 842 requires accounting for a transaction as a financing in a sale leaseback when the seller-lessee is provided

an option to purchase the property from the landlord at the tenant's option. The Company expects that this provision

could change the accounting for these types of leases in the future. Topic 842 also includes the concept of separating

lease and nonlease components. Under Topic 842, nonlease components, such as common area maintenance, would

be accounted for under Topic 606 and separated from the lease payments. However, the Company elected the lessor practical expedient allowing the Company to not separate these components when certain conditions are met. With this election, the Company combined tenant reimbursements with rental income on its Condensed Consolidated Income Statements. Additionally, we will recognize a charge to rental income for amounts deemed uncollectible. Further, the Company has historically only capitalized direct leasing costs, such as leasing commissions. While the new standard revises the treatment of indirect leasing costs and permits the capitalization and amortization only of direct leasing costs, the Company does not expect an impact to its financial statements related to the capitalization of leasing costs. Also, the Narrow-Scope Improvements for Lessors under ASU 2018-20 allows the Company to continue to exclude from revenue costs paid by our tenants on our behalf directly to third parties, such as property taxes and insurance.

Topic 842 provided two transition alternatives. The Company adopted the standard based on the prospective

optional transition method, in which leases for comparative periods continue to be accounted for in accordance with Topic 840.

Upon adoption, where the Company is the lessee, we recorded a right of use asset and a related operating lease liability, each totaling approximately $0.1 million, related to one ground lease which will have minimal impact on the recognition of future ground lease expense. The right of use lease asset is included in other assets and the operating lease liability is included in other liabilities on the Company's Condensed Consolidated Balance Sheet.

Derivatives and Hedge Accounting

In October 2018, the FASB issued an update, ASU 2018-16, Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes to ASC Topic 815, Derivatives and Hedging. ASU 2018-16 expands the list of U.S. benchmark interest rates permitted in the application of hedge accounting by adding the OIS rate based on SOFR as an eligible benchmark interest rate. ASU 2018-16 is effective for interim and annual reporting periods in fiscal years beginning after December 15, 2018. We adopted this update effective January 1, 2019. The adoption of this update did not have an impact on our Condensed Consolidated Financial Statements.

Recently Issued Accounting Pronouncements

Financial Instruments-Credit Losses

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses, which changes the impairment model for most financial assets and certain other instruments. For trade and other receivables, held-to-maturity debt securities, loans and other instruments, companies will be required to use a new current expected credit loss ("CECL") model that generally will result in the earlier recognition of allowances for losses. For available-for-sale debt securities with unrealized losses, companies will measure credit losses in a manner similar to what they do today, except that the losses will be recognized as allowances rather than as reductions in the amortized cost of the securities. Companies will have to disclose significantly more information, including information they use to track credit quality by year of origination for most financing receivables. Companies will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. This standard is effective for the Company on January 1, 2020 with early adoption permitted. In August 2018, the FASB issued a proposal that would amend the ASU to clarify that receivables arising from leases would not be within the scope of the ASU but rather would be accounted for under the leasing standard. The Company continues to monitor the FASB's activity relating to this ASU.

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Real Estate Investments (Tables)

3 Months Ended

Mar. 31, 2019

Real Estate [Abstract]

Schedule of real estate property investments

At March 31, 2019, the Company had investments of approximately $478.4 million in 105 real estate properties. The following table summarizes the Company's real estate investments.

(Dollars in thousands)	Number of Facilities	Land and Land Improvements		Buildings, Improvements, and Lease Intangibles		Personal Property		Total		Accumulated Depreciation
Medical office buildings:
Florida	5	$	4,608	$	29,285	$	—	$	33,893	$	4,515
Ohio	6	3,638		26,483		—		30,121		5,508
Texas	3	3,115		15,591		—		18,706		4,456
Illinois	2	1,136		11,831		—		12,967		2,664
Kansas	3	2,455		14,933		—		17,388		4,189
Iowa	1	2,241		9,014		—		11,255		2,468
Other states	15	4,355		35,828		—		40,183		4,649
	35	21,548		142,965		—		164,513		28,449
Physician clinics:
Kansas	2	610		6,921		—		7,531		1,485
Illinois	6	2,888		9,539		—		12,427		540
Florida	4	253		9,484		—		9,737		912
Other states	9	2,903		21,462		—		24,365		3,459
	21	6,654		47,406		—		54,060		6,396
Surgical centers and hospitals:
Louisiana	1	1,683		21,353		—		23,036		1,244
Michigan	2	637		8,278		—		8,915		2,434
Illinois	2	2,349		8,222		—		10,571		1,411
Florida	1	271		7,069		—		7,340		810
Arizona	2	576		5,389		—		5,965		1,603
Other states	7	2,130		17,857		—		19,987		4,074
	15	7,646		68,168		—		75,814		11,576
Specialty centers:
Illinois	3	3,489		24,733		—		28,222		2,117
Other states	22	5,170		38,344		—		43,514		7,331
	25	8,659		63,077		—		71,736		9,448
Behavioral facilities:
West Virginia	1	2,138		22,897		—		25,035		880
Illinois	1	1,300		18,803		—		20,103		1,332
Indiana	2	1,126		6,040		—		7,166		351
Other states	3	1,411		12,840		—		14,251		499
	7	5,975		60,580		—		66,555		3,062
Inpatient rehabilitation facilities:
Texas	1	1,515		27,001		—		28,516		82
	1	1,515		27,001		—		28,516		82
Long-term acute care hospitals:
Indiana	1	523		14,405		—		14,928		1,222
	1	523		14,405		—		14,928		1,222
Corporate property	—	—		2,161		135		2,296		309
Total real estate investments	105	$	52,520	$	425,763	$	135	$	478,418	$	60,544

