Encompass Health Credit Rating & NNN Cap Rate (2026)

Encompass Health Business Overview & NNN Investment Profile

In its 2025 Form 10‑K, Encompass Health describes itself as the nation’s largest owner and operator of inpatient rehabilitation hospitals in terms of patients treated, revenues and number of hospitals. The company operated 176 hospitals with 11,641 licensed beds across 39 states and Puerto Rico at June 30, 2026 (Form 10‑Q), and recorded 263,299 patient discharges in 2025 (Form 10‑K). Net operating revenues reached $5.94 billion in fiscal year 2025, a 10.5% increase over 2024, while Adjusted EBITDA, a company-defined non-GAAP measure, grew 14.9% (February 5, 2026 earnings release). The company reported adding 517 inpatient rehabilitation beds during 2025 through eight new hospitals and 127 beds added to existing hospitals.

Encompass Health’s business model is built on a critical and growing need: specialized inpatient rehabilitation for patients recovering from strokes, traumatic brain injuries, spinal cord injuries, hip fractures, and other debilitating neurological and orthopedic conditions. About 92% of the patients Encompass serves are admitted from acute-care hospitals (2025 Form 10‑K), and its patients are recovering from a major injury or illness. Encompass expects demand for its services to keep growing as the U.S. population ages. For 2025, Encompass was named America’s Most Awarded Leader in Inpatient Rehabilitation by Newsweek and Statista and ranked among Fortune’s World’s Most Admired Companies.

Why Encompass Health Matters for NNN Investors

Inpatient rehabilitation hospitals occupy a unique position in healthcare real estate. These are large, purpose-built facilities designed specifically for intensive rehabilitation with specialized equipment, therapy gyms, patient rooms configured for extended stays, and clinical infrastructure that cannot be easily replicated or repurposed. Encompass operates 67 of its 176 hospitals as joint ventures (June 30, 2026, Form 10‑Q), many of them with acute care hospitals or health systems. It owns most of its hospital real estate: of its 173 hospitals at December 31, 2025 (2025 Form 10‑K), it owned the building and land at 103, owned the building on leased land at 34, and leased both at 36.

Encompass’s 2025 Form 10-K lists seven new hospitals expected to open in 2026 and five in 2027, with opening dates tentative, plus 150 to 200 beds added to existing hospitals in each year. If Encompass were upgraded to investment grade, cap rates on its leases could compress, but an upgrade is not assured.

Cap Rate Analysis & Pricing for Encompass Health NNN Properties

Live asking cap rates for Encompass Health and comparable healthcare tenants, shown for each tenant with at least three current listings:

Active listings InvestmentGrade.com tracks with an asking cap rate (stated in the listing, or computed from its stated income and price when no rate is stated), listings last observed October 16, 2026. Asking cap rates are not closed-sale cap rates. The middle half is the range from the 25th to the 75th percentile of listings. The 10-year Treasury yield is 5.24% as of October 1, 2026 (FRED series DGS10). Ratings are the agency ratings in our ratings database for the entity shown, which may be a parent company; the rating type (for example issuer, senior unsecured debt, long-term debt or revenue bond ratings) varies by company and is shown on each tenant page. A rating applies to a lease only if the rated entity signs or guarantees it, so confirm the tenant and any guarantor in the lease. n/a means no verified rating is on file. Not shown because fewer than 3 active listings with a published cap rate were observed: Encompass Health, HCA Healthcare, Acadia Healthcare.

Building age, market and remaining lease term can each move a property’s asking cap rate, so compare listings with similar characteristics.

Price depends on bed count, building age, location and lease terms. Encompass generated $1.18 billion of operating cash flow and $817.9 million of adjusted free cash flow (a company-defined non-GAAP measure) in 2025, against total operating and finance lease liabilities of $517.7 million at year-end (2025 Form 10‑K; the adjusted cash flow measure is from the February 5, 2026 earnings release).

New to the metric? See what a cap rate is and how it is calculated.