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Real Estate Leases (Tables)

3 Months Ended

Mar. 31, 2019

Leases [Abstract]

Schedule of future minimum lease payments for operating leases

Future minimum lease payments under the non-cancelable operating leases due the Company for the years ending December 31, as of March 31, 2019, are as follows (in thousands):

2019 (nine months ending December 31)	$	32,823
2020	41,304
2021	38,200
2022	34,688
2023	30,177
2024 and thereafter	156,754
	$	333,946

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Debt, net (Tables)

3 Months Ended

Mar. 31, 2019

Debt Disclosure [Abstract]

Schedule of debt

The table below details the Company's debt as of March 31, 2019 and December 31, 2018.

	Balance as of
(Dollars in thousands)	March 31, 2019		December 31, 2018		Maturity Dates
Revolving Credit Facility	$	—	$	43,000	3/23
A-1 Term Loan, net	49,778		49,759		3/22
A-2 Term Loan, net	49,735		49,722		3/24
A-3 Term Loan, net	74,341		—		3/26
Mortgage Note Payable	5,263		5,285		5/24
	$	179,117	$	147,766

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Derivative Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of fair value of derivative instruments on balance sheet

The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the Condensed Consolidated Balance Sheets as of March 31, 2019 and December 31, 2018.

	Asset Derivatives Fair Value at					Liability Derivatives Fair Value at
	March 31, 2019		December 31, 2018		Balance Sheet Classification	March 31, 2019		December 31, 2018		Balance Sheet Classification
Interest rate swaps	$	215	$	902	Other assets	$	857	$	98	Other Liabilities

Schedule of derivative gain (loss)

The table below details the location in the financial statements of the gain or loss recognized on interest rate derivatives designated as cash flow hedges for the three months ended March 31, 2019 and 2018.

	Three Months Ended March 31,
(Dollars in thousands)	2019			2018
Amount of unrealized (loss) gain recognized in OCI on derivative	$	(1,213	)	$	906
Amount of (gain) loss reclassified from accumulated OCI into interest expense	$	(62	)	$	68
Total Interest Expense presented in the Condensed Consolidated Statements of Income in which the effects of the cash flow hedges are recorded	$	2,054		$	1,268

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Stockholders' Equity (Tables)

3 Months Ended

Mar. 31, 2019

Equity [Abstract]

Schedule of reconciliation of common stock

The following table provides a reconciliation of the beginning and ending common stock balances for the three months ended March 31, 2019 and for the year ended December 31, 2018:

	Three Months Ended March 31, 2019	Year Ended December 31, 2018
Balance, beginning of period	18,634,502	18,085,798
Issuance of common stock	143,600	334,700
Restricted stock-based awards	84,690	214,004
Balance, end of period	18,862,792	18,634,502

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Net Income Per Common Share (Tables)

3 Months Ended

Mar. 31, 2019

Earnings Per Share [Abstract]

Schedule of earnings per share

The following table sets forth the computation of basic and diluted net income per common share.

	Three Months Ended March 31, 2019
(Dollars in thousands, except per share data)	2019			2018
Net income	$	1,450		$	1,872
Participating securities' share in earnings	(324		)	(241		)
Net income, less participating securities' share in earnings	$	1,126		$	1,631
Weighted average Common Shares outstanding
Weighted average Common Shares outstanding	18,735,673			18,164,132
Unvested restricted shares	(781,003		)	(590,449		)
Weighted average Common Shares outstanding–Basic	17,954,670			17,573,683
Dilutive potential common shares	—			—
Weighted average Common Shares outstanding –Diluted	17,954,670			17,573,683
Basic Net Income per Common Share	$	0.06		$	0.09
Diluted Net Income per Common Share	$	0.06		$	0.09

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Incentive Plan (Tables)

3 Months Ended

Mar. 31, 2019

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Summary of nonvested restricted stock activity

A summary of the activity under the 2014 Incentive Plan for the three months ended March 31, 2019 and 2018 is included in the table below.

		Three Months Ended March 31,
		2019	2018
Stock-based awards, beginning of period		709,487	512,115
	Stock in lieu of compensation	42,525	47,027
	Stock awards	42,165	46,974
	Total stock granted	84,690	94,001
	Vested shares	—	—
Stock-based awards, end of period		794,177	606,116

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Other Assets (Tables)

3 Months Ended

Mar. 31, 2019

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Schedule of Other Assets

Items included in Other assets, net on the Company's Condensed Consolidated Balance Sheets as of March 31, 2019 and December 31, 2018 are detailed in the table below.

	Balance as of
(Dollars in thousands)	March 31, 2019		December 31, 2018
Notes receivable	$	24,119	$	24,110
Accounts and interest receivables	2,092		2,158
Straight-line rent receivables	3,593		3,254
Prepaid assets	515		487
Deferred financing costs, net	848		318
Leasing commissions, net	862		790
Deferred tax asset	2,008		2,024
Fair value of interest rate swaps	215		902
Above-market intangible assets, net	162		168
Right of use leased asset	141		—
Other	267		335
	$	34,822	$	34,546

Schedule of VIEs

The VIEs that we have identified at March 31, 2019 are summarized in the table below.

Classification	Carrying Amount (in millions)		Maximum Exposure to Loss (in millions)
Notes receivable	$	0.9	$	0.9
Note receivable	$	23.0	$	23.0

Highlands Transition Update

As previously announced, the Company experienced payment issues with the old operator of Highlands Hospital ("Highlands"). Effective February 11, 2019, the Company signed a transition agreement (the "Transition Agreement"), to transition the property to a new operator and signed a lease with a new operator.

The old operator and new operator have signed an asset purchase agreement pursuant to which the new operator will take over the facility. In addition, the old operator and new operator have signed a management agreement and the new operator is currently managing Highlands pursuant to the management agreement. The new operator continues to perform due diligence and is in the process of preparing for transfer of licenses and related items customary for these types of transactions. We cannot provide assurance as to the timing, or whether, this transaction will actually close.

The new lease will be effective upon the transfer of the licenses to the new operator, which is anticipated to happen in the second half of 2019. The new lease provides for rental payments approximately equal to the amounts due under the previous agreements with the old operator.

The Company is receiving monthly payments under the Transition Agreement which approximate the amounts due from the old operator under the previous agreements. These payments are to continue as long as the Transition Agreement is in place. The Transition Agreement will terminate when the licenses are transferred to the new operator, at which time the new lease will become effective.

Since the Transition Agreement became effective in February, the Company only received payments during the first quarter for February and March and thus did not recognize revenue for the month of January representing approximately $0.3 million.

In addition, the Company incurred professional fees (legal and accounting) totaling over $0.1 million related to the workout and transition.

The Transition Agreement includes provisions for the Company to receive payment for the amounts due from the old operator that remain unpaid. The Company anticipates collecting all amounts due.

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Fair Value of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2019

Fair Value Disclosures [Abstract]

Fair Value, by Balance Sheet Grouping

The table below details the fair values and carrying values for our notes receivable, interest rate swaps, and mortgage note payable at March 31, 2019 and December 31, 2018, using level 2 inputs.

	March 31, 2019				December 31, 2018
(Dollars in thousands)	Carrying Value		Fair Value		Carrying Value		Fair Value
Notes receivable	$	24,119	$	23,948	$	24,110	$	23,936
Interest rate swap asset	$	215	$	215	$	902	$	902
Interest rate swap liability	$	857	$	857	$	269	$	269
Mortgage note payable	$	5,365	$	5,277	$	5,391	$	5,307

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Summary of Significant Accounting Policies - Business Overview/Segment Reporting (Details) $ in Thousands, ft² in Millions	3 Months Ended
	Mar. 31, 2018 USD ($)	Mar. 31, 2019 USD ($) ft² state real_estate_property	Jan. 01, 2019 USD ($) lease	Dec. 31, 2018 USD ($)
Disaggregation of Revenue [Line Items]
Value of real estate property investments and mortgages		$ 478,400
Number of real estate properties | real_estate_property		105
Number of states in which real estate investments are in | state		29
Area of real estate property (in square feet) | ft²		2.3
Operating lease ROU assets		$ 141		$ 0
Tenant reimbursements
Disaggregation of Revenue [Line Items]
Revenue	$ 1,400
ASU 2016-02
Disaggregation of Revenue [Line Items]
Operating lease ROU assets			$ 100
Operating lease liabilities			$ 100
Number of ground leases | lease			1

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Real Estate Investments - Additional Information (Details) $ in Millions	Mar. 31, 2019 USD ($) real_estate_property
Real Estate [Abstract]
Value of real estate property investments and mortgages | $	$ 478.4
Number of real estate properties | real_estate_property	105

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Real Estate Investments - Schedule of Real Estate Property Investments (Details) $ in Thousands	Mar. 31, 2019 USD ($) real_estate_property	Dec. 31, 2018 USD ($)
Real Estate Properties [Line Items]
Number of Facilities | real_estate_property	105
Land and Land Improvements	$ 52,520	$ 50,270
Buildings, Improvements, and Lease Intangibles	425,763	394,527
Personal Property	135	133
Total real estate properties	478,418	444,930
Accumulated Depreciation	$ 60,544	$ 55,298
Medical office [Member]
Real Estate Properties [Line Items]
Number of Facilities | real_estate_property	35
Land and Land Improvements	$ 21,548
Buildings, Improvements, and Lease Intangibles	142,965
Total real estate properties	164,513
Accumulated Depreciation	$ 28,449
Medical office [Member] | Florida [Member]
Real Estate Properties [Line Items]
Number of Facilities | real_estate_property	5
Land and Land Improvements	$ 4,608
Buildings, Improvements, and Lease Intangibles	29,285
Total real estate properties	33,893
Accumulated Depreciation	$ 4,515
Medical office [Member] | Illinois [Member]
Real Estate Properties [Line Items]
Number of Facilities | real_estate_property	2
Land and Land Improvements	$ 1,136
Buildings, Improvements, and Lease Intangibles	11,831
Total real estate properties	12,967
Accumulated Depreciation	$ 2,664
Medical office [Member] | Iowa [Member]
Real Estate Properties [Line Items]
Number of Facilities | real_estate_property	1
Land and Land Improvements	$ 2,241
Buildings, Improvements, and Lease Intangibles	9,014
Total real estate properties	11,255
Accumulated Depreciation	$ 2,468
Medical office [Member] | Kansas [Member]
Real Estate Properties [Line Items]
Number of Facilities | real_estate_property	3
Land and Land Improvements	$ 2,455
Buildings, Improvements, and Lease Intangibles	14,933
Total real estate properties	17,388
Accumulated Depreciation	$ 4,189
Medical office [Member] | Ohio [Member]
Real Estate Properties [Line Items]
Number of Facilities | real_estate_property	6
Land and Land Improvements	$ 3,638
Buildings, Improvements, and Lease Intangibles	26,483
Total real estate properties	30,121
Accumulated Depreciation	$ 5,508
Medical office [Member] | Other States [Member]
Real Estate Properties [Line Items]
Number of Facilities | real_estate_property	15
Land and Land Improvements	$ 4,355
Buildings, Improvements, and Lease Intangibles	35,828
Total real estate properties	40,183
Accumulated Depreciation	$ 4,649
Medical office [Member] | Texas [Member]
Real Estate Properties [Line Items]
Number of Facilities | real_estate_property	3
Land and Land Improvements	$ 3,115
Buildings, Improvements, and Lease Intangibles	15,591
Total real estate properties	18,706
Accumulated Depreciation	$ 4,456
Physician clinics [Member]
Real Estate Properties [Line Items]
Number of Facilities | real_estate_property	21
Land and Land Improvements	$ 6,654
Buildings, Improvements, and Lease Intangibles	47,406
Total real estate properties	54,060
Accumulated Depreciation	$ 6,396
Physician clinics [Member] | Florida [Member]
Real Estate Properties [Line Items]
Number of Facilities | real_estate_property	4
Land and Land Improvements	$ 253
Buildings, Improvements, and Lease Intangibles	9,484
Total real estate properties	9,737
Accumulated Depreciation	$ 912
Physician clinics [Member] | Illinois [Member]
Real Estate Properties [Line Items]
Number of Facilities | real_estate_property	6
Land and Land Improvements	$ 2,888
Buildings, Improvements, and Lease Intangibles	9,539
Total real estate properties	12,427
Accumulated Depreciation	$ 540
Physician clinics [Member] | Kansas [Member]
Real Estate Properties [Line Items]
Number of Facilities | real_estate_property	2
Land and Land Improvements	$ 610
Buildings, Improvements, and Lease Intangibles	6,921
Total real estate properties	7,531
Accumulated Depreciation	$ 1,485
Physician clinics [Member] | Other States [Member]
Real Estate Properties [Line Items]
Number of Facilities | real_estate_property	9
Land and Land Improvements	$ 2,903
Buildings, Improvements, and Lease Intangibles	21,462
Total real estate properties	24,365
Accumulated Depreciation	$ 3,459
Surgical Centers and Hospitals [Member]
Real Estate Properties [Line Items]
Number of Facilities | real_estate_property	15
Land and Land Improvements	$ 7,646
Buildings, Improvements, and Lease Intangibles	68,168
Total real estate properties	75,814
Accumulated Depreciation	$ 11,576
Surgical Centers and Hospitals [Member] | Arizona [Member]
Real Estate Properties [Line Items]
Number of Facilities | real_estate_property	2
Land and Land Improvements	$ 576
Buildings, Improvements, and Lease Intangibles	5,389
Total real estate properties	5,965
Accumulated Depreciation	$ 1,603
Surgical Centers and Hospitals [Member] | Florida [Member]
Real Estate Properties [Line Items]
Number of Facilities | real_estate_property	1
Land and Land Improvements	$ 271
Buildings, Improvements, and Lease Intangibles	7,069
Total real estate properties	7,340
Accumulated Depreciation	$ 810
Surgical Centers and Hospitals [Member] | Illinois [Member]
Real Estate Properties [Line Items]
Number of Facilities | real_estate_property	2
Land and Land Improvements	$ 2,349
Buildings, Improvements, and Lease Intangibles	8,222
Total real estate properties	10,571
Accumulated Depreciation	$ 1,411
Surgical Centers and Hospitals [Member] | Louisiana [Member]
Real Estate Properties [Line Items]
Number of Facilities | real_estate_property	1
Land and Land Improvements	$ 1,683
Buildings, Improvements, and Lease Intangibles	21,353
Total real estate properties	23,036
Accumulated Depreciation	$ 1,244
Surgical Centers and Hospitals [Member] | Michigan [Member]
Real Estate Properties [Line Items]
Number of Facilities | real_estate_property	2
Land and Land Improvements	$ 637
Buildings, Improvements, and Lease Intangibles	8,278
Total real estate properties	8,915
Accumulated Depreciation	$ 2,434
Surgical Centers and Hospitals [Member] | Other States [Member]
Real Estate Properties [Line Items]
Number of Facilities | real_estate_property	7
Land and Land Improvements	$ 2,130
Buildings, Improvements, and Lease Intangibles	17,857
Total real estate properties	19,987
Accumulated Depreciation	$ 4,074
Specialty Centers [Member]
Real Estate Properties [Line Items]
Number of Facilities | real_estate_property	25
Land and Land Improvements	$ 8,659
Buildings, Improvements, and Lease Intangibles	63,077
Total real estate properties	71,736
Accumulated Depreciation	$ 9,448
Specialty Centers [Member] | Illinois [Member]
Real Estate Properties [Line Items]
Number of Facilities | real_estate_property	3
Land and Land Improvements	$ 3,489
Buildings, Improvements, and Lease Intangibles	24,733
Total real estate properties	28,222
Accumulated Depreciation	$ 2,117
Specialty Centers [Member] | Other States [Member]
Real Estate Properties [Line Items]
Number of Facilities | real_estate_property	22
Land and Land Improvements	$ 5,170
Buildings, Improvements, and Lease Intangibles	38,344
Total real estate properties	43,514
Accumulated Depreciation	$ 7,331
Behavioral facilities [Member]
Real Estate Properties [Line Items]
Number of Facilities | real_estate_property	7
Land and Land Improvements	$ 5,975
Buildings, Improvements, and Lease Intangibles	60,580
Total real estate properties	66,555
Accumulated Depreciation	$ 3,062
Behavioral facilities [Member] | Illinois [Member]
Real Estate Properties [Line Items]
Number of Facilities | real_estate_property	1
Land and Land Improvements	$ 1,300
Buildings, Improvements, and Lease Intangibles	18,803
Total real estate properties	20,103
Accumulated Depreciation	$ 1,332
Behavioral facilities [Member] | Indiana [Member]
Real Estate Properties [Line Items]
Number of Facilities | real_estate_property	2
Land and Land Improvements	$ 1,126
Buildings, Improvements, and Lease Intangibles	6,040
Total real estate properties	7,166
Accumulated Depreciation	$ 351
Behavioral facilities [Member] | Other States [Member]
Real Estate Properties [Line Items]
Number of Facilities | real_estate_property	3
Land and Land Improvements	$ 1,411
Buildings, Improvements, and Lease Intangibles	12,840
Total real estate properties	14,251
Accumulated Depreciation	$ 499
Behavioral facilities [Member] | West Virginia [Member]
Real Estate Properties [Line Items]
Number of Facilities | real_estate_property	1
Land and Land Improvements	$ 2,138
Buildings, Improvements, and Lease Intangibles	22,897
Total real estate properties	25,035
Accumulated Depreciation	$ 880
Inpatient Rehabilitation Facilities [Member]
Real Estate Properties [Line Items]
Number of Facilities | real_estate_property	1
Land and Land Improvements	$ 1,515
Buildings, Improvements, and Lease Intangibles	27,001
Total real estate properties	28,516
Accumulated Depreciation	$ 82
Inpatient Rehabilitation Facilities [Member] | Texas [Member]
Real Estate Properties [Line Items]
Number of Facilities | real_estate_property	1
Land and Land Improvements	$ 1,515
Buildings, Improvements, and Lease Intangibles	27,001
Total real estate properties	28,516
Accumulated Depreciation	$ 82
Long-Term Acute Care Hospitals [Member]
Real Estate Properties [Line Items]
Number of Facilities | real_estate_property	1
Land and Land Improvements	$ 523
Buildings, Improvements, and Lease Intangibles	14,405
Total real estate properties	14,928
Accumulated Depreciation	$ 1,222
Long-Term Acute Care Hospitals [Member] | Indiana [Member]
Real Estate Properties [Line Items]
Number of Facilities | real_estate_property	1
Land and Land Improvements	$ 523
Buildings, Improvements, and Lease Intangibles	14,405
Total real estate properties	14,928
Accumulated Depreciation	$ 1,222
Corporate property [Member]
Real Estate Properties [Line Items]
Number of Facilities | real_estate_property	0
Land and Land Improvements	$ 0
Buildings, Improvements, and Lease Intangibles	2,161
Personal Property	135
Total real estate properties	2,296
Accumulated Depreciation	$ 309

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Real Estate Leases (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Real Estate [Line Items]
2019 (nine months ending December 31)	$ 32,823
2020	41,304
2021	38,200
2022	34,688
2023	30,177
2024 and thereafter	156,754
Total	333,946
Straight Line rent	336	$ 415
Other Liabilities [Member]
Real Estate [Line Items]
Deferred revenue	$ 1,500		$ 1,600

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Real Estate Acquisitions (Details) ft² in Thousands, $ in Millions	3 Months Ended
	Mar. 31, 2019 USD ($) ft² real_estate_property
Business Acquisition [Line Items]
Area of real estate property (in square feet) | ft²	2,300
Acquisition Of Two Properties During 1st Quarter 2019 [Member]
Business Acquisition [Line Items]
Number of properties acquired | real_estate_property	2
Area of real estate property (in square feet) | ft²	83
Consideration transferred	$ 32.7
Percentage of properties that were leased at acquisition	100.00%
Revenue from properties acquired	$ 0.4
Net income from properties acquired	0.2
Transaction costs	$ 0.1

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Mortgage and Other Notes Receivable (Details) $ in Thousands			3 Months Ended
	Apr. 25, 2018 USD ($) hospital	Dec. 28, 2017 USD ($) real_estate_property	Mar. 31, 2019 USD ($)	Mar. 31, 2018 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($) mortgage_note_receivable
Accounts, Notes, Loans and Financing Receivable [Line Items]
Mortgage note receivable, net						$ 10,600
Notes receivable			$ 24,119		$ 24,110
Proceeds from the repayment of notes receivable			31	$ 17
Repayments of mortgage note payable	$ 6,700		27	0
Real estate property			$ 417,874		389,632
Mortgage Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of mortgage note receivables | mortgage_note_receivable						1
Promissory Notes, Secured by Accounts Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Mortgage loans on real estate, face amount of mortgages		$ 11,450
Notes receivable		8,750
Receivable with imputed interest, discount		2,700
Promissory Notes, Secured By Facilities Owned By Borrower [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Notes receivable	23,000			$ 2,200
Notes Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Notes receivable					$ 900
Proceeds from the repayment of notes receivable		$ 10,950
Proceeds from the repayment of notes receivable, interest	260
Proceeds from the repayment of notes receivable, fees and expenses	$ 250
Other Assets [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Interest receivable						$ 600
Long-Term Acute Care Facility [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of properties used to secure notes by borrower | hospital	7
Inpatient Rehabilitation Hospital [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of properties used to secure notes by borrower | hospital	1
Specialty Hospital [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of properties used to secure notes by borrower | real_estate_property		2
Property Previously Financed By Mortgage Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Real estate property	$ 4,500

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Debt, net - Schedule of Debt (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Debt Instrument [Line Items]
Debt, net	$ 179,117	$ 147,766
Term Loan [Member] | Third Amended And Restated Credit Facility [Member]
Debt Instrument [Line Items]
Debt, net	175,000
Mortgage Note Payable [Member]
Debt Instrument [Line Items]
Debt, net	5,263	5,285
Revolving Credit Facility [Member] | Line of Credit [Member] | Third Amended And Restated Credit Facility [Member]
Debt Instrument [Line Items]
Debt, net	0	43,000
A-1 Term Loan [Member] | Term Loan [Member] | Third Amended And Restated Credit Facility [Member]
Debt Instrument [Line Items]
Debt, net	49,778	49,759
A-2 Term Loan [Member] | Term Loan [Member] | Third Amended And Restated Credit Facility [Member]
Debt Instrument [Line Items]
Debt, net	49,735	49,722
A-3 Term Loan [Member] | Term Loan [Member] | Third Amended And Restated Credit Facility [Member]
Debt Instrument [Line Items]
Debt, net	$ 74,341	$ 0

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Debt, net - Narrative (Details)		3 Months Ended
	Mar. 29, 2019 USD ($) option	Mar. 31, 2019 USD ($)	Mar. 31, 2018 USD ($)	Dec. 31, 2018 USD ($)
Line of Credit Facility [Line Items]
Debt issuance costs		$ 1,323,000	$ 218,000
Amount outstanding		179,117,000		$ 147,766,000
Third Amended And Restated Credit Facility [Member]
Line of Credit Facility [Line Items]
Debt issuance costs	$ 1,300,000
Third Amended And Restated Credit Facility [Member] | Term Loan [Member]
Line of Credit Facility [Line Items]
Face amount	$ 175,000,000
Unused borrowing commitment fee percentage	0.35%
Amount outstanding		$ 175,000,000
Weighted average interest rate percentage		4.569%
Third Amended And Restated Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member] | Term Loan [Member]
Line of Credit Facility [Line Items]
Variable rate percentage	1.25%
Third Amended And Restated Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | Maximum [Member] | Term Loan [Member]
Line of Credit Facility [Line Items]
Variable rate percentage	2.30%
Third Amended And Restated Credit Facility [Member] | Base Rate [Member] | Minimum [Member] | Term Loan [Member]
Line of Credit Facility [Line Items]
Variable rate percentage	0.25%
Third Amended And Restated Credit Facility [Member] | Base Rate [Member] | Maximum [Member] | Term Loan [Member]
Line of Credit Facility [Line Items]
Variable rate percentage	1.30%
Third Amended And Restated Credit Facility [Member] | Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Debt issuance costs	$ 700,000
Third Amended And Restated Credit Facility [Member] | Revolving Credit Facility [Member] | Line of Credit [Member]
Line of Credit Facility [Line Items]
Maximum borrowing capacity	$ 150,000,000
Number of options to extend | option	1
Length of extension	12 months
Remaining borrowing capacity	$ 150,000,000
Amount outstanding		$ 0		43,000,000
Third Amended And Restated Credit Facility [Member] | Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member] | Line of Credit [Member]
Line of Credit Facility [Line Items]
Variable rate percentage	1.25%
Third Amended And Restated Credit Facility [Member] | Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | Maximum [Member] | Line of Credit [Member]
Line of Credit Facility [Line Items]
Variable rate percentage	1.90%
Third Amended And Restated Credit Facility [Member] | Revolving Credit Facility [Member] | Base Rate [Member] | Minimum [Member] | Line of Credit [Member]
Line of Credit Facility [Line Items]
Variable rate percentage	0.25%
Third Amended And Restated Credit Facility [Member] | Revolving Credit Facility [Member] | Base Rate [Member] | Maximum [Member] | Line of Credit [Member]
Line of Credit Facility [Line Items]
Variable rate percentage	0.90%
Third Amended And Restated Credit Facility [Member] | Credit Facility, Accordion Feature [Member]
Line of Credit Facility [Line Items]
Maximum borrowing capacity	$ 525,000,000
Third Amended And Restated Credit Facility [Member] | A-1 Term Loan [Member] | Term Loan [Member]
Line of Credit Facility [Line Items]
Face amount	$ 50,000,000
Debt term	5 years
Amount outstanding		49,778,000		49,759,000
Third Amended And Restated Credit Facility [Member] | A-2 Term Loan [Member] | Term Loan [Member]
Line of Credit Facility [Line Items]
Face amount	$ 50,000,000
Debt term	7 years
Amount outstanding		49,735,000		49,722,000
Third Amended And Restated Credit Facility [Member] | A-3 Term Loan [Member]
Line of Credit Facility [Line Items]
Debt issuance costs	$ 600,000
Third Amended And Restated Credit Facility [Member] | A-3 Term Loan [Member] | Term Loan [Member]
Line of Credit Facility [Line Items]
Face amount	$ 75,000,000
Debt term	7 years
Amount outstanding		$ 74,341,000		$ 0
Third Amended And Restated Credit Facility [Member] | Revolving Credit Facility, Unused Borrowing Capacity Rate 1 [Member] | Line of Credit [Member]
Line of Credit Facility [Line Items]
Unused borrowing commitment fee percentage	0.25%
Percentage of borrowing capacity outstanding	33.30%
Third Amended And Restated Credit Facility [Member] | Revolving Credit Facility, Unused Borrowing Capacity Rate 2 [Member] | Line of Credit [Member]
Line of Credit Facility [Line Items]
Unused borrowing commitment fee percentage	0.35%
Percentage of borrowing capacity outstanding	33.30%

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Derivative Financial Instruments - Narrative (Details) $ in Millions	3 Months Ended
	Mar. 31, 2019 USD ($) derivative_instrument
Derivative [Line Items]
Cash flow hedges reclassified to interest expense	$ 0.2
Cash Flow Hedging [Member] | Interest Rate Contract [Member]
Derivative [Line Items]
Number outstanding interest rate derivatives | derivative_instrument	7
Notional amount	$ 175.0
Termination value	0.7
Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | Interest Rate Swap [Member]
Derivative [Line Items]
Interest rate swap liability	$ 0.7

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Derivative Financial Instruments - Fair Value Balance Sheet (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Derivatives, Fair Value [Line Items]
Derivative asset	$ 215	$ 902
Cash Flow Hedging [Member] | Interest Rate Swap [Member] | Designated as Hedging Instrument [Member]
Derivatives, Fair Value [Line Items]
Derivative liability	700
Cash Flow Hedging [Member] | Interest Rate Swap [Member] | Designated as Hedging Instrument [Member] | Other Assets [Member]
Derivatives, Fair Value [Line Items]
Derivative asset	215	902
Cash Flow Hedging [Member] | Interest Rate Swap [Member] | Designated as Hedging Instrument [Member] | Other Liabilities [Member]
Derivatives, Fair Value [Line Items]
Derivative liability	$ 857	$ 98

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Derivative Financial Instruments - Cash Flow Hedging (Details) - Interest Rate Contract [Member] - Cash Flow Hedging [Member] - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Derivative Instruments, Gain (Loss) [Line Items]
Amount of unrealized (loss) gain recognized in OCI on derivative	$ (1,213)	$ 906
Interest expense
Derivative Instruments, Gain (Loss) [Line Items]
Amount of (gain) loss reclassified from accumulated OCI into interest expense	(62)	68
Total Interest Expense presented in the Condensed Consolidated Statements of Income in which the effects of the cash flow hedges are recorded	$ 2,054	$ 1,268

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Stockholders' Equity - Reconciliation of Common Stock (Details) - shares	3 Months Ended	12 Months Ended
	Mar. 31, 2019	Dec. 31, 2018
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance, beginning of period (in shares)	18,634,502	18,085,798
Issuance of common stock (in shares)	143,600	334,700
Restricted stock-based awards (in shares)	84,690	214,004
Balance, end of period (in shares)	18,862,792	18,634,502

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Stockholders' Equity - Equity Offering (Details) - USD ($)		3 Months Ended
	Aug. 07, 2018	Mar. 31, 2019	Dec. 31, 2018
Subsidiary, Sale of Stock [Line Items]
Common Stock, par value (in dollars per share)		$ 0.01	$ 0.01
At The Market Offering Program [Member] | Common Stock [Member]
Subsidiary, Sale of Stock [Line Items]
Common Stock, par value (in dollars per share)	$ 0.01
Value of shares authorized	$ 100,000,000
Shares issued in transaction (shares)		143,600
Proceeds from sale of stock		$ 4,700,000
Sales price (in dollars per share)		$ 33.57
Remaining availability under ATM program		$ 84,800,000

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Net Income Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Earnings Per Share [Abstract]
Net income	$ 1,450	$ 1,872
Participating securities' share in earnings	(324)	(241)
Net income, less participating securities' share in earnings	$ 1,126	$ 1,631
Weighted average Common Shares outstanding
Weighted average Common Shares outstanding (in shares)	18,735,673	18,164,132
Unvested restricted shares (in shares)	(781,003)	(590,449)
Weighted average Common Shares outstanding–Basic (in shares)	17,954,670	17,573,683
Dilutive effect of restricted stock (in shares)	0	0
Weighted average Common Shares outstanding –Diluted (in shares)	17,954,670	17,573,683
Basic Net Income per Common Share (in dollars per share)	$ 0.06	$ 0.09
Diluted Net Income per Common Share (in dollars per share)	$ 0.06	$ 0.09

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Incentive Plan - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
2014 Incentive Plan [Member] | Restricted Common Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense	$ 0.9	$ 0.6

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Incentive Plan - Restricted Stock Activity (Details) - 2014 Incentive Plan [Member] - shares	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Restricted Common Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Stock-based awards, beginning of period (in shares)	709,487	512,115
Granted (in shares)	84,690	94,001
Vested shares (in shares)	0	0
Stock-based awards, end of period (in shares)	794,177	606,116
Restricted Common Stock, Stock in Lieu of Compensation [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Granted (in shares)	42,525	47,027
Restricted Common Stock, Stock Awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Granted (in shares)	42,165	46,974

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Other Assets - Other Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Operating Lease, Right-of-Use Asset	$ 141	$ 0
Notes receivable	24,119	24,110
Accounts and interest receivables	2,092	2,158
Straight-line rent receivables	3,593	3,254
Prepaid assets	515	487
Deferred financing costs, net	848	318
Leasing commissions, net	862	790
Deferred tax asset	2,008	2,024
Fair value of interest rate swaps	215	902
Above-market intangible assets, net	162	168
Other	267	335
Other assets, net	$ 34,822	$ 34,546

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Other Assets - Narrative (Details) $ in Thousands		2 Months Ended	3 Months Ended	12 Months Ended
	Apr. 25, 2018 USD ($) hospital	Mar. 31, 2019 USD ($)	Mar. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Mar. 31, 2018 USD ($)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Notes receivable		$ 24,119	$ 24,119	$ 24,110
Professional fees			$ 100
Notes Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Notes receivable				$ 900
Note receivable interest rate				9.00%
Promissory Notes, Secured By Facilities Owned By Borrower [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Notes receivable	$ 23,000				$ 2,200
Note receivable interest rate	9.00%
Long-Term Acute Care Facility [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of properties used to secure notes by borrower | hospital	7
Inpatient Rehabilitation Hospital [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of properties used to secure notes by borrower | hospital	1
Hospitals [Member] | Notes Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Proceeds from payments		$ 300

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Other Assets - VIEs (Details) - Notes Receivable [Member] $ in Millions	Mar. 31, 2019 USD ($)
Variable Interest Entity One [Member]
Variable Interest Entity [Line Items]
Carrying Amount	$ 0.9
Maximum Exposure to Loss	0.9
Variable Interest Entity Two [Member]
Variable Interest Entity [Line Items]
Carrying Amount	23.0
Maximum Exposure to Loss	$ 23.0

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Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Mortgage note receivable			$ 10,600
Notes receivable	$ 24,119	$ 24,110
Interest rate swap asset	215	902
Carrying Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Notes receivable	24,119	24,110
Mortgage note payable	5,365	5,391
Carrying Value [Member] | Interest Rate Swap [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Interest rate swap asset	215	902
Interest rate swap liability	857	269
Fair Value [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Notes receivable	23,948	23,936
Mortgage note payable	5,277	5,307
Fair Value [Member] | Interest Rate Swap [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Interest rate swap asset	215	902
Interest rate swap liability	$ 857	$ 269

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Subsequent Events (Details) $ / shares in Units, ft² in Thousands, $ in Millions	May 01, 2019 $ / shares	Apr. 30, 2019 USD ($) ft² real_estate_property	Mar. 31, 2019 ft²
Subsequent Event [Line Items]
Area of real estate property (in square feet) | ft²			2,300
Subsequent Event [Member]
Subsequent Event [Line Items]
Dividend declared (in dollars per share) | $ / shares	$ 0.41
Number of properties acquired | real_estate_property		1
Area of real estate property (in square feet) | ft²		81
Consideration transferred | $		$ 27.0
Percentage of properties that were leased at acquisition		100.00%
Revolving Credit Facility [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
Draw on credit facility | $		$ 23.0